Home 331 LAFAYETTE STREET, LLC v. FRAN & DIANE'S LLC

2017 Mass. App. Div. 164

May 26, 2017 - October 31, 2017

Appellate Division Northern District

Court Below: District Court, Salem Division

Present: Coven, P.J., Crane & Nestor, JJ.

Richard D. Grundy for the plaintiff.

Marc E. Chapdelaine for the defendant.


NESTOR, J. In this commercial summary process action, the defendant, Fran & Diane's LLC (Fran & Diane's), appeals from a summary judgment for possession granted to the plaintiff, 331 Lafayette Street, LLC ("Lafayette"). The defendant also appeals from an order of the trial judge dismissing its appeal from the judgment.

Fran & Diane's operated a pizza restaurant at 333 Lafayette Street, Salem, MA. Fran & Diane's originally signed a lease on August 19, 2009 and originally rented the premises from the Lee Family Enterprises, LLC ("Lee"). The original lease provided for a term of "two (2) years and 13 days commencing on August 19, 2009 and ending on August 31, 2011." Fran & Diane's had the right to extend the lease for up to four terms of two years each. In order to extend the lease, it was required that, at least six months prior to the end of the current term, it must give Lee written notice by registered or certified mail.

On June 3, 2015, Fran & Diane's sent Lee a letter, stating, in part, "We were recently notified by Bob Burr [agent of Lafayette] that he is in the process of buying our building and that the intent is to tear it down and build an office building. . . . Over the years Extended Lease Terms were granted without notice . . . . [K]indly accept notice to extend to the next extended term; 2015-2017." Lee responded, in part, "You were initially tenants under a Commercial Lease dated August 19, 2009. By its terms, the Lease expired on August 31, 2011. The parties have not entered into a written agreement to extend the lease term and you have failed to properly extend the term of this Lease in accordance with the provisions of the Lease. Accordingly, you have been and continue to be tenants at will on a month to month basis."

On July 9, 2015, Fran & Diane's was served a notice to quit for nonpayment of rent for allegedly not paying rent for July, 2015. Fran & Diane's tendered payment for both June and July, 2015. Lee's attorney responded that Fran & Diane's was a tenant at will and the money was being accepted as payments made on the tenancy at will.

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On May 31, 2016, the purchase by Lafayette was finalized. On that same date, Lafayette served Fran and Diane's with a thirty-day notice to quit. A summary process summons and complaint was served on Fran & Diane's on July 15, 2016.

On August 8, 2016, Lafayette demanded payment for the months of June and July, 2016. Fran & Diane's forwarded a check on August 13, 2016. Fran & Diane's stopped payment on that check after the trial judge allowed a motion for summary judgment on August 26, 2016. It ultimately made good on that payment on October 25, 2016.

On September 16, 2016, the trial judge sanctioned Fran and Diane's in the amount of $1,075.00. It was sanctioned that amount for changing the locks on the unit without the consent of the landlord. On February 17, 2017, Fran & Diane's was found in contempt for failure to pay that amount.

On September 19, 2016, the trial judge set the bond in the amount of $4,180.75, representing use and occupancy for August and September, 2016. Fran and Diane's posted that amount on September 23, 2016.

On October 31, 2016, upon Lafayette's motion to dismiss Fran & Diane's appeal from the judgment based on its having stopped payment on its check for June and July, 2016 use and occupancy, the trial judge dismissed Fran and Diane's appeal and issued immediate execution for possession on the property by Lafayette. In dismissing the appeal, the trial judge stated, "[T]here's been an incredible amount of bad faith, I think, in this case, and as a result, I'm going to allow the plaintiff's motion to dismiss the appeal and issue the execution immediately."

