Levings v. Forbes & Wallace, Inc.

CourtAppeals Court of Massachusetts
Citation396 N.E.2d 149,8 Mass.App.Ct. 498
PartiesWillard S. LEVINGS, trustee v. FORBES & WALLACE, INC.
Decision Date24 October 1979

Donald N. Sweeney, Boston, for plaintiff.

William K. Danaher, Jr., Springfield, for defendant.

Before HALE, C. J., and GRANT and KASS, JJ.

KASS, Justice.

Although the underlying cause is a contract action for material sold and services delivered, the insertion in the complaint of a claim under G.L. c. 93A, § 11, requires consideration once again of the reach of that statutory provision to commercial disputes between business organizations.

First, however, we must meet a procedural issue. The complaint was filed on July 8, 1974. It alleged that the plaintiff (Trane), at the request of the defendant (Forbes), repaired a central air conditioning unit located in a department store in Springfield; that Forbes had refused to pay Trane's bill for labor and materials; and that Forbes, from the time it first placed the written order for the work, never intended to pay Trane for its labor and materials. It is the last allegation, that in effect Forbes duped Trane into working for it, on which the c. 93A claim rests.

Procedural skirmishes followed, largely involving efforts by Trane to make discovery, which Forbes resisted by leading Trane a merry chase. For this Forbes incurred mild sanctions. Mass.R.Civ.P. 37, 365 Mass. 797 (1974). On March 16, 1976, Trane moved for a speedy trial, and that motion was allowed. On July 22, 1976, however, the case was dispatched to a master on an order of reference which directed him not to report the evidence since Forbes had demanded a jury; i. e., the master was to make his report "facts not final." Not until March 11, 1977, just five days short of a full year after the motion for a speedy trial had been allowed, did the master file his report. Regrettably, this was characteristic of the long and dilatory course of the litigation. The master made findings favorable to Trane, including a finding that when Forbes issued its purchase order to Trane, "it intended not to pay the plaintiff for the work which the plaintiff was to perform pursuant to the purchase order." Forbes filed objections to the master's report, but made no effort to have those objections heard, nor does the record disclose what the objections were. Trane, for its part, never moved for adoption of the report. While the master's report remained in this limbo, Forbes yielded on the contract claim and agreed to pay Trane the full amount of its bill, plus interest.

Trane pressed the c. 93A complaint, which was tried in October of 1977, without a jury since, at that time, an action under c. 93A, § 11, was an equitable action. 1 It is the position of Trane that once the matter became jury-waived, the status of the master's report became governed by Mass.R.Civ.P. 53(e)(2), 365 Mass. 820 (1974), under which the court shall accept the master's findings of fact unless clearly erroneous. If so regarded, the master's report served to equip Trane with the substantial advantage of the master's finding that Forbes hired Trane, never intending to pay for the latter's work. If the master's report is to be regarded as "facts not final," in accordance with the original order of reference, the status of the master's findings is no more than prima facie evidence of the matters found. Prior to the adoption of the Rules of Civil Procedure in 1974, the waiver of a jury trial did not alter the status of a master's (then an auditor's) report. Ott v. Comeau, 297 Mass. 108, 110, 8 N.E.2d 173 (1937). Under the present rules the view appears to be that "if the master has heard the case 'facts not final,' the principles governing a master's report in a jury case control." Smith and Zobel, Rules of Practice §§ 53.11 and 53.12 (1977). So to regard the master's report is a particularly apt result in the instant case, where that report was never adopted and where the parties proceeded without express objection to a full trial (including the testimony of witnesses and the admission in evidence of many exhibits) of the c. 93A issue.

We turn now to whether Trane's complaint stated a case within the scope of c. 93A. As originally enacted, c. 93A undertook to provide "a more equitable balance in the relationship of consumers 2 to persons conducting business activity." Commonwealth v. DeCotis, 366 Mass. 234, 238, 316 N.E.2d 748, 752 (1974). See also Tober Foreign Motors, Inc. v. Reiter Oldsmobile, Inc., 376 Mass. ---, --- A, 381 N.E.2d 908 (1978); Alperin and Chase, Consumer Rights and Remedies § 123, n.25 (1979). Complaints brought by consumers had to filter through the Attorney General, who alone could bring enforcement actions. Passage of St. 1969, c. 690, inserted a private remedy provision in the statutory scheme. This appears as § 9. For a review of the history of these developments see Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693-700, 322 N.E.2d 768 (1975).

