MAINESUPREMEJUDICIALCOURT ReporterofDecisionsDecision: 2021ME14Docket: BCD-20-82SubmittedOnBriefs: September29,2020

Decided: March23,2021Revised: April22,2021Panel: MEAD,GORMAN,JABAR,HUMPHREY,HORTON,andCONNORS,JJ.Majority: MEAD,GORMAN,JABAR,andHUMPHREY,JJ.Dissent: CONNORSandHORTON,JJ.

H&BREALTY,LLC

v.

JJCARS,LLC,etal.

GORMAN,J.

[¶1] H&B Realty, LLC, appeals from a judgment of the Business and

Consumer Docket (Duddy, J.) in favor of JJ Cars, LLC, and JohnMokarzel on

H&B’scomplaintforbreachofcontract.H&Bcontendsthatthecourterredby

applyingtheaffirmativedefensesofbreachofcontractandfailuretomitigate

damagesaspleadedbyJJCarsandMokarzel.1Weaffirmthejudgment.

1 Wehavenotspecificallyheldthat“breachofcontract”isanaffirmativedefensethatmustbe

pleadedassuch.Here,JJCarsandMokarzelassertedbothinacounterclaimandasa“defense”thatH&B’smaterialbreachofthecontractexcusedtheirobligationsunderthecontract.Thetrialcourtagreed.Wehaveidentifiedfailuretomitigatedamagesasanaffirmativedefense,seeTangoftheSea,Inc.v.Bayley’sQualitySeafoods,1998ME264,¶12,721A.2d648,butneednotaddressthatissuehere.Seeinfran.4.

2

I.BACKGROUND

[¶2]Initsjudgment,thecourtmadethefollowingfindingsoffact,which

aresupportedbycompetentevidenceintherecord.SeeDupuisv.Ellingwood,

2017ME 132,¶3, 166 A.3d 112. H&B and JJ Cars entered into a five-year

commercial lease agreement commencing on July 1, 2011, and ending on

June30, 2016,whereby JJ Cars leased a car dealershipproperty inPortland

fromH&B. Mokarzel, thesolememberof JJCars,personallyguaranteed the

paymentof rentandother chargesunder the lease. ArticleXIIIof the lease

containedthefollowingprovisionregardingsubleasing:

Lesseewillnot...sub-let...theleasepremises,withouttheprior written consent of Lessor in each instance which consentshall not be unreasonablywithheld or delayed. The consent byLessortoany...sub-lettingshallbesubjecttoLessor’sreasonablereview and approval of subtenant’s or sublessee’screditworthiness,businessexperience,andcapacitytoperformtheLessee’sobligationsunderthislease....

Anyassignment...astowhichLessorhasconsented...shallnot be effective or deemed valid unless at the time of suchassignment:

(a) Each . . . sublessee shall agree in a written statementsatisfactorytoLessortoassumeandabidebyallofthetermsandprovisionsofthisLease...and

(b) Each . . . sublessee has submitted a current financialstatement...and

(c) Lessee shall pay Lessor an assignment fee . . . . Theassignmentfeewillbe...($250.00).

3

Lessorshallnotbeobligatedtoconsenttoanyproposed...sublettingif...atthetimeoftheproposal...Lesseeisinmaterialdefaultunderanyterm,covenantorconditionofthisLease....

ArticleXX(a)(iv)(B)oftheleasealsorequiredthat“[u]ponanyterminationof

the Lessee’s right to possession only without termination of the Lease: . . .

Lessorshallusecommerciallyreasonableeffortstorelettheleasedpremises

or any part thereof for such rent and upon such terms as Lessor, in its

reasonablediscretion,shalldetermine.”

[¶3]JJCarsoperatedacardealershipatthelocationfromJulyof2011

untilFebruaryof2013.ByFebruaryof2013,JJCarswasinfinancialdistress,

andMokarzel, thesolememberof JJCars,decided toclose thebusinessand

sublettheproperty.

[¶4] From February of 2013 until October of 2015, three separate

businessessubletthepropertyfromJJCars.Approvalforthefirstandthirdof

thesesubletsbyH&Bwasprovidedbyitssolemember,SterlingBoyington.As

tothesecondsublet,thecourtfoundthat“Boyingtonneverobjected.”JJCars

neversubmittedanyofthefinancialinformationrequiredbytheleaseterms

foranyofthesesubletstoH&B.

[¶5] In November of 2015, Wholesale Motors, Inc., owned by Dave

McGovern,beganoccupyingtheproperty.WholesaleMotorswantedtosublet

4

thepropertyandwasalsointerestedinextendingtheleaseorpurchasingthe

property. When JJ Cars sought H&B’s consent to sublease the property to

WholesaleMotors,BoyingtonrefusedtogiveconsentonbehalfofH&Bbecause

he “did not likeMcGovern.” BecauseH&B refused to approve the sublease,

WholesaleMotorsvacatedthepropertyinNovemberof2015.

[¶6]AfterthesubleaseopportunitywithWholesaleMotorsended,the

propertywas unoccupied and JJ Cars stoppedpaying rent. H&Bobtained a

forcibleentryanddetainer judgmentagainst JJCarsonMarch24,2016,and

thensoldthepropertyonoraboutApril7,2016.

