WHDT Congress Holdings LP v. Farnsworth Congress LLC (Lawyers Weekly No. 12-059-17)

WHDT Congress Holdings LP has contracted to buy a ground-floor commercial condominium unit in a building that Farnsworth Congress LLC is having constructed at 338 Congress Street in the Fort Point Channel neighborhood of Boston. The parties’ purchase and sale agreement gives Farnsworth a “limited right of approval” of any proposed tenant to ensure that it “is of similar quality and class” as the “first class appearance and nature” of the building as a whole. Although WHDT is not required to lease the unit to a restaurant, if its wishes to do so Farnsworth has the contractual right to withhold approval if the proposed tenant is not “of similar or greater quality and appearance” to Row34, Bastille Kitchen, Sportello, and Blue Dragon, which are all located within a few blocks of the new building.
WHDT filed a complaint in January 2017 claiming that Farnsworth has unreasonably withheld approval of a franchise of the “&pizza” chain as a tenant, allegedly in violation of the parties’ P&S. Almost three months later WHDH served, and has now filed, a motion for a preliminary injunction that would enjoin Farnsworth from withholding its approval of &pizza’s tenancy and also order Farnsworth to provide plans and other documentation regarding the disputed condominium. WHDT proposes that resolution of its preliminary injunction motion be consolidated with a bench trial on the merits to be held no later than forty-five days of the date it served its motion, i.e. by June 5, 2017.1
The Court declines to consolidate the motion hearing with the trial and hold both in early June, because new issues raised by WHDT for the first time in its motion
1 Neither party has requested a jury trial. WHDT represents that is because the parties waived any right to a jury trial in their P&S.
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papers will require a reasonable time for discovery plus expert testimony. The Court will deny the preliminary injunction motion because WHDT has not shown that it is likely to prevail on the merits of its claims or that it will suffer any irreparable harm in the meantime. If WHDT had sought a prompt trial when it filed its complaint, it may have made sense to schedule the trial for early June. It is now too late for that. But the Court believes that the parties should be able to get this case ready for trial within the next two or three months. It will hold a scheduling conference next week to set a trial date and all intermediate deadlines.
1. Request to Consolidate P.I. Hearing and Trial. WHDT argues in its reply brief that there is no real need for discovery in this case, and thus trial can be scheduled almost immediately.
That might be true if trial of this case were limited to the breach of contract claims in the complaint. The parties have already presented most of the relevant evidence on those claims in their preliminary injunction papers.
But WHDT raises a new issue for the first time in its preliminary injunction memorandum, arguing that if Farnsworth was entitled under the terms of the P&S to withhold approval of &pizza then the P&S should be reformed to eliminate any requirement that a restaurant tenant be of a higher quality and class than &pizza. WHDT asserts that there are no better tenants in the market than &pizza. WHDT also reiterates an allegation in its complaint that the condo unit, which has only about 1,500 square feet of space, is just too small to fit “a successful sit-down restaurant” that is similar in quality to the restaurant benchmarks specified in the P&S.
Farnsworth is entitled to a reasonable amount of time to conduct discovery and procure expert testimony regarding this new contract reformation claim. It is entitled to understand exactly what WHDT has done to try to identify prospective restaurant or other commercial tenants, and pull together rebuttal evidence on this topic. It is also entitled to a reasonable period to rebut WHDT’s assertion that no quality restaurant can survive such a small space.2
2 This assertion may come as a surprise to anyone who has eaten at the very successful Spoke Wine Bar in Davis Square, Somerville, which arguably is of the same quality and class as the restaurant comparables listed in the P&S, and which was and soon will again be located in a very tiny space. The architectural firm that
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The Court concludes that it would therefore be unfair to force Farnsworth to go to trial in early June, especially since WHDT chose to wait for several months after filing its complaint before asking for such an early trial date. Nonetheless, the Court believes it may be appropriate to schedule the trial in July or August. It will discuss the timing of the trial with the parties at next week’s scheduling conference.
2. Merits of Motion for Preliminary Injunction. In the meantime, the Court will deny WHDT’s request for preliminary injunctive relief.
