United States District Court, E.D. Wisconsin
DECISION AND ORDER ON DEFENDANT'S MOTION TO
JOSEPH UNITED STATES MAGISTRATE JUDGE
Property Owner, LLC (“the Owner”) filed an
Amended Complaint against the United States Postal Service
(“USPS”) alleging breach of USPS's lease of
the Owner's property at 345 West St. Paul Avenue in
Milwaukee, Wisconsin (“the
Property”). (Docket # 26.) USPS moves to dismiss the
Amended Complaint on the grounds that it fails to state a
claim upon which relief can be granted pursuant to
Fed.R.Civ.P. 12(b)(6). For the reasons that follow,
USPS's motion to dismiss will be granted.
Owner alleges that USPS entered into a lease for the Property
effective April 1, 1970. (Id. ¶ 5.) The
original lease term expired in 2000, but the lease granted
USPS eight successive five-year renewal options and is still
in force. (Docket # 26-1 at 1; Docket # 26 ¶¶ 6-7.)
The Owner alleges that, pursuant to the terms of the lease,
USPS is obligated to maintain the Property. (Id.
¶ 8.) Section 7(a) of the lease states as follows:
The Government shall, unless herein specified to the
contrary, keep the [ ] premises in good repair and tenantable
condition, except that the Government shall not be obligated
to repair the [ ] premises in the event of total or partial
damage thereto or destruction thereof caused by fire or other
casualty or calamity, Acts of God, acts of the public enemy,
or acts of a stranger, the repair of which said damage or
destruction shall remain the obligation of the Lessor. . . .
The term “repair” as used in this subparagraph
includes repairs of every character, exterior and interior,
structural and nonstructural, ordinary as well as
extraordinary, foreseen as well as unforeseen, replacements
and renewals. . . . The Government's responsibilities as
stated herein shall be fulfilled at such time and in such
manner as it considers necessary to keep the demised
premises, equipment, fixtures, improvements and appurtenances
in proper condition.
(Docket # 26-1 at 2.) The lease also contains the following
Prior to expiration or termination of this Lease the
Government shall, if required by the Lessor by notice in
writing sixty days in advance of such termination, restore
the premises to as good condition as that existing at the
time of entering upon the same under this Lease, reasonable
wear and tear and damages by the elements or by circumstances
over which the Government has no control, excepted.
(Id. at 3 ¶ 9.)
about September 13, 2017, USPS' agent, EMCOR, sent the
Owner a letter identifying deficiencies in the Property as
follows: “There is grass, mold, plants, bird droppings
and debris all over the roof. There are a couple roof leaks
on the north side. Need roof maintenance and repairs.”
(Id. ¶ 11.) The letter requested that the Owner
“have this work completed no later than
10/13/2017.” (Id. ¶ 12.) The Owner
contacted EMCOR to inform EMCOR that all maintenance and
repair obligations remained with USPS, not the Owner.
(Id. ¶ 15.) EMCOR acknowledged this fact.
(Id. ¶ 16.) However, nothing happened to
remediate the issues raised. (Id. ¶ 17.)
March 9, 2018, a representative from the Owner toured the
Property. (Id. ¶ 18.) On or about April 16,
2018, the Owner sent USPS a letter detailing the issues
visually observed and requesting action to address them.
(Id. ¶ 19.) The issues included the following:
the north roof was covered in moss, plants, birds, and bird
droppings; safety netting was installed under various
ceilings; epoxy coating on the second floor was worn away,
allowing water to infiltrate the concrete slab on the second
floor drive floor and permitting dripping to the floors
below; and the east ramp displayed signs of concrete
deterioration. (Id. ¶ 20.) USPS did not respond
to the April letter. (Id. ¶ 21.) The Owner also
expressed concerns about alleged structural deficiencies in
the seawall. (Id. ¶ 22.)
about July 10, 2018, the Owner sent a notice of default to
USPS pursuant to Wis.Stat. §§ 704.17(3) and
704.21(1)(3), providing a deadline of August 15, 2018 to
remediate the issues. (Id. ¶ 23.) On July 11,
2018, a representative of USPS replied via email that USPS
was looking into remedying the issues. (Id. ¶
24.) On March 19, 2019, USPS allowed the Owner's
engineers to inspect the premises. (Id. ¶ 30.)
