10 HIGH STREET RESTAURANT LLC v. JOHN POWER (2026)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

This appeal arises from the COVID-19 pandemic-era closure of a restaurant in downtown Boston. The parties filed two lawsuits after the tenant, 10 High Street Restaurant, LLC (tenant or restaurant), vacated space leased by the KNH Realty Trust (landlord). In the first suit, the restaurant brought claims against two trustees of the landlord seeking damages for the termination of the lease, wrongful eviction, interference with contractual and advantageous relationships, and violation of G. L. c. 93A, §§ 2, 11. The second suit was brought by the trustees of the landlord against Seth Greenberg, the restaurant's operator, to recover damages pursuant to a lease guarantee agreement that Greenberg signed. These suits were consolidated in the Superior Court.

After a judge (motion judge) allowed partial summary judgment in the landlord's favor there was a bench trial before a second judge (trial judge) to determine damages. By agreement, the case was tried under Rule 20(2)(h) and 20(8) of the Rules of the Superior Court (2024) (rule 20). The trial judge entered a special verdict concluding, among other things, that the tenant was liable to the landlord for $2,843,127.33 for breach of the parties’ lease.

On appeal, the tenant and Greenberg contend that the motion judge erred in concluding that the lease termination was justified by the tenant's failure to reimburse the landlord for cleanup costs resulting from a grease trap explosion, and in holding Greenberg personally liable for amounts owed by the restaurant under the lease. They also assert the trial judge erred in (1) determining the credit for the landlord's failure to mitigate its damages, (2) awarding attorney's fees to the landlord, and (3) returning the liquor license to the landlord. We affirm.

Background. The parties are well familiar with the facts of this dispute, which were comprehensively summarized by the motion judge. As relevant to our decision today, the relationship between the landlord and tenant was memorialized in a commercial lease executed as of March 19, 2014. The lease contemplated a term of up to fifteen years for a restaurant.

Article XIII of the lease provided that the tenant would trigger an “event of default” by, among other things, (1) failing to make “any payment of rent or other charges” within ten days after written notice by the landlord that the payment was past due or (2) failing to cure a default in the performance of any other covenanted obligations within thirty days after notice. An event of default permitted the landlord to “immediately terminate” the lease either by providing the tenant notice or by entry into the premises. The lease obligated the tenant to pay liquidated damages in this situation as well as any difference between the monthly rent owed under the lease less any amount received by the landlord from a replacement tenant, if any, for the remainder of the lease's term.

Section 17.09 of the lease listed “services and maintenance” to be provided at the tenant's expense, among them a requirement that the tenant “install and maintain grease traps in the [p]remises.” The tenant was required to “do whatever is necessary in order to maintain properly the grease trap and prevent, at all times, any overflow or discharge of grease.” Should such discharge occur and not be caused by the landlord or another tenant, the lease required that the tenant “be responsible for all costs of cleanup of the overflow or discharge, including all costs of removing grease, and repair, restoration or replacement of property damaged by such overflow or discharge.”

In June 2019 the top of the grease trap blew off because of pressure build-up, causing flooding in the restaurant bathrooms. This was characterized at the time as the “worst grease trap flooding in the history” of the restaurant. The landlord paid for the necessary repairs. Beginning shortly thereafter, the landlord started seeking reimbursement from the tenant. The tenant submitted an insurance claim for the damage to its insurer, which was paid to the tenant. Further cleanup efforts by the landlord resulted in additional charges to the tenant during the period from July 2019 to February 2020. The tenant never reimbursed the landlord for any of the grease trap charges.

In March 2020, then-Governor Charlie Baker issued the first of a series of executive orders related to the COVID-19 pandemic. The restaurant closed and never reopened.

Discussion. We review a grant of summary judgment de novo to determine whether, “viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law” (citation omitted). Casseus v. Eastern Bus Co., 478 Mass. 786, 792 (2018). “The moving party bears the burden of affirmatively demonstrating the absence of a triable issue.” Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 550 n.6 (2008). If the moving party carries its burden, “the party opposing the motion must respond and allege specific facts establishing the existence of a genuine issue of material fact.” French King Realty Inc. v. Interstate Fire & Cas. Co., 79 Mass. App. Ct. 653, 659-660 (2011). As to the tenant and Greenberg's claim that the judge erred in holding Greenberg personally liable under the guaranty, we “review the judge's denial of a motion for reconsideration only for an abuse of discretion.” Merchants Ins. Group v. Spicer, 88 Mass. App. Ct. 262, 271 (2015), citing Commissioner of Revenue v. Comcast Corp., 453 Mass. 293, 312-313 (2009). This same standard applies to our review of a judge's ruling on a motion in limine. See Solimene v. B. Grauel & Co., 399 Mass. 790, 799 (1987). We review the trial judge's ruling after the rule 20 bench trial to determine whether it “has no rational basis in the evidence” (citation omitted). Aspell v. Raad, 106 Mass. App. Ct. 291, 293 (2025).

