Robinson Aviation v. City of New Haven et al. (2012)

MEMORANDUM OF DECISION

On June 23, 2011, K.R. Robinson Associates Limited Partnership and Robinson Aviation, Inc., the plaintiffs, filed a nine-count, second amended complaint against the defendants, the city of New Haven (the city), Tweed–New Haven Airport Authority (the authority) and Aviation Facilities Co., Inc. d/b/a/ Avports (AFCO).   The complaint alleges the following.   The Tweed–New Haven Airport is owned by the city and operated by the authority.   Pursuant to the Management Agreement, the airport is managed by AFCO. Plaintiff Robinson Associates entered into a lease agreement with the city on or about May 21, 1986, for the lease of certain property to operate a Fixed Based Operator (FBO) at the airport.   The city leased the relevant property to the authority pursuant to the ground lease agreement dated July 1, 1998.   Following the ground lease agreement, Robinson Associates and the authority entered into an amended and restated lease agreement (Authority FBO Lease) on or about October 1, 1999, for an initial term of forty years for the lease of the property at the airport to operate an FBO. Plaintiff Robinson Aviation, Inc. continues to operate an FBO at the airport pursuant to said Authority FBO Lease.   Robinson Associates and the authority entered into an amendment to the Authority FBO Lease (the Amendment) on or about November 12, 2008.

In or around March 2008 through approximately December 2008, the defendants undertook construction efforts with regard to the runway safety area at the south end of Runway 2–20 at the airport (southern construction), over which an AFCO employee oversaw and managed daily.   The southern construction, which was performed during business hours on weekdays, interfered with the plaintiffs' business only intermittently and for limited periods of time.   During negotiation and execution of the Amendment to the Authority FBO Lease between the authority and the plaintiffs, the southern construction was ongoing, and it was known to all parties that the defendants intended to undertake a construction project concerning a safety overrun at the north end of Runway 2–20 (northern construction) as well as a construction project concerning the extension of Taxiway B at the south end of Runway 2–20 (Taxiway B construction).   While it was understood that these two projects were going to be performed during weekday business hours, the plaintiffs also had an understanding that the scope of these projects would be less than that of southern construction.   It is also alleged that at no time in the course of negotiating the Amendment, did the defendants indicate to the plaintiffs that they intended to close Runway 2–20 for an extended period of time, despite their knowledge and understanding of it;  instead, the defendants intentionally, willfully and/or negligently failed to inform the plaintiffs prior to agreeing upon the Amendment that they intended to close Runway 2–20 during business hours on weekdays.   The defendants undertook the northern construction in or around February 2009, which continues to date.   Additionally, the defendants undertook the Taxiway B construction in or around August 2009 without advance notice to the plaintiffs of the anticipated extended periods of closure of Runway 2–20 or discussion of its potential impact on the plaintiffs.

On or about August 23, 2009, AFCO published a Notice to Airmen (NOTAM) announcing the closing of Runway 2–20 at the airport on weekdays from 7:00 a.m. to 4:00 p.m. AFCO issued the notice on behalf of the authority with its knowledge and acquiescence.   Also on or about August 23, 2009, AFCO and/or the authority proceeded to close Runway 2–20 during business hours.   The closing of Runway 2–20 precluded landing and departure of general aviation turbine aircraft on weekdays, resulting in substantial lost business to the plaintiffs.   The plaintiffs allege that the defendants withheld material information regarding the scope of planned construction projects and the anticipated runway closures, causing harm to the plaintiffs.

As a result, the plaintiffs have brought various causes of actions against the defendants in counts one through nine of the second amended complaint.   On November 14, 2011, the defendants filed a motion to strike, together with a memorandum of law, counts one, three, five, six, seven, eight and nine.   On November 29, 2011, the plaintiffs filed a memorandum of law in opposition to the defendants' motion to strike.   The defendants filed their reply memorandum of law on December 14, 2011.   The matter was heard on February 6, 2012.

