United States District Court, M.D. Pennsylvania
Order Filed: May 29, 2014, August 14, 2014, December 3, 2013
[Copyrighted Material Omitted]
For Clark Distribution Systems, Inc., Plaintiff: Michael A. Farnan, The Farnan Law Office, Pittsburgh, PA; Stephen J. Del Sole, William S. Stickman, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA; William S. Stickman, PRO HAC VICE, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA.
For The Clark Group, Inc., Consol Plaintiff: Stephen J. Del Sole, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA; William S. Stickman, PRO HAC VICE, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA.
For ALG Direct, Inc., Defendant: Daniel C. Sullivan, Ryan A. Mahoney, PRO HAC VICE, Sullivan Hincks & Conway, Oak Brook, IL; Elisabeth K. H. Pasqualini, Harrisburg, PA; John J. Barrett, Jr., Reger, Rizzo & Darnall, LLP, Philadelphia, PA.
For ALG Direct, Inc., Consol Third Party Plaintiff: Daniel C. Sullivan, Ryan A. Mahoney, PRO HAC VICE, Sullivan Hincks & Conway, Oak Brook, IL; John J. Barrett, Jr., Reger, Rizzo & Darnall, LLP, Philadelphia, PA.
For Clark Distribution Systems, Inc., Consol Third Party Defendant: William S. Stickman, PRO HAC VICE, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA.
For Mediator, Mediator: Joel Robin Burcat, SAUL EWING LLP, Harrisburg, PA.
For ALG Direct, Inc., Counterclaim Plaintiff: Elisabeth K. H. Pasqualini, Harrisburg, PA; John J. Barrett, Jr., Reger, Rizzo & Darnall, LLP, Philadelphia, PA; Ryan A. Mahoney, Sullivan Hincks & Conway, Oak Brook, IL.
For Clark Distribution Systems, Inc., Counterclaim Defendant: Michael A. Farnan, The Farnan Law Office, Pittsburgh, PA; Stephen J. Del Sole, William S. Stickman, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA.
Christopher C. Conner, Chief United States District Judge.
This is a consolidated civil action filed by plaintiffs Clark Distribution Systems, Inc. (" CDS" ) and Clark Group, Inc. (" Clark" ) against American Logistics Group, Inc., operating as ALG Direct, Inc. (" ALG" ). CDS, a freight forwarder, alleges that ALG, a logistics provider and distributor of printed materials, breached the parties' Transportation Services Agreement. Relatedly, Clark alleges that ALG breached the terms of a sublease executed between the parties. Presently before the court are plaintiffs' omnibus motion (Doc. 65) for summary judgment and the magistrate judge's report (Doc. 99) recommending that it be granted in part and denied in part. ALG filed objections (Doc. 100) to the magistrate judge's report and recommendation (" R& R" ), and the parties fully briefed the issues raised by ALG's objections. (See Docs. 101, 102, 105, 108). For the reasons set forth below, the court will adopt the R& R in part and reject it in part.
I. Factual Background 
Clark is the parent company of CDS, a logistics and transportation company that provides freight forwarder services. (Doc.
67 ¶ ¶ 1, 5; Doc. 71 ¶ ¶ 1, 5). ALG is a logistics company that often works with freight forwarders such as CDS to arrange for the distribution of its clients' freight. (Doc. 67 ¶ 2, 71 ¶ 2).
On June 28, 2010, CDS and ALG entered into a Transportation Services Agreement (" TSA" ), wherein CDS agreed to provide freight forwarding services for ALG. (Doc. 67 ¶ 4, 71 ¶ 4). During this same time period, ALG agreed to sublease one-half of Clark's warehouse in Harrisburg, Pennsylvania (" the Harrisburg Site." ). (Doc. 67 ¶ 7, 71 ¶ 7). ALG sought a Pennsylvania facility in which Clark would handle freight forwarding work pursuant to the TSA, while ALG handled separate co-mail and co-palletization operations after installing its own equipment. (Doc. 67 ¶ 10, 71 ¶ 10, 68-2 at 3). A Letter of Intent, executed before the sublease agreement, further delineates the parties' plans. (Doc. 67-4, 71 ¶ ¶ 58-61, 76 ¶ ¶ 58-61). Somewhat inexplicably, the sublease contains an integration clause and does not reference either the TSA or the Letter of Intent. (Doc. 67 ¶ ¶ 11-12, 67-1, 71 ¶ ¶ 11-12).
