Baldassari v. Public Finance Trust

• Decision Date: 06 November 1975
• Citation: 337 N.E.2d 701,369 Mass. 33
• Parties: Ronald BALDASSARI et al. 1 v. PUBLIC FINANCE TRUST et al. 2
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 701

337 N.E.2d 701

369 Mass. 33

Ronald BALDASSARI et al. ¹

v. PUBLIC FINANCE TRUST et al. ²

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Sept. 17, 1975.

Decided Nov. 6, 1975.

Lisa Fitzgerald and Jeffrey W. Kobrick, Boston, for plaintiffs.

Verne W. Vance, Jr., Boston, for defendants.

Before TAURO, C.J., and REARDON, BRAUCHER, HENNESSEY, KAPLAN, and WILKINS, JJ.

BRAUCHER, Justice.

This is a consumer class action for an injunction and damages against a Massachusetts finance company and its out-of-State parent corporation, based on alleged collection of debts in an unfair, deceptive or unreasonable manner in violation of G.L. c. 93, § 49, inserted by St. 1970, c. 883, § 1. We review the procedure followed in the trial court under G.L. c. 93A, § 9, and Mass.R.Civ.P. 23, 365 Mass. --- (1974), and hold that the action was properly dismissed both as a class action and as an individual action by the named plaintiffs under G.L. c. 93A, § 9(1). The Baldassari claims, we hold, were barred by G.L. c. 260, § 2A, inserted by St.1948, c. 274, § 2, the two-year statute of limitations governing actions of tort; moreover, we hold that all the plaintiffs' claims fail because no 'loss of money or property' by them is alleged as required by § 9(1).

We recognize that our disposition of this case is not entirely satisfactory. The plaintiffs allege clear, serious and continuing violations of G.L. c. 93, § 49, and there must be some remedy. The Attorney General can sue for an injunction under G.L. c. 93A, § 4. The plaintiffs could undoubtedly have maintained an action apart from c. 93A for damages, at least if they could show bodily harm. George v. Jordan Marsh Co., 359 Mass. 244, 253, 268 N.E.2d 915 (1971). Perhaps they also could have obtained injunctive relief apart from c. 93A, but that is not what they now press on us. With respect to the claim under c. 93A which they do press, we are limited by the clear terms of the statute.

1. The plaintiffs' allegations. We summarize the allegations of the plaintiffs' bill in equity, filed on May 8, 1974. The defendant Public Finance Trust (Public), doing business as Public Finance Company, is a Massachusetts business trust engaged in the business of making loans through approximately forty offices in Massachusetts. All its shares are held by American Investment Company (American), a Delaware corporation, which controls the policies of Public.

On September 1, 1971, two of the plaintiffs, the Baldassaris, after a series of consumer credit transactions, were some $213.30 in arrears on a total balance of over $3,300 owed to Public. For three months thereafter, the defendants or their agents, servants or employees attempted to collect the debt in an unfair, deceptive or unreasonable manner, entailing (a) numerous harassing telephone calls to the Baldassari residence, often before 9 A.M. and after 6 P.M., totaling 180 calls in nine weeks; (b) use of false identities, threats of legal actions never subsequently commenced, use of offensive, embarrassing and abusive language, and threats to publish the Baldassaris' credit record to an unauthorized third party; (c) on one occasion, appearance at the Baldassari residence and ringing of the doorbell over 100 times to coerce payment; (d) contacts with unauthorized third persons, including Ronald Baldassari's employer, and communication to them of the Baldassaris' debt situation; (e) direct communication with the Baldassaris after the defendants had received written notice from counsel for the Baldassaris that all further communications relating to the consumer debt were to go only to counsel; (f) at least twenty-four unrequested visits to the Baldassaris in an attempt to collect the debt, on an average of twice a week for three months. On two occasions between October 1, 1971, and January 7, 1972, agents, servants or employees of the defendants encountered Ronald Baldassari in a public area and, by force or threats, caused him, against his will, to dress and accompany them to Public's office, which he was not free to leave until he communicated with the office manager about the debt.

After a series of consumer credit transactions with the defendants, the other two named plaintiffs, the Mayos, on January 14, 1972, were $64 in arrears on a balance of $1,920. Thereupon the defendants attempted collection in an unfair, deceptive or unreasonable manner for a period of thirteen months. The collection practices complained of are alleged in terms substantially similar to those described in items (a) through (e) above with respect to the Baldassaris.