[¶7]Twomonthsafterthesale,H&Bfiledaone-countcomplaintagainst

JJ Cars and Mokarzel individually, alleging breach of contract and seeking

damages forunpaid rent fromNovemberof2015 throughApril6,2016. In

their amended answer, JJ Cars and Mokarzel asserted five counterclaims

against H&B—alleging breach of contract, fraud, discrimination, failure to

mitigate damages, and punitive damages—and eight affirmative defenses,

includingbreachofcontractandfailuretomitigatedamages.2

2Laterintheaction,JJCarsandMokarzelfiledaseparateactionagainstBoyington.Thetrialcourt

explainedthattheseparateclaimsandcounterclaimsotherthanthatallegingbreachofcontractwerebasedonassertionsthatBoyington“harborsracialanimusagainstpersonsofcolor[,]harassedanddiscriminatedagainst JJCars’ subtenants[,] andcaused those subtenants tovacate thepremises.”Although the trial court found that Boyington hadmade “bigoted, repulsive, and discriminatorystatements,”itconcludedthatJJCarsfailedtoestablishthatBoyington’sstatementshadanyeffecton its ability to find or keep tenants. The court entered a judgment in favor of H&B on the

5

[¶8] Thecourt conducteda jury-waived trialduringwhichBoyington

and Mokarzel testified.3 In its judgment, the court found that JJCars and

Mokarzelhadbreachedtheleaseagreementbyfailingtopayrentbeginningin

Novemberof2015.ThecourtalsofoundthatH&BbreachedArticleXIIIofthe

lease by unreasonably withholding its consent to JJ Cars to sublease to

Wholesale Motors. The court further found that H&B breached its duty to

mitigatedamages—pursuant toArticleXX(a)(iv)(B)of the lease—because it

did not take steps to relet the property after JJ Cars began missing rent

payments in November of 2015. Based on these findings, and citing Cellar

Dwellers, Inc. v. D’Alessio, 2010ME 32, ¶ 16, 993 A.2d 1, the court issued a

judgment infavorof JJCarsandMokarzelonthegroundthattheirbreach—

failuretopayrent—wasexcusedbyH&B’smaterialbreaches—unreasonably

withholding consent to sublet to Wholesale Motors and failing to mitigate

damages.

counterclaimsofJJCarsandMokarzel.ThecourtalsoenteredajudgmentinfavorofBoyingtononthethird-partycomplaintofJJCarsandMokarzel.

3Inthisappeal,H&Bhasnotprovidedatranscriptofthetestimonyoftheothertrialwitnesses.The court’s findings are supported by the testimony of Boyington andMokarzel alone. SeeM.R.App.P.5(b)(2)(A)(requiringapartyclaiminginsufficiencyoftheevidencetoprovideatranscriptofallrelevantevidence).

6

[¶9] The court denied H&B’s subsequent motion for additional and

amendedfindingsandtoalteroramendthejudgment.SeeM.R.Civ.P.52(b),

59(e).H&Btimelyappealsfromthejudgmentonitscomplaint.See14M.R.S.

§1851(2020);M.R.App.P.2B(c)(2)(D).

II.DISCUSSION

[¶10] H&B raises a variety of challenges to the court’s finding that it

breachedtheleasebyunreasonablywithholdingconsenttoWholesaleMotors’

proposedsublease.4“Whetherabreachofcontracthasoccurredisafindingof

factreviewedforclearerror.”CoastalVenturesv.AlshamPlaza,LLC,2010ME

63,¶20,1A.3d416.Where,ashere,aparty’smotionforfurtherfindingshas

been denied, we do not infer findings from the evidence in the record.

SeeM.R.Civ.P.52(b);Douglas v. Douglas, 2012 ME 67, ¶ 27, 43 A.3d965.

Rather, we confine our review to the trial court’s explicit findings and

determinewhether those findingsaresupportedby therecord. SeeEhretv.

Ehret,2016ME43,¶12,135A.3d101. Although the trial court’s judgment

must be “supported by express factual findings that are based on record

evidence,aresufficienttosupporttheresult,andaresufficienttoinformthe

4 H&Balsochallengesthecourt’sfindingthatitbreachedthecontractbyfailingtomitigateits

damages. Because thecourtdidnoterr inapplying theaffirmativedefenseofbreachofcontractconcerningthesublettingissue,wedeclinetoreachthemitigationargument.

7

parties and any reviewing court of the basis for the decision,” Mooar v.

Greenleaf,2018ME23,¶7,179A.3d307(quotationmarksomitted),“thereis

norequirementthatacourtidentifythereasoningitusestoreacheachfinding

offact.”Thebergev.Theberge,2010ME132,¶18,9A.3d809.

[¶11] H&B first contends that it reasonably withheld its consent to

WholesaleMotors’subleasebecauseJJCarsdidnotprovideH&Bwithrecords

or give H&B the opportunity to inquire into Wholesale Motors’

creditworthiness,experience,orcapacitytoperform.H&Balsocontendsthat

itsrefusaltoconsenttothesubleasewasaresultofWholesaleMotors’request

toextendthesubleasebeyondthefourmonthsremainingontheleaseand,as

such,itsrefusalwasmotivatedbylegitimatecommercialbusinessconcerns.