In October 2010, ALG's clients began submitting freight to the Harrisburg Site for freight forwarding services. (Docs. 67 ¶ 30, 71 ¶ 30). Immediately thereafter, a conflict arose between the parties concerning CDS's handling of the freight of one of ALG's clients, Vertis Incorporated (" Vertis" ). (Docs. 67 ¶ ¶ 14-35, 71 ¶ ¶ 14-35). As a result, in November 2010, ALG diverted all freight away from the Harrisburg Site while ALG employees attempted to organize the freight that was already there. (Docs. 71 ¶ 82, 76 ¶ 82).
Around Thanksgiving 2010, ALG staged a number of loads for CDS to deliver to CDS's competitor, Nationwide, for ultimate delivery to USPS. (Docs. 71 ¶ 83, 76 ¶ 83). ALG alleges that CDS failed to deliver this freight as staged; instead, the freight was loaded in a largely disorganized manner and sent to Nationwide. (Docs. 71 ¶ 84, 76 ¶ 84). ALG stopped paying invoices to CDS under the TSA in November 2010. (Doc. 67 ¶ 41; Doc. 71 ¶ 41). ALG also made its last rent payment under the Sublease in November 2010, which reflected a pre-payment of rent for the month of December. (See Doc. 67 ¶ 42, Doc. 71 ¶ 42, Doc. 67-1; compare Doc. 68-9 at 13-14 with Doc. 68-9 at 15-17). On December 17, 2010, legal counsel for Clark and CDS sent a letter to ALG demanding that ALG " immediately cease shipping of any additional [c]ommodities and make arrangements to collect all [c]ommodities located at CDS facilities." (Doc. 71 ¶ 85; Doc. 76 ¶ 85).
II. Procedural History
CDS filed the instant action against ALG and its then-president, Patrick Del Monico  on December 17, 2010, asserting
breach of contract and anticipatory repudiation against ALG. (Doc. 1 at 5-6). On July 29, 2011, the court granted ALG's motion to dismiss for lack of subject matter jurisdiction with leave to amend. (Doc. 32). CDS filed a proper amended complaint that same day, which alleges only breach of contract against ALG under the terms of the parties' transportation services agreement (" the TSA case" ). (Doc. 33 ¶ ¶ 30-32).
On January 26, 2012, the court granted a joint motion to consolidate the TSA case with Clark Group, Inc. v. ALG Direct, Inc. (Civ. A. No. 1:11-CV-1299), (" the Sublease case" ). In the Sublease case, Clark alleges that ALG breached the terms of the sublease executed between the parties. (Civ. A. No. 1:11-CV-1299, Doc. 1). After answering the complaint, ALG filed a third-party complaint against CDS. (Civ. A. No. 1:11-1299, Doc. 9). In the third-party complaint, ALG claims that CDS tortiously interfered with the sublease through its alleged abandonment of the TSA and that CDS and Clark conspired to cause ALG to default on the sublease. (Id.) On November 14, 2011, CDS filed its answer to ALG's third-party complaint. (Civ. A. No. 1:11-1299, Doc. 12).
After consolidation, ALG answered CDS's amended complaint from the TSA case. (Doc. 57). In its answer, ALG asserted several counterclaims against CDS for damages allegedly caused by CDS's mishandling of freight. (Id.)
CDS and Clark filed the instant omnibus motion (Doc. 65) for summary judgment on April 15, 2013. With respect to the TSA case, CDS alleges that the court should grant it partial summary judgment on ALG's counterclaims seeking an indemnification obligation for future damages incurred against Vertis. (Doc. 65 at 4, 66 at 20-24). However, while the motion was pending, ALG filed an amended counterclaim removing this claim (Doc. 93). Clark also asserts that summary judgment in its favor is warranted in the Sublease case because ALG breached the sublease by withholding payment. (Doc. 66 at 7-9). ALG does not contest that it withheld payment, but instead asserts that it is not liable for damages because Clark breached ALG's covenant of quiet enjoyment by actually and constructively evicting ALG from the Harrisburg Site. (Doc. 72 at 1).
