Anketell v. Office of Consumer Affairs & Bus. Regulation
| Decision Date | 09 September 2022 |
| Docket Number | 21-P-263 |
| Citation | 101 Mass.App.Ct. 628,195 N.E.3d 464 |
| Parties | Damian ANKETELL & another v. OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION. |
| Court | Appeals Court of Massachusetts |
John J. Regan, Peabody, for the plaintiffs.
Michael A. Lafleur, Assistant Attorney General, for Office of Consumer Affairs and Business Regulation.
Present: Rubin, Henry, & Grant, JJ.
In this case we construe the Home Improvement Contractors Act, G. L. c. 142A, pursuant to which the Office of Consumer Affairs and Business Regulation (OCABR) imposed administrative sanctions on a home improvement contractor. We conclude that the hearing officer properly determined that the contractor's failure to inform the homeowners that their payments would be used to fund his own real estate development business amounted to a material misrepresentation within the meaning of G. L. c. 142A, § 17 (4), and that the contractor abandoned the homeowners’ project in violation of G. L. c. 142A, § 17 (2).
The plaintiffs, Damian Anketell and his construction company, Ground Up Construction, Inc. (Ground Up), appeal from a Superior Court judgment upholding, on judicial review under G. L. c. 30A, § 14, a decision by the OCABR.2 In that decision, OCABR's hearing officer (hearing officer) found that Anketell had violated G. L. c. 142A, § 17, by making a material misrepresentation to the homeowners and by abandoning their home improvement project. Anketell argues that the hearing officer erred as a matter of law in construing the term "material misrepresentation" in G. L. c. 142A, § 17 (4), to encompass his failure to disclose to the homeowners that he deposited the funds they paid him to a general fund used for Anketell's businesses rather than using those funds to pay subcontractors on the homeowners’ project. Anketell further argues that the hearing officer erred by construing the term "abandoning" in G. L. c. 142A, § 17 (2), without a specific intent requirement. We affirm the judgment.
Background. The following facts are drawn from the decision of the hearing officer and the documentary exhibits.3 The homeowners signed a $111,293 contract for Anketell and Ground Up to remodel the attic of their home, which included constructing an office, bedroom, bathroom, and play area, in addition to replacing the roof and building a staircase. The contract, which was signed by Anketell on August 31, 2014, and by the homeowners on October 13, 2014, required the homeowners to pay Anketell in four installments: (1) a $38,952 deposit; (2) $27,823 on the first day of demolition; (3) $27,823 on completion of rough construction and framing; and (4) a final payment of $16,695 on completion of the project. The contract did not specify that Anketell would allocate the homeowners’ funds exclusively for use on their project. Anketell did not tell the homeowners that he had a second business, Castle Hill Properties, LLC (Castle Hill), through which he bought, renovated, and sold properties for profit, colloquially referred to as "flipping" properties. Nor did Anketell tell the homeowners that it was his practice to place their payments in a general fund that he also used to fund Castle Hill's projects.
On October 17, 2014, the homeowners paid Anketell the first installment. By March 18, 2015, the day Anketell began demolition, the homeowners had made a partial payment of $21,500 toward the second installment, in several checks. The homeowners paid Anketell one of those checks in the amount of $7,500, and the next day a $7,000 check that Anketell made out to a subcontractor on the homeowners’ project was returned for insufficient funds. On March 20, 2015, the homeowners paid an additional $6,232 toward the second installment.4 Despite these payments, Ground Up's checking account had a negative balance.
Before the third installment was due, Anketell requested that the homeowners make an advance payment of $11,130 toward the rough construction and framing, and they did so on March 25, 2015. As of March 31, 2015, Ground Up's account had a balance of only $170. That day, Anketell told the homeowners that he was having liquidity problems and asked them to make another advance payment; they refused. Also on that day, the subcontractors stopped working because Anketell was not paying them. By that point, the homeowners had paid Anketell $77,814 of the contract price, but he and Ground Up had completed only about twenty to twenty-five percent of the project: the framing was incomplete, the roof had been removed and the exposed areas were covered in places only by a tarpaulin, and the heating and air conditioning system had been disconnected.
