NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 

23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, 

as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties 

and, therefore, may not fully address the facts of the case or the panel's 

decisional rationale. Moreover, such decisions are not circulated to the entire 

court and, therefore, represent only the views of the panel that decided the case. 

A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 

2008, may be cited for its persuasive value but, because of the limitations noted 

above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 

n.4 (2008).

COMMONWEALTH OF MASSACHUSETTS

APPEALS COURT

22-P-1078

STAG INDUSTRIAL HOLDINGS, LLC

vs.

BLACK SWAN HOLDINGS, LLC.

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The defendant, Black Swan Holdings, LLC (Black Swan), 

appeals from a Superior Court judgment awarding the plaintiff, 

Stag Industrial Holdings, LLC (Stag Industrial), damages in an 

action on a guaranty executed by Black Swan. Black Swan 

disputes the award of liquidated damages and the award of 

posttermination damages stemming from a tenant's obligations 

under a lease. We affirm. 

Background. Stag Industrial, here the commercial landlord,

brought this action in the Superior Court against Black Swan to 

enforce an unconditional guaranty by Black Swan of the 

obligations of RADG Holdings, LLC (RADG), the tenant under a 

commercial lease of premises1 in Gaffney, South Carolina

1 The leased premises included a parcel of land and a large 

warehouse of about 227,000 square feet. 
2

2

(premises). RADG stopped paying the rent due under the lease in 

July 2020. Stag Industrial then sued RADG in South Carolina to 

recover past-due rent and unpaid taxes. 

On March 21, 2021, a default judgment entered against RADG 

in the South Carolina action in an amount equal to the unpaid 

rent through March 2021 and unpaid property taxes for 2020. 

Stag Industrial then terminated RADG's lease on March 25, 2021. 

On April 20, 2021, Stag Industrial filed a complaint in the 

Suffolk Superior Court against Black Swan, pursuant to the 

guaranty.2 On June 23, 2021, Black Swan was defaulted. It is 

undisputed that Black Swan was properly served, did not answer 

the complaint, and did not attempt to remove the default or 

contest liability. Instead, Black Swan's sole challenge was to 

the damages claimed by Stag Industrial. 

While Stag Industrial terminated RADG's lease in March 

2021, RADG did not vacate the premises until November 2021. Due 

to deferred maintenance and damage, Stag Industrial had to make 

extensive repairs to the premises, at a significant cost, to be 

able to market and relet the premises to another potential 

tenant.

2 Stag Industrial is a Massachusetts limited liability company 

with its principal place of business in Boston. The guaranty 

states that the "Guarantor [Black Swan] consents to and agrees 

that the courts of The Commonwealth of Massachusetts shall have 

personal jurisdiction over the Guarantor for any action brought 

on this Guaranty." 
3

3

On March 9, 2022, Stag Industrial elected to invoke the 

liquidated damages remedy under sections 9.2(c)(i) and (iii) of 

the lease.3 This provision required RADG's payment of "all sums 

provided for in th[e] Lease" plus "an amount equal to the sum of 

all of the Rent and other sums due hereunder and payable with 

respect to the twelve . . . month period next following the date 

of termination."4 

3 The liquidated damages clause of the lease stated in relevant 

part: 

"If this Lease is terminated due to an Event of Default, 

then Tenant covenants, as an additional cumulative 

obligation after termination, to pay forthwith to Landlord 

at Landlord's election made by notice to Tenant at any time 

after termination, as liquidated damages a single lump sum 

payment equal to the sum of (i) all sums provided for in 

this Lease to be paid by Tenant and not then paid at the 

time of such election, plus either (ii) the present value 

. . . of the excess of all of the Rent reserved for the

residue of the Term over all of the fair market rent 

reasonably projected by Landlord to be received on account 

of the Premises during such period, which Rent from 

reletting shall be reduced by reasonable projections of 

vacancies and by Landlord's Reletting Expenses described 

above to the extent not theretofore paid to Landlord, or 

(iii) an amount equal to the sum of all of the Rent and 

other sums due hereunder and payable with respect to the 

twelve . . . month period next following the date of 

termination. Because Landlord's damages resulting from 

Tenant's default and subsequent termination are difficult 

to ascertain as of the Date of this Lease, the parties 

agree that the foregoing agreed-to sum represents a 

reasonable forecast of Landlord's expected damages as a 

result of Tenant's breach and early termination." 

