Home CSHV CONCORD, LLC vs. OMEGA MANAGEMENT GROUP CORP. and others [Note 1]

2016 Mass. App. Div. 78

December 11, 2015 - June 8, 2016

Appellate Division Northern District

Court Below: District Court, Lowell Division

Present: Swan, P.J., Coven & Nestor, JJ. [Note 2]

John F. Farraher, Jr. and Zachary C. Kleinsasser for the plaintiff.

Jonas A. Jacobson for defendant Omega Management Group Corp.


NESTOR, J. This is an appeal of a commercial summary process eviction action that was tried jury waived on November 21, 2013.

We summarize the trial judge’s findings. CSHV Concord, LLC (“Landlord”) is a wholly-owned subsidiary of the California State Teachers Retirement System. Omega Management Group Corp. (“Tenant”) and Landlord are parties to a written lease for commercial property located in Billerica. The original lease was executed on May 3, 2006, and was to end on February 28, 2013. Two amendments to the lease were negotiated and signed by both parties on August 27, 2010, and September 1, 2012. At the lease inception, the Landlord agreed to an abatement of six months of rent. If the Tenant were to default under the terms of the lease, then all abated rent would become due and payable with interest. At the signing of the initial lease amendment, the Landlord agreed to an additional four months of rent abatement with the same proviso that, upon default, all abated rent would become due and payable. The second lease amendment changed the lease expiration date to August 31, 2015.

The Tenant defaulted on rent payments from April 5, 2012, through March 26, 2013, in the amount of $30,453.43. Pursuant to the terms of the lease, the Landlord served the Tenant with a notice of default on March 27, 2013. The notice indicated that a total amount of $30,453.43 of rent was past due. A cure date of April 5, 2013, was established. The Tenant failed to pay, and a notice of termination, effective April 11, 2013, was served on the Tenant. The Landlord then commenced eviction proceedings. The parties began to negotiate, and, in

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fact, the Tenant paid a substantial portion of the moneys due. The parties agreed to a stipulation of dismissal, without prejudice, on May 13, 2013. [Note 3]

Around the same date that the parties agreed to dismiss the case, the Landlord sent a letter to the Lowell District Court stating that the lease had been reinstated. There was no evidence produced at trial that this letter or any notice of reinstatement was ever sent to the Tenant. [Note 4]

The Tenant fell behind again in rent in August of 2013. The Landlord issued another notice of default and commenced another eviction proceeding, which resulted in the trial at issue. Prior to trial, the parties stipulated that judgment for the Landlord would enter on the issue of possession. After a bench trial, the judge found that the lease had been reinstated effective May 13, 2013, and that the Tenant had defaulted under the lease by failing to pay rent. The court accepted the Landlord’s calculation of damages, awarding the Landlord:

Unpaid Base Rent and Operating Costs $46,214.26

Late Charges & Interest on Unpaid Rent $6,045.92

Late Charges & Interest on Previously Paid Rent $8,733.23

Conditionally Abated Rent $124,264.60

Interest on Conditionally Abated Rent $99,552.72

$284,810.73

The court also awarded the Landlord attorney’s fees and costs in the amount of $85,948.45. Judgment entered on June 6, 2014. The Tenant thereafter filed motions to amend findings of fact and for remittitur, contesting in each the court’s finding that the lease had been reinstated and requesting a reduction in damages to $60,933.41. This appeal followed.

We review the trial judge’s factual findings for clear error. Mass. R. Civ. P. 52(c). A finding is “clearly erroneous” when there is no evidence to support it, or when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. Guardianship of Clyde, 44 Mass. App. Ct. 767 , 774 (1998); D&D Realty Trust v. Borgeson, 2015 Mass. App. Div. 115 , 118. The central issue in this case is whether the lease was reinstated after the April 11, 2013, termination date. If the lease was not in force at the time of the filing of this case, then the Landlord would be prevented from recovering late charges, abated rent, and attorney’s fees after termination of the lease.

The lease has a provision providing that “notices or other communications between the parties shall be in writing and shall be deemed duly given, if delivered in person, or upon the earlier receipt, if mailed by certified or registered mail, or three (3) days after certified or registered mailing, return receipt

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requested, postage prepaid, addressed and sent to the parties at their addresses.” No notice of agreement as to any reinstatement of the lease was ever served in writing by either party.

Notwithstanding the requirement that all notices and communications be in writing, the conduct between the parties does not support the contention that the parties agreed that the lease was back in full force and effect after being terminated on April 11, 2013. The Landlord’s property manager, Steven Werst, testified that there was no agreement between the parties because the Tenant never was able to pay the amount of rent and late charges that were due. John Maraganis, the Tenant’s president, testified that “[s]omehow the first eviction ended up that they just stopped coming after us,” and that “they wanted us out. And I had told them we were looking at space and that we were going to move. And they had -- the lease was terminated.”

There was no reinstatement of the lease absent sufficient notice. “The mere holding over, without any agreement, expressed or fairly inferable from the circumstances, by a tenant after the expiration of a written lease, which contains a stipulation as to the payment of rent beyond the term, constitutes him a tenant at sufferance. Warren v. Lyons, 152 Mass. 310 . Edwards v. Hale, 9 Allen 462 . This has always been the law of this Commonwealth . . . .” Benton v. Williams, 202 Mass. 189 , 192 (1909).

In this case, the lease specifically prohibited any oral agreements. There was no evidence that the Tenant had agreed to, or was even notified of, reinstatement of the Lease after its termination on April 11, 2013. As a result, the trial court’s finding that the lease was reinstated, effective May 13, 2013, was clearly erroneous. The Landlord is entitled to seek all damages under the provisions of the lease agreement, including but not limited to, rent, abated rent, attorney’s fees, late charges, and interest through April 11, 2013, when the lease was terminated. Any recovery subsequent to April 11, 2013, is limited to use and occupancy. The judgment for the Landlord is vacated, and the matter is returned to the Lowell District Court for a new trial.


FOOTNOTES

[Note 1] Anthony & Alexander Group, LLP, Customer Relationship Management Institute, LLC, Goldmine TeleServices Group, Inc., and ProSearch Services Group, Inc. Omega Management Group Corp. is the only defendant party to this appeal.

[Note 2] The Honorable Allen G. Swan, Presiding Justice, participated in the hearing, review, and decision of this appeal, but completed his Appellate Division service prior to the issuance of this opinion.

[Note 3] The Tenant remained in arrears, and the record is not clear as to the reason for the dismissal of the initial summary process action. Trial testimony seems to indicate that the Tenant was making efforts to move out and the Landlord was satisfied to have some, but not all, of the past due rent and late fees.

[Note 4] There was a letter that was apparently sent to the Tenant’s attorney, but the trial judge excluded that from being admitted as evidence.