MISC 20-000353
Mass. Land Ct.Jan 29, 2021Background
- BP Prucenter Acquisition LLC owns the Prudential Center and is landlord under a long-term commercial lease with Saks Fifth Avenue LLC (original lease 1967; Sixth Amendment extended term to 2033 with further option periods).
- The Lease contains typical provisions: minimum rent, percentage rent, tenant share of taxes and CAM, a 10-day cure period for monetary defaults, and a termination clause allowing landlord to mail notice of termination upon uncured default; post-termination tenant remains liable for sums due with credit for net reletting proceeds.
- Saks ceased paying rent and related charges as of April 1, 2020; BP sent a default notice (Apr 27, 2020) and a Termination Notice (May 18, 2020).
- BP filed a declaratory-judgment action seeking a declaration that the Lease was lawfully terminated, that Saks is a tenant at sufferance, and that Saks owes minimum rent, taxes and other charges; BP did not seek possession in this complaint.
- Saks moved to dismiss under Mass. R. Civ. P. 12(b)(1) for lack of Land Court subject matter jurisdiction, arguing the dispute is a contract/summary-process matter; BP argued the dispute affects interests in land and falls within G. L. c. 185, § 1(k).
- The Land Court denied Saks’s 12(b)(1) motion, concluding the court has jurisdiction to determine lease termination and ancillary jurisdiction to adjudicate use and occupancy/monies due.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Land Court has subject-matter jurisdiction over BP's declaratory action | Lease creates an interest in land; termination adjudicates landlord/tenant interests and falls within G. L. c. 185, § 1(k) | This is essentially a contract dispute/summary process matter better suited to courts authorized to hear summary process and not within Land Court jurisdiction | Denied 12(b)(1): Land Court has jurisdiction because lease termination adjudicates interests in land and the court may exercise ancillary jurisdiction over related monetary claims |
| Whether BP's pleading improperly evades summary process by omitting a claim for possession | BP intentionally did not seek possession and seeks only declaration of termination and sums owed | The complaint effectively seeks the same relief as summary process and should be dismissed or deferred to summary process forums | Court accepted that BP avoided seeking possession and found the complaint amenable to Land Court adjudication, though noted the issue is close |
| Whether a commercial lease being treated as a contract bars Land Court remedies (e.g., post-termination damages/use and occupancy) | Even if leases have contract aspects, a long-term lease is an interest in land and Land Court can adjudicate termination and award use and occupancy | Modern caselaw treats commercial leases as contracts; remedies for post-termination damages may be contractual | Court recognized the modern contract trend but held a lease still creates an interest in land; Land Court has ancillary jurisdiction to award use and occupancy (Essex Co. v. Goldman) |
| Whether doctrinal shift (leases as contracts) removes Land Court role in lease disputes | A lease remains an interest in land for many legal purposes (Statute of Frauds, recording, estate statutes) | Treating leases as contracts means disputes belong to courts of general contract jurisdiction | Court concluded dual nature of leases means some lease disputes (like termination impacting title/estate) fall within Land Court jurisdiction |
Key Cases Cited
- Boston Hous. Auth. v. Hemingway, 363 Mass. 184 (recognizing lease as contract basis for implied warranty of habitability in residential leases)
- Wesson v. Leone Enters., 437 Mass. 708 (applying mutually dependent covenant analysis to commercial leases)
- 275 Washington St. Corp. v. Hudson River Int'l, LLC, 465 Mass. 16 (treating commercial leases as contracts but declining to adopt benefit-of-the-bargain damages post-termination)
- Essex Co. v. Goldman, 357 Mass. 427 (Land Court may award damages/rent; supports ancillary jurisdiction over monetary claims tied to real property interests)
- First Nat'l Bank v. Fairhaven Amusement Co., 347 Mass. 243 (leasehold is an interest in land for purposes of the Statute of Frauds)
- Motsis v. Ming's Supermkt., Inc., 96 Mass. App. Ct. 371 (recognizing that for some purposes courts treat commercial leases as contracts)