ALG responds by emphasizing the Letter of Intent and the plain language of the TSA. According to ALG, the parties intended for CDS to handle and prepare ALG's clients' commodities for delivery. ALG argues that CDS's failure to complete this task constructively evicted ALG because it constituted an overt restriction on the use of the subleased premises, limiting the premises' utility, and forcing ALG to remove its commodities from the site. (Doc. 72 at 8-11). ALG also contends that it was actually evicted from the Harrisburg Site when Clark's counsel sent the December 17, 2010 letter, demanding that ALG " cease shipping of any additional [c]ommodities and make arrangements to collect all [c]ommodities located at CDS facilities." (Id. at 11).
Clark avers that there is no factual or legal support for ALG's defenses. Clark contends that the sublease between the parties was fully integrated and that the
court cannot look to the letter of intent or the TSA to demonstrate the parties' intent under the sublease. (Doc. 75 at 4-5). Clark alleges that its conduct does not rise to the level of interference with actual possession necessary to constitute a breach of the covenant of quiet enjoyment. (Id. at 5-9). As a factual matter, Clark asserts that the sublease was not limited to ALG's operations under the TSA, but also contemplated ALG implementing co-mail and co-palletization operations at the site. (Id. at 9-11). Clark further contends that its actions did not force ALG to remove its commodities from the site, and that ALG took this action unilaterally. (Id. at 11-12).
The instant motion was referred to Magistrate Judge Susan E. Schwab, who filed an R& R on December 3, 2013. (Doc. 99). The Magistrate Judge recommends that the court deny CDS's motion for partial summary judgment as moot in light of ALG's amended counterclaim. The Magistrate Judge further recommends that the court grant Clark's motion for summary judgment as it relates to the Sublease case. The Magistrate Judge finds that the parties do not dispute ALG's withholding of rent payments and concludes that the record evidence does not support ALG's defenses of constructive or actual eviction.
The Magistrate Judge finds that ALG was not constructively evicted because the sublease contemplated other uses for the Harrisburg Site besides CDS's handling of ALG's clients' commodities. (Id. at 17-18). Specifically, the sublease indicates that ALG's intended use of the Harrisburg Site was for " general warehouse purposes" and other " common and usual purposes pertaining to [its] business." (Doc. 67-1 at 5). The Magistrate Judge determines that the sublease was fully integrated and that its terms were unambiguous. (Doc. 99 at 15-16). Thus, the Magistrate Judge concludes that it is precluded from considering extrinsic evidence, such as the Letter of Intent or the TSA, in its analysis of the sublease's purpose. (Id.) Based on the sublease's terms, the Magistrate Judge reasons that " ALG still maintained the right and privilege under the sublease to enter and use the Harrisburg site for business purposes." (Doc. 99 at 18). The Magistrate Judge further notes that there was no evidence that ALG was blocked from the Harrisburg Site or that the Harrisburg Site was changed in some fundamental way as to render it unsuitable for ALG's business purposes. (Id. at 18).
The Magistrate Judge also concludes that a jury could not reasonably determine that Clark actually evicted ALG. The Judge reasons that " ALG's decision to withhold rental payments occurred before Clark sent ALG the letter demanding that ALG 'cease shipping of any additional [c]ommodities and make arrangements to collect all [c]ommodities located at CDS facilities.'" (Doc. 99 at 18). Thus, the Magistrate Judge opines that ALG's defenses are meritless and that the court should grant summary judgment to Clark on its breach of contract claim.
ALG filed objections (Doc. 100) to the Magistrate Judge's recommendation that the court should grant Clark's motion for summary judgment as it relates to the Sublease case. Generally, ALG asserts that questions of material fact and law remain concerning its defenses that preclude summary judgment. ALG also asserts that the Magistrate Judge's finding that ALG's third-party complaint against CDS for liability on the sublease survives summary judgment is contradictory to the Magistrate Judge's recommendation to grant Clark's motion for summary judgment in the Sublease case. Neither party objected to the Magistrate Judge's recommendation to deny CDS's motion for partial
summary judgment as moot in the TSA case. ALG's objections are fully briefed and ripe for disposition.
III. Legal Standard
A. Legal Standard for a Motion for Summary Judgment
Through summary adjudication the court may dispose of those claims that do not present a " genuine dispute as to any material fact" and for which a jury trial would be an empty and unnecessary formality. See Fed.R.Civ.P. 56(a). The burden of proof is upon the non-moving party to come forth with " affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon, 331 F.Supp.2d 311, 315 (M.D. Pa. 2004); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Only if this threshold is met may the cause of action proceed.
Pappas, 331 F.Supp.2d at 315.