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).  “A motion to strike challenges the legal sufficiency of a pleading, and, consequently, requires no factual findings by the trial court.”  (Internal quotation marks omitted.)   New London County Mutual Ins. Co. v. Nantes, 303 Conn. 737, 747 (2012).   The court construes “the complaint in the manner most favorable to sustaining its legal sufficiency ․ Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically.”  (Internal quotation marks omitted.)   Connecticut Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 252–53, 990 A.2d 206 (2010).

Count One—Breach of contract, the Management Agreement, as third party beneficiaries against AFCO.

The plaintiffs have alleged in paragraph 68 of the operative complaint that, pursuant to article two of the amendment and restatement of Management Agreement, (a) AFCO was and is required to “[p]erform all Authority obligations existing or arising pursuant to existing and future agreements with fixed based operators and other tenants and concessionaires at the Airport”;  (b) “[a]dminister and review performance of agreements between the Authority and Airport concessionaires, tenants and contractors (including construction contractors) ․ in a manner which is consistent with the proper operation of the Airport, provide coordination of the work to avoid or minimize disruption of Airport operations and service and, perform or cause to be performed all obligations imposed on the Authority pursuant to such agreements”;  and (c) “[m]onitor all Authority agreements with construction contractors and general contractors at or concerning the Airport to ensure that the daily operation of the airport is not unduly impacted.”   Moreover, the plaintiffs have alleged in paragraphs 69 and 70 that they are third-party beneficiaries of the Management Agreement, and as such, AFCO “had and has direct obligations to the Plaintiffs as set forth in Article Two, § 2(e)(1) and § 2(e)(5)-(6) of the Management Agreement.”

“[T]he ultimate test to be applied [in determining whether a person has a right of action as a third party beneficiary] is whether the intent of the parties to the contract was that the promisor should assume a direct obligation to the third party [beneficiary] ․ [I]t is not in all instances necessary that there be express language in the contract creating a direct obligation to the claimed third party beneficiary.”  (Internal quotation marks omitted.)   Grigerik v. Sharpe, 247 Conn. 293, 311–12, 721 A.2d 526 (1998).   Construing the complaint in the manner most favorable to sustaining its legal sufficiency, the plaintiffs have sufficiently alleged that the parties to the Management Agreement intended to create a direct obligation to the plaintiffs, making them third-party beneficiaries to the Management Agreement.   The court denies the defendants' motion to strike this count.

Count Three—Breach of duties of good faith and fair dealing as to AFCO.

“It is axiomatic that the implied duty of good faith and fair dealing is a covenant implied into a contract or a contractual relationship ․ The covenant of good faith and fair dealing presupposes that the terms and purpose of the contract are agreed upon by the parties and that what is in dispute is a party's discretionary application or interpretation of a contract term ․ In accordance with these authorities, the existence of a contract between the parties is a necessary antecedent to any claim of breach of the duty of good faith and fair dealing.”  (Citations omitted;  internal quotation marks omitted.)  Hoskins v. Titan Value Equities Group, 252 Conn. 789, 793, 749 A.2d 1144 (2000).  “While the appellate courts have yet to address the issue of whether a third party may allege breach of an implied covenant of good faith and fair dealing ․ our Superior Court has held, on several occasions, that third parties are generally not permitted to bring such a cause of action.   The law is clear that only contracting parties may enforce the implied covenant of good faith and fair dealing ․ No Connecticut court has extended the implied covenant of fair dealing and good faith to parties who have not entered into a contractual relationship ․” (Emphasis added;  internal quotation marks omitted.)   Beck v. New Samaritan Family Housing of Waterbury, Inc., Superior Court, judicial district of Waterbury, Docket No. CV 030181797 (June 15, 2005, Matasavage, J.) (39 Conn. L. Rptr. 520).

Inasmuch as the plaintiffs have alleged and argued that they are bringing this action as third-party beneficiaries to the management agreement the motion to strike the third count is granted.

Counts Five, Six, Seven and Eight—Negligent misrepresentation and/or omission and fraudulent misrepresentation and/or omission as to AFCO and the Authority.

