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).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
25-P-9
BROM+FLED II LLC & another. 1
vs.
COLONIAL TRADING COMPANY, INC.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The defendant, Colonial Trading Company, Inc. (tenant),
appeals from a Superior Court judge's judgment following a jury-
waived trial, ordering that the tenant pay the plaintiffs,
Brom+Fled II LLC and Brahmin Realty Associates LLC (landlord),
past-due rent (plus late fees and interest) and vacate the
leased building in the downtown section of the city of Boston
(building). The tenant contends that (1) its nonpayment of rent
was excused by the landlord's material breach, (2) the judge
erred by failing to treat the tenant's affirmative defenses as
counterclaims, (3) the tenant was entitled to a tenant
improvement allowance offset, and (4) if not excused for
1 Brahmin Realty Associates LLC. nonpayment of rent, the tenant was only obligated to pay unpaid
rent, not additional fees associated with the nonpayment. We
affirm.
Background. The landlord and the tenant entered into a
ten-year commercial lease for the building on September 22,
2017. The monthly rent for the first five years was $12,500,
and for the last five years was $13,750, plus "additional rent"
covering real estate taxes and insurance.
On May 27, 2019, the tenant entered into a sublease with
Hostel Collective (hostel subtenant) for $6,700 monthly rent.
On July 2, 2019, the landlord instructed the tenant to cease
using the property "for Airbnb or other residential businesses
immediately," assertedly because the building was "registered
with the city as a commercial property" -- not residential.
Then, on September 3, 2019, the landlord sent a notice of
default alleging that the tenant was in breach of multiple
provisions of the lease and demanding that the hostel subtenant
leave the building, at which point the tenant asked the hostel
subtenant to vacate and the landlord took no further action.
In May 2020, the tenant ceased paying monthly rent. As a
result of the tenant's nonpayment, the landlord served a default
notice on July 30, 2020, informing the tenant that failure to
pay the rent for May, June, and July 2020, within five days
would constitute an event of default pursuant to the lease. The
2 tenant did not make payment, and the landlord served a second
notice of default on September 3, 2020. Ultimately, on
September 25, 2020, the landlord filed an action against the
tenant for breach of contract and filed an amended complaint on
March 22, 2021.
Discussion. "The interpretation of a contract is a
question of law, which we review de novo." James B. Nutter &
Co. v. Estate of Murphy, 478 Mass. 664, 667 (2018). However,
"we accept the judge's findings of fact as true unless they are
'clearly erroneous.'" Millennium Equity Holdings, LLC v.
Mahlowitz, 456 Mass. 627, 636 (2010).
1. Material breach. "A breach of a contract is a material
breach when it involves an essential and inducing feature of the
contract" (quotation and citation omitted). EventMonitor, Inc.
v. Leness, 473 Mass. 540, 546 (2016). "It is well established
that a material breach by one party excuses the other party from
further performance under the contract." Ward v. American Mut.
Liability Ins. Co., 15 Mass. App. Ct. 98, 100 (1983).
The tenant argues that the landlord committed a material
breach of the contract when the landlord demanded that the
tenant terminate the sublease, and that the breach excused the
tenant from any obligation to pay rent. However, the argument
is unavailing because the landlord did not commit a breach of
the lease by requiring the tenant to terminate the sublease with
3 the hostel subtenant. The tenant had not provided the landlord
with evidence that it had insurance to cover the hostel
subtenancy, the certificate of occupancy did not include use of
the building as a hostel, and the tenant began work on the
building without submitting plans to the landlord -- all
violations of the lease agreement. 2 Further, even if the
landlord's demand that the hostel subtenant vacate the building
had been unjustified, the tenant's foregoing material breaches 3
preceded the landlord's. And, although the landlord may have
later refused to consider any further subtenancies beginning
with a proposed subtenant in December 2021, any blanket refusal
of subtenancies began after the tenant was already in breach of
its obligation to pay rent. See Ward, 15 Mass. App. Ct. at 100.
