GTP Structures I, LLC v. Wisper II, LLC

153 F.Supp.3d 983

GTP Structures I, LLC, Plaintiff,

v.Wisper II, LLC, Defendant.

No. 14-1317

United States District Court, W.D. Tennessee, Eastern Division.

Signed December 22, 2015

Andrew Paul Fishkin, Fishkin Lucks LLP, Newark, NJ, E. Franklin Childress, Jr., Baker Donelson Bearman Caldwell & Berkowitz, Memphis, TN, for Plaintiff.

Stephen L. Hughes, Kizer, Bonds, Hughes & Bowen, PLLC, Milan, TN, John D. Burleson, Matthew Robert Courtner, Milton Dale Conder, Jr., Robert O. Binkley, Jr., Rainey Kizer Reviere & Bell, PLC, Jackson, TN, for Defendant.

ORDER GRANTING IN PART THE PARTIES' CROSS-MOTIONS FOR SUMMARY JUDGMENT

J. DANIEL BREEN, CHIEF UNITED STATES DISTRICT JUDGE

INTRODUCTION

Plaintiff, GTP Structures I, LLC (“GTP”), brought this action on November 25, 2014, pursuant to this Court's diversity jurisdiction under 28 U.S.C. § 1332, against Defendant, Wisper II, LLC (“Wisper II”), alleging claims for breach of contract, unjust enrichment, and mandatory injunctive relief.¹ (Docket Entry (“D.E.”) 1.) Before the Court are the parties' cross-motions for summary judgment. (D.E. 53; D.E. 56.)

STANDARD OF REVIEW

Rule 56 of the Federal Rules of Civil Procedure provides in pertinent part that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The court must view all evidence in the light most favorable to the nonmoving party and draw all justifiable inferences in the nonmoving party's favor. Ondo v. City of Cleveland , 795 F.3d 597, 603 (6th Cir.2015). “There is a genuine issue of material fact only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. “The test is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. The moving party must initially show the absence of a genuine issue of material fact. Id. (citing Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). It is then incumbent upon the nonmoving party to “present significant probative evidence to do more than show that there is some metaphysical doubt as to the material facts to defeat the motion.” Id. The court may not make credibility determinations or weigh evidence as these are functions of the jury rather than the judge. Yazdian v. ConMed Endoscopic Tech., Inc. , 793 F.3d 634, 644 (6th Cir.2015). Cross-motions for summary judgment are analyzed under the same standard. La Quinta Corp. v. Heartland Props. LLC , 603 F.3d 327, 335 (6th Cir.2010). Each motion is evaluated on its own merits. Id. A party may move for partial summary judgment identifying the part of each claim on which summary judgment is sought. See Fed. R. Civ. P. 56(a).

If the movant “also bears the burden of persuasion at trial, the moving party's initial summary judgment burden is higher in that it must show that the record contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to disbelieve it.” Cockrel v. Shelby Cty. Sch. Dist. , 270 F.3d 1036, 1056 (6th Cir.2001) ; accord Hantz Fin. Servs., Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Penn. , No 13-cv-11197, 130 F.Supp.3d 1089, 1091–92, 2015 WL 5460632, at *2 (E.D.Mich. Sept. 17, 2015). “[S]ummary judgment in favor of the party with the burden of persuasion is inappropriate when the evidence is susceptible to different interpretations or inferences by the trier of fact.” Cockrel , 270 F.3d at 1056 ; see also Arnett v. Myers , 281 F.3d 552, 561 (6th Cir.2002). “Plaintiff['s] showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for plaintiffs.” Hantz Fin. Servs . , 130 F.Supp.3d at 1092, 2015 WL 5460632, at *2. “If the defendant [ ] respond[s] to the motion with controverting evidence which demonstrates a genuine issue of material fact, [the plaintiff's] motion must be denied.” Kassouf v. U.S. Liability Co. , No. 1:14CV2656, 2015 WL 5542530, at *3 (N.D.Ohio Sept. 18, 2015).

FACTS

Wisper was a Tennessee limited liability company that provided wireless internet access services through equipment installed on wireless cell towers. (D.E. 1 at ¶ 6.). It leased the space for its equipment on the cell towers from NTCH-West Tenn, Inc. (“NTCH”), through two Master Lease Agreements (“MLAs”), on July 13, 2012. (Id. at ¶ 7.) The MLAs had identical terms and governed specific sets of site lease agreements and associated Site Lease Agreements (collectively, the “SLAs”). (Id. ) All of the SLAs had identical terms except to identify the specific tower on which NTCH leased the space to Wisper. (Id. at ¶ 8.) NTCH and Global Tower Properties, LLC (“Global Tower”), entered into an Asset Purchase Agreement (“APA”), under which Global Tower purchased all of NTCH's rights, title, and interest in and to real and personal assets, properties, and rights, including NTCH's rights under the MLAs and SLAs. (Id. at ¶ 9.) Global Tower then subsequently assigned its interests under the APA to Plaintiff. (Id. )