[¶12] Although Boyington testified that those were the reasons he

refusedtoagreeto thesublease, thecourtdidnotcredit thoseexplanations.

Instead, the court relied on Mokarzel’s testimony that H&B’s reason for

withholdingconsentwasBoyington’sdislikeforMcGovern.Mokarzeltestified

astoBoyington’sdistasteforMcGovernduringdirect-examination:

A:Eventually,Ifoundanotherperson. . .McGovern. AndwhenIasked...[Boyington]tomeetwith[McGovern],hesaidIdon’tlikehim, I’mnotgoingtomeethim. I’mlike, [Boyington],yougottoworkwithme.[Boyingtonsaid]Idon’tlikehim....Idon’tlikethatguy,Idon’tlikehim.AndI’mtheonewho’sdo[ing]businesswithhim,andI’mnotgoingto.

8

Mokarzel’stestimonycontinuedoncross-examination:

Q: And you didn’t ask [Boyington] for his consent before yousubleasedtoMcGovern?

A:Idid.Hesaidno,Idon’tlikehim.Wouldn’tmeet.

Q:So,youdidnotgethiswrittenconsent,correct?

A: He wouldn’t give it. He wouldn’t meet with him despitemyaskingbecausehe“didn’tlikehim.”

Q:So...henevermetwithhimbuthedidn’tlikehim,isthatyourtestimony?

A:Wemetintheparkinglotasdiscussedearlier,and[McGovern]saidto[Boyington],Iwanttoextendalonger-termlease.Hesaidno.Hewouldn’teventalkaboutalonger-termlease.[McGovern]said,Iwanttoinvestmoneyintheproperty...but...Ican’thaveafour-monthlease.[Boyington]said,I’mnotgivingyoualonglease.Takeitupwith[Mokarzel].I’mnotdoingit.

Thecourtdidnot—andwasnotrequired to—believeBoyington’sversionof

events,norwasitrequiredtocreditBoyingtonasawitnessoverMokarzel.5See

GuardianshipofGionest,2015ME154,¶7,128A.3d1062;seealsoRoalsvikv.

Comack,2019ME71,¶7,208A.3d367(explainingthatgreatdeferenceispaid

tothefact-finderbecauseithasthefirst-handopportunitytoseeandhearthe

5 H&B also argues that the court posited that Boyington acted unreasonably based on the

erroneous finding that he refused to ever meet with McGovern. H&B points out that althoughMokarzeldidclaimthatBoyingtonrefusedtomeethim,Mokarzelpromptlycontradictedhimselfbyagreeing thatameeting tookplace inNovemberof2015. Even if the court erred in finding thatBoyingtonnevermetwithMcGovern,theerrorisharmlessbecausethecourtfound—andcompetentrecordevidencesupports—thatH&BrefusedtoleasetoWholesaleMotorssimplybecauseBoyingtondidnotlikeMcGovern.SeeM.R.Civ.P.52(c).

9

witnessestestify).Therewascompetent,substantialevidencetosupportthe

trialcourt’s findingthat“Boyingtondidnotwithholdhisconsentbasedona

‘reasonable review’ of [Wholesale Motors’] creditworthiness, business

experienceorcapacitytoperformJJCars’obligationunderthelease,”butrather

thathewithheldhisconsent“simplybecause[he]didnotlikeMcGovern.”See

Chapman v. Katz, 862 N.E.2d 735, 745 (Mass. 2007) (stating that, in a

commercialcontext,whendeterminingwhetherarefusaltogiveconsenttoa

tenant’ssubleaseisreasonable,onlyfactorsrelating“toalandlord’sinterestin

preservingthepropertyorinhavingthetermsofthe...leaseperformedshould

beconsidered”)(quotingRestatement(Second)ofProp.:LandlordandTenant

§ 15.2(2)(Am. L. Inst. 1977)). WedeclineH&B’s invitation to re-weigh the

evidenceonthisissue.SeeRoalsvik,2019ME71,¶7,208A.3d367.

[¶13] H&B further argues that it could not consent to the sublease

becauseWholesaleMotorsdidnotagreeinawrittenstatementtoabidebythe

termsandprovisionsoftheleaseanddidnotsubmitafinancialstatementand

a$250administrative fee. Because leasesarecontracts inaddition tobeing

conveyancesofproperty,ordinarycontractprinciplesapply.SeeTondreauv.

Sherwin-WilliamsCo.,638A.2d728,730(Me.1994).“Theinterpretationofan

unambiguous contract must be determined from the plain meaning of the

10

languageusedandfromthefourcornersoftheinstrumentwithoutresortto

extrinsicevidence.”SeeAm.Prot.Ins.Co.v.AcadiaIns.Co.,2003ME6,¶11,814

A.2d 989 (quotationmarks omitted). “Where the language of a contract is

unambiguous,wereviewthatcontractdenovoasaquestionoflaw.”Williams

v.Williams,2017ME94,¶9,161A.3d710.ContrarytoH&B’sargument,aplain

reading of Article XIII demonstrates that these documents and fees were

requiredonlyafterH&Bhadconsentedtothelease.SeeAm.Prot.Ins.Co.,2003

ME6,¶11,814A.2d989. BecauseH&Bhadalreadyunreasonablywithheld

consenttothesublease,asamatteroflawtheopportunityforsubmittingthe

necessarydocumentsandfeesneverarose.

