MISC 137347

March 14, 1991

Essex, ss.



This action by Charles E. Whitney and Philip K. Ciolfi, the plaintiffs, the lessees named in a lease from Hugh J. Gilbert and Lorraine C. Gilbert to them dated November 7, 1985 demising certain premises in Danvers in the County of Essex known as 156 Andover Street (Route 114) (the "Lease"), seek a declaratory judgment as to the rights of the parties pursuant to the Lease and damages from an alleged breaches by the lessors, Hugh J. Gilbert and Lorraine C. Gilbert, the defendants. The trial was bifurcated, and issues of liability were tried initially with any questions of damages being postponed until after the conclusion of the first portion of the trial and the decision on appeal, if any. The Court has tried continuously during the course of the litigation to persuade the parties to reach agreement since prolongation of the litigation cannot be justified financially. The difficulty which the parties have experienced in reaching agreement derives in large part from the inartistic drafting of the Lease from Mr. and Mrs. Gilbert to Messrs. Ciolfi and Whitney (Exhibit No. 2) and the failure adequately to make the provisions of the Lease consistent with two prior leases from the Gilberts and affecting their land, one to Shell Oil Company ("Shell") dated May 5, 1970 (Exhibit No. 104) and the second to Papa Gino's of America, Inc. ("Papa Gino's") dated July 25, 1984 (Exhibit No. 106A). There was a notice of lease of the latter recorded with Essex South District Deeds in Book 7501, Page 143 and a memorandum of the Shell lease also dated May 5, 1970 and recorded with said Deeds in Book 5755, Page 789 (Exhibit No. 105). There are several major points of dispute between the lessors and the lessees as to the interpretation of the Lease including the date upon which the payment of rent commenced, the entitlement of the lessees to a $10,000 credit for which provision is made in an amendment to the Lease dated October 31, 1986 (Exhibit No. 14), the question of additional rent for a 1,500 square foot overhang on the second floor of the building constructed by the lessees, and the inability of the lessees to obtain an occupancy permit which the town authorities ruled was dependent upon site plan approval due, the lessees allege, in part to the lack of cooperation by the lessors. There were peripheral issues as to the withdrawal of the lessors' consent to obtain sign approval, access problems because of the provisions of the lease to Papa Gino's, a setback problem occasioned by a Danvers moratorium and the limitation in the lease to Papa Gino's as to purposes for which the remainder of the lessors' premises might be used which conflicts with the provisions of the Lease.

A trial was held at the Land Court on September 6, 18, 20 and 28, 1990, October 25 and 26, 1990 and November 1 and 2, 1990 at which a stenographer was appointed to record and transcribe the testimony. [Note 1] One hundred thirty-five exhibits were introduced into evidence, some with multiple parts, which are incorporated herein for the purpose of any appeal. Witnesses in the case were Charles Whitney, one of the plaintiffs, Peter Bryson, the Building Inspector for the Town of Danvers, Mark Reagan, Planning Director for the Town of Danvers and Hugh J. Gilbert, a defendant and one of the lessors. At the conclusion of the plaintiffs' case the defendant made several motions. One motion was for judgment on Count I of the complaint and requested a finding that the plaintiffs' rental obligation commenced on August 10, 1988. This motion was denied. A motion to dismiss Count III of plaintiffs' complaint insofar as it related to a lease to one John Fraher was allowed. However, such allowance is without prejudice to the plaintiffs' rights to claim damages for the breach of the provision in the Lease to the plaintiffs which permitted them to use the premises for any lawful purpose inasmuch as the lease to Papa Gino's on its face limits the uses to which the remainder of the lessors' property may be put. A motion to dismiss Count VI seeking breach of contract damages was denied. A motion to dismiss Count VIII of the plaintiffs' complaint which relates to the defendants' failure to consent to variances from landscaping and parking requirements also was denied in open court. Defendants' motion to dismiss Counts IV and V seeking damages suffered from plaintiffs' inability to use the front sign posts and defendants' alleged failure to authorize plaintiffs' application for a variance to erect such signs, respectively, were taken under advisement and are hereby granted since the counts were waive by plaintiffs' counsel.

