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23-P-372 Appeals Court
CLASSIC RESTAURANT CONCEPTS, LLC vs. PRESIDENT AND FELLOWS OF HARVARD COLLEGE.
No. 23-P-372.
Suffolk. February 16, 2024. - June 25, 2024.
Present: Sacks, Singh, & Walsh, JJ.
Contract, Lease of real estate, Implied covenant of good faith and fair dealing. Real Property, Lease. Fraud. Landlord and Tenant, Quiet enjoyment, Constructive eviction. Damages, Breach of covenant of quiet enjoyment. Consumer Protection Act, Lease, Businessman's claim, Unfair or deceptive act. Practice, Civil, Summary judgment, Fraud, Consumer protection case. Declaratory Relief.
Civil action commenced in the Superior Court Department on August 25, 2017.
The case was heard by Michael D. Ricciuti, J., on a motion for summary judgment.
Philip Y. Brown (Amelia R. Gray, also present) for the plaintiff. Richard J. Riley for the defendant.
SACKS, J. In this commercial lease dispute, the lessee,
Classic Restaurant Concepts, LLC (Classic), sought damages from 2
the lessor, the President and Fellows of Harvard College
(Harvard), based on the closure of a street in front of the
leased premises in connection with a Harvard construction
project. Classic now appeals from a summary judgment entered in
favor of Harvard on all counts of Classic's complaint and on
Harvard's counterclaim for lost rent for breach of the lease.
We affirm so much of the judgment as dismissed Classic's claims
for fraudulent inducement, fraud, negligent misrepresentation,
and nuisance (counts I-IV). We vacate so much of the judgment
as dismissed Classic's claims for breach of the lease's covenant
of quiet enjoyment, breach of the implied covenant of good faith
and fair dealing, violation of G. L. c. 93A, § 11, and
declaratory judgment (counts V-VIII), and we vacate the money
judgment on Harvard's counterclaim for lost rent.
Background. In 2011, Harvard leased the premises at 8
Holyoke Street in the Harvard Square area of Cambridge
(premises) to a tenant that operated a restaurant. In late
2014, the tenant wanted to opt out of the lease, and so Harvard
asked Classic if it was interested in opening its own restaurant
on the premises. Harvard informed Classic that, beginning in
April 2016, Harvard's building then known as Holyoke Center --
which was directly across Holyoke Street from the premises and
which occupied an entire city block -- would undergo substantial 3
renovations, continuing through 2018, and would become the new
Smith Campus Center (SCC).
Classic was interested. In September 2015, Classic
acquired the prior tenant's leasehold interest, and on September
11, 2015, Harvard and Classic signed an amendment to the
original lease. For convenience we refer to the lease as so
amended simply as the lease.1
The lease required Classic to continuously operate a
restaurant on the premises. The restaurant, to be named En
Boca, was required to be "a distinctive 'destination restaurant'
of high quality . . . serving . . . high-quality fare, offering
distinct lunch and dinner menus . . . having an atmosphere of
fine dining with full service provided by a highly trained wait
staff" and not serving fast food or operating on a "quick serve"
basis. The lease included a covenant of quiet enjoyment.
The lease further required Classic to operate the
restaurant in a manner that "maximize[d] the amount of [g]ross
[r]evenue that can be produced," and if gross revenue exceeded
specified base amounts in various years, a percentage would be
paid to Harvard as additional rent. Harvard agreed to charge
below-market rent in the beginning years of the lease. Harvard
also abated the rent entirely through the end of February 2016.
1 As discussed infra, a second amendment to the lease was executed in November 2016. 4
By January 2016, Classic was in possession of the premises at 8
Holyoke Street, and within a month or two thereafter Classic
began demolition, to be followed by renovations.
In March 2016, Harvard's contractor for the SCC project
directly across Holyoke Street, Consigli Construction Co.
