KC Air Cargo Services, Inc. v. The City of Kansas City, Missouri
WD81945, WD81968
| Mo. Ct. App. | Jul 16, 2019Background
- KC Air Cargo Services (KCACS) leased airport land from City, built improvements, and sublet space; lease contained a clause giving lessee an opportunity to lease at market rate or at a rate offered to the City by another party.
- KCACS sued the City in 2013 for property damage and sought lost profits beyond base lease term; circuit court initially treated the disputed clause as an enforceable renewal provision for damages purposes; the case settled.
- KCACS later sought a declaratory judgment (2015) that the clause was an enforceable renewal option (arguing perpetual or 30-year renewal); City contended it was a right of first refusal and raised charter/term-limit defenses.
- On summary judgment the circuit court found the clause enforceable in perpetuity and awarded KCACS attorneys’ fees; this court in K.C. Air Cargo I reversed the perpetuity holding to a single 30-year renewal and remanded for a factual hearing on whether "special circumstances" warranted attorneys’ fees.
- On remand the circuit court held an evidentiary hearing, found KCACS had exercised the option to renew for 30 years, but concluded sovereign immunity and the absence of special circumstances barred an award of attorneys’ fees; KCACS appealed and the City cross-appealed the renewal-exercise finding.
- The Court of Appeals affirmed the denial of attorneys’ fees (no abuse of discretion) and held the circuit court exceeded the prior mandate by declaring KCACS had exercised the renewal; the judgment was modified to state KCACS has a one-time 30-year renewal option.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorneys’ fees may be awarded under §527.100 via the "special circumstances" exception | KCACS: Special circumstances existed (City lacked substantial grounds, interfered with property rights, shifting positions, financial motive) warranting fees | City: No special circumstances; sovereign immunity bars fees | Court: No abuse of discretion in denying fees; special circumstances exception narrowly construed and not shown; did not decide sovereignty issue |
| Whether the appellate mandate required additional evidence or merely different presentation to award fees | KCACS: K.C. Air Cargo I was procedural; same evidence sufficed if presented at hearing | City: Remand required factual development; hearing appropriate | Court: K.C. Air Cargo I required a hearing and factual development; trial court complied and reasonably found evidence insufficient for fees |
| Proper interpretation of renewal clause (perpetuity vs. one 30-year renewal) | KCACS: Clause grants a right to renew (argued perpetuity or long term) | City: Clause is a right of first refusal or limited renewal; perpetuity violates charter limit | Court: Earlier panel (K.C. Air Cargo I) held clause grants a one-time 30-year renewal (not perpetuity); affirmed |
| Whether the circuit court exceeded the appellate mandate by declaring KCACS had exercised the option to renew | KCACS: Did not dispute remand scope | City: Circuit court exceeded mandate by entering an exercise-of-option judgment on remand | Court: That portion exceeded mandate and was null and void; modified judgment to state KCACS has a one-time 30-year option (without declaring it exercised) |
Key Cases Cited
- K.C. Air Cargo Servs., Inc. v. City of Kansas City, 523 S.W.3d 1 (Mo. App. W.D. 2017) (prior appellate opinion limiting renewal to one 30-year term and remanding on attorneys’ fees)
- Ellis v. Hehner, 448 S.W.3d 320 (Mo. App. E.D. 2014) (standard of review and "special circumstances" attorney-fee doctrine in declaratory judgment actions)
- Klinkerfuss v. Cronin, 289 S.W.3d 607 (Mo. App. E.D. 2009) (examples of narrow, limited "special circumstances" supporting fee awards)
- Guidry v. Charter Commc'ns, Inc., 308 S.W.3d 765 (Mo. App. E.D. 2010) (scope of trial court authority on remand; mandates control subsequent proceedings)