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Midwest Flight Academy, Inc. v. Thomas Cleveland

November 21, 2011

MIDWEST FLIGHT ACADEMY, INC.
v.
THOMAS CLEVELAND



Name of Assigned Judge Sitting Judge if Other or Magistrate Judge Philip G. Reinhard than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT:

For the reasons stated below, defendant's motion to dismiss is denied.

O[ For further details see text below.] Electronic Notices.

STATEMENT - OPINION

Plaintiff, Midwest Flight Academy, Inc., brings this action, pursuant to 42 U.S.C. § 1983, against Thomas Cleveland, the airport manager for the City of DeKalb, Illinois ("City"), in his individual capacity. Plaintiff claims a denial of equal protection of the laws in violation of the Fourteenth Amendment to the United States Constitution. Defendant moves to dismiss for failure to state a claim on which relief can be granted. Fed. R. Civ. P. 12 (b) (6).

The facts are taken from plaintiff's complaint. In 2009, plaintiff operated Specialized Service Operations ("SASO") at the DeKalb Taylor Municipal Airport consisting of a flight school and an aircraft rental business. To operate a flight school or an aircraft rental business at the airport, the operator is required to have an SASO contract with the City or a Fixed Base Operator ("FBO") contract with the City. Plaintiff had SASO contracts with the City for both its flight school and aircraft rental businesses.

Also, in 2009, DeKalb Aviation, LLC ("Aviation") was operating at the airport under an FBO contract with the City. When the City and Aviation entered their FBO contract, the member-managers of Aviation were M & E, LLC and KKM Aviation, LLC. On or about May 1, 2009, KKM Aviation, LLC withdrew as a member of Aviation and Fly America, Inc. ("Fly America") became a member-manager of Aviation. Fly America was owned in part by Jeffrey Kohlert, it's president. Kohlert and defendant are close friends who previously worked together at the DuPage Airport.

After becoming a member-manager of Aviation, Fly America , as a member-manager of Aviation, operated a flight school and aircraft rental business under the auspices of the FBO contract between Aviation and the City. The revenue from the flight school and aircraft rental business went to Fly America. Fly America was not approved as an operator of a flight school or aircraft rental business in its own capacity and the City and Fly America had not entered an SASO or FBO contract.

On or about December 16, 2009, an agreement was entered among Tom Stellman (the then owner of plaintiff's stock), plaintiff, and Christopher Riggsby, to sell all of the outstanding stock of plaintiff to Riggsby. Plaintiff's SASO contracts with the City required the written consent of the City to any transfer of the voting stock of plaintiff.

In January 2010, defendant agreed with Kohlert that defendant would stall the City's approval of the transfer of plaintiff's stock to Riggsby for about three months in order to cause plaintiff's students to move from plaintiff's flight school to the flight school being operated by Fly America, in its capacity as member-manager of Aviation. In order to delay the City's approval of plaintiff's stock transfer, defendant required plaintiff to obtain a recommendation for the approval of the transfer from the DeKalb Airport Advisory Board ("Board") before the matter would be presented to the city council of the City. Defendant told plaintiff that in order to obtain City approval, it would first have to submit a business plan to the Board and appear before the Board which would conduct a hearing and make a recommendation to the City.

Plaintiff promptly prepared and submitted the business plan. The Board's December 2009 and January 2010 meetings were cancelled. The Board met in February 2010 but defendant chose not to present the matter of plaintiff's stock transfer at that meeting. The matter was ultimately presented at the Board's March 16, 2010 meeting and the Board unanimously recommended approval of the transfer. The City, at its city council meeting on or about April 12, 2010, approved the transfer. It took four months for plaintiff to obtain the necessary approval from the City to resume its flight school and aircraft rental operation under the existing SASO contracts.

Eight months later, in December 2010, the City advised Aviation it was in breach of its FBO contract. Defendant locked Aviation out of the building it was leasing at the airport and the City took the position that Aviation's FBO contract was terminated and, therefore, that Fly America could no longer continue to operate a flight school and aircraft rental business as a member-manager of Aviation. Defendant and Kohlert discussed how Fly America could operate a flight school and aircraft rental business in its own capacity, apart from Aviation, and how Fly America could expedite a request for City approval of an SASO contract with Fly America to do so.

Defendant agreed with Kohlert not to require Fly America to submit a business plan or to appear before the Board to obtain a recommendation for approval of the proposed SASO contract. Instead, defendant wrote a memo to the mayor and city council proposing a city council resolution authorizing the mayor on behalf of the city to enter into SASO contracts with Fly America for a flight school and aircraft rental business. The memo and two newly drafted SASO contracts signed by Kohlert were presented to the city council on or about January 10, 2011 and the council authorized the mayor to enter these contracts on behalf of the City. It took Fly America only three weeks to obtain the necessary ...


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