B. Standard of Review for a Magistrate Judge's Recommendation
When parties file objections to a magistrate judge's report and recommendation, the court must perform a de novo review of the contested portions of the report. Sample v. Diecks, 885 F.2d 1099, 1106 n.3 (3d Cir. 1989) (citing 28 U.S.C. § 636(b)(1)(C)). Local Rule 72.3 requires " written objections which . . . specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections." The court will review the uncontested portions of the Magistrate Judge's report for " clear error on the face of the record." See Cruz v. Chater, 990 F.Supp. 375, 375-78 (M.D. Pa. 1998) (quoting Fed.R.Civ.P. 72(b) advisory committee's note (1983)).
The court will first review the Magistrate Judge's recommendation that the court deny CDS's motion for summary judgment in the TSA case as moot in light of ALG's amended counterclaim. The court will subsequently examine whether a jury could reasonably find that Clark actually or constructively evicted ALG from the Harrisburg Site, which would preclude Clark's recovery of damages for ALG's alleged breach of the sublease. Finally, the court will address the Magistrate Judge's determination that ALG's third-party complaint against CDS in the Sublease case survives despite her recommendation to grant summary judgment in favor of Clark.
A. Moot Issue
CDS asserts that partial summary judgment should be granted on ALG's counterclaims in the TSA case for damages associated with claims brought against ALG by Vertis. While the instant motion was pending, ALG filed an amended counterclaim that removed the claim for Vertis damages. (Doc. 93). The Magistrate Judge thus recommended that the court deny CDS's partial motion for summary judgment as moot. The parties do not object to the Magistrate Judge's recommendation on this ground, (see Doc. 100 at 2 n.2, 101 at 15 n.9) and the court does not find it to be clearly erroneous. Thus, the court will deny CDS's motion for partial summary judgment as moot.
B. ALG's Affirmative Defenses
ALG does not contest that it withheld payments contrary to the sublease's terms. Instead, ALG asserts that it is not liable because Clark breached ALG's implied covenant of quiet enjoyment. The covenant of quiet enjoyment provides that a lessor must permit a tenant the full enjoyment of its leasehold subject to any rights reserved to the lessor. Checker Oil Co. v. Delaware, Inc. v. Harold H. Hogg, Inc., 380 A.2d 815, 818 (Pa. S.Ct. 1977). Under Pennsylvania law, the covenant of quiet enjoyment is implied when not expressly provided for in a lease. Kohl v. PNC Bank Nat'l Ass'n, 590 Pa. 151, 912 A.2d 237, 248 (Pa. 2006). Any wrongful act by the lessor that interferes with the lessee's possession, in whole or in part, breaches the covenant of quiet enjoyment and constitutes a termination of the lease agreement. Id. at 248-49 (quoting Kelly v. Miller, 249 Pa. 314, 94 A. 1055, 1056 (1915)). Hence, the breach of a covenant of quiet enjoyment may occur through constructive or actual eviction. Id. In the case sub judice, ALG alleges that Clark breached ALG's implied covenant of quiet enjoyment through both constructive and actual eviction of ALG from the Harrisburg Site. The court will address each theory in turn.
1. Constructive Eviction
Constructive eviction is sufficient to breach the covenant of quiet enjoyment when the lessor's acts substantially decrease the utility of the premises. Kohl, 912 A.2d at 249. In other words, a breach of the covenant of quiet enjoyment through constructive eviction occurs when a lessor " changes some essential aspect of the premises so substantially as to render the property unsuitable for the purposes for which it is leased." North Wales Assoc., Inc., v. Intown Properties, Inc., 152 F.Supp.2d 643, 645-46 (E.D. Pa. 2001). The interference must be " of a substantial nature" and result in the tenant's abandonment of the premises. Kuriger v. Cramer, 345 Pa.Super. 595, 498 A.2d 1331, 1338 (Pa. S.Ct. 1985).