(Consigli), received permission from the Cambridge department of
public works to close Holyoke Street to vehicular through-
traffic during construction work hours, in order to facilitate
the construction, beginning in April 2016. The sidewalk in
front of the premises remained open but Consigli expected, and
had already informed Harvard, that the street closure could
continue (albeit not necessarily every day) until the end of the
SCC project in August 2018. Although Consigli was carrying out
the work, there was evidence that the final decision on a
construction "means and methods" issue such as a street closure
would be up to the client, i.e., Harvard.2
2 This evidence came from one of Classic's principals, based on his experience working with contractors. He stated that even if a contractor told a client that closing a street for two and one-half years was the best way to conduct a project and save money, the client could say, "no, we can't do that. We'll have to spend more money and make it more equitable around the building for other people to share the burden on their businesses." Relatedly, a Consigli project executive agreed that Harvard either had directed or was understood to "want [Consigli] to limit" construction impacts such as street closures. Classic thus may be able to prove that Harvard could control Consigli's actions in this regard. 5
Classic opened its restaurant sometime in the fall of 2016,
but, according to one of Classic's principals, the construction
made Holyoke Street "a war zone. The street you couldn't get
down. Even our sidewalk, the fence was only a couple of feet
wide. It was hard to get to the restaurant." Classic paid
Harvard only two months' rent, and the restaurant ceased
operations as of June 2017. As Consigli anticipated, Holyoke
Street remained closed until the summer of 2018.
Classic commenced this action, claiming that the closure of
Holyoke Street, for Harvard's benefit, interfered with the
restaurant's operations and caused or significantly contributed
to its demise. Classic now appeals from the summary judgment in
Harvard's favor.
Discussion. Our review is de novo. We consider all of the
evidence before the motion judge and draw all reasonable
inferences therefrom in favor of the nonmoving party, Classic.
See Miller v. Cotter, 448 Mass. 671, 676 (2007). We review
whether Harvard, as the moving party, met its burden of showing
that there is no genuine issue as to any material fact and that
it is entitled to judgment as a matter of law. See Drakopoulos
v. U.S. Bank Nat'l Ass'n, 465 Mass. 775, 777 (2013).
1. Fraud and fraudulent inducement. Classic's claims for
fraud and fraudulent inducement asserted that Harvard had failed
to disclose information about the impact of the SCC project on 6
Holyoke Street, and specifically the closure of Holyoke Street,
and thereby fraudulently induced Classic to enter into the lease
in September 2015.3 Classic's theory was that Harvard had a duty
to disclose the information, either because disclosure was
"necessary to prevent [Harvard's] partial or ambiguous statement
of the facts from being misleading," or because "the
nondisclosed fact [was] basic to, or [went] to the essence of,
the transaction." Stolzoff v. Waste Sys. Int'l, Inc., 58 Mass.
App. Ct. 747, 763 (2003).
The judge ordered summary judgment on these claims because,
among other reasons, Classic could cite no evidence that Harvard
knew, before executing the lease, the extent to which Holyoke
Street would be closed. On appeal, Classic has not pointed to
any such evidence. The earliest evidence of any discussion of
closing Holyoke Street by Harvard (or its contractor Consigli)
dates to October 21, 2015, which postdates the execution of the
lease. Classic thus had no reasonable expectation of proving an
essential element of its fraud claims -- that, at the time
Harvard's alleged nondisclosure of material facts could have
influenced Classic's decision to sign the lease, Harvard itself
3 Classic's claim for negligent misrepresentation was dismissed on a ground that did not apply to the fraud claims. On appeal, Classic does not challenge the dismissal. 7
knew of those facts.4 Summary judgment dismissing the fraud
claims was therefore proper. See Kourouvacilis v. General
Motors Corp., 410 Mass. 706, 716 (1991).
On appeal, Classic presses an additional argument: that
even after the parties executed the lease in September 2015, the
claimed fraudulent nondisclosures about the closure of Holyoke
Street continued. In its summary judgment opposition, however,
Classic encouraged the judge "to separate Classic's claims into
three buckets" and to consider the fraud claims as fitting into
the bucket related to "Harvard's conduct leading up to the
execution of the lease." Classic mentioned post-September 2015
nondisclosures only in passing. Harvard argues that the issue
is waived, and we agree. To whatever extent those later alleged
nondisclosures could support fraud claims, Classic "did not
sufficiently raise the issue below and is therefore barred from
raising it on appeal." Boss v. Leverett, 484 Mass. 553, 562
(2020). We return to the issue infra when we discuss Classic's
chapter 93A claim, which Classic put into the bucket relating to
"Harvard's conduct during the entire relationship."
4 We therefore need not address whether the claims also fail on the ground that nondisclosure of information about the street closure concerned only "conditions to exist in the future" and so could not support a fraud claim. Stolzoff, 58 Mass. App. Ct. at 759. 8
2. Implied covenant of good faith and fair dealing.
Classic asserts that Harvard committed a breach of the implied
covenant of good faith and fair dealing by causing the closure
of Holyoke Street to facilitate Harvard's own construction
project, thereby interfering with Classic's ability to reap the
benefits of the lease. Classic argues that the street closure
impaired its efforts to continuously operate a distinctive,
high-quality "destination restaurant" on the premises, in a
manner that maximized gross revenue, as the lease required.