The defendants' answer set forth a counterclaim in which the defendants seek to have the plaintiffs declared in default, their estate forfeited with the defendants entitled to immediate use and possession free and clear of any claims of the plaintiffs together with a judgment for the rent due and attorneys' fees. I hereby deny the relief sought by the defendants since the plaintiffs have paid the rent in full and have substantially otherwise performed, and the defendants clearly have breached some of their obligations in the Lease and are not entitled to a forfeiture. The defendants also filed a motion for costs and attorneys fees which is hereby denied.

Finally, there remain on the docket several diverse motions which have either been rendered moot by the litigation or this decision and so are accordingly dismissed.

On all the evidence I find and rule as follows:

1. Mr. Gilbert, a former United States mailman, and his wife initially constructed a building at 156 Andover Street rectangular in shape and perpendicular to Andover Street (Route 114) in the Town of Danvers in the 1960's. The Gilberts conducted a pet shop in this building, and it was through a purchase by Charles Whitney, one of the plaintiffs, of a dog for his mother from the Gilberts that their acquaintanceship began.

2. The first lease of the premises to a third party was a lease by Mr. and Mrs. Gilbert to Shell Oil Company dated May 5, 1970 and demising the entire portion of the lessors' premises from the northeasterly line of the existing pet shop extended to Andover Street. This is approximately 44,935 square feet. In the lease (Exhibit No. 104) Shell also was granted a drainage easement to the rear of the premises. The lessors reserved an easement to be used in common with Shell and the lessors' successors in a portion of the premises demised to Shell in order to park vehicles and additionally reserved driveway rights of access at the two corners of the demised premises on Andover Street. There was a separate easement agreement which related to Shell's drainage easement over which the grantors (i.e., the defendants in this action) reserved the right to use for ingress to and egress from Andover Street and the premises and agreed not to obstruct. The memorandum of lease (Exhibit No. 105) which is recorded in Book 5755, Page 789 sets forth the same provisions as to the description of the leased premises and the reservation of easements by the lessors therein (see Exhibit No. 117A).

3. Subsequently the Gilberts, having elected to retire and to spend much of the year in Florida, leased the building formerly housing their pet shop to Papa Gino's of America, Inc. by instrument dated July 25, 1984 (Exhibit No. 106A). The lease and notice of lease to Papa Gino's refers to Exhibit A, a reduced version of which is attached to the notice of lease (Exhibit No. 106) but is impossible to decipher. [Note 2] Article 31.1 of the Papa Gino's lease grants it the right to extend its building toward Andover Street for a distance of 15 feet which if constructed would violate the terms of the lease to Shell. That lease further provides in Section 29.1 "Tenant shall have the right to install its sign where the existing hi-rise pet shop sign is now placed." The section continues "tenants shall also have the right to stripe the parking lot in all paved areas within the demised premises as well as on the easement area specified in Exhibit A. An additional sign may be placed adjacent to access easement A." See also Article 17.1. The high-rise sign referred to in this paragraph is that which the plaintiffs also wish to use. I make no decision as to whether the provisions as to the parking area comply with the terms of the lease to Shell since neither Shell nor Papa Gino's are parties to this litigation. The provision as to an additional sign now would require approval from the Danvers Planning Board and perhaps the Danvers Zoning Board of Appeals.

4. The negotiations between the plaintiffs and the defendants commenced about two years before the Lease was in fact signed. The parties dealt directly with each other without the benefit of counsel until progress slowed. At some point each retained counsel to advise them, but ultimately with a moratorium approaching in Danvers, the parties returned to direct negotiations. The amendment to the Lease which is dated October 31, 1986 (Exhibit No. 14) appears to have been drafted and signed by the parties without benefit of counsel. Not only as to the original Lease and the amendment thereto but as to many of their negotiations thereafter, the parties would meet in Mr. Whitney's office in a building across the street from the locus, would exchange ideas and draft proposals, xerox them and then either agree or agree to disagree. Mr. Ciolfi took little or no part in the negotiations although his son has engaged in recent discussions in an attempt to resolve the current impasse between the parties, the other lessees and the Town.

5. The building which the plaintiffs have constructed extends from the Papa Gino's building at a right angle and is not an integral part thereof. There is a false wall between the two structures, and there is no access between the restaurant and the new structure. Papa Gino's lease at Article 32.1 expressly excludes restaurants, donut shops, ice cream stores, arcades, pet shops, bars and nightclubs from the Gilberts' land during the term of its lease. The Lease to the plaintiffs permits the lessees to use the premises demised to them for any lawfully permitted use. Finally, because of the location of the plaintiffs' structure on the locus the only entry to the underground garage which is through the rear of the building is only accessible over land leased to Papa Gino's which may violate its rights; Papa Gino's has objected to such use, but has not actively pursued its objections.

