Kitner v. CTW Transport, Inc.
| Decision Date | 13 February 2002 |
| Docket Number | No. 99-P-1061.,99-P-1061. |
| Citation | 53 Mass. App. Ct. 741,762 NE 2d 867 |
| Parties | JAMES B. KITNER & another v. CTW TRANSPORT, INC. |
| Court | Appeals Court of Massachusetts |
Present: LAURENCE, SMITH, & MASON, JJ.
Harvey Nosowitz for the defendant.
Louis Movitz for the plaintiffs.
In November of 1996, the plaintiffs, James B. Kitner and his wife Sandra I. McKinney, filed a complaint in Lynn District Court seeking damages from the defendant, CTW Transport, Inc. (CTW), for breach of a conditional sales and security contract, misrepresentation, and violation of G. L. c. 93A. On January 27, 1997, the case was removed to Superior Court.
On October 13, 1998, the matter went to trial before a jury on the theories of negligent misrepresentation, intentional misrepresentation, and breach of the contract. After a three-day trial, the jury returned verdicts in favor of CTW on the counts charging breach of contract and intentional misrepresentation but found for the plaintiffs on the count of negligent misrepresentation. The jury awarded damages in the amount of $18,238.
The judge had reserved to himself the plaintiffs' c. 93A claim. The judge ruled that CTW's actions violated c. 93A and awarded $36,500 to the plaintiffs. Subsequently, the judge awarded an additional $20,000 to the plaintiffs in attorney fees and expenses. The judge also ruled that the jury's verdict was duplicative of the c. 93A award because both the negligent misrepresentation and the c. 93A violation produced the same harm. Therefore, he dismissed the jury award and awarded judgment on the plaintiffs' c. 93A claim.
On appeal, CTW claims that the judge committed error when he awarded damages to the plaintiffs pursuant to their c. 93A claim because North Dakota law governed CTW'S conduct and not Massachusetts law. In addition, CTW contends that even if Massachusetts law did apply to the c. 93A claim, the judge's findings did not support a c. 93A violation. CTW also claims that the judge committed error in calculating the plaintiffs' damages and denying the defendant's motion for a directed verdict on the plaintiffs' negligent misrepresentation claim.
Facts. We summarize the undisputed facts introduced at trial, supplemented by facts found by the judge on the plaintiffs' c. 93A claim.
In June of 1994, Kitner was hired by CTW as a long-haul commercial truck driver. CTW is a North Dakota corporation with its corporate headquarters in Fargo, North Dakota. CTW also has a place of business in Peabody, Massachusetts, and Kitner worked out of that terminal. While employed by CTW, the truck that Kitner operated was insured under a CTW policy with John Deere Insurance Company (John Deere). However, after Kitner was employed for three or four months, John Deere advised CTW that it would not continue to insure Kitner's truck because Kitner had a prior conviction for operating a motor vehicle while under the influence of intoxicating liquor.
In order to keep Kitner working for CTW, the plaintiffs and CTW entered into a conditional sales and security contract (contract) on September 1, 1994, whereby CTW agreed to sell to the plaintiffs a 1990 Peterbilt Semi Tractor for $36,200 plus twelve percent interest.2 Under the contract, the plaintiffs agreed to provide liability insurance for the truck, and also agreed that Kitner would be an independent contractor, not an employee, of CTW. In addition, the plaintiffs agreed to pay for maintenance and repairs on the truck.
Also on September 1, 1994, the plaintiffs obtained a twelve-month liability insurance policy from Canal Insurance Company (Canal). Canal agreed to insure the truck despite being advised of Kitner's prior operating under the influence offense. The plaintiffs made a down payment of $1,314 on the Canal policy. The policy required them to pay nine additional monthly premiums of $710, for insurance coverage through September 2, 1995.
In March of 1995, Canal sent a notice to the plaintiffs (and to CTW as lienholder) that the plaintiffs' insurance policy would be canceled if the current monthly premium was not received within two weeks of the notice. The plaintiffs made the payment within the required period and the policy was not canceled. On May 22, 1995, Canal sent another notice to the plaintiffs, and to CTW, that the policy would be canceled if the current premium was not received by June 6, 1995. The June payment would have represented payment in full for coverage through September 2, 1995.
