STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss. DOCKET NO. BCD-CV-2016-33
H&B REALTY, LLC, ) ) Plaintiff/Counterclaim Defendant, ) ) v. ) ) JJ CARS, LLC & JOHN MOKARZEL, ) ORDER FOLLOWING BENCH TRIAL ) Defendants, Counterclaim Plaintiffs, ) & Third Party Plaintiffs, ) ) v. ) ) STERLING BOYINGTON, ) ) Third Party Defendant )
This case involves A commercial lease dispute, and a claim that the landlord racially
discriminated against the tenant's sublessees. The case was tried to the Bench on October 30, 2019.
Sterling Boyington (“Boyington”) testified on his own behalf, and on behalf of H&B Realty, LLC
(“H&B”). John Mokarzel (“Mokarzel”) testified on his own behalf, and on behalf of JJ Cars, LLC
(“JJ Cars”). Witnesses Justin Hynes, Abderrahim Lembarra, Shirley Deschenes, and Garrett
Chapman also testified. The parties submitted proposed Findings of Fact and Conclusions of Law
on November 27, 2019. For the reasons discussed below, the Court determines that the parties
have not prevailed on their respective claims. Accordingly, the Court grants judgment in favor of
Defendants, Counterclaim Defendant, and Third Party Defendant on the respective claims.
1 FINDINGS OF FACT
The Court has carefully weighed the credibility of the parties and witnesses, who often
provided conflicting testimony. Based on the stipulations of the parties and the evidence adduced
at trial, and drawing all reasonable inferences there from, the Court makes the following findings
of fact.
At all relevant times, H&B was the owner of the premises situated at 220 Riverside Street,
Portland, Maine, and Boyington was the sole member of H&B. Boyington operated a car
dealership on the property. In 2011 Boyington decided to stop running the dealership and he put
up a sign that the property was for lease. Mokarzel saw the sign and decided he would like to
operate a car dealership at the property. Mokarzel created JJ Cars for that purpose. Mokarzel was
the sole member of JJ Cars.
On May 25, 2011, H&B and JJ Cars entered into a five-year Lease Agreement commencing
on July 1, 2011, and scheduled to terminate on June 30, 2016. Mokarzel guaranteed the payment
of rent and other charges under the Lease Agreement. As will be discussed in further detail below,
JJ Cars and Mokarzel ultimately experienced financial difficulties. They paid rent as required for
over four years, but made no rent payments after October 2015. H&B conveyed title to the
property to a third person purchaser on or about April 6, 2016, at which point the Lease Agreement
terminated.
Following execution of the Lease Agreement, JJ Cars took possession of the premises, and
from July 2011 until February 2013, Mokarzel operated a car dealership at the location. During
this period of time, Boyington would occasionally stop by Mokarzel’s 's dealership to check on
the property, and to socialize. During his visits, Boyington would make racist remarks about
people of color to the employees of JJ Cars, who were Caucasian. He referred to people of color
2 as “those people." He occasionally used the N-word. Even though he lacked any authority,
Boyington would say to employees of JJ Cars that "if any of those people come in, they aren’t
allowed to use the facilities." He would also say “I don't like those people on my lot," even though
the lot was not Boyington’s to control. If Boyington observed a person of color use the bathroom,
Boyington would instruct one of JJ Cars' employees to clean up the bathroom afterwards. On at
least one occasion, Boyington told an employee to not let people of color into the office, but to go
outside to deal with them. The employees of JJ Cars generally disregarded Boyington, but were
offended by his comments. The comments also made Mokarzel uncomfortable. Mokarzel told
Boyington to stop making the comments; that those were Boyington’s opinions, not Mokarzel’s.
By February 2013, Mokarzel was in financial duress, and decided to close his business and
sublease the premises. JJ Cars sublet the premises to Omar Martinez (“Martinez”). Martinez
operated a business called Unique Auto Sales. Mokarzel did not provide H&B with the
prerequisites necessary to obtain H&B’s consent to sublet the premises, but Boyington
nevertheless consented. Martinez stayed in the location for six to seven months, but ultimately
moved his business to a new location on Warren Avenue in Portland.
Mokarzel next subleased the premises to an individual referred to as "Captain Bill."
Captain Bill operated an outboard motor repair business on the premises for about one month, but
then relocated. Mokarzel did not provide Boyington with the prerequisites necessary to obtain
approval to sublet premises to Captain Bill, but Boyington never objected to the sublet.
After Captain Bill left, JJ Cars subleased the premises to AHF, LLC (“AHF”). AHF was
owned by Abderrahim Lembarra (“Lembarra,” but sometimes referred to in the testimony as
“Abraham”) and two other individuals. AHF used the premises to operate a car dealership and a
transportation service. As with the other subtenants, Mokarzel did not provide to Boyington any
3 of the prerequisite information and documents required by the Lease Agreement in order to obtain
the landlord’s consent to sublet the premises, but Boyington consented anyway.