6. The Town of Danvers imposed a moratorium for approximately one year and four months in this area of Route 114. The moratorium proscribed the construction of any building or addition to an existing structure greater than 2,000 square feet. During the period of the moratorium the town planned to review its zoning by­law to increase the setbacks and rename the district as the Route 114 Corridor A Zone rather than referring to it as Industrial I. The Danvers Planning Board endorsed an Approval Not Required plan of the locus on February l8, 1986 which had been filed on January 23, 1986. The building inspector ruled, however, that the existing use of the premises was protected by the filing of the ANR plan, but that the dimensional requirements were not, all in accordance with Bellows Farms, Inc. v. Building Inspector of Acton, 364 Mass. 253 (1973). See also Cape Ann Land Development Corp. v. City of Gloucester, 371 Mass. 19 (1976). There was slight evidence introduced on this point during the trial where this was an oblique issue only.

7. Mr. Gilbert was anxious to preserve the existing setback which Mr. Whitney failed to do before the moratorium by obtaining a building permit, by complying with section 6 of Chapter 40A or through some other method. Accordingly the amendment to the ground lease dated October 31, 1986 (Exhibit No. 14) was executed which gives rise to one of the problems now before the Court. The amendment provided for a one year extension of the Lease; the $1,000 per month payment called for in the Lease was waived. A law suit against the Town of Danvers challenging the applicability of the moratorium to locus was to be pursued to conclusion. This apparently is Land Court Miscellaneous case No. 120768, which is still pending and presumably is now moot inasmuch as the sideline setback which would have been lost by the moratorium was the subject of a variance which was granted. In any event, the moratorium has expired. The two crucial provisions of the amendment were as follows: In paragraph 2 this language appears: "We [the Gilberts] agree to deduct from the first year's lease payment the cost for obtaining a building permit not to exceed ten thousand dollars ($10,000), before the moratorium expires in order to protect our property from down zoning, setback, parking or any other changes that the town may impose and you [Whitney and Ciolfi] will pursue getting said building permit." The other provision in the amendment which is enlightening on the program planned by the parties is found in the fifth paragraph which reads: "Before the building permit expires, you will build the two 2,000 Sq. Ft. buildings and the rent will depend upon the amount of space you build; i.e., 3,500/month for 8,000 Sq. Ft., $1750./month for 4,000 Sq. Ft. and 875.00/month for 2,000 Sq. Ft., the entire 8,000 Sq. Ft. footprint will be built as soon as possible" [Note 3]

8. The plaintiffs never constructed the buildings which the plaintiffs and the defendants had discussed which would have comprised separate rectangles each with footprints of 2,000 square feet ultimately joined together. The building inspector discouraged the application although it was not clear from the record whether he in fact denied applications for building permits or whether even applications were ever made (see Exhibit Nos. 13 and 108).

9. The $1,000 per month rent called for in the Lease and referred to in the amendment is found in page 2 of the Lease where there is also a provision for the deposit by the lessee of $21,000 which was paid. The paragraph in question further provides for the lessees to commence promptly at the lessees' sole cost and expense, to obtain all approvals and permits necessary for the proposed construction and to use their best efforts. If the lessee should fail to obtain a building permit within six months of the execution of the Lease, the Lease shall terminate and lessors shall be entitled to retain the deposit, provided, however, that upon the showing of diligent attempts by the lessees, the lessors shall grant a three month extension followed by a nine month extension during which time the lessee was to increase the amount already on deposit by paying $1,000 a month; three payments were made until they were forgiven by the amendment. The moratorium, of course, imposed limitations on the lessees' ability to comply with the terms of the Lease and would either have excused performance or extended the deadlines if the parties had not otherwise dealt with the question. The deposit plus the $1,000 per month payment (s), if any, were to be the source of rental payments until exhausted, once such rental obligation accrued.

