Source: http://nh.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180412_0000084.C01.htm/qx
Timestamp: 2019-04-23 06:43:03+00:00

Document:
FindACase | Hiam v. Homeaway. Com, Inc.
Hiam v. Homeaway. Com, Inc.
John C. Traficonte for appellant.
Jonathan M. Albano, with whom Amanda V. McGee and Morgan, Lewis & Bockius LLP were on brief, for appellee.
Before Lynch, Stahl, and Kayatta, Circuit Judges.
Duped into parting with thousands of dollars to reserve a vacation rental property in Belize that apparently did not exist, plaintiff Peter Hiam sued the owner of the website on which he found the ersatz tropical villa, claiming that the website's guarantee misled him. The district court granted summary judgment to the website's owner, HomeAway.com, Inc. ("HomeAway"). On appeal, Hiam argues that the district court incorrectly applied Massachusetts consumer protection law. Finding no error in the judgment, we affirm.
Since we are reviewing an order granting summary judgment to HomeAway, we recite the facts in the light most favorable to Hiam, the nonmoving party. Walsh v. TelTech Sys., Inc., 821 F.3d 155, 157-58 (1st Cir. 2016). Hiam enlisted the help of his adult son, Christopher, to plan a family vacation for the end of 2014. In April 2014, Christopher (on behalf of his father) checked for possible opportunities on VRBO.com, a website owned and operated by HomeAway. The parties agree that VRBO.com (short for "vacation rentals by owner") is a website-based business that allows property owners to advertise their vacation rentals to the public. VRBO.com acts like a searchable online bulletin board; it allows property owners to list their properties, but HomeAway does not itself own or manage any properties, nor does it make itself a party to any contracts between property owners and renters.
After browsing VRBO.com's offerings, Christopher identified a promising option purportedly located in Placencia, Belize. The "Jewels of Belize" estate advertised itself as a beachfront property with room for fourteen people, a private chef, transportation around Belize, and other amenities. Communicating at first through the VRBO website and then directly by email with a purported representative from the estate, Hiam and his son decided to book the property for a one-week period at the end of 2014 into early 2015. The total cost for the rental was $46, 565, which Hiam sent to the purported proprietors in two equal installments paid in April and October of 2014. Silence then ensued, and Hiam shortly thereafter realized he had been taken. The Jewels of Belize, it appears, did not even exist.
In December of 2014, Hiam directed his son to contact HomeAway for help. Two months later, HomeAway customer service informed the Hiams that HomeAway removed the listing for the property from the VRBO site "because [HomeAway was] uncertain of the availability of the property" and because no response had been received from the owner. Nonetheless, HomeAway told the Hiams that it had concluded that the property was real and legitimate, and offered them no further assistance. By this point in time, HomeAway had received customer service inquiries from Brooke Hutchens and two other unnamed individuals, each of whom claimed that the Jewels of Belize had similarly defrauded them of thousands of dollars. And previously, in August 2014, other individuals had written in to alert HomeAway that the listing was "a totally bogus scam" and depicted a property located on a Caribbean island.
At the time, HomeAway maintained a limited refund policy called the "Basic Rental Guarantee" (the "Guarantee"). We attach a copy of the Guarantee as an appendix to this opinion. The Guarantee offered a maximum $1000 refund to customers who fell victim to "Internet Fraud, " as determined and defined by HomeAway, but only when customers satisfied a series of conditions and requirements. To qualify, the customer needed to have been a "Registered Traveler" within the meaning of the Guarantee's terms, have paid for the rental through a covered payment method (excluding wire transfer services like Western Union), have been denied a refund from the payment provider and the property owner, and have reported the alleged fraud to HomeAway within just seven business days of the first event giving rise to the refund request. Additionally, the $1000 refund was only payable if HomeAway determined, in its "reasonable discretion, " that the complained-of listing constituted "Internet Fraud, " meaning it was "fictitious or illegitimate" because the property did not exist or because it was advertised with the intent of defrauding travelers.
