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Patriot Aviation, LLC v. State of New Jersey

February 20, 2007

RE: PATRIOT AVIATION, LLC
v.
THE STATE OF NEW JERSEY ET AL.



The opinion of the court was delivered by: Joel A. Pisano, U.S.D.J

LETTER OPINION

ORIGINAL TO BE FILED WITH THE CLERK OF THE COURT

Dear Parties

On September 14, 2006, the Court held a hearing on a motion to dismiss filed by Defendants State of New Jersey, Department of Transportation, (the "State"), Richard Gimello ("Gimello"), Deputy Attorney General Laura Eytan ("Eytan"), and Greg McDonough ("McDonough"). After the hearing, the Court determined that it was appropriate to treat Defendants' motion as a motion for summary judgment, and permitted the parties to file supplemental papers consistent with Fed. R. Civ. P. 56. Presently before the Court is Defendants' motion for summary judgment pursuant to Fed. R. Civ. P. 56. For the following reasons, Defendants' motion is granted.

I. Background

Patriot Aviation LLC ("Patriot") is a limited liability company organized under the laws of the State of New Jersey with its principal place of business located in Lumberton, New Jersey. The New Jersey Department of Transportation ("NJDOT") is a public department of the State of New Jersey. The NJDOT Division of Aeronautics is a public agency operating under the authority of the Department of Transportation. Gimello is the Executive Director of NJDOT/Intermodal Services and has authority over the NJDOT, Division of Aeronautics. Eytan is a Deputy Attorney General, with her principal office at State of New Jersey, Office of Attorney General, Department of Law and Public Safety. McDonough is an employee of NJDOT.

On January 1, 2004, Patriot executed a three year contract, or operating agreement, with Aviation Industrial Realty Corporation ("AirCorp") to operate and maintain the South Jersey Regional Airport ("SJRA" or "the airport"). This was the second contract that Patriot entered into with the airport. The first contract was effective June 1, 2003 and was for a 30 year term. Patriot agreed to the reduced term in the second contract in return for AirCorp's undertaking to perform additional responsibilities. Under the contract, Patriot was entitled to collect all revenues and rents generated by the airport, and in exchange, Patriot was required to pay AirCorp $7,500 per month. In February of 2004, the State purchased the airport from AirCorp subject to the remainder of Patriot's contract with AirCorp.

In May 2004, Patriot began abating payment to the State to recoup amounts it paid for repairs that it alleges were the State's responsibility. In February of 2005, the State demanded that Patriot provide all of its books, financial records, and tax returns to the Department of Transportation, Division of Aeronautics, and submit to a comprehensive business audit. On March 9, 2005, Patriot filed an Order to Show Cause and Verified Complaint in the Superior Court of New Jersey, Burlington County, seeking to prevent the State from auditing the airport operating records and from terminating Patriot's operating agreement. The Honorable Ronald E. Bookbinder, J.S.C., Chancery Division, held hearings and case management conferences on March 16, 2005, March 18, 2005, April 20, 2005, April 29, 2005 and May 5, 2005. Judge Bookbinder did not enjoin the State from terminating the operating agreement. By letter dated March 16, 2005, the State terminated its contract with Patriot for Patriot's failure to pay the required monthly fee and to remit arrears for 2004 and 2005.

Ultimately, Patriot voluntarily dismissed the proceeding before Judge Bookbinder. Patriot filed a four-count complaint against Defendants in this Court on November 28, 2005. The First Count of Plaintiff's First Amended Complaint alleges that the State terminated Patriot's leasehold interest in the SJRA without due process of law because the State did not institute an action for condemnation or otherwise pursue lawful means of termination and did not pay just compensation to Patriot. The Second Count alleges that the State breached its contract with Patriot. The Third Count alleges that the State breached its obligations of good faith and fair dealing. The Fourth Count alleges that the State refused to return the personal property of Patriot and its employees, sold some of this personal property, and used or consumed numerous items of Patriot's personal property without permission from Patriot or compensating Patriot, which constituted the conversion of Patriot's property.

II. Standard of Review

A court shall grant summary judgment under Rule 56(c) of the Federal Rules of Civil Procedure "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The substantive law identifies which facts are critical or "material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A material fact raises a "genuine" issue "if the evidence is such that a reasonable jury could return a verdict" for the non-moving party. Healy v. N.Y. Life Ins. Co., 860 F.2d 1209, 1219 n.3 (3d Cir. 1988).

On a summary judgment motion, the moving party must show, first, that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party makes this showing, the burden shifts to the non-moving party to present evidence that a genuine fact issue compels a trial. Id. at 324. In so presenting, the non-moving party may not simply rest on its pleadings, but must offer admissible evidence that establishes a genuine issue of material fact, id., not just "some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

The Court must consider all facts and their logical inferences in the light most favorable to the non-moving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The Court shall not "weigh the evidence and determine the truth of the matter," but need determine only whether a genuine issue necessitates a trial. Anderson, 477 U.S. at 249. If the non-moving party fails to demonstrate proof beyond a "mere scintilla" of evidence that a genuine issue of material fact ...


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