Breach of contract

Aviation Professionals Institute, LLC v. Gary/ Chicago International Airport Authority

Lake Superior Court -  No. 45D04-0711-CC-00187

Injuries: Lost future profits

Date: Apr. 27 – May. 1, 2009

Judge or Jury Trial: Jury Trial

Judge: Hon. Gerald N. Svetanoff

Disposition: Defense verdict

Plaintiff Attorney(s): John A. Sopuch III and Shawn Collins, Collins Law Firm, Naperville, Ill.; George
Paras, Merrillville

Defendant Attorney(s): Nelson Nettles, Joseph Maguire, and Richard Norris, Norris Choplin & Schroeder,
Indianapolis; Patrick Lyp, Blachly Tabor Bozik & Hartman, Valparaiso

Case Information: This was an aviation case involving a contract between the Gary/Chicago International
Airport and a fixed base operator, Aviation Professionals Institute. In 2002, API signed a 10-year large hangar lease (with
two 5-year options) to operate a flight school at the Gary airport. In 2005, API wished to expand into a full-service FBO,
offering additional services including the sale of aviation fuel. In December 2005, the airport board approved API to become
a full-service FBO; however the airport believed the terms of the contract amendment remained to be worked out and put into
writing. The original lease had an integration clause requiring amendments be in writing and signed. On cross-motions for
summary judgment the trial court ruled that a contract amendment existed as of the December 2005 board approval, despite the
integration clause. Interlocutory appeal was denied.

The Gary airport had understood API`s plan as selling AVGAS (100 LL) the first year, and expanding into jet fuel in future
years once another jet fuel tank was installed. When API learned in January 2006 that the airport would not allow them to
share the existing jet fuel tanks with the other FBO, API claimed the airport breached the contract. Ultimately, API never
sold aviation fuel of any kind and was evicted from the airport for the failure to pay rent by the end of 2006.
API filed an administrative complaint with the Federal Aviation Administration, which was denied. API also filed a federal
court action with federal and state antitrust claims. That action was dismissed by the federal court. Then in November 2007,
API filed this breach of contract action in Lake County, seeking $15 million dollars in lost future profits through 2022,
the remainder of the lease term.

The jury trial concerned whether the amended contract was breached, whether API`s performance was excused, and whether a
breach caused API any lost future profits. The judge allowed the jury to consider the entire future lease period for future
profits, leaving to the jury to decide when such evidence became speculative. Expert testimony was the sole evidence for and
against lost future profits. James Alerding, Clifton Gunderson, testified for API. Dan Ochse of Jacobs Consultancy testified
for the airport. The jury deliberated 2 hours and 15 minutes before returning a verdict for the Gary airport.

 - Nelson Nettles