Hiam does not seek the $1000 refund offered by the Guarantee. Rather, he claims that the Guarantee caused him to lose $46, 565 by misleading him into believing that HomeAway made reasonable efforts to keep fraudulent listings off its site. And because it seems that HomeAway does nothing to check out offerings before posting them, Hiam argues that HomeAway is liable for common law fraud and for engaging in unfair or deceptive trade practices under Massachusetts' Chapter 93A. Mass. Gen. Laws ch. 93A, § 2(a) ("Chapter 93A"). The district court concluded as a matter of law that the Guarantee was not deceptive or fraudulent in the manner alleged, and disposed of the three counts in Hiam's complaint that hinge on accepting his construction of the Guarantee as a deceptive representation. Hiam v. HomeAway.com, Inc., 267 F.Supp.3d 338, 352 (D. Mass. 2017). Hiam appeals this ruling.
Hiam's arguments on appeal train principally on the use of the word "guarantee" in the title of the "Basic Rental Guarantee." The pivotal question, one we consider de novo, is whether under Massachusetts law we should construe the use of the word "guarantee" as a representation or warranty by HomeAway to its users that some degree of pre-screening or verification of listings takes place.
Hiam argues that the answer is yes, but this argument fails in the starting blocks because there is no language at all in the Guarantee that makes any such representation or warranty. The document simply establishes a process for obtaining a refund of up to $1000, subject to various conditions. The document also references a separate program in which, for a fee, HomeAway offers the ability to participate in a broader refund plan that covers more risks and pays up to $10, 000. The only mention at all of any screening whatsoever by HomeAway takes the form of a condition to payment; that is, HomeAway will not pay a refund claim unless, among other things, the "listing is subsequently determined to be, in HomeAway's reasonable discretion, fictitious or illegitimate." In other words, when a qualified user timely makes a claim for a limited refund, HomeAway at that time checks out the listing and pays the specified refund if it determines in its reasonable discretion that the offering is illegitimate.
Nothing in this arrangement implies that HomeAway checked out the listing before receiving a claim under the Guarantee. And if there were any doubt on this point, the website's terms and conditions (by which all "Registered Traveler[s]" agree to be bound) would eliminate it. HomeAway states in those terms and conditions that "[w]e have no duty to pre-screen content posted on the Site by members, travelers or other users." HomeAway also "specifically disclaim[s] any and all liability arising from the alleged accuracy of the listings" and advises customers that they are "solely responsible for verifying the accuracy of . . . content and descriptions."
Undaunted by the force of the Guarantee's actual terms, Hiam points to regulations adopted under Chapter 93A. See 940 Mass. Code Regs. 3.01 & 3.03. Hiam construes these regulations as transforming the word "guarantee" as used in any consumer advertising into some type of "representation" about "some characteristic of the product or service." In the case of VRBO.com listings, Hiam says that the implicit "characteristic" of the products offered on the site is their reasonably verified authenticity as a result of VRBO.com's self-policing.
Having reviewed the subject regulations de novo, Smith v. Jenkins, 732 F.3d 51, 70-71 (1st Cir. 2013), we find nothing that deems every "guarantee, " no matter how worded, to be a representation of some fact concerning the guaranteed product. To the contrary, one subsection of the regulations describes that an additional duty by a seller is triggered "[w]here guarantees are employed in such a manner as to constitute representations of material facts." 940 Mass. Code Regs. 3.03(7). That wording plainly presumes that the word "guarantee" can be used in some other manner (such as, for example, to assure a refund in the event the consumer is not satisfied).
Chapter 93A regulations identify several characteristics that a guarantee should have in order to avoid being deceptive: it should "clearly and conspicuously disclose" the "nature and extent of the guarantee, " including "[w]hat product or part of the product" is covered, what part of the product is excluded, the "duration of the guarantee, " and what a claimant "must do before the guarantor will fulfill his obligation under the guarantee." 940 Mass. Code Regs. 3.03(1). Further, it must clearly identify the guarantor and disclose "exactly what the guarantor undertakes to do under the guarantee." Id. 3.03(1)(b). In turn, and tellingly, the regulation lists a "refund" as an example of what a guarantor may undertake to do. Id.