4 At oral argument, counsel for Stag Industrial confirmed that 

the twelve-month period ran from March 25, 2021, to March 24, 

2022. Black Swan does not contest this time frame. 
4

4

On May 24, 2022, and June 2, 2022, a Superior Court judge 

held an evidentiary hearing on Stag Industrial's request for an

assessment of damages.5 As noted supra, Black Swan did not 

challenge the default or otherwise raise any liability defenses

under its guaranty.6 Accordingly, the judge found that Black 

Swan, by virtue of the default, was "liable under the 

Unconditional Guaranty to pay all of RADG's obligations under or 

related to the Lease, including past due rent, other monies due 

under the Lease due to RADG's default, liquidated damages, and 

[Stag Industrial's] reasonable attorneys' fees and litigation

expenses." 

The judge determined that Stag Industrial was entitled to 

recover the sum awarded in the South Carolina action in the 

amount of $578,793.75 plus interest.7 He also found that Stag 

Industrial was entitled to the cost of removing debris and 

refuse left inside the premises by RADG, which amounted to 

$149,700. Furthermore, the judge found that RADG failed to make 

5 For a period of "more than six months," Stag Industrial moved 

for extensions of time to file its motion for an assessment of 

damages. 

6 The Superior Court judge did not make any factual findings

regarding Black Swan's liability under the guaranty. See 

Marshall v. Stratus Pharms., Inc., 51 Mass. App. Ct. 667, 670-

671 (2001) ("Upon default . . . the factual allegations of a 

complaint are accepted as true for purposes of establishing 

liability" [citation omitted]).

7 This sum is equal to the unpaid rent through March 2021 and 

unpaid property taxes for 2020 and bears interest from the date 

of judgment at a rate of 7.25 percent per year. 
5

5

repairs8 to the premises as required under the lease9 and, 

therefore, Stag Industrial was entitled to the costs of 

maintenance and repair work, recoverable under the lease and the 

unconditional guaranty, in the amount of $554,990.46. Finally, 

the judge found that between April 2021 and March 2022, RADG 

failed to pay rent totaling $656,718.72, utility costs totaling 

$76,952.81, and property taxes totaling $127,435. The lease 

called for a late fee of 5 percent and interest of 1.5 percent 

per month on all rent and additional rent, which totaled

$43,055.33 and $63,321.59, respectively. 

In finding that Stag Industrial was entitled to damages 

pursuant to the lease's liquidated damages remedy, the judge 

found that Stag Industrial acted within a reasonable timeframe

in making its election of the remedy.10 More importantly, he 

found that the liquidated damages clause was reasonable and did

not constitute a penalty.11 The judge found this amount to total 

$656,718.72. 

8 These repairs included repainting the exterior of the building, 

repairing and repaving concrete and parking areas, repairing 

broken dock doors, and repairing the HVAC and sprinkler systems, 

as well as repairing plumbing, roofing, and electrical systems. 

9 RADG was required to make these repairs pursuant to section 

9.2(a) and (b) of the lease. 10 The lease stated that Stag Industrial could elect to enforce 

the liquidated damages clause "at any time after termination." 11 The judge noted that Stag Industrial would have been entitled 

to recover more had it elected the alternative remedy under 

section 9.2(c)(ii) of the liquidated damages clause, pursuant to 

which the tenant would have to pay all sums provided for in the 
6

6

In sum, the judge ordered Black Swan to pay Stag Industrial 

"$578,793.75, plus interest thereon from March 12, 2021[,] at 

the rate of 7.25 percent; plus $2,328,892.63, with no 

prejudgment interest to be calculated thereon; plus reasonable 

attorneys' fees and costs of $76,737.92" for both the South 

Carolina action and the present action. Black Swan filed a 

timely appeal challenging the damages award, asserting that the 

liquidated damages clause is "disproportionate" to Stag 

Industrial's actual damages and that the award under the clause 

otherwise constitutes an impermissible penalty. 

