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Tyler Chapman obtains defense judgment in commercial lease dispute

Tyler E. Chapman persuaded a Massachusetts Superior Court judge to reject a commercial landlord’s claim that a commercial tenant’s former employees were liable for amounts due under the lease after the commercial tenant and its guarantor both defaulted.

The commercial tenant, a developer of multiple commercial and residential real estate projects, leased commercial office space in Hingham, Mass., in 2018, but subsequently failed to pay rent and its related corporate entities were ultimately placed into receivership. 

Some of the individual defendants had their names appear as “partners” on the commercial tenant’s website.

The landlord sued the individual former employees, claiming they were personally liable for the rent and other charges related to the renovation of the space and brokerage fees.

However, Mr. Chapman, on behalf of the former employees, successfully argued that the landlord’s claim failed because the landlord was unable to show that he reasonably or detrimentally relied on the former employees being “partners” of the commercial tenant.

The judge analyzed the commercial landlord’s claims on a “partnership by estoppel” legal theory and found that the landlord leased the property to the commercial tenant based on the apparent financial viability of the commercial tenant and its guarantor and not based on any of the individual defendants identifying themselves as “partners.”