"The covenant of good faith and fair dealing is implied in
every contract, including contracts between sophisticated
business people" (quotation and citations omitted). Weiler v.
PortfolioScope, Inc., 469 Mass. 75, 82 (2014). "The implied
covenant provides that neither party shall do anything which
will have the effect of destroying or injuring the right of the
other party to receive the fruits of the contract" (quotation
and citations omitted). Id. The implied covenant "exists so
that the objectives of the contract may be realized, [and a]
breach occurs when one party violates the reasonable
expectations of the other" (quotations and citations omitted).
Id.
To show that it was harmed by the street closure, Classic
cited the testimony of one of its principals, based on his
decades of experience in the restaurant industry, that the type 9
of customer it was trying to attract did "not . . . want to go
down a closed street. It needs to feel good. It needs to be
warm and welcoming." The fact that cars could not drive by the
front of the restaurant to drop off patrons "crushed the
business." Classic also cited the testimony of an expert in
restaurant management that the closing of a one-way street5 has
"a significantly negative impact on retail, especially
restaurant, sales on that street. When a street is physically
closed, or even when customers have the perception that it might
be closed when they get there, that closing will result in both
visibility and accessibility being significantly diminished."
To show that Harvard benefited from the street closure,
Classic cited the testimony of a Consigli project executive that
closing Holyoke Street (or at least a street near a construction
project) is "good for me. I can build faster. If the city says
you can't close the road, it's going to make the project more
difficult for me." From such evidence it could reasonably be
inferred that the street closure allowed Harvard to complete the
SCC project more quickly and at less cost.
Despite this evidence that the street closure harmed
Classic's ability to operate the restaurant while benefiting
Harvard, the judge rejected the implied covenant claim on the
5 It appears undisputed that Holyoke Street is a one-way street. 10
ground that, in the judge's view, Classic impermissibly sought
to read into the lease a provision that "Harvard would prevent
the closure of Holyoke Street." The judge saw this as violating
the principle that the implied covenant "may not . . . be
invoked to create rights and duties not otherwise provided for
in the existing contractual relationship." Uno Restaurants,
Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004)
(Uno). The judge reasoned that Classic was aware of the SCC
project from the start and "was specifically aware of road
closures before it entered into the [s]econd [a]mendment [to the
lease6] and did not address them in it. There was thus no
intended and agreed expectation regarding road closures that
could have been implied . . . and Classic never negotiated for
an express term on this point."
The first flaw in this analysis is that Classic never
claimed Harvard was required to prevent the closure of Holyoke
Street. Rather, Classic asserts that Harvard was required to
refrain from itself causing the closure of Holyoke Street to an
extent that would injure Classic's right under the implied
covenant "to reap the benefits prescribed by the terms of the
[lease]." Uno, 441 Mass. at 385. Whether the closure did so is
a question of fact, as to which there is a genuine dispute.
6 The second amendment, signed in November 2016, abated the rent for an additional six months, through September 1, 2016. 11
That Classic knew of the impending SCC project when it
entered the lease is a circumstance that may be considered in
evaluating whether and to what extent the closure impaired
Classic's right to operate as required by the lease. This is
because duties under the implied covenant depend on each party's
"reasonable expectations of the other" (quotation and citation
omitted). Weiler, 469 Mass. at 82. But Classic's general
knowledge of the planned SCC project does not, on this record,
equate to specific knowledge of or acquiescence to the closure
of Holyoke Street in the manner and for the time periods that it
was later closed. Harvard has not established that Classic, in
signing the lease, should reasonably have expected the closure
to occur.7 On this record, a factfinder could find that Classic
reasonably expected that Harvard would not cause a street
closure that would significantly impair Classic's ability to
perform the obligations and reap the benefits of the lease.8
7 Nor did anything in the second amendment to the lease constitute acquiescence to the closure or otherwise waive Classic's rights under the implied covenant. Notably, on appeal, Harvard does not defend the judge's reasoning based on the second amendment. That amendment, executed on November 17, 2016, merely retroactively extended the rent abatement period through September 1, 2016. So far as appears, the amendment made no other substantive change to the lease. Indeed, the amendment expressly ratified all covenants, terms, and conditions of the lease, and it included an integration clause.