2.1. Legal Standards. “A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To the contrary, “the significant remedy of a preliminary injunction should not be granted unless the plaintiffs had made a clear showing of entitlement thereto.” Student No. 9 v. Board of Educ., 440 Mass. 752, 762 (2004). “Trial judges have broad discretion to grant or deny injunctive relief.” Lightlab Imaging, Inc. v. Axsun Technologies, Inc., 469 Mass. 181, 194 (2014).
A plaintiff is not entitled to preliminary injunctive relief if it cannot prove that it is likely to succeed on the merits of its claim. See, e.g., Fordyce v. Town of Hanover, 457 Mass. 248, 265 (2010) (vacating preliminary injunction on this ground); Wilson v. Commissioner of Transitional Assistance, 441 Mass. 846, 858-859 (2004) (same).
Nor may a plaintiff obtain a preliminary injunction without proving that it will suffer irreparable harm in the absence of such an order, and that such harm to the plaintiff from not granting the preliminary injunction would outweigh any irreparable harm that defendants are likely to suffer if the injunction issues. See, e.g., American Grain Products Processing Institute v. Department of Pub. Health, 392 Mass. 309, 326-329 (1984) (vacating preliminary injunction on this ground); Nolan v. Police Comm’r of Boston, 383 Mass. 625, 630 (1981) (same).
2.2. Analysis. WHDT has not met its burden of proving that it is likely to succeed on the merits or that it will suffer any irreparable harm in the absence of preliminary injunctive relief.
designed the Spoke space states that the restaurant seating, bar, kitchen, and restrooms all fit in 908 sq. ft. of retail space, and that the operation uses an additional 662 sq. ft. of support spaces in the basement. See http://incitearchitecture.com/spoke-winebar-and-restaurant (last visited May 16, 2017).
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WHDT has not shown that Farnsworth unreasonably withhold approval of &pizza as a tenant. Although WHDT has filed an affidavit asserting that &pizza would be of the same or better quality of some restaurants in the Fort Point Channel neighborhood, it has made no showing that &pizza is comparable in quality to the four benchmark restaurants listed in the P&S.3 The Court credits Farnsworth’s evidence that &pizza serves pizza in cardboard boxes, soda in plastic cups, and asks its customers to eat off of cardboard plates with their hands or plastic utensils. It also credits the evidence that &pizza is therefore of a lower quality or class than the benchmark restaurants.
If WHDT could prove its claim that Farnsworth has threatened not to approve any restaurant that serves pizza, that may establish a breach of the P&S. Anyone who has dined at Short & Main in Gloucester, Massachusetts knows that a high-quality restaurant of quality comparable to the P&S benchmarks can have a pizza-focused menu. But such a showing would not entitle WHDT to an order compelling Farnsworth to accept &pizza as a tenant.
Although WHDT also argues that Farnsworth breached the P&S by refusing to provide access to and documentation concerning the condominium unit, it has not supported that claim with convincing evidence. The Court does not credit Farnsworth’s conclusory hearsay evidence on this point, and instead credits the contrary evidence based on personal knowledge in the affidavits submitted by Farnsworth.
WHDT has also not shown that it will suffer irreparable harm without a preliminary injunction. It claims that it will suffer lost profits and may have to forfeit a $ 210,000 deposit if it cannot sign &pizza as a tenant. But money can compensate for such economic damages. Since WHDT could be made whole by money damages, it is not entitled to preliminary injunctive relief. See Packaging Industries Group, Inc. v. Cheney, 380 Mass. 609, 621 (1980) (preliminary injunction “must be denied” where money damages would adequately compensate for any harm that plaintiff might suffer before final judgment is entered, “no matter how likely it may be that
3 Instead, WHDT compares &pizza to the restaurants By Chloe, Tikkaway, Aceituna Grill, and Yoki Express.
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the moving party will prevail on the merits”). Finally, since WHDT has not shown that Farnsworth breached the P&S by withholding approval of &pizza as a tenant, it has also not shown that it is being denied an opportunity to occupy and use the unit in a manner consistent with the P&S.
Plaintiff’s motion for a preliminary injunction and for a trial on the merits within the next forty-five days is DENIED. The Court shall conduct a scheduling conference pursuant to Mass. R. Civ. P. 16 on May 23, 2017, at 2:00 p.m. The Court intends to set an appropriately short time for completing fact discovery and exchanging expert disclosures, and to schedule a trial on the merits in the very near future.
May 16, 2017
Kenneth W. Salinger
Justice of the Superior Court

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