Sierra Marketing, Inc. v. New England Wholesale Co., Inc.

• Decision Date: 16 August 1982
• Citation: 14 Mass.App.Ct. 976,438 N.E.2d 1101
• Parties: SIERRA MARKETING, INC. v. NEW ENGLAND WHOLESALE COMPANY, INC., et al.
• Court: Appeals Court of Massachusetts

Page 1101

438 N.E.2d 1101

14 Mass.App.Ct. 976

SIERRA MARKETING, INC. v. NEW ENGLAND WHOLESALE COMPANY, INC., et al.

Appeals Court of Massachusetts Hampshire.

Argued April 13, 1982.

Decided Aug. 16, 1982.

Richard M. Howland, Amherst, for defendants.

Patrick J. Melnik, Northampton, for plaintiff.

Before BROWN, ROSE and DREBEN, JJ.

RESCRIPT.

This action was commenced by Sierra Marketing, Inc. (Sierra), against New England Wholesale Company, Inc. (New England), and its president and sole stockholder, John Regish, to recover $33,289 which Sierra alleged was due it for 900 wood stove doors sold and delivered to the defendants in 1977 by Sierra's assignor, Investment Rarities, Inc. In their answer, the defendants claimed that the stove doors were defective and asserted a number of counterclaims that included allegations that Sierra had violated G.L. c. 93A in its dealings with them. Following a jury-waived trial in the Superior Court, judgment was entered for Sierra for $24,870. That figure represents the amount claimed by Sierra less set-offs for 100 doors which the court found to be defective and a $4,864.34 payment which the court found the defendants had made in October, 1977, to Sierra's assignor in partial payment on the account at issue.

All of the parties have now appealed. The defendants allege that the judge erred in allowing Sierra to recover on its contract claim and contend that they were entitled to relief on their c. 93A counterclaim as a matter of law. They also argue that Sierra is not entitled to maintain the action because of its failure to comply with the qualification requirements of G.L. c. 181 and that the judge erred in entering judgment against Regish individually. In its cross appeal, Sierra contends that the October, 1977, payment made to its assignor was not on the account at issue and should not have been applied to reduce the amount of its recovery.

1. We consider first the defendants' argument that G.L. c. 181, § 9, precludes Sierra, a Virginia corporation, from maintaining this action because of its failure to file the certificate required by G.L. c. 181, § 4, with the State Secretary. It is settled that the qualification requirements of G.L. c. 181 are inapplicable to foreign corporations whose activities within the Commonwealth are limited to those of an interstate nature. Remington Arms Co. v. Lechmere Tire & Sales Co., 339 Mass. 131, 158 N.E.2d 134 (1959). Goodwin Bros. Leasing, Inc. v. Nousis, 373 Mass. 169, 366 N.E.2d 38 (1977). The record before us discloses nothing to indicate that the plaintiff had ever conducted any intrastate activity in Massachusetts. It appears that Sierra's activities here were limited to communications with the defendants from its Virginia offices and a 1978 trip to Hadley, Massachusetts, made by Sierra's president to discuss the defendants' account. In addition, Sierra's president offered uncontradicted testimony that Sierra never maintained an office or an employee in Massachusetts. This minimal level of activity and its obviously interstate quality leads to the conclusion that Sierra cannot be barred from the courts by G.L. c. 181, § 9. See Shulton, Inc. v. Consumer Value Stores, Inc., 352 Mass. 605, 611-612, 227 N.E.2d 482 (1967); Goodwin Bros. Leasing, Inc. v. Nousis, 373 Mass. at 175-176, 366 N.E.2d 38.

2. The defendants' second contention is that the judge erred in allowing Sierra to recover on its contract claim. The primary thrust of this somewhat vague argument appears to be that, based on the evidence before him, the trial judge was compelled to conclude that all of the doors delivered to the defendants were defective. Although the defendants introduced credible expert testimony concerning an alleged design defect in the doors, there was an abundance of evidence to support the judge's finding that no more than 100 were defective. For example, Regish himself testified that he had received complaints on only half of the 200 Sierra stoves that he had sold. There was also testimony from another Sierra licensee who had experienced a failure rate in the doors of only one to two percent and who stated that this rate was inherent in any cast iron product. An explanation of the abnormal failure rate apparently experienced by the defendants on the stoves that they had sold was offered by an employee of Investment Rarities who stated that their foundries would occasionally produce a bad "batch" of doors. In view of this evidence, the fact that the doors were delivered to the defendants in several shipments, and G.L. c. 106, § 2-607(4)'s imposition of the burden of proof on the buyer to establish any breach regarding accepted goods, we decline the defendants' invitation to tread upon the "preserve of the trial judge," Springgate v. School Comm. of Mattapoisett, --- Mass.App. ---, --- Mass.App.Ct.Adv.Sh. (1981) 257, 263, 415 N.E.2d 888 (1981), and conclude that his...