On September 20, 1972, the Baldassaris sent a 'formal demand letter' to Public and its office manager. The letter consisted of seventeen single spaced typed pages; it included, as one of eleven separate types of acts or practices relied on, a description of collection attempts substantially like those described above. The letter expressed the belief that numerous persons to whom Public had extended credit had been injured in a similar manner, stated an intention to maintain a class action on behalf of such persons, and demanded that any tender of settlement include suitable arrangements for the compensation and protection of the class. After receiving the letter the defendants communicated false information about the Baldassaris to a credit reporting agency, and the false information has since impaired the Baldassaris' ability to secure consumer credit.

The bill states that the plaintiffs bring the action on behalf of themselves and five described classes of persons who are now or may become similarly situated. Each class is composed of persons subjected to a particular type of practice of the defendants: (1) communications with third persons in violation of G.L. c. 93, § 49(a); (2) communications after notification by an attorney, contrary to G.L. c. 93, § 49(b); (3) threats of violence, use of offensive language, or threats of action not taken, all contrary to G.L. c. 93, § 49(c); (4) unrequested telephone calls in violation of G.L. c. 93, § 49(c), if there were more than four such calls in a one-month period or more than sixteen such calls in a twelve-month period; (5) unrequested visits in violation of G.L. c. 93, § 49(c), if there were more than three such visits in a three-month period or more than four such visits in a twelve-month period. Each class is limited to persons whose debts arose from contracts made since August 14, 1968, and to actions of Public in Massachusetts after that time. It is alleged that each class meets the six requirements of Mass.R.Civ.P. 23(a) and (b), 365 Mass. --- (1974), that the actions complained of are actions which the defendants use commonly and repeatedly in the collection of debts owed to them, and that the defendants have employed each type of practice against a minimum of twenty-five persons during the time and location limits specified.

It is also alleged that the defendants' actions were done without privilege, were extreme and outrageous, and were intentionally done so as to cause severe emotional distress to the plaintiffs, and did cause such distress, and that the plaintiffs have no adequate remedy at law. Damages and temporary and permanent injunctions are sought, together with attorney's fees and costs.

2. The proceedings below. Pursuant to Mass.R.A.P. 8(d), 365 Mass. --- (1974), the parties have agreed on a statement showing how the issues presented by the appeal arose and were decided in the Superior Court. The judge allowed the plaintiffs discovery only on a very limited basis, ruling that issues of class representation should first be heard and decided on the assumption that the plaintiffs' allegations of fact were true.

After a hearing the judge filed a written memorandum of decision on the class issues. He ruled that the Mayos had no standing to sue Public, either individually or as class representatives, since they had alleged no demand for relief under G.L. c. 93A, § 9(3). As against American, a foreign corporation, however, no such demand was required. He also ruled that the members of the alleged classes were not 'similarly situated' to the named plaintiffs as required by § 9(2). He therefore denied the plaintiffs' motion to certify the class, and allowed so much of the defendants' motions to dismiss as alleged an improper class action and the failure of the Mayos to make a statutory demand against Public.

After a subsequent hearing, the judge filed a second memorandum of decision. He ruled that the remaining individual actions of the Baldassaris were subject to a two-year statute of limitations, G.L. c. 260, §§ 2A, 4, and were barred. As to the Mayos, he ruled that any claims based on acts prior to May 8, 1972, were barred. He further ruled that none of the plaintiffs had alleged any loss of money or property, real or personal, as required by G.L. c. 93A, § 9(1). They had therefore failed to state any claim on which relief could be granted. A final judgment was entered dismissing the actions of all plaintiffs against all defendants, and the plaintiffs appealed.

3. Tort claims apart from c. 93A. The bill in equity can be read to include tort claims for false imprisonment and for intentional infliction of emotional distress. In ruling on the statute of limitations the judge said that G.L. c. 260, § 4, was applicable to the Baldassaris' allegations of false imprisonment; he also cited George v. Jordan Marsh Co.,359 Mass. 244, 268 N.E.2d 915 (1971), a case of intentional infliction of emotional distress. Such claims can be made apart from G.L. c. 93A, § 9, without compliance with the requirements of that section. Violations of G.L. c. 93, § 49, such as those alleged here, may also give rise to tort claims. The propriety of injunctive relief in such a case is governed by traditional standards, and the propriety of a class action is subject to Mass.R.Civ.P. 23. This case, however, has been argued to us entirely...