38 Mass. App. Ct. 545 | Mass. App. Ct. | 1995
This controversy arises out of an order placed on March 1, 1988, by the plaintiff Standard Register Company (Standard Register) with the defendant Bolton-Emerson, Inc. (Bolton), for the manufacture and delivery of a label machine known as a hot melt coater. We summarize the facts (none of which is challenged) as set forth by the
Tired of the pattern of delay and empty promises perpetrated by Fitzgerald, Urquhart, and Bolton, Standard Register finally cancelled the contract, obtained a coater from another source, and sued for damages. Standard Register filed a two-count complaint claiming breach of contract against Bolton seeking a return of its deposit, cost of the replacement coater, moving expenses, and lost profits; and claiming a violation of G. L. c. 93A, § 11, against both the corporation and Fitzgerald and Urquhart individually for their misrepresentations seeking multiple damages and attorney’s fees. Following a bench trial, a judge of the Superior Court ruled in favor of Standard Register on both counts. Judgment entered against all defendants in the amount of $1,163,474 on both the contract and G. L. 93A, § 11, counts combined, includ
The defendants raise two issues on appeal, both limited to an attack on the amount of damages that the trial judge determined Standard Register was legally entitled to recover on its complaint. First, all defendants argue that Standard Register was not entitled to damages for lost profits under either count since the limitation of liability provisions of the contract precluded recovery of all such consequential damages.
1. Lost profits damages. Bolton and Standard Register, as commercially sophisticated parties, were free to limit or exclude prospective consequential damages arising from a breach of the coater contract so long as the waiver was not unconscionable. G. L. c. 106, § 2-719(3). See also Deerskin Trading Post, Inc. v. Spencer Press, Inc., 398 Mass. 118, 124 (1986). However, Standard Register alleged, and the judge ruled, that the lost profits damages suffered by Standard Register were caused by the defendants’ unfair or deceptive acts of misrepresenting Bolton’s ability to perform the coater contract in violation of G. L. c. 93A, § 11, and not a result
An action pursuant to G. L. c. 93A is “neither wholly tortious nor wholly contractual in nature.” Slaney v. Westwood Auto, Inc., 366 Mass. 688, 704 (1975). See also York v. Sullivan, 369 Mass. 157, 164 (1975); Heller v. Silverbranch Constr. Corp., 376 Mass. 621, 626 (1978). Even so, claims of unfair or deceptive acts or practices may be founded on activities that more closely resemble either a traditional breach of contract action, see Linthicum v. Archambault, 379 Mass. 381, 387 (1979) (breach of warranty), or an action in tort. See Levings v. Forbes & Wallace, Inc., 8 Mass. App. Ct. 498, 504 (1979) (misrepresentation). See also Computer Sys. Engr., Inc. v. Qantel Corp., 571 F. Supp. 1365, 1370 (D. Mass. 1983), affd., 740 F.2d 59, 70 (1st Cir. 1984). Such a classification of a chapter 93A claim as either a contract or tort action has been dispositive, for instance, in determining the scope and effect of a choice-of-law provision in a contract. See Worldwide Commodities, Inc. v. J. Amicone Co., 36 Mass. App. Ct. 304, 307-308 (1994). See also Computer Sys. Engr., Inc. v. Qantel Corp., supra; Northeast Data Sys. Inc. v. McDonnell Douglas Computer Sys. Co., 986 F.2d 607, 610 (1st Cir. 1993).