Lembarra only met with Boyington on one occasion, about six weeks after AHF had
occupied the premises. Boyington appeared at the premises. Lembarra offered Boyington a cup
of tea. Boyington complained that in the past, Somalis from the business next door would come
onto the premises and do damage to his property. Boyington told Lembarra that “I wish I had a
wall to block niggers coming over to my property, they have done a lot of damage to my property."
Boyington asked Lembarra where he was from. Lembarra was offended by the tone and content
of Boyington’s comments.
AHF’s car dealership never turned a profit, and by approximately October 2015 AHF
decided to close its car business and relocate its transportation service to a better location. Once
again, Mokarzel began looking for a new subtenant.
By November 2015, Mokarzel had identified Wholesale Motors, Inc., a nearby company
owned and operated by David McGovern (“McGovern”), as a potential subtenant. McGovern is
Caucasian. McGovern began to occupy the premises. McGovern not only wanted to sublet the
premises, but to extend the Lease Agreement and possibly buy the property. In November 2015,
Mokarzel and McGovern asked to meet with Boyington, but Boyington refused. Mokarzel
persisted in attempting to arrange for Boyington to meet with McGovern, but Boyington said he
didn’t like McGovern and wouldn’t meet with him. Boyington refused to approve a sublease for
McGovern, and McGovern soon vacated the premises.
After that, the premises sat unoccupied. Mokarzel stopped paying rent and any other
expenses, and Boyington took no steps to find a new tenant. Boyington simply decided he no
longer wanted H&B to lease the premises. On February 1, 2016, Boyington sent JJ Cars and
4 Mokarzel a notice of default. On March 10, 2016, Boyington served JJ Cars and Mokarzel with a
Complaint for FED. On March 24, 2016, with the cooperation of Mokarzel, Boyington obtained
an FED judgment for the premises. Thereafter, Boyington contacted a broker at CBRE to sell the
property.
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STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss. DOCKET NO. BCD-CV-2016-33
H&B REALTY, LLC, ) ) Plaintiff/Counterclaim Defendant, ) ) v. ) ) JJ CARS, LLC & JOHN MOKARZEL, ) ORDER FOLLOWING BENCH TRIAL ) Defendants, Counterclaim Plaintiffs, ) & Third Party Plaintiffs, ) ) v. ) ) STERLING BOYINGTON, ) ) Third Party Defendant )
This case involves A commercial lease dispute, and a claim that the landlord racially
discriminated against the tenant's sublessees. The case was tried to the Bench on October 30, 2019.
Sterling Boyington (“Boyington”) testified on his own behalf, and on behalf of H&B Realty, LLC
(“H&B”). John Mokarzel (“Mokarzel”) testified on his own behalf, and on behalf of JJ Cars, LLC
(“JJ Cars”). Witnesses Justin Hynes, Abderrahim Lembarra, Shirley Deschenes, and Garrett
Chapman also testified. The parties submitted proposed Findings of Fact and Conclusions of Law
on November 27, 2019. For the reasons discussed below, the Court determines that the parties
have not prevailed on their respective claims. Accordingly, the Court grants judgment in favor of
Defendants, Counterclaim Defendant, and Third Party Defendant on the respective claims.
1 FINDINGS OF FACT
The Court has carefully weighed the credibility of the parties and witnesses, who often
provided conflicting testimony. Based on the stipulations of the parties and the evidence adduced
at trial, and drawing all reasonable inferences there from, the Court makes the following findings
of fact.
At all relevant times, H&B was the owner of the premises situated at 220 Riverside Street,
Portland, Maine, and Boyington was the sole member of H&B. Boyington operated a car
dealership on the property. In 2011 Boyington decided to stop running the dealership and he put
up a sign that the property was for lease. Mokarzel saw the sign and decided he would like to
operate a car dealership at the property. Mokarzel created JJ Cars for that purpose. Mokarzel was
the sole member of JJ Cars.
On May 25, 2011, H&B and JJ Cars entered into a five-year Lease Agreement commencing
on July 1, 2011, and scheduled to terminate on June 30, 2016. Mokarzel guaranteed the payment
of rent and other charges under the Lease Agreement. As will be discussed in further detail below,
JJ Cars and Mokarzel ultimately experienced financial difficulties. They paid rent as required for
over four years, but made no rent payments after October 2015. H&B conveyed title to the
property to a third person purchaser on or about April 6, 2016, at which point the Lease Agreement
terminated.
