Court of Appeals of Massachusetts
766 N.E. 2d (2002)
In September 1997, Alexander Neihaus (plaintiff) rented his single-family home to Mitchell and Tiffani Maxwell (defendants). The Maxwells paid a security deposit and the last month’s rent upfront. Neihaus hired Hunneman Residential Services (Hunneman) to manage the property. Hunneman deposited the last month’s rent and security deposit into a single bank account. Hunneman then deposited the Maxwells’ monthly rental payments into a separate operating account. The Maxwells paid rent every month of the lease, including the last month of August 1998, but refused to vacate at the end of the lease. Despite staying in the home, the Maxwells did not pay rent for September 1998. Accordingly, Hunneman withdrew the Maxwells’ last month’s rent from the security-deposit account. Neihaus sued the Maxwells on September 25, 1998. The Maxwells raised several counterclaims, including a claim that Neihaus illegally commingled funds by pooling the security deposit with other funds. The Maxwells also claimed Neihaus should have returned their security deposit within 30 days after the end of the written lease period, which was on August 31, 1998, even though they did not vacate the property then. The trial court dismissed the Maxwells’ counterclaims and ordered them to return the property. The Maxwells appealed.
Rule of Law
Holding and Reasoning (Cohen, J.)
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