Opinion
20-P-532
03-18-2021
154 TURNPIKE ROAD LLC v. A BEAUTIFUL YOU, INC., & another.
NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
This appeal arises from a dispute over a tenant's obligation to pay holdover rent pursuant to the terms of a commercial lease. In September 2006, the plaintiff, 154 Turnpike Road LLC (154 Turnpike), executed a commercial lease with the defendants, A Beautiful You, Inc., and Elliot Lach (collectively ABY). Lach signed a personal guarantee on the lease for retail space located at the Crossings at Whites Corner in Southborough. After the lease expired in 2013, the parties attempted to negotiate a new lease without success. ABY ultimately left the premises in 2017. As we will discuss in more detail, 154 Turnpike then billed ABY for holdover rent in the amount of $113,979. When ABY refused to pay, 154 Turnpike commenced this action, alleging breach of contract. ABY subsequently asserted counterclaims alleging breach of the covenant of good faith and fair dealing and violation of G. L. c. 93A. Following a bench trial, a judge of the Superior Court ruled in favor of 154 Turnpike. We affirm.
Background. We summarize the largely undisputed facts found by the judge. See Cavadi v. DeYeso, 458 Mass. 615, 624 (2011); Mattoon v. Pittsfield, 56 Mass. App. Ct. 124, 139 (2002). ABY was a tenant in 154 Turnpike's building from 2006 to 2017. The parties entered into a commercial lease on September 27, 2006. Article 26 of the lease contains a "holdover clause" whereby, "[i]n the event [t]enant fails to vacate [p]remises by the [l]ease [t]ermination [d]ate, [t]enant hereby agrees to pay [l]andlord one and a half (1 1/2) times the monthly rental rate." In addition, article 23 of the lease contains a "no waiver clause" providing in pertinent part that "[f]ailure of [l]andlord or [t]enant to complain of any act or omission on the part of the other party no matter how long the same may continue, shall not be deemed to be a waiver by said [l]andlord or [t]enant of any of its rights hereunder." Article 27 of the lease included an "entire agreement" clause stating that the lease "shall not be modified or cancelled except by writing subscribed to all parties."
The monthly rent under the terms of the lease was $5,998.90. The lease expired on September 30, 2013, but ABY remained as a tenant until October 31, 2017. Prior to the expiration of the lease on September 30, 2013, Lach had negotiations with various representatives of 154 Turnpike regarding a new lease or an extension of the existing lease, but nothing was finalized. ABY continued to pay $5,998.90 on a monthly basis until it vacated the premises. During the entire time of ABY's tenancy, 154 Turnpike sent a monthly invoice to ABY for each month's rent. The invoice included a separate charge for operating expenses. ABY timely paid the invoices, but, at one point, had some outstanding arrears. By letter dated October 1, 2014, 154 Turnpike notified ABY that it was in default. The letter also referred to the provision in the lease regarding holdover rent and stated that 154 Turnpike was not waiving its right to collect the additional rent retroactively to October 1, 2014. ABY cured the default, and 154 Turnpike continued to send monthly invoices for rent at the regular rate.
At trial, Lach testified that he understood that the rent would remain the same after the lease expired and that he had "heard nothing about holdover rent until 2017." He further testified that he was told that the landlord wanted him to stay and not to "worry about any arrears or any late fees or any of that stuff." According to Lach, if he had known that he would have to pay 150 percent of the usual rent, he would have "requested reconsideration."
The judge ruled that the lease terms are clear and unambiguous and concluded that ABY was liable for one and one-half times the applicable rent during the time it occupied the space as a holdover tenant. In reaching his conclusion, the judge found that 154 Turnpike's practice of sending monthly invoices was a courtesy to ABY and was not a requirement of the lease. He also rejected ABY's argument that 154 Turnpike's conduct was contrary to the terms of the lease and constituted a waiver of the requirement of written consent to any modification. The judge reasoned as follows:
"In the present case, there was no . . . evidence offered of 'sufficient force' to overcome the presumption [that the integrated agreement expresses the intent of the parties]. While it is true that the parties were discussing a potential extension of the lease, there was no evidence that the landlord ever expressed an intent to waive the provision of the lease applicable to the holdover tenant status. The fact that the landlord continued to invoice on a monthly basis the tenant for the original commercial lease rental amount, is not sufficient to overcome the applicable presumption. In addition, the landlord received nothing of value in exchange and therefore there was no consideration provided to the landlord for the proposed waiver and/or modification of the lease provision, which conferred a significant benefit on the landlord. Accordingly, the landlord is entitled to the full benefit of the commercial lease provision regarding holdover tenancy."The judge also dismissed ABY's counterclaims without discussion.
