TBM Land Conservancy, Inc. v. Nextel West Corp.
TBM Land Conservancy, Inc. v. Nextel West Corp.
Opinion of the Court
ORDER
This matter is before the Court on the Motion to Dismiss Plaintiffs’ First, Third, Fourth and Fifth Claims for Relief [Docket No; 10] filed by defendants Nextel West Corp., Nextel Finance Company, Nextel Communications, Inc., and Sprint Communications, Inc. (“Sprint”) (collectively, “Nextel”). The Court has jurisdiction pursuant to 28 U.S.C. § 1332.
I. BACKGROUND
■ The complaint sets forth the following allegations, which, for the purpose of ruling on the instant motion to dismiss, the Court takes as true. See Alvarado v. KÓB-TV, LLC, 493 F.3d 1210, 1215 (10th Cir. 2007) (“We must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.”).
Plaintiff TBM Land Conservancy, Inc. (“TBM”) brings claims related to Nextel’s termination of a “Communications Site Lease Agreement” (the “Site Lease”). TBM and one of Nextel’s predecessor entities executed the Site Lease in March 1997. Docket No. 3 at 1-2, ¶¶ 1, 2, 7-8. The Site Lease granted Nextel
Section 11.1 of the Site Lease' provides, in pertinent part, that Nextel may terminate the Site Lease without further liability “after the initial five (5) year term, if [Nextel] determines that the Premises are
II. STANDARD OF REVIEW
The Court’s function on a Rule 12(b)(6) motion for failure to state a claim upon which relief can be granted is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiffs complaint alone is sufficient to plausibly state a claim. Fed. R. Civ. P. 12(b)(6); Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (citations omitted). In doing so, a district court may take into account “documents referred to in the complaint if the documents are central to the plaintiffs claim and the parties do not dispute the documents’ authenticity.” Alvarado, 493 F.3d at 1215 (citation and quotation marks omitted).
The “plausibility” standard requires that relief must plausibly follow from the facts alleged, not that the facts themselves are plausible. Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008). However, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not shown— that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937,173 L.Ed.2d 868 (2009) (internal quotation marks and alteration marks omitted).
III. ANALYSIS
A. Breach of Contract
Nextel argues that TBM has not stated a claim for breach of contract because the Site Lease gives Nextel the right
The parties agree that Nextel’s letter dated August 27, 2013 accurately reflects Nextel’s reasons for terminating the Site Lease.
The August 27, 2013 letter states, in relevant part:
The Site’s older 2G (second generation) iDEN technology performed well in the past for the voice and direct connect radio communications for which it was designed. However, today’s customers demand data-centric multi-media communi'cations, including simultaneous operation of multiple applications, all *of . which requires [sic] the 3G and 4G speeds of the newer CDMA, EVDO, WiMax, LTE .and Network Vision technologies. Nextel; has determined that the features and functionality offered by these new technologies being deployed at other site locations by Sprint renders this Nextel iDEN site technologically ■ obsolete.
Docket No: 10-3 at 2.
The relevant provision" of the Site Agreement grants Nextel the right to terminate its lease without penalty “if [Nextel] determines that the Premises‘are not appropriate for its operations for technological- reasons, including, without limitation, signal interference.” Docket No. 10-1 at 5. TBM argues that the. Site Lease requires Nextel to make a determination “that the groundr — just the ground” covered by the Site Lease was inappropriate for Nextel’s operations for technological reasons. Docket No. 14 at 6 (emphasis in original). Nextel responds that a number of courts have considered substantially identical claims.and have held that, under language similar to that-contained , in the Site Lease, Nextel’s determination that .the technology installed on the .relevant site was no longer needed to operate its communications network was sufficient to terminate the agreement. The cases that Nextel.. cites, Seachase Condominium Owner’s. Ass’n, Inc. v. Nextel WIP Lease Corp., 2013 WL 6385911 (S.D.Ala. Dec. 6, 2013), Marton v. Nextel Commc’ns of the Mid-Atl., Inc., Case No. CV-12-301 (Me. Super. Ct., York Cnty. Nov. 20, 2013),
Two courts have considered Nextel agreements that, like the Site Lease, permit Nextel to terminate for technological (and not economic) reasons. In Lofty Enters., Inc. v. Nextel Commc’ns of the Mid-Atl., Inc., 2005 WL 2787563 (Mass.App. Oct. 26, 2005), the Appeals Court of Massachusetts held that, where a plaintiff challenged Nextel’s determination that a site was “not appropriate for its operations for technological reasons,” the plaintiff was “entitled to exploré the1 basis for [Nextel’s] determination to ascertain whether it had a basis in fact or, in other words, whether it was made in good faith.” M at *1. The Lofty court reversed dismissal of a plaintiffs claim as premature where the record did “not establish that the plaintiff will be unable to prove on a more fully developed record that no good faith basis for such a determihation exists in fact.” Id. The Court finds that Lofty is distinguishable. In that case, the court held that the plaintiff was entitled to take discovery to determine whether Nextel’s stated reason “had a basis in fact or, in other words.. .was made in good faith.” Lofty,. 2005 WL 2787563, at *1. Here, the parties do not dispute Nextel’s basis for terminating the Site Lease. Rather, they dispute whether Nextel’s stated justification was a “technological reason” sufficient to, terminate the agreement.