8 Classic's implied covenant claim, and for that matter its quiet enjoyment claim, alleged breaches based not only on the closure of Holyoke Street but also on Harvard's use of Holyoke 12
The second flaw in the judge's analysis is his broad
reading of the Supreme Judicial Court's statement that "[t]he
purpose of the covenant of good faith and fair dealing is not to
supply contractual terms that the parties are free to
negotiate." Uno, 441 Mass. at 388. This statement, taken out
of context and applied literally, could entirely negate the
implied covenant, by confining it to the enforcement of a
contract's express terms. In theory, parties to a contract
could always, in retrospect, have negotiated express terms to
deal with any possible future action by one party that might
injure the other party's ability to benefit from the contract.
This is true whether the future action is an employer's
termination of a salesperson in order to prevent the salesperson
from collecting bonus commissions on sales already made, see
Fortune v. National Cash Register Co., 373 Mass. 96, 104-106
(1977), or a lessor's limiting access to the leased premises in
order to facilitate the lessor's separate construction project.
If the failure to negotiate an express term preventing the
employer or the lessor from taking such action rendered the
Street during the SCC project in a manner that caused noise, dust, dirt, and grime. Nothing in the statement of undisputed material facts accompanying Harvard's summary judgment motion established that Classic had no reasonable expectation of proving violations based on these other effects. Whether such effects rose to the level of a violation of either covenant presents issues of fact. 13
implied covenant inapplicable, the implied covenant would be a
nullity.
The very phrase "implied covenant," however, contemplates
an obligation that is not express in the contract. Proof that
the quoted language from Uno does not have the broad scope the
judge attributed to it is that the Supreme Judicial Court
continues to enforce the implied covenant notwithstanding that
language.9 See, e.g., Robert & Ardis James Found. v. Meyers, 474
Mass. 181, 189-191 (2016) (rejecting claim that trial judge used
implied covenant to impose new duty; rather, judge properly
enforced duty "to cooperate in effectuating the existing,
agreed-upon deal on its own terms"); Ayash v. Dana-Farber Cancer
Inst., 443 Mass. 367, 385-388, cert. denied sub nom. Globe
9 Uno may be understood more narrowly. The court there reasoned that "[w]here there are many varying methods by which [a party's express contractual right] may be protected [in the event of a particular contingency confronting the other party], we are reluctant to conclude that the covenant of good faith and fair dealing has, sub silentio, provided a specific form of protection that is not mentioned in the parties' contract." Uno, 441 Mass. at 386. Here, in contrast, Harvard does not point to "many varying methods" by which Classic's contractual right and duty to operate a destination restaurant could be protected against loss of necessary access attributable to Harvard's construction project. The situation might be different if Harvard controlled alternative means of access to the premises that approximated the access available from Holyoke Street. If Harvard offered one of those alternative means to Classic during Harvard's construction project, then Uno suggests that Classic could not invoke the implied covenant to compel Harvard to adopt the particular solution of keeping Holyoke Street open. 14
Newspaper Co. v. Ayash, 546 U.S. 927 (2005) (jury could
reasonably find that hospital breached implied covenant by
failing to abide by its own bylaws in its conduct toward its
physicians).
We are unpersuaded by Harvard's remaining arguments about
why the implied covenant claim should fail as a matter of law.
First, Harvard argues that Classic's claim of interference with
its high-end restaurant conflicts with the rule that "[i]n the
ordinary lease of real estate there is no implied warranty that
the premises are fit for occupancy or for the particular use
contemplated by the lessee." Gade v. National Creamery Co., 324
Mass. 515, 518 (1949). But Classic does not seek to enforce any
such implied warranty. Rather, Classic seeks to enforce what it
asserts is Harvard's obligation under the implied covenant not
to take action that injures (by impairing access to the
premises) Classic's right to do what the lease allows and
requires: operate a high-end restaurant. Put differently,
Classic does not claim Harvard implicitly promised the premises'
suitability for a high-end restaurant, but only that Harvard
promised not to injure the premises' suitability for that
purpose.
