Sky Harbor Air Serv., Inc. v. Reams
| Decision Date | 20 July 2012 |
| Docket Number | No. 11-8062,No. 11-8025,No. 11-8004,11-8004,11-8025,11-8062 |
| Parties | SKY HARBOR AIR SERVICE, INC., a Wyoming corporation; H. PAUL MARTIN, Plaintiffs - Appellants, v. SHELLY REAMS, SCOTT HINDERMAN, WILLIAM L. HICKMAN, KEVIN PAINTER, and JAMES JAGUSCH, individually and in their official capacities; DAVE HARING, individually and in his official capacity as Cheyenne Regional Airport Manager; GREAT LAKES AVIATION, LTD., d/b/a Great Lakes Airlines; CHEYENNE REGIONAL AIRPORT BOARD, Defendants - Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
(D. Wyo.)
ORDER AND JUDGMENT*Before LUCERO, HOLLOWAY, and MATHESON, Circuit Judges.
In 2008, Sky Harbor Air Service, Inc., ("Sky Harbor") and its owner, H. Paul Martin, asserted more than a dozen claims against various defendants in the U.S. District Court for the District of Wyoming. On summary judgment, the district court dismissed all of their claims. Sky Harbor and Mr. Martin also were held liable on a breach-of-contract counterclaim and ordered to pay attorney fees.
In the three appeals consolidated before us, Sky Harbor challenges rulings in favor of defendants Shelly Reams, the Cheyenne Regional Airport Board, and Great Lakes Aviation (collectively the "Defendants"). Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm the district court's grant of summary judgment to the Defendants but remand for a recalculation of the attorney fees awarded to Ms. Reams.
Sky Harbor and Mr. Martin (collectively "Sky Harbor") accuse the Defendants of forcing them into financial ruin. Sky Harbor's allegations are rooted primarily in two events: (1) the State of Wyoming's decision to stop using Sky Harbor's services at the Cheyenne Regional Airport, and (2) Sky Harbor's lease negotiations with the Cheyenne Regional Airport Board (the "Board").
Sky Harbor was a fixed-base operator ("FBO") at the Cheyenne Regional Airport. As an FBO, Sky Harbor provided ground support services, including fueling, tie-down services, and aircraft maintenance for general aviation customers. Between 1988 and2005, Sky Harbor had an annual lease arrangement with the State of Wyoming Aeronautics Division ("Aeronautics") to house the State's aircraft and to provide other services at the airport.
In March 2005, a Sky Harbor employee damaged an elevator on a state jet. Sky Harbor's chief mechanic determined that the damage was within limits for safe flight and that it did not require immediate repair or entry in the aircraft's logbook. He confirmed his assessment with the aircraft's manufacturer.
The next day, Mr. Martin reported the incident to Sky Harbor's insurance provider, and Sky Harbor's chief mechanic reported the incident to the Federal Aviation Administration ("FAA"). The mechanic also applied a sealant or adhesive to temporarily fix the elevator damage.
Shelly Reams, the head of Aeronautics, did not learn of the aircraft damage until weeks later—on April 21, 2005—after state pilots noticed the damage. On May 13, 2005, Ms. Reams contacted an FAA official, who agreed to investigate the incident.
On May 19, 2005, the Wyoming Department of Transportation ("WyDOT") Commission met in an executive, closed-door session. According to minutes from the meeting, Ms. Reams informed the Commission that Sky Harbor had damaged the elevator on a state aircraft, that Sky Harbor did not report the damage to Aeronautics, and that a cover-up of the incident was suspected. The WyDOT director stated he would request a criminal investigation.
The WyDOT Commission then voted to end Aeronautics' lease with Sky Harbor.On May 24, 2005, Ms. Reams delivered a letter to Mr. Martin informing him that Aeronautics would not renew its annual lease with Sky Harbor to house state aircraft and to provide other services.
During the transition away from Sky Harbor's services, Ms. Reams sought assistance from Great Lakes Aviation ("GLA") to temporarily provide emergency fuel and minor maintenance for state aircraft. Ms. Reams also recommended to the WyDOT Commission that the State build its own hangar facility, and the State eventually contracted with the Board to do so.
On June 2, 2005, an FAA official told Ms. Reams that recordkeeping of aircraft repairs had not been Sky Harbor's responsibility, but rather the responsibility of the State's pilots and mechanics. The FAA official nevertheless agreed to open an investigation into the damage to the state aircraft. However, Ms. Reams left the issue to law enforcement and did not provide the FAA with any documentation on the incident.
