Court Opinion

ID: 4031759
Source: CourtListenerOpinion
Date Created: 2016-09-07 15:07:39.188497+00
Date Added: 2024-06-11T14:35:58.780074
License: Public Domain

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us

SJC-12033

                  LIMOLINER, INC.   vs.   DATTCO, INC.

            Suffolk.    May 2, 2016. - September 7, 2016.

 Present:     Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &
                              Hines, JJ.1

Consumer Protection Act, Businessman's claim, Unfair or
     deceptive act. Regulation. Attorney General.

     Certification of a question of law to the Supreme Judicial
Court by the United States Court of Appeals for the First
Circuit.

     Robert E. Curtis, Jr., for the plaintiff.
     Christopher S. Williams for the defendant.

     LENK, J.    The plaintiff, Limoliner, Inc. (Limoliner), owns

and operates a fleet of luxury motor coaches.      In 2011, it hired

the defendant, Dattco, Inc. (Dattco), to perform repair work on

one those of vehicles, verbally requesting certain specific

repairs.    The defendant recorded most of those requests in

     1
       Justices Spina, Cordy, and Duffly participated in the
deliberation on this case prior to their retirements.
                                                                   2

writing, but failed to write down the plaintiff's request to

repair one of the vehicle's key electrical components.      The

defendant then failed to make any repairs to that component.

Thereafter, the plaintiff commenced an action in the Superior

Court, alleging, among other things, that, by not recording the

plaintiff's verbal request in writing, the defendant had

violated G. L. c. 93A, § 2 (a), as interpreted by 940 Code Mass.

Regs. § 5.05(2) (1993) ("unfair or deceptive act" for automobile

repair shop not to record in writing specific repairs requested

by customer).   The case was removed to the United States

District Court for the District of Massachusetts on the basis of

diversity jurisdiction.   Following a jury-waived trial, a

magistrate judge rejected the plaintiff's claim under 940 Code

Mass. Regs. § 5.05(2), concluding that the regulation applied

only to consumer transactions, and not to transactions where the

customer is another business.   The plaintiff appealed, and the

United States Court of Appeals for the First Circuit certified

to us the following question:

         "Does 940 [Code Mass. Regs.] § 5.05 apply to
    transactions in which the customer is a business entity?"

We conclude that this regulation does apply to transactions in

which the customer is a business entity and, accordingly, answer

"yes" to the certified question.
                                                                          3

    1.     Background.    "We set forth below the relevant

background and procedural history of the case contained in the

[decision of] the First Circuit [certifying a question to this

court], occasionally supplemented by undisputed information in

the record."    Insurance Co. of the State of Pa. v. Great N. Ins.

Co., 473 Mass. 745, 746 (2016).          See Limoliner, Inc. v. Dattco,

Inc., 809 F.3d 33 (1st Cir. 2016) (Limoliner).

    Limoliner is a Massachusetts corporation that operates a

fleet of luxury motor coaches.       Id. at 34.     Dattco is a

Connecticut corporation that repairs motor vehicles, including

buses and coaches.       Id. at 34-35.    In May, 2011, representatives

of Limoliner met with representatives of Dattco regarding one of

Limoliner's motor coaches, which was in need of extensive

repairs.    Id. at 35.     At this meeting, Limoliner verbally

requested that Dattco repair, among other things, the vehicle's

inverter.    The inverter is "an important component of

LimoLiner's vehicles" because it converts power generated by the

vehicle into a form usable by passengers, who may plug their

electronic devices into onboard outlets.         Dattco agreed to make

the necessary repairs, including those to the inverter.           Id.

Following this meeting, Dattco generated a written list of

repairs that did not include the inverter.          Id.

    In August, 2011, repairs to the motor coach -- including to

the inverter -- were not yet complete, and Limoliner "became
                                                                        4

concerned about the time Dattco was taking to repair the

vehicle."    Id.   Later that month, Dattco informed Limoliner that

the vehicle was ready to be picked up, although the inverter had

not yet been fixed.     Id. Dattco sent Limoliner an invoice for

$10,404, which Limoliner refused to pay.     Id.   Dattco, however,

"would not return [the vehicle] without payment of its invoice."

      In October, 2011, Limoliner commenced this action in the

Superior Court, asserting claims for breach of contract,

misrepresentation, negligence, and replevin.       Id.   It also

asserted a claim pursuant to G. L. c. 93A, § 2 (a), alleging

that Dattco had engaged in an "unfair or deceptive act[] or

practice[]" by failing to record in writing, as required by 940

Code Mass. Regs. § 5.05, Limoliner's verbal request for inverter

work.2    Id. at 36.   After removing the case to Federal court on

the basis of diversity jurisdiction, the defendant asserted

counterclaims for breach of contract and quantum meruit.3          Id. at

35.