Second, Harvard argues that, because the lease contains an
integration clause, the implied covenant cannot be used to
enforce "any separate understanding about use of Holyoke 15
Street," and any evidence of such an understanding would be
barred by the parol evidence rule. But Classic does not seek to
enforce any such separate understanding. Classic seeks to
enforce the implied covenant of good faith and fair dealing,
which "is implied in every contract" (emphasis added), Uno, 441
Mass. at 385, even those with integration clauses. See, e.g.,
Starr v. Fordham, 420 Mass. 178, 184, 188 (1995); Winchester
Gables, Inc. v. Host Marriott Corp., 70 Mass. App. Ct. 585, 591-
592, 597 (2007); Frostar Corp. v. Malloy, 63 Mass. App. Ct. 96,
104 & n.18, 105-106 (2005).
3. Covenant of quiet enjoyment. Like its claim for breach
of the implied covenant of good faith and fair dealing,
Classic's claim for breach of the lease's covenant of quiet
enjoyment asserted that Harvard, by causing the closure of
Holyoke Street, interfered with Classic's ability to operate a
restaurant on the leased premises. A breach of the covenant is
shown where the landlord "deprives the lessee of a vital part of
what the landlord knows the lessee must have in order to carry
on [its] business." Charles E. Burt, Inc. v. Seven Grand Corp.,
340 Mass. 124, 127 (1959) (Burt). "The covenant . . . protects
a tenant's right to freedom from serious interference with [its]
tenancy -- acts or omissions that impair the character and value
of the leased premises." Doe v. New Bedford Hous. Auth., 417 16
Mass. 273, 285 (1994). See Simon v. Solomon, 385 Mass. 91, 102
(1982).10
The judge rejected Classic's quiet enjoyment claim on
grounds much like those he cited in rejecting the implied
covenant claim. He reasoned that any interference with quiet
enjoyment here did not rise to the level of a breach, in light
of the evidence "that Classic was well aware that construction
of the [SCC] would occur during its tenancy, that [the premises
were] not rendered entirely inaccessible to customers as a
result of the construction, and that when it entered into the
[s]econd [a]mendment, Classic did not address this issue."
We may assume that an evaluation of what "the landlord
knows the lessee must have in order to carry on [its] business"
or what constitutes a "serious interference" with a tenancy
takes into account the parties' reasonable expectations. Burt,
340 Mass. at 127. As we concluded above, however, Classic's
general knowledge of the impending SCC project does not
necessarily equate to specific knowledge of the scope of the
closure of Holyoke Street. Nor does the silence of the second
10Classic cites the standard from Burt, a commercial lease case. Burt, 340 Mass. at 124-126. Harvard cites the standard from Simon, a case concerning the covenant of quiet enjoyment under G. L. c. 186, § 14, protecting residential tenants. Simon, 385 Mass. at 99. The parties have not addressed and we do not decide whether and, if so, how the standards may differ substantively. 17
amendment on the street closure constitute Classic's agreement
to the closure or waive Classic's rights under the lease's
express covenant of quiet enjoyment. Classic seeks not to
rewrite the lease but to enforce, as applied to the particular
issue of street closure, Harvard's existing, express obligation
not to interfere with Classic's quiet enjoyment. Finally, that
the street closure did not render the premises entirely
inaccessible would not preclude a finding that the closure
nevertheless seriously interfered with Classic's tenancy, see
Doe, 417 Mass. at 285, or deprived Classic of the reasonable
access that Harvard knew Classic needed in order to operate a
high-end restaurant while maximizing revenue. See Burt, supra
at 127. Whether the closure did so presents disputed issues of
fact.
We address Harvard's remaining arguments against the quiet
enjoyment claim. First, Harvard asserts that the lease did not
give Classic "any rights in Holyoke Street beyond those enjoyed
by the general public." But Classic does not assert any such
greater rights in Holyoke Street itself. Rather, Classic
asserts a right under the lease (one not possessed by the
general public) that Harvard not take action, whether by causing
the closure of Holyoke Street or otherwise, to interfere with
Classic's quiet enjoyment of the premises. 18
Second, Harvard argues that because Classic "received
below-market rent as consideration for likely construction
impacts," Classic "accepted the risk of construction adversely
affecting its business," and cannot now assert the covenant of
quiet enjoyment as a limit on Harvard's freedom to cause such
impacts. Once again, however, general knowledge that the SCC
project would occur, while a relevant circumstance, does not
necessarily constitute agreement to any and all construction
impacts no matter how severe their effect on Classic's tenancy,
or a waiver of Classic's right under the covenant of quiet
enjoyment to challenge specific impacts. Moreover, there is a
factual dispute regarding the extent to which the rent
concessions were intended to compensate for construction impacts
(as Harvard contends) or instead to facilitate Classic's
buildout (as Classic asserts).
