San Bernardino Superior Judge Winston Keh dismissed Coyote Aviation’s suit against Redlands Feb. 8, without granting the business leave to amend its complaint.
Business owner Gil Brown claimed that Redlands illegally terminated his lease in the Redlands Municipal Airport in April, 2020.
Keh found that Brown had failed to extend his lease in time.
In its complaint, Coyote Aviation claimed that Redlands promised to end the lease at a later date than was written in the lease agreement. If the later date were applied, it would mean that the company had written to extend its lease in time.
“The City of Redlands capitalized on a known error, a technicality, in the land lease agreement. We are disappointed in the ruling,” Brown said over the phone.
“The court’s ruling today affirms what the City of Redlands has maintained regarding the contract with Coyote Aviation. We are pleased with the court’s decision,” Redlands Spokesperson Carl Baker wrote by email.
Coyote Aviation entered into a 20-year lease with Redlands April 4, 2000. The lease was to end April 4, 2020. The company was unable to occupy the hangar until September 2000, and agreed to a new lease with the city at that time. The September lease agreement plainly named April 4, 2020, as the end-date, instead of saying the lease would end in 20 years from the beginning date.
The lease agreement gave Coyote Aviation two options to extend the lease for an additional 15 years each, but the business had to do so through a written request 45 days before the end of the lease, according to the lease agreement and Keh. To renew the lease in time, based on the end date in the lease agreement, Coyote Aviation had to renew its lease by May 19, 2020.
Instead, Coyote Aviation wrote to renew its lease June 22, 2020.
“Because (Coyote Aviation’s) own allegations and exhibits demonstrate (Coyote Aviation) failed to timely exercise the lease extension as set forth in the September lease, (Coyote Aviation)’s first cause of action for breach of contract fails,” Keh’s ruling reads.
Coyote Aviation claimed in its complaint that the September lease agreement should have been for a full 20 years, instead of ending April 4, 2020. The complaint claimed the explicit date of April 4, 2020 was an error. Further, it said the city, when contacted about the error on Dec. 5, 2000, agreed to honor a full 20-year term that would end Sept. 5, 2020. The lease agreement was never formally changed.
The company claimed Redlands Airport Supervisor Bruce Shaffer and Assistant Director of Facilities and Services Tim Sullivan agreed on June 23, 2020 to honor a Sept. 5, 2020 termination date instead of the listed date of April 4, 2020.
“Add an additional 15–year term. Change CPI to San Bernardino. Change Term date to September 5, 2020,” Sullivan wrote to Shaffer in a June 23, 2020 email attached to the complaint.
Keh ruled that an informal agreement as described by Coyote Aviation does not count under California law. The only valid contracts made by a city are those approved by the city council and signed by the mayor, Keh ruled.
Shaffer told Coyote Aviation Aug. 31, 2020 that Redlands would not honor the extension request, and that it was the city’s view that the lease expired April 4, 2020, the complaint claims.
Then-City Attorney Dan McHugh emailed Brown Sept. 25, 2020, telling him he stayed past the lease.
“(A) clause permitting the extension of your lease was not exercised by you, some time has passed since the operative date of that clause, and we now find ourselves in the position of Coyote Aviation being a ‘hold over’ tenant under the provisions of the lease,” the email, which was attached to the complaint, reads.
The company claimed it had already tried to extend its lease in December and January of 2020, but not through a written request. The company claimed the lease agreement gave the option of requesting an extension through a written request, but allowed other ways of making the request. Keh ruled that those requests were not valid, and that the lease agreement did require a written request.
Coyote Aviation’s second complaint claimed breach of contract, specific performance, breach of the implied covenant of good faith and fair dealing, declaratory relief and promissory estoppel/detrimental reliance. Since the breach of contract cause of action failed, so did the others, Keh ruled.
The business’ first complaint was also dismissed by Keh, but the judge had given the company time to amend its complaint.
Case information
Case No. CIVSB2203398.
Timothy McCulloch of Phoenix’s Dickinson Wright and Rittu Kumar of Beverly Hills’ Kumar Law represented Coyote Aviation.
Scott Ditfurth, Jessica Lomakin and Dustin Nirschl of Riverside’s Best, Best & Krieger represented Redlands.
Read the complaint, including the lease and other complaint exhibits here.
Read Keh’s ruling here.
NOTE: Follow Our Courts Executive Editor Toni Momberger was serving as a member of the Redlands City Council in 2020. Because of the conflict, she was not involved in the oversight or editing of this coverage. Ray Smith, a former newspaper editor and courts reporter, acted as editor in her stead.
