No. 2003-1215-A.Commonwealth of Massachusetts Superior Court. WORCESTER, SS.
December 22, 2004.
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
PETER W. AGNES, Jr., Justice of the Superior Court.
INTRODUCTION
This is a civil action that arises out of a dispute between the plaintiffs and defendants over the terms of a commercial lease for the premises located at 161 Milk Street, Westboro, Massachusetts (“premises”).
BACKGROUND
The essential facts are not in dispute.[1] On or about October 5, 1983, plaintiff and Howard Fafard (Fafard) entered into a written commercial lease for the premises. This lease had two addenda — an Option to Purchase addendum (“option”) and a Purchase and Sales Agreement (“PS Agreement”). This lease contains a provision that it is binding on the heirs, successors and assigns of the parties. The lease and addenda were signed by the parties under seal. On April 27, 1990, Fafard conveyed title to the leased premises to the defendants.
As a result of disputes between the parties over the terms of the lease and its addenda, the defendants commenced a Summary Process action against the plaintiff in the Westborough District Court. The plaintiff, in turn, asserted counterclaims seeking the relief that he seeks in this court. After a trial, the district court made Findings of Fact and Rulings of Law. The defendants appealed the district court decision to the Worcester Superior Court. See Worcester Superior Court Civil Action No. 1993-00249-B. Prior to trial, the parties before the Superior Court entered into 16 written stipulations. See “Stipulation of the Parties,” Exhibit 5 to the Plaintiff’s Motion for Summary Judgment (“Stipulation”).
There is no dispute between the parties with respect to stipulations 1-9. These stipulations confirm and establish that the parties (plaintiff and Fafard) entered into a written lease for the premises on October 5, 1983. The lease had a term of one year commencing on December 1, 1983 and ending at midnight on November 30, 1984. The plaintiff occupied the premises and did business as Lincoln Pharmacy beginning in 1983. After the lease expired, the plaintiff continued to occupy the premises and did business as Lincoln Discount Drug until September 30, 1992. The plaintiff vacated the premises on October 15, 1992. Before the plaintiff’s occupancy, the premises had been used as a roller skating rink. The plaintiff made arrangements for work to be done to make the premises suitable as a place to operate a pharmacy. Fafard conveyed the premises to the defendants by deed dated April 27, 1990. By a letter dated June 8, 1990, the plaintiff received written notice to send rent and all future payments to the defendants. Until April, 1990, the plaintiff paid monthly rent equivalent to 3% of gross sales. The plaintiff paid no rent for the thirty month period from May, 1990 until October, 1992. Based on the applicable rule, the amount of rent due for this period is $82,714.41 The plaintiff also paid real estate taxes for the year 1984 in the amount of $5,67.00 The plaintiff also paid the utility bills throughout the time of its occupancy with the exception of a single water bill in the amount of $60.80. The plaintiff filed a claim in the bankruptcy proceedings involving Fafard but it was disallowed in its entirety by an order dated January 24, 1994.
Paragraphs 10 to and including 16 of the stipulations deal with costs and expenses that the plaintiff alleges it incurred in preparing the premises for occupation and in making certain improvements and upgrades. These costs and expenses total $72,216.10 and include things such as the installation of a new sprinkler system, ceiling lights, a glass store front, an alarm system, a new floor, fixtures and furniture, a new road pole and sign, upgrades of the electrical and refrigeration systems, and certain costs relating to the access road. In the Superior Court Summary Judgment proceeding, the court ruled that it would treat the contents of these paragraphs of the stipulation as binding only if it ruled that the plaintiff’s counterclaim was correctly presented. Following the second trial of the Summary Process case, the Superior Court entered judgment for possession and costs in favor of the defendant Trustees and dismissed the plaintiff’s counterclaims.
In the present action, its counterclaim having been dismissed in the above referenced Summary Process action, the plaintiff seeks recovery of the $72,216.10 noted above.[2] With regard to the option to purchase contained in an addendum to the lease, the decision by this court in the Summary Process case found that the tenant gave timely notice that it was exercising its rights under the option and tendered a check in the amount of $62,500 as required by the purchase and sales agreement, but that the lessor rejected the exercise of the option.[3]
DISCUSSION
1. For the reasons set forth on pages 10-16 of the Plaintiff’s Memorandum of Law, this court rules as a matter of law that the defendant breached the option agreement contained in the lease. As plaintiff’s argues on page 12 of its memorandum of Law, this court ruled that the plaintiff had no legal obligation to pay real estate taxes in its decision in the Summary Process case and that determination has preclusive effect in this case. The defendants’ argument that the lease (paragraph 23) is unambiguous and that therefore the parol evidence rule bars extrinsic evidence to explain its terms is misdirected. The plaintiff’s claim is not that the lease terms mean something different than what they appear to say, but rather that the parties engaged in a course of conduct after signing the lease which modified its terms. See Plaintiff’s Concise Statement at 8, para. 20. See Vakil v. Anesthesiology, Ass’n, 51 Mass. App. Ct. 114, 119
(2001).
2. With regard to the plaintiff’s argument that it is entitled to recover $8,000 representing its share of the costs of the access road, see Plaintiff’s Memorandum of Law at 16-19, the intent of the parties in paragraph 15 of the lease was that the plaintiff would recover its 8,000 share of the access road remained in place for four years and that is in fact what occurred. To hold otherwise would reward the defendant for its breach of the agreement.
3. With regard to the plaintiff’s claim that it is entitled to “reliance damages” in the amount of $60,524.00 representing its out of pocket losses flowing from the defendants’ breach of the option, the plaintiff maintains that it expended those amounts for renovations and improvements based upon or in reliance on the grant of the option. See VMark Software, Inc. v. EMC Corp., 37 Mass. App. Ct. 610, 611-612 n. 2 (1994) (measure of contract reliance damages is “similar to the tort standard of actual, or out-of-pocket, loss proximately suffered”). Under the lease, the plaintiff had a legal obligation to expend funds for renovations that were necessary to prepare the premises for use as a retail establishment. On the basis of the record before me, it is not possible to say as a matter of law that the expenditures in question went beyond the scope of the necessary renovations to operate a pharmacy on the premises. Accordingly, this aspect of the motions filed by the parties are DENIED.
CONCLUSION
4. based on a consideration of the entire record before the court, I rule that the plaintiff’s motion for summary judgment isALLOWED IN PART because the plaintiff was not under a legal obligation to pay real estate taxes under the terms of the lease, as modified, that the plaintiff timely and properly exercised its option, that the defendant breached the lease by rejecting the plaintiff’s exercise of the option and that the plaintiff is entitled to reimbursement for real estate taxes ($5,267.00), a deposit paid in conjunction with the Option and PS Agreement ($5,000), and amounts paid for its share of the access road ($8,000). Otherwise the plaintiff’s motion is DENIED and the defendants’ cross motion is DENIED.