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Afco Cargo Pit LLC v. Dhl Express (Usa)

December 10, 2010

AFCO CARGO PIT LLC, PLAINTIFF,
v.
DHL EXPRESS (USA), INC., DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Cathy Bissoon*fn1

MEMORANDUM AND ORDER

I.MEMORANDUM

Plaintiff landlord AFCO Cargo PIT LLC asserts that Defendant tenant DHL Express (USA), Inc. breached a Lease agreement when it vacated the leased premises prior to the expiration of the renewal term of the Lease. Pending before the Court is Defendant‟s Motion for Judgment on the Pleadings (Doc. 23), in which Defendant asserts that Plaintiff has failed to state a claim for breach of contract because Defendant could not have renewed the Lease. Defendant asserts that, after the original term of the Lease expired, it was a holdover tenant occupying the premises on a month-to-month basis. For the reasons stated herein, the Court will deny Defendant‟s motion.

BACKGROUND

A.Factual Background

While the pertinent facts in this case appear to be largely undisputed, see Am. Answer (Doc. 26), the facts below are presented as alleged in the Amended Complaint (Doc. 17). See Allah v. Al-Hafeez, 226 F.3d 247, 249-50 (3d Cir. 2000) (noting that on a defendant‟s motion for judgment on the pleadings, all allegations in the complaint must be accepted as true and all reasonable inferences must be drawn in favor of the plaintiff).

On February 1, 2002, Plaintiff AFCO Cargo PIT LLC entered into a Lease with ABX Air, Inc., by which Plaintiff subleased to ABX Air certain property at the Pittsburgh International Airport. Am. Compl. ¶ 10 (Doc. 1). The Lease had an initial term of five years. Id. at ¶ 11.

Rider No. 1 to the Lease granted ABX Air the right to renew the Lease for a five year renewal term. Id. at ¶ 11; Rider No. 1 (Doc. 17-1 at 54). Rider No. 1 states that "[t]he renewal option provided for in this Rider No. 1 shall be personal to Tenant and shall not be applicable to any assignee, subtenant or successor of Tenant." Rider No. 1 at ¶ 5 (Doc. 17-1 at 54).

Through a series of assignments, Defendant DHL Express (USA), Inc. was assigned ABX Air‟s rights under the Lease in 2003. Am. Compl. ¶¶ 12-13.

On May 15, 2007, Defendant e-mailed Plaintiff, stating: "I can confirm that we are planning to renew our lease at the current PIT location for 5 years." Doc. 17-2; see also Am. Compl. ¶ 14. On May 16, 2007, Plaintiff responded via e-mail, explaining: "As per the Lease document, Rider No. 1, "Renewal Option‟, Tenant must notify Landlord by the giving of a written notice. A "formal‟ notice by e-mail would serve this office to confirm your renewal of the Lease as per the terms of the agreement." Doc. 17-3; see also Am. Compl. ¶ 16. Defendant e-mailed Plaintiff on May 22, 2007, stating: "Per our phone con, I received confirmation today from DHL Strategic Planning to exercise the PIT 5 year lease renewal." Doc. 17-4; see also Compl. ¶ 18.*fn2

Sometime following this e-mail exchange, Defendant paid Plaintiff rent retroactive to February 1, 2007. Am. Compl. ¶ 19. Defendant paid Plaintiff rent through approximately June 2009, in accordance with the Renewal Term rent formula set forth in Paragraph 4 of Rider No. 1 of the Lease. Id. at ¶ 20.

On June 18, 2009, Defendant sent Plaintiff a letter notifying Plaintiff that: "DHL Express hereby terminates the above referenced Lease for the space located at and about Cargo Building 1, Pittsburgh International Airport. This termination is effective today." Doc. 17-5; see also Am. Compl. ¶ 23.

On July 17, 2009, Plaintiff informed Defendant by letter that Plaintiff believed Defendant had no right to terminate the Lease because Defendant exercised its five-year renewal option pursuant to Rider No. 1, making the expiration date of the Lease January 31, 2012. See Doc. 17-6; Am. Compl. ¶ 24. In that letter, Plaintiff also informed Defendant that Plaintiff believed Defendant was in default of the lease for vacating the leased premises. See Doc. 17-6; Am. Compl. ¶ 24.

On February 4, 2010, and July 23, 2010, Plaintiff‟s counsel sent Defendant letters demanding payment for amounts allegedly due and owing under the Lease. Am. Compl. ¶¶ 26, 28. Defendant did not pay the amounts demanded by ...


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