Cummings Properties, LLC v. Hines
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The Supreme Judicial Court affirmed the judgment of the superior court in favor of Cummings Properties, LLC in this suit brought to enforce Darryl Hines's obligations as guarantor of a commercial lease, holding that Hines failed to meet his burden to prove that the amount provided for in the lease's liquidated damages clause was an unreasonable forecast of damages at the time the lease was signed.
At issue was whether a liquidated damages clause in the lease was unenforceable where Hines's company defaulted on the rent but Cummings was able to relet the property. The trial judge found in favor of Cummings and awarded it the balance owed under the lease's liquidated damages clause. The appeals court reversed, determining that the liquidated damages provision was an unenforceable penalty because it did not account for the possibility that Cummings could, in mitigation of Hines's breach, relet the premises and collect rent. The Supreme Judicial Court affirmed, holding (1) this Court has never required that the amount of a liquidated damages clause take into account any future rents collected from a new tenant to be enforceable; and (2) Hines failed to meet his burden to show that the liquidated damages clause was unenforceable.
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