On April 3, 2015, at the request of a subcontractor, the homeowners met with the subcontractor and Anketell. The subcontractor told the homeowners that he and the other subcontractors were not being paid and that much of the money that the homeowners had paid toward the contract had been diverted to Anketell personally. That subcontractor had reviewed Ground Up's bank statements and learned that the homeowners’ payments had been depleted from the account by cash withdrawals and checks payable to "cash" or to Anketell personally, with no explanation from Anketell where the funds had gone. Although Anketell promised the homeowners that he would be able to recapitalize and complete the project in a short amount of time, they had lost faith in him.
Within days after that meeting, the homeowners stopped credit card payments totaling $17,362 that they had made toward the second and third installments due under the contract. The homeowners filed a verified complaint in the Superior Court against Anketell, Ground Up, and Castle Hill, alleging claims including breach of contract, fraud in the inducement, material misrepresentation in violation of G. L. c. 142A, § 17 (4), and abandonment in violation of G. L. c. 142A, § 17 (2). Two days later, Anketell and Ground Up filed for bankruptcy. The homeowners pursued their claims in bankruptcy court, where a judge ruled the debts nondischargeable pursuant to 11 U.S.C. § 523(a)(2).5
The homeowners also filed a complaint with the OCABR. In April 2018, after resolution of the bankruptcy matter, the OCABR held an administrative hearing at which Anketell and the homeowners testified and exhibits including Ground Up's financial records were admitted in evidence. The hearing officer issued a written decision concluding that because the contract clearly set forth a payment schedule with installments due at certain stages of the project, Anketell's failure to tell the homeowners that he would deposit their payments to his businesses’ general fund was a material misrepresentation. The hearing officer further concluded that Anketell had abandoned the project without justification. Crediting the testimony of the homeowners and discrediting portions of Anketell's testimony, the hearing officer found that Anketell's financial issues were caused by his own mismanagement of Ground Up's funds, including his use of those funds for Castle Hill's projects. From evidence that included Anketell's testimony, the hearing officer found that before construction began, Anketell spent over $50,000 of the homeowners’ funds, including by diverting money to Castle Hill. Pursuant to OCABR's authority under G. L. c. 142A, § 18, the hearing officer imposed a $4,700 administrative penalty on Anketell and suspended his home improvement contractor certificate of registration for ten months. Anketell filed a motion for reconsideration, arguing that his "[m]ere nondisclosure" of the fact that he had deposited the homeowners’ payments to his businesses’ general fund could not amount to a "material misrepresentation" within the meaning of G. L. c. 142A, § 17 (4). The hearing officer denied the motion, noting that Anketell's argument either failed to address the facts here or misapprehended the degree to which G. L. c. 142A protects homeowners analogously to the consumer protection statute, G. L. c. 93A.
Anketell then filed a complaint in the Superior Court pursuant to G. L. c. 30A, § 14, for judicial review of the OCABR's decision. The parties filed cross motions for judgment on the pleadings. The judge allowed the OCABR's motion, and judgment entered dismissing the complaint. This appeal followed.
Discussion. 1. Standard of review. "Under G. L. c. 30A, § 14 (7), [w]e shall uphold an agency's decision unless it is based on an error of law, unsupported by substantial evidence, unwarranted by facts found on the record as submitted, arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with the law" (quotation and citation omitted). Crossing Over, Inc. v. Fitchburg, 98 Mass. App. Ct. 822, 827, 161 N.E.3d 432 (2020). Although we interpret statutes de novo, we give "substantial deference" to the OCABR's interpretation of the statute it is charged with administering (citation omitted).6 Mendes's Case, 486 Mass. 139, 143, 156 N.E.3d 188 (2020). See Sullivan v. Board of Appeal on Motor Vehicle Liab. Policies & Bonds, 97 Mass. App. Ct. 818, 821 & n.7, 151 N.E.3d 885 (2020).
To the extent that Anketell may be contesting the sufficiency of the evidence to support the hearing officer's factual findings, we are unable to assess that claim because Anketell has not provided us with a transcript of the administrative hearing. See note 3, supra. Beyond that, "[w]e do not make a de novo determination of the facts or draw different inferences from the facts found by the agency" (citation omitted).
However, to the extent that Anketell is contesting the hearing officer's legal conclusions that Anketell's failure to inform the homeowners that their payments would be deposited to his businesses’ general fund amounted to a material misrepresentation within the meaning of G. L. c. 142A, §...
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