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WILMINGTON TRUST COMPANY v. COUNTY OF ALLEGHENY

September 9, 2005.

WILMINGTON TRUST COMPANY, Plaintiff,
v.
COUNTY OF ALLEGHENY, ALLEGHENY COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, ALLEGHENY COUNTY AIRPORT AUTHORITY, USAIRWAYS, INC., KENT G. GEORGE, EARL HORD, ROBERT J. MACEY, GLENN MAHONE, DAVID J. MAYERNIK, JON PIPPY, RICHARD L. SHAW, MARY PAT SOLTIS, RICH STANIZZO, JOHN DOE 1, JOHN DOE 2, JOHN DOE 3, JOHN DOE 4, and JOHN DOE 5 Defendants.



The opinion of the court was delivered by: DAVID CERCONE, District Judge

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff, Wilmington Trust Company ("Wilmington Trust"), brought this action under 42 U.S.C. § 1983 and under state law, seeking to recover principal and interest on bonds issued to refinance certain property and facilities at the Pittsburgh International Airport (the "Airport"). Defendant, Allegheny County Industrial Development Authority (the "ACIDA") and Defendants, County of Allegheny (the "County"), Allegheny County Airport Authority (the "Airport Authority"), and Kent G. George, Earl Hord, Robert J. Macey, Glenn Mahone, David J. Mayernik, Jon Pippy, Richard L. Shaw, Mary Pat Soltis, and Rich Stanizzo (the "ACAA Representatives") (collectively with the Airport Authority, the "ACAA Parties"), have filed motions to dismiss Wilmington Trust's complaint under Rule 12(b)6 of the Federal Rules of Civil Procedure. II. STATEMENT OF THE CASE

  On July 1, 1980, the County entered into a Ground Lease Agreement (the "Ground Lease") with the National Transportation Center (the "NTC") under which the County as operator of the Airport leased certain real property at the Airport as well as all its right title and interest in certain facilities to be constructed on the leased property. Complaint ¶ 21. The original term of the Ground Lease was to be twenty (20) years from the Completion Date.*fn1 Complaint ¶ 23. Under the Ground Lease, the County consented to a sublease by the NTC of the leased property, including the facilities to be constructed, to US Airways, Inc. ("US Air"). Complaint ¶ 22. The County's consent to sublease, however, did not "vary or modify the terms, covenants and conditions to be observed and performed by NTC and [US Air] pursuant to [the] Lease." See Ground Lease ¶ 1(b). Further, the County had the right to terminate the Ground Lease upon an uncured "Event of Default," including the filing of a voluntary petition in bankruptcy by US Air. See Ground Lease ¶ 21(a)(i).

  The NTC and US Air then entered into a separate Sublease Agreement. Complaint ¶ 30. Construction of the facilities to be leased by US Air in accordance with the 1980 sublease was financed in part by revenue bonds (the "1980 bonds") issued by the ACIDA. Complaint ¶ 29. In July of 1991, the County and the NTC amended the Ground Lease, granting the NTC the right to extend the term to March 1, 2021. Complaint ¶ 25. On June 1, 1991, the NTC, with the County's consent, assigned all its right, title and interest in the Ground Lease to the ACIDA. Complaint ¶ 25. At the same time, the ACIDA entered into a Sublease and Security Agreement (the "Sublease") with US Air under which US Air was to sublease the property and facilities. Complaint ¶¶ 33 and 34. The Sublease incorporated all the terms, conditions and covenants of the Ground Lease. Complaint ¶ 35.

  In June of 1991, the ACIDA refinanced the 1980 bonds by issuing Airport Special Facilities Revenue Refunding Bonds, Series 1991A (the "1991A Bonds). Complaint ¶ 31. The 1991A Bonds were issued pursuant to a Trust Indenture dated June 1, 1991, entered between ACIDA and Wilmington Trust as Trustee. Complaint ¶ 32. The Official Statement, published in connection with the issuance of the 1991A Bonds, provides:
The 1991A Bonds will be secured by an assignment of all right, title and interest of the [ACIDA] in and to the 1980 Ground Lease and the 1991A Sublease . . . Payments of rent by [US Air] under the 1991A Sublease will be sufficient, together with the other funds available for such purpose, to provide for payment of the principal of and premium, if any, and interest on the 1991A Bonds at or prior to their maturity. The obligation of [US Air] to make payment of such rent pursuant to the 1991A Sublease is absolute and unconditional.
Complaint ¶ 37.

