In Breach of Contract Claim, Courts May Award Both Damages and Specific Performance

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In Motsis v. Ming's Supermarket, Inc., (Mass. App. Ct. Nov. 5, 2019), the Appeals Court affirms a judgment awarding a commercial tenant both monetary relief and specific performance.

Monetary damages and specific performance are two remedies that a party may pursue when another party has breached their contract. Choice of remedy analyses often create the impression that in order to maximize damages litigants must focus on either monetary relief or specific performance (essentially, a court order requiring a party to perform a specific act) under the contract terms.

However, does that mean it is impermissible for a court to award both monetary damages for breach of contract and specific performance of the breached contract provision(s)? A recent decision by the Massachusetts Appeals Court says no.

In Motsis, Ming's Supermarket, Inc. ("Ming") rented a warehouse from Leo J. Motsis, trustee of the 140-148 East Berkeley Realty Trust ("Motsis"). The lease provided that Motsis was responsible for making all structural repairs to the warehouse, and that the cost of such repairs would be added to Ming's rent if they were caused by Ming. In February 2015 Ming was informed that it could no longer use the warehouse for food storage because it lacked the proper permit, and because of several structural repair issues. Ming then requested Motsis address the structural repairs, so Ming could obtain the necessary permits. Motsis refused to make the repairs, and Ming stopped paying rent in April 2015.

Motsis brought suit against Ming for breaching the lease, and Ming counterclaimed against Motsis for breach of the lease and the related implied covenant of good faith and fair dealing. Ming sought damages for lost profits and an order of specific performance that Motsis make structural repairs as described in the lease. After a jury trial, judgment entered against Motsis and the court awarded Ming both past and future monetary damages, and ordered Motsis to make structural repairs to the warehouse.

On appeal, Motsis argued that the relief awards were improper because the tenant could not receive both lost profit damages for breach of the lease and specific performance of provisions in the lease provision. However, the Appeals Court stated that the trial judge could have reasonably concluded that the landlord should be required to perform the relevant obligations of the lease in the future and pay damages caused by his previous failures to do so and for any period of delay in completing specific performance. The landlord further argued that specific performance was improper because there was nothing unique about the warehouse to require the specific performance remedy; however, the court stated that the judge could have reasonably found that the warehouse was uniquely suited to Ming's needs since it was adjacently located to the supermarket.

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