International Fidelity Ins. Co. v. Wilson

• Court: United States State Supreme Judicial Court of Massachusetts
• Citation: 443 N.E.2d 1308,387 Mass. 841
• Parties: INTERNATIONAL FIDELITY INSURANCE COMPANY v. Richard E. WILSON et al. 1 (and a companion case 2 ).
• Decision Date: 10 January 1983

Page 1308

443 N.E.2d 1308 387 Mass. 841 INTERNATIONAL FIDELITY INSURANCE COMPANY
v.
Richard E. WILSON et al. ¹ (and a companion
case ²). Supreme Judicial Court of Massachusetts,
Middlesex. Argued Sept. 14, 1982.
Decided Jan. 10, 1983.

Page 1310

[387 Mass. 842] Marvin H. Margolies, Boston, for Richard E. Wilson and others.

Leonard E. Pass and William M. Appel, Revere, for Patrick H. Pignato.

Joseph D. Steinfield, Boston, for plaintiff.

Before [387 Mass. 841] WILKINS, LIACOS, ABRAMS, NOLAN and LYNCH, JJ.

[387 Mass. 842] LIACOS, Justice.

These cases, consolidated at trial, arise out of the reconstruction of Powder Point Bridge in the town of Duxbury. The plaintiff International Fidelity Insurance Company (IFIC) issued a payment and performance bond to Wilson Iron Works, a sole proprietorship owned by the defendant Richard E. Wilson, Sr., to secure the performance of a contract with the town of Duxbury to repair the bridge. Wilson Iron Works defaulted on the contract, and the town called on IFIC to meet its obligations under the bond. IFIC did so and brought these actions to recover damages.

[387 Mass. 843] IFIC contended that it issued the bond in reliance on the apparent ability and willingness of Wilson Iron Works to perform the repairs and suffered damages when Wilson Iron Works proved unable and unwilling to do so. It advanced three theories for recovery. First, it alleged that the defendants Wilson, Sr., and his wife Sarah Wilson were liable on an indemnity agreement issued to secure the bond. Second, it alleged that the defendants had made fraudulent misrepresentations and were liable under the common law of fraud. Third, it alleged that the defendants Wilson, Sr., Wilson, Jr., and Pignato committed wilful and knowing violations of G.L. c. 93A, §§ 2 & 11, and were liable for multiple damages and attorneys' fees.

The cases went to trial before a jury on March 20, 1981. The plaintiff called a number of witnesses, introduced exhibits, and read into the record depositions taken of the defendants. None of the defendants testified at the trial or called any witnesses on their behalf. The jury were informed that Wilson, Jr., and Pignato each claimed a privilege under the Fifth and Fourteenth Amendments to the Constitution of the United States, and under art. 12 of the Massachusetts Declaration of Rights, and refused to answer numerous questions while being deposed. Wilson, Sr., and Mrs. Wilson were not represented by counsel during the trial.

The judge submitted written questions to the jury who made written findings (special verdicts) under Mass.R.Civ.P. 49(a), 365 Mass. 812 (1974). The jury answered as follows. First, there was a valid contract of indemnity between IFIC and the defendants Wilson, Sr., and Mrs. Wilson. Second, Wilson, Sr., and Mrs. Wilson either signed or ratified the indemnity agreement with IFIC. Third, IFIC expended $208,470, the penal sum of the bond, to satisfy its liabilities under the bond. Fourth, Wilson, Sr., signed the contract for the repair of the bridge. Fifth, he failed to perform his contract for repair. Sixth, IFIC suffered damages as a result of fraudulent misrepresentations to it by Wilson, Sr., Wilson, Jr., and Pignato. Seventh and eighth, IFIC [387 Mass. 844] suffered damages as a result of the use by Wilson, Sr., Wilson, Jr., and Pignato of unfair and deceptive practices. Ninth, IFIC

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suffered damages of $19,728 as a consequence of either the defendants' unfair and deceptive practices or their fraudulent misrepresentations.

Based on these answers, a series of judgments was entered as follows: A judgment for the plaintiff against Wilson, Sr., and Mrs. Wilson on the indemnity count for $208,470, plus interest from April 4, 1977; a judgment against Wilson, Sr., Wilson, Jr., and Pignato, jointly and severally, for compensatory damages of $19,728 on the fraud count and the G.L. c. 93A count, and for attorneys' fees of $19,990 under G.L. c. 93A, § 11. The judge also determined, based on the jury's answers, that the defendants had engaged, intentionally, in unfair and deceptive acts, that Wilson, Sr., Wilson, Jr., and Pignato had committed wilful and knowing violations of G.L. c. 93A, § 2, and were liable for multiple damages under G.L. c. 93A, § 11. A judgment for double damages against Wilson, Sr., and treble damages against Wilson, Jr., and Pignato was entered, assessing noncompensatory damages of $19,728 against Wilson, Sr., and $39,456 each against Wilson, Jr., and Pignato. The judgments provided that each defendant was independently liable for these awards. The plaintiff's damage awards under these judgments totalled $346,828, consisting of $208,470 on the indemnity agreement, attorneys' fees of $19,990, compensatory damages under the common law of fraud and § 11 of $19,728, and multiple damages under § 11 of $98,640. ³

The defendants appeal from the various judgments. ⁴ They challenge the validity of the entry of these judgments, including the computation of damages due the plaintiff. They also challenge various rulings and proceedings below, as well as the sufficiency of the evidence to support the special [387 Mass. 845] verdicts. We shall consider all issues that are properly before us and affirm the judgments.