Discussion. 1. Standard of review. We accept the judge's 

findings of fact unless they are clearly erroneous. See Kendall

v. Selvaggio, 413 Mass. 619, 620 (1992). "On the other hand, to 

ensure that the ultimate findings and conclusions are consistent 

with the law, we scrutinize without deference the legal standard 

which the judge applied to the facts." Id. at 621. "Whether a 

liquidated damages provision in a contract is an unenforceable 

lease not yet paid, plus rent for the remainder of the lease 

term reduced by the present value and the fair market value of 

the premises. Had Stag Industrial elected the liquidated 

damages remedy under section 9.2(c)(ii), Black Swan could have 

faced the potential cost of ten years of rent as a liquidated 

damages remedy. Like the Superior Court judge, we express no 

view whether that clause would have been reasonable and 

enforceable.

 
7

7

penalty is a question of law." NPS, LLC v. Minihane, 451 Mass. 

417, 419 (2008). See Manganaro Drywall, Inc. v. Penn-Simon 

Constr. Co., 357 Mass. 653, 656 (1970). 

2. Analysis. Neither party disputes that Massachusetts is 

a proper venue to hear this case under the guaranty. Moreover, 

neither party disputes that South Carolina Law governs this 

case.12 However, Black Swan argues that optional liquidated 

damages clauses are unenforceable under both Massachusetts law 

and South Carolina law, despite conceding that South Carolina 

law alone governs the contract, and does not cite any South 

Carolina law in its brief to support this proposition.13 As 

Black Swan does not cite to any relevant case law to support the 

proposition that optional liquidated damages are unenforceable 

under South Carolina law, which governs the lease, this issue is 

waived.14 Stating a claim "in a cursory and conclusory fashion" 

12 Section 12.4 of the lease stated that it "shall be governed 

and construed . . . in accordance with the laws of the State of 

South Carolina." However, while Black Swan states that South 

Carolina law controls the lease in its opposition to Stag 

Industrial's request for the assessment of damages and default 

judgment, Black Swan does not cite any South Carolina law to 

challenge the enforceability of the liquidated damages clause. 13 Black Swan also concedes that there is no binding precedent in 

Massachusetts on the issue of optional liquidated damages 

clauses. 

14 Although Black Swan cited South Carolina cases in its reply 

brief, those cases do not offer support for the proposition that 

optional liquidated damages clauses are unenforceable under 

South Carolina law. In any event, South Carolina law appears to 

contradict Black Swan's claim. See Richman Enters. vs. Pamplin,

U.S. Ct. App., Nos. 95-1142 & 95-1216, slip op. at 11 n.8 (4th 
8

8

and citing "no legal authority to support the[] claim" 

constitutes "an insufficient appellate argument" (citations 

omitted). McCone v. New England Tel. & Tel. Co., 393 Mass. 231, 

236 (1984). See Mass. R. A. P. 16 (a) (9), as appearing in 481 

Mass. 1628. 

Even if we were to consider this argument, we discern no 

basis for reversing the judgment. It is well settled that "a 

contract provision that clearly and reasonably establishes 

liquidated damages should be enforced, so long as it is not so 

disproportionate to anticipated damages as to constitute a 

penalty." TAL Fin. Corp. v. CSC Consulting, Inc., 446 Mass. 