2. Tenant's affirmative defense. At trial, the tenant
argued that the landlord's demand to remove the hostel subtenant
was a breach that either precluded the landlord from recovering
or entitled it to offset any damages. The tenant raised both of
these claims as a single affirmative defense in its answer to
the landlord's complaint. However, because the lease explicitly
2 We note that the appellant did not submit the then- existing certificate of occupancy in the record on appeal.
3 The tenant makes no argument that its failure to comply with the requirements related to insurance, the certificate of occupancy, and the obligation to submit plans to the landlord were not material breaches.
4 required that the rent be paid "without any set-off or deduction
whatsoever," the judge held that the tenant was barred from
seeking an offset. We discern no error. Balles v. Babcock
Power Inc., 476 Mass. 565, 571-572 (2017) ("When contract
language is unambiguous, it must be construed according to its
plain meaning").
The judge also appropriately declined to reach the tenant's
claim that the landlord had tortiously interfered with their
subtenancy, because the tenant had not asserted a counterclaim.
The defendant contends that it was error not to treat its
affirmative defense as a counterclaim for tortious interference.
Mass. R. Civ. P. 8 (c), 365 Mass. 749 (1974), states, in
relevant part, that "[w]hen a party has mistakenly designated a
defense as a counterclaim or a counterclaim as a defense, the
court on terms, if justice so requires, shall treat the pleading
as if there had been a proper designation." However, the tenant
explicitly stated in its opening argument that: "We did not
file a counterclaim, and you'll find no evidence of a
counterclaim, but you'll find that we have been asking for these
offsets from the beginning of the case." On the second day of
trial, the tenant again stipulated that there was no
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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).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
25-P-9
BROM+FLED II LLC & another. 1
vs.
COLONIAL TRADING COMPANY, INC.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The defendant, Colonial Trading Company, Inc. (tenant),
appeals from a Superior Court judge's judgment following a jury-
waived trial, ordering that the tenant pay the plaintiffs,
Brom+Fled II LLC and Brahmin Realty Associates LLC (landlord),
past-due rent (plus late fees and interest) and vacate the
leased building in the downtown section of the city of Boston
(building). The tenant contends that (1) its nonpayment of rent
was excused by the landlord's material breach, (2) the judge
erred by failing to treat the tenant's affirmative defenses as
counterclaims, (3) the tenant was entitled to a tenant
improvement allowance offset, and (4) if not excused for
1 Brahmin Realty Associates LLC. nonpayment of rent, the tenant was only obligated to pay unpaid
rent, not additional fees associated with the nonpayment. We
affirm.
Background. The landlord and the tenant entered into a
ten-year commercial lease for the building on September 22,
2017. The monthly rent for the first five years was $12,500,
and for the last five years was $13,750, plus "additional rent"
covering real estate taxes and insurance.
On May 27, 2019, the tenant entered into a sublease with
Hostel Collective (hostel subtenant) for $6,700 monthly rent.
On July 2, 2019, the landlord instructed the tenant to cease
using the property "for Airbnb or other residential businesses
immediately," assertedly because the building was "registered
with the city as a commercial property" -- not residential.
Then, on September 3, 2019, the landlord sent a notice of
default alleging that the tenant was in breach of multiple
provisions of the lease and demanding that the hostel subtenant
leave the building, at which point the tenant asked the hostel
subtenant to vacate and the landlord took no further action.
In May 2020, the tenant ceased paying monthly rent. As a
result of the tenant's nonpayment, the landlord served a default
notice on July 30, 2020, informing the tenant that failure to
pay the rent for May, June, and July 2020, within five days
would constitute an event of default pursuant to the lease. The
2 tenant did not make payment, and the landlord served a second
notice of default on September 3, 2020. Ultimately, on
September 25, 2020, the landlord filed an action against the
tenant for breach of contract and filed an amended complaint on
March 22, 2021.