At some point, the Federal Bureau of Investigation and the Department of Homeland Security began an investigation of the aircraft damage.1 The FBI questioned Ms. Reams about the damage to the jet, the sequence of events surrounding the incident, and the quality of Sky Harbor's services.
Media then began reporting about an investigation into Sky Harbor's role in damaging the state aircraft. Five articles quoted Ms. Reams as saying, in regard to SkyHarbor: Aple. Appx. (11-8004), Vol. IV, at 704.
In 2004—before the aircraft damage—Sky Harbor negotiated with the Board to take over the lease of a hangar at the airport. This hangar, known as the "Paint Shop," had been operated as a facility for painting aircraft. Sky Harbor requested to use the Paint Shop for purposes other than painting, including general aircraft maintenance. The Board refused Sky Harbor's proposed change in use.
Sky Harbor nonetheless assumed the Paint Shop lease—in addition to its lease with the Board to provide FBO services at the airport—in December 2004. Sky Harbor's rent was $9,500 per month.
Sky Harbor eventually became significantly delinquent in its payments to the Board on the Paint Shop and FBO leases. To allow Sky Harbor to continue its airport services, Sky Harbor and the Board engaged in lease amendment negotiations and reached an agreement on October 23, 2006. Under this agreement, Sky Harbor's satisfaction of $114,000 in unpaid Paint Shop rent would culminate with a payment of $104,000 on April 30, 2007.
Sky Harbor did not fulfill its obligation to pay the Paint Shop's past-due rent, and the Board terminated the Paint Shop lease in December 2007. As a result, in March 2008, Sky Harbor and the Board submitted a stipulated motion in Laramie County Circuit Court agreeing that Sky Harbor would vacate the Paint Shop. The court entered an orderapproving the parties' stipulated motion.
After Sky Harbor left the Paint Shop, the Board sought a new lessee. GLA submitted a lease proposal that would have required the Board to change the use of the building from aircraft painting to general aviation maintenance.2 GLA was not awarded the Paint Shop lease and has never occupied the building.3
In June 2008, Sky Harbor filed a verified complaint against the Defendants and moved for a preliminary injunction to prevent GLA from taking over the Paint Shop lease. Sky Harbor argued that if the Board allowed GLA to occupy the Paint Shop and to use the facility for a purpose other than aircraft painting, such disparate treatment would violate the Equal Protection Clause of the Fourteenth Amendment.
On November 10, 2008, the district court denied Sky Harbor's motion for a preliminary injunction.
On July 1, 2009, Sky Harbor filed a verified amended complaint alleging the following: The Defendants falsely accused Sky Harbor of criminal activity in connection with damage to the state aircraft. The Defendants also devised a plan to cause Aeronautics to stop using Sky Harbor's services, which forced Sky Harbor to become delinquent on its lease payments to the Board and publicly discredited the company. The Defendants aimed to enable the Board to evict Sky Harbor as the airport's sole FBO, take over its business, pave the way for the State to obtain funding for its own hangar and fueling facility, and give GLA the opportunity to expand its operations into the Paint Shop.
Sky Harbor further alleged that Ms. Reams had a motive to oust Sky Harbor as the airport's FBO and to build a state-owned hangar and fueling facility. In Sky Harbor's view, Ms. Reams sought this outcome so that Aeronautics would become a department separate from WyDOT and so that Ms. Reams would receive a promotion and salary increase.
Sky Harbor asserted 14 claims. They included claims for (1) extortion,4 wire and mail fraud, bank fraud, and conspiracy under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968; (2) government defamation, deprivation of free speech, disparate treatment in violation of the Equal ProtectionClause, and conspiracy under 42 U.S.C. § 1983; and (3) breach of contract, breach of implied contract, promissory estoppel, and equitable estoppel under Wyoming law.
In response, the Board asserted a counterclaim under Wyoming law for breach of the Paint Shop lease.
On August 21, 2009, the Defendants moved for summary judgment on all of Sky Harbor's claims. The district court granted their motions. The court's 60-page order also granted the Board summary judgment on its counterclaim for Sky Harbor's breach of the Paint Shop lease. But the court declined to grant damages to the Board due to remaining issues of material fact.
On July 19, 2010, the Board filed a renewed summary judgment motion on the issue of damages for breach of the Paint Shop lease. Sky Harbor responded that the Paint Shop lease was illegal and unenforceable.
On October 26, 2010, the district court granted the Board's motion and awarded $429,809.20 in damages, attorney fees, and costs. The court characterized the posture of the Board's...
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