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
24-P-375
PARAMOUNT MOB, LLC
vs.
TRISTAN MEDICAL ENTERPRISES, P.C., & another.1
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Tristan Medical Enterprises, P.C. (defendant), and its
principal, Ryan Welter (collectively, defendants), contest
damages awarded to the plaintiff for breach of a commercial
lease by the defendant. We affirm.
Background. "We accept the judge's findings of fact unless
they are clearly erroneous." NPS, LLC v. Minihane, 451 Mass.
417, 419 (2008), citing Kendall v. Selvaggio, 413 Mass. 619, 620
(1992).
On May 15, 2017, the plaintiff leased to the defendant two
suites in the plaintiff's commercial property in Raynham. The
lease was for a five-year term and required payment of monthly
1 Ryan Welter. base rent along with additional rental fees. It included a
liquidated damages provision that provided that, in the event of
a default,
"Tenant shall pay to Landlord the Fixed Rent, Additional Rent and other sums required to be paid by Tenant to and including the date of such expiration, termination or repossession; and, thereafter, Tenant shall, until the end of what would have been the expiration of the then existing Term in the absence of such expiration, termination or repossession, and whether or not the Premises or any part thereof shall have been relet, be liable to Landlord for, and shall pay to Landlord, as liquidated and agreed current damages, the Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less the net proceeds, if any, of any reletting effected for the account of Tenant pursuant to" another section of the lease.
The defendant made timely rent payments for approximately a
year, but then missed payments. In time, the plaintiff brought
a summary process action to recover possession and unpaid rents.
By agreement for judgment, execution for possession and rent was
issued but held in escrow by the plaintiff; it was to be
released and served upon the occasion of any future default for
nonpayment. In early August 2019, the defendant defaulted and
(by agreement) vacated the premises by the end of the month,
remitting a payment for use and occupancy through August 2019.
The plaintiff filed a complaint alleging breach of the
lease, breach of a personal guaranty of the lease, and trustee
2 process,2 and a judge of the Superior Court awarded summary
judgment to the plaintiff on the issue of liability. After a
hearing on damages, a second judge of the Superior Court
(damages judge) awarded the plaintiff damages of $386,273.70,
plus prejudgment statutory interest and attorney's fees. The
defendants moved for relief from the judgment awarding damages
to the plaintiff. See Mass. R. Civ. P. 60 (b), 365 Mass. 828
(1974). Denying that motion, the damages judge found that the
defendant's principal was a sophisticated party.
Discussion. The defendants maintain that (1) the
liquidated damages provision in the parties' lease agreement was
a prohibited penalty, and the damages judge's reasoning in
awarding damages was therefore flawed, (2) the plaintiff failed
to introduce sufficient evidence of the applicable lease terms,
and (3) the damages judge erred in determining, posthearing,
that the individual defendant was a "sophisticated party." We
begin with a review of the third point because it affects review
of the first.3
2 The claim for trustee process was dismissed by stipulation.
3 We are not persuaded by the defendants' second argument that the existence of unspecified "subsequent lease documents" rendered this lease ambiguous. The lease was dated May 15, 2017, and amended on May 31, 2017. The case was litigated based on this lease, which the parties agreed they had signed. The parties' joint pretrial memorandum referred to it as the "Lease Agreement." In the stipulation of facts for the damages
3 a. Sophisticated party. Whether the defendant was a
sophisticated party is a question of fact, see Cummings Props.,
LLC v. Hines, 492 Mass. 867, 873-874 (2023) (Hines), which we
review for clear error, see H1 Lincoln, Inc. v. South Washington
St., LLC, 489 Mass. 1, 13 (2022). Here, we perceive none. The
damages judge properly grounded his ruling in the documentary
and testimonial evidence. He noted that the principal was the
previous owner of the building in which the defendant leased its
space and had sold the building to the plaintiff. The damages
judge also relied on the principal's familiarity with commercial
leases, common area maintenance charges, and other charges
common to commercial leases, noting that the principal was
represented by counsel during the lease negotiations.
b. Prohibited penalty. "Whether a liquidated damages
provision in a contract is an unenforceable penalty is a
question of law," NPS, LLC, 451 Mass. at 419, which we review de
novo, see James B. Nutter & Co. v. Estate of Murphy, 478 Mass.