Discussion. On review of a judgment after a jury-waived trial, we accept the judge's findings of fact unless they are clearly erroneous and "review the judge's legal conclusions de novo." Cavadi, 458 Mass. at 624 (2011), quoting T.W. Nickerson, Inc. v. Fleet Nat'l Bank, 456 Mass. 562, 569 (2010). See Mattoon, 56 Mass. App. Ct. at 139. ABY does not challenge the judge's findings of fact. Rather, it claims that the findings support its assertion that the terms of the lease were modified by an oral agreement and that 154 Turnpike waived its right to collect holdover rent by its conduct which included 1) sending ABY monthly invoices for the regular rent, which ABY then paid, and 2) failing to commence any summary process or other action to recover possession of the space. Lastly, ABY claims that 154 Turnpike is collaterally estopped from collecting the additional rent because ABY reasonably relied on the monthly invoices as reflecting the total amount due. We address each argument in turn.
"It is a settled principle of law that '[t]he mode of performance required by a written contract may be varied by a subsequent oral agreement based upon a valid consideration.'" Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439 (1992), quoting Siegel v. Knott, 316 Mass. 526, 528 (1944). "Additionally, a provision that an agreement may not be amended orally but only by a written instrument does not necessarily bar oral modification of the contract." Cambridgeport Sav. Bank, supra.
The judge was not required to accept Lach's testimony. See Cavadi, 458 Mass. at 633 (in bench trial "judge was not required to believe [defense witness's] testimony or agree with [defendant's] characterization" of certain facts). The burden was on ABY to prove that the parties agreed on a subsequent oral modification. See Cambridgeport Sav. Bank, 413 Mass. at 439 (burden on party claiming modification to provide evidence that subsequent agreement to modify was reached). That burden was not met. To the contrary, the evidence supported the judge's conclusion that there was no specific oral agreement to relieve ABY from its obligation to pay holdover rent. In addition, even if such an agreement could be implied based on Lach's understanding and representations by 154 Turnpike employees, any such agreement was not based on valid consideration. See id. As the judge found, 154 Turnpike received nothing of value from ABY in exchange for not charging the holdover premium.
Nor was there sufficient evidence to prove that 154 Turnpike waived its right to collect the holdover rent by its conduct. "Mutual agreement on modification of the requirement of a writing may . . . 'be inferred from the conduct of the parties and from the attendant circumstances' of the instant case." Id., quoting First Pa. Mtge. Trust v. Dorchester Sav. Bank, 395 Mass. 614, 625 (1985). As noted, the lease contained a no waiver provision, and 154 Turnpike's conduct was not inconsistent with a lack of intent to relinquish its right to collect the additional rent. Considering the lease provision and the letter dated October 1, 2014, reminding ABY of the holdover provision, the judge properly concluded that 154 Turnpike did not waive its rights under the lease.
ABY also argues that 154 Turnpike is estopped from enforcing the holdover rent provision. While ABY did raise estoppel as a defense in its answer to 154 Turnpike's complaint, ABY failed to raise the issue of detrimental reliance in its proposed rulings of law other than in connection with its G. L. c. 93A claim, and the issue was not addressed at trial. The argument is therefore waived. See G.B. v. C.A., 94 Mass. App. Ct. 389, 397 (2018) (defense not argued at trial is waived on appeal).
Given our conclusion, it follows that 154 Turnpike's conduct did not constitute an unfair or deceptive act under G. L. c. 93A. Consequently, the judge also properly dismissed ABY's counterclaim alleging a c. 93A violation.
Judgment affirmed.
By the Court (Vuono, Rubin & Sullivan, JJ.),
The panelists are listed in order of seniority.
/s/
Clerk Entered: March 18, 2021.