[¶14] H&B next contends that it was not required to consent to the

subleasebecauseJJCarswasinmaterialdefault,asdefinedinthelease,fornot

payingrentattheagreed-uponsum.6 ContrarytoH&B’sassertion,thecourt

6 H&BalsomakesaglancingreferenceinaparentheticaltoJJCarsbeinginmaterialbreachof

Article XIII for not seeking consent for the three prior subleases. H&B’s argument fails toacknowledgeoracceptthecourt’sfindingthatBoyingtonhadtwiceconsentedtothesubleasingofthepropertyandonceacquiesced,factssupportedbyBoyington’stestimonythathesanctionedthesubleases because “[the sublessees’] money was green.” “A material breach of contract is anon-performance of a duty that is so material and important as to justify the injured party inregardingthewholetransactionasatanend.”CellarDwellers,Inc.v.D’Alessio,2010ME32,¶16,993A.2d1(quotationmarksomitted).GivenH&B’sback-to-backacceptanceofthreesubleases—andtherevenuetheycreated—JJCars’failuretoabidebythetechnicalaspectsoftheleasewithregardtosubleasingcannotbeseenasa“material”breachofthelease.Further,H&B’sargumentonthisissueignoresourdisfavorforrestraintsonsubleases.SeeWatervillev.Kelleher,127Me.32,35,141A.70,71 (1928) (“Covenants against subletting are restraints which courts do not favor. They areconstruedwiththeutmostjealousyandeasymodeshavealwaysbeencountenancedfordefeatingthem.”);Cowan&Scannell,MaineRealEstateLawandPractice§15.32at684(2d.ed.2007).

11

found thatMokarzel hadpaid rent as requireduntilOctober of 2015, a fact

supportedbyMokarzel’stestimonythatBoyingtonconsentedtohimpayinga

lesseramountofrent.Again,althoughthereiscertainlycontradictoryevidence

intherecord,thereisampleevidencetosupportthecourt’sfindingsthatJJCars

wasnotinmaterialdefaultoftheleasebyfailingtopayrent.SeeEhret,2016

ME43,¶12,135A.3d101.

[¶15] H&B also argues that, even if it had unreasonably refused to

consenttothesubleaseinNovemberof2015,itwouldnothavedeprivedJJCars

ofanyreasonablyexpectedbenefitpursuant to the leasebecauseWholesale

Motors continued to occupy the premises and pay rent to JJ Cars.7 Again,

contrarytoH&B’ssuggestion,thecourtfoundthat,afterNovemberof2015,the

property was unoccupied. To the extent that H&B challenges the court’s

findingsregardinghowlongWholesaleMotorsoccupiedthepropertyandpaid

renttoMokarzel, thosefindingsaresupportedbytheevidencepresentedby

7ThedissentcontendsthatthereisnofactualfindingthatconnectsH&B’srefusaltoconsentto

thesubleasewithWholesaleMotors’departureandJJCars’subsequentinabilitytoperformitsdutiesunder the lease agreement. Dissenting Opinion ¶ 26. We disagree. The trial court found that,“BoyingtonrefusedtoapproveasubleaseforMcGovernandMcGovernsoonvacatedthepremises,”and“[h]adBoyingtonprovidedthereasonableconsentrequiredundertheLeaseAgreement,JJCarsandMokarzelwouldnothavebeeninthepositionofbeingunabletopayrentandotherchargesfromNovember2015throughApril6,2016.”Althoughthesecondfindingwasinaccuratelylabeledasaconclusionoflawbythetrialcourt,itslabeldoesnotchangeitscharacterforpurposesofourreview.

12

Mokarzel,theweightandcredibilityofwhichwasforthetrialcourtaloneto

assign.SeeGuardianshipofGionest,2015ME154,¶7,128A.3d1062.

[¶16] Finally, H&B argues that, even if it breached the lease by

unreasonably withholding its consent to Wholesale Motors’ sublet of the

property,itdidnotrisetothelevelofamaterialbreach.8“Whetheramaterial

breachhasoccurredisaquestionoffactthatwereviewforclearerror.”Jenkins,

Inc. v.WalshBros., 2001ME98,¶13, 776A.2d1229. Amaterial breachof

contract is a nonperformance of a contractual obligation that excuses the

injured party from further performance and justifies the injured party in

regardingthewholetransactionasatanend.CellarDwellers,2010ME32,¶16,

993A.2d1

[¶17] Here, for nearly three years, JJ Cars had been subletting the

propertyinordertoensurethatthepropertygeneratedincometopaytherent

owedtoH&B.Boyingtonwaswellawarethatonlybysublettingtheproperty

8 Thedissent suggests that the court failed tomake a finding thatH&B’s breach of the lease

agreementwasmaterialbecause the term“material”doesnotappear in the trialcourt’sopinion.DissentingOpinion¶29. Thetrialcourt,however,explicitlycitedtoCellarDwellers,2010ME32,¶16,993A.2d1,insupportofitsconclusionthat“H&B’sbreachoftheLeaseAgreementthereforeexcused JJ Cars andMokarzel’s lackof performance.” Paragraph sixteenof our opinion inCellarDwellersprovidesthestandardfordeterminingwhetherabreachofacontractismaterialand,onthefactsofthatcase,drawstheconclusionthat“thereiscompetentevidenceintherecordtosupportthecourt’sfindingthat[theappellee]committedamaterialbreachthatdischarged[theappellant’s]duties under the [contract].” Id. Given the trial court’s citation to that paragraph, we arehard-pressedtofaultits“failure”tousetheword“material”initsdecisionandconcludethatthetrialcourtfoundthatH&B’sbreachoftheleaseagreementwasmaterial.