Third, Harvard contends that, absent any evidence that it
carried out the SCC construction in a manner that violated the
terms of its various permits or was otherwise unlawful, it
cannot be held to have breached the covenant of quiet enjoyment.
Harvard relies on cases holding that a property owner's
compliance with permits and laws may insulate it from private
nuisance claims brought by neighbors. See, e.g., Hull v.
Massachusetts Port Auth., 441 Mass. 508, 519 (2004); Strachan v.
Beacon Oil Co., 251 Mass. 479, 487-488 (1925). But Harvard 19
cites no case in which such principles have been applied to
covenant of quiet enjoyment claims -- particularly where, as
here, the covenant was expressly agreed to by the parties
themselves, rather than being implied in law.11 See generally
Simon, 385 Mass. at 102 (discussing covenant of quiet enjoyment
implied at common law and now imposed by G. L. c. 186, § 14).
Fourth, Harvard argues that, to recover on its quiet
enjoyment claim, Classic must, but cannot, show that Harvard "at
least acted negligently in not alleviating the condition."
Jablonski v. Casey, 64 Mass. App. Ct. 744, 748 (2005). See Al-
Ziab v. Mourgis, 424 Mass. 847, 850–851 (1997).12 Harvard
asserts that it complied with applicable laws and permits and
11Although claims for private nuisance and for breach of the covenant of quiet enjoyment have elements that are similar - - as illustrated by the description of those claims in Doe, 417 Mass. at 285, 288 -- we know of no case holding that every aspect of the law of private nuisance applies equally to the law of quiet enjoyment. Indeed, in Doe, the court upheld summary judgment for the landlord on the tenants' nuisance claim, but it ruled that the quiet enjoyment claim presented issues of fact requiring a trial. See id. at 287-289. Here, the judge ordered summary judgment for Harvard on Classic's nuisance claim on the same ground relied on in Doe, and on appeal Classic has not argued that doing so was error.
12Jablonski and Al-Ziab involved the covenant and the statutory right of quiet enjoyment protecting tenants of residential premises. See Al-Ziab, 424 Mass. at 850; Jablonski, 64 Mass. App. Ct. at 747-748. The parties here have not argued that the standard applied to an express covenant of quiet enjoyment in a commercial lease is materially different. See note 11, supra. 20
carried out the work in a "reasonable and proper manner." "The
key inquiry is whether the serious interference with the tenancy
is a natural and probable consequence of what the landlord did,
what he failed to do, or what he permitted to be done"
(quotation and citation omitted). Goreham v. Martins, 485 Mass.
54, 66-67 (2020). Here, a finder of fact could conclude that,
even if Harvard and Consigli carried out the project in a lawful
and otherwise reasonable manner, the natural and probable
consequence of Harvard's actions causing the closure of Holyoke
Street, if proven, was to significantly impair access to the
premises and thus seriously interfere with Classic's tenancy. A
finder of fact could also conclude that Harvard knew or should
have known of this interference and acted at least negligently
in failing to take appropriate corrective measures.13
4. Chapter 93A. To the extent that Classic's c. 93A claim
is based on alleged nondisclosures before execution of the
13We need not resolve the parties' disagreement regarding whether, under Winchester v. O'Brien, 266 Mass. 33 (1929), a tenant may recover on a quiet enjoyment claim even if "the work was carried on in a reasonable and proper manner." Id. at 38. Although the precise basis of liability in that nearly century- old decision is not easy to discern, Harvard cites no case suggesting that a landlord's performing construction work in a "reasonable and proper manner" constitutes a defense to a quiet enjoyment claim based on the work's effect on the tenant. Rather, the reasonableness of a landlord's affirmative conduct necessarily depends in part on whether the conduct substantially interferes with the tenancy. 21
lease, it fails for the same reason as the fraud claims: under
c. 93A, "[t]here is no liability for failing to disclose what a
person does not know." Underwood v. Risman, 414 Mass. 96, 100
(1993). Insofar as the c. 93A claim is based on Harvard's later
conduct and statements, however, summary judgment should not
have been granted.