In May of 1995, after the plaintiffs received the second notice, Costas Flessas, CTW's president, discussed the matter of the plaintiffs' insurance with Kitner. He informed Kitner that CTW could purchase insurance for the plaintiffs at a smaller monthly premium than what the plaintiffs were paying Canal. It was then agreed between the plaintiffs and CTW that CTW would place the plaintiffs on its insurance policy and the plaintiffs would therefore then allow Canal's insurance policy to lapse.3 Flessas did not inform the plaintiffs that John Deere was still its insurance carrier, i.e., the same insurer who had previously advised CTW that it would not insure a truck operated by Kitner. As a result of Flessas's representation that he would procure insurance for the truck, the plaintiffs allowed the policy with Canal to lapse.
Once CTW placed the plaintiffs' truck under its policy with John Deere, it attempted to conceal from John Deere that Kitner was the operator of the truck. However, after John Deere requested and received from CTW the identity of Kitner as the truck operator, it informed CTW that, as of July 14, 1995, the policy on the truck would be canceled because it would not insure Kitner as operator because of his past driving record.
On July 14, 1995, Kitner arrived at the Peabody terminal to submit his paperwork on a truck load he had just delivered in Chelsea. Flessas told Kitner that he was repossessing the truck because Kitner had violated the contract in that he had failed to provide insurance for the truck. Flessas fired Kitner without giving him any opportunity to resume his insurance with Canal.
On September 14, 1995, CTW sent a notice of default to the plaintiffs, demanding accelerated payment on the contract within two weeks or CTW would permanently retain the truck. The plaintiffs could not make the payment, and CTW retained the truck. The plaintiffs then brought this action.
1. Choice of law issue as to G. L. c. 93A claim.4 The contract between the plaintiffs and CTW contained the following language: "This Agreement is being executed and delivered and is intended to be performed in the State of North Dakota, and the substantive laws of the State of North Dakota shall govern the identity, construction, enforcement, and interpretation of this Agreement ... unless the laws of another state require such application to this Agreement or parts thereof."
Prior to trial, CTW filed a motion seeking a declaration that North Dakota law should govern the enforcement and interpretation of the contract, including the G. L. c. 93A claim. The plaintiffs responded, requesting a ruling that Massachusetts law applied to the case.
The judge found that Therefore, the judge ruled that the law of Massachusetts should apply to the matter.
On appeal, CTW claims that both parties agreed below that the contract was governed by G. L. c. 106, § 1-105, which provides in relevant part, "when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties." Therefore, CTW argues that the only question before the trial court was whether, at the time of the contract, there was a reasonable basis for the selection of North Dakota law, not whether the lawsuit was reasonably related to Massachusetts.
The plaintiffs respond that the judge did not commit error because the contract at issue and the relevant conduct by and between the parties relate exclusively to Massachusetts.
For two reasons, we conclude that the judge did not commit error in choosing to ignore the choice of law provision in the contract. They are (1) the language of the contract and (2) the relevant law as to G. L. c. 93A in regard to CTW's conduct.
a. The language of the contract. The language in the contract as to choice of law is expressly self-limiting. It states that North Dakota law would only "govern the identity, construction, enforcement, and interpretation of the" contract. The language does not indicate that North Dakota law would also cover tortious conduct or unfair acts inducing a breach of the contract. Contrast Canal Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. 369, 377-379 (1990) ().
b. Choice of law provision and G. L. c. 93A. "An action pursuant to G. L. c. 93A is `neither wholly tortious nor wholly contractual in nature.'" Standard Register Co. v. Bolton-Emerson, Inc., 38 Mass. App. Ct. 545, 548 (1995), quoting from Slaney v. Westwood Auto, Inc., 366 Mass. 688, 704 (1975). See Kattar v. Demoulas, 433 Mass. 1, 12 (2000). ...
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