13

hadJJCarsbeenabletousethepropertytogenerateincomeinordertomeet

its obligations under the lease. Boyington’s breach of his duty to not

unreasonablywithholdhis consent ended any chance JJ Carshad touse the

property in a way that would continue to generate income to pay rent.

SeeMorin Bldg. Prods. Co. v. Atl. Design & Constr. Co.,615 A.2d 239, 241

(Me.1992)(concluding that “[p]revention of performance is a breach of

contractthatexcusesfurtherperformancebythenon-breachingparty”).The

trialcourtdidnoterrindeterminingthatthisbreachwasmaterial.

[¶18]Becausethereiscompetentrecordevidencetosupportthecourt’s

findingthatH&Bmateriallybreachedtheleasebyrefusingtoconsenttosublet

thepropertytoWholesaleMotors,wediscernnoerrorinthecourt’sjudgment.

Theentryis:

Judgmentaffirmed.

CONNORS,J.,withwhomHORTON,J.,joins,dissenting.

[¶19] Not everybreachof a contractualduty excuses theotherparty

fromitsdutytoperform.Forthisreason,Idissent.

14

A. JJCars’FirstAffirmativeDefense:9H&B’sRefusaltoConsenttoaSublease

[¶20]H&BandJJCarsenteredintoafive-yearleasecommencingin2011

andendingin2016.Overthecourseofthelease,neitherpartystrictlyabided

bythetermsofthewrittenagreement.Forexample,threetimespriortothe

WholesaleMotorssublease,JJCarsmovedasubtenantintotheleasedpremises

withoutseekingH&B’spriorconsent,contrarytothetermsofthelease.Each

time,H&Bacquiescedafterthefact.

[¶21]Thefourthandlasttime,withWholesaleMotors,JJCarsonceagain

movedinitschosensubtenant,thistimeeitherbeforeseekingH&B’sconsent

orafterignoringH&B’srefusaltoconsent.

[¶22] As theCourtnotes, givenourdeferential reviewonappeal, the

recordsupportsthetrialcourt’sfindingthatwhenJJCarssoughtconsenttothe

Wholesale Motors sublease, H&B’s owner, Sterling Boyington, refused to

9Althoughwehavenotheldthatabreach-of-contractdefensemustbepleadedaffirmatively,see

Court’sOpinion¶1n.1,anymatter“constitutinganavoidance”mustbesetforthasanaffirmativedefense,M.R.Civ.P.8(c).JJCarsadmittedtonotpayingrentafterOctober2015butdeniedliabilityby asserting that H&B unreasonably withheld consent. See Affirmative Defense, Black’s LawDictionary(11thed.2019)(defining“affirmativedefense”as“[a]defendant’sassertionoffactsandargumentsthat,iftrue,willdefeattheplaintiff’s...claim,evenifalltheallegationsinthecomplaintaretrue”);seealsoCarrollv.Acme-ClevelandCorp.,955F.2d1107,1115(7thCir.1992)(observingthat “Illinois regards a plaintiff’s breach of contract as an affirmative defense”);FDIC v.ModularHomes,Inc., 859F.Supp.117,122-23 (D.N.J.1994) (stating thatNew Jersey recognizesbreachofcontractasanaffirmativedefense).JJCarsthereforeassertedanaffirmativedefenseandboretheburden of proof. SeeHansen v. Sunday River Skiway Corp., 1999ME45, ¶ 11 n.2, 726A.2d 220(“Generally thepartyopposinga claim,usually adefendant, has theburdenofproofonan issuecharacterizedasanaffirmativedefenseorotherissuestoavoidorreduceliability.”).

15

consent because he did not like the owner ofWholesaleMotors,whichwas

unreasonableandthereforeconstitutedabreachofthelease.Court’sOpinion

¶¶ 5, 12. That breach did not relieve JJ Cars of its obligation to pay rent,

however,giventhedisconnectbetweenH&B’sbreachandJJCars’inabilityto

perform its obligations under the lease. It is factually indisputable that

Boyington’s refusal to consent toWholesaleMotors’ subtenancywas simply

ignored by all. This fact and the remainder of the record shows no causal

connectionbetweenBoyington’srefusaltoconsentandJJCars’inabilitytopay

rent.Putsimply,asamatteroflaw,H&B’sbreachwasnotmaterial.

1. Remedy

[¶23]JJCars’subleasetoWholesaleMotorsindisregardofH&B’srefusal

to consent was the appropriate and effected remedy by JJ Cars. The

Restatement(Second)ofProp.:LandlordandTenant§15.2cmt.g(Am.L.Inst.