Following execution of the Lease Agreement, JJ Cars took possession of the premises, and
from July 2011 until February 2013, Mokarzel operated a car dealership at the location. During
this period of time, Boyington would occasionally stop by Mokarzel’s 's dealership to check on
the property, and to socialize. During his visits, Boyington would make racist remarks about
people of color to the employees of JJ Cars, who were Caucasian. He referred to people of color
2 as “those people." He occasionally used the N-word. Even though he lacked any authority,
Boyington would say to employees of JJ Cars that "if any of those people come in, they aren’t
allowed to use the facilities." He would also say “I don't like those people on my lot," even though
the lot was not Boyington’s to control. If Boyington observed a person of color use the bathroom,
Boyington would instruct one of JJ Cars' employees to clean up the bathroom afterwards. On at
least one occasion, Boyington told an employee to not let people of color into the office, but to go
outside to deal with them. The employees of JJ Cars generally disregarded Boyington, but were
offended by his comments. The comments also made Mokarzel uncomfortable. Mokarzel told
Boyington to stop making the comments; that those were Boyington’s opinions, not Mokarzel’s.
By February 2013, Mokarzel was in financial duress, and decided to close his business and
sublease the premises. JJ Cars sublet the premises to Omar Martinez (“Martinez”). Martinez
operated a business called Unique Auto Sales. Mokarzel did not provide H&B with the
prerequisites necessary to obtain H&B’s consent to sublet the premises, but Boyington
nevertheless consented. Martinez stayed in the location for six to seven months, but ultimately
moved his business to a new location on Warren Avenue in Portland.
Mokarzel next subleased the premises to an individual referred to as "Captain Bill."
Captain Bill operated an outboard motor repair business on the premises for about one month, but
then relocated. Mokarzel did not provide Boyington with the prerequisites necessary to obtain
approval to sublet premises to Captain Bill, but Boyington never objected to the sublet.
After Captain Bill left, JJ Cars subleased the premises to AHF, LLC (“AHF”). AHF was
owned by Abderrahim Lembarra (“Lembarra,” but sometimes referred to in the testimony as
“Abraham”) and two other individuals. AHF used the premises to operate a car dealership and a
transportation service. As with the other subtenants, Mokarzel did not provide to Boyington any
3 of the prerequisite information and documents required by the Lease Agreement in order to obtain
the landlord’s consent to sublet the premises, but Boyington consented anyway.
Lembarra only met with Boyington on one occasion, about six weeks after AHF had
occupied the premises. Boyington appeared at the premises. Lembarra offered Boyington a cup
of tea. Boyington complained that in the past, Somalis from the business next door would come
onto the premises and do damage to his property. Boyington told Lembarra that “I wish I had a
wall to block niggers coming over to my property, they have done a lot of damage to my property."
Boyington asked Lembarra where he was from. Lembarra was offended by the tone and content
of Boyington’s comments.
AHF’s car dealership never turned a profit, and by approximately October 2015 AHF
decided to close its car business and relocate its transportation service to a better location. Once
again, Mokarzel began looking for a new subtenant.
By November 2015, Mokarzel had identified Wholesale Motors, Inc., a nearby company
owned and operated by David McGovern (“McGovern”), as a potential subtenant. McGovern is
Caucasian. McGovern began to occupy the premises. McGovern not only wanted to sublet the
premises, but to extend the Lease Agreement and possibly buy the property. In November 2015,
Mokarzel and McGovern asked to meet with Boyington, but Boyington refused. Mokarzel
persisted in attempting to arrange for Boyington to meet with McGovern, but Boyington said he
didn’t like McGovern and wouldn’t meet with him. Boyington refused to approve a sublease for
McGovern, and McGovern soon vacated the premises.
After that, the premises sat unoccupied. Mokarzel stopped paying rent and any other
expenses, and Boyington took no steps to find a new tenant. Boyington simply decided he no
longer wanted H&B to lease the premises. On February 1, 2016, Boyington sent JJ Cars and
4 Mokarzel a notice of default. On March 10, 2016, Boyington served JJ Cars and Mokarzel with a
Complaint for FED. On March 24, 2016, with the cooperation of Mokarzel, Boyington obtained
an FED judgment for the premises. Thereafter, Boyington contacted a broker at CBRE to sell the
property. The property went under contract promptly, and closed on or about April 7, 2016.
CONCLUSIONS OF LAW
Based on its one count Complaint, H&B seeks damages for unpaid rent and other charges
under the Lease Agreement for the period November 2015 through April 6, 2016, which was the
day before the premises were sold. JJ Cars and Mokarzel seek to avoid paying damages on a
variety of grounds, two of which are persuasive. 1 Article XIII of the Lease Agreement provides
that Lessor’s consent to Lessee’s proposed sublease “shall not be unreasonably withheld or
delayed.” In this case, Boyington refused to provide H&B’s consent for JJ Cars to sublease to
McGovern, simply because Boyington did not like McGovern. Boyington did not withhold his
consent based on a “reasonable review” of McGovern’s creditworthiness, business experience, or
capacity to perform JJ Cars’ obligations under the lease. Boyington refused to conduct any review
at all, and refused to even talk with McGovern. McGovern wanted not only to sublease the
premises, but to extend the Lease Agreement and possibly even buy the building. Had Boyington
provided the reasonable consent required under the Lease Agreement, JJ Cars and Mokarzel would
not have been in the position of being unable to pay rent and other charges from November 2015
through April 6, 2016. H&B’s breach of the Lease Agreement therefore excused JJ Cars and
Mokarzel’s lack of performance. See Cellar Dwellers, Inc. v. D'Alessio, 2010 ME 32, ¶ 16, 993
A.2d 1.
