812 F. Supp. 2d 83
D. Mass.2011Background
- Lease dated Feb. 12, 1996: 15-year term from Mar. 1, 1996 to Mar. 1, 2011 between Bachorz/Scuderi and Miller (landlord) with option to purchase for $175,000 and rent credits.
- Lease required no default to exercise the option; option exercised during term by written instrument to landlord.
- Plaintiffs sublet portions of the Premises without Miller's written consent beginning 2002, and undertook improvements and municipal-violation-associated actions.
- Miller, by 2002–2006, partially waived consent requirement and implicitly encouraged subletting; in 2009 he left the state and ceased office visits.
- Plaintiffs paid for roof repair in 2002 after Miller’s implied compromise; by 2009 they sought to exercise the option to purchase.
- Court reserved whether defaults barred option and ultimately held Miller waived consent rights and defaults were inconsequential; plaintiffs entitled to specific performance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Miller's waiver of prior written consent foreclosed defaults as to the purchase option | Bachorz/Scuderi argue waiver by conduct and statements; consent not required for option | Miller's anti-waiver clause and lack of formal modification prevent waiver | Waiver found; conduct and statements showed waiver extending to option |
| Whether alleged defaults were inconsequential or material to the option | Defaults were minor and did not prejudice Landlord; Trinity controls | Defaults were significant or prejudicial and breached option conditions | Defaults deemed inconsequential and immaterial; did not bar exercise of option |
| Whether strict compliance with default provisions is required for option exercise | Strict compliance is not necessary when defaults are inconsequential | Strict adherence required; any default forfeits the option | Not required; Trinity standard governs, allowing performance despite minor defaults |
| What is the appropriate remedy given the above conclusions | Specific performance of option | Dismiss or deny specific performance due to defaults | Plaintiffs entitled to specific performance; summary judgment for partial grant |
Key Cases Cited
- Pear v. Davenport, 67 Mass.App.Ct. 239 (Mass. App. Ct. 2006) (strict view of option conditions but not per se forfeiture for minor defaults)
- Trinity Realty I, LLC v. Chazumba, LLC, 931 N.E.2d 510 (Mass. App. Ct. 2010) (defaults must be significant or prejudicial; not all minor breaches defeat option)
- Sunoco, Inc. (R & M) v. Makol, 372 F.3d 31 (1st Cir. 2004) (distinguishes waiver and material breach; option rights must be preserved when no substantial prejudice)
- Leisure Sports Inv. Corp. v. Riverside Ent., Inc., 388 N.E.2d 719 (Mass. App. Ct. 1979) (option exercise where no express condition precludes despite other breaches)