1. Tenant's default. We are not persuaded by the tenant's argument that the notice of default and corresponding notice of termination were materially inaccurate and therefore ineffective. The tenant never addressed its failure to reimburse the landlord for the grease trap repairs, the details of which were included in the notice of default. We agree with the motion judge that the record established that the tenant “was in material default before the pandemic hit because it refused to pay the cost of cleaning up grease that escaped from [the restaurant's] grease trap system,” and the landlord “was entitled to terminate the [l]ease for this reason alone.”

In so deciding, we reject the assertion that the notice of default did not adequately identify these costs as relating to the grease trap cleanup. Under the unambiguous terms of the lease, an event of default that remained uncured after a specified amount of time was grounds for termination. See Balles v. Babcock Power Inc., 476 Mass. 565, 571-572 (2017) (unambiguous contract language construed according to plain meaning). The tenant was on notice for over eight months that the landlord sought reimbursement for the grease trap cleanup; the detailed sums on the related invoices were then repeated on the notice of default. We therefore conclude that the lease termination was lawful.⁴

We are similarly unpersuaded that the casualty and taking clause in the lease is relevant to this analysis. That clause applied when the premises or building, or any substantial part of them, “shall be taken by any exercise of the right of eminent domain or shall be materially destroyed or damaged by fire or unavoidable casualty or by action of any public or other authority,” or when they “suffer[ed] any material direct or consequential damage for which [l]andlord and [t]enant, or either of them, shall be entitled to compensation by reason of anything done in pursuant [sic] of any public or other authority.”

The motion judge concluded, and we agree, that government action triggered this provision only if it materially destroyed or damaged a substantial part of the premises, and consequently, rent abatement was available only when government action caused the premises to suffer “destruction or damage” rendering them “unfit for use or occupation.” There is no question that the COVID-19 pandemic and related government health orders were catastrophic for the restaurant industry. But business losses are not the sort of “destruction or damage” contemplated by this clause. See, e.g., Balles, 476 Mass. at 571-572 (“When contract language is unambiguous, it must be construed according to its plain meaning”). See also Verveine Corp. v. Strathmore Ins. Co., 489 Mass. 534, 542-543 (2022) (courts determine fair meaning of contract language as applied to subject matter; construing insurance contracts covering “direct physical loss or damage to” property as not covering losses caused by COVID-19 moratoria).⁵

2. Greenberg's personal liability. The motion judge concluded that Greenberg “personally guaranteed payment of any and all amounts owed by [the tenant] under the [l]ease.” Greenberg asserts this conclusion was erroneous because -- as relevant here -- section 1 of the parties’ guaranty limited his obligations to the payment of “Minimum Base Rent, Percentage Rent, Real Estate Taxes, utility charges, late fees and interest due under the Lease through the Vacate Date.” He also maintains that the landlord's termination of the lease further limited Greenberg's personal liability because Greenberg was liable only for “rent,” which ended with the lease. Taken together, Greenberg contends, these two provisions limit his liability under the guaranty to “only the abated or deferred Real Estate Taxes,” perhaps with late fees, as defined by the lease.

The guaranty provided that Greenberg's liability would terminate if the tenant “fully and strictly complie[d]” with certain requirements to establish a “Vacate Date.” Those requirements were as follows: (1) the tenant delivers an irrevocable written notice to surrender specifying the vacate date in a specific form and within a specific time frame; (2) the tenant actually vacates the premises on the specified date; and (3) the tenant paid and performed all obligations through the vacate date. The trial judge concluded that the tenant and Greenberg did not establish a vacate date, as defined under the guaranty. Absent a vacate date, Greenberg's obligations continued under the guaranty. Although Greenberg now argues that the tenant sent a notice of surrender on August 31, 2020, he makes no argument about the remaining requirements to establish a vacate date and, as discussed above, at the relevant time, the tenant had not reimbursed the landlord for expenses incurred for the grease trap cleanup as the tenant was obligated to do under the lease.

