HLM Realty Corp. v. Morreale

1984 Mass. App. Div. 224, 1984 Mass. App. Div. LEXIS 28
CourtMassachusetts District Court, Appellate Division
DecidedSeptember 28, 1984
StatusPublished

This text of 1984 Mass. App. Div. 224 (HLM Realty Corp. v. Morreale) is published on Counsel Stack Legal Research, covering Massachusetts District Court, Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HLM Realty Corp. v. Morreale, 1984 Mass. App. Div. 224, 1984 Mass. App. Div. LEXIS 28 (Mass. Ct. App. 1984).

Opinion

Banks, J.

This is an action in contract by the plaintiff-landlord to recover rent allegedly due by the defendant-tenant pursuant to a lease of commercial property. The case is before this Division upon questions of law voluntarily reported by the trial justice under G.L.c. 231, §108.

The salient facts of this controversy may be summarized as follows: The [225]*225plaintiff-lessor leased office space to the defendant-lessee for the four year period of December 1, 1975 through November 80, 1979. The lease contained the following provision:

The Lessee shall have the option to renew said lease for four consecutive five year terms upon fair and reasonable rent to be agreed upon between the owners of the premises and the Lessees, said option to be exercised by written instrument to the owners ninety (90) days prior to the end of each term, the rent to be agreed upon prior to thirty (301 days before expiration of each term. In the event that the owners and the Lessees can not agree upon a fair and reasonable rent, they shall appoint a commercial realtor from the City of Waltham to assess a fair and reasonable rent and if necessary they may appoint a third realtor to arrive at a fair and reasonable rent. . . . All parties to this lease agree to abide by the rent as established by the appointed realtors and an addenda to that effect will be executed by all parties and attached to the originals of this lease. (Emphasis supplied.)

On July 2, 1979, the defendant forwarded a letter to the plaintiff which stated:

I hereby exercise my option to renew the lease. . . . Renewal to be effective for five years ending November 30, 1984.

On or about September 1, 1979, the defendant vacated the premises without notice to the landlord. No rent was paid for any period after August 31, 1979.

The plaintiff-lessor executed neither a new lease, nor an extension of the first lease, in response to the defendant’s letter of July 2, 1979. There was no evidence that the parties ever agreed upon anew rent, or designated a realtor to determine such rent.

The plaintiff ultimately sold the premises on December 31, 1980.

The plaintiff initiated suit on October 11,1979 for full rent from September 1, 1979 through November 30, 1984. Judgment was entered for the plaintiff on March 20, 1980 in the sum of $12,142.88. Damages were assessed for the period up to and including December.31, 1980.

In response to the defendant’s request for a report on the denial of his motion for a new trial and to vacate judgment, the trial justice reported two questions of law to this Division. In a March 8,1983 Opinion1, we vacated the trial court’s assessment of damages and remanded the case for further proceedings. The trial court permitted plaintiff to amend its complaint by adding a specific claim for damages accruing between October 11,1979 and December 31,1980. The court then assessed damages for this time period and again entered judgment for the plaintiff.

The defendant submitted his second Dist./Mun. Cts. R. Civ. P., Rule 59 motion for a new trial which was again denied by the court. The trial justice, however, voluntarily reported the following three questions to this Division:

1. Was the option in the lease an option to renew or an option to extend.
2: Was the Plaintiff-landlord required to execute a new lease or a formal extension of the old lease to recover any rent for the period December 1, 1979-December 31, 1980?
3. Is the Defendant-tenant estopp'ed from claiming that the [226]*226plaintiff-landlord was required to execute anew lease or a formal extension of the old lease, by his act of vacating the premises before December 1, 1979?

1. It is well established that under the law of this Commonwealth a distinction is made between an option to renew and a tenant’s right to extend a lease. See, e.g., Strauss v. Sheehan, 310 Mass. 646, 648 (1942); Shannon v. Jacobson, 262 Mass. 463, 465-466 (1928). Compare Gibbs Realty & Invest. Corp. v. Carvel Stores Realty Corp., 351 Mass. 684, 685 (1967) (“tenuous distinction”). Utilization of the term “renew” customarily requires the execution of “a new lease for an additional term or a formal extension of the existing lease or something equivalent thereto.” O’Brien v. Hurley, 331 Mass. 172, 174 (1954). See also Wit v. Commercial Hotel Co., 253 Mass. 564, 670 (1925); Leavitt v. Maykel, 203 Mass. 506, 509 (1909). An “option to extend,” however, implies a simple “continuation of the original lease for a further term upon compliance with the conditions for the exercise of an option.” Klickstein v. Neipris, 283 Mass. 91, 94 (1933). The distinction between renewal and extension is thus primarily confined to whether a new instrument is required to bind the parties to a second rental term. Sciripo v. McMillan, 355 Mass. 657, 659 (1969).

