United States District Court, S.D. Ohio, Eastern Division
Vascura Magistrate Judge.
OPINION & ORDER
ALGENON L. MARBLEY CHIEF UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Plaintiff/Counterclaim
Defendant Snyder Development Company's
(“Snyder”) Motion to Dismiss
Defendants/Counterclaimants AutoZone, Inc.'s and AutoZone
Development LLC's Restated Counterclaim against Snyder. (ECF
No. 37; 58). Snyder's first motion to dismiss (ECF
No. 37) is MOOT. For the reasons that
follow, Snyder's second motion to dismiss (ECF No. 58) is
October of 2002, Snyder agreed to lease to AutoZone a unit in
a strip mall located on Agler Road in Gahanna, Ohio. (ECF No.
2 at 2). They entered into a lease agreement for five years
with three separate options to extend the lease for renewal
periods of five years. Id. at 12. AutoZone exercised
those first two of those options to renew. Id. at 5.
The lease agreement included a clause requiring Snyder's
prior written consent should AutoZone wish to assign or
sublet the unit. (ECF No. 58 at 3).
April of 2015, however, AutoZone entered into a lease
agreement for a rental unit on the other side of the strip
mall with FD Gahanna Ohio Agler Road LLC (“FD
Gahanna”). FD Gahanna owned the other half of the strip
mall on Agler Road and was allegedly attempting to purchase
Snyder's half at a reduced “fire sale” price.
(ECF No. 53 at 12). To do so, FD Gahanna was purportedly
engaging in sly tactics-it offered AutoZone a fifteen-year
lease and agreed to assume and pay off AutoZone's
existing lease with Snyder so that the unit that AutoZone was
renting would become vacant. (Id. at 12; ECF No. 58
at 3). In December 2015, AutoZone vacated the Snyder unit and
stopped paying rent pursuant to its new lease with FD
Gahanna. FD Gahanna did not make payments to Snyder, arguing
that because Snyder never gave its consent to the assignment,
it was never obligated to pay. (ECF No. 53 at 11-12).
Snyder brought this case alleging claims of breach of
contract and negligence in relation to the lease with
AutoZone. (ECF No. 2). In response, AutoZone brought a
third-party complaint against FD Gahanna and two
counterclaims against Snyder for breach of contract and
tortious interference with contract. (ECF No. 25; ECF No.
53). Snyder now moves to dismiss the counterclaims brought
against it by AutoZone, arguing: (1) that it has not breached
the contract between them because the express terms of that
contract gave Snyder sole discretion to permit or refuse
assignment of the lease; and (2) that AutoZone failed to
plead plausibly lack of justification in its tortious
interference with contract claim. (ECF No. 37; 58). AutoZone
opposes the motion to dismiss arguing that Snyder's
arguments are impermissible attempts to try this case at the
pleading stage and that it has sufficiently pled both causes
of action. (ECF No. 40).
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6), the Court may
dismiss a cause of action for “failure to state a claim
upon which relief can be granted.” Fed.R.Civ.P.
12(b)(6). Such a motion “is a test of the
plaintiff's cause of action as stated in the complaint,
not a challenge to the plaintiff's factual
allegations.” Golden v. City of Columbus, 404
F.3d 950, 958-59 (6th Cir. 2005). Thus, the Court “must
construe the complaint in the light most favorable to the
plaintiff” and “accept all well-pled factual
allegations as true[.]” Ouwinga v. Benistar 419
Plan Servs., Inc., 694 F.3d 783, 790 (6th Cir. 2012). If
more than one inference may be drawn from an allegation, the
Court must resolve the conflict in favor of the plaintiff.
Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir. 1993).
The Court cannot dismiss a complaint for failure to state a
claim “unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim
which would entitle him to relief.” Id.
a complaint must contain a “short and plain statement
of the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). The allegations need not
be detailed but must “give the defendant fair notice of
what the claim is, and the grounds upon which it
rests.” Nader v. Blackwell, 545 F.3d 459, 470
(6th Cir. 2008) (quoting Erickson v. Pardus, 551
U.S. 89, 93 (2007)). A complaint's factual allegations
“must be enough to raise a right to relief above the
speculative level, ” and must contain “enough
facts to state a claim to relief that is plausible on its
face.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555, 570 (2007). A claim is plausible when it
contains “factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). The Court is not required to accept as
true mere legal conclusions unsupported by factual
allegations. Id. (citing Twombly, 550 U.S.
LAW & ANALYSIS
Breach of Contract
first claim is for breach of contract. AutoZone argues Snyder
materially breached the terms of their lease by refusing to
consent to its attempt to assign the lease to FD Gahanna
because this refusal violated the “implied duty of good
faith and fair dealing inherent in the Snyder lease.”
(ECF No. 53 at 13). Additionally, AutoZone claims that Snyder
acted in a “commercially unreasonable” manner by
refusing the assignment because Snyder had no legitimate
basis to refuse consent since the assignment would not have
eliminated AutoZone's underlying liability on the lease
and would have only added another obligor (FD Gahanna).
Id. In response, Snyder argues that it did not
breach the lease agreement because it had an “absolute
and exclusive right” to withhold written consent to the
lease and that its refusal to give consent was not only
commercially reasonable but an “astute and sensible
business decision and conduct.” (ECF No. 58 at 7).
issue is whether the implied covenant of good faith and fair
dealing applies to the contractual provision permitting
AutoZone to assign its lease only with Snyder's
permission. Snyder argues that it did not breach the implied
covenant of good faith and fair dealing because that covenant
cannot be used to override the express terms of lease
agreement, which vest it with the exclusive ability to
withhold consent to assignment. Id. at 8. AutoZone
acknowledges that there is a rift in Ohio law regarding
whether a landlord is required to act in a commercially
reasonable manner in deciding to consent to a lease
assignment. (ECF No. 40 at 6-7) (citing Littlejohn v.
Parrish, 839 N.E.2d 49, 54 (Ohio App. 1st Dist. 2005)
and F & L Ctr. Co. v. Cunningham Drug Stores,
Inc., 19 Ohio App.3d 72, 75, 482 N.E.2d 1296, 1299
(1984)). AutoZone urges this court to follow the
Littlejohn decision, which criticized the approach
used in F&L and determined ...