WHTR Real Estate Ltd. Partnership v. Venture Distributing, Inc.

16 Mass. L. Rptr. 471
CourtMassachusetts Superior Court
DecidedAugust 29, 2002
DocketNo. 97750
StatusPublished

This text of 16 Mass. L. Rptr. 471 (WHTR Real Estate Ltd. Partnership v. Venture Distributing, Inc.) 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
WHTR Real Estate Ltd. Partnership v. Venture Distributing, Inc., 16 Mass. L. Rptr. 471 (Mass. Ct. App. 2002).

Opinion

Rouse, J.

INTRODUCTION

In this action, the plaintiff, WHTR Real Estate Limited Partnership (WHTR), as assignee of Commerce Way Limited Partnership seeks to collect money owing under a commercial lease from Venture Distributing, Inc., f/k/a Landsdowne Ltd., Inc. (Venture) as lessee, and from United Liquors, Ltd. (United) as guarantor of the lease. WHTR contends that Venture defaulted for failing to pay rent and other amounts due under the lease. Venture responds that the landlord unreasonably withheld its consent to sublet the premises and [472]*472consequently failed to comply with the terms of the lease. Venture also alleges violations of G.L.c. 93A and raises numerous defenses. After a trial, without jury, and based upon all of the credible evidence, stipulations, and fair inferences therefrom, the court makes the following findings of fact, rulings of law, and order for judgment.

FINDINGS OF FACT

1. On February 23, 1994 Commerce Way Limited Partnership (Commerce Way or landlord), as lessor, entered into a lease (the lease) with Landsdowne Ltd., Inc. (Landsdowne), n/k/a Venture, as lessee, for the use of 47,250 square feet of warehouse space located at 110 Commerce Way (the premises), one of several buildings in a complex known as the Commerce Way Business Park in Woburn, Massachusetts (the Complex). The lease was for an initial term of 36 months commencing March 1, 1994 and ending February 28, 1997.

2. On February 23, 1994 United, a wholesaler and importer of alcoholic beverages, executed a guaranty of the lessee’s obligations under the lease. Venture has been a wholly owned subsidiary of United since 1994.

3. After executing the lease, Landsdowne changed its name to Venture. Venture is a wholesaler of nonalcoholic beverages and used the premises for the storage of non-alcoholic beverages.

4. The lease granted Venture the right to sublet the premises, subject to the landlord’s consent “which consent shall not be unreasonably withheld or delayed.” The subletting-assignment provision of the lease states, in relevant part:

Lessee shall not assign, sublet ... or encumber (collectively referred to as “Transfer”) . . . this lease without Lessor’s prior written consent, which consent shall not be unreasonably withheld or delayed. Lessor’s refusal to consent to a Transfer for any use or purpose other than specifically stated in Paragraph 8 shall not be deemed to be an unreasonable withholding of consent. In the event the Lessee desires to Transfer this lease to a new lessee to whom Lessor is required to give its proposed reasonable consent pursuant to the foregoing paragraph, Lessor shall have the option of either (1) allowing the lessee to Transfer this Lease, in which case Lessee shall remain primarily liable upon all the terms, conditions and covenants hereof, will deliver to Lessor an instrument executed by the Transferee binding the same to the terms and provisions of this lease and will pay the Lessor the amount by which the sum of rent, additional rent due to taxes and all other money or consideration it received from a Transferee exceeds the sum of all monetary obligations which Lessee owes to Lessor for the period of such Transfer; or (2) terminating this lease and relieving Lessee of all its future obligations hereunto provided that upon receipt of written notice from Lessee of Lessor’s intention to terminate the lease, Lessee may withdraw its request for consent... in which event this lease shall continue in full force and effect without any transfer of the same. In the event of such termination, Lessee shall be relieved of all future obligations hereinafter as of the date of termination. In the event the lease is terminated, as hereinafter provided, Lessor shall be free to enter into a new lease with a proposed new tenant or anyone else on whatever terms and conditions it chooses.

5. In 1995, WHTR, formerly known as WHBB Real Estate Limited Partnership, acquired the mortgage on the Complex and the right to collect all amounts due under the lease from Venture and under the guaranty from United. WHTR’s long-term plan was to sell the Complex at the highest price possible and an integral part of that plan was to have the Complex fully occupied at the highest rent possible at the time of sale. To that end, WHTR hired J.E. Robert Companies to manage the Complex, which in turn, hired Fallon, Hines & O’Connor (Fallon Hines), commercial real estate brokers, to lease vacant space, retain existing tenants, and “maximize income on the property.”

6. In early 1996, Venture determined that it no longer needed to occupy the premises and could save approximately $300,000 annually if it vacated the premises and consolidated its operations at another facility. Lewis Gack (Gack), Vice President of both Venture and United, requested real estate broker Bruce A. Levine (Levine) to locate a subtenant for the premises.

7. In early 1996, USCO Distribution Services, Inc. (USCO), a company which provides inventoiy management and distribution services, was occupying and using warehouse and office space located on the Chelmsford, Massachusetts campus of one of its customers, Sun Microsystems, Inc. (Sun). Sun advised USCO that, in April 1996, it would have to vacate the warehouse space it was using to store computer parts for Sun.

8. In mid-March 1996 representatives of USCO toured the Woburn premises occupied by Venture. On March 15, 1996 Venture’s broker sent USCO a proposal or a letter of intent to lease the Woburn premises. Venture’s proposal provided that the Woburn premises would be delivered to USCO “as is” and would be subleased at $3.75 square foot for the initial year and $4.00 a square foot for each of two option years. This proposal also stated that it was “subject to a mutually agreeable Lease being negotiated between the two parties involved,” and that the proposal would expire on March 18 at 5 pm. This proposal was signed only by Venture’s broker, Levine; it was not signed by any officer or executive of Venture. Levine, as Venture’s broker, was not authorized to execute an agreement that would legally bind Venture.

9. USCO did not accept the March 15 proposal. On March 19, 1996 USCO forwarded a counterproposal [473]*473to Venture which added a list of conditions to Venture’s proposal. Specifically, USCO’s counterproposal added the following language to Venture’s proposal:

This proposal is also subject to the following:

1. Satisfactory review of Sublessor’s lease with Lessor.
2. Rent commencement May 15, 1996.
3. Consent of Lessor (if required) and Lessor’s Lender (if required) each of which shall be Sublessor’s responsibility.
4. Satisfactory review of adequate Phase 1 Environmental Site Assessment (to be provided by Sub-lessor) by Sublessee’s counsel. Satisfactory walk through and inspection by Sun Microsystems, Inc. and by Sublessor.
5. Sublessor to pay brokers’ fees.
6. Review and approval of final agreements & documents by Sun Microsystems, Inc.
7. Review and approval of final agreements & documents by Sublessee’s senior management team.

10. On or about March 21, 1996 USCO obtained a copy of the lease and guaranty from Gack.

11. Prior to March 22, pursuant to USCO’s request, Gack requested a 2 IE report from the landlord.

12.

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Bluebook (online)
16 Mass. L. Rptr. 471, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whtr-real-estate-ltd-partnership-v-venture-distributing-inc-masssuperct-2002.