Under the lease, if the landlord terminates due to an event of default, the tenant “will during the remainder of the [t]erm, pay to [l]andlord on the last day of each calendar month the difference, if any, between the rental which would have been due for such month had there been no such termination and the sum of the amount being received by [l]andlord as rent from occupants of the Premises, if any.” Greenberg seeks to recast this amount as “damages,” that he contends he is not responsible for under the terms of the guaranty. We disagree. The lease provision also permits the landlord to seek liquidated damages, which it did not do here. Instead, the landlord seeks only the difference between the rent owed under the terms of the lease less any amount that the landlord obtains from a new tenant to the property. This amount then falls within the guaranty as Greenberg “unconditionally and irrevocably guarantee[d] to [l]andlord ․ the punctual payment in full (and not merely the collectability) of all installments of Minimum Base Rent, Percentage Rent, Real Estate Taxes, utility charges, late fees and interest due under the Lease through the Vacate Date.”

As to Greenberg's argument that the judge awarded damages beyond those types listed in the guaranty, he has not identified any specific evidence on damages that was considered at trial and should not have been. Moreover, where the parties waived factual findings, the judge did not (and was not required) to detail what amounts she included in the damages award. Based on the record before us and in the absence of any objection to specific amounts or evidence, we discern no error.

We note that our review of the damages amount is limited to determining whether “anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [prevailing party]” (citation omitted). K & K Dev., Inc. v. Andrews, 103 Mass. App. Ct. 338, 344 (2023). See Rule 20(8)(b) of the Rules of the Superior Court (2024). The trial judge awarded the landlord over $2.8 million in damages, the sum remaining after she subtracted the damages for the landlord's failure to mitigate. The trial judge was presented with the lease, the guaranty, and the notice of lease termination, as well as evidence of lease charges owed through November 2024; a spreadsheet detailed sums owing for base rent, tax payments, and the unpaid grease trap cleanup, through “Lease Year 15.” She heard two days of testimony. Having reviewed the evidence, we cannot say that the judge's damages award had no rational basis in the evidence.

3. Mitigation. The tenant maintains that the trial judge allotted too little credit for the landlord's failure to mitigate damages. The heart of this argument is that the judge failed to put the landlord to its burden to explain why it did not more actively pursue another potential restaurant tenant (restaurant chain) for the space. We again review to determine whether the judgment has any rational basis in the evidence. See Aspell, 106 Mass. App. Ct. at 293.

The judge heard testimony from multiple witnesses about the landlord's mitigation efforts, focusing primarily on a potential tenant with whom the landlord advanced past the initial inquiry phase. By comparison, there was sparse evidence at trial about the inquiry from the restaurant chain. The tenant had an opportunity at trial to cross-examine the landlord and the leasing agent about both potential tenants. On this record, we cannot say that the trial judge's mitigation of over $1.1 million in damages had “no rational basis in the evidence” (citation omitted). Aspell, 106 Mass. App. Ct. at 293.

4. Attorney's fees. The tenant maintains that the trial judge erred in her attorney's fee award because (1) the tenant's obligations under the lease, including its responsibility to pay attorney's fees, ended by July 30, 2020, at the latest and (2) the lease lacked language reserving the right to claim those fees after the lease was terminated.

We need not address these arguments because the lease was only one of the two legal mechanisms by which the tenant assumed responsibility for the landlord's legal fees. Under the guaranty, Greenberg agreed that, in a lawsuit to enforce the guaranty, he would reimburse the landlord for “all reasonable expenses incurred in connection therewith,” including “reasonable attorneys’ fees.” This guaranty language formed a basis for the trial judge's attorney's fee ruling and was not challenged on appeal.⁶

Judgments entered March 12, 2025, affirmed.

FOOTNOTES

4.   Because we conclude that the failure to pay for the grease trap cleanup was an event of default, we reject the tenant's argument that the tenant retained ownership of the liquor license. Under the terms of the lease, if the landlord terminated the lease because of an event of default, the tenant was obligated to cooperate with the landlord to transfer the liquor license back to the landlord.

5.   Because our conclusion renders the issue moot, we do not address the motion judge's conclusion that the “frustration of purpose” doctrine excused the tenant's rent payments for April through June 2020. Similarly, we need not revisit the motion judge's conclusion that the tenant was not entitled, ex post facto, to reassign amounts paid as rent for March 2020 to its unpaid reimbursement for the grease trap cleanup. The tenant admitted that it did not pay the grease trap charges, and this position aligns with the undisputed evidence.

6.   The landlord's request for appellate attorney's fees is allowed. The parties shall proceed in accordance with Mass. R. A. P. 25 (b), as appearing in 498 Mass. 1601 (2026).