In Pub. Storage v. Sprint ‘Corp., 2015 WL 1057923 (C.D.Cal. Mar. 9, 2015), the court considered whether Sprint and Nextel’s reasons for terminating a site agreement were sufficient where the lease allowed for termination upon Nextel’s determination that the premises were “not appropriate for its operations for reasonable environmental concerns or for- technological reasons, including without limitation, signal interference.” Id. at *7. The Pub. Storage court held that the agreement granted Nextel “broad, but not unfettered, discretion to' terminate a lease upon finding that the leased premises are not appropriate for its operations for reasons actually related to its wireless network technology.” Id. at *12. The Pub. Storage court found that it was undisputed that Nextel- “instituted a technological change in the Sprint-Nextel network, jettisoning Nextel’s old iDEN technology in favor of a CDMA/EVDO/LTE platform” and that, “because the at-issue premises housed technology that was no longer needed due to the shift away from iDEN... and ■ since other sites ' housing teehnologically-appropriate infrastructure already provided coverage in the affected areas, the at-issue premises were no longer ‘appropriate for Sprint-Nextel’s operations for technological reasons.” Id. (alteration marks and ellipses omitted). The
The Court finds Pub. Storage’s reasoning persuasive. The Site Lease provided Nextel with the discretion, after the expiration of the initial five-year term, to terminate, the lease for .any “technological ■reason” that it determined made the Site inappropriate for the operation of its network. While such discretion was not unfettered, after plaintiff asked that Nextel justify its grounds, for terminating the lease, Nextel provided its reason. As reflected in the August 27,2013 letter, Docket No. 10-3 at 2, Nextel’s operations evolved away from the technology installed on the Site and Nextel had access to other facilities that were sufficient to satisfy its needs. Plaintiff interprets this explanation as admitting that the reason that Nextel terminated the lease was “because the Nextel facilities situated on the Ground Lease were duplicative of facilities operated by Sprint.” Docket Ño. 14 at 9. Accepting this interpretation as correct, the Court finds that it satisfies the “technological reason” requirement of the contract.
Neither party defines the word “technological.” Merriam-Webster’s Dictionary defines “technological” as “of, relating to, or characterized by technology.”
Even if the Court found that the phrase “technological -reasons” was ambiguous and considered plaintiffs extrinsic evidence that the parties eliminated “economic reasons” from the termination provision, the result would be the same. The dividing line between technology and economics is blurry in the wireless communications industry, but the redundancy that Nextel cited had its origins in the integration of Nextel and Sprint’s networks. Here, as in Pub. Storage, “since other sites housing technologically-appropriate ' infrastructure already provided coverage in the affected areas,” the Site was no longer “appropriate for [Nextel’s] operations.. .for technological reasons.” Pub. Storage, 2015 WL 1057923, at *12. “[A] technological-reasons termination need not be solely or purely technological.” Id. at *14 (emphasis in original).- The Site Lease, like the agreement in Pub. Storage, allows Nextel “the choice to terminate rather than (a) spend the money needed to overcome the technological defect, dr (b) continue paying rent on an unusable property.” Id.
