McDermott v. Marcus, Errico, Emmer & Brooks, P.C.
775 F.3d 109
1st Cir.2014Background
- McDermott, owner of Pondview Condominiums units 104 and 105, was charged monthly assessments and late fees by Pondview.
- Pondview threatened liens, collected costs and attorney's fees, and engaged MEEB to collect from McDermott after delinquency.
- From 2005–2008, MEEB filed nine collection actions; two went to trial and MEEB was awarded attorney's fees.
- MEEB allegedly contacted McDermott’s mortgagees and his own creditors, sometimes without his consent or knowledge, and sometimes while he was represented by counsel.
- McDermott sued in federal court asserting Chapter 93A and FDCPA violations; the magistrate initially found per se 93A liability from FDCPA violations and awarded damages, later reversed on reconsideration following Klairmont.
- On appeal, the First Circuit reversed in part and held that FDCPA violations can constitute per se Chapter 93A liability independent of a separate trade-or-commerce finding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDCPA violations can yield per se Chapter 93A liability. | McDermott contends FDCPA triggers per se 93A liability. | MEEB argues no per se 93A liability without trade-or-commerce; Klairmont limits per se to AG regulations, not independent statutes. | FDCPA violations constitute per se Chapter 93A liability. |
| Whether 940 C.M.R. § 3.16(4) permits per se 93A liability for FDCPA violations. | Regulation makes FDCPA violations per se 93A violations. | Regulation does not override trade-or-commerce requirement; Klairmont controls. | Regulation does not independently make FDCPA per se; Klairmont's framework applied; but court ultimately finds per se liability via federal statute. |
| Whether Massachusetts incorporated federal consumer protection law (FTC Act/FDCPA) to create per se 93A liability. | Massachusetts wholly incorporated FTC Act into 93A; FDCPA violations per se violate 93A. | Per se liability requires unfair/deceptive acts in trade or commerce; not automatic from federal statute alone. | FDCPA violations constitute per se 93A violations under 93A as incorporated from the FTC Act. |
| Whether MEEB’s FDCPA violations were willful/bad faith justifying multiple damages. | Willful violations justify double/treble damages under 93A § 9(3). | Magistrate found no bad faith; Chapter 183A pre-suit notices not required; no basis for multiple damages. | No clear error; no willful/bad faith finding; no multiple damages awarded. |
Key Cases Cited
- Klairmont v. Gainsboro Restaurant, Inc., 987 N.E.2d 1247 (Mass. 2013) (AG regulations cannot render all statutory violations per se Chapter 93A; per se must still satisfy trade/deception.)
- Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912 (Mass. 1993) (violation of the unfair claims settlement act constitutes per se 93A violation.)
- Reddish v. Bowen, 849 N.E.2d 901 (Mass. App. Ct. 2006) (statutory text can create per se 93A liability under Chapter 142A § 17.)
- Slaney v. Westwood Auto, Inc., 322 N.E.2d 768 (Mass. 1975) (mass incorporation of FTC Act into 93A; guiding interpretations of 'unfair'/'deceptive'.)
- Kraft Power Corp. v. Merrill, 981 N.E.2d 671 (Mass. 2013) (93A defines unfair/deceptive conduct by reference to FTC Act interpretations.)
- Barnes v. Fleet Nat’l Bank, N.A., 370 F.3d 164 (1st Cir. 2004) (statutory interpretation of per se 93A liability across federal/FTC framework.)
- French v. Corporate Receivables, Inc., 489 F.3d 402 (1st Cir. 2007) (earlier per se statements regarding FDCPA violations and 93A.)