Constructive eviction sufficient to breach the covenant of quiet enjoyment
typically involves " a structural change resulting in a diminishment of the utility of the leased premises" or " an overt restriction placed on the use of property." Kohl v. PNC Bank Nat'l Assoc., 590 Pa. 151, 912 A.2d 237, 249 (Pa. 2006). For example, in 2401 Pennsylvania Ave. Corp. v. Federation of Jewish Agencies of Greater Phila., 507 Pa. 166, 489 A.2d 733 (Pa. 1985), the court found that the landlord breached the new tenant's covenant of quiet enjoyment by extending the lease of a holdover tenant for the space previously leased to the new tenant. In Checker Oil Co. Of Delaware v. Harold H. Hogg, Inc., 251 Pa.Super. 351, 380 A.2d 815, 819 (Pa. S.Ct. 1977), the court found that the landowner breached the tenant's covenant of quiet enjoyment by erecting a guardrail blocking one of two entries to tenant's gasoline station. The court reasoned that " [t]he impairment of the lessee's possession need not be total, but the utility of the premises must be substantially decreased by the landlord's interference with a right or privilege which is necessary to the enjoyment of the premises." 380 A.2d at 819. See also Pollock v. Morelli, 245 Pa.Super. 388, 369 A.2d 458 (Pa. S.Ct. 1976) (finding breach of covenant where landowner created mini-mall around tenant's drycleaning store). A landlord's bad faith lawsuit that prevents the tenant from marketing the property may also constitute a constructive eviction. See Kohl, 912 A.2d at 248-49. Minor misdeeds on behalf of the landlord that do not substantially affect a tenant's use of the leasehold are not sufficient. See North Wales Associates, Inc. v. Intown Properties, Inc., 152 F.Supp.2d 643, 645-46 (E.D. Pa. 2001) (holding that landlord did not breach covenant of quiet enjoyment through the provision of substandard lease space because defendant did not show that simultaneous operation of heat and air conditioning systems and dirt discharge from the air conditioner substantially rendered the property unsuitable); Rittenhouse v. Barclay White, Inc., 425 Pa.Super. 501, 625 A.2d 1208 (Pa. S.Ct. 1993) (finding no breach of covenant where landlord failed to obtain proper occupancy permits); Perakis v. Lucerne Energy, Inc., 385 Pa.Super. 302, 560 A.2d 814, 816 (Pa. Super. 1989) (finding no breach where defendants did not present any evidence in support of assertion that business opportunities relating to other properties may have been affected by sale of leased premises); Derrickheim Co. v. Brown, 305 Pa.Super. 173, 451 A.2d 477 (Pa. 1982) (noting that normally, the existence of a cloud over title is not sufficient to breach the covenant of quiet enjoyment).
To determine whether Clark's actions substantially affected ALG's use of the premises, the court must first analyze the purposes for which ALG leased the Harrisburg Site. The sublease specifically provides that ALG would use the Harrisburg Site for " general warehouse purposes" and other " common and usual purposes pertaining to [its] business." (Doc. 67-1 at 5). Absent ambiguity, the plain meaning of the terms provided in the sublease control the court's inquiry concerning the intentions of the parties. Drysdale v. Woerth, 153 F.Supp.2d 678, 685 (E.D. Pa. 2001) (quoting Warren v. Greenfield, 407 Pa.Super. 600, 595 A.2d 1308, 1311 (Pa. S.Ct. 1991) (" The intent of the parties to a written contract is regarded as embodied in the writing itself." )).
ALG asserts that the predominant purpose of the sublease was to facilitate operations under the TSA, pointing to the parties' previous Letter of Intent and the TSA itself as support. ALG contends that CDS's failure to perform under the TSA agreement rendered ALG's use of the
Harrisburg Site unsuitable. However, it is well established that the parol evidence rule bars any extrinsic evidence of prior representations of the parties if the contract is fully integrated. See Rahemtulla v. Hassam, 539 F.Supp.2d 755, 772 (M.D. Pa. 2008) (citations omitted). If a written contract contains an integration clause, the court may not consider any other evidence of the parties' agreement outside the four corners of the contract. Id.
ALG does not object to the Magistrate Judge's determination that the sublease was a fully integrated contract. Rather, ALG asserts that the sublease is silent concerning the nature of ALG's " common and usual" business purposes and, therefore, the court must look to the parties' prior representations in the Letter of Intent and the TSA to determine the application of this term. (Doc. 100 at 6-7).