In support of their motion to strike, the defendants argue that showing of causation is necessary for negligent and fraudulent misrepresentations and/or omission claims and also that the plaintiffs have failed to allege that their reliance on any of the alleged misrepresentations caused them damage.   The plaintiffs argue that the defendants procedurally waived their argument regarding a lack of an alleged causal link between the alleged misrepresentations and resulting damages because they failed to raise the same in their prior motion to strike which has been denied.¹  The defendants counter that because the plaintiffs added new facts in the operative complaint by alleging that they are third-party beneficiaries to the Management Agreement, the defendants could not have waived these grounds in support of their April 12, 2010 motion to strike.

“[A]lthough the appellate courts have not ruled on the issue, in numerous cases, the judges of the Superior Court have concluded that the rules of practice preclude a party from filing successive motions to strike when the grounds raised in a later motion could have been raised in the initial motion ․ [A] second motion to strike may be appropriate in limited circumstances.   For example, when a plaintiff, pursuant to Practice Book § 10–44, files a subsequent pleading alleging new facts ․ Additional motions to strike, however, are not allowed when the grounds asserted therein could have been raised in an earlier motion.”  (Internal quotation marks omitted.)   Beckstein v. Allstate Ins. Co., Superior Court, judicial district of New London, Docket No. CV 10 6005267 (March 30, 2011, Cosgrove, J.).

Comparing the plaintiffs' allegations in counts five, six, seven and eight, sounding in negligent and fraudulent misrepresentation and/or omission claims against the defendants, to those allegations in respective counts of the earlier complaint, it is clear the allegations are essentially the same, except—as the defendants have noted—the plaintiffs have alleged in the operative complaint that they are third-party beneficiaries of the Management Agreement.   However, in these counts, the plaintiffs have alleged that the defendants' misrepresentations occurred “in the course of a business transaction, namely the negotiation and execution of the Amendment to the Authority FBO Lease agreement,” not the Management Agreement.   Thus, the defendants' grounds for moving to strike these counts could have been raised in their earlier motion to strike.   Therefore, the court denies the defendants' motion to strike as to counts five, six, seven and eight.

Count Nine—Conspiracy

As the parties agreed at oral argument and in their memoranda of law, there is no independent claim of civil conspiracy under Connecticut law.   Because the court denied the defendants' motion to strike as to counts five, six, seven and eight, the court denies the motion to strike this count of civil conspiracy.

CONCLUSION

The court grants the defendants' motion to strike as to count three and denies as to counts one, five, six, seven, eight and nine.

By the Court,

Dubay, J.

FOOTNOTES

FN1. Judge Zoarski, in his April 12, 2010 decision denied the defendants' motion to strike negligent misrepresentation and/or omission counts against the defendants because the court was “satisfied that the plaintiffs have alleged sufficient facts to demonstrate that the defendants negligently misrepresented the scope and extent of the construction projects and its resulting impact on the plaintiff's business operations.”   Additionally, the court denied the defendants' motion to strike the fraudulent misrepresentation and/or omission counts because the court was satisfied that “the plaintiffs have sufficiently advanced alternative theories of liability against the defendants as to their knowledge of the pendency and scope of the construction projects when they entered into the FBO lease and amendment and in discussing the Minimum Standards with the plaintiffs.”.  FN1. Judge Zoarski, in his April 12, 2010 decision denied the defendants' motion to strike negligent misrepresentation and/or omission counts against the defendants because the court was “satisfied that the plaintiffs have alleged sufficient facts to demonstrate that the defendants negligently misrepresented the scope and extent of the construction projects and its resulting impact on the plaintiff's business operations.”   Additionally, the court denied the defendants' motion to strike the fraudulent misrepresentation and/or omission counts because the court was satisfied that “the plaintiffs have sufficiently advanced alternative theories of liability against the defendants as to their knowledge of the pendency and scope of the construction projects when they entered into the FBO lease and amendment and in discussing the Minimum Standards with the plaintiffs.”

Dubay, Kevin G., J.