MIRAGES & AVERY has secured the dismissal of all claims against its client, a commercial landlord in Medway that had been sued by its former tenant for breach of contract, wrongful eviction, conversion of property and violation of the Massachusetts Consumer Protection Statute (Mass. Gen. Laws c. 93A). Final judgment was entered in our client’s favor following a three-day jury trial held in Norfolk Superior Court. The jury found our client not liable for two of the three claims that it considered, and awarded the tenant zero damages on the third (see below). In a separate written decision, the judge presiding over the case found our client not liable for violation of c. 93A, a claim which would have entitled the tenant to his reasonable attorney’s fees plus three times (3X) any damages awarded.
The parties had entered into a commercial lease in 2014 whereby the tenant rented two garage bays from our client. Their relationship began to deteriorate almost immediately after the tenant began to store unregistered and dismantled vehicles within the parking lot outside the premises, in violation of town by-laws. Eventually, our client was forced to tow and store these vehicles off-site. The tenant refused to reimburse any towing or storage costs and also stopped paying rent. In accordance with the parties’ lease, and with the assistance of prior counsel, our client terminated the commercial lease and changed the locks to the tenant’s garage bays. Over the next 18 months, our client sold or disposed of the remaining property left behind at the premises, (automotive tools and broken down cars) which the tenant never sought to remove.
We began to represent our client after it had sued to recover unpaid rent and towing/storage costs, following the retirement of predecessor counsel. However, it quickly became apparent that the former tenant was judgment-proof, that is, unable to financially afford the amounts due to our client. Thus, the focus of the case quickly became about defending against the tenant’s counterclaims for property that he valued at over $250,000. Prior to trial , the court decided via summary judgment that (1) the tenant had violated the parties’ lease by storing unregistered vehicles on site and failing to pay rent, but that (2) our client should have utilized judicial process to effectuate the tenant’s removal. Despite questionable evidence as to the value of the tenant’s property, our client made several reasonable offers to settle the case prior to trial, all of which were rejected.
Thus, the case proceeded to trial in July of this year. The jury determined that our client had wrongfully converted property worth only $7,000 from the tenant, but that even this amount should be set-off by over $10,000 that our client had spent to store the tenant’s property. Thus, no damages were awarded to the tenant. As mentioned above, the court subsequently found that our client (1) had lawfully terminated the parties’ lease, and (2) had not committed any unfair or deceptive trade practices by changing the locks to the premises and selling/disposing of the tenant’s property after providing the tenant several opportunities to remove the property.
The proceedings in this case reveal several important lessons for real estate litigators:
(1) Despite the Trial Court’s ruling on summary judgment, there is still no appellate case of record in Massachusetts that decisively tackles the question of whether summary process actions are required to evict commercial tenants (the closest analysis coming in the Supreme Judicial Court case of Gidwani v. Wasserman, 373 Mass. 162, briefed by both parties on summary judgment). However, the Court’s ruling in our case (as well as other Trial Court decisions) strongly indicates that summary process must be utilized by both residential and commercial landlord prior to repossession. That being said…
(2) The failure to utilize summary process in the commercial context does not constitute an automatic nor “per se” violation of the Massachusetts Consumer Protection Statute (c. 93A). Whether or not a commercial landlord’s “self-help” constitutes a violation of the statute will depend on various factors, including (a) whether or not the landlord’s efforts to repossess the premises were forcible or peaceful, (b) whether the lease allowed for self-help or required summary process, (c) whether or not the landlord had any reasonable belief that the premises and property therein had been abandoned by the landlord.
(3) The Court has almost complete discretion in determining what is and is not a violation of the Consumer Protection Statute. Automatic and presumptive violations of the statute are few are far between. Although our client was found liable for the intentional tort of conversion, the Court found that the client’s conduct was not deceptive nor intended to deceive the tenant. Rather, the client demonstrated a good-faith basis for its ultimately unsuccessful legal defense of abandonment. Furthermore, the tenant was not found credible in arguing for six-figure damages with respect to tools, parts and broken down cars of little to no value.
The outcome in this case demonstrates our commitment at MIRAGES & AVERY to quality trial work, if necessary, in each and every litigation matter.