422, 431 (2006). "A liquidated damages provision will usually 

be enforced provided two criteria are satisfied: first, that at 

the time of contracting the actual damages flowing from a breach 

were difficult to ascertain; and second, that the sum agreed on 

as liquidated damages represents a 'reasonable forecast of 

damages expected to occur in the event of a breach.'" NPS, LLC, 

451 Mass. at 420, quoting Cummings Props., LLC v. National 

Communications Corp., 449 Mass 490, 494 (2007). "Where damages 

Cir. Mar. 19, 1996) (applying South Carolina law to liquidated 

damages clause and noting, in relevant part, "[o]ften, the 

language of the liquidated damages clause is flexibly designed

to preserve the option of the non-breaching party to use the 

liquidated damages remedy or to seek one of the normal remedies 

for breach" [citation omitted]). 
9

9

are easily ascertainable, and the amount provided for is grossly 

disproportionate to actual damages, or unconscionably excessive, 

the court will award the aggrieved party no more than its actual 

damages." NPS, LLC, supra. As there is "'no bright line 

separating an agreement to pay a reasonable measure of damages 

from an unenforceable penalty clause' . . . the reasonableness 

of the measure of anticipated damages depends on the 

circumstances of each case." Id., quoting TAL Fin. Corp., 

supra. In determining whether the liquidated damages provision 

is reasonable, "we look to the circumstances at the time of 

contract formation."15 NPS, LLC, supra. The burden of showing 

that a liquidated damages provision is unenforceable lies with 

the party challenging enforcement of the provision. See id. 

See also TAL Fin. Corp., supra at 423. 

In the present case, Black Swan argues that the liquidated 

damages clause in the lease is unenforceable because anticipated 

damages were ascertainable at the creation of the lease, and 

15 A recent Supreme Judicial Court opinion, Cummings Props., LLC

v. Hines, 492 Mass. 867, 873 (2023), reaffirms that liquidated 

damages clauses must be assessed by looking at the circumstances 

at the time of contract formation:

"We remain convinced that where a contract is unambiguous 

and freely entered into, it is preferable for parties to 

bargain with one another as they see fit, rather than to 

have courts step in to decide whether and how to 

restructure a contract because certain contingencies were 

not accounted for by one of the parties." 
10

10

that "the damages sought pursuant to the liquidated damages 

clause were excessive so as to amount to double recovery." Stag 

Industrial contends that Black Swan "did not put forth any 

evidence that the parties to the Lease intended the Liquidated 

Damages to serve as a penalty." 

We agree with Stag Industrial that Black Swan has not met 

its burden to show that the liquidated damages clause is 

unenforceable and that the liquidated damages amount is 

excessive. First, Black Swan has not shown that the liquidated 

damages clause was so unreasonable as to constitute a penalty. 

Black Swan provided no evidence to suggest that at the time of 

contract formation, potential damages were easily ascertainable, 

or that the clause was not a reasonable forecast of damages 

expected to occur in the event of a breach. To the contrary,

the lease stated: "Because Landlord's damages resulting from 

Tenant's default and subsequent termination are difficult to 

ascertain as of the Date of this Lease, the parties agree that 

the foregoing agreed-to sum represents a reasonable forecast of 

Landlord's expected damages as a result of Tenant's breach and 

early termination." 

Second, the sum provided for in the Lease is not "grossly 

disproportionate to actual damages," nor is it "unconscionably 

excessive." NPS, LLC, 451 Mass. at 420. To the extent that the 

sum represented the amount due under the lease as of the date of 
11

11

election and a sum equal to at least one year of rent that would 

have been due over the twelve months following termination of 

the lease, it appears to be a reasonable anticipation of damages 

that might accrue from the nonpayment of rent. See Cummings 

Props., LLC v. Hines, 492 Mass. 867, 873 (2023) (liquidated 

damages clause requiring of payment of entire balance of rent 

due was reasonable under circumstances presented); NPS, LLC,

supra at 422 (liquidated damages clause requiring payment of 

balance of all years remaining on contract was reasonable). 

Here, damages were difficult to estimate at the outset, and

Black Swan is required to pay less than the total amount it 

would have paid had RADG complied with the lease obligations. 

"The sum provided for therefore bears a reasonable relationship 

to the anticipated actual damages resulting from a breach." 

NPS, LLC, supra. 

