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Guaranty Towers, LLC v. Cellco Partnership

September 6, 2007

GUARANTY TOWERS, LLC, PLAINTIFF
v.
CELLCO PARTNERSHIP D/B/A VERIZON WIRELESS, WISCONISCO FIRE ENGINE CO. NO. 1, INC., DEFENDANTS



The opinion of the court was delivered by: William W. Caldwell United States District Judge

MEMORANDUM

I. Introduction

Plaintiff, Guaranty Towers, LLC, filed this action against defendants, Cellco Partnership, d/b/a Verizon Wireless (Cellco), and Wiconisco Fire Engine Co. No. 1, Inc. (Wiconisco). Plaintiff leased land from Wiconisco on which it built a communications tower, leasing space on the tower to third parties. The case arises from Wiconisco's decision about two years after making the lease with Guaranty Towers to lease another portion of its property to Cellco so that Cellco could construct its own communications tower, giving Plaintiff competition.

Invoking our diversity jurisdiction, Plaintiff has made the following state-law claims. Against Wiconisco, Plaintiff makes a claim for breach of contract (count I), alleging that the lease between the two prohibited Wiconisco from also leasing to a competitor of Plaintiff. Against Cellco, Plaintiff makes: (1) a claim for tortious interference with business relationships (count II), alleging that Cellco intentionally induced Wiconisco to breach its contract with Plaintiff; and (2) a claim that Cellco intentionally or negligently made misrepresentations to Plaintiff (count III). Against both Defendants, Plaintiff makes: (1) a claim that they conspired to interfere with Plaintiff's business relations (count IV); (2) a claim for conversion, alleging that they interfered with Plaintiff's "right of possession" (count V); and (3) a claim for punitive damages (count VI).*fn1 We are considering each defendant's motion to dismiss under Fed. R. Civ. P. 12(b)(6).

II. Standard of Review

In considering a motion to dismiss, we must accept as true the factual allegations in the complaint and construe any inferences to be drawn from the allegations in Plaintiff's favor. See Morrison v. Madison Dearborn Capital Partners III L.P., 463 F.3d 312, 314 (3d Cir. 2006). The court is not limited to evaluating the complaint alone. It may consider documents that form the basis of a claim. Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004). It may also consider "documents whose contents are alleged in the complaint and whose authenticity no party questions," even though they "are not physically attached to the pleading . . . ." Pryor v. National Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002).

A complaint has to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, U.S. , , 127 S.Ct. 1955, 1974, 167 L.Ed.2d. 929 (2007)(rejecting the "no set of facts" language from Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). Detailed factual allegations are not required, id. at , 127 S.Ct. at 1964-65; Pryor, supra, 288 F.3d at 564, only a "short and plain statement" showing the right to relief. Pryor, supra, 288 F.3d at 564 (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) and quoting Fed. R. Civ. P. 8(a)(2)). With this standard in mind, we set forth the background to this litigation, as Plaintiff alleges it.

III. Background

Plaintiff, Guaranty Towers, builds and manages "towers for use by personal communications services, cellular, radio and paging carriers." (Compl. ¶ 5.) On or about March 24, 2000, it entered into a lease agreement with defendant Wiconisco, leasing a portion of Defendant's property in Wiconisco, Pennsylvania, so that it could build and operate a communications tower on the leased property. (Id. ¶ 6.) "In reliance upon its Lease Agreement with Wiconisco," Plaintiff did build the communications tower, at a cost in excess of $150,000. (Id. ¶ 8.) The lease was for an initial term of nineteen years,(doc. 15-3, Cellco's Mot. to Dismiss, Ex. B, ¶ 3), and could be renewed at Plaintiff's option for four additional twenty-year terms. (Id. ¶ 4).*fn2

Plaintiff alleges that, as part of the lease, Wiconisco "agreed that it would not lease any of its property to parties that were competitors of the Plaintiff nor to (sic) do anything that would unreasonably interfere with Plaintiff's use of the property for its business of leasing space on its communication tower." (Compl. ¶ 7.) The language of the lease on which this allegation is based reads as follows:

LESSOR covenants that LESSEE on paying the rent and performing the covenants shall peaceably and quietly have, hold and enjoy the leased Property without hindrance on the part of the LESSOR or any person or persons claiming by, through or under the LESSOR, for the term herein leased, including any renewal term; except that LESSOR may cultivate such property for any purpose, except for leasing to parties considered to be competitors of LESSEE, and does not unreasonably interfere with LESSEE'S use of the Property. (Cellco's Mot. to Dismiss, Ex. B, ¶ 13.)

In August of 2001, defendant Cellco, aware of Plaintiff's lease with Wiconisco, "expressed an interest in leasing space on Plaintiff's tower for the installation of its antennas and equipment." (Compl. ¶ 10.) "Cellco, with permission of the Plaintiff, conducted tests at the . . . site to determine if the site would provide the necessary coverage and the support of antennas for its business." (Id. ¶ 11.) However, after conducting the tests, Cellco told Plaintiff "that it was not interested in leasing space on Plaintiff's communications tower, even though the tests showed that this was an excellent location." (Id. ¶ 12.)

Instead, on or about March 21, 2002, without Plaintiff's knowledge, Cellco entered into a lease agreement with Wiconisco, allowing Cellco to erect its own communications tower on the "property immediately adjacent to Plaintiff's tower." (Id. ¶ 13.) Defendants knew this was a violation of the contract between Plaintiff and Wiconisco. (Id.) "Plaintiff did not learn of the existence of the Cellco tower until October of 2006 when it discovered that a client that it had been negotiating with for lease of space on its tower had signed a contract to lease space on the Cellco tower." (Id. ¶ 14.) As a result of Wiconisco's breach of contract and "Cellco's tortuous interference with Plaintiff's contractual arrangements," Plaintiff alleges it lost business and has suffered damages in excess of $75,000.00. (Id. ¶ 15.)

As noted, count I is for breach of contract against Wiconisco, alleging that the lease between the two prohibited Wiconisco from also leasing to a competitor of Plaintiff; count II is against Cellco for tortious interference with business relationships, alleging that Cellco, knowing of the contract, interfered with Plaintiff's business relations by intentionally inducing Wiconisco to breach its contract with Plaintiff (Compl. ¶ 19); count III is against Cellco, alleging that it intentionally or negligently made misrepresentations to Plaintiff; count IV is against both Defendants, alleging a civil conspiracy to interfere with Plaintiff's business relations (count IV); count V is against both defendants for conversion, alleging that they interfered with Plaintiff's "right of possession" (count V); and count VI is against both defendants for punitive damages.

IV. Discussion

A. Breach-of-Contract Claim in Count I Against

Wiconisco

Defendant Wiconisco moves to dismiss the breach-of-contract claim against it by arguing that the lease does not absolutely prohibit Wiconisco from leasing to competitors of Plaintiff, only from leasing the property subject to the lease to competitors of Plaintiff. Wiconisco remains free to lease other areas of its property to Plaintiff's competitors.

For this interpretation, it relies on language in paragraph 13 guaranteeing Plaintiff the quiet enjoyment of "the leased property" with the exception that Wiconisco "may cultivate such property," and with the further exception of not "leasing to parties considered to be competitors of LESSEE." In Defendant's view, this language ties the prohibition on leasing to competitors to the "leased property," leaving it free to lease other areas of its land to Plaintiff's competitors. Wiconisco also relies on other provisions in the lease which it says support limiting paragraph 13's prohibition on leasing to Plaintiff's competitors to the land leased to Plaintiff. Hence, since Plaintiff admits in its complaint that ...


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