Opinion ID: 196849
Heading Depth: 3
Heading Rank: 3

Heading: Sun's Violation of Chapter 93A

Text: 3. Sun's Violation of Chapter 93A In its challenge to the district court's finding that Sun is liable under section 11, Sun maintains that its conduct was not unfair or deceptive. However, its argument on that basis is conclusory at best: Sun points to neither evidence in the record nor case law which would cast into doubt the district court's factual determination on that point.9 As neither Sun See Cambridge Plating Co., slip op. at 39. 9 Sun does cite to evidence that Damon was a businessmen who had sold gasoline and used underground storage tanks for some thirty years prior to buying the property, but only to maintain that the court must apply a heightened standard of an unfair or deceptive act or practice. We remind Sun that [s]ophistication of the parties is not mentioned in chapter 93A and the amendment of chapter 93A to cover business entities did not limit the -40- nor our review of the record provides us with grounds to find the district court erred, we affirm the lower court's application of section 11. See Schwanbeck v. Federal-Mogul Corp., 578 N.E.2d 789, 803 (Mass. 1991) (noting that whether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact), rev'd on other grounds, 592 N.E.2d 1289 (Mass. 1992). Sun does look to Winter Panel Corp. v. Reichhold Chems., Inc., 823 F. Supp. 963 (D. Mass 1993), for support. There, plaintiff alleged that the defendant chemical supplier made false statements about its ability to supply the plaintiff with chemicals. Sun acknowledges that the Winter Panel court noted that [k]nowing non-disclosure of information necessary to make affirmative statements complete or non-misleading will give rise to an action for misrepresentation, including an action under chapter 93A. Id. at 975. Sun nonetheless seeks to save itself from liability by reliance on the court's additional statement that [s]imply neglecting to discuss [defendant's representatives'] lack of practical experience with the precise methods of production pursued by Winter Panel, however, does not at present seem to be the kind of knowing omission that achieves statute's protection to small, unsophisticated businesses. V.S.H. Realty, Inc. v. Texaco, Inc., 757 F.2d 411, 418 (1st Cir. 1985). Regardless of the level of the parties' sophistication, we apply the well-developed standard for section 11 actions between two persons engaged in business. Of course, their relative levels of sophistication may enter into the fact-based analysis the court carries out in weighing whether a party's act was unfair or deceptive. -41- the level of rascality necessary to find a violation of chapter 93A. Id. As we have already affirmed the district court's finding of misrepresentation, it is manifest that Sun's acts sink below the level of simply neglecting to discuss the 1974 contamination. Winter Panel offers Sun no relief. Sun's primary argument against the district court's holding blurs the line between section 11 liability and multiple damages.10 Specifically, it contends that since the district court apparently found Sun's conduct was not willful and knowing, Sun cannot have engaged in common law fraud. Since it could not have engaged in fraud, it concludes, its conduct did not rise to the level of intentional misconduct, beyond mere negligence or inadvertence, that section 11 demands. We disagree. As noted above, the district court refused to award multiple damages here on the basis that [m]ultiple damages are not mandated when misrepresentation occurs. Only callous and intentional violations deserve multiple damages treatment. In this instance, we believe the evidence of bad faith or willful intent to deceive is insufficient to merit a punitive award of multiple damages. 10 Sun also makes the circular argument that if its conduct amounts to negligence, it has not met the requirement of rascality needed for section 11, since negligence cannot be the basis for a section 11 violation. To the contrary, negligence can provide the basis for chapter 93A liability, so long as it is paired with an unfair or deceptive act or practice -- in other words, negligence plus rascality equals liability. See Squeri, 588 N.E.2d at 24; Glickman v. Brown, 486 N.E.2d 737, 741 (Mass. App. Ct. 1985); see, e.g., Briggs v. Carol Cars, Inc., 553 N.E.2d 930 (Mass. 1990) (upholding application of sections 2 & 9 of chapter 93A where defendant made reckless misrepresentation). -42- (District Court Findings of Fact and Conclusions of Law, at 12 (citations omitted)). As Sun itself indicates, reading the district court opinion as finding that Sun was not at all knowing or willful is inconsistent with the first element of the tort of misrepresentation, i.e. that a party make a false representation with the knowledge of its falsity. See Barret Assocs., Inc., 190 N.E.2d at 868. We understand the district court opinion as indicating that there was evidence of bad faith and willful intent to deceive, but that some quantum of knowing or willful violation must be met before a party is entitled to punitive damages under chapter 93A. Indeed, shades of culpability are supposed to matter in applying the punitive damages provision in the statute. Cambridge Plating Co., slip op. at 42. Our reading is consistent with the district court's specific finding that when Damon asked Laubinger if Sun had experienced any problems with the station and underground tanks, Laubinger replied that it was a good station, despite his knowledge of the 1974 contamination. Cf. VMark Software, 642 N.E.2d at 596 n.15 (We put great stock in the findings of the trial judge on issues such as intent and motivation, since he was in a superior position to assess the weight and credibility of the witnesses, and there is no showing that his findings were clearly erroneous.). The case law supports this reading. In VMark Software, Inc. v. EMC Corp., cited by the district court, the trial court found VMark guilty of misrepresentation, but did not grant EMC -43- multiple damages under section 11. EMC claimed that the scienter requirement for the tort of misrepresentation automatically triggered section 11's mandatory doubling of damages for a knowing violation of chapter 93A. The court disagreed, finding that although VMArk's misstatements were made with sufficient awareness of the facts for it to be liable under the traditional tort formula, they were not made so 'knowingly' as to warrant the punitive sanctions of double damages under c. 93A. Id. at 595. We recently reaffirmed that [l]iability under Chapter 93A for conduct amounting to intentional misrepresentation does not automatically trigger punitive damages. There must be something more. Cambridge Plating Co., slip op. at 42. Accordingly, the district court's conclusion that Sun's actions were not knowing and willful enough to require punitive damages is not inconsistent with intentional misrepresentation.