Further, the liquidated damages clause anticipated a 

scenario that occurred in the present circumstances –- Stag 

Industrial's inability to relet the premises following 

termination of the lease. Indeed, at the evidentiary hearing, 

Stag Industrial's representative testified that the premises was 

still vacant, and that even if Stag Industrial was successful in 

leasing the premises, "rent would not be paid until . . . some 

point in 2023." Given this fact, actual damages would far 

exceed the liquidated damages amount. As the judge highlighted 
12

12

in his findings, Stag Industrial's election of section 

9.2(c)(iii) under the liquidated damages clause, requiring 

payment of twelve months rent in addition to payment of all sums 

provided for in the lease under section 9.2(c)(i), constituted

an amount significantly lower than Stag Industrial's projected 

actual damages.16

Finally, Black Swan contends that the judge erred in 

awarding Stag Industrial posttermination damages resulting from 

Stag Industrial's demand that RADG remove warehouse racking from

the premises and Stag Industrial's deferred maintenance and 

repairs. Black Swan argues that the racking removal and 

deferred maintenance were not supported by the lease; that the 

expense of the racking removal and deferred maintenance was

excessive; and that Stag Industrial failed to mitigate its

damages.17 

In terms of the racking removal and deferred maintenance, 

section 6.9 of the lease required RADG, upon vacating the 

premises, to "remove . . . fixtures and personal property," and 

to "repair[] damage to the Premises which results in the course 

of such removal and restoring the Premises to a fully functional 

16 As discussed supra, had Stag Industrial elected to enforce 

section 9.2(c)(ii), the liquidated damages amount could have 

been significantly larger. See note 11, supra. 17 Black Swan again failed to cite any relevant South Carolina 

law, which controls the lease, in support of this claim. 
13

13

and tenantable condition." If RADG failed to remove such 

property, section 6.9 of the lease required RADG to "pay to 

[Stag Industrial] the reasonable cost and expense incurred by 

[Stag Industrial] in effecting such removal and . . . in making 

any required prepares to the Premises." The lease thus 

established RADG's responsibilities and consequent damages if 

those responsibilities were not fulfilled. The language of the 

lease was clear, and the judge did not err in concluding that 

the expenses of the racking removal and deferred maintenance

were not excessive. See, e.g., Balles v. Babcock Power Inc., 

476 Mass. 565, 571 (2017) ("when the language of a contract is 

clear, it alone determines the contract's meaning"). 

We also disagree with Black Swan's claim that Stag 

Industrial presented no evidence of any effort to mitigate 

damages. Initially, this argument fails because "the burden of 

proving that losses could have been avoided by reasonable 

efforts rests with the party in breach," American Mechanical 

Corp. v. Union Mach. Co. of Lynn, 21 Mass. App. Ct. 97, 103 

(1985), here Black Swan as the guarantor for RADG. Moreover, 

Black Swan presented no evidence to demonstrate that Stag 

Industrial failed to mitigate damages. Black Swan's claim, in 

this regard, is thus conclusory and speculative. By contrast, 

there was evidence that Stag Industrial terminated the lease in 

March 2021, but RADG did not vacate the premises until November 
14

14

2021. As a result, Stag Industrial was forced to "clean up and 

repair the building to get [it] in a condition to be relet and 

marketed" and thus was unable to advertise the premises for the 

purpose of reletting or selling it until 2022. In view of these 

facts, and without contrary evidence adduced by Black Swan, the 

failure to mitigate claim fails on the record before us.18 

Judgment affirmed.

By the Court (Neyman, Henry & 

Ditkoff, JJ.19),

Assistant Clerk

Entered: January 31, 2024.

18 Stag Industrial is entitled to an award of attorney's fees 

pursuant to the guaranty. It may submit an application for fees 

and costs, with supporting documentation, to this court within 

fourteen days of the date of rescript. See Fabre v. Walton, 441 

Mass. 9, 10-11 (2004). Black Swan shall have fourteen days 

thereafter to respond. Black Swan's request for attorney's fees 

and costs is denied. 

19 The panelists are listed in order of seniority.