      2
       Limoliner contends that Dattco violated 940 Code Mass.
Regs. § 5.05 (1993) in other respects as well. Limoliner, Inc.
v. Dattco, Inc., 809 F.3d 33 (1st Cir. 2016) (Limoliner). The
trial judge did not make findings of fact with respect to these
other claims, however, presumably because she concluded that
this regulation did not apply to inter-business disputes and
that findings on this issue were not necessary.
      3
       Before the case was removed to the Federal court, a judge
of the Superior Court ordered Dattco to return the vehicle once
Limoliner deposited $10,404 with the clerk's office. Limoliner
                                                                    5

     Following a jury-waived trial, a magistrate judge found for

Limoliner on the breach of contract claim.4      She found for Dattco

on Limoliner's remaining claims, as well as on the counterclaim

for quantum meruit.5     Id. at 36.   In rejecting Limoliner's

regulatory claim under 940 Code Mass. Regs. § 5.05, the judge

concluded that the provision at issue did not apply to disputes

between businesses, and that, accordingly, Limoliner was not

entitled to relief.      Id.

     Limoliner appealed from various aspects of the decision.

The United States Court of Appeals for the First Circuit

affirmed the judgment, except with respect to the regulatory

claim.    Id. at 42.   On that issue, it certified to us the

question we now address.

     2.    Discussion.   Title 940 Code Mass. Regs. § 5.05

provides, in relevant part:

          "(2) It is an unfair or deceptive act or practice for
     a repair shop, prior to commencing repairs on a customer's

deposited the money, and Dattco then returned the vehicle.
Limoliner, supra at 35.
     4
       In light of this finding, the judge rejected Dattco's
counterclaim for breach of contract. Limoliner, supra at 35-36.
See Lease-It, Inc. v. Massachusetts Port Auth., 33 Mass. App.
Ct. 391, 397 (1992) ("material breach by one party excuses the
other party from further performance under the contract"
[citation omitted]).
     5
       After subtracting Dattco's award for quantum meruit,
Limoliner was awarded a total of $25,123.89. Limoliner, supra
at 36.
                                                                   6

    vehicle, to fail to record in writing the following
    information:

         ". . .

         "(e) The specific repairs requested by the customer,
    or, if the customer has not requested specific repairs, a
    brief description of the problems the customer has
    encountered with the vehicle which caused him to bring it
    to the repair shop."

This regulation was promulgated by the Attorney General pursuant

to G. L. c. 93A, § 2, which forbids "unfair or deceptive acts or

practices in the conduct of any trade or commerce," G. L.

c. 93A, § 2 (a), and authorizes the Attorney General to "make

rules and regulations," G. L. c. 93A, § 2 (c), "identify[ing]

particular business practices as falling within the[] scope" of

the statute's prohibition.   Purity Supreme, Inc. v. Attorney

Gen., 380 Mass. 762, 771 (1980).

    As amended in 1972, the protections provided by G. L.

c. 93A, § 2 (a), apply both to transactions between consumers

and businesses, and to transactions involving "persons engaged

in trade or commerce . . . with other persons also engaged in

trade or commerce."   Manning v. Zuckerman, 388 Mass. 8, 12

(1983), citing G. L. c. 93A, § 11.   The amended statute also

expressly authorizes the Attorney General to promulgate rules

regulating such transactions.   See G. L. c. 93A, § 11

(businesses protected against any "practice declared unlawful

by . . . regulation" [emphasis supplied]).   Thus, it is
                                                                   7

undisputed that, if the Attorney General so intended, 940 Code

Mass. Regs. § 5.05 would apply to inter-business transactions.

The question is whether the Attorney General actually intended

that it be applied in this way.   See Knapp Shoes, Inc. v.

Sylvania Shoe Mfg. Corp., 418 Mass. 737, 745 (1994) (Knapp)

(central issue in interpreting Attorney General's regulation is

what "the Attorney General had in mind").   For the reasons that

follow, we conclude that 940 Code Mass. Regs. § 5.05 was

intended to apply to inter-business transactions.

    "The general and familiar rule is that a [regulation] must

be interpreted according to the intent of [the officer or agency

responsible for its promulgation] ascertained from all its words

construed by the ordinary and approved usage of the language,

considered in connection with the cause of its enactment, the

mischief or imperfection to be remedied and the main object to

be accomplished, to the end that the purpose of its framers may

be effectuated."   Knapp, supra at 744-745, quoting Industrial

Fin. Corp. v. State Tax Comm'n, 367 Mass. 360, 364 (1975).

