O'Malley v. Hamadi Al Tamimi

• Decision Date: 19 July 2016
• Docket Number: No. 15–P–961.,15–P–961.
• Citation: 89 Mass.App.Ct. 1132,54 N.E.3d 608 (Table)
• Parties: Eugene O'MALLEY v. Adel A. HAMADI AL TAMIMI.
• Court: Appeals Court of Massachusetts

89 Mass.App.Ct. 1132

54 N.E.3d 608 (Table)

Eugene O'MALLEY

v.Adel A. HAMADI AL TAMIMI.

No. 15–P–961.

Appeals Court of Massachusetts.

July 19, 2016.

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

The defendant Adel A. Hamadi Al Tamimi appeals from a jury verdict in the Superior Court finding him in violation of G.L. c. 93A, and the award of treble damages and attorney's fees to the plaintiff Eugene O'Malley. We affirm.

Background. We recite the facts as the jury could have found them, and as they pertain to the issues on appeal. The defendant hired the plaintiff to procure funding to pay for the cost of pending litigation² and also, apparently, for unrelated personal expenses.³ The plaintiff was a career management consultant whose background included helping clients raise capital from investment banks and other sources for growth, acquisitions, and restructuring.⁴

The defendant was introduced to the plaintiff by one of the defendant's attorneys, Stephen Burr,⁵ who was assisting the defendant in his fundraising efforts. The plaintiff and the defendant had their first meeting in June of 2011, during which the plaintiff was informed that the defendant sought $6 million dollars in funding.

Before a consulting agreement between the parties was formalized, the plaintiff began identifying potential fund sources, including Burford Capital Limited (Burford), with funding options that met the defendant's primary requirement of unrestricted usage. Although Burr would have been able to approach Burford through Crowell & Mooring LLP (Crowell Mooring), the law firm prosecuting the Oman claim on behalf of the defendant, Burr never sought to exploit contacts at Crowell Mooring to explore funding.

The defendant and the plaintiff entered into a consulting agreement on July 14, 2011. The consulting agreement provided that the plaintiff would receive a fee representing four percent of the capital procured through his efforts. The plaintiff received a $5,000 retainer, which Burr paid from his own funds as the defendant was without money prior to receiving funding. Both parties signed the consulting agreement in their individual capacities.

A funding agreement was reached with Burford on August 8, 2011. Shortly thereafter Burford wired $5,960,000⁶ to Burr's client funds account on behalf of the defendant.

On August 24, 2011, the plaintiff sent the defendant an invoice of $240,000 representing his four percent fee under the consulting agreement. The defendant did not pay the invoice but made a partial payment of $50,000 on September 8, 2011. Approximately a week later, the defendant first approached Burr and discussed reasons that might justify refusing to pay the invoice in full. These reasons were not disclosed to the plaintiff at that time.

During trial, the defendant filed motions for directed verdict on the c. 93A claim at the close of the plaintiff's case and at the close of all the evidence, both of which the judge denied. The jury found the defendant liable for breach of contract and violation of c. 93A. The judge issued a judgment awarding the plaintiff damages of $193,400 plus interest, multiple damages in the amount of $386, 800, attorney's fees of $790,943, and costs of $34,586.

Discussion. We affirm the denial of a motion for a directed verdict if “anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [nonmoving party].”⁷ Poirier v. Plymouth, 374 Mass. 206, 212 (1978)

(quotation omitted).

The defendant asserts that his actions did not violate c. 93A because (1) the contract in question was not conducted in the course of “trade or commerce,” and (2) his breach of contract, without more, did not amount to “an unfair or deceptive act or practice.” G.L. c. 93A, § 11

.