First, "a breach of the implied covenant of good faith and
fair dealing may constitute an unfair or deceptive act or
practice for the purposes G. L. c. 93A." Massachusetts
Employers Ins. Exch. v. Propac-Mass, Inc., 420 Mass. 39, 43
(1995). Harvard's alleged actions in causing the closure of
Holyoke Street for the benefit of Harvard's own construction
project could be viewed as unfair or deceptive under c. 93A for
the same reason that those actions could, by injuring Classic's
right to reap the benefits of the lease, constitute a breach of
the implied covenant.14
Second, and similarly, a breach of the covenant of quiet
enjoyment could also be viewed as unfair or deceptive under
c. 93A. The same conduct may violate both the covenant and the
statute. See Cruz Mgt. Co. v. Thomas, 417 Mass. 782, 788-790
(1994); Wolfberg v. Hunter, 385 Mass. 390, 400-401 (1982).
14Of course, a breach of the implied covenant, or of the covenant of quiet enjoyment discussed infra, would not constitute a per se violation of c. 93A. All elements of a c. 93A claim would still need to be proven. 22
Third, Classic's summary judgment opposition cited evidence
that Harvard did not timely or accurately disclose what it knew
about the planned or likely street closure and that Classic was
injured as a result. Viewing the evidence in the light most
favorable to Classic, in February 2016, Consigli told Harvard
that the Holyoke Street closure "will be essentially every day,
Monday through Friday for the next 2.5 years," but Harvard did
not share this information with Classic. In late February or
early March 2016, when the street was first closed and Classic
asked Harvard for an explanation, Harvard replied that the
closure would end "before school resumed in the fall of 2016."
Harvard repeated this assurance in July 2016: "we're going to
get it reopened before the school starts." In August 2016,
Classic emailed Harvard to express surprise and dismay over
reports that the planned closure would last approximately three
more months. In mid-September 2016, Harvard sent Classic a copy
of a public notice stating that Holyoke Street was expected to
be closed a few days per week for the next two weeks, after
which it would be closed Monday through Friday from 7 A.M. to 4
P.M. for approximately two and one-half months.
A finder of fact could conclude not only that Harvard did
not timely disclose what it knew or expected about the street
closure but also that such nondisclosures harmed Classic. There
is evidence that Classic spent about $350,000 in preopening 23
expenses, approximately half of which went to hiring and
training employees for a planned August 2016 restaurant opening
but that, because of the street closure, Classic delayed the
opening and let those employees go, meaning those expenditures
"went out the window." Classic also spent $120,000 or more to
retain salaried employees (managers, chefs, and a sommelier)
during the two-month period when Classic "had to wait until the
road opened in order for [the restaurant] to open."15
Harvard argues that nondisclosure of information about the
street closure cannot be the basis for c. 93A liability because
Harvard had only a "suspicion" about the closure, or an
awareness of its "likelihood, rather than knowledge" that it
would occur. Underwood, 414 Mass. at 100 (lessor's general
awareness that older houses were more likely to contain lead
paint could not make lessor liable for not disclosing presence
of such paint to tenant). See Greenery Rehabilitation Group,
15The judge rejected Classic's argument that it could have altered the timing of its opening; the judge reasoned that the lease obligated Classic "to open and continuously operate the restaurant." The lease, however, gave Harvard a choice of remedies for Classic's breach of that obligation, one of which was liquidated damages of $100 per day. The record does not establish what remedy (if any) Harvard would have sought. Notably, Harvard not only had sought no remedy by September 2016, but in November 2016 it executed the second amendment, extending the rent abatement through September 1, 2016. Had Harvard sought liquidated damages, it appears Classic could have made a rational choice to pay them in order to avoid larger expenditures. 24
Inc. v. Antaramian, 36 Mass. App. Ct. 73, 78 (1994) (no c. 93A
liability for nondisclosure of "a predictive insight about the
future operations of a going business in relation to changing
market conditions"). But these cases do not sweep as broadly as
Harvard suggests.
In Underwood itself, the court acknowledged its earlier
decision recognizing that a landlord's failure to inform
prospective tenants of a pending application for rent increases
could be an unfair or deceptive act. Underwood, 414 Mass. at
100, citing York v. Sullivan, 369 Mass. 157, 162 (1975).
Nothing in York suggests that this result depended on the
landlord being certain, at the time the tenants signed their
leases, that the application would be granted. York, supra at
157-161.
Here, similarly, it is not dispositive that Harvard may not
have known the extent of the street closure with certainty at
the time Classic was deciding when to hire and train the new
restaurant's staff. A finder of fact could conclude that, at
least for a substantial part of 2016, Harvard knew significantly
more than it chose to tell Classic, that it was in Harvard's
interest for Classic to open and operate, and that Harvard's
nondisclosure harmed Classic by causing it to incur pre-opening
expenses that turned out to be wasted. A finder of fact could
also conclude that Harvard harmed Classic by failing to honor 25
its assurance that the street would be open by the time school
resumed in the fall of 2016.
