963 N.E.2d 758
Mass. App. Ct.2012Background
- Lease: 12-year term from April 13, 2006 to April 16, 2018 for a dental practice; guarantor signed separate guaranty.
- Tenant abandoned premises in 2008; rent payments ceased by April 2008; landlord re-entered May 19, 2008.
- Indemnity clause par. 21(h) obligates tenant to indemnify against all loss of rent during remainder of term.
- Cumulative remedies clause par. 44(j) states remedies are non-exclusive and may be cumulative with other remedies.
- Landlord obtained a new tenant March 26, 2010 for the entire remainder of the original term; dispute centers on timing of damages under indemnity.
- Judgment initially granted damages; on appeal, court held damages under indemnity cannot be calculated until end of original lease term; remanded for calculation of damages as of possession date.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timing of indemnity damages under the lease | Landlord seeks damages immediately under indemnity once breach occurred. | Indemnity damages are only ascertainable at term end. | Indemnity damages must be postponed to end of original lease term. |
| Effect of cumulative remedies clause on damages timing | Clause permits immediate remedies beyond indemnity. | Remedies stay within contract and do not offset indemnity timing. | Cumulative remedies do not provide an independent immediate damages remedy. |
| Guarantor’s damages timing | Guarantor should follow tenant’s postponement of damages. | Guarantor’s duties mirror tenant; same postponement applies. | Guarantor similarly postpones posttermination damages to end of term. |
| Disposition of damages on appeal | Damages should be computed now for mismatch with prior leases. | Law requires end-of-term calculation for indemnity. | Damages as of possession date vacated; remanded for end-of-term calculation consistent with opinion. |
Key Cases Cited
- Gardiner v. Parsons, 224 Mass. 347 (Mass. 1916) (indemnity damages calculated at end of lease term; end-term ascertainment)
- Zevitas v. Adams, 276 Mass. 307 (Mass. 1931) (indemnity cannot be recovered until specified term ends)
- Woodbury v. Sparrell Print, 187 Mass. 426 (Mass. 1905) (time for payment of loss of rent accrues when premises cease to be unleased; depends on re-letting)
- Locke v. Fahey, 288 Mass. 341 (Mass. 1934) (tenants not liable for future rent absent indemnity provision)
- Priestley v. Sharaf’s, Inc., 4 Mass. App. Ct. 218 (Mass. App. Ct. 1976) (indemnity clause described; distinguishes from liquidated damages)
- Manhattan Properties, Inc. v. Irving Trust Co., 291 U.S. 320 (U.S. 1934) (indemnity vs. liquidated damages; distinction in damages recovery)