    As with statutes, we begin our analysis of the regulation

by looking to its language.   See Associated Subcontractors of

Mass., Inc. v. University of Mass. Bldg. Auth., 442 Mass. 159,

164 (2004) ("analysis begins with the statutory language, 'the

principal source of insight into Legislative purpose'" [citation

omitted]); Knapp, supra at 744 (we analyze "[l]anguage in a
                                                                   8

regulation[] like language in a statute").    The regulation

provides that "[i]t is an unfair or deceptive act or practice

for a repair shop, prior to commencing repairs on a customer's

vehicle, to fail to record in writing the . . . specific repairs

requested by the customer" (emphasis supplied).    See 940 Code

Mass. Regs. § 5.05(2).   By its terms, then, the regulation

applies only to repairs made on vehicles belonging to

"customers."   The question before us is whether a "customer"

must be a consumer, or also may be another business.

    The regulation's own language indicates the answer to this

question.   The word "customer" is defined in the first section

of the Attorney General's motor vehicle regulations as "any

person who . . . seeks to have repairs . . . performed by a

repair shop on a motor vehicle" (emphasis supplied), 940 Code

Mass. Regs. § 5.01 (1993), and, in that same section, "person"

is defined as "an association, a corporation, an institution, a

natural person, an organization, a partnership, a trust or any

legal entity."   Id.   Connecting these definitions, it is

apparent that the term "customer" refers to "corporations" and

other "legal entities," which, by definition, cannot be

consumers, see Black's Law Dictionary 382 (10th ed. 2014)

(consumer is "a natural person who uses products for personal

rather than business purposes" [emphasis supplied]), and which

are most often created for business purposes.   See id. at 415
                                                                      9

(corporation is "[a]n entity [usu[ally] a business] having

authority under law to act as a single person").

       That the "customer" protected by the regulation may be a

business emerges, also, from the regulation's definition of

"customer" as a person who seeks "repairs . . . on a motor

vehicle" (emphasis added).      See 940 Code Mass. Regs. § 5.01.

The term "motor vehicle" is defined as having "the same meaning

as that set forth in [G. L.] c. 90, § 1," 940 Code Mass. Regs.

§ 5.01, and, in that statute, "motor vehicle" refers to an array

of vehicles -- "bus[es]," "mobile construction crane[s],"

"tandem unit[s]," "tractor[s]" -- whose uses ordinarily are

commercial in nature rather than personal.       See G. L. c. 90,

§ 1.       Indeed, a "bus" -- the type of vehicle at issue here -- is

explicitly defined in commercial terms.       See id. (bus is "any

motor vehicle operated upon a public way . . . for the carriage

of passengers for hire").

       Of significance, also, is that another provision in the

Attorney General's motor vehicle regulations contains a clause

specifically limiting its applicability to "motor vehicles which

are purchased primarily for personal, family or household

purposes."      See 940 Code Mass. Regs. § 5.04 (1993).   No such

clause is employed here.6      Given that the Attorney General knew

       6
       Similarly, other of the Attorney General's regulations --
outside the motor vehicle context -- have clauses limiting their
                                                                   10

how to limit motor vehicle regulations to consumer transactions,

and in fact had done so in another context, we assume that the

failure to do so here "was purposeful."   See Bulger v.

Contributory Retirement Appeal Bd., 447 Mass. 651, 659-660

(2006).   See also Bishop v. TES Realty Trust, 459 Mass. 9, 13

(2011) (where "Legislature demonstrated that it knew how to"

implement particular distinction, "we will not impute . . . an

intent" to create such distinction "[w]here the Legislature has

not done so" [citation omitted]).

     Our reasoning in Knapp, supra, supports this analysis.

There, we held that a provision from a different section7 of the

Attorney General's regulations promulgated under G. L. c. 93A,

§ 2 (c), did not apply to inter-business transactions.     See

Knapp, supra at 738; 940 Code Mass. Regs. § 3.08(1) (1993).      We

based this conclusion, in large part, on the fact that the

provision at issue "was promulgated [in 1971,] when G. L. c. 93A

protected consumers, but not persons engaged in trade or

applicability to "natural persons." See, e.g., 940 Code Mass.
Regs. § 7.03 (2012) (debtor "means a natural person"); 940 Code
Mass. Regs. § 8.03 (2008) (borrower "means any natural person");
940 Code Mass. Regs. § 30.03 (2011) (customer "means any natural
person").
     7
       The provision at issue in Knapp Shoes, Inc. v. Sylvania
Shoe Mfg. Corp., 418 Mass. 737 (1994) (Knapp), appears in 940
Code Mass. Regs. §§ 3.00 (2014), the sections concerning
"Customer Protection: General Regulations," while the one at
issue here appears in 940 Code Mass. Regs. §§ 5.00 (1993), the
"Motor Vehicle Regulations."
                                                                     11

commerce, from unfair or deceptive acts or practices."      See

Knapp, supra at 744.   Here, by contrast, the motor vehicle

regulations -- among them the provision at issue –- were

promulgated approximately four years after the Legislature gave

the Attorney General the power to regulate inter-business

transactions under G. L. c. 93A.   See 940 Code Mass. Regs.

