Leardi v. Brown

• Decision Date: 28 February 1985
• Citation: 474 N.E.2d 1094,394 Mass. 151
• Parties: Tina LEARDI et al. 1 v. Harold BROWN 2 et al. 3
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1094

474 N.E.2d 1094

394 Mass. 151

Tina LEARDI et al. ¹ v. Harold BROWN ² et al. ³

Supreme Judicial Court of Massachusetts Suffolk.

Argued Nov. 7, 1984.

Decided Feb. 28, 1985.

M. Robert Dushman, Boston (Steven M. Brody, Boston, with him) for defendants.

Harvey S. Shapiro, Boston (Burton A. Nadler, Boston, with him) for plaintiffs.

Ernest L. Sarason, Jr., Boston, for Massachusetts Tenants Organization, amicus curiae, submitted a brief.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and LYNCH, JJ.

HENNESSEY, Chief Justice.

This is an appeal from a judgment entered in the Housing Court of the City of Boston, and involves the interpretation of a recent amendment to G.L. c. 93A, the Massachusetts Consumer Protection Act. Specifically, we are asked to determine whether, within the meaning of that statute, the tenants comprising the plaintiff class have been "injured" by the use of deceptive and illegal clauses in the defendants' standard apartment lease, despite the fact that the plaintiffs were unaware of, and the defendants have never attempted to enforce, these illegal provisions. We conclude that, in the particular circumstances presented here, the plaintiffs have been "injured," and are thus entitled to an award of statutory damages under G.L. c. 93A.

We are also confronted with the appeal of the plaintiff Marla Allisan, who, in addition to her claims as a member of the class, asserts certain distinctive and additional claims on her own behalf. We conclude that there was no error in the judge's order denying Allisan's individual claims.

1. Facts with Respect to the Class Claims.

In the spring of 1980, Tina Leardi received an offer from her landlord, Harold Brown, to renew her tenancy at an increased rental commencing on September 1, 1980. At the time this offer was made, Leardi occupied her premises pursuant to the landlord's standard apartment lease. On or about August 1, 1980, after she had notified the landlord of her intention to renew, Leardi received an "Agreement to Extend Lease," which was designed to extend the standard apartment lease for an additional year. After consulting with counsel, Leardi refused to sign the agreement to extend the lease on the ground that it, as well as the standard apartment lease which it incorporated, contained illegal and deceptive terms.

On August 13, 1980, Leardi's counsel made a written demand for relief under G.L. c. 93A, § 9(3). The demand was made on behalf of all individuals who had signed, or who had been asked to sign, the standard apartment lease containing the allegedly illegal provisions. The demand letter requested that the landlord cease using such illegal clauses in its lease, that the lease currently in use be deemed null and void, that a new lease without the offending provisions be offered, and that each tenant be awarded $25 for each illegal clause in the rental agreement. With respect to those individuals who had refused to sign the agreement to extend the lease, the letter demanded that the landlord charge them only the rent due under the preceding lease, until the tenants had been given the opportunity to enter into revised leases.

The landlord responded on August 21, 1980. He denied that his leases were either unfair or deceptive, but he offered not to enforce or attempt to enforce "any provision of any lease which runs contrary to law and the law's interpretation by the courts." The landlord further advised that if Leardi failed to sign the agreement to extend the lease, or to vacate, by October 1, 1980, he would begin process to recover possession of the premises.

On August 28, 1980, Leardi filed a class action against Harold Brown and his managing agent (defendants) in the Housing Court of the City of Boston. The Housing Court judge later defined the class as made up of "those individuals who, on or after September 1, 1980, resided in the [premises owned or managed by the defendants Harold Brown and Robert G. Ward] under the agreements here challenged or who so occupied while refusing to enter such agreements." ⁴ The plaintiffs alleged that numerous provisions of the defendants' standard apartment lease violated the Commonwealth's statutory and decisional law, as well as public policy. The complaint sought declaratory and injunctive relief, damages under G.L. c. 93A, § 9, and damages for "restitution."

The plaintiffs moved for partial summary judgment, conceding, for the purposes of the motion, that no member of the class had ever read, and that the landlord had never attempted to enforce, the offending portions of the lease. The Housing Court judge granted the motion on the c. 93A claim, awarding each member of the class $75, while denying relief on the class claim for restitution. ⁵ The parties cross-appealed, and we granted the application for direct appellate review.

