Court ruling against Honda dealership’s obstructionist landlords upheld

News

The landlords of a Honda dealership engaged in “unfair commercial extortion,” fraudulently misrepresented the ownership of the property and wrongfully delayed construction of the store for more than two years, the Massachusetts Supreme Judicial Court has ruled.

The sharply worded decision upheld an award of $10,517,250, plus attorney fees, in favor of what was then Majestic Honda, which sought to relocate from Rhode Island to Massachusetts. It is now Balise Honda of North Attleboro.

In 2016, Majestic signed a 23-year lease for the site from a group of businesses connected with Alfredo Dos Anjos. Under the lease, Majestic was to demolish existing buildings and build two new ones. The site is near a CarMax store owned by Dos Anjos on the city’s “Auto Road,” the decision said.

What occurred was “a bitter and protracted dispute” in which dealer principal James Balise was coerced to sell to Dos Anjos for only $1 an adjacent parcel he’d bought for $800,000, Chief Justice Scott Kafker wrote in the unanimous opinion. He said Dos Anjos also gave “pretextual reasons” for terminating the lease and “willfully and wrongly strung Majestic along as a means to extract undeserved benefits.”

The Jan. 24 decision detailed a series of steps the Dos Anjos businesses took to impede Majestic from getting necessary municipal permits for the project; to try limiting use of the site exclusively to a Honda store, thereby preventing Majestic from housing other brands there; to terminate the lease; and to not reinstate it. The court also said the businesses intentionally made false statements and “did nothing to correct their misrepresentations as to the ownership of the premises.”

The lease was reinstated after Majestic won at trial, and construction proceeded while the Supreme Court appeal was pending.

The store opened last May.

“Our commitment has always been to serve the North Attleboro community and our customers,” Balise told Automotive News.

In the decision, the court said, “The defendants’ conduct — which included fraudulent misrepresentations and pretextual contractual objections designed to string along [Majestic] and coerce additional concession to which the defendants were not entitled under the lease — meets the standard for unfair or deceptive practices.”

It upheld the trial court’s finding that the misconduct delayed the development and operation of the store by more than two years and said evidence of unfair and deceptive conduct was sufficient to justify the court’s doubling of the compensatory damages.

Defense lawyer Robert Cordy said, “The extensive fact findings made by the trial judge made the appeal of his rulings very challenging.”

Cordy, of Boston, said the case now is being mediated toward a final settlement.

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