664, 667 (2018). "A contractual liquidated damages provision is
entitled to a presumption of validity, especially where . . . it
was negotiated between two sophisticated parties." Hines, 492
Mass. at 873, quoting Nantasket Beachfront Condominiums, LLC v.
Hull Redev. Auth., 87 Mass. App. Ct. 455, 469 (2015). "It is
hearing, the parties described the lease terms by reference to this lease. No later lease appears in the record.
4 well settled that a contract provision that clearly and
reasonably establishes liquidated damages should be enforced, so
long as it is not so disproportionate to anticipated damages as
to constitute a penalty" (quotation and citation omitted). NPS,
LLC, supra at 420.
"The burden of showing that a liquidated damages provision
is unenforceable rests with the party challenging enforcement of
the provision (here, the defendant)." NPS, LLC, 451 Mass. at
420. "If, at the time the contract was made, actual damages
were difficult to ascertain and the sum agreed on by the parties
as liquidated damages represents a reasonable forecast of
damages expected to occur in the event of a breach, it will
usually be enforced." Cummings Props., LLC v. National
Communications Corp., 449 Mass. 490, 494 (2007) (National
Communications Corp.). "In assessing reasonableness, we look to
the circumstances at the time of contract formation; we do not
take a 'second look' at the actual damages after the contract
has been breached." NPS, LLC, supra. See Hines, 492 Mass. at
873 (reaffirming "single look" approach for assessing
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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
24-P-375
PARAMOUNT MOB, LLC
vs.
TRISTAN MEDICAL ENTERPRISES, P.C., & another.1
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Tristan Medical Enterprises, P.C. (defendant), and its
principal, Ryan Welter (collectively, defendants), contest
damages awarded to the plaintiff for breach of a commercial
lease by the defendant. We affirm.
Background. "We accept the judge's findings of fact unless
they are clearly erroneous." NPS, LLC v. Minihane, 451 Mass.
417, 419 (2008), citing Kendall v. Selvaggio, 413 Mass. 619, 620
(1992).
On May 15, 2017, the plaintiff leased to the defendant two
suites in the plaintiff's commercial property in Raynham. The
lease was for a five-year term and required payment of monthly
1 Ryan Welter. base rent along with additional rental fees. It included a
liquidated damages provision that provided that, in the event of
a default,
"Tenant shall pay to Landlord the Fixed Rent, Additional Rent and other sums required to be paid by Tenant to and including the date of such expiration, termination or repossession; and, thereafter, Tenant shall, until the end of what would have been the expiration of the then existing Term in the absence of such expiration, termination or repossession, and whether or not the Premises or any part thereof shall have been relet, be liable to Landlord for, and shall pay to Landlord, as liquidated and agreed current damages, the Fixed Rent, Additional Rent and other sums which would be payable under this Lease by Tenant in the absence of such expiration, termination or repossession, less the net proceeds, if any, of any reletting effected for the account of Tenant pursuant to" another section of the lease.
The defendant made timely rent payments for approximately a
year, but then missed payments. In time, the plaintiff brought
a summary process action to recover possession and unpaid rents.
By agreement for judgment, execution for possession and rent was
issued but held in escrow by the plaintiff; it was to be
released and served upon the occasion of any future default for
nonpayment. In early August 2019, the defendant defaulted and
(by agreement) vacated the premises by the end of the month,
remitting a payment for use and occupancy through August 2019.
The plaintiff filed a complaint alleging breach of the
lease, breach of a personal guaranty of the lease, and trustee
2 process,2 and a judge of the Superior Court awarded summary
judgment to the plaintiff on the issue of liability. After a
hearing on damages, a second judge of the Superior Court
(damages judge) awarded the plaintiff damages of $386,273.70,
plus prejudgment statutory interest and attorney's fees. The
defendants moved for relief from the judgment awarding damages
to the plaintiff. See Mass. R. Civ. P. 60 (b), 365 Mass. 828
(1974). Denying that motion, the damages judge found that the
defendant's principal was a sophisticated party.
