Sightseeing Tours of Am., Inc. v Air Pegasus Heliport, Inc.

[*1] Sightseeing Tours of Am., Inc. v Air Pegasus Heliport, Inc. 2006 NY Slip Op 52194(U) [13 Misc 3d 1240(A)] Decided on November 17, 2006 Supreme Court, New York County Richter, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 17, 2006
Supreme Court, New York County

Sightseeing Tours of America, Inc. and Liberty Helicopters, Inc. (NY), Petitioners,

against

Air Pegasus Heliport, Inc. and Hudson River Park Trust, Respondents.



107779-06



For plaintiffs:

Robinson Freilich Bruno & Cohen LLC

The Legal Center

One Riverfront Plaza

Newark, NJ 07102

For defendant Air Pegasus:

Leon Friedman

148 East 78th Street

New York, NY 10021

For defendant Hudson River Park Trust:

Konner Teitelbaum & Gallagher

467 Seventh Avenue - 12th Floor

New York, NY 10018

Rosalyn Richter, J.

Petitioners/Plaintiffs Sightseeing Tours of America, Inc. and Liberty Helicopters, Inc. (NY)(collectively "Liberty")are companies that provide the majority of helicopter services, including public tours and charters, at the West 30th Street Heliport in Manhattan. Respondent Hudson River Park Trust ("HRPT") is a public benefit corporation that operates and maintains Hudson River Park, where the Heliport is located. Defendant Air Pegasus Heliport, Inc. ("Air Pegasus") is the sole and exclusive fixed base operator of the Heliport pursuant to a March 25, 1996 agreement between Air Pegasus and HRPT ("the Agreement").[FN1] The Agreement provides that Air Pegasus may collect fees and charges for the use of the Heliport and must pay to HRPT a certain percentage of its gross receipts.

In late 2004, HRPT began an investigation to verify the accuracy of Air Pegasus's reporting of its gross revenues and to ensure that HRPT was receiving its proper share of those revenues. Liberty maintains that it cooperated with HRPT's investigation by providing requested documents and information related to Air Pegasus. In January 2006, HRPT initiated a lawsuit against Air Pegasus alleging that it had violated the Agreement and had wrongfully diverted revenues from HRPT. That action is currently pending.

In this hybrid Article 78 proceeding/plenary action, Liberty contends that HRPT has failed to exercise its authority to prevent alleged abuses and misconduct by Air Pegasus. Liberty's chief [*2]complaint is that, despite numerous requests, HRPT has failed to investigate Air Pegasus's recent imposition of a higher fee schedule for Liberty's use of the Heliport. Liberty argues that the new fees violate the Agreement between Air Pegasus and HRPT because they are not "fair, reasonable and non-discriminatory". Agreement, ¶ 34[b]. Liberty contends that the new fees are being imposed in retaliation for its cooperation with HRPT's investigation of Air Pegasus and to raise the funds needed to pay for the settlement of the lawsuit between HRPT and Air Pegasus. Liberty argues that if the new fees are allowed to go into effect, it would be forced to cease operations at the Heliport.

In addition, Liberty contends that HRPT failed to adequately investigate Air Pegasus's alleged diversion of funds and that, despite repeated requests, HRPT failed to look into previous attempts by Air Pegasus to wrongfully increase fees at the Heliport and to engage in discriminatory pricing.[FN2] Liberty also argues that HRPT abused its discretion in refusing to accede to Liberty's request that HRPT remove Air Pegasus as operator of the Heliport. Liberty argues that HRPT has abused the public trust in allowing the Heliport to be run by an entity guilty of diverting funds and committing other wrongful acts.

In Motion Sequence No. 3, Air Pegasus seeks to dismiss the petition/complaint in its entirety and HRPT cross-moves for the same relief. The first cause of action seeks Article 78 relief and alleges that HRPT has acted arbitrarily and capriciously by refusing to investigate the allegedly improper acts of Air Pegasus. In the second cause of action, Liberty contends that HRPT's failure to act constitutes a breach of the public trust.[FN3] In its prayer for relief, Liberty seeks an order directing HRPT to fully investigate Air Pegasus's alleged wrongdoing and to immediately designate a new interim operator of the heliport.[FN4]

Since Liberty is asking this court to direct HRPT to conduct an investigation of Air Pegasus, the petition is in the nature of a mandamus to compel. It is well-settled that mandamus is an "extraordinary remedy" and is only available "to compel the performance of a purely ministerial act where there is a clear legal right to the relief sought". Legal Aid Society of Sullivan County, Inc. v. Scheinman, 53 NY2d 12, 16 (1981). Moreover, mandamus to compel may not be awarded to compel an act which involves the exercise of judgment or discretion. Milek v. Town of Hempstead, 294 AD2d 440 (2d Dept. 2002).