10. The Town of Danvers Building Inspector issued a permit to build which is denominated building permit on the printed form (Exhibit No. 17) but which was limited on the face of the approved floor plan to the construction of foundation and footings for wich authority was given on August 10, 1988 (Exhibit No. 23; see also Exhibit No. 23A). There is a second notation dated December 14, 1988 also on Exhibit No. 23 (see also Exhibit No. 23B) which authorizes the full construction of the building. The Danvers By-laws do not contain any provision for a limited building permit called a foundation permit; only one permit was issued but in two stages. The state building code, however, which has preempted the field does indeed refer to a distinction between the two types of permits, and it was pursuant to this section of which the defendants had been advised by the building inspector, that the plaintiffs were authorized to commence construction. (Exhibit Nos. 122 and 123)

The Code provides in relevant part:

When application for a permit to erect or add to a building or structure has been filed . . . and pending issuance of such permit, the building commissioner or inspector of buildings may, at his discretion, issue a special permit for the foundations or any other part of a building or structure. The holder of such a permit may proceed at his own risk without assurance that a permit for the entire structure will be granted.

780 CMR 114.8.

11. Exhibit B to the Lease provides cryptically "construction or building of approximately 7,500 square feet on 2 stories to total 15,000 square feet." The authorship of the words "to total 15,000 square feet" was in doubt since neither Mr. Whitney [Note 4] nor Mr. Gilbert remembered who added the writing. However, Gilbert did want assurance that Whitney would not build a structure too small to generate sufficient rent. There are several other provisions in Exhibit B which are not material to the present dispute. There is, however, this language which has engendered difficulty: "Add minimum of three (3) signs, costs to be divided by users." As to the latter provision Mr. Gilbert testified, and I so find, that he suggested the addition of this language. It was not intended to impose an obligation on the plaintiffs to add the signs, but it was intended to grant them the right to do so. Although paragraph 5 of the Lease requires the lessees to pay their share of electricity and insurance for the "front sign", lessees are not obliged to so use the sign.

12. It is unclear from the language of the Lease whether the 15,000 square foot building the lessees undertook to build was a minimum or maximum figure because of the inartistic wording of the provision. The Lease is silent as to any extra rent for a building which exceeds the specified number of square feet, but there is a provision for rent escalation from the subleases which are negotiated. Since the plaintiffs were constructing the building at their expense and it ultimately would inure to the owner of the real estate, as would an overage from the sublessees, I interpret the 15,000 square foot figure to be the minimum size of the building which the lessees were required to build.

13. Before the parties entered into the Lease the land of the defendants had been the subject of a cease and desist order issued by the Danvers Conservation Commission. Mr. Whitney represented the Gilberts in obtaining an order of conditions from the Commission. In connection with this matter Mr. Gilbert signed a broad consent which authorized Mr. Whitney to appear in his behalf before various boards and commissions of the Town of Danvers (Exhibit No. 1).

14. There were a number of applications made by Mr. Whitney on behalf of himself and Mr. Ciolfi to the Danvers Planning Board and the Danvers Board of Zoning Appeals. Mr. Whitney thought that the blanket consent executed by Mr. Gilbert gave him authority to do this, as well as the requirements set forth in Exhibit B to the Lease which Whitney interpreted as consent being given because failure to fulfill the provisions, he believed, amounted to breach. At some stage of the negotiations Mr. Gilbert personally and through his counsel revoked his consent (see Exhibit No. 88). His reason seemed to have been the language of the standard Danvers ZBA application which authorized the petition to be considered as the appropriate form of relief, whether an appeal or an original application for a variance, from the local authority.

15. The Danvers Planning Board and Zoning Board of Appeals treated the parking lot, denoted "Parking Easement" on Exhibit No. 106B as a new property which was subject to the site plan provisions of the zoning by-law, presumably enacted during the moratorium. This, however, fails to acknowledge the provisions of the lease to Shell which pre-dated by many years any site plan requirement and which comprise part of the premises leased to Shell with the areas denoted "parking easements" leased back to the Gilberts for use by future lessees. The parking lot was created pursuant to the 1970 lease to Shell in which Papa Gino's and subsequently the plaintiffs were granted rights. The controlling party is Shell, and subsequent lessees have no right to take action which conflicts with the established grants to Shell. The Planning Board appears to have been in error in requiring the plaintiffs to revise the existing parking area by adding landscaping behind the service station, at the street line and along the property lines if Shell objected to these changes as it ultimately did. [Note 5]

16. Mr. Whitney made the internecine dispute worse by proposing that the liquor store on the adjoining lot be allowed to advertise on the fifty-five foot high sign posts currently used only by Papa Gino's, and to pass from its lot onto the Shell premises, and conversely that tenants and business invitees of the lessees of the Gilbert properties be allowed to go back and forth to the liquor store. This was without any authority which he had, and his initiative in this regard was in error.