  In recognition that bonds were to be issued to finance construction of certain facilities at the Airport, the Ground Lease authorized the ACIDA to assign its interest in the Ground Lease "to the Trustee as security under the Trust Indenture for the payment of the principal of, and premium if any, and interest on the Bonds . . ." See Ground Lease ¶ 30(c). In accordance with the Trust Indenture, ACIDA granted, conveyed and assigned to Wilmington Trust all its right, title and interest in the Ground Lease and the Sublease. Complaint ¶ 45. The County was not a party to the Trust Identure. On or about September 23, 1999, the County transferred the operation and management of the Airport to the Airport Authority. Complaint ¶ 48.

  On or about August 11, 2002, US Air filed a voluntary petition in bankruptcy in the United States Bankruptcy Court for the Eastern District of Virginia. Under Paragraph 21(a)(i) of the Ground Lease, US Air's filing constituted an Event of Default. See Ground Lease ¶ 21(a). By letter dated December 17, 2003, the Airport Authority advised the ACIDA that, as a result of US Air's bankruptcy and rejection of the Ground Lease, the Airport Authority was terminating the Ground Lease. Complaint ¶ 49; The County's Motion to Dismiss, Ex. H. By letter dated January 2, 2004, the ACIDA waived the thirty (30) day notice requirement under the Ground Lease and agreed that the Amended Ground Lease would be terminated effective 12:02 a.m. on January 5, 2004. Complaint ¶ 50; The County's Motion to Dismiss, Ex. I.

  On January 6, 2004, the Airport Authority notified Wilmington Trust that because the Ground Lease had never been extended, and because US Air had rejected the Ground Lease in the bankruptcy proceedings, the Ground Lease was terminated. Complaint ¶ 51. On January 5, 2004, the Airport Authority and US Air entered into a Hangar Facility Lease Agreement (the "2004 Lease") under which the premises which were subject to the Amended Ground Lease and the 1991A Sublease and Security Agreement were leased to US Air for a period of three (3) years. Complaint ¶ 52. No reference to the 1991A Bonds was made in the 2004 Lease, nor was any provision made for the payment of rents and revenues to the Trustee, Wilmington Trust, for payment in turn to the bondholders. Id.

  III. STANDARD FOR MOTION TO DISMISS

  When considering a Rule 12(b)(6) motion, a court is required to accept as true all of the allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the plaintiff. Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989); see also Ford v. Schering-Plough Corp., 145 F.3d 601, 604 (3d Cir. 1998). A motion to dismiss under Rule 12(b)(6) may be granted only if the court finds the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. See Conley v. Gibson, 355 U.S. 41, 45 (1957); Schering-Plough Corp., 145 F.3d at 604. A court need not credit a complaint's "bald assertions" or "legal conclusions" when deciding a motion to dismiss. In re Burlington Coat Factory Securities Litigation, 114 F.3d 1410, 1429-30 (3d Cir. 1997) (quoting Glassman v. Computervision Corp., 90 F.3d 617, 628 (1st Cir. 1996)). See also CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (2d ed. 1997) (noting that courts, when examining 12(b)(6) motions, have rejected "legal conclusions," "unsupported conclusions," "unwarranted inferences," "unwarranted deductions," "footless conclusions of law," or "sweeping legal conclusions cast in the form of factual allegations").

  Generally, "to the extent that [a] court considers evidence beyond the complaint in deciding a 12(b)(6) motion, it is converted to a motion for summary judgment." Anjelino v. New York Times Co., 200 F.3d 73, 88 (3d Cir. 1999). However, in resolving a 12(b)(6) motion to dismiss, a court may look beyond the complaint to matters of public record, including court files and records, and documents referenced in the complaint or essential to a plaintiff's claim which are attached to a defendant's motion. Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). A court may consider documents which are attached to or submitted with the complaint, as well as legal arguments presented in memorandums or briefs and arguments of counsel. Pryor v. NCAA, 288 F.3d 548, 560 (3d Cir. 2002) (citation omitted). Further, documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered. Id.

  IV. DISCUSSION

  In its motion, the ACIDA argues that Wilmington Trust's Section 1983 claims must be dismissed because: (a) there is no causal connection between the ACIDA's single action and the alleged constitutional deprivations; (b) Wilmington Trust has not alleged a constitutionally protected property right; (c) the alleged action by the ACIDA fails to shock the conscience; and (d) the complaint fails to state a claim for conspiracy to violate Section 1983. Similarly, the County and the ACAA Parties contend that Wilmington has failed to allege a claim under Section 1983 because the complaint fails to allege (1) the deprivation of a constitutionally protected right; (2) the requisite municipal liability; (3) actions that shock the conscience; (4) the specific personal involvement of each ACAA Representative; and (5) because Wilmington Trust's section 1983 claim fails, its claim of conspiracy to violate Section 1983 must also fail. Further, the County and the ACAA Parties argue that, under ...


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