Harvard may, of course, be correct in arguing that the
"appropriate course for a property manager when presented with
uncertain information about future construction logistics is to
not share information that may prove inaccurate." Whether
Harvard's nondisclosures were unfair or deceptive, or instead
spared Classic the consequences of uncertainty, depends in the
first instance on disputed issues of fact. Summary judgment on
the c. 93A claim was therefore erroneous.
5. Remaining claims. Classic asserted a claim for a
declaratory judgment that it owed Harvard no money under the
lease, that the lease was terminated, and that Harvard was
liable to Classic for damages. Harvard counterclaimed for its
own damages, including lost rent, for breach of the lease. The
judge ruled that for Classic to obtain the requested declaratory
relief, Classic would have to prove a constructive eviction
under the standards set forth in Wesson v. Leone Enters., Inc.,
437 Mass. 708, 713-714 (2002). Concluding that Classic would be
unable to do so, the judge ruled that Classic was not entitled
to abandon the lease and stop paying rent and that Harvard was
entitled to judgment on its counterclaim. The parties then
agreed to the entry of a money judgment in Harvard's favor,
subject to Classic's right of appeal. 26
We have concluded above that Classic's claim for breach of
the lease's covenant of quiet enjoyment requires a trial. If
there is such a breach, "the tenant may raise constructive
eviction as a defense to an action to recover rent." Wesson,
437 Mass. at 713. "A constructive eviction is any act of a
permanent character, done by the landlord, or by his
procurement, with the . . . effect of depriving the tenant of
the enjoyment of the premises demised, or of a part thereof, to
which he yields and abandons possession, within a reasonable
time" (quotations and citations omitted). Id. The landlord's
"act must have some degree of substance and permanence of
character" (quotation and citation omitted). Id. at 714.
"[C]onduct that does not make the premises untenantable for the
purposes for which they were used will not constitute
constructive eviction" (quotation and citation omitted). Id.
For the reasons already discussed in connection with Classic's
quiet enjoyment and implied covenant claims, we conclude that
issues of disputed fact remain regarding whether the closure of
Holyoke Street at Harvard's instance, by interfering with access
to the leased premises, constituted a constructive eviction.
Moreover, even if there was no constructive eviction,
Classic may still be able to obtain declaratory relief along the
lines it seeks, under the rule of mutually dependent covenants
adopted in Wesson, 437 Mass. at 720. Under that rule, 27
"Except to the extent the parties to a lease validly agree otherwise, if the landlord fails to perform a valid promise contained in the lease to do, or to refrain from doing, something . . . and as a consequence thereof, the tenant is deprived of a significant inducement to the making of the lease, and if the landlord does not perform his promise within a reasonable period of time after being requested to do so, the tenant may . . . terminate the lease."
Wesson, supra, quoting Restatement (Second) of Property
(Landlord and Tenant) § 7.1 at 247 (1977). The rule requires a
lesser showing than a constructive eviction. It "does not
require that the premises be untenantable for the purposes for
which they were used," but only that the tenant "demonstrate the
landlord's failure, after notice, to perform a promise that was
a significant inducement to the tenant's entering the lease,"
including "promises that constitute a substantial benefit
understood at the time the lease was entered to be significant
to the purpose thereof" (quotation and citation omitted).
Wesson, supra at 721-722.
Here, a determination that Harvard committed a breach of
the covenant of quiet enjoyment could support a declaration,
under the rule of dependent covenants, that the lease and
Classic's rent obligation were terminated.16 The judgment must
16The parties have not briefed, and we do not address, whether a breach of the implied covenant of good faith and fair dealing or of any other promise by Harvard could also support such relief. 28
therefore be vacated insofar as it dismissed Classic's claim for
declaratory relief and awarded Harvard damages.
Conclusion. So much of the judgment as dismissed Classic's
claims for fraudulent inducement, fraud, negligent
misrepresentation, and nuisance (counts I-IV) is affirmed. So
much of the judgment as dismissed Classic's claims for breach of
the lease's covenant of quiet enjoyment, breach of the implied
covenant of good faith and fair dealing, violation of G. L.
c. 93A, § 11, and declaratory judgment (counts V-VIII) is
vacated. The judgment on Harvard's counterclaim is likewise
vacated.
So ordered.