Discussion. "The interpretation of a contract is a
question of law, which we review de novo." James B. Nutter &
Co. v. Estate of Murphy, 478 Mass. 664, 667 (2018). However,
"we accept the judge's findings of fact as true unless they are
'clearly erroneous.'" Millennium Equity Holdings, LLC v.
Mahlowitz, 456 Mass. 627, 636 (2010).
1. Material breach. "A breach of a contract is a material
breach when it involves an essential and inducing feature of the
contract" (quotation and citation omitted). EventMonitor, Inc.
v. Leness, 473 Mass. 540, 546 (2016). "It is well established
that a material breach by one party excuses the other party from
further performance under the contract." Ward v. American Mut.
Liability Ins. Co., 15 Mass. App. Ct. 98, 100 (1983).
The tenant argues that the landlord committed a material
breach of the contract when the landlord demanded that the
tenant terminate the sublease, and that the breach excused the
tenant from any obligation to pay rent. However, the argument
is unavailing because the landlord did not commit a breach of
the lease by requiring the tenant to terminate the sublease with
3 the hostel subtenant. The tenant had not provided the landlord
with evidence that it had insurance to cover the hostel
subtenancy, the certificate of occupancy did not include use of
the building as a hostel, and the tenant began work on the
building without submitting plans to the landlord -- all
violations of the lease agreement. 2 Further, even if the
landlord's demand that the hostel subtenant vacate the building
had been unjustified, the tenant's foregoing material breaches 3
preceded the landlord's. And, although the landlord may have
later refused to consider any further subtenancies beginning
with a proposed subtenant in December 2021, any blanket refusal
of subtenancies began after the tenant was already in breach of
its obligation to pay rent. See Ward, 15 Mass. App. Ct. at 100.
2. Tenant's affirmative defense. At trial, the tenant
argued that the landlord's demand to remove the hostel subtenant
was a breach that either precluded the landlord from recovering
or entitled it to offset any damages. The tenant raised both of
these claims as a single affirmative defense in its answer to
the landlord's complaint. However, because the lease explicitly
2 We note that the appellant did not submit the then- existing certificate of occupancy in the record on appeal.
3 The tenant makes no argument that its failure to comply with the requirements related to insurance, the certificate of occupancy, and the obligation to submit plans to the landlord were not material breaches.
4 required that the rent be paid "without any set-off or deduction
whatsoever," the judge held that the tenant was barred from
seeking an offset. We discern no error. Balles v. Babcock
Power Inc., 476 Mass. 565, 571-572 (2017) ("When contract
language is unambiguous, it must be construed according to its
plain meaning").
The judge also appropriately declined to reach the tenant's
claim that the landlord had tortiously interfered with their
subtenancy, because the tenant had not asserted a counterclaim.
The defendant contends that it was error not to treat its
affirmative defense as a counterclaim for tortious interference.
Mass. R. Civ. P. 8 (c), 365 Mass. 749 (1974), states, in
relevant part, that "[w]hen a party has mistakenly designated a
defense as a counterclaim or a counterclaim as a defense, the
court on terms, if justice so requires, shall treat the pleading
as if there had been a proper designation." However, the tenant
explicitly stated in its opening argument that: "We did not
file a counterclaim, and you'll find no evidence of a
counterclaim, but you'll find that we have been asking for these
offsets from the beginning of the case." On the second day of
trial, the tenant again stipulated that there was no
counterclaim and confirmed that the offset had been raised as an
affirmative defense. The judge, therefore, cannot be faulted
5 for concluding that the tenant had not mistakenly designated
their counterclaim as a defense. See Mass. R. Civ. P. 8 (c).
3. The tenant improvement allowance. The lease agreement
provided for a tenant improvement allowance for up to $26,250,
subject to certain conditions, including that the tenant provide
a written disbursement request. The tenant contends that, by
virtue of the lease agreement, it was entitled to the tenant
improvement allowance. We are not persuaded. The tenant
improvement allowance was only available if the tenant were not
in default, and the only disbursement request that appears in
the record was made on December 23, 2020, long after the tenant
was in default. While the tenant testified that it submitted a
request prior to December 23, 2020, the judge was not required
to credit this testimony particularly where, as here, there was
no additional credible evidentiary support. See Millennium
Equity Holdings, LLC, 456 Mass. at 636-638.