The right to employ the potent weaponry of c. 93A (new substantive rights, multiple damages, counsel fees) was conferred upon businessmen, 3 as opposed to consumers, by St. 1972, c. 614, § 2, which inserted c. 93A, § 11, into the General Laws. It is the position of the defendant Forbes that, in a controversy between businesses, the unfair method of competition or unfair or deceptive act or practice of which the injured party complains must (a) have an anti-competitive effect and (b) involve a plaintiff who is a "consumer" i. e., is a vendee or lessee of goods, services or property. In the instant case, the plaintiff Trane was a purveyor of services, rather than a purchaser.

A statement issued by the House Committee on Banks and Banking, which reported favorably on the bill which became St. 1972, c. 614, 4 lends some support to the proposition that the target of § 11 is activity which is anti-competitive in purpose or effect. The focus of the House Committee's statement is exclusively on the consequences to consumers and the economy of unfair competition; businesses which could not survive unfair competition would close, allowing the survivors to set higher prices in a monopolistic environment, to the detriment of consumers. The language of § 11 suggests no such limitation, however; it speaks in terms of an "unfair method of competition Or an unfair or deceptive act or practice" (emphasis supplied). The disjunctive nature of the wrongs categorized in § 11 comes into sharp relief in PMP Associates, Inc. v. Globe Newspaper Co., 366 Mass. 593, 596-598, 321 N.E.2d 915 (1975), in which the court held that a refusal to sell advertising space did not, without more, constitute an unfair trade practice because it was "not within any recognized conception of unfairness, (was) neither immoral, unethical, oppressive nor unscrupulous." Id. at 596, 321 N.E.2d at 918. Coupled with an anti-competitive motive or effect, the court observed, Id. at 597, 321 N.E.2d 915 and citing numerous cases arising under the Trade Commission Act, 5 this otherwise innocent practice might well become unlawful under c. 93A. It follows by necessary implication that a business practice which did fall within a class of activity described as unfair or deceptive in Federal Trade Commn. v. Sperry & Hutchinson Co., 405 U.S. 233, 244, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972), and 29 Fed.Reg. 8325, 8355 (1964), would be proscribed by § 11 and, therefore, actionable without the additional anti-competitive trait. In Frank J. Linhares Co., Inc. v. Reliance Ins. Co., 4 Mass.App. 617, 623, 357 N.E.2d 313 (1976), for example, we said that allegation of a refusal to deliver a truck to which the plaintiff had a right of possession unless the plaintiff should agree in writing to release the defendant from warranties or repairs stated a good § 11 claim. The defendant's activity in that case had no anti-competitive overtones.

Forbes' argument that only buyers, not sellers, may avail themselves of remedies under § 11 finds no support in the statutory language or its history. Until recently, G.L. c. 93A, § 9(1), limited rights of action to persons who were purchasers and lessees while § 11, however, contained no such limitation; rather it conferred the businessman's 93A claim on "(a)ny person who engages in the conduct of any trade or commerce." The remedies and procedures in §§ 9 and 11 are related, but not parallel, and the conditions of one section should not be read by implication into the other. Nader v. Citron, 372 Mass. 96, 99-101, 360 N.E.2d 870 (1977). In any event, St. 1979, c. 406, § 1, enacted last July, eliminated the purchaser and lessee qualification from § 9(1). As that provision now reads, "Any person, other than a person entitled to bring action under section eleven . . . who has been injured by . . . any method, act or practice declared to be unlawful by section two" may bring an action under c. 93A. It does not, incidentally, require an exceptionally lively imagination to conjure circumstances under which an economically powerful business in the capacity of a buyer might act unfairly in relation to a small business in the capacity of a seller of goods or services.

It remains to ask whether, on the facts found, Forbes has committed a transgression which exposes it to a c. 93A claim, i. e., did it do anything unfair or deceptive? What is unfair is a definitional problem of long standing, which statutory draftsmen have prudently avoided. "It is impossible to frame definitions which embrace all unfair practices. There is no limit to human inventiveness in this field." H.R.Conf.Rep. No. 1142, 63rd Cong., 2d Sess. (1914). The criteria adopted in our decisions are those spelled out in PMP Associates v. Globe Newspaper Co., 366 Mass. at 596, 321 N.E.2d 915, and derive in large measure from the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (1976), and regulations thereunder. Those criteria require us in a case such as this to look...

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