1. Dismissal of appeal. In order for a plaintiff to seek a dismissal of a summary process appeal for failure to pay an appeal bond or make periodic payments, it must be proved that the defendant is not in compliance with G.L. c. 239, § 5(c), which states, in relevant part:

"Except as provided in section 6, the defendant shall, before any appeal under this section is allowed from a judgment of the superior court, a housing court, or a district court, rendered for the plaintiff for the possession of the land or tenements demanded in a case in which the plaintiff continues at the time of establishment of bond to seek to recover possession, give bond in a sum as the court orders, payable to the plaintiff, with sufficient surety or sureties approved by the court, or secured by cash or its equivalent deposited with the clerk, in a reasonable amount to be fixed by the court. In an appeal from a judgment of a district court the bond shall be conditioned to enter the action in the appellate division at the return day next after the appeal is taken. . . . The bond shall also be conditioned to pay to the plaintiff, if final judgment is in plaintiff's favor, all rent accrued at the date of the bond, all intervening rent, and all damage and loss which the plaintiff may sustain by the withholding of possession of the land or tenements demanded and by any injury done thereto during the withholding, with all costs, until delivery of possession thereof to the plaintiff."

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Generally, it is appropriate relief to dismiss an appeal when a defendant is not in compliance with the court's order to pay an appeal bond amount. Section 5 of G.L. c. 239 requires "any person for whom the bond . . . has been waived to pay . . . all or any portion of any rent which shall become due," but does not explicitly require dismissal upon noncompliance. The court must therefore consider "how far slips in procedure ‘have interfered with the accomplishment of the purposes [of the statute] and to what extent the other side can justifiably claim prejudice.'" Brockton Hous. Auth. v. Williams, 14 Mass. App. Ct. 955 , 956 (1982), quoting Schulte v. Director of the Div. of Employment Sec., 369 Mass. 74 , 80 (1975). The pertinent factors are: (1) the desire to decide landlord-tenant disputes on the merits; (2) the likelihood that the landlord will receive any rent due while the proceedings are pending; and (3) tenant hardship. Kargman v. Dustin, 5 Mass. App. Ct. 101 , 106-107 (1977).

Fran & Diane's paid and fully compensated Lafayette for all of the past due rent, prior to its appeal being dismissed. There was no reason to believe that any future payments required under the appeal bond would not be satisfied. In short, evidence of "bad faith" is not a sufficient basis to dismiss an appeal of a summary process matter; there must be noncompliance with the terms of the appeal bond that has been fixed. It was error to dismiss the defendant's appeal on this basis.

2. Summary judgment. [Note 1] The trial judge allowed Lafayette's motion for summary judgment after a hearing on August 25, 2016.

A court will grant summary judgment where there are no genuine issues of material fact and where the record, including the pleadings and affidavits, entitles the moving party to judgment as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419 , 422 (1983). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and showing that summary judgment entitles it to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14 , 16-17 (1989). If the moving party establishes the absence of a triable issue, the party opposing the motion must respond and allege specific facts that would establish the existence of a genuine issue of material fact in order to defeat a motion for summary judgment. Id. at 17. A party opposing summary judgment "cannot rest on his or her pleadings and mere assertions of disputed facts to defeat the motion for summary judgment." LaLonde v. Eissner, 405 Mass. 207 , 209 (1989). Summary judgment motions may be accompanied by affidavits based on personal knowledge that set forth such facts as are admissible in evidence. Mass. R. Civ. P. 56(e). The court, for purposes of summary judgment, will review such facts and all reasonable inferences from those facts in the light most favorable to the nonmoving party. Ford Motor Co., Inc. v. Barrett, 403 Mass. 240 , 242 (1988).

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The trial judge correctly noted that the lease was unambiguous in the steps necessary to be taken by Fran & Diane's to extend the terms of the commercial lease. It was required to give: 1) written notice; 2) delivered via registered or certified mail, return receipt requested; 3) addressed to the landlord or the landlord's attorney 4) and the request must be given six months prior to the end period of the lease. The trial judge further noted that at no point did Fran & Diane's ever plead that it provided the requisite written notice under the terms of the commercial lease. Finally, the judge noted the antiwaiver clause in the lease, which stated, "Failure of a party to enforce at any time . . . the provisions of this lease shall not be construed as a waiver of such provisions or the right of such party thereafter to enforce each and every provision."