The engineers observed structural damage to the seawall.
(Id. ¶ 31.) On March 21, 2019, USPS produced an
investigation report relating to the seawall dated February
14, 2019. (Id. ¶ 32.) The Owner alleges that
the structural integrity of the seawall is compromised and
requires further inspection and immediate repair.
(Id. ¶ 36.)
motion to dismiss under Fed.R.Civ.P. 12(b)(6) challenges the
sufficiency of the complaint on the basis that the plaintiff
has failed to state a claim upon which relief can be granted.
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 Supreme Court has
interpreted this language to require that the plaintiff plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007). In Ashcroft v.
Iqbal, the Supreme Court elaborated further on the
pleadings standard, explaining that a “claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged, ”
though this “standard is not akin to a
‘probability requirement.'” 556 U.S. 662, 678
(2009). The allegations in the complaint “must be
enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555 (internal
determining the sufficiency of a complaint, the court should
engage in a two-part analysis. See McCauley v. City of
Chicago, 671 F.3d 611, 616 (7th Cir. 2011). First, the
court must “accept the well-pleaded facts in the
complaint as true” while separating out “legal
conclusions and conclusory allegations merely reciting the
elements of the claim.” Id. (citing
Iqbal, 556 U.S. at 680). Next, “[a]fter
excising the allegations not entitled to the presumption [of
truth], [the court must] determine whether the remaining
factual allegations ‘plausibly suggest an entitlement
to relief.'” Id. (citing Iqbal,
556 U.S. at 681). As explained in Iqbal,
“[d]etermining whether a complaint states a plausible
claim for relief will . . . be a context-specific task that
requires the reviewing court to draw on its judicial
experience and common sense.” 556 U.S. at 679. All
factual allegations and any reasonable inferences must be
construed in the light most favorable to the nonmoving party.
Price v. Bd. of Educ. of City of Chicago, 755 F.3d
605, 607 (7th Cir. 2014).
federal law governs obligations to and rights of the United
States under its contracts, federal courts may look to state
law to supply the rules of decision where federal law is
silent. Powers v. U.S. Postal Service, 671 F.2d
1041, 1043 (7th Cir. 1982) (citing United States v.
Fox, 94 U.S. 315, 320 (1877)). As there is no federal
common law of landlord and tenant, the Seventh Circuit has
elected to apply state law to disputes under postal service
leases. Powers, 671 F.2d at 1042-46; cf. U.S.
Postal Service v. Ester, 836 F.3d 1189, 1195 (9th Cir.
2016) (applying state law to postal service lease). Under
Powers, Wisconsin supplies the rules for resolving
this dispute. However, because Wisconsin law is in harmony
with general principles of contract interpretation and the
common law of landlord and tenant on the relevant points, as
shown below, little turns on this distinction.
heart of the Owner's complaint is that USPS breached its
lease with the Owner by failing to keep the Property
“in good repair and tenantable condition” as
required by Section 7(a) of the lease. Count One seeks
eviction under Wisconsin law. (Docket # 26 ¶¶
37-45.) Count Two seeks monetary damages for an unlawful
taking. (Id. ¶¶ 46-59.) Count Three seeks
monetary damages for breach of contract. (Id.
¶¶ 60-67.) Count Four seeks monetary damages for
breach of the implied covenant of good faith and fair
dealing. (Id. ¶¶ 68-72.) Count Five seeks
a declaratory judgment. (Id. ¶¶ 73-76.)
However, the Amended Complaint fails to state a claim on any
of these counts.
Counts One, Two, and Three: Breach of the Lease
first three counts rely on the Owner's claim that USPS
breached the lease by failing to keep the Property in
“good repair and tenantable condition” as
required by Section 7(a) of the lease. (Id.
¶¶ 38, 48, 63.) To support this claim, the Owner
alleges that USPS failed to remedy the following
a. the North roof was covered in moss, plants, birds, and
b. safety netting was installed under all exterior concrete
coffered ceilings ...