17. The leases to the plaintiffs' tenants would be in full force with occupancy pursuant thereto if the Planning Board had not mistaken its role. The building inspector required the developers, the plaintiffs herein, to comply with the present site plan bylaw, but the parking lot already was grandfathered with the lease to Shell and the current requirements of the Planning Board as to landscaping, number of parking spaces and traffic flow could not be met without trampling on Shell's existing rights. Many of the problems which the parties have faced in this suit have to be laid at the door of the municipal authorities although the latter certainly are not alone to blame and are not parties to this litigation. Mr. Whitney was apt to move forward and propose changes where his right to do so was questionable such as lowering the sign posts on which there is an advertisement for Papa Gino's. On the other hand Mr. Gilbert was upset by perfectly standard language which was not Mr. Whitney's invention and revoked his consent for Whitney to apply for relief which the ZBA required as standard practice. This was a breach of an implied duty to cooperate. In addition, Mr. Gilbert assumed that he still had rights left in the properties in question, whereas he had leased the entire premises and his rights, if any, were minimal. [Note 6] The Gilberts by leasing all the land owned by them at the locus effectively disposed of their interest therein other than the right to collect rents. In addition, neither Mr. Whitney nor the Gilberts were sophisticated real estate owners who were aware of the problems involved in a major development like the present, and they principally acted without counsel. Mr. Gilbert, for example, forbade Mr. Whitney to consult either Shell or Papa Gino's about the plans and requirements of the municipal authorities, for fear he might upset the Gilbert relationships. Since Mr. Gilbert already had signed leases in effect, it is hard to see how Mr. Whitney could have interfered with these rights by mere consultation with the lessees. In any event the unfortunate combination of impetuosity, inexperience, revised laws and hardhearted Boards has brought us to the present impasse. [Note 7]

Any question about lack of coopertion by the Gilberts with the plaintiffs on the sign has apparently been removed from the case by consent given by the defendants, and I will not deal further with this aspect of the case other than to say the language in question is unclear. It is short-handed in content, and I construe it to grant the lessees the right to add a minimum of three more signs to the existing sign posts beneath the towering name of Papa Gino's. It was a privilege granted to the lessees not a requirement that they do this. To the extent that the lessees entered into an undertaking with their own lessees to add the latter parties' names to a sign, the effect thereof is not before the Court. The Gilberts breached the grant by withdrawing their consent unconditionally; they could merely have stressed the necessity of recognizing the rights of Papa Gino's and joined in any litigation arising from the action of the local boards.

The most important controversy between the parties concerns the commencement date for the payment of rent. The Lease spaks in terms of the issuance of the building permit as distinguished from the lease to Shell where the rent was payable annually and presumably on the first day of April 6, 1971, nearly a year after the lease was signed. Papa Gino's lease provides for the payment of rent on the earlier of the sixty days after the execution of the lease or the opening day by the tenant for business. The question before the Court in the present lease is whether the provision that the rent commences on the issuance of a building permit refers to the building permit limited to footings and foundation or the building permit covering construction of the building itself. It would appear in the words of the court in Smith v. Board of Appeals of Brookline, 366 Mass. 197 , 200 (1974) that there were "real practical impediments" to the issuance of a full building permit at the time the building inspector authorized the excavation of the foundation and placement of the footings.

While the Danvers Building Code does not recognize a foundation permit as distinguished from a building permit to construct the entire building, the Code of Massachusetts Regulations provides "pending issuance of [a building] permit, the building commissioner or inspector of buildings may, at his discretion, issue a special permit for the foundations or any other part of a building or structure." 780 CMR 114.8 (emphasis added). This provision is controlling, and I find and rule that the plaintiffs' obligation of monthly rental payments of $3,500 commenced on December 14, 1988, the date the Danvers Building Inspector approved the building permit in full, not August 19 of that year, the date Mr. Bryson approved the permit for foundation and footings only. The defendants argue that it was the intent of the parties that any building permit would trigger the rental obligation, but the language does not lead to this conclusion. Since at the time the lease was drafted neither party knew of the existence of a species of building permit for foundation and footings only, neither could have intended that issuance of such a permit would trigger plaintiffs' rental obligation.