In construing a written lease to determine whether a renewal or extension was intended, resort must be made to the language employed by the parties. The inclusion in the renewal clause of the phrase “option to renew" or the word “renew”, as in the instant case, constitutes some evidence of the parties’ intent to renew rather than extend the lease. Manaster v. Gopin, 330 Mass. 569, 572 (1953); Hanna v. County of Hampden, 250 Mass. 107, 109-110 (1924); Ingram v. Sonitrol Sec. Systems of Worcester, Inc., 11 Mass. App. Ct. 754, 757-758 (1981). Conversely, a clause insuring that all terms and conditions of the original lease “shall remain in full force and effect” is evidence that the parties contemplated a simple, automatic extension of their original lease. Gibbs Realty & Inves. Corp. v. Carvel Stores Realty Corp., supra, at 685.

The lease at issue expressly employs the term “renew” and contains no provision for the continued operation of all terms and conditions of the original lease upon renewal. The lease in fact anticipates the designation of a different rent term in the renewal lease and sets forth a procedure for the parties’ agreement thereon. This portion of the renewal clause suggests that the plaintiff-lessor was bargaining for something more herein than the simple assurance of continued occupancy of the premises as might have been achieved by an extension clause. A new relationship between the parties seems clearly to have been contemplated as to one of the most significant lease terms; namely, the rental rate.

In Ingram v. Sonitrol Sec. Sys. of Worcester, Inc., supra at 758, the Appeals Court held that the elaborate negotiating process undertaken by the parties to establish a rent schedule, coupled with the üse of the term “renewal” in the original lease, compelled the conclusion that the parties intended a renewal upon the execution of anew lease rather than a simple extension of their first lease. The lease at issue herein similarly contemplated negotiations between the parties for a new rental term and thus the execution of a new lease.

Accordingly, the answer to question 1. as reported by the trial court is that the option in question is an option to renew.

2. The provision for a renewal of a written lease requires, by definition, the execution of a new lease or a formal extension of the old lease.

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Related

Scirpo v. McMillan
247 N.E.2d 368 (Massachusetts Supreme Judicial Court, 1969)
Gow v. Buckminster Hotel, Inc.
146 N.E.2d 924 (Massachusetts Supreme Judicial Court, 1958)
Gibbs Realty & Investment Corp. v. Carvel Stores Realty Corp.
223 N.E.2d 534 (Massachusetts Supreme Judicial Court, 1967)
O'BRIEN v. Hurley
117 N.E.2d 922 (Massachusetts Supreme Judicial Court, 1954)
Cellucci v. Sun Oil Co.
320 N.E.2d 919 (Massachusetts Appeals Court, 1974)
Manaster v. Gopin
116 N.E.2d 134 (Massachusetts Supreme Judicial Court, 1953)
Leavitt v. Maykel
89 N.E. 1056 (Massachusetts Supreme Judicial Court, 1909)
Hanna v. County of Hampden
145 N.E. 258 (Massachusetts Supreme Judicial Court, 1924)
Wit v. Commercial Hotel Co.
149 N.E. 609 (Massachusetts Supreme Judicial Court, 1925)
Shannon v. Jacobson
160 N.E. 245 (Massachusetts Supreme Judicial Court, 1928)
D. A. Schulte, Inc. v. Brockton Young Men's Christian Ass'n
173 N.E. 414 (Massachusetts Supreme Judicial Court, 1930)
Klickstein v. Neipris
185 N.E. 920 (Massachusetts Supreme Judicial Court, 1933)
Linden Park Garage, Inc. v. Capitol Laundry Co.
187 N.E. 849 (Massachusetts Supreme Judicial Court, 1933)
Straus v. Shaheen, Inc.
39 N.E.2d 573 (Massachusetts Supreme Judicial Court, 1942)
Ingram v. Sonitrol Security Systems of Worcester, Inc.
11 Mass. App. Ct. 754 (Massachusetts Appeals Court, 1981)
HLM Realty Corp. v. Morreale
1983 Mass. App. Div. 79 (Mass. Dist. Ct., App. Div., 1983)

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Bluebook (online)
1984 Mass. App. Div. 224, 1984 Mass. App. Div. LEXIS 28, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hlm-realty-corp-v-morreale-massdistctapp-1984.