White Plains Aviation Partners, LLC v. The County of Westchester

Background

White Plains Aviation Partners, LLC, doing business as Million Air White Plains, sued the County of Westchester. The case concerns a 2016 lease under which Million Air operated a commercial fixed-base operator at Westchester County Airport. The lease authorized specified improvements, including expanding and refurbishing the terminal and building a new hangar, but did not include improvements to the existing hangar.

Million Air alleged that the parties had discussed replacing the existing hangar in a later phase of construction. In 2017, Million Air submitted plans for that modified hangar under a lease provision requiring the County not to unreasonably withhold, delay, or condition approval of required material changes to the plans or improvements. The County rejected the request, initially stating that the modified hangar was not required and that additional environmental and regulatory approvals were needed. The County later characterized the modified hangar as a new project rather than a modification covered by the lease.

Million Air also alleged that the County directed it to prepare a joint stormwater plan covering the listed improvements and the modified hangar, then later required a separate stormwater system for the listed improvements as a condition of approving an amended lease. Million Air claimed that this change would require substantial costs and disruption. It further alleged that the County allowed another airport tenant, Ross Aviation, to accommodate aircraft over a specified weight while not allowing Million Air to do so.

The County moved to dismiss under Rule 12(b)(6), which tests whether a complaint adequately states a legal claim. At this stage, the court accepted well-pleaded factual allegations as true and drew reasonable inferences for Million Air. The court applied New York law because the lease so provided.

Breach of Contract

The court dismissed Million Air’s breach-of-contract claim. It held that the lease provision was unambiguous: the County had to avoid unreasonably withholding approval of material changes or modifications that were "required" for the specified improvements. The court interpreted "required" to mean necessary. Because the specified improvements were complete and the modified hangar was not necessary to complete them, the court concluded that the County did not breach that provision by rejecting the modified-hangar plans.

The court also held that a lease provision discussing rent for additional improvements did not make the lease ambiguous. That provision addressed additional improvements if the parties agreed to them; the court found that the County had not agreed to the modified hangar. The court further declined to consider Million Air’s allegations about oral negotiations because the lease contained a merger clause stating that the written lease was the parties’ complete agreement and could be changed only by a mutual written agreement.

Implied Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing is a legal obligation not to act in a way that destroys or injures the other party’s right to receive the benefits of a contract. The court dismissed as duplicative Million Air’s claim that the County breached this duty by rejecting the modified-hangar plans, because that claim was based on the same facts as the dismissed breach-of-contract claim.

The court allowed Million Air’s separate stormwater-related claim to proceed. Million Air alleged that the County first directed it to prepare a joint stormwater plan and later demanded a stormwater system for the listed improvements alone as a condition of approving an amended lease. The court held that these allegations, which it had to accept as true at this stage, plausibly showed that the County had taken inconsistent and bad-faith positions that could deprive Million Air of benefits under the lease.

The court dismissed Million Air’s claim concerning Ross Aviation and allegedly overweight aircraft. The lease stated that Million Air received no exclusive airport rights except those expressly granted. Because the lease did not give Million Air an exclusive right to accommodate those aircraft or to be free from competition by other airport tenants, the court concluded that the implied covenant could not create such a right.

Declaratory Judgment

The court dismissed Million Air’s request for a declaration that the County breached the lease. Because the court found no breach of the lease’s approval provision, it concluded that Million Air was not entitled to the requested declaration.

Disposition

The court granted the County’s motion to dismiss in part and denied it in part. Million Air’s implied-covenant claim concerning the stormwater system was allowed to proceed. All other claims were dismissed. The County was ordered to file an answer by March 25, 2022, and the clerk was instructed to terminate the motion.