DBT Yuma, L.L.C. v. Yuma County Airport Authority
361 P.3d 379
Ariz.
2015

Background

  • Yuma County leased airport property to Yuma County Airport Authority (YCAA), a nonprofit corporation formed in 1965 to operate Yuma International Airport.
  • DBT Yuma subleased airport property from YCAA (operating as Lux Air); YCAA later evicted DBT Yuma and entered a new sublease with another tenant.
  • DBT Yuma sued YCAA for breach of the sublease and added Yuma County, arguing YCAA was the County’s agent/instrumentality under A.R.S. § 28-8424, making the County vicariously liable.
  • The trial court granted summary judgment for Yuma County; the court of appeals affirmed but included language the Supreme Court later vacated in part.
  • The Arizona Supreme Court granted review to decide whether § 28-8424(A)(3) alone makes a nonprofit airport authority an agent of the county for imputed liability.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether A.R.S. § 28-8424(A)(3) makes a nonprofit airport authority the county's agent for imputed liability § 28-8424(A)(3) calls airport authorities an “agency or instrumentality,” so the County should be liable for YCAA’s breaches The statute’s “agency or instrumentality” language describes public function but does not create a statutory principal-agent relationship; YCAA is a separate body politic and corporate under § 28-8424(A)(1) The statute alone does not make YCAA the County’s agent for imputed liability

Key Cases Cited

  • First Nat’l City Bank v. Banco Para El Comercio Exterior, 462 U.S. 611 (discusses treatment of governmental instrumentalities as distinct juridical entities)
  • Hertz Drive-Ur-Self Sys. v. Tucson Airport Auth., 81 Ariz. 80, 299 P.2d 1071 (explains airport authority performs public functions but did not decide principal liability of the owner)
  • Thompson v. Tucson Airport Auth., 163 Ariz. 173, 786 P.2d 1024 (addressed agency issues under a different statute; not dispositive here)
  • L.G. Lefler, Inc. v. Tucson Airport Auth., 141 Ariz. 23, 684 P.2d 904 (treated TAA as an agent under the public works statute’s distinct definition)
  • Dobbs v. Shelby Cty. Econ. & Indus. Dev. Auth., 749 So.2d 425 (public corporation is separate from and not an alter ego or agent of the county)
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