Hilton Head Air Service, Inc. v. Beaufort County, 1829

• Decision Date: 14 October 1991
• Docket Number: No. 1829,1829
• Court: South Carolina Court of Appeals
• Parties: HILTON HEAD AIR SERVICE, INC., Respondent, Cross-Appellant, v. BEAUFORT COUNTY, Appellant, Cross-Respondent. . Heard

Page 849

418 S.E.2d 849

308 S.C. 450

HILTON HEAD AIR SERVICE, INC., Respondent, Cross-Appellant, v. BEAUFORT COUNTY, Appellant, Cross-Respondent.

No. 1829.

Court of Appeals of South Carolina.

Heard Oct. 14, 1991.

Decided May 26, 1992.

Rehearing Denied July 16, 1992.

Certiorari Denied Sept. 22, 1992.

Terry A. Finger, of Novit & Scarminach, Hilton Head Island, for appellant, cross-respondent.

Herbert W. Hamilton, of Whaley, McCutchen, Blanton & Rhodes, Columbia, for respondent, cross-appellant.

BELL, Judge:

This is an action for specific performance and for declaratory and injunctive relief arising out of a lease. Hilton Head Air Service, Inc., commenced suit against Beaufort County, alleging the County's plans to relocate and develop a commercial air service terminal violate the Hilton Head Airport Master Plan and the terms of a May 11, 1979, lease between the parties. The County answered and counterclaimed, alleging that Air Service breached the terms of the lease. The County sought a decree terminating the lease and damages for unpaid rent. Air Service replied to the counterclaim, alleging, among other things, the affirmative defense of waiver. The circuit court referred the matter to the master in equity for final judgment with direct appeal. The master denied the prayer for an injunction, ordered the County to lease 2.4 acres of property at Hilton Head Airport to Air Service, and dismissed the counterclaims on the ground that the County had waived its right to strict performance of the lease. Both parties appeal. We affirm the denial of injunctive relief and the dismissal of the counterclaims. We reverse the order requiring the County to lease the additional 2.4 acres on the terms imposed by circuit court.

In 1974, the County leased property located at the Hilton Head Airport to Air Service. Since 1977, Air Service has operated an aviation business on the leased premises, providing services to the flying public such as fueling, maintenance, and repair of aircraft. Air Service has also allowed rental car companies to operate on the premises.

On May 11, 1979, the County and Air Service entered a twenty-five year lease which is the subject of this lawsuit. It provided:

The Beaufort County Council will act to develop the Hilton Head Airport as shown in the Hilton Head Airport Master Plan Study as accepted by the Federal Aviation Administration, with the exception that Beaufort County does not intend to extend the airport runway beyond its present 3,700 foot length.

An airport master plan study is a development plan designed to assist the orderly growth and development of an airport. Normally, an airport study makes a twenty year projection for development. Typically, an airport master plan is updated every five years in accordance with the recommendations of the Federal Aviation Administration.

The Hilton Head Airport Master Plan Study was first commissioned in 1973. One purpose of the study was to evaluate several new sites for the airport, analyze the existing airport site, and determine whether the airport should move or remain at the existing site. The study's final recommendation was to remain at the existing site.

The 1977 version of the Master Plan Study in use when the County entered the 1979 lease with Air Service included a "Terminal Area Plan" that showed a future "proposed" terminal on the same side of the airport runways as the premises leased to Air Service. However, it also contained the following disclaimers:

... [T]his study was produced as a planning tool for Beaufort County. The 20 year recommendations and projections were based on aviation facts and requirements, and approval of this plan does not in any way obligate Beaufort County to carry out its recommendations. * * * *

The contents do not necessarily reflect the official views or policy of the FAA. Acceptance of this report by the FAA does not in any way constitute a commitment on the part of the United States to participate in any development depicted therein nor does it indicate that the proposed development is environmentally acceptable....

