TOWNSHIP OF WINSLOW v. NEXTEL COMMUNICATIONS OF THE MID-ATLANTIC, INC., 1:17-cv-02618

In April 2004 the Township of Winslow (Plaintiff) and Nextel Communications (Nextel) entered a Communications Site Lease for space on a Township water tank; initial five-year term with four automatic five-year renewals.
Monthly rent was $1,750, increased on renewal and by $250 after a 2010 amendment permitting Clearwire to sublease space.
No party terminated the Lease before renewal terms began; Plaintiff alleges Defendants unilaterally terminated the Lease effective August 31, 2016 and refused to pay rent.
Defendants submitted two letters (July 7, 2016 and August 16, 2016) invoking Section 10(v) of the Lease allowing termination for economic or technological reasons; the letters appear on Sprint letterhead and reference Clearwire, not Nextel.
Plaintiff asserted three counts: (I) breach of contract; (II) breach of implied covenant of good faith and fair dealing; (III) joint and several liability. Defendants moved to dismiss under Rule 12(b)(6).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether court may consider the Lease and termination letters on a 12(b)(6) motion	Complaint is based on the Lease and the alleged termination letters	Letters and Lease are exhibits to the motion, not the complaint	Court may consider the Lease and the July 7 and August 16 letters as integral to the complaint
Whether Nextel breached the Lease by purported termination	Defendants unilaterally terminated without proper cause; lease in effect until May 2020	Section 10(v) permitted termination for technological/economic reasons	Denied dismissal of breach claim: letters purport to terminate but were not shown to be sent by Nextel (party to the Lease), so plaintiff may proceed
Whether plaintiff sufficiently pleaded breach of implied covenant of good faith and fair dealing	Termination was done in bad faith and injured Plaintiff's contractual rights	Plaintiff pleaded only conclusory allegations, no motive or intent	Dismissed Count II for failure to plead bad motive or specific facts supporting bad faith
Whether joint and several liability is a standalone cause of action	Plaintiff included joint and several liability as Count III	Joint-and-several liability is not a separate cause of action	Dismissed Count III as technically improper; plaintiff may still pursue joint-and-several liability as a remedy or theory of recovery

Evancho v. Fisher, 423 F.3d 347 (3d Cir. 2005) (pleading standard and factual-acceptance on motion to dismiss)
Bell Atl. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (applying Twombly to all civil actions)
Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192 (3d Cir. 1993) (when courts may consider documents outside complaint)
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (documents integral to complaint may be considered)
Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (elements of breach of contract under New Jersey law)
Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159 (3d Cir. 2001) (implied covenant protects the fruits of the contract)
Wilson v. Amerada Hess Corp., 773 A.2d 1121 (N.J. 2001) (bad motive required to sustain implied covenant claim)
Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 864 A.2d 387 (N.J. 2005) (bad faith or improper motive standard for implied covenant)
Sons of Thunder, Inc. v. Borden, Inc., 690 A.2d 575 (N.J. 1997) (definition of the implied covenant of good faith and fair dealing)