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Signal Aviation Services, Inc. v. City of Lebanon

Supreme Court of New Hampshire

June 28, 2016

SIGNAL AVIATION SERVICES, INC.
v.
CITY OF LEBANON

          Argued: January 7, 2016.

         Grafton.

          Law Office of Stephen P. Girdwood, PLLC, of Lebanon (Stephen P. Girdwood on the brief and orally), for the plaintiff.

          Gardner Fulton & Waugh PLLC, of Lebanon (Adele M. Fulton on the brief and orally), for the defendant.

          HICKS, J.

         The plaintiff, Signal Aviation Services, Inc. (Signal), appeals a ruling of the Superior Court (Bornstein, J.) granting summary judgment in favor of the defendant, City of Lebanon (City), in this action by Signal for, among other things, breach of contract. The City cross-appeals a portion of the trial court's order interpreting the contract. We affirm.

         The following facts were recited in the trial court's order, are contained in the record, or are taken from our decision in a prior appeal in this case. See Signal Aviation Servs. v. City of Lebanon, 164 N.H. 578 (2013). Signal leases 8.91 acres at the Lebanon Municipal Airport (airport) as assignee of a Lease and Operating Agreement (LOA). The City owns the airport and is the lessor under the LOA. The LOA grants Signal the nonexclusive right and obligation to provide fixed based operator (FBO) services at the airport. FBO services include "aircraft ground guidance and ramp service, aircraft parking and storage, aircraft maintenance and repair service, flight training, sale and rental of aircraft, flight services and charter operations, and maintenance in operation of facilities for the comfort and convenience of pilots and passengers." (Quotation and ellipsis omitted.) In granting this nonexclusive right, the City agreed in paragraph 3M(2) of the LOA that "[a]ny other operator of aeronautical endeavors or activities will not be permitted to operate on the Airport under rates, terms [or] conditions which are more favorable than those set forth in this Agreement."

         In 2006, the City increased the assessed value of the land leased by Signal, not including the improvements, from $77, 400 to $868, 300, resulting in a corresponding increase in Signal's property tax liability. Id. at 580. Signal applied for an abatement of taxes for the years 2006 and 2007. Id. Following denial by the City's assessors, Signal appealed to the New Hampshire Board of Tax and Land Appeals (BTLA). Id. The BTLA dismissed the appeals because Signal failed to present evidence of the property's market value. Id. Signal did not appeal that decision. Id.

         Signal then brought the instant action claiming, among other things, breach of contract. Its writ alleged that the City "materially breached its obligations under the [LOA] by providing more favorable and disproportionate tax assessments and taxation schemes under agreements with other entities at the Airport providing commercial aeronautical services there."

         The City filed a motion to dismiss, arguing that Signal's exclusive remedy for disproportionate taxation was through the statutory abatement process and, consequently, the trial court lacked jurisdiction to grant the relief sought. Id. at 581. The trial court granted the City's motion and Signal appealed. Id. at 579.

         On appeal, we affirmed the trial court's order in part, reversed in part, and remanded for further proceedings. Id. We held that "to the extent that Signal's breach of contract claim sought relief from 'disproportionate taxation, ' its claim [was] unavailing, " as it was, "in effect, a claim for abatement of taxes . . . [which] may be pursued only through the tax abatement statutory scheme." Id. at 583. We also held:

However, to the extent that Signal's breach of contract claim sought relief from "unequal treatment, " specifically with respect to the amount of taxable land the City attributes to Signal and to other airport tenants with which the City contracts, Signal may pursue this claim without complying with the tax abatement statutory process.

Id. at 583-84.

         On remand, the City moved for summary judgment on what remained of Signal's breach of contract claim. The trial court noted that Signal's objection specified four tenants, or categories of tenants, that were allegedly taxed disproportionately. First, Signal claimed that Magic Bird Contracting, Inc. (Magic Bird) and Lebanon Hangar Associates, Ltd. (Lebanon Hangar) are taxed more favorably than Signal. Second, Signal argued that tenants at the Executive Ramp, where the City had constructed T-hangars and tie-down spaces "to provide the public with . . . parking spaces for private aircraft, " receive more favorable tax treatment. (Quotation omitted.) Third, Signal contended that tenants at the Airport Terminal are taxed disproportionately. Finally, Signal claimed that the City's exemption from taxes constitutes unequal treatment for purposes of paragraph 3M(2).

         The trial court granted the City's motion for summary judgment, and Signal now appeals. The City cross-appeals, challenging a portion of the trial court's interpretation of the LOA. On April 21, 2016, we requested supplemental briefing from the parties on the following questions:

With respect to the issue of taxation, do paragraphs 3M(2) and 3D, taken together, ensure only that all operators of aeronautical endeavors or activities permitted to operate on the airport will be required to pay such taxes as are lawfully levied or assessed?
Does the City's operation of the Executive Ramp violate paragraphs 3M(2) and 3D as so construed?

         Having received supplemental briefs from both parties, we now resolve the issues before us.

         Our standard of review is well-settled:

In reviewing the trial court's rulings on cross-motions for summary judgment, we consider the evidence in the light most favorable to each party in its capacity as the nonmoving party and, if no genuine issue of material fact exists, we determine whether the moving party is entitled to judgment as a matter of law. If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment.

Granite State Mgmt. & Res. v. City of Concord, 165 N.H. 277, 282 (2013) (quotations and citation omitted).

         In addition, this appeal requires us to review the trial court's interpretation of the LOA. Our review is de novo "[b]ecause the proper interpretation of a written agreement is ultimately a question of law for this court." Gen. Linen Servs. v. Franconia Inv. Assocs., 150 N.H. 595, 597 (2004). We will sustain the trial court's findings and conclusions unless they are lacking in evidentiary support or tainted by error of law. Id. Our standards regarding contract interpretation are also well-established:

It is axiomatic that we give an agreement the meaning intended by the parties when they wrote it. When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and context in which the agreement was negotiated, when reading the document as a whole. Absent ambiguity, the parties' intent will be determined from the plain meaning of the language used. Only when the parties reasonably disagree as to its meaning will the agreement's language be deemed ambiguous. If the agreement's ...

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