The Appeals Court has held that it "is in accord with our cases . . . to look at the question of waiver as a question of fact in light of all circumstances, including the existence of the antiwaiver clause." M.J.G. Props., Inc. v. Hurley, 27 Mass. App. Ct. 250 , 252 (1989). "Waiver is the intentional relinquishment of a known right." Normandin v. Eastland Partners, Inc., 68 Mass. App. Ct. 377 , 378 (2007), quoting Niagara Fire Ins. Co. v. Lowell Trading Corp., 316 Mass. 652 , 657 (1944). See also Roseman v. Day, 345 Mass. 93 , 99 (1962). "[W]hether there was a waiver was a question of fact." Mastrullo v. Ryan, 328 Mass. 621 , 624 (1952). See also Ciriello v. Fortin, 2016 Mass. App. Div. 26 , 28. Waiver is "a fact to be determined in the light of all the testimony and the attendant circumstances" and not as a matter of law. Corcoran Mgt. Co., Inc. v. Withers, 24 Mass. App. Ct. 736 , 743 (1987). See also Globe Leather & Shoe Findings, Inc. v. Golburgh, 339 Mass. 380 , 382 (1959) (jury warranted in finding waiver based on landlord's continued acceptance of rent).

While the question of waiver is generally a question of fact, the issue can be decided on summary judgment where the facts material to waiver are undisputed "and only one possible inference may arise from those facts." Dynamic Mach. Works, Inc. v. Machine & Elec. Consultants, Inc., 444 Mass. 768 , 773 (2005), quoting Central Ill. Pub. Serv. Co. v. Atlas Minerals, Inc., 965 F. Supp. 1162, 1174 (C.D. Ill. 1997). It is a "well established principle that certain actions, although not sufficient to constitute a valid contract modification, may still represent a waiver of rights." Bachorz v. Miller-Forslund, 812 F. Supp. 2d 83, 90 (D. Mass. 2011), quoting G.L. c. 106, § 2A-208(3) ("Although an attempt at modification or recession does not satisfy the requirements of [this statute], it may operate as a waiver.")

In this case, in an affidavit by its manager submitted in opposition to summary judgment, Fran & Diane's alleged that Lee, its previous landlord, expressed oral waiver of service of notice to elect to extend the commercial lease as long as it complied with scheduled rent increases. Fran & Diane's further averred that it was in full compliance with the rent increases scheduled under the original commercial lease. On August 31, 2014, Jackie Lee of Lee Family Enterprises, LLC wrote to Fran and Diane's. Included in the letter was, "As a separate matter, I haven't heard from you about renewing the lease from September 1, 2014 through August 31, 2015. Please let me know if you would like to renew." The sentence at least suggests that a trier of fact could find that the lease had previously been renewed by the parties without the strict formalities required

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by the commercial lease. Moreover, Fran & Diane's offered the letter as an exhibit indicating that it had written, "Paid and Renewed # 2157 = $2,042.30 Sept 1, 2014," and returned it to its landlord at the time, Jackie Lee. Fran and Diane's presented sufficient evidence that there is a material question of fact as to whether there was a waiver of the written notice requirement to extend the commercial lease.

The order dismissing the defendant's appeal is reversed. The allowance of the plaintiff's motion for summary judgment is reversed, the judgment is vacated, and the matter is returned for trial.


FOOTNOTES

[Note 1] As both parties have briefed the issue and in the interest of judicial economy, we will proceed to address the merits of the court's allowance of summary judgment, rather than returning this matter to the trial court for the defendant's perfection of that appeal. See Ciszewski v. Industrial Acc. Bd., 367 Mass. 135 , 142 (1975); Peabody Props., Inc. v. Salaam, No. 16-P-1627 (Mass. App. Ct. July 17, 2017) (unpublished Rule 1:28 decision).