Contract – Chapter 93A – Double damages

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Where a defendant general contractor paid a plaintiff subcontractor only a fraction of what was owed for clearing snow and ice, the plaintiff should not have been awarded double damages, as the evidence was insufficient to establish liability under G.L.c. 93A, §11.

“A general contractor, Hatch Landscape & Design (Hatch), hired a subcontractor, Green Paradise Services (Green Paradise), to clear snow and ice at various businesses. Although Green Paradise performed its contractual obligations throughout the winter season, Hatch paid it only a fraction of what it was owed. After Hatch ignored repeated requests for payment, as well as a G.L.c. 93A demand letter, Green Paradise filed suit. Following a trial in the Superior Court, the jury found Hatch liable for breaching the contract and violating G.L.c. 93A, §11, and the judge subsequently awarded Green Paradise attorney’s fees and costs under c. 93A, §11. On appeal, Hatch does not challenge the jury’s verdict as to the contract claim, but argues that because the evidence was insufficient to establish its liability under c. 93A, §11, its motions for a directed verdict and judgment notwithstanding the verdict should have been allowed as to that claim. We agree and, accordingly, reverse so much of the corrected judgment as awards Green Paradise double damages, attorney’s fees, and costs under c. 93A. …

“On appeal, Hatch does not dispute that it breached the contract by failing to fully pay Green Paradise for the services it performed. Hatch also violated the provision in the contract that required it to pay invoices within forty-five days and prohibited it from withholding payment for longer than sixty days ‘unless there is a dispute over [a] specific invoice.’ The only question is whether Hatch’s conduct also amounted to a violation of G.L.c. 93A, §11. …

“In this case, there is no evidence that Hatch withheld payment to force Green Paradise ‘to do what otherwise it could not be legally required to do.’ … Hatch did not attempt to extort Green Paradise into providing additional benefits not covered by the parties’ contract. Nor did Hatch attempt to renegotiate the terms of their contractual relationship. Green Paradise argues that Hatch’s refusal to pay was an attempt to pressure it into accepting ‘cents on the dollar for its work.’ The record is devoid of evidence, however, that Hatch had sought to impose ‘new and adverse contract terms,’ such as a lower rate of payment for Green Paradise’s work. … To the contrary, despite repeated inquiries from Green Paradise, Hatch did not provide any explanation regarding its refusal to pay the remaining invoices. An intent ‘to extract additional benefits not covered by the contract’ cannot be reasonably inferred where the defendant did nothing more than breach a contract and refuse to say why. …

“Nor can c. 93A liability be inferred from the fact that Hatch paid Green Paradise for its services at the start of the winter season. Green Paradise argues that the jury could have reasonably inferred that ‘those initial payments constituted a ploy to induce Green to continue to plow that winter,’ and Amaral testified that he stopped pursuing work from other potential customers after entering into the contract with Hatch. To establish a c. 93A claim, however, a party’s extortionate conduct must arise from its breach or threatened breach of a contract, not from its initial compliance with the contract. …

“To be sure, the evidence at trial established that Hatch’s violation of its contractual obligations was knowing, unjustified, and harmful to Green Paradise. As the judge observed in denying Hatch’s motion for judgment notwithstanding the verdict, Hatch was ‘paid substantially more than the plaintiff billed for those jobs, yet … retained the full payment without paying the plaintiff for [its] work,’ and it withheld payment without informing Green Paradise ‘of any discrepancy or other reason why.’ Nevertheless, those actions, however unseemly, do not rise ‘to the level of “commercial extortion” or a similar degree of culpable conduct’ required for a c. 93A violation (quotation omitted). Zabin v. Picciotto, 73 Mass. App. Ct. 141, 169 (2008).

“Because, even when all reasonable inferences are drawn in Green Paradise’s favor, the evidence was insufficient to establish a violation of c. 93A, §11, the jury’s verdict and award of double damages on that claim must be reversed. Furthermore, because the judge based her award of attorney’s fees and costs to Green Paradise on the jury’s finding that Hatch committed an unfair or deceptive act or practice in violation of c. 93A, §11, that award must also be reversed. …

“So much of the corrected judgment as awarded double damages, attorney’s fees, and costs under the plaintiffs’ c. 93A claim is reversed. The corrected judgment is modified to dismiss the plaintiffs’ c. 93A claim, and, as so modified, the corrected judgment is affirmed.”

Green Paradise Services, LLC, et al. v. Hatch Landscape & Design, Inc., et al. (Lawyers Weekly No. 81-117-24) (Docket No. 23-P-1188) (Oct. 10, 2024).

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