An updated version of the Master Plan Study in use when this suit commenced locates the "proposed" terminal on the opposite side of the runways from Air Service's operation. This Master Study Plan has been accepted by the Federal Aviation Administration.

I.

Air Service contends the 1979 lease bound the County to develop the airport as shown in the 1977 Master Plan Study. It claims the later revision of the study moving the proposed terminal to the other side of the runways constitutes a breach of the lease. Consequently, it argues, the master erred when he denied a mandatory injunction compelling the County to develop the terminal at the location shown in the 1977 Master Plan Study.

We hold the master properly denied the injunction. According to its own provisions, the Master Plan Study is a twenty year planning tool subject to continuing modification and approval by the Federal Aviation Administration. The 1979 lease does not say, as Air Service suggests, the County must develop the airport according to the Master Plan Study "as it now exists with no changes." On the contrary, the words say the County is responsible to develop the airport "as shown in the Hilton Head Airport Master Plan Study as accepted by the Federal Aviation Administration." The 1977 Study is not specified.

These words must be read in context. At the time the parties entered the lease, the airport master development plan was contemplated as an ongoing plan covering an extended period during which, as the Study itself emphasized, conditions would change. Furthermore, the disclaimers quoted above made it clear the Study was not a binding "fixed for all time" document. When they entered the lease, the parties well knew conditions would change and the Master Plan Study would be, as in fact it has been, updated from time to time.

The County's duty under the lease was, likewise, a continuing responsibility over a twenty-five year term. Nothing in the lease indicates the County was restricted to conditions as they existed in 1979 in carrying out its long term responsibilities as lessor. In this respect, the responsibility to act in accordance with the Study was similar to other responsibilities listed in the same section of the lease. Those responsibilities included maintaining the runways in a safe condition, mowing grassy areas, protecting approaches to the airport, and complying with Federal Aviation Administration regulations and guidelines. It would be farfetched to claim these provisions meant the County would only mow those grassy areas existing in 1979 or only comply with 1979 federal regulations and guidelines.

The Master Plan Study under which the County intends to build a new terminal shows the terminal on the opposite side of the runways from Air Service's leased premises. The Federal Aviation Administration has accepted the plan. Thus, the County is in compliance with its responsibility under the lease to develop the airport "as shown in the Hilton Head Airport Master Plan Study as accepted by the Federal Aviation Administration." The County has not breached the lease and should not be enjoined from proceeding with development of the terminal.

II.

Air Service also seeks a decree of specific performance requiring the County to lease it a 2.4 acre parcel adjacent to the northeastern boundary of its existing leasehold on the same terms as the 1979 lease. Initially, Air Service wished to lease and improve the additional land for use as an aircraft parking ramp. In September, 1988, Air Service requested the Beaufort County Aviation Board to authorize a lease of the additional 2.4 acres for aircraft parking. The Board approved the request at its December meeting. Several months later, Air Service changed its plans to include parking rental cars on the additional land. The Federal Aviation Administration will not permit rental car parking in this area for safety reasons.

The 1979 lease provides that it may be modified to expand the leased area "upon such terms, conditions, and requirements for improvements on the additional space as the county may reasonably require."

Pursuant to the Board's authorization, an attorney for the County drew a "Lease Amendment and Modification" adding the 2.4 acres to the leasehold. The Amendment contained the following two clauses:

4. All improvements to the Additional Property shall be at Lessee's sole cost and expense. All improvements must receive approval from the Lessor and the Federal Aviation Administration prior to construction. * * * *

5. Notwithstanding any provision contained herein or in the Lease, the Lessee shall use the Additional Property for the specific purpose of aircraft parking, tiedown, servicing, and for no other purposes. * * * *

When the County presented the Amendment to Air Service for execution, the president of Air Service refused to sign it and struck through clauses 4 and 5. The parties have never agreed on the terms for leasing the additional 2.4 acres and they have signed no document including the tract in the leasehold.

The 1979 lease clearly states that the County may require any lease of additional property to be subject to reasonable terms, conditions, and requirements. There is no evidence the...