Likewise, two recent cases involving the interaction of contractual limitation provisions and § 11 claims show that a determination of whether a limitation of remedies provision precludes recovery under chapter 93A depends on the classification of the G. L. c. 93 A, § 11, claim as one in contract or tort. First, in Canal Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. 369, 379 (1990), the court held that a limitation
In the present case, the misrepresentations of the defendants are at the core of Standard Register’s claim for a violation of G. L. c. 93A, § 11, thereby making it a chapter 93A claim which sounds in tort rather than contract. Compare Worldwide Commodities, Inc. v. J. Amicone Co., 36 Mass. App. Ct. at 307-308. The trial judge concluded that the defendants violated § 11 by misrepresenting Bolton’s ability to complete the coater so as to induce Standard Register both to enter into the contract and to refrain from cancelling the contract. See Computer Sys. Engr., Inc. v. Qantel Corp., 571 F. Supp. at 1367, 1370; Jurgens v. Abraham, 616 F. Supp. 1381, 1386 (D. Mass. 1985). The facts supporting the deceitful conduct of the defendants which are the basis of the 93A claim are distinct from those giving rise to the breach of contract claim. In addition, the § 11 claim is predicated on the tort theory of common-law misrepresentation rather than merely a restatement of a breach of warranty claim under the contract as contrasted with Canal Electric. We hold that because the tort-like elements of the chapter 93A claim predominate over the contract elements, the limitation of liability provisions in the coater contract are ineffective to bar Standard Register from recovering for a violation of G. L. c. 9 3A, § 11, based on such deceitful activity. The only difference between the present case and VMark is that Standard Register pleaded its misrepresentation claim as part of its chapter 93A count rather than in a separate tort count. The result is that, unlike in VMark, there is no issue of duplicative actual damages, and Standard Register can recover under its § 11 claim any and all damages proximately caused by the defendants’ misrepresentations, including lost profits.
Even if the limitation of liability provisions of the coater contract shielded Bolton as the corporate defendant from liability under G. L. c. 93A, § 11, the provisions have no effect on the independent liability of Fitzgerald and Urquhart who
2. Division of chapter 93A damages. Urquhart and Fitzgerald argued, at an additional hearing to assess damages and attorney’s fees under G. L. c. 93A, § 11, held by the judge following the trial, that their violations of chapter 9 3 A, and thus their personal liability, did not occur until after
3. Appellate counsel fees. The plaintiff has asked for an award of appellate attorney’s fees. The plaintiff may file forthwith a petition to a single justice of this court for such fees, together with the necessary back-up material, and the defendants shall have ten days to respond to such submission, all in accordance with the procedure set forth in Yorke Mgmt. v. Castro, 406 Mass. 17, 20 (1989).
Judgment affirmed.
There are two limitation of remedies provisions in the coater contract: “1. Warranties and Buyer’s Exclusive Remedies. . . .
“BUYER’S REMEDIES with respect to any product sold by us shall be LIMITED EXCLUSIVELY to the right to replacement or repair f.o.b. Lawrence, Mass., or refund as above provided. IN NO EVENT SHALL WE BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHICH MAY ARISE IN CONNECTION WITH SUCH PRODUCT.” “6. Delivery. . . .
“Bolton-Emerson, Inc. shall not be liable for delay due to causes beyond its reasonable control .... IN NO EVENT SHALL WE BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHICH MAY ARISE IN CONNECTION WITH ANY SUCH DELAY.”
The parties briefed and argued whether the consequential damages clause was properly pleaded and raised below at trial and whether the clause applied to these facts according to the rules of contract interpretation. Since we decide that the limitation clause has no effect on a claim under chapter 93A founded on a tort-based theory of fraud irrespective of its validity and meaning, we do not need to reach such issues.
The measure of “actual” damages afforded a buyer of goods in an action for breach of contract is the difference between the market price or the cover price and the contract price. G. L. c. 106, § 2-713. G. L. c. 106, § 2-712. See also Productora e Importadora de Papel, S. A. de C. V. v. Fleming, 376 Mass. 826, 838 (1978).
Chapter 93A provides for the recovery of actual damages as well as attorney’s fees. “Actual” damages under chapter 93A are similar to compensatory damages in tort in that an injured party can recover all such damages proximately caused by the defendant’s unfair or deceptive conduct. DiMarzo v. American Mut. Ins. Co., 389 Mass. 85, 101 (1983). The court in VMark refused to allow recovery of actual damages on the chapter 93A count because they were duplicative of the damages awarded under the tort count for misrepresentation. VMark Software, Inc. v. EMC Corp., supra at 621. Chapter 93A also authorizes the award of double or treble damages in circumstances of a knowing or wilful violation of the statute. See Canal Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. at 379 n.10.