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The Exhibit Source, Inc. v. Wells Avenue Business Center, LLC

Appeals Court of Massachusetts, Suffolk

November 20, 2018

THE EXHIBIT SOURCE, INC.
v.
WELLS AVENUE BUSINESS CENTER, LLC.

          Heard: September 13, 2018.

          Complaint received and sworn to in the Central Division of the Boston Municipal Court Department on May 6, 2014. The case was tried before Myong J. Joun, J.

          Evan M. Fray-Witzer for the defendant.

          David C. Aisenberg for the plaintiff.

          Present: Wolohojian, Lemire, & Englander, JJ.

          ENGLANDER, J.

         The defendant commercial landlord Wells Avenue Business Center, LLC (Wells), failed to return the $15, 982 security deposit of the plaintiff tenant, The Exhibit Source, Inc. (Exhibit Source). Exhibit Source sued, asserting various common-law claims, as well as a claim under G. L. c. 93A, § 11. The jury found for the plaintiff on the common-law claims, and the judge separately found for the plaintiff under c. 93A, and awarded treble damages and attorney's fees. The Appellate Division affirmed. On further appeal to this court, the defendant argues that (1) the trial judge improperly adjusted the jury's damages award, (2) the facts did not support a c. 93A violation, (3) language in the commercial lease prohibited the award of multiple damages, and (4) it made a reasonable offer of settlement, which pretermitted an award of multiple damages and attorney's fees. We affirm.

         Background.

         Exhibit Source and Wells entered into a commercial lease (lease) pursuant to which Exhibit Source provided a security deposit of $15, 982. The lease terminated August 31, 2013. The lease expressly required the defendant landlord to return the security deposit "[w]ithin thirty (30) days" of lease termination, except that the landlord could "apply" the security deposit to compensate for damages suffered as a result of a "Tenant Default." "Tenant Default," in turn, was a defined term; as discussed below, the only "tenant default" that could possibly apply to the facts here was in lease section 16.1(d) -- "failure by Tenant to fulfill any other obligation under this lease, if such failure is not cured within twenty (20) days of notice from Landlord to Tenant ..." (emphasis supplied).

          As the trial judge found, the defendant landlord failed to fulfill its obligations with respect to the security deposit. The plaintiff tenant vacated the premises as of August 31, 2013. Representatives of the landlord and the tenant walked through the premises on September 4, 2013. The landlord's representative did not raise any issue as to the condition of the premises at that time, or indeed for the next seven months. Starting in October of 2013 the plaintiff repeatedly requested the return of the security deposit. A representative of the landlord represented several times that the full amount would be forthcoming. That did not happen.

         Eventually, on April 1, 2014, the landlord returned $1, 202.28 of the deposit, and retained $14, 780. The landlord claimed the $14, 780 was for damage to the property, allegedly caused when the tenant removed certain shelving and signage upon leaving in August of 2013. The alleged damage would have been visible during the September 4, 2013, walk-through. At no time prior to April 1, 2014, did the landlord provide notice to the tenant of any damage, and the landlord never provided an opportunity to cure as contemplated by the lease.

         The plaintiff filed suit on May 6, 2014, and asserted claims for breach of contract, breach of the implied covenant of good faith, conversion, misrepresentation, and violations of G. L. c. 93A, § 11. The landlord did not make a settlement offer when it filed its answer on May 30, 2014, although it had offered $6, 000 around the time that the tenant filed suit.[1]

         The jury returned verdicts for the tenant on each of the common-law claims, in response to special verdict questions. It awarded damages of $25, 366.70, which it listed on its special verdict form thusly:

"$20, 000.00

damages

$ 5, 366.70

security balance

$25, 366.70

plaintiff to receive"


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