The defendant contends that he sought the funding arrangement purely to acquire funds for personal reasons and that the plaintiff does not engage in securing private funding as part of his normal course of business. However, “an isolated [transaction] not in the normal course of business [is] not insulated ... from the reach of G.L. c. 93A, § 11

.” Frullo v. Landenberger, 61 Mass.App.Ct. 814, 821 (2004).⁸

“To establish a private person's liability under § 11

we assess the nature of the transaction, the character of the parties involved, and the activities engaged in by the parties. Other relevant factors are whether similar transactions have been undertaken in the past, whether the transaction is motivated by business or personal reasons (as in the sale of a home), and whether the participant played an active part in the transaction.” Begelfer v. Najarian, 381 Mass. 177, 191 (1980) (citation omitted).

The record supports the finding that the transaction was for business purposes. Both parties were sophisticated business people; the defendant was involved in international mining operations and the plaintiff had decades of experience raising working capital for commercial clients. The transaction between the parties was arms-length-the plaintiff provided a service to the defendant for a fee. See Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 23 (1997)

(finding commercial transaction where “arrangement ... was an arm's-length transaction between two corporations”).

Contrary to the defendant's position on appeal, there was evidence in the record that he was seeking funding not merely for personal reasons, but also “to pay for arbitration prep, expert witnesses, etc[etera] on the Oman case and also to pay for a complex case he has going on here [in Massachusetts].”⁹ Further evidence demonstrated that Burford is an international company specifically engaged in the business of funding litigation. The record does not support the defendant's characterization of the arrangement as one that is “unique.”

We now turn to whether the defendant's behavior could be found to rise to the level of an unfair or deceptive act or practice, keeping in mind that a mere nonpayment of debt normally does not “justify a finding of c. 93A liability.” Community Builders, Inc. v. Indian Motocycle Assocs., 44 Mass.App.Ct. 537, 559 (1998)

. The plaintiff argues that the defendant's refusal to pay the fee due under the terms of the consulting agreement was not a simple breach, but amounted to commercial extortion.

Commercial extortion consistently has been found to violate c. 93A. See Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 475 (1991)

( “Anthony's knowing use of a pretext to coerce HBC into paying Anthony's more than the contract required establishes [that Anthony's wilfully violated c. 93A] as a matter of law”). The defendant concedes for purposes of this appeal that the plaintiff fulfilled his end of the bargain by securing the required funds and that, as a result, he was contractually obligated to pay the plaintiff's fee. This case does not involve a “[g]ood faith dispute as to whether money [wa]s owed”; such disputes do not violate c. 93A. Duclersaint v. Federal Natl. Mort. Assn., 427 Mass. 809, 814 (1998).

The defendant argues forcefully that the evidence of extortionate motive in this record fails to support a claim under c. 93A because the plaintiff was unaware of the acts alleged to constitute unfair or deceptive behavior, and thus unaffected by them. Alternatively stated, the defendant's argument is that the law imposes no liability for unconsummated intentions to inflict harm. The argument is not without some merit as it addresses the element of causation; on this record, however, we need not reach it.

It is correct, as the defendant adduces, that the evidence includes the defendant's contemplation of several tactics intended to force the plaintiff to accept a lower fee than the one to which he was contractually entitled, but that the plaintiff was not necessarily aware of those tactics. Those tactics included a possible claim that Crowell Mooring, rather than the plaintiff, had secured the funding; this claim was advanced notwithstanding the defendant's previous deposition testimony that he had no basis for such a claim.¹⁰ In his discussions with Burr the defendant also proposed a scheme that would solicit Burford's objection to any payment of the plaintiff's fee until the Oman claim was successfully concluded, although Burford had not raised any such objection. Finally, the defendant contemplated withholding payment on the grounds that the plaintiff was unqualified due to his lack of prior experience in litigation funding, notwithstanding that the defendant was aware of this fact prior to signing the consulting agreement, and notwithstanding that the plaintiff had performed successfully.

However, there was additional evidence of improper motive. Burr testified that the defendant instructed him “to keep [the plaintiff] away from him [the defendant]” so that the defendant would not have to respond...