§ 5.07 (1980) (provisions took effect, variously, in 1976 and

1977); St. 1972, c. 614 (applying statute's protections to

businesses).

     In addition, we noted in Knapp, supra, that the regulation

at issue in that case "use[d] the term 'consumer' to denote the

persons protected by [its] provisions."    Here, the term

"consumer" is not used.   The regulation refers only to

"customers," a term defined to include corporations and other

legal entities that, by definition, cannot be consumers.8     940

Code Mass. Regs. §§ 5.01, 5.05.    See Black's Law Dictionary 382,

supra (consumer is "a natural person" [emphasis supplied]).

     The defendant argues, however, that at least one aspect of

our reasoning in Knapp militates for an opposite conclusion.        In

     8
       The defendant notes that the regulation in Knapp, supra at
744 n.6, also used the term "customer," in addition to
"consumer," and that the terms were used "apparently
interchangeably." On this basis, the defendant contends that
the two should be considered interchangeable here as well. This
argument is unpersuasive. Here, unlike the regulation at issue
in Knapp, only the term "customer" is used. There is no mention
of the word "consumer." See 940 Code Mass. Regs. § 5.05.
                                                                    12

that case, we found significant that the regulation "concern[ed]

matters generally involved in consumer transactions."    Id.

at 744.   "These matters include[d], for example, . . . a

prohibition on charging for repairs which the customer has not

authorized, or representing, untruthfully, that the goods being

inspected are in such a dangerous condition that they should not

be used prior to repair."   Id.   Because the regulation at issue

here concerns similar matters, the defendant contends that it,

like that in Knapp, was intended to apply only to consumer

transactions.9   See 940 Code Mass. Regs. § 5.05(1) (unlawful to

state that "a vehicle is in a dangerous condition or that a

customer's continued use of a vehicle may be harmful to the

     9
       Indeed, some of the provisions in 940 Code Mass. Regs.
§ 5.05 are couched in language resembling that in the Knapp
regulation. Compare, e.g., 940 Code Mass. Regs. § 3.08 (1993)
(section entitled "Repairs and Services Including Warranties and
Service Contracts" declares "unfair and deceptive," among other
things, to "[r]epresent that repairs are indicated to be
necessary when such is not a fact") with 940 Code Mass. Regs.
§ 5.05 (section entitled "Repairs and Services" declares "unfair
and deceptive," among other things, statement "[t]hat repairs
are necessary or desirable when such is not a fact").

     The defendant notes one additional similarity: that the
Knapp regulation, like the one here, broadly defines "person" to
include corporations and legal entities. 940 Code Mass. Regs.
§ 3.01 (2014). The defendant does not make clear, though, what
significance it attributes to this point. The definition of
"person" in our regulation is important only because "customer"
is defined to mean "any person." 940 Code Mass. Regs. § 5.01.
In the Knapp regulation, by contrast, none of the operative
terms ("customer" and "consumer") were defined as "persons," see
940 Code Mass. Regs. § 3.01, and it therefore did not matter, in
our construction of those terms, what "person" meant.
                                                                   13

customer or others when such is not a fact"); 940 Code Mass.

Regs. § 5.05(3) (unlawful "to charge a customer for any repairs"

not authorized by customer).

     This argument is unavailing.    That the regulation in Knapp,

supra at 744, "concern[ed] matters generally involved in

consumer transactions" was significant only in the absence of

indications from the regulation's language of its intended

scope.    See id. at 744-745 (regulation lacked "language denoting

the persons protected thereunder," and "contain[ed] no language

suggesting that it was meant to apply to a broader class of

persons or interests").    Here, by contrast, the regulation

contains language "denoting the persons protected thereunder,"

and indicating that "it was meant to apply to a broader class of

persons or interests."    See id.   Thus, while the regulation's

provisions plainly are relevant to consumer transactions, its

protections were not limited to that context.10

     10
       For this reason, we are not persuaded by the defendant's
contention that the regulation's use of an authorization form
written in the first person, or its reference to customers as
"him or her," implies intent to restrict its applicability only
to "individual consumers/customers." See 940 Code Mass. Regs.
§ 5.05(3)-(4). The language of the regulation may have been
written with consumers in mind, but that does not mean it was
intended only for consumers. Moreover, with respect to the
form, both its first person language and its use of colloquial
terms, such as "car," might simply reflect an attempt to provide
an easily-intelligible document -- one that would be just as
helpful to businesses, who might not be versed in legal or
automotive jargon, as to consumers.
                                                                 14

