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LLC v. EAC Organics, Inc.

United States District Court, D. Massachusetts

January 19, 2018

LSDP 15, LLC
v.
EAC ORGANICS, INC.

          MEMORANDUM AND ORDER ON PLAINTIFF LSDP LLC'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          RICHARD G. STEARNS, UNITED STATES DISTRICT JUDGE

         Plaintiff LSDP 15, LLC (Lake Street) moves for summary judgment on a bento box of claims brought against defendant EAC Organics, Inc. (EAC) arising out of a lease of real property in Barnstable, Massachusetts. The court will deny the motion and, pursuant to Fed.R.Civ.P. 56 (f)(1), sua sponte grant summary judgment to EAC.

         BACKGROUND

         EAC owns the parcel and is the landlord for the current tenant, EAC's affiliate WeCare Organics LLC (WeCare), a seasonal landscaping and horticultural retail business on Cape Cod. In 2015, Lake Street approached EAC seeking to negotiate a long-term lease of the property to build a solar energy facility. EAC was amenable, and the parties negotiated a 20-year lease commencing on December 1, 2015 - with two 5-year renewal options. As part of the Lease, Lake Street had the right to require that WeCare, the existing tenant, vacate the premises with 60-days' notice.

         The Lease contained two provisions requiring Lake Street to begin construction on the property within 12 months (by December 1, 2016). Section 3.1 stated that:

Nothing herein shall obligate the Lessee to construct, install or operate any Lessee Improvements on the Leased Property, provided, however in the event that the Lessee does not construct, install or operate any Lessee Improvements on the Leased Property on or before twelve (12) months from the Effective Date of this agreement . . . Lessor shall have the right to terminate this Lease Agreement upon ten (10) days written notice to the Lessee.

         Section 4.2 provided that: “Lessor may terminate this Lease Agreement without being deemed in default and without further liability to Lessee if the construction phase of the Solar Development Project . . . has not begun on or before 12 months from the Effective Date of the Lease Agreement.”

         The Lease also contained an integration clause:

14.9 Entire Agreement: Amendments. This Lease Agreement constitutes the entire agreement between Lessor and Lessee respecting its subject matter. This Lease Agreement shall not be modified or amended except in a writing signed by both parties. No purported modifications or amendments, including, without limitation, any oral agreement (even if supported by new consideration), course of conduct or absence of a response to a unilateral communication, shall be binding on either party unless embodied in a written agreement signed by both parties.

         Although Lake Street invested substantial time and financial resources acquiring the necessary permits for the solar energy project, for reasons that are disputed[1], in the fall of 2016, the parties began negotiating a modification of the date by which Lake Street was required to begin construction. In an email dated October 19, 2016, EAC wrote that “[a]s the schedule has pushed, we have to consider business timing issues with our existing operation [WeCare].” Pl.'s Statement of Material Facts (SOF), Dkt #31, ¶ 42. Lake Street argues that this email “is related to EAC having previously verbally informed Lake Street that EAC did not want WeCare's 2017 season to begin and be subject to Lake Street's right to require WeCare's lease be terminated with sixty (60) day [sic] notice.” Pl.'s Mem. in Support of Summary Judgment, Dkt #30 at 6-7. It is unclear when this alleged “previous verbal agreement” took place, as Lake Street offers no non-hearsay evidence of the prior agreement.

         On November 16, 2016, business and legal representatives from both Lake Street and EAC spoke by telephone. In the ensuing conversation, Lake Street alleges that the parties reached an agreement to extend the construction deadline to July 1, 2017, in lieu of the initial date of December 1, 2016. As consideration for this alleged modification, Lake Street argues that it agreed to waive its right to provide WeCare with 60-days' notice to vacate (as provided in Section 1.8 of the Lease[2]). However, there is nothing in the record that supports the claim that an oral agreement was reached during this conversation, and EAC in its Answer and in its Memorandum in Opposition to Summary Judgment insists that no such agreement was reached. On November 21, 2016, Lake Street sent EAC a proposed Amendment to the Lease extending the construction start date from December 1, 2016, to July 1, 2017.

         EAC never signed the Amendment. Instead, on November 28, 2016, EAC's legal representative sent an email to Lake Street's counsel stating that his client had “business concerns” with the proposed Amendment and proposing a conference call to discuss the matter. What occurred next is unclear. Lake Street alleges that EAC “cut off all communications with Lake Street and refused to respond to phone calls or emails from Lake Street, ” which EAC denies. See Answer, Dkt #11, ¶ 51; Def.'s Response to Statement of Facts, Dkt # 34, ¶ 59. When Lake Street did not begin construction by December 1, 2016, EAC sent Lake Street an overnight letter - dated December 13, 2016, and received on December 14, 2016 - in which it exercised its option to terminate the Lease pursuant to Section 4.2.

         Lake Street then brought this lawsuit, seeking a declaratory judgment (Count 1) that EAC did not legally terminate the Lease and that Lake Street should have been permitted to begin construction on the solar facility by July 1, 2017, the date on which the parties allegedly agreed in the telephone call. Compl. ¶ 72. Lake Street also alleged breach of contract (Count II), breach of the implied covenant of good faith and fair dealing (Count III), promissory estoppel (Count IV), fraudulent misrepresentation (Count V), violation of Mass. Gen. Laws ch. 93A (Count VI), and indemnification for losses under the terms of the Lease (Count VII).

         Following discovery, Lake Street brought this Motion for Partial Summary Judgment as to Liability, Dkt #29, on all of its claims. EAC opposes Lake Street's Motion and, although it has not filed a cross-motion for Summary Judgment, argues in its Memorandum in Opposition that the court should “grant EAC summary judgment dismissing each of Lake Street's claims pursuant to authority granted to the ...


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