District Judge Michael McHenry has ruled in favor of the COS Owners Association and against the Church For All Nations on a motion by COSOA for judgment on the pleadings.
Accordingly, McHenry has vacated a trial set to begin March 13; the case was filed by the church in January 2021. It revolves around the church’s effort to gain permission to build an airplane hangar at Colorado Springs Airport, which leases land to COSOA, but after shelling out some $400,000 since 2008, it still doesn’t have a hangar.
Essentially, the church wanted COSOA to allow it to use its own developer to build a hangar for its aircraft, but COSOA said any new hangar construction must go through the designated developer, Hoag Construction, because that company invested a lot of money in development of the pad sites about a decade ago and should be given the chance to recover that investment. In the alternative, the church could pay Hoag $240,000 and then hire a developer to build the hangar, although even that alternative was later withdrawn.
In his ruling, McHenry said, “To plead a breach of contract claim under Colorado law (which is the basis for Plaintiff’s claim for breach of the covenant of good faith and fair dealing), a plaintiff must sufficiently plead a factual basis for the following elements: (1) the existence of a contract, (2) performance by the plaintiff or some justification for nonperformance, (3) failure to perform the contract by the defendant, and (4) resulting damages to the plaintiff…. Other courts have determined that a plaintiff … must plead the terms of the agreement upon which the alleged liability rests.”
The church’s lawsuit, McHenry wrote, “does not plausibly establish the existence of a contract as it alleges almost none of the terms of any such agreement other than Plaintiff’s expressed right to build a hangar. Plaintiff seeks to build a hangar on land which COSOA leases based on the allegation that it paid ‘rent.’
“This is insufficient to show any contractual right to build a hangar on a leasehold estate (that COSOA does not even own),” the judge wrote. “Moreover, even if Plaintiff has alleged some type of tenancy it would be on a month-to-month basis without a defined term…. A month-to-month tenancy that can be terminated on thirty days notice offers no support for Plaintiff’s claim that it has a right to build a hangar on a leasehold estate and should have been permitted to select its own developer.”
Similarly, McHenry ruled against the church on its other claims, including that it had a right to use its own developer.
The attorney for COSOA declined to comment and the attorney for the church didn’t respond to an email seeking comment.
The church could appeal McHenry’s ruling or ask for him to reconsider. Whatever happens, it appears the church wants to continue an effort to remove existing COSOA board members and install its favored members in efforts to attain the right to build a hanger. That’s apparent in a motion filed by the church for continuation of trial, filed Feb. 25 before McHenry’s March 2 ruling, that notes the church disputes the outcome of a vote on removing board members that took place on Feb. 16 at a special meeting of COSOA.
“… [M]embers of the association have made a demand for arbitration challenging the reported special meeting results and seeking confirmation of Tom Hoag’s, Tim Brannaman’s, and Al Briccetti’s removal as directors, review of a proxy procured by Mr. Hoag, and confirmation of the validity of prior shareholder action,” the church’s motion states.
Read McHenry’s ruling here: