Superior Court of Massachusetts, Suffolk, Business Litigation Session
ALTITUDE, INC. nka Altitude, LLC
ALTITUDE PROPERTIES, LLC
MEMORANDUM OF DECISION AND ORDER ON THE PARTIESâ
CROSS MOTIONS FOR SUMMARY JUDGMENT
Mitchell H. Kaplan, Justice Superior Court
plaintiff, Altitude, LLC (Altitude) is a Massachusetts
limited liability company with a usual place of business at
363 Highland Avenue, Somerville, Massachusetts (the
Property). Altitude Properties, LLC (Properties) is also a
Massachusetts limited liability company. It owns the Property
and leases space in it to Altitude pursuant to a Commercial
Lease (the Lease). A dispute has arisen between Altitude and
Properties concerning the interpretation of a lease term.
Properties maintains that a change in the ownership of
Altitude constituted a material breach of the Lease and
declared it in default. Altitude maintains that there is
nothing in the Lease that could be interpreted as restricting
its right to change ownership of its shares. Altitude brought
this action against Properties asserting claims for Breach of
Contract, Breach of the Implied Covenant of Good Faith and
Fair Dealing, Vilolation of G.L. chapter 93A, and Declaratory
Judgment. Properties answered asserting the same four causes
of action as counterclaims against Altitude, and adding a
claim for Summary Process with Account Attached.
case is now before the court on the partiesâ cross motions
for summary judgment on all claims. For the reasons that
follow both partiesâ motions are ALLOWED, in part, and,
DENIED, in part.
following facts are not in dispute.
Inc., a corporation all of whose shares were owned by Brian
Matt, and Spy Pond Associates, Inc. executed the Lease on
June 6, 2000. Sometime thereafter, Properties became the
successor to Spy Pond Associates and the Landlord under the
Lease. The original Lease term was 10 years, but in 2010 it
was extended to 2021.
dispute between the parties arises out of a single provision
of the Lease found in paragraph 13, which reads as follows:
The Lessee does not have the right to assign this lease.
Assignment can occur only in the event LESSEE acquires or
merges with another company and maintains controlling
interest in the merged company.
December 28, 2016, Altitude wrote to Properties informing it
that Altitude proposes to sell all of its stock to a
subsidiary of Accenture plc, after which the Lease "may
be assigned to Accenture Sub, Inc. or another of its
affiliates." The letter requested that Properties
consent to the transaction, to the extent Propertiesâ
"consent may be required under the Lease."
Properties responded on January 5, 2017:
We have reviewed your communications to date with our counsel
and we agree that if this is merely a stockownership transfer
as you have represented, and that the existing corporate
tenant remains obligated as the existing operating company
occupying the leased premises, then in that event there
technically has not been as assignment of this lease within
the present lease language. Therefore, is there [sic] no
reason for us to provide a consent to anything regarding your
internal corporate matters and transactions. But, we do
appreciate your informing us of this change of stockholder
sale of Mattâs stock in Altitude to Accenture Sub, Inc.
closed on January 9, 2017. Also, on that date, Altitude, Inc.
was converted into a limited liability company pursuant to
G.L.c. 156D, § 9.50 et seq.
on March 30, 2017, Properties sent Altitude a letter in which
you have attempted and/or completed a transaction resulting
in an assignment of your lease/occupancy to another entity in
which you have not maintained a controlling interest as
letter went on to state that this transaction constituted a
breach of the lease and therefore, an event ...