4. Damages. The judge awarded the landlord damages in the
amount of $545,054.45, an amount which included unpaid rent,
late fees, real estate taxes, and repair and maintenance
reimbursements. The tenant contends that the damages
calculation was based on an incorrect application of the lease's
acceleration clause. 4 The argument is not supported by the
4 The tenant's argument regarding the acceleration clause appears to be a response to an argument advanced by the landlord
6 record. Although Section 23.1 (d) (i) of the lease contains an
acceleration clause, Section 23.1 (d) (ii) alternatively allowed
the landlord to collect "sums equal to the Fixed Minimum Annual
Rent and Additional Rent which would have been payable by
Tenant, had Tenant not committed such Event of Default and had
Landlord not otherwise terminated the Lease as a result, on the
dates such payments would have otherwise been due" under the
lease. The $545,054.45 damages figure reflects the tenant's
total unpaid rent and fees 5 from May 2020 through December 2023,
as calculated in a ledger that was entered into evidence at
trial. Each of the entries having already come due, the
landlord's damages therefore reflect a calculation of damages
according to Section 23.1 (d) (ii) of the lease, rather than an
application of the lease's acceleration clause, which would have
made the tenant liable for the entire remaining rent and fees.
in postjudgment motions, in which the landlord justified the application of prejudgment interest pursuant to G. L. c. 231, § 6C, beginning with the September 29, 2020 notice of default through the lease's acceleration clause. The tenant does not appeal the application of prejudgment interest beginning from September 29, 2020, so we only address the tenant's argument related to the lease's acceleration clause.
5 These fees include unpaid real estate taxes, late fees, insurance payments, and repair and maintenance reimbursements. All such fees fall under the lease's definition of "Additional Rent," which includes "all other payments (including but not limited to Real Estate Tax Payments, late fees, interest or other fees, charges or sums) to be made by the Tenant to the Landlord."
7 Because the damages do not reflect an application of the lease's
acceleration clause, whether the acceleration clause could
properly have accelerated the tenant's liability for fees
additional to rent need not be resolved. 6
The tenant's argument that it should be excused from paying
rent for the floors that it did not occupy is also unavailing.
Section 5.1 (a) of the lease states that the tenant would be
responsible for the full rental amount "without any set-off or
deduction whatsoever." Further, Section 17.8 (e) of the lease
makes it clear that a subtenancy of the building's upper floors
had no effect on the tenant's obligations to the landlord:
"Neither the Sublease nor Landlord's consent thereto shall
release or discharge Tenant from any liability or obligation
under the Lease, and Tenant shall remain liable and responsible
for, the full performance . . . with the same force and effect
as though no sublet had been made pursuant to the terms of the
6 Nevertheless, tenant's reliance on Cummings Properties, LLC v. National Communications Corp., 449 Mass. 480, 492 n.5 (2004), for the proposition that an acceleration clause cannot make a tenant in default responsible for additional financial obligations beyond rent is misplaced. The acceleration clause in Cummings Properties, LLC only allowed the lessor to collect "the entire balance in rent," while the acceleration clause here allows the landlord to collect "the remaining total amount of Fixed Minimum Annual Rent, Additional Rent and other charges which would have been payable and due by Tenant for the remainder of the Lease." See id. at 491 n.3. We need not consider whether the acceleration clause constitutes a penalty and not liquidated damages. See id. at 497.
8 Lease." The tenant would have been obligated for the full
rental amount even if a subtenant occupied the other floors. 7
Judgment affirmed.
By the Court (Vuono, Desmond & Toone, JJ. 8),
Clerk
Entered: February 11, 2026.
7 Given the result we reach, if for no other reason, the tenant's request for attorney's fees is denied.
8 The panelists are listed in order of seniority.