PARAMOUNT MOB, LLC v. TRISTAN MEDICAL ENTERPRISES, P.C., & Another.

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

24-P-375

PARAMOUNT MOB, LLC

vs.

TRISTAN MEDICAL ENTERPRISES, P.C., & another.1

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

Tristan Medical Enterprises, P.C. (defendant), and its

principal, Ryan Welter (collectively, defendants), contest

damages awarded to the plaintiff for breach of a commercial

lease by the defendant. We affirm.

Background. "We accept the judge's findings of fact unless

they are clearly erroneous." NPS, LLC v. Minihane, 451 Mass.

417, 419 (2008), citing Kendall v. Selvaggio, 413 Mass. 619, 620

(1992).

On May 15, 2017, the plaintiff leased to the defendant two

suites in the plaintiff's commercial property in Raynham. The

lease was for a five-year term and required payment of monthly

1 Ryan Welter.
base rent along with additional rental fees. It included a

liquidated damages provision that provided that, in the event of

a default,

"Tenant shall pay to Landlord the Fixed Rent, Additional
Rent and other sums required to be paid by Tenant to and
including the date of such expiration, termination or
repossession; and, thereafter, Tenant shall, until the end
of what would have been the expiration of the then existing
Term in the absence of such expiration, termination or
repossession, and whether or not the Premises or any part
thereof shall have been relet, be liable to Landlord for,
and shall pay to Landlord, as liquidated and agreed current
damages, the Fixed Rent, Additional Rent and other sums
which would be payable under this Lease by Tenant in the
absence of such expiration, termination or repossession,
less the net proceeds, if any, of any reletting effected
for the account of Tenant pursuant to" another section of
the lease.

The defendant made timely rent payments for approximately a

year, but then missed payments. In time, the plaintiff brought

a summary process action to recover possession and unpaid rents.

By agreement for judgment, execution for possession and rent was

issued but held in escrow by the plaintiff; it was to be

released and served upon the occasion of any future default for

nonpayment. In early August 2019, the defendant defaulted and

(by agreement) vacated the premises by the end of the month,

remitting a payment for use and occupancy through August 2019.

The plaintiff filed a complaint alleging breach of the

lease, breach of a personal guaranty of the lease, and trustee

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process,2 and a judge of the Superior Court awarded summary

judgment to the plaintiff on the issue of liability. After a

hearing on damages, a second judge of the Superior Court

(damages judge) awarded the plaintiff damages of $386,273.70,

plus prejudgment statutory interest and attorney's fees. The

defendants moved for relief from the judgment awarding damages

to the plaintiff. See Mass. R. Civ. P. 60 (b), 365 Mass. 828

(1974). Denying that motion, the damages judge found that the

defendant's principal was a sophisticated party.

Discussion. The defendants maintain that (1) the

liquidated damages provision in the parties' lease agreement was

a prohibited penalty, and the damages judge's reasoning in

awarding damages was therefore flawed, (2) the plaintiff failed

to introduce sufficient evidence of the applicable lease terms,

and (3) the damages judge erred in determining, posthearing,

that the individual defendant was a "sophisticated party." We

begin with a review of the third point because it affects review

of the first.3

2 The claim for trustee process was dismissed by
stipulation.

3 We are not persuaded by the defendants' second argument
that the existence of unspecified "subsequent lease documents"
rendered this lease ambiguous. The lease was dated May 15,
2017, and amended on May 31, 2017. The case was litigated based
on this lease, which the parties agreed they had signed. The
parties' joint pretrial memorandum referred to it as the "Lease
Agreement." In the stipulation of facts for the damages

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a. Sophisticated party. Whether the defendant was a

sophisticated party is a question of fact, see Cummings Props.,

LLC v. Hines, 492 Mass. 867, 873-874 (2023) (Hines), which we

review for clear error, see H1 Lincoln, Inc. v. South Washington

St., LLC, 489 Mass. 1, 13 (2022). Here, we perceive none. The

damages judge properly grounded his ruling in the documentary

and testimonial evidence. He noted that the principal was the

previous owner of the building in which the defendant leased its

space and had sold the building to the plaintiff. The damages

judge also relied on the principal's familiarity with commercial

leases, common area maintenance charges, and other charges

common to commercial leases, noting that the principal was

represented by counsel during the lease negotiations.

b. Prohibited penalty. "Whether a liquidated damages

provision in a contract is an unenforceable penalty is a

question of law," NPS, LLC, 451 Mass. at 419, which we review de

novo, see James B. Nutter & Co. v. Estate of Murphy, 478 Mass.

664, 667 (2018). "A contractual liquidated damages provision is

entitled to a presumption of validity, especially where . . . it

was negotiated between two sophisticated parties." Hines, 492

Mass. at 873, quoting Nantasket Beachfront Condominiums, LLC v.

Hull Redev. Auth., 87 Mass. App. Ct. 455, 469 (2015). "It is

hearing, the parties described the lease terms by reference to
this lease. No later lease appears in the record.

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well settled that a contract provision that clearly and

reasonably establishes liquidated damages should be enforced, so

long as it is not so disproportionate to anticipated damages as

to constitute a penalty" (quotation and citation omitted). NPS,

LLC, supra at 420.

"The burden of showing that a liquidated damages provision

is unenforceable rests with the party challenging enforcement of

the provision (here, the defendant)." NPS, LLC, 451 Mass. at

420. "If, at the time the contract was made, actual damages

were difficult to ascertain and the sum agreed on by the parties

as liquidated damages represents a reasonable forecast of

damages expected to occur in the event of a breach, it will

usually be enforced." Cummings Props., LLC v. National

Communications Corp., 449 Mass. 490, 494 (2007) (National

Communications Corp.). "In assessing reasonableness, we look to

the circumstances at the time of contract formation; we do not

take a 'second look' at the actual damages after the contract

has been breached." NPS, LLC, supra. See Hines, 492 Mass. at

873 (reaffirming "single look" approach for assessing

enforceability of liquidated damages provisions).

Because the defendant was a sophisticated party, the

liquidated damages provision "should be enforced so long as it

is not so disproportionate to anticipated damages as to

constitute a penalty.'" NPS, LLC, 451 Mass. at 420. Rent

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acceleration clauses fall within this rule. See National

Communications Corp., 449 Mass. at 494, and cases cited.

The damages judge found that "the actual damages resulting

from a breach were difficult to ascertain at the time the

contract was signed" and that "the sum agreed on as liquidated

damages represent[ed] a 'reasonable forecast of damages expected

to occur in the event of a breach.'" These conclusions were

supported by the record. Having so ruled, the damages judge

properly concluded that the liquidated damages provision was

enforceable.

The defendants maintain that the plaintiff failed to show

that the losses resulting from its breach were difficult to

ascertain, but this misunderstands the law; the burden was on

the defendants to show that the liquidated damages provision was

unenforceable. See Hines, 492 Mass. at 871. As the defendants

6
failed to carry that burden, we discern no error in the damages

judge's ruling that the provision was enforceable.4

Judgment affirmed.

Order denying motion for
relief from judgment
affirmed.

By the Court (Sacks,
Hershfang & Tan, JJ.5),

Clerk

Entered: July 10, 2025.

4 The defendants also maintain that the judge erred by
failing to credit the defendants for rent payments made by a
subsequent tenant, but that argument fails because mitigation is
not required where a valid liquidated damages provision exists.
See NPS, LLC, 451 Mass. at 423 ("in the case of an enforceable
liquidated damages provision, mitigation is irrelevant and
should not be considered in assessing damages").

5 The panelists are listed in order of seniority.

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