Headquarters Hotel, LLC v. LBV Hotel, LLC, 010320 MASUP, 1884CV02916BLS1

Docket Nº:1884CV02916BLS1
Opinion Judge:Brian A. Davis, Associate Justice of the Superior Court
Party Name:Headquarters Hotel, LLC v. LBV Hotel, LLC
Case Date:January 03, 2020
Court:Superior Court of Massachusetts

Headquarters Hotel, LLC


LBV Hotel, LLC

No. 1884CV02916BLS1

Superior Court of Massachusetts, Suffolk, Business Litigation Session

January 3, 2020


Brian A. Davis, Associate Justice of the Superior Court

Plaintiff Headquarters Hotel, LLC ("Headquarters") filed this action against defendant LBV Hotel, LLC ("LBV") in September 2018 seeking a determination as to the parties’ respective rights under a "right of first offer" provision (the "ROFO Provision") in their Estate for Years Agreement (the "Agreement"). The Agreement grants LBV an estate in the real estate owned by Headquarters at 154 Berkley Street, Boston, Massachusetts (the "Premises") until 2131.1 Headquarters claims that LBV triggered Headquarters’ right to purchase the Premises in January 2018 by sending Headquarters written notification of LBV’s desire to sell the Property in accordance with the terms of the ROFO provision in the Agreement. Headquarters, however, refused to execute a confidentiality agreement that LBV demanded as part of the sale process, with the result that the parties’ proposed transaction devolved into acrimony and, ultimately, litigation.

Headquarters’ claims against LBV are set out in the five counts of its Verified Complaint and Jury Demand ("Complaint," Docket Entry No. 1.0). Headquarters’ claims include breach of contract (Count I); breach of express and implied covenants of good faith and fair dealing (Count II); estoppel/reliance interest (Count III); violation of G.L.c. 93A, § 11 (Count IV); and declaratory judgment pursuant to G.L.c. 231A (Count V). Each of Headquarters’ claims is premised on the notion that LBV remains obligated to go forward with a possible sale of the Premises to Headquarters under the ROFO Provision. LBV, in turn, denies any liability to Headquarters and any obligation to go forward with a sale of the Premises to Headquarters or any other purchaser. LBV also has asserted a series of counterclaims that, in most instances, simply mirror Headquarters’ claims. See Answer and Counterclaims of LBV Hotel, LLC ("Counterclaims," Docket Entry No. 17.0).

The case came before the Court most recently on LBV’s Motion for Summary Judgment (the "Motion," Docket Entry No. 25.0). The gist of LBV’s Motion, fairly characterized, is that its offer to sell the Premises to Headquarters in accordance with the ROFO Provision was effectively rejected by Headquarters and thereafter withdrawn by LBV, with the result that all of Headquarters’ claims fail, and all of LBV’s Counterclaims succeed, as a matter of law. Headquarters opposes the Motion.

The Court conducted a hearing on LBV’s Motion on September 24, 2019. All parties appeared and argued. Upon consideration of the written submissions of the parties and the oral arguments of counsel, LBV’s Motion is ALLOWED IN PART for the reasons summarized, briefly, below.

Factual Background

The following facts, as revealed by the summary judgment record, are undisputed.2

Headquarters is the record owner of the Premises, which (appropriately) once housed the headquarters of the Boston Police Department. On or about June 24, 2002, Headquarters entered into the Estate for Years Agreement with LBV’s predecessor in interest, Berkeley Hotel Associates, LLC ("Berkeley"), pursuant to which Headquarters granted Berkeley a 129-year estate in the Premises (the "Estate for Years"). Berkeley subsequently operated a luxury hotel on the site for approximately eleven years. In 2013, LBV acquired all of Berkeley’s right, title, and interests in the Agreement, as reflected in the Second Amendment to the Agreement, dated as of February 11, 2013.3 LBV has operated the "Loews Boston Hotel" on the Premises since that time.

The original Agreement contains a ROFO Provision at Section 15.1. See Joint Appendix, Exhibit 1, at 62-64. Under the ROFO Provision, if either party to the Agreement desires to market its interest in the Premises to potential third-party purchasers, the offering party first must offer its interest to the other party "at the same price and upon all of the same terms and conditions" that the offering party shall extend to third-party purchasers. Id. at 62. After the offering party makes its ROFO offer, the "non-offering party [has] ninety (90) days from the date the non-offering party receives all information which it reasonably requests which is necessary to evaluate the value of the offering party’s interest and "to notify the offering party that the non-offering party has...

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