The HomeAway Guarantee performs each of these functions. It clearly discloses that the "nature and extent of the guarantee" is a conditional limited refund of 50% of the amount paid, up to $1000. Any amount lost above that is excluded from coverage. Section 4.9 of the Guarantee specifies the duration of the guarantee, requiring the consumer to notify HomeAway within seven business days of the "first event giving rise to" the reimbursement request. Section 1 requires the claimant to do a number of things before becoming eligible under the Guarantee, including requesting and being denied a refund from the property owner. The Guarantee lists these prerequisites in bullet points in a section that begins, "You qualify for the Program if you do all of the following." Subsequent sections add further detail to those requirements. Finally, the Guarantee explains exactly what the guarantor will do upon receiving a qualifying complaint: pay up to $1000 if funds are lost as a result of "Internet Fraud, " a defined term.
We agree with the district court that a factfinder could determine that HomeAway implicitly promises to conduct some kind of after-the-fact investigation before denying an otherwise qualifying refund claim. Hiam, 267 F.Supp.3d at 352. We also share Hiam's bewilderment that, after claiming to investigate the listing, HomeAway concluded that the Jewels of Belize property was legitimate. HomeAway could not even reach the putative owners, and by the time it responded to Hiam, it had received the complaints of several others who, during the same timeframe, lost money to the fraudsters and complained to customer service or otherwise wrote in to alert HomeAway that the listing was a "bogus scam booking." But Hiam does not argue that he otherwise qualified for a refund (i.e., that he was a "Registered Traveler" who made a timely claim, etc.). Nor does he argue that any deficiency in HomeAway's investigation of his complaint otherwise caused him any harm. Hiam also expressly disavows any attempt to claim a refund under the actual terms of the Guarantee. He also failed to develop in the district court or on appeal, in other than a fleeting and cursory manner, any contention that HomeAway owed him a duty of care in investigating the complaints of others and caused him harm by breaching that duty. CMM Cable Rep, Inc. v. Ocean Coast Props., Inc., 97 F.3d 1504, 1525-26 (1st Cir. 1996) (arguments not made before the district court cannot be raised for the first time on appeal); United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (arguments made in only a perfunctory manner are deemed waived). In sum, Hiam's claim concerning the effect of HomeAway's Guarantee is limited, and so too is our holding in response: we agree with the district court that the Guarantee itself is not misleading or deceptive under Massachusetts law in the manner alleged by Hiam.
Hiam also sought to hold HomeAway liable under a regulation that prohibits any "seller of travel services" from making deceptive or misleading representations. 940 Mass. Code Regs. 15.02 & 15.03. The district court rejected this claim because it decided that HomeAway was not a "seller of travel services" as defined in the applicable regulations. 267 F.Supp.3d at 348. The district court also determined that even if the regulations applied in this instance, they would be preempted by Section 230 of the Communications Decency Act ("CDA"), 47 U.S.C. § 230. 267 F.Supp.3d at 348-49.
Hiam argues that HomeAway "arranges" travel services, so it fits the regulation's definition of a "seller of travel services." 940 Mass. Code Regs. 15.02. And as a seller of travel services, Hiam argues, HomeAway violated the regulation (and therefore Chapter 93A) by "representing to Peter Hiam that the fictitious property . . . was 'legitimate, '" a false representation made in contravention of 940 Mass. Code. Regs. 15.03.
We have already rejected Hiam's argument that the Guarantee itself entailed any representation concerning the authenticity of listings. So we assume that Hiam is referring to the specific representation that "the property is legitimate" made by HomeAway in an email response to Hiam's customer service complaint. While the record would adequately support a finding that this after-the-fact representation was false, Hiam says nothing at all regarding how such an after-the-fact misrepresentation caused him any injury, nor does he develop any argument that he can prevail without proof of some injury. See Hershenow v. Enter. Rent-A-Car Co. of Bos., Inc., 840 N.E.2d 526, 533 (Mass. 2006) (recovery under Chapter 93A's private right of action requires a showing of loss). Thus, without deciding whether HomeAway is a "seller of travel services" or whether the CDA would apply if so, we affirm the grant of summary judgment as to this claim.

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