If a fully integrated contract contains an ambiguous term, the court may evaluate parol evidence to clarify and define the ambiguous contractual term. Bethlehem Steel Corp. v. United States, 270 F.3d 135, 139 (3d Cir. 2001); see also Neff v. Cooper Hosp./Univ. Medical Center, Civ. A. No. 96-5875, 1999 WL 667283, at *8 (E.D. Pa. Aug. 24, 1999) (" Where, as in this case, the Court determines that a contract with an integration clause contains ambiguous terms, it is appropriate to receive in evidence parol evidence . . . to explain the meaning of the ambiguous terms." ). A term is ambiguous if it possesses two or more meanings or it could be understood in more than one way. Mellon Bank, N.A. v. Aetna Business Credit, 619 F.2d 1001, 1011 (3d Cir. 1980). In other words, when the court can divine the term's meaning " without any guide other than a knowledge of the simple facts on which, from the nature of the language in general, its meaning depends," the term is not ambiguous. Baney v. Eoute, 2001 PA Super. 260, 784 A.2d 132, 136 (Pa. S.Ct. 2001).
In the case sub judice, the term " common and usual" business purposes is not ambiguous. It is not a term that is capable of two meanings in the present circumstances. Indeed, the parties do not dispute its application: ALG agrees with Clark that the Sublease contemplated the use of the Harrisburg Site for operations under the TSA agreement as well as for other business operations, such as ALG's eventual co-mail and co-palletization operations. (See Doc. 67 ¶ 10; Doc. 71 ¶ 10). The parties' dispute centers on the relative importance of the TSA operations to ALG's enjoyment of the premises. This is not a question of contract interpretation, nor a question of the parties' intent behind creating the sublease. It is simply a question
of fact. The court is barred from examining prior representations of the parties to determine the intent behind the sublease under the parol evidence rule, but the court is certainly not barred from considering extrinsic evidence concerning whether ALG's " common and usual" business use of the property was substantially disturbed by CDS's inaction under the TSA.
In this vein, the R& R concludes that Clark did not violate ALG's right to quiet enjoyment of the premises through constructive eviction because ALG could have continued to use the premises for business purposes other than those contemplated under the TSA. (Doc. 99 at 17-18). However, constructive eviction may occur in situations where the property remains technically usable for its intended purpose. For example, the tenants of the properties at issue in Checker Oil Co. and Pollock were able to continue their business operations, but the landlord's structural changes substantially diminished the utility of using those premises for business purposes. Similarly, ALG was certainly capable of continuing to enter and use the Harrisburg Site for other business purposes, but a jury could reasonably find that its inability to conduct business operations pursuant to the TSA substantially diminished the utility of using the Harrisburg Site for business purposes. It is undisputed that, as of November 2010, ALG's only business use of the Harrisburg Site was for operations pursuant to the TSA. (See Doc. 67 ¶ 10; Doc. 71 ¶ ¶ 10, 62; Doc. 76 ¶ 62). A factfinder could reasonably conclude that ALG did not unilaterally decide to abandon the Harrisburg Site by diverting and removing its commodities, but instead that CDS's non-performance under the TSA forced its hand, resulting in a constructive eviction. Thus, Clark is not entitled to judgment as a matter of law and its summary judgment motion must be denied.
2. Actual Eviction
According to the R& R, a jury could not reasonably conclude that Clark actually evicted ALG. ALG argues that actual eviction occurred when Clark and CDS's counsel sent ALG a letter dated December 17, 2010, directing ALG to " cease shipping of any additional [c]ommodities and make arrangements to collect all [c]ommodities located at CDS facilities." (Docs. 71 ¶ 85, 76 ¶ 85). The Magistrate Judge reasons that Clark did not actually evict ALG pursuant
to this letter because ALG's decision to withhold rental payments occurred in November 2010. (Doc. 99 at 18). In its objections, ALG highlights credible record evidence indicating that ALG's last rent payment in November 2010 actually represented the pre-payment of rent for the month of December. (See Doc. 67 ¶ 42, Doc. 71 ¶ 42, Doc. 67-1; compare Doc. 68-9 at 13-14 with Doc. 68-9 at 15-17).
Clark asserts that the timing of ALG's final rent payment is irrelevant because the evidence indicates that (1) ALG's decision to cease rent payments occurred in November 2010 and (2) ALG actually removed its commodities from the Harrisburg Site in November 2010. (Doc. 101 at 4 n.4, 13, 13 n.6). This argument is unavailing: the actual withholding of rental payments, as opposed to the decision to do so in the future, constitutes a breach. Moreover, Clark does not identify any provision in the sublease indicating that ALG's removal or diversion of commodities from the Harrisburg Site would ex proprio vigore constitute a breach of the sublease sufficient to negate ALG's implied covenant of quiet enjoyment. Regardless of ALG's internal decision to cease rent payments ...