2. Facts with Respect to the Plaintiff Allisan.

The plaintiff Marla Allisan also refused to sign the agreement to extend her lease, although in September, 1980, she began paying the increased rent called for by its terms. On September 11, she was served with a notice to quit which terminated her tenancy, and which offered her a new tenancy at $210 per month. She telephoned the defendants' agent to discuss the notice. The agent, Susan Elliot, warned Allisan that the defendants would increase her rent $25 per month until Allisan signed the agreement to extend the lease. Allisan then wrote to Robert Ward, the managing agent for Hamilton Realty Company, explaining her reasons for refusing to sign the extension to her lease. Ward failed to respond to her letter. As a result of the defendants' actions, Allisan claims she has suffered "emotional upset, crying, distraction, chest and shooting arm pains, indigestion, and concern and worry about the status of her tenancy."

Allisan joined the class action as a named plaintiff, and brought individual claims on the basis of interference with quiet enjoyment of the premises in violation of G.L. c. 186, § 14, and intentional infliction of emotional distress. The claims were tried, and on December 29, 1982, the judge of the Housing Court found in favor of the defendants. Allisan appealed. ⁶

3. Defendants' Appeal.

a. Validity of Lease Provisions. The defendants first contend that the Housing Court judge erred in holding various provisions of the standard apartment lease unlawful. A review of the record before the Housing Court establishes, however, that the defendants failed to argue the validity of these provisions in their papers opposing the plaintiffs' motion for partial summary judgment. Since "[o]ur cases hold consistently that a nonjurisdictional issue not presented at the trial level need not be considered on appeal," Royal Indem. Co. v. Blakely, 372 Mass. 86, 88, 360 N.E.2d 864 (1977), we decline to pass on the merits of the defendants' contentions with respect to the validity of each of the challenged lease provisions. See General Elec. Co. v. Assessors of Lynn, 393 Mass. 591, 608, 472 N.E.2d 1329 (1984); M.H. Gordon & Son, Inc. v. Alcoholic Beverages Control Comm'n, 386 Mass. 64, 67, 434 N.E.2d 986 (1982); South Shore Bank v. H & H Aircraft Sales, Inc., 16 Mass.App. 472, 480, 452 N.E.2d 276 (1983).

We do note, however, that the result here would not be affected by our thorough consideration of the standard lease agreement. For instance, paragraph eight of the lease advises that "THERE IS NO IMPLIED WARRANTY THE PREMISES ARE FIT FOR HUMAN OCCUPATION (HABITABILITY) except so far as governmental regulation, legislation or judicial enactment otherwise requires." By itself, the bold face provision is contrary to our decision in Boston Hous. Auth. v. Hemingway, 363 Mass. 184, 199, 293 N.E.2d 831 (1973), where we held that "in a rental of any premises for dwelling purposes ... there is an implied warranty that the premises are fit for human occupation.... This warranty ... cannot be waived by any provision in the lease or rental agreement."

The defendants contend that this provision is rendered perfectly lawful by the inclusion, in small print, of words to the effect that the implied warranty is disclaimed "except so far as governmental regulation, legislation or judicial enactment otherwise requires." We disagree. General Laws c. 93A, § 2(b), expressly incorporates judicial interpretations of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (1982). Under that statute, an act or practice is deceptive if it possesses "a tendency to deceive." Trans World Accounts, Inc. v. F.T.C., 594 F.2d 212, 214 (9th Cir.1979). In determining whether an act or practice is deceptive, "regard must be had, not to fine spun distinctions and arguments that may be made in excuse, but to the effect which it might reasonably be expected to have upon the general public." P. Lorillard Co. v. F.T.C., 186 F.2d 52, 58 (4th Cir.1950).

Taken as a whole, paragraph eight clearly tends to deceive tenants with respect to the "landlord's obligation to deliver and maintain the premises in habitable condition." Boston Hous. Auth. v. Hemingway, supra 363 Mass. at 198, 293 N.E.2d 831. Paragraph eight suggests, as the judge found, that the implied warranty of habitability is "the exception and not the rule, if it exists at all." Indeed, the average tenant, presumably not well acquainted with our decision in Boston Hous. Auth. v. Hemingway, supra, is likely to interpret the provision as an absolute disclaimer of the implied warranty of habitability. The conjunction of bold face and small print suggests, as the judge recognized, "a clear and calculated effort to further mislead tenants." It suggests to tenants that their signatures on the lease constitute a waiver of their right to habitable housing.

Paragraph five of the standard apartment lease, which the judge below characterized as "an unabashed attempt to annul or render less meaningful" rights guaranteed by the State sanitary code, seems drafted with the same impermissible...