Landlord and tenant – Liquor license – Collateral

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Where an issue has been raised regarding whether a contractual provision prohibiting the pledge of a license to serve alcoholic beverages as collateral for a loan violates public policy, the anti-pledge provision is enforceable because it is neither prohibited by G.L.c. 138, §23, nor “manifestly injurious to the public interest and welfare” in violation of public policy.

“The primary issue presented in this case is whether a contractual provision prohibiting the pledge of a license to serve alcoholic beverages (liquor license or license) as collateral for a loan violates public policy. N&M Trust VII (N&M) leased a commercial property to Burn, LLC (Burn). As part of the lease, N&M sold its liquor license for the property to Burn for one dollar. The lease also prohibited Burn from pledging the liquor license as collateral for a loan (antipledge provision), and provided that any pledge constituted a default under the lease. The lease further required Burn to transfer the license back to N&M for one dollar at the end of the lease term. Prior to the termination of the lease, however, Burn pledged the license to its principal, Brian Lesser, as collateral for a loan. When N&M discovered that the license had been pledged to Lesser, N&M terminated the lease and demanded return of the license.

“The plaintiffs, Mario Nicosia, individually and as trustee of N&M, and N.I.C. Limited Partnership, initiated the present suit against the defendants, Lesser, BL Note Holding Tremont Street, LLC, and Burn. Following a grant of partial summary judgment and a jury-waived trial on the remaining claims, a judgment awarding damages, attorney’s fees, and costs entered for the plaintiffs, and the defendants appealed. The defendants make four primary arguments on appeal. First, the defendants argue that the motion judge erred in granting summary judgment in favor of the plaintiffs on their breach of contract claim because the anti-pledge provision is unenforceable as against public policy. Second, the defendants argue that the trial judge erred in finding for the plaintiffs on their G.L.c. 93A, §11, claim, because Burn pledged the license to Lesser on the good faith belief that the anti-pledge provision was unenforceable. Third, the defendants argue that the trial judge erred as a matter of law in finding the defendants liable to the plaintiffs for conversion of the liquor license when Burn refused to cooperate with N&M to sell the license back. Fourth, the defendants argue that the trial judge abused her discretion in awarding the plaintiffs attorney’s fees and costs.

“We hold that (1) the anti-pledge provision is enforceable because it does not violate G.L.c. 138, §23, or public policy; (2) the record supports a determination that Lesser, acting individually and on the behalf of all the defendants, willfully and knowingly engaged in unfair and deceptive conduct when he falsely affirmed under oath to the Boston licensing board (licensing board) and Alcoholic Beverages Control Commission (ABCC) that the pledge agreement did not violate or constitute a default of any other agreement; (3) Burn is liable for breach of contract but not conversion of the license because N&M neither possessed nor was entitled to immediate possession of the license at the time Burn refused to cooperate with N&M to sell the license back; and (4) the trial judge did not abuse her discretion in awarding the plaintiffs attorney’s fees and costs. …

“We hold that the anti-pledge provision is enforceable and therefore affirm summary judgment in favor of the plaintiffs on that ground. We likewise affirm the G.L.c. 93A judgment and the award of attorney’s fees and costs in favor of the plaintiffs. We reverse the judgment against the defendants for conversion of the liquor license.”

Nicosia, et al. v. Burns, LLC, et al. (Lawyers Weekly No. 10-135-25) (22 pages) (Kafker, J.) Motions for summary judgment were heard by Peter B. Krupp, J., and the case was heard by Hélène Kazanjian, J., in Superior Court. Kevin M. Considine (Alexander Furey also present) for Burn, LLC, and others; David Kelston (Noah Rosmarin also present) for the plaintiffs; the following submitted briefs for amici curiae: Albert L. Farrah for Suzanne Iannella; Ben Robbins and Frank J. Bailey for Pioneer New England Legal Foundation; Joshua M. Bowman, Richard Heller and Scott McConchie for Spark Business Consulting, Inc. (Docket No. SJC-13755) (Dec. 16, 2025).

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