There was evidence of the following facts. In March, 1976, the town of Duxbury received a bid from Wilson Iron Works on a contract to repair Powder Point Bridge. The bid was notarized by Pignato and falsely indicated that Wilson Iron Works was an experienced bridge contractor. During the months of April and May, Wilson, Jr., and Pignato made several trips to Duxbury and assured the town of Wilson Iron Works's ability to perform the contract and to furnish a bond. The town determined that Wilson Iron Works was the lowest qualified bidder. On May 10, 1976, the town and Wilson Iron Works signed a contract for the repair of Powder Point Bridge.

During this time, Wilson Iron Works sought to obtain a payment and performance bond from IFIC to secure the performance of the contract. Wilson, Jr., and Pignato retained an accounting firm which prepared unaudited financial statements. Wilson, Jr., Wilson, Sr., and Pignato then met with Norman Daniel, the Massachusetts broker agent of IFIC. Daniel testified that at the meeting, Wilson, Sr., stated that he was an experienced bridge contractor, ready and able to repair Powder Point Bridge. Daniel told Wilson, Sr., that he and his wife would be required to sign an indemnity agreement and to provide financial statements. Wilson, Sr., replied that he would do so, but indicated that there might be a problem getting his wife's signature. Wilson, Jr., represented that he was an employee of Wilson Iron Works and said that he would help persuade Mrs. Wilson to sign the agreement. Following the meeting, Wilson, Jr., and Pignato forwarded the required financial statements to Daniel, who undertook his own review of the Wilsons' credit standing. After completing this review, Daniel recommended to IFIC that it issue the bond. An indemnity agreement bearing the apparent signatures of Mrs. Wilson and Richard Wilson, Sr., was signed and notarized by Pignato, and IFIC issued the bond.

Work began on the bridge in June or July, 1976, under the supervision of Wilson,

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Jr., with no evidence of assistance [387 Mass. 846] from his father. Requisitions bearing the name of Wilson, Sr., were submitted to the town, and the town issued periodic checks payable to Wilson Iron Works. These checks were deposited in bank accounts opened by Wilson, Jr., in the name of Wilson Iron Works. The bridge work proceeded haphazardly. During December, the town notified IFIC that Wilson Iron Works had defaulted and called upon IFIC to complete the work and to pay any suppliers who had outstanding claims.

IFIC hired a new contractor who completed the work at a net cost to IFIC of $182,947.77. The contractor testified that he had to do over much of the work done by Wilson because of its poor quality. He also testified that Wilson, Jr., received multiple payments for materials. IFIC also satisfied the claims of Wilson's suppliers in the amount of $44,250. ⁵

1. Sufficiency of the evidence. At the outset, we are confronted with challenges to the sufficiency of the evidence below to support the special verdicts. Wilson, Sr., argues that IFIC failed to demonstrate that he signed either the indemnity agreement or the contract between the town and Wilson Iron Works, or that he either engaged in any unfair or deceptive practices or made any fraudulent misrepresentations which damaged IFIC. Wilson, Jr., presents similar argument as to whether IFIC was damaged by any unfair or deceptive practice or fraudulent misrepresentation. For different reasons, we decline to set aside the special verdicts as to either defendant.

a. Wilson, Sr. It is an established rule that an "appellate court cannot review the sufficiency of the evidence in the absence of an effective motion for a directed verdict." Martin v. Hall, 369 Mass. 882, 884, 343 N.E.2d 841 (1976). See Mass.R.Civ.P. 50(a), 365 Mass. 814 (1974). Our review of the record reveals that Wilson, Sr., failed to move for a directed verdict. Consequently, he is barred from challenging the sufficiency [387 Mass. 847] of the evidence here. We recognize that Wilson, Sr., appeared pro se after the trial judge ordered his original counsel to withdraw from representing multiple defendants. The judge, however, issued that order eight months before the case came to trial. Wilson, Sr., had ample opportunity to secure substitute counsel, but he chose instead to proceed without counsel. ⁶

The right of self-representation is not "a license not to comply with relevant rules of procedural and substantive law." Faretta v. California, 422 U.S. 806, 834-835 n. 46, 95 S.Ct. 2525, 2540-2541 n. 46 (1975). A pro se litigant is bound by the same rules of procedure as litigants with counsel. Martinez-McBean v....