1977),provides:

Ifthelandlordorthetenantwithholdsunreasonablyhisconsenttoa proposed transfer by the other party, the other party mayproceed tomake the transferwithout regard to the termsof therestraint on alienation, because the restraint is valid only to theextenttheconsenttoatransferisnotwithheldunreasonably.

Thus,afterH&Bunreasonablywithhelditsconsent,JJCarswasfreetosublease

to Wholesale Motors. See Polk v. Gibson Prods. Co. of Hattiesburg, Inc.,

257So.2d225,230-32(Miss.1972)(concludingthatthelesseeshadarightto

16

subleasethepremisestopreservethepropertyandmitigatedamagesafterthe

lessorundulywithheldconsent);RoundupTavern,Inc.v.Pardini,413P.2d820,

821-22(Wash.1966)(requiringthelessortoacknowledgethesubtenantasthe

rightfullesseeafterthelessorhadunreasonablywithheldconsent).

[¶24]Critically,thisisexactlywhatJJCarsdid.NotonlywasJJCarsfree

tosublease,butitdidinfactsubleasethepremisestoWholesaleMotors—just

asithaddonewiththethreepriorsublessees.JJCarstooktheremedyopento

it,leavingnobasistoexcuseitsdutytoperformitsobligationsunderthelease.

2. LackofaCausalConnection

[¶25] The trial court made no factual finding supported by record

evidencethatcausallyconnectsH&B’sbreachtoJJCars’inabilitytopayrent.

ThereisnoevidencethatH&B’srefusalpreventedJJCarsfromsubleasingto

WholesaleMotors.Onthecontrary,therecordindicatesthatH&B’srefusalto

consentwas simply ignored. Furthermore, there is no evidence thatH&B’s

refusal to consent caused Wholesale Motors to renege on its sublease10 or

10 The only time that the trial court addressed causation was when it found that, although

Boyingtonmade“bigoted,repulsive,anddiscriminatorystatements”toJJCars’employees,“[t]herewasnocredibleevidencethatBoyingtonmadesimilarcommentsdirectedatthesubtenantsofJJCars,orthatBoyingtoncausedthesubtenantstovacatethepremises.”

17

prevented JJ Cars from seeking another subtenant after Wholesale Motors

vacatedthepremises.

[¶26]TheCourt’sopinionstatesthat“[b]ecauseH&Brefusedtoapprove

thesublease,WholesaleMotorsvacatedtheproperty inNovemberof2015.”

Court’sOpinion¶5.Butthereisnosuchfindingbythetrialcourtlinkingthose

events,andthereisnoevidenceintherecordindicatingthatH&B’srefusalto

consent was the reason why Wholesale Motors departed.11 The owner of

JJCars,JohnMokarzel,testifiedthatheignoredBoyington’srefusaltoconsent

andthatWholesaleMotorsoccupiedthepropertyuntilJanuary2016.12Indeed,

the evidence shows that during the three months that Wholesale Motors

subleasedthepremises,oneof itsrentcheckstoJJCarsbounced,suggesting

thattheproblemwasnotH&B’signoredrefusaltoconsenttoWholesaleMotors

asasubtenant,butratherWholesaleMotors’inabilitytopay.

11 BecauseH&B filedamotion for further findingsof factandconclusionsof law, “wedonot

assume that the [trial court] made all the findings necessary to support its judgment.” CellarDwellers,Inc.v.D’Alessio,2010ME32,¶15n.6,993A.2d1.“Rather,wereviewthecourt’sfindingstodetermineiftheyaresufficient,asamatteroflaw,tosupporttheresultandiftheyaresupportedbytheevidenceintherecord.”Id.(quotationmarksomitted).ThetrialcourtfoundthatWholesaleMotorsvacatedthepremises“soon”afterBoyington’srefusal,butitmadenofindingpinpointingthedate further or, more importantly, tyingWholesaleMotors’ departure, whenever it occurred, toH&B’srefusaltoconsent.

12 Mokarzeltestifiedthat,althoughWholesaleMotorswasnotactivelyrunningitsbusinessonH&B’spropertyinDecember2015andJanuary2016,WholesaleMotorswasusingthepropertyasanoverflowparkinglotforitsbusinesslocatednextdoor.

18

[¶27] The trial court stated in its conclusions of law that “[h]ad

Boyington provided the reasonable consent required under the Lease

Agreement,JJCarsandMokarzelwouldnothavebeeninthepositionofbeing

unable to pay rent.” But no finding of fact in its decision supports this

conclusioneither,nordoes the recordevidence. DespiteWholesaleMotors’

payingrenttoJJCarsfromNovember2015toJanuary2016,JJCarslastpaid

renttoH&BinOctober2015.

