Huntington Aircraft Inc. v. Peachtree City Airport Auth.

The defendant's discretion in determining whether to consent to the assignment of access easement rights was subject to an implied duty of good faith and fair dealing.

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In this declaratory judgment action, Hunting Aircraft appeals the final judgment entered in favor of Peachtree City Airport Authority, in which the trial court declared that the Authority owed no implied duty of good faith and fair dealing when exercising its contractually-granted discretion as to whether to consent to Hunting’s proposed assignment of its easement rights over the Authority’s property. We hold that absent an express contractual provision to the contrary, a duty of good faith and fair dealing is implied into all non-leasehold contract provisions granting discretion to one of the parties, and we therefore reverse. In rendering its final judgment, the trial court allowed no discovery and held a final hearing shortly after the answer was filed, allowing as evidence only two written contracts to which the parties stipulated. Because the trial court reached its decision based solely on its construction of the contracts, which is a legal question, we apply a de novo standard of review. Neely Dev. Corp. v. Svc. First Investments .1

The undisputed facts show that on property adjacent to the Authority’s airport property, Hunting sought to operate an aviation maintenance and fueling facility. In 1991, Hunting and the Authority entered into an agreement which, in exchange for certain scheduled fees to be paid regularly by Hunting, conveyed to Hunting a non-exclusive access easement for the purpose of allowing Hunting to move aircraft from its property across the airport’s boundary and onto the airport property and its runways and taxiways. The duration of the agreement was 25 years, renewable for another 25 years on the same terms with the consent of both parties, which consent could not be unreasonably or arbitrarily withheld. The Authority could declare a default and terminate the agreement if Hunting sold or assigned its real property interests or its easement rights without the prior written consent of the Authority. Hunting has apparently made all payments required by the agreement.

Huntington Aircraft Inc. v. Peachtree City Airport Auth.

The defendant's discretion in determining whether to consent to the assignment of access easement rights was subject to an implied duty of good faith and fair dealing.

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