The MLAs are for twenty-five-year terms, and the “Initial Term” of each SLA is for five years. (Id. at ¶ 11.) Unless the SLA is properly terminated at the end of the first five year term, it is automatically extended for another four additional five year terms (“Extension Terms”). (Id. ) The “Initial Term” and any “Extension Terms” are collectively referred to as the “Term.” (Id. ) Pursuant to the MLAs, the monthly rent (“Rent”) for each SLA started at “$1,000 as outlined in each particular SLA” and was to be paid in monthly installments during the Term.” (Id. at ¶ 12.) Both the MLAs and the SLAs provide that “the Rent for each month shall be 103% of the monthly Rent for the immediately preceding year commencing on the annual anniversary” of the particular SLA beginning date. (Id. )

The MLAs provide that failure to pay rent, after notice and lapse of a fifteen day cure period with no cure, constitutes default. (Id. at ¶ 13.) The party to whom rent is due then

may pursue all rights and remedies permitted by applicable law, including but not limited to the following:

(i) ... declare to be immediately due and payable, ... a sum equal to (y) all Rent ... due ... and in arrears at the time of default, plus (z) the Rent reserved for the then entire unexpired balance of the term of the SLA (taken without regard to early termination of the Term), ... up to the end of such Term ...; and/or

(ii) ... terminate the SLA ... [whereupon, the party in default shall] quit and surrender possession of the Premises to Lessor ....

(Id. )

On March 27, 2013, Wisper filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of Tennessee. (Id. at ¶ 15.) It remained in possession of its assets as Debtor in Possession and kept its equipment installed on the wireless cell towers that were the subject of the MLAs and SLAs. (Id. at ¶ 16.) Pursuant to a Plan of Reorganization (the “Plan”) confirmed by the bankruptcy court, Wisper was merged into Wisper II, with Wisper II—Defendant in the instant matter—as the surviving entity. (Id. at ¶ 17.) Following the Plan and a consent order for the assumption and assignment of unexpired lease agreements (“Consent Order”), the unexpired MLAs and forty-nine of the associated SLAs were assumed and assigned to Wisper II. (Id. at ¶¶ 18-19.) Accordingly, Wisper II became responsible for all obligations and liability for performance under the MLAs and associated SLAs. (Id. at ¶ 20.)

Wisper II continued to provide wireless internet service to its customers through its equipment located on the wireless cell towers but beginning in May of 2014, ceased to pay GTP the rent owed. (Id. at ¶ 21.) Ruth Dowling, GTP's legal counsel, contracted Tom Farrell, Wisper II's General Manager, in June of 2014 to inform Farrell of the default and to seek information on when or if rent would be paid. (D.E. 53-13.) Over the subsequent months, Farrell and Dowling continued to communicate about the default and potential lease renegotiations involving NTCH. (See D.E. 53-14; D.E 53-15.) GTP had yet to receive any of the outstanding rent when it filed suit on November 25, 2014. (D.E. 1 at ¶ 23.)

On March 18, 2015, Wisper II filed a motion for a preliminary injunction to enjoin GTP “from taking any action to disable, disconnect and/or remove or dispose of Wisper II's Communication Facility on or from any of the remaining thirty seven (37) Tower sites” where its equipment remained. (D.E. 21 at 4.) On March 24, Defendant sought to withdraw its motion following a mutual agreement of the parties. (D.E. 25.) The motion was then terminated. On June 24, 2015, Wisper II's remaining equipment on the cell towers were removed, and it made a one-time payment of $140,968.20 to GTP. (D.E. 53-2 at 6.)

THE PARTIES' MOTIONS

Plaintiff submits in its motion and supporting memoranda of law that: (1) it substantially complied with the contractual condition precedent to maintaining an action for default, and (2) it made reasonable efforts to mitigate the damage caused by Defendant's breach. (D.E. 53-2; D.E. 60.) Defendant contends that: (1) Plaintiff failed to comply with the condition precedent before filing suit—specifically that its method of giving notice of the default and the notice itself were inadequate, (2) there is a disputed issue of material fact as to whether Plaintiff engaged in sufficient mitigation efforts to offset its damages, and (3) there exists a disputed issue of material fact as to whether Defendant's liability is capped at $300,000. (D.E. 58.)

ANALYSIS

Choice of Law

In a diversity action, state substantive law governs. Performance Contracting, Inc. v. Dyna S teel Corp. , 750 F.3d 608, 611 (6th Cir.2014). This Court must also apply the choice-of-law rules of Tennessee....