No Proof Tenant Terminated Lease in Bad Faith

The General Services Administration (GSA) leased space in a building for use as a government office. The lease gave the GSA the right to terminate the lease at any time after five years by giving the owner written notice of its intention to do so. Almost seven years into its lease term, the GSA gave the owner written notice that it intended to terminate the lease. It then leased space in a nearby building. The owner sued the GSA, claiming that it terminated its lease in bad faith, in retaliation for a dispute that arose regarding space the GSA leased in another building of the owner's.

A federal appeals court in Pennsylvania ruled that the owner didn't prove that the GSA had terminated its lease in bad faith. The court noted that because “the government is always presumed to act in good faith,” “clear and convincing” proof that it acted in bad faith is needed to refute that presumption. But here, the owner's “conspiracy theory” was merely based on “uncorroborated speculation,” the court said [Long Lane LP v. Bibb].