Panel hears dispute over rent-acceleration clause and missing amended lease; court to consider enforcement and double-recovery claim

In appellate argument on case 24P375, Paramount MOB v. Tristan Medical Enterprises, counsel for the tenants and the landlord debated whether a rent-acceleration (liquidated-damages) clause in a commercial lease was enforceable and whether the landlord could collect accelerated rent while also receiving rent from a successor tenant.

Ben Dunlap, counsel for the appellants Tristan Medical Enterprises and Dr. Ryan Welter, described what he called a "fundamental unfairness": enforcement of rent acceleration would permit a double recovery when another commercial tenant occupied the space and paid rent during the remaining lease term. Dunlap pointed to precedent and urged the court to treat the liquidated-damages provision as invalid in the circumstances or to require a credit for rent collected from the successor tenant.

The panel and counsel discussed controlling precedent including Commissioner of Insurance decisions and a 2007 SJC decision in Cummings Properties, with the court and counsel parsing whether the modern rule permits enforcement of a liquidated-damages clause tied to nonpayment of rent even if other non-rent defaults exist. Dunlap said the record did not include the amended and restated lease dated September 29, 2017, and argued the trial court had no evidentiary basis to enforce a provision not before the court.

Opposing counsel and a supplemental speaker representing the plaintiff observed that the operative lease language had been used in district-court and superior-court proceedings and had been relied on in stipulated facts and summary-judgment filings. The panel examined testimony and documentary record entries about whether the amended-and-restated lease was produced in discovery and whether any missing document justified vacating the judgment.

The trial court had found the liquidated-damages provision negotiated between the parties and the trial judge later made findings about the lessee's sophistication. Appellants challenged those findings and said missing lease documents and the factual record undermined the trial court's reliance on the provision.

After hearing argument, the panel took the matter under advisement. No decision was announced from the bench.