     We note, in this regard, that the provision at issue here

appears in the Attorney General's "Motor Vehicle Regulations,"

940 Code Mass. Regs. §§ 5.00 (1993), while the one at issue in

Knapp appears in the "Customer Protection: General Regulations,"

940 Code Mass. Regs. §§ 3.00 (2014).11   This is significant

     11
       The defendant cites various cases and treatises
suggesting that the Attorney General's regulations pursuant to
G. L. c. 93A apply only to consumers, but these authorities
address only the general customer protection regulations
codified in 940 Code Mass. Regs. §§ 3.00, and not the motor
vehicle regulations in 940 Code Mass. Regs. §§ 5.00. See Baker
v. Goldman, Sachs & Co., 771 F.3d 37, 56-57 (1st Cir. 2014)
(appears from Knapp decision that other regulations in 940 Code
Mass. Regs. §§ 3.00 may not apply to inter-business
transactions); In re First New England Dental Centers, Inc., 291
B.R. 229, 241 (D. Mass. 2003) (assuming, based on Knapp, that
940 Code Mass. Regs. § 3.16 does not apply "to business to
business transactions"). While the defendant cites one treatise
that makes the broad statement "that none of the attorney
general's regulations will be applied to" business disputes
"unless and until the attorney general promulgates regulations
dealing specifically with" such matters, this statement, too,
was made in the context of a discussion of the general customer
protection regulations in 940 Code Mass. Regs. §§ 3.00. See
Golann, Evolution of Chapter 93A: National and Local Authority,
in Chapter 93A Rights and Remedies 1–6 (Mass. Cont. Legal Educ.
3d ed. 2014) (discussing our decision in Knapp construing "the
general regulations" and citing unpublished Federal case dealing
with provision of general customer protection regulations).

     Also, even with respect to the general customer protection
regulations in 940 Code Mass. Regs. §§ 3.00, there is some
disagreement whether they are to be applied only to consumer
transactions. See Lechoslaw v. Bank of Am., N.A., 618 F.3d 49,
58 (1st Cir. 2010) (assuming that 940 Code Mass. Regs. § 3.16
applies to business disputes); J.E. Pierce Apothecary, Inc. v.
Harvard Pilgrim Health Care, Inc., 365 F. Supp. 2d 119, 144 (D.
Mass. 2005) (concluding that 940 Code Mass. Regs. § 3.16 applies
to business disputes); Lily Transp. Corp. v. Royal Institutional
Servs., Inc., 64 Mass. App. Ct. 179, 187 (2005) (applying 940
Code Mass. Regs. § 3.16[2] to business disputes).
                                                                    15

because, as construed in Knapp, the general regulations in 940

Code Mass. Regs. §§ 3.00 were intended to counteract disparities

in bargaining power and sophistication often present in

transactions between businesses and consumers.    See Knapp, supra

at 738 (940 Code Mass. Regs. § 3.08[2] did not apply to

transaction "entered into by persons engaged in the conduct of

trade and commerce having equal bargaining power and business

acumen").    On this basis, we concluded that, where those

disparities are generally less likely to exist –- as in

transactions between two businesses -- the Attorney General may

not have intended those regulations to apply.    Knapp, supra at

745 ("Attorney General had in mind protection for consumers"

only).

       In the motor vehicle context, however, the specialized

nature of the product is such that even an otherwise-

sophisticated business might be at an informational

disadvantage.    This is especially so if the business is not, as

here, a commercial bus company with some automotive expertise,

but, for example, a retail shop looking to repair its delivery

van.    The Attorney General might reasonably have decided -- as

the regulation's language indicates he did -- that the policies

behind the motor vehicle rules necessitated that they be applied

even beyond the consumer context.
                                                                  16

    3.   Conclusion.   Concluding that 940 Code Mass. Regs.

§ 5.05 applies to transactions in which the customer is a

business entity, we answer the certified question, "Yes."

    The Reporter of Decisions is to furnish attested copies of

this opinion to the clerk of this court.   The clerk in turn will

transmit one copy, under the seal of the court, to the clerk of

the United States Court of Appeals for the First Circuit, as the

answer to the question certified, and will also transmit a copy

to each party.