MEMORANDUM AND ORDER ON MOTION TO DISMISS BY GEORGE
W. HERZ, II
P. Leibensperger, Justice
commercial landlord, 300 Needham Street, LLC ("
Landlord"), sues for failure to pay rent owed under a
written lease and for unfair and deceptive conduct in
violation of G.L.c. 93A, § 11. The Landlord sues the
tenant, URC, LLC (" Tenant"), and the guarantor of
the lease obligations, Uno Restaurants, LLC ("
Guarantor"). These defendants do not move to dismiss.
The Landlord also sues George W. Herz, II, the Senior Vice
President and Secretary of both the Tenant and the Guarantor.
Herz moves to dismiss arguing that the Landlord's
complaint fails to state a claim upon which relief may be
Landlord's complaint is stated in four counts. Count I
asks for a declaratory judgment that, among other things, the
Tenant is in breach of the lease and that it has no right to
terminate the lease. Count II alleges breach of the lease.
Count III alleges breach of a written guaranty of
Tenant's obligations under the lease. Count IV alleges
that all defendants, including Herz, engaged in unfair and
deceptive conduct in violation of c. 93A.
first argument for dismissal is that he is not a party to the
lease and the guaranty. Thus, Counts I, II and III, based
upon those contracts, must be dismissed as to him. He is, of
course, correct. In fact, it does not appear that the
Landlord even alleges a claim against Herz in Counts II and
III, and to the extent that Count I seeks a declaration of
rights under the contracts, Herz should not be a party. To
make this clear, Herz's motion to dismiss Counts I, II
and III as to him will be allowed.
Landlord's c. 93A claim against all defendants is based
on the following facts, as alleged in the complaint. Of
course, in considering a motion to dismiss the complaint, the
court must accept as true the allegations of the complaint
and draw every reasonable inference in favor of the
plaintiff. Curtis v. Herb Chambers I-95, Inc., 458
Mass. 674, 676, 940 N.E.2d 413 (2011).
early 2015, approximately two months after Tenant opened a
restaurant on the premises, Tenant told Landlord that it was
experiencing financial difficulty and wished to close the
restaurant. Nearly ten years remained on the lease. Tenant
requested an early termination of the lease. Landlord
refused. In March 2015, Tenant closed the restaurant and
ceased operations on the premises.
between the Landlord and Tenant continued. In August 2015,
Tenant threatened to " shut off the spigot" of rent
payments " in order to pressure and coerce Landlord into
accepting an early termination of the lease on Tenant's
preferred terms." Complaint ¶ 24. On December 24,
2015, Herz sent a letter to Landlord stating that because
Landlord had rejected Tenant's proposals, " tenant
shall commence withholding rent starting January 1,
2016." Complaint ¶ 25. As a result, it is alleged
that " Tenant and Guarantor are withholding Rent in a
deliberate and wrongful attempt to gain leverage over
Landlord, and to thereby coerce Landlord into caving to the
demands by Tenant and Guarantor for an early termination of
the Lease on the terms sought by Tenant and Guarantor."
Complaint, ¶ 37. Herz, the individual who signed both
the lease and the guaranty and who communicated with Landlord
about the possibility of early termination, " is causing
Tenant and Guarantor to engage in this deliberate, wrongful
and coercive conduct." Complaint ¶ 38.
does not contest, nor could he, that under certain
circumstances a tenant who refuses to pay rent owed pursuant
to a plan to coerce or leverage the landlord into conceding
to an alteration of the lease may be held liable under c.
93A. Atkinson v. Rosenthal, 33 Mass.App.Ct. 219,
226, 598 N.E.2d 666 (1992) (where there is " a
consistent pattern of the use of a breach of contract as a
lever to obtain advantage for the party committing the breach
in relation to the other party; i.e., the breach of contract
has an extortionate quality that gives it the rancid flavor
of unfairness, " a breach of lease may be a c. 93A
violation). See also, Anthony's Pier Four, Inc. v.
HBC Assocs., 411 Mass. 451, 474, 583 N.E.2d 806 (1991)
(conduct in disregard of known contractual obligation
intended to secure a benefit for the breaching party is a c.
93A violation). At this stage, Landlord adequately pleads
facts to sustain a c. 93A claim.
argument for dismissal hinges on his assertion that he,
personally, was not attempting to gain a benefit for himself
and was not engaging in trade or commerce. This argument
fails. " It is settled that corporate officers may be
held liable under c. 93A for their personal participation in
conduct invoking its sanctions." The Community
Builders, Inc. v. Indian Motorcycle Assocs., Inc., 44
Mass.App.Ct. 537, 560, 692 N.E.2d 964 (1998). The complaint
adequately alleges Herz's participation in alleged c. 93A
violations. Accordingly, Herz's motion to dismiss Count
IV of the Complaint must be denied.
motion to dismiss of George W. Herz II is ALLOWED, in part,
and DENIED, in part. Counts I, II and III of the complaint
are dismissed as to ...