Charley Noble, LLC v. Elaine Corp.

29 Mass. L. Rptr. 503
CourtMassachusetts Superior Court
DecidedApril 3, 2012
DocketNo. MICV201002227
StatusPublished

This text of 29 Mass. L. Rptr. 503 (Charley Noble, LLC v. Elaine Corp.) 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
Charley Noble, LLC v. Elaine Corp., 29 Mass. L. Rptr. 503 (Mass. Ct. App. 2012).

Opinion

Leibensperger, Edward R, J.

This is a relatively straightforward action by a commercial landlord against a commercial tenant for unpaid rent and other charges. The plaintiff is the sublandlord (Landlord) and the defendant is the subtenant (Tenant) under a Sublease (Lease). Despite claims of unfair business practices under G.L.c. 93A, §11, by both sides, the dispute is of the “garden variety” in that the Tenant simply has not paid the amounts due under the Lease.1 The Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

The Landlord entered into a Lease with the Tenant dated January 18, 2008. It is a sublease because the Landlord leased an 88,000 s.f. warehouse pursuant to a master lease. The Landlord then subleased space within the warehouse. The Lease was for approximately 12,000 s.f. The term of the Lease was from January 25, 2008 to January 31, 2011.

The parties offered the Lease into evidence as Exhibit 2. They stipulated to the fact that a Lease was entered into and they stipulated to Exhibit 2. During the trial, the Tenant attempted to cast some doubt as to whether Exhibit 2 was, in fact, the actual lease entered into by the parties. The Tenant pointed out that there is a footer on each page of Exhibit 2 with the date 1/25/08, while the signature page of Exhibit 2 has a footer with the date 1/15/08, and the handwritten date next to the signatures is January 18, 2008. The Landlord representative testified that Exhibit 2 is a true copy of the Lease and the footer dates merely reference when the pages were reprinted. The Tenant offered no alternative version of the Lease despite testimony that it has a copy of the Lease in its files. I find that Exhibit 2 is a true and accurate copy of the Lease that existed between the parties.

The Lease provides for a Gross Rent of $2,250 per month for the first 4 months, and $5,500 per month for the rest of the term. In the Lease, Gross Rent is defined to “include Base Rent and cost for Janitorial services within the common areas, Real Estate Taxes, Exterior Maintenance, Common Area Utilities and Building and Property Liability Insurance.” The Lease also provides for Additional Rent. Under that provision, the Tenant is responsible for utility costs applicable to the leased premises, a proportionate share of snow removal charges, and a share of any additional real estate taxes above the 2007 base year. The Lease explicitly allocated 17.4% of such charges incurred by the Landlord as the Tenant’s “proportionate share.”

The Landlord submitted into evidence a ledger indicating amounts owed and paid by the Tenant from the inception of the Lease to date. On the basis of the ledger and the testimony of the Landlord’s representative, the Landlord claims that it is owed $68,390. The Landlord acknowledges, however, that it holds $11,000 as a security deposit that must be applied to the amount owed by the Tenant.

When the term of the Lease ended on January 31, 2011, the Tenant did not vacate the premises. On February 4, 2011, the Landlord gave written notice to the Tenant that it intended to charge “holdover” rent for the period following the end of the lease term on January 31, 2011. Pursuant to paragraph 3 of the Lease, if the Tenant fails to vacate the premises upon the termination of the Lease, “the Subtenant will be subject to a holdover lease rate of two times the current monthly rent until Subtenant has completely vacated the premises." The Landlord presented evidence, essentially uncontroverted, that the Tenant did not depart from the premises until March 31, 2011. Accordingly, the Tenant is liable to the Landlord for the holdover rent in the amount of $22,000.

The Landlord received a security deposit from the Tenant in the amount of $11,000. The Landlord held the security deposit in its operating account throughout the term of the lease and still holds it currently. The Lease, paragraph 8, does not require that the Landlord apply the security deposit to amounts payable by the Tenant during the course of the Lease period. I find, however, that once the Tenant vacated the property on March 31, 2011, the Landlord should have applied the security deposit to the amounts owed by the Tenant so as to reduce ongoing late charges and interest owed by the Tenant.

The amount shown on the Landlord’s ledger for past due Gross Rent and Additional Rent is $34,988. That amount includes $12,988 for past due Additional Rent, and $22,000 for “holdover” rent for the months of February and March 2011.1 find that the Landlord is entitled to recover the full amount of $34,989, less the application of the security deposit.

[504]*504The Tenant disputes that the Landlord is entitled to receive the Additional Rent. The Tenant did not contest the specific charges shown on the Landlord’s ledger or the method of calculation shown on the ledger. It obj ected, however, to having liability for those amounts. I address the Tenant’s objections and find, based upon my own calculations, that some of the Landlord’s claim is not warranted by the evidence.

I.Additional Rent

Each month the Landlord billed the Tenant for amounts owed as Additional Rent as described in paragraph 7 of the Lease. For the first fourteen months of the Lease, the Tenant paid the Additional Rent charges. Commencing in April 2009, and continuing thereafter, however, the Tenant refused to pay Additional Rent. The Tenant contends that it had only agreed to pay Gross Rent. This contention is, of course, belied by the explicit terms of the Lease. Accordingly, I find the Tenant is liable for the Additional Rent charges as set forth in the ledger in the amount of $12,988.

II.Late Charges

The Lease provides in paragraph 6 that payment by the Tenant more than three days after the date payment is due subjects the Tenant to a late charge of 5% of the overdue amount. From the very beginning of the lease term, the Tenant consistently paid late. Nevertheless, the Landlord did not assess late charges until August 2009.1 find that the Landlord is entitled under the Lease to assess late charges. The amount of late charges accessed through the term of the Lease ending January 31, 2011, is $2,635. In February and March 2011, the Tenant did not vacate the premises and did not leave the property in proper condition. Late charges of $2,675 were incurred by the Tenant for that period. The Landlord, however, in its ledger assessed $24,491 of late charges for a period of fourteen (14) months from February 2011, to the month of trial, March 1, 2012. I find that, in that calculation, the Landlord double counted the late charges for two months. In addition, the Landlord could have, and should have, applied the security deposit of $11,000 to reduce the amount owed by the Tenant starting on April 1,2011, when the Tenant no longer occupied the premises. Adjusting for those errors, the amount owed for the twelve months in late charges for the period April 1, 2011 to March 1, 2012 is $1,199 per month. Accordingly, the total amount owed by Tenant to the Landlord for late charges is $14,388 for the twelve (12) months before trial, plus $5,310 ($2,635 + $2,675) for the period of occupancy, for a total of $19,698.

III.Interest

The Landlord’s ledger claims that interest owed by the Tenant through March 1, 2012 is $3,601. The Lease provides, in paragraph 6, that the Landlord may charge interest on delinquent amounts at the prime rate, plus 4% per annum. At trial, the Landlord’s representative testified that the prime rate plus 4% at the time of trial is 7.25%.

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Cite This Page — Counsel Stack

Bluebook (online)
29 Mass. L. Rptr. 503, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charley-noble-llc-v-elaine-corp-masssuperct-2012.