Because the Court has determined that Nextel has provided a “technological reason” for terminating the lease, Plaintiff has failed to state a plausible claim for breach of contract.
B. Implied Covenant of Good Faith and Fair Dealing
“Colorado, like the majority of jurisdictions, recognizes that every contract contains an implied duty of good faith and fair dealing,” Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo. 1995), intended to “ensure that a party is not deprived of the fruits of a contract by the arbitrary - or unreasonable actions -of the other party.” Salt Lake Tribune Publ’g Co., LLC v. AT&T Corp., 320 F.3d 1081/ 1104 (10th Cir. 2003). This duty “applies when one party has discretionary authority to determine certain terms of the contract, such as quantity, price, or time.” Amoco, 908 P.2d at 498. “A-party’s justified expectations are violated if evidence indicates it would not have signed- the contract had it known of the manner in which the party given discretion would exercise its discretion to determine open terms under a contract.” ADT 'Security S'ervs., Inc. v. Premier Home Protection, Inc., 181 P.3d 288, 293 (Colo.App. 2007). The implied covenant cannot, however, be used to impose obligations. that conflict with the express terms of the agreement or to “inject substantive terms into the contract.” Id.
Nextel argues that TBM’s claim for breach of the implied covenant of good faith and fair dealing should be dismissed because TBM seeks to “write into the Site Lease ... a requirement that Nextel West ‘produce technological evidenee/data which would establish... that the Site was/is no longer appropriate for its operations for technological reasons.” Docket No. 10 at 9. The Court agrees. Plaintiffs good faith and fair dealing claim is premised on Nextel’s failure, after repeated requests, to provide “evidence/data” that supports its
IV. CONCLUSION
For the foregoing reasons, it is
ORDERED that defendants , Nextel West Corp., Nextel Finance, Company, Nextel Communications, Inc., and Sprint Communications Inc.’s Motion to Dismiss Plaintiff’s First, Third, Fourth, and Fifth Claims for Relief [Docket No. 10] is Granted, it is further
ORDERED that plaintiff TBM‘ Land Conservancy, Inc.’s first, third, fourth, and fifth claims for relief are dismissed with prejudice. Plaintiff’s second claim remains pending.
. For ease of reference, although. TBM at times refers to actions taken by Nextel's predecessor entity, OneComm Corporation, N.A., the Court will refer to all such actions as if they had been performed by Nextel. See Docket No. 3 at 2, ¶ 8. . .
. Nextel removed this action on January 20, 2015. Docket No. 1.
. Nexteí attaches the August 27, 2013 letter in its entirety to its motion to dismiss. See Docket No. 10-3. The letter, which the complaint relies on, is properly considered in resolving Nextel’s Rule 12(b)(6) motion. See Utah Gospel Mission v. Salt Lake City Corp., 425 F.3d 1249, 1253-I-54 (10th Cir. 2005) > ("[A] document central to the plaintiffs claim and referred to in the complaint may be considered in resolving a motion to dismiss, at least where the document’s authenticity is not in dispute.”).
. Attached to defendants' motion as Exhibit E. See Docket No; 10-5.
. Although it is not relevant to the Court’s analysis of Nextel’s motion to dismiss, TBM states that, when it negotiated the Site Lease with Nextel, it insisted on removing Nextel’s right- to terminate for "economic reasons" from Nextel’s standard agreement as a condition of entering into the contract. Docket No. 14 at 5-6.
. Technological, Merriain-Webster’s Dictionary Online, http://www.merriam-webster. com/dictionary/technological (last visited September 8, 2015).
. Nextel argues, and TBM does not dispute, that if plaintiff’s breach of contract claim fails, its claims for tortious interference and ’ attorneys’ fees fail as well. See Docket No. 10 at 9-11. Accordingly, Nextel’s motion will be granted as to those claims.
Reference
- Full Case Name
- TBM LAND CONSERVANCY, INC., a Colorado corporation v. NEXTEL WEST CORP., a Delaware corporation Nextel Finance Company, a Delaware corporation Nextel Communications, Inc., a Delaware corporation and Sprint Communications, Inc., a Kansas corporation
- Cited By
- 2 cases
- Status
- Published