Opinion
10-P-1253
08-02-2011
CNA CORPORATION v. STONY HILL SAND & GRAVEL, INC.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 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 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.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, CNA Corporation (CNA), the owner of a gravel pit in Wilbraham, brought an action in the nature of a writ for summary process against its tenant, defendant Stony Hill Sand and Gravel, Inc. (Stony Hill), seeking possession of the demised premises. CNA also claimed damages totaling $148,013.07, consisting of base rent, holdover rent, and taxes. CNA also asked for attorney's fees incurred in the enforcement of what it claimed to be a lease between the parties. Stony Hill responded that it had complied with the terms of the written lease that existed between the parties, and, upon the expiration of that lease, continued in possession of the premises as a tenant at will. It further claimed that CNA had not suffered any damages on account of any breach of the lease, nor is CNA entitled to taxes or attorney's fees. After a jury-waived trial, a Superior Court judge dismissed CNA's writ for summary process and ordered judgment to enter for Stony Hill with costs. CNA filed a timely appeal.
After the trial, Stony Hill voluntarily vacated the premises. Although the issue of possession is no longer before us, the matters of rent and taxes are still viable issues. See Miskolczi v. Wilson, 6 Mass. App. Ct. 861, 861 n.1 (1978).
Background. We summarize the judge's findings of fact, supplemented by undisputed facts. CNA owns a parcel of land in Wilbraham suitable for extraction of sand and gravel. Stony Hill is a corporation that processes and provides sand and gravel for various projects.
On August 1, 2001, the parties entered into a commercial lease for a certain parcel on a large plot owned by CNA. The lease term was for a period of five years beginning on August 1, 2001, and expiring on the fifth anniversary of that date. Under the lease, Stony Hill had the right to extend the lease term for two consecutive five-year periods, but had to exercise that option by providing CNA with written notice not less than one hundred and eighty days before the expiration of the lease term.
The yearly rent was $30,000, payable at the rate of $2,500 per month. The rent was based on a per acre amount, as shown in an exhibit listed as attached to the lease. The lease also provided that the parties had arranged for, but had not yet completed, a professional survey of the leased premises in order to ascertain the exact number of acres in the leased parcel; upon completion of the survey, the rent would be 'adjust[ed] for any underpayment or overpayment.' A holdover provision in the lease provided that after the expiration of the lease term or the extension term, the holdover 'shall be construed to be a tenancy from month-to-month and shall otherwise be on the provisions contained' in the lease. During the holdover, the lease provided for an increase in the monthly rent to 150 percent of the monthly rent.
The judge found that the exhibit never was attached to the lease.
The lease expired by its terms on July 31, 2006. Stony Hill did not provide written notice exercising its option to extend the lease. Stony Hill paid $2,500 a month through September of 2008. CNA cashed each check without protest or reservations.
The lease also provided that Stony Hill should pay taxes with respect to the amount 'estimated and billed' by CNA, such payment payable at the beginning of each month. CNA never estimated or billed Stony Hill for taxes during the term of the lease.
Several months after the lease expired, CNA had a survey completed as contemplated by the lease. In a letter dated August 14, 2008, CNA stated to Stony Hill that the survey had been completed in 2006. The survey concluded that the leased parcel consisted of seven acres, not the five acres estimated by the parties at the time the lease was signed. As a consequence, according to CNA, the monthly rent during the lease should have been $3,500, not the $2,500 Stony Hill had paid. In a notice of termination dated September 17, 2008, CNA stated that Stony Hill owed additional rent (August 1, 2001, through September 1, 2008) in the amount of $86,000; unpaid real estate taxes through June 30, 2008, in the amount of $9,207.89; and unpaid holdover rent in the amount of $45,500. Beginning in October of 2008, Stony Hill increased its monthly rent payment to $3,300.
The judge ruled that the lease terminated on July 31, 2006. Thereafter, as a result of CNA accepting and processing monthly rent checks in the amount of $2,500 instead of the increased amount required by the holdover provision, a new tenancy was created, i.e., a tenancy at will, which governed the parties' conduct, rather than the terms of the expired written lease. The judge also found that because the survey was not done during the course of the initial lease, and no taxes were billed during that time, Stony Hill did not have to pay additional rent or taxes. Therefore, the judge dismissed CNA's writ for summary process, and ordered judgment to enter for Stony Hill with costs.
The judge further found that the survey incorrectly attributed a large pond to Stony Hill's leased parcel that actually was located on CNA's unleased parcel.
On appeal, CNA claims that the judge committed error in ruling that (1) the terms of the lease did not govern the tenancy after the lease expired, and (2) CNA was not entitled to rent adjustments including holdover rent, tax payments, and attorney's fees.
Discussion. It is clear that a tenancy at will was created after the expiration of the lease. See Corcoran Mgmt. Co. v. Withers, 24 Mass. App. Ct. 736, 742 (1987). Each and every month during the two years after the expiration of the lease, Stony Hill paid CNA $2,500 in rent and CNA accepted it without protest or reservation. '[S]uch payment and acceptance of rent, standing alone, are prima facie proof of the creation of a tenancy at will.' Staples v. Collins, 321 Mass. 449, 451 (1947).
Our decision is governed by Boudreau v. Johnson, 241 Mass. 12 (1922). There, the court held, 'It is well settled that . . . a tenant, in holding over after the expiration of a written lease, holds the premises as a tenant at will, according to the terms of the written lease, in the absence of a new agreement' (emphasis supplied). 241 Mass. at 16. Boudreau further instructs as to the other provisions of the expired lease that, 'Upon the termination of the written lease, the occupancy did not cease, but the relation of landlord and tenant continued[,] . . . the only difference being that instead of being in under a written lease and for a fixed term, they were in by parole and as tenants at will. In holding over whether by mutual consent and agreement or otherwise they held the same premises with all the rights and privileges that had been annexed to them, and upon the terms and conditions specified in the written lease, except so far as modified by mutual arrangement.' Ibid., quoting from Walker Ice Co. v. American Steel & Wire Co., 185 Mass. 463, 467 (1904).
Here, the amount of the monthly rent, given the acceptance of the lower amount for such an extended period, demonstrates that the provision in the expired lease of increased rent was modified by a new agreement by the parties. Furthermore, CNA's failure to bill Stony Hill for taxes during the initial lease and the extended period following that expiration acted as a waiver as to the payment of taxes.
As to the survey, the judge properly found that it was flawed because it incorrectly attributed a pond to Stony Hill's leased parcel that should have been attributed to CNA's unleased parcel. Because CNA did not demonstrate the actual amount of acres leased by Stony Hill, Stony Hill did not have to pay an additional amount of rent based on the survey.
In light of our decision, we decline CNA's request for appellate attorney's fees.
Judgment affirmed.
By the Court (Trainor, Smith & Meade, JJ.),