Court Opinion

ID: 6460030
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:46:48.109499+00
Date Added: 2024-06-11T15:51:49.445211
License: Public Domain

Gillerman, J.
(dissenting). I have no doubt that there was larceny in the defendant’s heart as he rewrote the first sales contract and wrote up the remaining five contracts for Nellon to sign. But it is fundamental to criminal law that “there can be no criminal liability for bad thoughts alone. ...” LaFave and Scott, Substantive Criminal Law § 1.2(b) at 10 (1986). I dissent because I conclude that the defendant’s conduct, however ex-ploitive and unfair it may have been, does not fall within the crime of larceny by false pretenses.
1. There was no evidence of a false statement of material fact. The gist of the crime of larceny by false pretenses, as the majority points out, is proof that a false statement of fact was made by the defendant upon which the victim relied. The Commonwealth failed to introduce any direct evidence that the defendant made any false statements to Nellon. Neither Nellon nor the defendant testified, nor was there a witness who testified to what he heard the two men say to each other, and there was *528no other evidence of what the defendant said to Nellon, or of what Nellon said to the defendant.
Nevertheless, the judge found that there were misrepresentations of fact made by the defendant to Nellon. He found that the statements on the purchase contracts (which he referred to as “invoices . . . prepared by the defendant”) “contain false statements of fact because they consistently undervalued the value of the trade-in and consistently overvalued the Maroney sticker prices [i.e., the manufacturer’s suggested retail price, commonly known as the ‘sticker price’]” (emphasis added).
The purchase contracts prepared by the defendant and signed by Nellon are barren of any words of representation. The contracts merely recorded the price of the vehicle sold, the trade-in allowance, the miscellaneous costs of the transaction, and the mathematical calculation of the cash due on delivery of the vehicle purchased.
The judge’s argument proves too much. He ruled, in substance, that the terms of the transactions were so unfair that the terms themselves were “false statements.” But it makes much more sense to say that if the terms were that unfair, no competent adult would accept those terms regardless of what was said. I return to this point below; it is enough to say where, as here, a contract merely recites the financial terms of a transaction, it is unreasonable to conclude that those financial terms may be taken as a representation as to the fair value of the vehicles sold and bought. A car salesperson who offers and sells a vehicle to a competent adult in excess of the sticker price, or who offers and buys a used vehicle for less than blue book has not, without more, committed larceny; this is so because the offeror has made no false statement of fact.1
The judge, not unmindful of the problem presented by this unusual case, acknowledged that (on his view of the purchase *529contracts) the statements of value “were opinions,” but he ruled that “values may be stated falsely,” citing Commonwealth v. Coshnear, 289.Mass. 516, 522 (1935).
Coshnear provides no support for the judge’s conclusions. That case involved a circular for the sale of stock which stated that “the stock [being offered for sale] was selling at a fair market price in the open market in the vicinity of” $125 per share (emphasis added). In fact, the evidence was that the defendants were purchasing the shares of the same stock at $100 per share, and “in many instances [for] much less. . . .” Id. at 523. In Coshnear, the defendant’s statement had to do with actual sales in the open market; the statement was both explicit and demonstrably false. In the case before us, there was no evidence that the defendant made any statement.
The majority, rightly perceiving that the purchase contracts cannot themselves “contain” false statements of fact, as the judge found, argues that the “finder of fact may infer a false statement as to the value of the six trucks. . . .”2
The majority’s argument does no better, it seems to me, than that of the judge. The manifestly unreasonable terms of the six transactions were not accepted by Nellon because of some unknown, untestified-to false statement of fact by the defendant upon which Nellon relied; no reasonable, competent adult would accept such extravagant terms no matter what he was told. Rather, Nellon accepted the six transactions because his impaired cognitive ability disabled him from realizing that the terms of the transactions were grossly unfair to him. The majority’s “inference” of false statements is pure conjecture. See Brown v. Commonwealth, 407 Mass. 84, 89 (1990), S.C., 414 Mass. 123 (1993).
Moreover, I believe Massachusetts decisional law does not support the proposition that in a business transaction involving the purchase and sale of property, a statement — much less an inferred statement — regarding value is a statement of fact rather than one of opinion. “It has long been settled that false *530statements concerning the market value of property are held to be matters of opinion, judgment, or seller’s talk, and do not afford any ground for a claim for damages ... in an action for false representations . . . .” Gaucher v. Solomon, 279 Mass. 296, 299 1932). See Davis v. Noone, 341 Mass. 488, 492 (1960) (“use of the words ‘fair market value”. . . would have been a matter of opinion”); Ross v. Friedman, 22 Mass. App. Ct. 513, 517 at n.8 (1986) (plaintiff sought to rescind a compromise agreement in a will contest, claiming a mutual mistake of fact regarding the value of-estate property. The court rejected the argument. Quoting from 3 Corbin, Contracts § 605 (1960), we wrote, “Value is one of