I do not, however, agree with the plaintiffs that they are entitled to deduct from the first year's lease payment the cost of obtaining a building permit not to exceed $10,000. In fact, the plaintiffs have not historically so interpreted this provision and have not dealt with the defendants as though they believed this was their right. Moreover, there is no evidence as to steps taken by the plaintiffs to obtain the building permit seasonably in order to protect the Gilbert property from "down zoning, setback, parking or any other changes that the Town may impose." While the language of the amendment is difficult to interpret, I find and rule that while it did not unequivocally require success by the plaintiffs in their endeavor to obtain the ends specified in paragraph 2, it at least required reasonable efforts to be made to obtain a desired result. There was no evidence of such efforts, and the litigation which the plaintiffs instituted in this Court pursuant to the Lease amendment was never pursued to conclusion. Although it had been assigned for trial on January 21, 1987, the trial was never held.

As to building size and attendant rental amounts, there is nothing in the Lease which requires the lessees to make any additional payments to the lessors for any overage of the building constructed from the 15,000 square foot figure set forth in the Lease which I find and rule simply to be a minimum. [Note 8] I further find and rule that the lessors wanted to be certain that the building constructed by the lessees was a major player in the Route 114 development and that it would be large enough to generate sufficient income for their retirement. While the Lease was so written that there is no increase to be paid by the lessees for any increase in area, there are escalation provisions (so-called "step increases" under the Lease) dependent on the terms of the subleases.

The site plan requirements of the Danvers Zoning By-law present the most difficult aspect of this case. The parties finally have attempted to resolve their disagreement about an appropriate site plan by numerous consultations between the lessors, the lessees, Shell, Papa Gino's and the Danvers Planning Board, and there should be nothing so intractable that the goodwill of these various entities cannot resolve. I have urged and continue to urge the parties to reach agreement. Despite repeated motions by the plaintiffs I have not as yet ordered that the rent be paid into escrow rather than directly to the lessors. If good faith efforts are not made by the lessors and those claiming under them to reach a settlement of this issue, then I may order the monies paid into an escrow account in the Court until there is a trial and decision on the issue of damages or until the liability issues are resolved on appeal, if any. Until that eventuality I find and rule that the defendants presently owe for rent overpaid by the plaintiffs now that there has been a judicial determination as to the disputed $10,000 reimbursement; that the defendants are entitled to a reasonable time to reimburse these amounts and that the defendants presently have no right to terminate the Lease.

The parties have stipulated that the plaintiffs have made the following rental payments:


November 7, 1985 $21,000.00

August 18, 1986 1,000.00

September 8, 1986 1,000.00

October 15, 1986 1,000.00 June 21, 1989 3,500.00

July 13, 1989 3,500.00

August 1, 1989 3,500.00 September 12, 1989 3,500.00 October 5, 1989 3,500.00

November 15, 1989 3,500.00 December 11, 1989 3,500.00

January 12, 1990 3,500.00

February 9, 1990 3,500.00

March 28, 1990 3,500.00 April 7, 1990 3,500.00

May 9, 1990 3,500.00

June 11, 1990 3,500.00

July 2, 1990 3,500.00

August 9, 1990 3,500.00

September 11, 1990 3,500.00

As to such payments, the Lease requires that the lessees' deposit $21,000.00 at the execution of the Lease, and "[d]uring the nine month extension period [discussed above at paragraph 9], .LESSEE shall deposit with LESSOR the amount of $1,000.00 per month" of which three were made. Then, "[i]mmediately after the building permit has been obtained, the original deposit pius any sums paid during the extension period shall be applied to the monthly rent due until the sum is exhausted beginning on the first day of the month after the month in which the building permit is issued. Rent for the month in which the building permit was issued shall be paid immediately in cash on a pro rata basis."