[¶28]Hence,evenacceptingthatH&Bbreachedtheleasebyrefusingto

consenttoWholesaleMotorsasasubtenant,13H&B’sbreachisinsufficientto

sustainJJCars’affirmativedefensegiventhelackofconnectionbetweenH&B’s

refusalandJJCars’inabilitytopayrent.14

13ByMokarzel’sownadmission,JJCarshadnotpaidthefullamountofrentowedsinceyeartwo

ofthecontract,constitutingamaterialbreach.PursuanttoArticleXIII(c)ofthecontract,ifJJCarswas inmaterial breach of the contract, then H&Bwas not obligated to consent to the sublease.Furthermore,ArticleXXIV(b)ofthecontractcontainedanintegrationclauserequiringanychangestobeinwriting,andMokarzeltestifiedthattheleasewasneveramendedtoallowthelesserpayment.TheCourtstatesthatthetrialcourt’sfindingthatJJCarshad“paidrentasrequired”foroverfouryears is supported by the record. Court’s Opinion ¶ 14. Mokarzel did testify—disputed byBoyington—thatBoyingtonforgavethedifference,butthereisnofactualfindingbythetrialcourtonthispoint,andwecannotfillintheblanks.Seesupran.11;seealsoEhretv.Ehret,2016ME43,¶¶12,15-16,135A.3d101;GuardianshipofGrenier,2018ME66,¶¶7-8,11-13,185A.3d728.14BothpartiestestifiedthatWholesaleMotorsnotonlywantedtoleasethepropertybutwanted

anextensionoftheleaseperiod,whichH&Brefused.Itisnotclear,butthetrialcourtappearedtoincludethisrefusaltoextendtheleaseasareasonwhyitconcludedthatH&B’srefusaltoconsentwas unreasonable and constituted a breach of the lease. There is support in the record thatWholesaleMotors’departurewasanimatedbyH&B’srefusaltoextendthelease,anditisuponthisrefusal toextend that JJCarsstoppedpayingrent. Notonlydoes this testimony further reflectadisconnect between H&B’s refusal to consent and JJ Cars’ failure to pay rent, but it supports aconclusionthatWholesaleMotors’departurewasduetoH&B’srefusaltoextendthelease,notits

19

3. MaterialityoftheBreach

[¶29] H&B’s refusal to consent lacked materiality. The trial court’s

opinionterselystates,“H&B’sbreachoftheLeaseAgreementthereforeexcused

JJ Cars and Mokarzel’s lack of performance.” The term “material” appears

nowhere in the trialcourt’sopinion. Buteven ifweconcludedthat the trial

courtimplicitlyfoundmaterialitybycitingtoCellarDwellers,Inc.v.D’Alessio,

2010ME32,¶16,993A.2d1,whichweshouldnot,seesupran.11,norecord

evidence would support that conclusion. See Jenkins, Inc. v. Walsh Bros.,

2001ME98,¶13,776A.2d1229(“Atrialcourt’sfactualfinding[regardingthe

materialityofabreach]isclearlyerroneousifthereisnocompetentevidence

in the record to support it.” (quotation marks omitted)). The trial court’s

conclusion that JJ Cars was excused from further performance under the

contractwithoutfindingthatH&B’sbreachwasmaterialisanerrorasamatter

oflaw.

[¶30] When determining whether a party has committed a material

breach,traditionalcontractprinciplesapply.AssociatedBuilders,Inc.v.Coggins,

1999 ME 12, ¶ 6, 722 A.2d 1278. “A material breach of contract is a

refusal to consent to the sublease. H&B, however, had no contractual duty to agree to a leaseextension.Hence,totheextentthatH&B’srefusaltoextendtheleaseformedapartofthetrialcourt’sreasoning,itconstituteslegalerrorandisanotherreasonwhytheaffirmativedefensefails.

20

non-performanceofadutythatissomaterialandimportantastojustifythe

injuredpartyinregardingthewholetransactionasatanend.”CellarDwellers,

2010ME32,¶16,993A.2d1(quotationmarksomitted).Conversely,abreach

byonepartythatisnotmaterialdoesnotjustifytheotherparty’ssubsequent

failuretoperformunderthecontract. SeeDownE.EnergyCorp.v.RMR,Inc.,

1997ME148,¶10,697A.2d417. Materialityisafact-bounddetermination

thatshouldbeapplied“insuchawayastofurtherthepurposeofsecuringfor

each party his expectation of an exchange of performances.” Restatement

(Second)ofConts.§241cmt.a(Am.L.Inst.1981).15

[¶31]Here,therecorddemonstrates,inseveralways,thatH&B’sbreach

wasnotmaterial. First, because it ignoredH&B’s refusal to consent, JJCars

suffered no detriment or prejudice.16 See Coggins, 1999 ME 12, ¶¶ 6-7,

722A.2d1278. Second, JJ Cars was not deprived of the benefit that it

reasonablyexpected—thatis,JJCarshadpossessionoftheproperty,itleased

15TheRestatement(Second)ofConts.§241(Am.L.Inst.1981)providesasetofcircumstances

thatmaybeconsideredindeterminingwhetherabreachismaterial.Althoughthefactorslistedinsection241arenotintendedforleases,seeRestatement(Second)ofConts.§231cmt.e(Am.L.Inst.1981), they nevertheless provide useful criteria in evaluating landlord-tenant cases, see, e.g.,LRRanchCo.v.Murnion,No.DA14-0103,2014Mont.LEXIS612,at*7(Mont.Oct.7,2014);DiBellav.Fiumara,828N.E.2d534,539-42&n.7(Mass.App.Ct.2005).

