Opinion ID: 198029
Heading Depth: 3
Heading Rank: 1

Heading: Unfair or Deceptive

Text: 33 Under §§ 2 and 11 of Chapter 93A, it is unlawful for those engaged in trade or commerce to employ unfair methods of competition and unfair or deceptive acts or practices in business transactions with others engaged in trade or commerce. Chapter 93A was designed to encourage more equitable behavior in the marketplace and impose liability on persons seeking to profit from unfair practices. Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 679 N.E.2d 191, 208 (1997) (citation, internal quotation marks and alterations omitted). The statute does not specifically define unfair or deceptive. See Ahern, 85 F.3d at 798 ([T]he statute does not contemplate an overly precise standard of ethical or moral behavior. It is the standard of the commercial marketplace. (citation and internal quotation marks omitted)); Linkage Corp., 679 N.E.2d at 209 (A practice is unfair if it is within the penumbra of some common-law, statutory, or other established concept of unfairness; is immoral, unethical, oppressive, or unscrupulous; and causes substantial injury to other businessmen. (citation, internal quotation marks and alterations omitted)). 34 The courts of Massachusetts have consistently held that conduct in disregard of known contractual arrangements and intended to secure benefits for the breaching party constitutes an unfair act or practice for c. 93A purposes. Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 583 N.E.2d 806, 821 (1991) (citation and internal quotation marks omitted). See Pepsi-Cola Metro. Bottling Co. v. Checkers, Inc., 754 F.2d 10, 17-19 (1st Cir.1985) (Chapter 93A violation found where payment withheld as a wedge to enhance bargaining power); Wang Labs., Inc. v. Business Incentives, Inc., 398 Mass. 854, 501 N.E.2d 1163 (1986). Where one party to an agreement employs a breach of contract to gain an unfair advantage over the other, the breach has an extortionate quality that gives it the rancid flavor of unfairness. Atkinson v. Rosenthal, 33 Mass.App.Ct. 219, 598 N.E.2d 666, 670 (1992) (citation omitted). Indeed, conduct largely equivalent to Dooyang's second act of deception has recently been held to violate Chapter 93A. See Community Builders, Inc. v. Indian Motocycle Assocs., Inc., 44 Mass.App.Ct. 537, 692 N.E.2d 964, 978 (1998) (defendants withheld payment unconscionably, stringing [plaintiff] along ... with a purpose of coercing [plaintiff] to settle for substantially less compensation than the parties had agreed to before the services were performed). 35 The district court's factual finding of unfair practices is clearly supported by the evidence. The court based its Chapter 93A ruling both on testimony that Dooyang did not intend to pay ADL for the work it performed and on documents which stated that Dooyang was avoiding paying its creditors by all possible means and which created a mechanism for measuring the success of its strategy by listing the reductions that resulted from Dooyang's deceptive tactics. As the district court found, Dooyang intended to force ADL into an unfavorable settlement by threatening litigation. There was no error in the court's finding that the second act of deception amounted to an unfair or deceptive act or practice under Chapter 93A. 36 Chapter 93A liability is decided case-by-case, and Massachusetts courts have consistently emphasized the fact-specific nature of the inquiry. Linkage Corp., 679 N.E.2d at 209. We emphasize that this case did not involve a good faith dispute over billing or a simple breach of contract, each of which is an insufficient basis for 93A liability. See, e.g., Pepsi-Cola Metro. Bottling Co., 754 F.2d at 18 (stating that mere breaches of contract, without more, do not violate [C]hapter 93A); Whitinsville Plaza, Inc. v. Kotseas, 378 Mass. 85, 390 N.E.2d 243, 251 (1979). This case is not like Quaker State Oil Refining Corp. v. Garrity Oil Co., 884 F.2d 1510, 1513-14 (1st Cir.1989), which held that refusal to pay an invoice without more was not enough to constitute a 93A violation. Here, Dooyang's wrongful purpose was to extract a favorable settlement from ADL for less than the amount Dooyang knew that it owed by repeatedly promising to pay, not doing so, stringing out the process, and forcing ADL to sue. 37 These developments in Massachusetts law will require the Massachusetts courts to give greater definition and clarity to the parameters of § 11 liability for those who do business in Massachusetts. Mere failure to pay a bill, standing alone, does not, it appears, give rise to such liability. See id. Where there is a good faith dispute over whether payment is actually owed, and that dispute is clearly articulated, it also appears there is no Chapter 93A liability. See id.; Levings v. Forbes & Wallace, Inc., 8 Mass.App.Ct. 498, 396 N.E.2d 149, 153 (1979). Of course, due to the fact-specific nature of the Chapter 93A inquiry, generalizations are always somewhat indeterminate. See Cambridge Plating Co., 85 F.3d at 769 (Perhaps by design, the dimensions of Chapter 93A liability are difficult to discern with precision.). This case does not involve a mere failure to pay a bill, and the facts are sufficiently strong that we easily conclude they are actionable as unfair or deceptive under Chapter 93A. We leave to the development of state law where the lines will be drawn in these the check is in the mail type cases.