Liberty has failed to convince this Court that it has a clear legal right to force HRPT to conduct an investigation of Air Pegasus. Liberty points to no statute, rule or regulation requiring [*3]HRPT to conduct an investigation of Air Pegasus's pricing practices. Nor has Liberty pointed to any case law which would impose upon HRPT such a duty to investigate based solely on a request from Liberty, a party that has a financial interest in the outcome of any such investigation. Thus, because Liberty has failed to show it has a clear legal right to the relief it seeks, it is not entitled to Article 78 relief. See Iocovello v. City of New York, 272 AD2d 201, 201 (1st Dept. 2000)("decision not to conduct an investigation was a matter of discretion and the remedy of mandamus does not lie to compel action involving the exercise of discretion or judgment").

Nevertheless, Liberty argues that the HRPT has failed to ensure that Air Pegasus abide by the Agreement, which requires that the fees set be "fair, reasonable and non-discriminatory". Agreement, ¶ 34[b]. However, Liberty is neither a signatory nor a third-party beneficiary of the Agreement. Moreover, the Agreement explicitly provides that it "shall not confer upon any person or entity other than the parties hereto any rights or remedies hereunder". Agreement, ¶ 50. Thus, since Liberty has no clear legal right to compel HRPT to enforce its contract with Air Pegasus, the Article 78 claims must be dismissed. See Matter of Application of Metropolitan Museum Historic District Coalition v. de Montebello, 3 Misc 3d 1109A (Sup. Ct. NY Cty. 2004), aff'd, 20 AD3d 28 (1st Dept. 2005)(proceeding in the nature of a mandamus to compel the City to enforce its own contract cannot be maintained by a private entity lacking third-party beneficiary status).

In the third cause of action, Liberty claims that Air Pegasus has tortiously interfered with its business.[FN5] Tortious interference with business relations "applies to those situations where the third party would have entered into or extended a contractual relationship with [the] plaintiff but for the intentional and wrongful acts of the defendant". WFB Telecommunications, Inc. v. NYNEX Corp., 188 AD2d 257, 257 (1st Dept. 1992). In order to state this cause of action, "[the] plaintiff must . . . demonstrate that a contract would have been entered into but for' [the] defendants' conduct". American Preferred Prescription, Inc. v. Health Management, Inc., 252 AD2d 414, 418 (1st Dept. 1998).

Judged by these standards, Liberty's claim for tortious interference with business must be dismissed. The complaint does not contain any allegation that a third party would have entered into or extended a contract with Liberty but for Air Pegasus's alleged interference. Indeed, the complaint does not even mention any entities with whom Liberty has business relations. Nor does the complaint indicate what wrongful acts may have been committed by Air Pegasus to interfere with any such relationship. Thus, Liberty's complaint has failed to sufficiently allege tortious interference with business. See Schoettle v. Taylor, 282 AD2d 411 (1st Dept 2001)(claim for tortious interference dismissed because the plaintiffs failed to allege any specific business relationship); Gross v. Empire Healthchoice Assurance, Inc., 12 Misc 3d 1155A (Sup. Ct. NY Cty. 2006)(claim dismissed because the plaintiffs did not specifically identify which business relations defendants have interfered with, other than a general allegation that their business relations have suffered).

In Motion Sequence No. 5, Air Pegasus seeks leave to renew and reargue the Court's previous decision granting Liberty a preliminary injunction prohibiting Air Pegasus from imposing the new fees upon Liberty and from discontinuing any discounts for Liberty that are currently in [*4]place. Because the Court has dismissed the entire petition/complaint, the preliminary injunction must be vacated. Thus, the motion for leave to reargue and renew is denied as moot. Accordingly, it is

ORDERED that Air Pegasus's motion and HRPT's cross-motion to dismiss the petition/complaint (Motion Sequence No. 3) is granted and the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that the previously-imposed preliminary injunction is vacated; and it is further

ORDERED that Air Pegasus's motion for leave to renew and reargue (Motion Sequence No. 5) is denied as moot.

This constitutes the decision and order of the Court.

November 17, 2006

Justice Rosalyn Richter Footnotes

Footnote 1: The Agreement was originally between Air Pegasus and the New York Department of Transportation ("DOT"), which had jurisdiction over the Heliport prior to the creation of HRPT in 1998. HRPT subsequently became the successor in interest of DOT's rights under the Agreement. Although the Agreement expired in 2001, HRPT has allowed Air Pegasus to continue to operate the Heliport under a series of month-to-month extensions of the Agreement.

Footnote 2: According to Liberty, HRPT has consistently claimed that it is without the power or authority to review or approve the fees charged by Air Pegasus.

Footnote 3: Air Pegasus is named as a necessary party in the first two causes of action.

Footnote 4: Liberty also asks the Court to enjoin any settlement of the lawsuit between HRPT and Air Pegasus pending a full investigation and to put other conditions on any such settlement.



Footnote 5: Although the caption of the third cause of action states that it is also against HRPT, there are no factual allegations in the body of the complaint to support this claim against HRPT.