Discussion. The defendants maintain that (1) the
liquidated damages provision in the parties' lease agreement was
a prohibited penalty, and the damages judge's reasoning in
awarding damages was therefore flawed, (2) the plaintiff failed
to introduce sufficient evidence of the applicable lease terms,
and (3) the damages judge erred in determining, posthearing,
that the individual defendant was a "sophisticated party." We
begin with a review of the third point because it affects review
of the first.3
2 The claim for trustee process was dismissed by stipulation.
3 We are not persuaded by the defendants' second argument that the existence of unspecified "subsequent lease documents" rendered this lease ambiguous. The lease was dated May 15, 2017, and amended on May 31, 2017. The case was litigated based on this lease, which the parties agreed they had signed. The parties' joint pretrial memorandum referred to it as the "Lease Agreement." In the stipulation of facts for the damages
3 a. Sophisticated party. Whether the defendant was a
sophisticated party is a question of fact, see Cummings Props.,
LLC v. Hines, 492 Mass. 867, 873-874 (2023) (Hines), which we
review for clear error, see H1 Lincoln, Inc. v. South Washington
St., LLC, 489 Mass. 1, 13 (2022). Here, we perceive none. The
damages judge properly grounded his ruling in the documentary
and testimonial evidence. He noted that the principal was the
previous owner of the building in which the defendant leased its
space and had sold the building to the plaintiff. The damages
judge also relied on the principal's familiarity with commercial
leases, common area maintenance charges, and other charges
common to commercial leases, noting that the principal was
represented by counsel during the lease negotiations.
b. Prohibited penalty. "Whether a liquidated damages
provision in a contract is an unenforceable penalty is a
question of law," NPS, LLC, 451 Mass. at 419, which we review de
novo, see James B. Nutter & Co. v. Estate of Murphy, 478 Mass.
664, 667 (2018). "A contractual liquidated damages provision is
entitled to a presumption of validity, especially where . . . it
was negotiated between two sophisticated parties." Hines, 492
Mass. at 873, quoting Nantasket Beachfront Condominiums, LLC v.
Hull Redev. Auth., 87 Mass. App. Ct. 455, 469 (2015). "It is
hearing, the parties described the lease terms by reference to this lease. No later lease appears in the record.
4 well settled that a contract provision that clearly and
reasonably establishes liquidated damages should be enforced, so
long as it is not so disproportionate to anticipated damages as
to constitute a penalty" (quotation and citation omitted). NPS,
LLC, supra at 420.
"The burden of showing that a liquidated damages provision
is unenforceable rests with the party challenging enforcement of
the provision (here, the defendant)." NPS, LLC, 451 Mass. at
420. "If, at the time the contract was made, actual damages
were difficult to ascertain and the sum agreed on by the parties
as liquidated damages represents a reasonable forecast of
damages expected to occur in the event of a breach, it will
usually be enforced." Cummings Props., LLC v. National
Communications Corp., 449 Mass. 490, 494 (2007) (National
Communications Corp.). "In assessing reasonableness, we look to
the circumstances at the time of contract formation; we do not
take a 'second look' at the actual damages after the contract
has been breached." NPS, LLC, supra. See Hines, 492 Mass. at
873 (reaffirming "single look" approach for assessing
enforceability of liquidated damages provisions).
Because the defendant was a sophisticated party, the
liquidated damages provision "should be enforced so long as it
is not so disproportionate to anticipated damages as to
constitute a penalty.'" NPS, LLC, 451 Mass. at 420. Rent
5 acceleration clauses fall within this rule. See National
Communications Corp., 449 Mass. at 494, and cases cited.
The damages judge found that "the actual damages resulting
from a breach were difficult to ascertain at the time the
contract was signed" and that "the sum agreed on as liquidated
damages represent[ed] a 'reasonable forecast of damages expected
to occur in the event of a breach.'" These conclusions were
supported by the record. Having so ruled, the damages judge
properly concluded that the liquidated damages provision was
enforceable.
The defendants maintain that the plaintiff failed to show
that the losses resulting from its breach were difficult to
ascertain, but this misunderstands the law; the burden was on
the defendants to show that the liquidated damages provision was
unenforceable. See Hines, 492 Mass. at 871. As the defendants
6 failed to carry that burden, we discern no error in the damages
judge's ruling that the provision was enforceable.4
Judgment affirmed.
Order denying motion for relief from judgment affirmed.
By the Court (Sacks, Hershfang & Tan, JJ.5),
Clerk
Entered: July 10, 2025.
4 The defendants also maintain that the judge erred by failing to credit the defendants for rent payments made by a subsequent tenant, but that argument fails because mitigation is not required where a valid liquidated damages provision exists. See NPS, LLC, 451 Mass. at 423 ("in the case of an enforceable liquidated damages provision, mitigation is irrelevant and should not be considered in assessing damages").
5 The panelists are listed in order of seniority.