the principal subjects of agreement. Each party is consciously assuming the risk of error of judgment. As to this, by business custom, by prevailing mores, by social policy, and by existing law, the rule is caveat emptor. It is also, and in equal degree, caveat vendor” (emphasis supplied); Schwanbeck v. Federal-Mogul Corp. 31 Mass. App. Ct. 390, 410 (1991), S.C., 412 Mass. 703 (1992) (“Estimates of value by a prospective seller to a prospective customer, especially a sophisticated one, cannot be seriously considered as a representation. What the seller depicts as a golden goose the buyer describes as an albatross; the seller’s lake is the buyer’s pond”); McEneaney v. Chestnut Hill Realty Corp., 38 Mass. App. Ct. 573, 575 (1995) (quoting from Restatement (Second) of Torts § 538A: “A representation is one of opinion if it expresses only. . . his judgment as to . . . value”). The core judgment embedded in the rule of caveat emptor is that offers and counter offers, without more, are not representations of value, much less a representation of the speaker’s honest belief in the fairness of the offer.
Commonwealth v. Leonard, 352 Mass. 636, 644-645 (1967), and Commonwealth v. Kenneally, 10 Mass. App. Ct. 162, 165-166 (1980), which the majority cite, are inapposite. Leonard involved false invoices regarding the number of men on the job, the amount of overtime, and the amount of supervision of the job. There was no issue of value as a statement of fact. In Kenneally, the issue was proof of the defendant’s intent to steal, not whether the expression of an opinion as to value was a statement of fact.3
*531In the end, I believe, the judge, explicitly, 4 and the majority, in more expressive but succinct terms,5 recognized that the impaired cognitive capacity of Nellon was indispensable to the result they reached. Nellon’s lack of capacity to understand and consent to transactions that no reasonable, competent adult would have accepted provides the underlying rationale for the judge’s decision and the majority’s opinion.6 Therein lies the difficulty, in my view.
2. The exploitation of an elderly or disabled person is not, without more, a crime in Massachusetts. The cases dealing with larceny by false pretenses have focused on the false representations of the defendant, not the victim’s perception of those events. See, e.g., Commonwealth v. Beckett, 373 Mass. 329 *532(1977) (defendant’s misrepresentation to the Department of Public Welfare); Commonwealth v. Catania, 377 Mass. 186 (1979) (defendant negotiated a forged cashier’s check); Commonwealth v. Crocker, 384 Mass. 353 (1981) (defendant cashed forged checks). In recent years, a number of States, recognizing the special vulnerability of elderly and disabled persons, have enacted statutes involving criminal penalties which are designed to discourage the exploitation of such persons.7
The Florida statute is the most precise and illuminates the problem at hand. It is a crime in Florida for a person to obtain or use the funds of an elderly or disabled person if the accused “knows or reasonably should know that the elderly person or disabled adult lacks the capacity to consent.” Fla Stat. c. 825.102 (1996 Supp.).
The Massachusetts Legislature did address the problem of the exploitation of elderly and disabled persons in 1995 when a statute was enacted, entitled “An Act relative to the assault, abuse, neglect and financial exploitation of an elderly or disabled person.” St. 1995, c. 297. Section 9 of c. 297, amends G. L. c. 266, § 30, the larceny statute, by adding subsection (5) which deals with larceny from a person sixty years or older, or a disabled person. However, new subsection (5) merely provides for increased penalties where the victim is a person sixty years or older, or a person with a disability. Subsection five does not change the elements of the substantive crime; it remains the same in subsection (5) as it currently appears in subsection (4): “Whoever steals, or with intent to defraud obtains by a false pretense. . . .” Moreover, St. 1995, c. 297, was passed approximately two years after a grand jury indicted the defendant charging him with the crimes for which he was convicted in this case.
The point need not be labored. Until the Legislature decides to enact appropriate remedial legislation, such as that enacted in Florida, protecting a person in Nellon’s circumstances from exploitation by unethical persons, Nellon’s lack of capacity to understand and consent to the unfair transactions imposed upon *533him by the defendant has no bearing on the crime with which the defendant is charged, and the position of the majority, in my view, cannot be maintained.8 See Commonwealth v. Drew, 19 Pick. 179, 184-185 (1837), cited with approval in Commonwealth v. Louis Constr. Co., 343 Mass. 600, 604-605 (1962). In Drew, the defendant opened and thereafter maintained a checking account as part of his plan to obtain money from the bank at a time when there were insufficient funds in his account. The defendant, without making any statement to the bank, “merely diew and presented his checks and they were paid.” Id. at 184. As planned, there were not sufficient funds in the account to cover the check. The verdict was set aside. The defendant could not be charged with having obtained money from the bank by false pretenses because he made no “representation of some fact or circumstance, calculated to mislead, which . . . [was] not trae.” Ibid. In citing Drew with approval, the court in Louis, quoted the following passage in Drew: “It is not the policy of the law to punish criminally mere private wrongs. . . [I]t would be inexpedient and unwise to regard every private fraud as a legal crime.” 343 Mass, at 605. See also Commonwealth v. True, 16 Mass. App. Ct. 709, 713 (1983).
The judgments should be reversed and the findings set aside.