1 For the reasons discussed in connect with the Third Party Complaint against Boyington, the Court does not find the claim of discrimination is a defense to H&B’s breach of contract claim.
5 Not only did Boyington fail to provide reasonable consent to sublease the premises, when
JJ Cars and Mokarzel began missing rent payments, Boyington took no steps whatsoever to lease
the premises to anyone else. It was not until near the very end of the lease term that Boyington
eventually decided to sell the building, after which it took only approximately two weeks to bring
a sale to closing. By failing to take any steps sooner, Boyington failed to mitigate damages.
H&B and Boyington argue that in the commercial lease context, a landlord has no duty to
mitigate damages unless the duty is contained in the commercial lease agreement. Dahl v. Comber,
444 A.2d 392, 393 n. 2 (Me. 1982). In this case, however, the Lease Agreement does obligate
H&B to mitigate damages. According to Article XX(a)(iv)(B) of the Lease Agreement, which
applies when the Lessor claims right to possession of the premises but has not yet terminated the
lease, “Lessor shall use commercially reasonable efforts to relet the leased premises or any part
thereof for such rent and upon such terms as Lessor, in its reasonable discretion, shall determine.”
H&B and Boyington were therefore required to mitigate damages, and failed to do so. For all of
these reasons, judgment is granted to JJ Cars and Mokarzel on the Complaint.
In their two count Counterclaim, JJ Cars and Mokarzel seek damages against H&B for
breach of the Lease Agreement’s obligation to not unreasonably withhold consent to subleasing,
and for fraud. Both counts fail. Although as discussed above H&B unreasonably withheld consent
for JJ Cars to sublease the premises to McGovern, neither JJ Cars nor Mokarzel has suffered any
damages therefrom. As to fraud, JJ Cars and Mokarzel failed to adduce any evidence that H&B
or Boyington engaged in fraud of any kind during the making of the Lease Agreement or thereafter.
Accordingly, judgment is granted to H&B on the Counterclaim.
In their Third Party Complaint against Boyington, JJ Cars and Mokarzel seek damages for
public accommodation discrimination pursuant to the Maine Human Rights Act, 5 M.R.A. § 4592.
6 Their theory is that Boyington harbors racial animus against persons of color; harassed and
discriminated against JJ Cars’ subtenants; and caused those subtenants to vacate the premises. The
problem is that the evidence does not support the theory, at least as to causation.
Based on his bigoted, repulsive, and discriminatory statements to Caucasian employees of
JJ Cars, about persons of color who arrived on the premises to purchase a car, Boyington appears
to harbor racial animus against people of color. However, all the comments credibly established
by the evidence occurred while JJ Cars was still in business and occupying the premises—before
the subletting occurred. There was no credible evidence that Boyington made similar comments
directed at the subtenants of JJ Cars, or that Boyington caused the subtenants to vacate the
premises. Moreover, not all the subtenants of JJ Cars were people of color. To the contrary, on
behalf of H&B, Boyington consented to subletting to subtenants who were persons of color. The
only subtenant Boyington objected to was McGovern, and McGovern is Caucasian.
During his one meeting with Lembarra, Boyington made reprehensible statements about
Somalis involved with a nearby business. However, the comments were not directed at Lembarra;
Boyington only had that one conversation with Lembarra; and Boyington consented to AHF’s
sublease. AHF’s car business eventually failed of its own accord, which caused AHF to close its
business and relocate its transportation service. On the evidence, JJ Cars and Mokarzel have not
sustained their burden of proving discrimination against their subtenants. Therefore, judgment is
granted to Boyington on the Third Party Complaint.
CONCLUSION
For all the reasons stated above, judgment is granted to JJ Cars and Mokarzel on the
Complaint. Judgment is granted to H&B on the Counterclaim. Judgment is granted to Boyington
7 on the Third Party Complaint. The Court declines to award attorney fees to any party, and each
party is responsible for its own costs.
So Ordered.
Pursuant to M.R. Civ. P. 79(a), the Clerk is instructed to incorporate this Order by reference
on the docket for this case.
Dated: January 3, 2020 __s/________________________ Michael A. Duddy Judge, Business and Consumer Docket