16ThetrialcourtdeniedJJCars’counterclaimagainstH&Bforunreasonablywithholdingconsentbecause,althoughH&Bbreachedtheleasebydoingso,JJCarshadsufferednodamages.

21

theproperty toWholesaleMotors, and it had the ability to lease to another

subtenant afterWholesaleMotorsmoved out. See Restatement (Second) of

Conts. § 241 cmt. b (Am. L. Inst. 1981). Finally, looking at the historical

relationshipbetweenthepartiesandtheirrespectivefailurestostrictlyadhere

tothetermsofthecontract,thetrialcourtcouldnothaverationallyinterpreted

H&B’swithholdingofconsenttoconstituteabreachthatsignaledtheendofthe

contract.SeeBrunswickDiggers,Inc.v.AnthonyGrace&Sons,Inc.,159Me.21,

25-26,187A.2d391,393(1963).

[¶32]TheCourtconcludesthatH&B’sbreachwasmaterialbecauseH&B

was aware that JJ Cars was only able to generate income by subletting the

property, and, therefore, by withholding consent, H&B “ended any chance

JJCars had to use the property in a way that would continue to generate

income.” Court’sOpinion¶17. Although “[p]reventionofperformance is a

breach of contract that excuses further performance by the non-breaching

party,”Morin Bldg. Prods. Co. v. Atl. Design& Constr. Co., 615A.2d 239, 241

(Me.1992),asnotedabove,nothingintherecordsupportsaconclusionthat

H&B’s ignoredrefusal toconsentaffected JJCars’ability tocollect rent from

WholesaleMotorsoranyotherviablesubtenant.

22

[¶33] In sum, although the trial court could find on this record that

Boyington’srejectionofWholesaleMotorsbasedonageneralantipathytoward

itsownerwasunreasonable,thefactsalsoreflectthatnoonepaidanyattention

tothisrejection.GiventhatBoyington’srefusaltoconsentwasignoredandthat

Wholesale Motors moved into the leased premises anyway, and given that

WholesaleMotorsdidnotvacatethepremisesbasedonthisrefusal,thelackof

connection between H&B’s breach and that of JJ Cars is fatal to JJ Cars’

affirmativedefense. Neither the trial court’s factual findingsnor the record

evidencesupportsalegalconclusionthatJJCarsmetitsburdenofprooftoshow

thatH&B’sbreachexcusedJJCarsfromitsdutytoperform.

B. JJCars’SecondAffirmativeDefense:MitigationofDamages

[¶34] Because I believe that JJ Cars’ breach-of-contract affirmative

defense fails, I must address the trial court’s conclusion on JJ Cars’ second

affirmativedefense—thatH&Bfailedtomitigateitsdamages.Thetrialcourt

baseditsrulingontheconclusionthatH&B’sdutytomitigatedamagesarosein

November2015.PursuanttoArticleXX(a)(iv)ofthelease,however,H&Bhad

nodutytomitigateuntilJJCars’rightofpossessionwasterminated,andthis

didnotoccuruntilH&Bregainedlegalpossessionthroughaforcibleentryand

detaineraction,afterwhichitswiftlysoldtheproperty. SeeM.R.Civ.P.80D.

23

Giventhelanguageofthelease,whetherthepropertywaslyingdormantfor

some period before that is immaterial because there is no duty tomitigate

outside the terms of a lease when that lease is commercial. See 14 M.R.S.

§§6010-A,6017(2020).

[¶35] The right to possession is determined by a forcible entry and

detaineraction.See20ThamesSt.LLCv.OceanStateJobLotofMe.2017,LLC,

2020ME55,¶5,231A.3d426 (stating that the forcibleentryanddetainer

process for commercial leases is governed by statute); Rubin v. Josephson,

478A.2d665,667(Me.1984)(recognizingthataforcibleentryanddetainer

actionis“asummaryproceedingtodeterminewhohasarightto immediate

possessionofrealpropertytotheexclusionofanother”andthatjudicialpower

inthistypeofactionis“purelystatutoryinorigin”).

[¶36] Because the termsof the leaseunambiguously state thatH&B’s

dutytomitigatewastriggeredwhenJJCars’righttopossessionwasterminated,

seeAm.Prot.Ins.Co.v.AcadiaIns.Co.,2003ME6,¶11,814A.2d989,andJJCars’

rightofpossessionwasterminatedonlyasofMarch24,2016,attheconclusion

oftheforcibleentryanddetaineraction,seeOceanStateJobLot.,2020ME55,

¶ 5, 231 A.3d 426, the trial court erred when it found that H&B’s duty to

24

mitigate arose in November 2015. See alsoDahl v. Comber, 444 A.2d 392,

393-96(Me.1982).

C. Conclusion

[¶37]Fortheforegoingreasons,thejudgmentshouldbevacatedandthe

matter remanded for a calculation of H&B’s damages arising from JJ Cars’

breach.

MarshallJ.Tinkle,Esq.,Thompson,MacColl&Bass,LLC,Portland,forappellantH&BRealty,LLCNealL.Weinstein,Esq.,OldOrchardBeach,forappelleeJJCars,LLC,andJohnMokarzelBusinessandConsumerDocketdocketnumberCV-2016-33FORCLERKREFERENCEONLY