The commentary to the Model Penal Code offers the following discussion to illustrate the irrelevancy in the criminal law of the unfairness of a bargain brought about by an undisclosed material fact. “Taking advantage of a known mistake that is influencing the other party to a bargain is not criminal under existing law in the absence of special circumstances imposing a duty to correct the mistake. The miner who discovers that his mine is nearly exhausted of ore may sell it to a stranger although he is fully aware that the stranger is buying under the mistaken belief that the property is still valuable as a mine.” See comment 3(f) to § 223.3 (1980).

I note that the Commonwealth did not try this case on the theory now put forward by the majority, and the judge did not decide the case on that theory. See note 4, infra. See, however, Commonwealth v. One 1986 Volkswagen GTI Auto., 417 Mass. 369, 370 n.l (1994) (“The theory of law on which by assent a case is tried cannot be disregarded when the case comes before an appellate court for review . . .”).

It is also worth noting that, to establish “value,” the majority relies on “market norms” — referring, presumably to the “sticker price” (i.e., the manufacturer’s suggested retail price) and the “blue book” of the National Automobile Dealers Association. The sticker price is self-defined as a mere *531suggestion, and the blue book, according to testimony by the Commonwealth’s witness, was merely a “guideline” which will vary with the individual transaction and “market conditions.”

During the trial the defendant moved to strike the Commonwealth’s evidence of the incompetency of Nellon. The judge denied the motion. He said it is not the Commonwealth’s theory to prove “that this defendant defrauded the victim. That is not the theory at all. . . . We agree everybody can buy cheap and sell dear. But you can’t take advantage of someone who can’t add it all up, and falls prey to this sort of cunning, as they put it. ... I mean that is all I know, So I am going to try it on their theory." (Emphasis added.)
In his judgment which he announced from the bench immediately following the conclusion of the trial, the judge emphasized that the defendant knew or should have known what the fair market value of the vehicles were, and that such values may be, and were stated falsely. Then the judge — who earlier in his opinion had found that Nellon was “borderline retarded” — pointed out that “the defendant. . . knew that [Nellon] was not really competent to enter into any contractual relationships. Competence to engage in business transactions is more than a transient surge of lucidity. It involves not merely comprehension of what is going on, but an ability to comprehend the nature and quality of the transaction, together with understanding of its significance and consequences.” (Emphasis added.)
The judge concluded that the conduct of the defendant was “inexcusable and criminal,” and found him guilty on all six indictments.

Viz.: “The days may be over when caveat emptor was a byword of capitalism and a sucker had only himself to blame.”

But for Nellon’s diminished cognitive ability, he would have been bound by the transactions, whether or not he had read or understood the agreement, see Spritz v. Lishner, 355 Mass. 162, 164 (1969), whether or not he could read, ibid., and regardless of the adequacy of the consideration, see Graphic Arts Finishers, Inc. v. Boston Redev. Authy., 357 Mass. 40, 43 (1970) (“The law does not concern itself with the adequacy of consideration; it is enough if it is valuable”), and criminal charges would not have been brought.

In Delaware, see Del Code Ann. tit. 31, § 3913 (1996); in Florida, see Fla. Stat. c. 825.102 (1996 Supp.); in Illinois, see 720 Ill. Comp. Stats. 5/16-1.3 (West 1996); in North Carolina, see N.C. Gen. Stat. § 14-32.3 (1996 Supp); in South Dakota, see S.D. Codified Laws § 22-46-3 (Michie 1997 Supp.); in Utah, see Utah Code Ann. § 76-5-111 (1996 Supp.); and in Wyoming, see Wyo. Stat. Ann. § 35-20-109 (Michie 1997).

It is not entirely irrelevant to point out that automobile salespersons are not subject to licensure by the Commonwealth, and particularized criminal penalties in connection with the sale of motor vehicles are limited to a few events. See G. L. c. 266, § 139 (altering identifying numbers); c. 266, § 92A (requiring disclosure of certain conditions affecting motor vehicles); c. 266, §§ 141 and 141A (regarding odometers and speedometers); c. Ill, § 142K (emission standards).