Opinion
No. 12–P–452.
2013-05-15
PERMABIT TECHNOLOGY CORPORATION v. 25 FIRST STREET LLC.
By the Court (CYPHER, BROWN & COHEN, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Permabit Technology Corporation (Permabit), a commercial tenant of 25 First Street LLC (landlord) in Cambridge, appeals from a Superior Court judgment awarding the landlord damages for Permabit's breach of their lease agreement. Permabit filed this action in the Superior Court on December 11, 2008, the landlord counterclaimed, and Permabit vacated the premises on March 29, 2009. Permabit disputes the meaning and effect of the lease provisions applicable to its default while it occupied the original premises and did not occupy the replacement premises.
Factual background. We summarize the judge's undisputed findings, which were based largely on facts stipulated by the parties at trial. Permabit entered into an eighteen-month lease in September, 2006, with the landlord's predecessor. After purchasing the leased premises, the landlord assumed the lease. Late in 2007, Permabit began negotiations for more space in the building, and after reaching agreement for the additional space, the parties executed a first amendment of the existing lease (amended lease) on June 13, 2008. The amended lease contemplated Permabit's continuing use of the “original premises” until the “replacement premises” were built-out to Permabit's specifications. Lease terms, including incentives and penalties, were agreed on to minimize, if not eliminate, the possibility that Permabit could be responsible for rent for the original as well as the replacement premises, if it were unable to move before the expiration of the original lease on June 30, 2008. Provisions were made for Permabit's occupancy of the original premises until the build-out of the replacement premises was completed.
These provisions were tested when Permabit could not meet its financial obligations before the build-out was completed. The landlord asked Permabit to make a proposal for a renegotiated lease arrangement. Permabit made such a proposal, which was not accepted. Permabit then defaulted. The landlord sent a notice of default and a notice of termination of the lease. Continued negotiations were unsuccessful, and the landlord changed the locks on the replacement premises on October 14, 2008.
The landlord filed a summary process action against Permabit on November 18, 2008, and subsequently took the security deposit and drew upon a letter of credit.
Analysis. 1. Lease obligations. Permabit argues at length that the judge improperly found that it was obligated to pay rent for the five-year term of the amended lease for the replacement premises because it never occupied the replacement premises.
The judge began her analysis by noting that the amended lease defined the “replacement premises commencement date” as the earlier of either the date of substantial completion of the build-out work Permabit was responsible for, or the date of Permabit's actual possession of the replacement premises. No specific date was specified. Because Permabit neither completed the build-out work nor occupied the replacement premises, and defaulted on its rent obligations, the judge was required to determine the effects of that default on Permabit's then current rent obligations and its obligation under the amended lease.
The judge found that in the amended lease the parties had agreed on a five-year term for the replacement premises and intended “to extend the existing Lease for a five-year term in the Replacement Premises and to substitute the Replacement Premises, when completed, for the Original Premises.”
The judge found that Permabit was current in its rent payments on the original premises through the end of September, 2008, but that the amended lease provided that the rent would change significantly on October 1, 2008, if Permabit continued to occupy the original premises. The judge also found that the amended lease structured penalties in the form of increased rent payments as an incentive for Permabit to complete the build-out expeditiously and compensate the landlord for delay in vacating the original premises.
Because Permabit was obligated to pay rent under the amended lease for the replacement premises, and its commencement date was not provided for in the amended lease, it was necessary for the judge to determine the commencement date for Permabit's rent obligations. Here, the judge reasonably could find that the commencement date was October 1, 2008, because “that is the date from which Permabit was obligated (if it failed to complete the build-out and vacate the Original Premises) to pay penalty rent.” The judge's determination of damages is based on this date. The parties do not dispute the judge's findings and order on damages.
The judge's ruling of law, citing Diamond Crystal Brands, Inc. v. Backleaf, LLC, 60 Mass.App.Ct. 502, 506 & n. 2 (2004), as authority to determine the commencement date in accordance with the parties' intent, was correct. The judge's factual findings in her determination of the parties' intent are not clearly erroneous. We conclude there was no error of law or fact in the judge's findings, and there is thus no basis for reversal. Id. at 505.
2. Other issues. We have not overlooked Permabit's additional arguments, but we do not discuss them because they do not constitute proper appellate argument. Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975). We also do not address the landlord's two arguments related to its cross appeal because the landlord does not appear to have submitted sufficient evidence to the judge to support them.
Judgment affirmed.