Restaurant Owners Incur $200,000 of Actual Damages and Recover $1.5 Million in Compensatory and Punitive Damages
Our clients entered into a long-term lease for a commercial property in Boston, invested $200,000 in restaurant equipment, furniture and decor, and opened a restaurant at the leased property only to be shut down by the Boston Police Department within two weeks of opening. The landlord’s license to operate a restaurant at the property, and its certificate of occupancy, had been pulled and were no longer valid as a result of an ongoing dispute with the licensing authorities.
A jury found that the landlord intentionally misled our clients and that our client’s reliance on the landlord’s representations about the validity of the license and occupancy permit was reasonable. The jury awarded our clients full compensatory damages and punished the landlord by doubling the amount of the compensatory damages and awarding our clients reasonable attorney’s fees.
The landlord appealed the case to the Massachusetts Appeals Court and the Massachusetts Supreme Judicial Court, and sought the protection of the United States Bankruptcy Court. We were able to defeat all of the landlord’s legal maneuvers and secure 100% recovery of the jury award with all accrued interest.
Landlord’s Bank Also Pays For Its Wrongful Conduct
At the beginning of the case, the Court granted our clients’ motion for an attachment lien on the landlord’s commercial property. Before the jury returned its verdict in favor of our clients, a bank holding the first mortgage on the commercial property foreclosed its mortgage and extinguished our clients’ attachment. The foreclosure sale resulted in surplus proceeds beyond the amount owed the bank on the first mortgage. The bank turned over the surplus proceeds to the landlord in disregard of our clients’ lien in order to settle a separate lawsuit between the bank and the landlord.
After the jury returned the verdict in favor of our clients, and in aid of identifying assets to satisfy the judgment against the landlord, we discovered the bank’s wrongful conduct. We sued the bank and the court granted our clients’ motion for summary judgment on their claim that the bank’s conduct was unfair or deceptive in violation of the Massachusetts Consumer Protection Statute, Chapter 93A of the General Laws. Chapter 93A provides robust protection, including punitive damages, against fraud and other intentional misconduct. The bank settled the case shortly thereafter, paying our clients more than $500,000 over and above the actual damages our clients suffered as a result of the bank’s wrongful conduct.
In total, our clients recovered $1.5 million on the $200,000 in actual damages they sustained in the failed restaurant venture..