A North Attleborough landlord tried to “extort” benefits from a Honda dealership tenant, according to a Superior Court judge, eventually leading to an over $20 million judgement against the owner. iStock photo

Now and then, a commercial landlord engages in conduct so peculiar, that others can only shake their heads in bewilderment. That was the case in H1 Lincoln, Inc. v. South Washington Street, LLC.

Entities controlled by Alfredo Dos Anjos own several properties in a North Attleborough area known as “Auto Road.” Two of Dos Anjos’s limited liability companies signed a long-term lease with Majestic Honda as tenant in 2016. Majestic planned to redevelop the site as a car dealership.

The lease allowed the Dos Anjos LLCs to review and approve Majestic’s plans, with a limited right to terminate the lease if they did not approve the plans. The LLCs agreed to cooperate with Majestic’s permitting applications.

Lease Negotiations Sour

Majestic provided a site plan to the Dos Anjos LLCs in 2017, showing demolition and replacement of one building, and renovation of another on the leased premises. The plan also disclosed that Majestic intended to use adjacent property, recently acquired by Majestic, for inventory display and parking. Dos Anjos had unsuccessfully tried to purchase the adjacent property.

When Dos Anjos learned of this purchase by Majestic, his relationship with Majestic soured. The LLCs did not respond to Majestic’s initial plan submittal. When Majestic resubmitted its plan two months later, the LLCs advised Majestic that they would approve Majestic’s plan if Majestic agreed to limit its use to a Honda dealership. Majestic agreed to this condition, although it was not required under the lease.

Surprisingly, the LLCs next sent Majestic a lease termination letter.

When Majestic tried to resuscitate the deal, Dos Anjos expressed interest in reinstating the lease if Majestic agreed to sell the adjacent property to the LLCs for $1 and add the property to the lease with no additional rent.

Majestic was amenable to this arrangement, and Dos Anjos’s lawyer sent Majestic a draft lease reinstatement agreement. Two months later, however, the LLCs sent Majestic a letter confirming the lease termination and returned Majestic’s rent checks. Majestic sued the LLCs in Superior Court.

Court Awards Double Damages Twice

A jury found that the LLCs had breached the lease, and a Superior Court judge concluded that their attempts to terminate the lease were mere pretexts concealing bitterness over Majestic purchasing the adjacent land.

This conduct amounted to a violation of Massachusetts General Laws Chapter 93A, which prohibits unfair and deceptive business practices. The judge found that the LLCs used tactics to “string Majestic along to extort unwarranted benefits,” such as restricting Majestic’s use to a Honda dealership, and requiring Majestic to sell the adjacent property for $1.

The judge awarded Majestic double damages under Chapter 93A, totaling $8,925,000. The judge also ordered the LLCs to cooperate with Majestic’s permitting applications.

During the permitting process, Majestic learned that trusts controlled by Dos Anjos, not the LLCs, were the true record owners of the leased premises, contrary to the LLCs’ representations in the lease and Dos Anjos’s sworn testimony.

The LLCs refused to correct this discrepancy, causing additional delays to Majestic’s project.

Majestic reopened the superior court case, joining the Dos Anjos trusts in the action, and claiming further violations of Chapter 93A. The judge awarded additional double damages to Majestic of $3.18 million.

Christopher R. Vaccaro

A $20M Judgement

Ultimately, with attorneys’ fees added, and various post judgment maneuvering, Majestic obtained a total monetary judgment of over $20 million against the Dos Anjos defendants, with post judgment interest accruing at almost $5,000 per day. The Dos Anjos defendants appealed, but the Supreme Judicial Court upheld the judgment.

While their appeal was pending, the Dos Anjos defendants did something unexpected – they paid the entire $20 million judgment to Majestic, to avoid accrual of post judgment interest. The Dos Anjos defendants eventually lost their appeal, but Majestic still claimed post-judgment interest for the time prior to the SJC’s final decision.

Last month the SJC held that the Dos Anjos defendants’ payment to Majestic halted the accrual of interest, despite the appeal, because Majestic had full, unconditional use of the payment during the appeal.

The Dos Anjos defendants’ payment of the $20 million judgment to Majestic pending the appeal was a risky move. If a defendant prevails on appeal, it cannot recover the judgment from a plaintiff that later is unable to repay the defendant.

Dos Anjos’s willingness to pay the $20 million to Majestic showed Dos Anjos’s confidence in Majestic’s reliability and good faith. If the Dos Anjos defendants had shown similar qualities in their dealings with Majestic, they could have avoided the harsh result of their misconduct.

Christopher R. Vaccaro, Esq. is a partner at Dalton & Finegold, L.L.P. in Andover. His email address is cvaccaro@dfllp.com.