As I have ruled the building permit for purposes of triggering obligations under the Lease was not issued until December 14, 1988. Paragraph 4 of the Lease requires a "cash" payment for the pro rata balance of rent due for the month in which the building permit is issued. The defendants now argue that this was never received. Ordering plaintiffs to now make the cash payment to cure any minor breach stemming therefrom has no practical value; instead I find and rule that the following amounts were owed and due and were to be deducted from the deposit to the extent available. Accordingly, rent for the balance of December was $2,032.20 ($112.90/day at 18 days); $24,000.00 (the deposits) less $2,032.20 left $21,967.80 from which the lessors were to withdraw the rent. The rent for the first six months of 1989 at $3,500.00 per month totals $21,000.00, with $967.80 remaining in the deposit as of July 1, 1989. Deducting the remaining $967.80 from the $3,500.00 July rent, leaves $2,532.20 due for the month of July and payments of the full $3,500.00 due from plaintiffs beginning August 1, 1989.

The plaintiffs began making $3,500.00 payments in June of 1989; the amount was paid June 21, 1989 and it appears from the balance of the stipulation that the outlay represented June, 1989 rent. The rest of the stipulation as to rental payments shows $3,500.00 payments were made every month through September, 1990. [Note 9] Although Mr. Gilbert testified that he commenced an action against Mr. Whitney for the nonpayment of rent there was no evidence offered to this effect, nor has an allegation been filed in this action seeking any rental deficiency from the date of entry of the stipulation to present. Accordingly, plaintiffs have overpaid rent; $3,500.00 in June, 1989 and $967.80 for part of July, 1989. Absent interest or penalty which might be raised in the damages portion of the trial, defendants owe plaintiffs $4,467.80 for rent overpaid as of September, 1990.

The defendants moved for an Order that the plaintiffs pay their share of real estate taxes, but it may be that such payments have in fact been made. The parties should re-examine this question in light of this decision.

In summary, both parties' conduct have given rise to the instant litigation; the Gilberts in leasing to the plaintiffs more rights than they had retained, withdrawing the consent which was required for the plaintiffs to proceed under the lease, and rights than they had retained, withdrawing the consent which was required for the plaintiffs to proceed under the lease, and mistaking the extent of the present interest of the lessors in the locus. The plaintiffs have erred by misinterpreting the scope of permissible modifications which may be made to locus absent express permission by Shell and in some instances Papa Gino's.

In conclusion, I find and rule that the plaintiffs' rental obligation did not commence until December 14, 1988 when the building permit, as a matter of law and as the parties understood that term, was "issued" by the building inspector; that the monthly rental payment remains at $3,500.00, the amount agreed to in the Lease, with the required building size being a minimum of 15,000 square feet; that the defendants did not accurately credit the rental payments as against the $24,000.00 deposits and miscalculated the monthly rental charge with the result that the plaintiffs have overpaid, and these funds must be returned; and that the plaintiffs are not entitled to a credit of $10,000.00 against rental payments as they did not pursue to conclusion the law suit against the Town of Danvers as called for by the 1986 amendment to the Lease or otherwise use reasonable efforts to obtain the building permit.

Judgment accordingly.


[Note 1] No witnesses appeared at the September 20 session, only exhibits were marked and some oral argument.

[Note 2] There was marked in evidence as Exhibit No. 106B a copy of a plan which purportedly is a copy of Exhibit A to the Papa Gino's lease. The reduced plan annexed to the notice of lease, however, is noticeably different.

[Note 3] There was an earlier amendment signed by the parties the previous day (October 30, 1986) which did not contain the specific rental amounts according to size of structure.

[Note 4] Note: Whitney would only say, at most, that the writing looked like his own, not that it necessarily was his.

[Note 5] The plaintiffs filed an action in the Land Court (Miscellaneous Case No. 156328) January 17 of this year against the Planning Board and Zoning Board of Appeals for the Town of Danvers regarding site plan approval.

[Note 6] In fact, it is doubtful that the Gilberts retain any authority to make certain demands of their lessees regarding improvements which affect only the other lessees, and do not implicate Gilberts' interest as lessor.

[Note 7] Note that Gilbert signed a Papa Gino's lease containing language which would have avoided many problems here had they appeared in the Whitney Lease. Why it was not so used was not addressed at trial.

[Note 8] Mr. Gilbert testified that Whitney and Ciolfi orally agreed to pay a rental increase attendant with an increase in square footage, but no such provision was incorporated into the Lease or amendment.

[Note 9] The stipulation is not dated but was admitted in evidence on September 20, 1990 and so could not reflect subsequent rental payments.