BBNT Solutions, LLC v. 625 Concord, Inc.

20 Mass. L. Rptr. 732
CourtMassachusetts Superior Court
DecidedMarch 24, 2006
DocketNo. MICV200503474C
StatusPublished

This text of 20 Mass. L. Rptr. 732 (BBNT Solutions, LLC v. 625 Concord, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BBNT Solutions, LLC v. 625 Concord, Inc., 20 Mass. L. Rptr. 732 (Mass. Ct. App. 2006).

Opinion

Smith, Herman J., J.

I. INTRODUCTION

On September 30, 2005, Plaintiff, BBNT Solutions, LLC (“BBNT”), commenced the present action against Defendant, 625 Concord, Inc. (“Concord”), for specific performance of an option to purchase (“Purchase Option”) , breach of the implied covenant of good faith and fair dealing, and for violation of G.L.c. 93A in connection with a written lease agreement between Concord and BBNT (“the Lease”) for a commercial property located at 10 Moulton Street, Cambridge, Massachusetts (“the Property”). Thereafter, Concord filed various counterclaims against BBNT as well as a third-party complaint against Intercontinental Fund III 20 Moulton Street, LLC (“Intercontinental”). Concord is the owner and landlord of the Property and BBNT is the tenant under the Lease. Intercontinental is BBNTs purported nominee to receive title to the Property. The parties are now before this court on BBNTs motion for partial summary judgment and separate and final judgment on its claim for specific performance. For the following reasons, BBNTs motion is ALLOWED.

II. BACKGROUND

The undisputed material facts, as established by the summary judgment record and taken in a light most favorable to the non-moving party, are as follows. Concord is the landlord of the Property under a lease dated October 18, 1973 (“the Lease”) originally executed between BoltBeranek and Newman, Inc. (“BBN”), as tenant, and Robert Jones and K. George Najarian, as landlord. In 1977, as Robert Jones and K. George Najarian’s successor-in-interest, Concord assumed ownership of the Property. On April 26, 2000, BBN assigned the Lease to BBNT pursuant to written agreement, under which BBNT agreed to be bound by terms of the Lease.

The Lease provides that BBNT, as tenant, pay all rent, insurance, taxes and expenses associated with its occupancy of the Property. The Lease further provides that BBNT, at its own cost and expense, maintain and keep the Property in good condition and repair during its term of lease. The Lease also permits BBNT to extend its term of lease on the same terms and conditions thereto for an additional term of years upon written notice to Concord.

In the event that Concord receives an offer to purchase the Property during the term of lease, Paragraph 26 of the Lease accords BBNT the right to purchase the Property on the same terms as the offer before Concord can consummate sale of the Property. Independent of that right, Paragraph 26 of the Lease grants BBNT the option to purchase the Property (“Purchase Option”) at any time. The Purchase Option requires the following to exercise the option:

[733]*733The Tenant shall have the option, exercisable by giving written notice to the Landlord at any time after December 31, 1989, during the initial and any renewal term of this lease, to purchase the lease premises and all improvements thereto at an option price . . . Such written notice shall specify a date within 90 days thereafter when closing shall occur.

The Purchase Option further sets out the following procedure by which the option price is to be calculated:

The “option price” shall be the higher of (a) the Landlord’s Percentage (as defined with respect to rent during the extension of terms of the fair market value, as of the date of the exercise of the option, of the lease premises (without giving effect to this lease), or (b) the Rental Factor ... reduced by any amount paid by the Tenant prior to the closing date as fixed annual rental during the initial term hereof which are attributable, in the computation of such fixed annual rental as hereinabove described, to amortization of said Rental Factor. If Landlord and Tenant are unable to agree on the option price it shall be determined by appraisal, the Landlord and Tenant each appointing one qualified real estate appraiser who shall in turn jointly choose a third. The three appraisers thus named shall act promptly and the agreement of any two as to the proper option price shall be binding upon the parties hereto.

According to the Lease, the foregoing provisions, as with all covenants, agreements, provisions, conditions and obligations contained in the Lease, shall run with the land and shall extend to, bind and inure to the benefit of Concord and its heirs, successors and assigns as well as to the benefit of BBNT and its successors and assigns. However, under the Lease, BBNT may not sell, assign or mortgage the Lease without the prior written consent of Concord. The Lease is terminable by Concord if BBNT defaults in the performance or adherence of the provisions of the Lease and fails to cure such default within thirty days after receipt of notice of such default. Upon termination of the Lease, BBNT shall surrender to Concord the Property in good order and condition.

On March 26, 2004, in connection with Intercontinental’s desire to purchase from and lease back to BBNT the Property, BBNT entered into an agreement with Intercontinental titled “Agreement With Respect To Right Of First Refusal And Option To Purchase” (“the I.F. Ill Purchase Option Agreement”) wherein BBNT agreed that Intercontinental shall have the right to compel BBNT to exercise the Purchase Option pursuant to the terms of the Lease and, in the process, BBNT shall name Intercontinental its nominee to take title to the Property. Although aware that BBNT had designated Intercontinental its nominee, Concord did not learn of the I.F. Ill Purchase Option Agreement until August 2005.

On June 28, 2004, by written notice to Concord, BBNT extended its lease of the Property for an additional five years, with the renewal term commencing January 1, 2005 and terminating December 31, 2009. On January 21, 2005, at the direction of Intercontinental, BBNT notified Concord by letter that it intended to exercise the Purchase Option. That letter specified April 7, 2005 as the closing date for the purchase of the Property, and contained BBNTs request that it be permitted to designate Intercontinental as its nominee to take title to the Property. On January 25, 2005, via e-mail, Allan Jones (“Jones”), President of Concord, acknowledged the proposed closing date and expressed his willingness to transfer title to Intercontinental at BBNTs request. Thereafter, Tom Taranto (‘Taranto”), Director of Asset Management for Intercontinental, contacted Jones to ask that Concord deal with Intercontinental in the purchase of the Property exclusive of BBNT. Jones then contacted Ed Campbell (“Campbell”), Vice President of Operations for BBNT, to communicate his disinclination to deal directly with Intercontinental in the Purchase Option process. Jones further stated to Campbell that he was aware of BBNTs involvement with Intercontinental and that BBNT remained amenable to the transfer of title to Intercontinental as BBNTs nominee. That same day, Jones engaged in a telephone conversation with David Lintz (“Lintz”), General Counsel for BBNT, during which Jones reiterated his unwillingness to deal with Intercontinental in connection with BBNTs exercise of the Purchase Option.

On March 1, 2005, Jones sent to Lintz an e-mail, in which Jones inquired into BBNTs efforts to propose a fair market value for the Property. Lintz subsequently forwarded that e-mail to Jones and requested instruction from Intercontinental as to how BBNT should respond.

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Bluebook (online)
20 Mass. L. Rptr. 732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bbnt-solutions-llc-v-625-concord-inc-masssuperct-2006.