United States Cellular Operating Company of Medford v. Western Radio Services Co., UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON PORTLAND DIVISION (June 11, 2013).
The following are excerpts from the Court's Opinion and Order (citations omitted):
Western Radio Services Co. ("Western Radio" or "Defendant") leases land on Walker Mountain from the U.S. Forest Service ("Forest Service" or "Plaintiff") on which Western Radio maintains a communications tower, a support building, and a generator pad (collectively, "Original Tower"). Beginning in August 2010, Western Radio constructed a new communications tower at the same site ("New Tower"). In the underlying action, the Court has held that Western Radio breached its lease with the Forest Service when it constructed the New Tower without receiving final approval from the Forest Service and that the New Tower was therefore a continuing trespass on the Forest Service's land. The Court has ordered Western Radio to remove all trespassing structures and to restore the site by August 30, 2013.
Under a series of agreements with Western Radio, U.S. Cellular Operating Company of Medford ("U.S. Cellular" or "Intervenor-Plaintiff") leases the right to place cellular telephone and related microwave antennas and other equipment on Western Radio's tower on Walker Mountain. An amendment to the lease, signed in November 2009, provides that the tower described in the lease refers "with equal force and effect to a substitute tower proposed to be constructed in place of [Western Radio's] existing tower" and that U.S. Cellular "covenants to cooperate with [Western Radio] in the removal of [U.S. Cellular's] antennas and their reattachment ... upon any such substitute tower following its construction."
On July 24, 2012, while the Forest Service's summary judgment motion was pending in the underlying case, Western Radio sent a letter to U.S. Cellular demanding that U.S. Cellular move its equipment to the New Tower ("demand letter"). Specifically, the demand letter asserted that U.S. Cellular was not complying with the lease amendment and that "[i]f US Cellular fails to cure the default within 30 days, Western [Radio] will exercise its remedies under section 18 of the lease." Section 18 of the lease allows Western Radio, upon default by U.S. Cellular, to terminate the lease and to remove U.S. Cellular's equipment from Western Radio's tower, among other possible remedies.
Aware that the Forest Service considered the New Tower to be unauthorized and was seeking its removal in the underlying action, U.S. Cellular moved to intervene, and sought a temporary restraining order ("TRO") to prevent Western Radio from declaring U.S. Cellular in breach of its lease or removing any of U.S. Cellular's equipment from the Original Tower. The Court granted the motion to intervene; granted the motion for a TRO; and subsequently issued a preliminary injunction to the same effect, which remains in force. In its amended complaint, U.S. Cellular asserts claims against Western Radio for anticipatory breach of contract and for declaratory judgment. U.S. Cellular now moves for summary judgment on both claims, which the Court GRANTS for the reasons that follow.
. . . U.S. Cellular argues that the New Tower is not a "substitute tower" under the lease amendment. The Court agrees. A "substitute" is a replacement, and a lawful, functional replacement of the Original Tower would comply with the Forest Service-Western Radio lease and be lawfully available for U.S. Cellular's occupancy. . . . . The term "substitute tower" is thus not ambiguous because there is no other plausible interpretation of the lease amendment when considered in the context of the contract as a whole. Western Radio's apparent position that any tower it may construct on Walker Mountain is a "substitute tower" onto which U.S. Cellular must move its equipment pursuant to the lease amendment, regardless of any legal challenges to the tower's construction, is not reconcilable with Western Radio's covenant to ensure U.S. Cellular's quiet enjoyment in compliance with the Forest Service lease. Because this Court has held that the New Tower violates Western Radio's lease with the Forest Service and is a continuing trespass on Forest Service land, it is not lawfully available for U.S. Cellular's use and thus not a "substitute tower." There being no substitute tower within the meaning of the lease amendment, U.S. Cellular did not breach any contractual commitment when it refused to move its equipment from the Original Tower, for which it continues to hold a valid lease.
In response, Western Radio argues that U.S. Cellular has not complied with its other obligations under the parties' lease. These appear to be new allegations. Under the terms of the lease, U.S. Cellular can only be considered in default if it fails to cure any violation of a lease provision (other than those regarding rent or other charges) within thirty days of written notice from Western Radio. Because Western Radio has submitted no evidence that it has given such notice to U.S. Cellular for these or any other alleged violations of the lease, it has not identified a genuine dispute as to whether U.S. Cellular has breached the parties' lease.
There being no genuine issue of material fact regarding the interpretation of the parties' lease, the Court can resolve U.S. Cellular's claim for declaratory judgment as a matter of law. The Court therefore holds and declares that U.S. Cellular is not in breach of its lease with Western Radio, that the lease amendment does not require U.S. Cellular to move its equipment from the Original Tower to the trespassing New Tower, and that Western Radio's demand letter is invalid. Because U.S. Cellular has not breached the lease, it continues to have the right under the lease to maintain its equipment on the Original Tower during the remaining term of the lease. The Court further holds that Western Radio's unfounded demand that U.S. Cellular remove its equipment from the Original Tower breached the lease's quiet enjoyment provision.