Contract – Chapter 93A – Limitation of liability

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Where a plaintiff commercial tenant filed a G.L.c. 93A complaint against the defendant landlord, a judgment in the tenant’s favor should be affirmed, as a limitation of liability provision in the parties’ lease did not protect the landlord from being held liable for a willful and knowing violation of Chapter 93A.

“The primary issue presented in this case is the enforceability of contractual provisions limiting liability for violations of G.L.c. 93A, section11, which makes ‘unfair or deceptive act[s] or practice[s]’ between businesses unlawful. We conclude that limitation of liability provisions will not be enforced to protect defendants who willfully or knowingly engage in the unfair or deceptive conduct prohibited by the statute.

“The case concerns a bitter and protracted dispute over a commercial lease. The plaintiff, H1 Lincoln, Inc., doing business as Majestic Honda (Majestic), is a car dealership whose principal is James Balise. The defendants are various entities connected with Alfredo Dos Anjos — specifically, two LLCs of which he is the principal, South Washington Street, LLC, and 849 South Washington Street, LLC (collectively, Dos Anjos LLCs or LLCs); and four realty trusts of which he is the trustee, 849 South Washington Street Realty Trust, 855 South Washington Street Realty Trust, 865 South Washington Street Realty Trust, and Cooper Avenue Realty Trust (collectively, Dos Anjos realty trusts). Majestic agreed to rent the property at issue from the Dos Anjos LLCs, with plans to develop and operate an automobile dealership facility there.

“When the Dos Anjos LLCs sought to terminate the lease, Majestic commenced this action against them in the Superior Court, alleging unfair and deceptive conduct in violation of G.L.c. 93A, section11, among other claims. Following a jury-waived trial, the judge found for Majestic on its c. 93A, section11, claim and granted specific performance coupled with delay damages. Because the judge also found that the Dos Anjos LLCs’ violations of the statute were ‘willful or knowing,’ he doubled the damages. After Majestic encountered further obstructive behavior from the defendants in its efforts to enforce the lease agreement, it moved for additional damages, alleging renewed violations of G.L.c. 93A, section11. The judge reopened the trial, where Majestic again prevailed and was awarded additional delay damages, which the trial judge again doubled for ‘willful or knowing’ violations. …

“We conclude that the defendants’ conduct — which included fraudulent misrepresentations and pretextual contractual objections designed to string along the plaintiffs and coerce additional concessions to which the defendants were not entitled under the lease — meets the standard for unfair or deceptive acts or practices under G.L.c. 93A, section11. Furthermore, the unfair or deceptive conduct was done willfully, warranting the double damages awarded by the trial judge. Finally, we conclude that a limitation of liability provision provides no protection in a c. 93A, section11, action where, as here, the violation of the statute was done willfully or knowingly. …

“The final issue we address is whether, as the defendants contend, Majestic may not recover even if the defendants are otherwise liable for the delay damages the trial judge assessed because it is barred from recovery by the limitation of liability provision in the lease. We agree with the trial judge’s conclusion that this provision does not preclude recovery by Majestic. However, we reach this conclusion for somewhat different reasons from those articulated by the trial judge, who relied on a distinction developed by the Appeals Court between c. 93A, section11, violations that are predominantly tort-like and those that resemble simple contract breaches. Because G.L.c. 93A establishes causes of action that blur the distinction between tort and contract claims, incorporating elements of both, we do not adopt this formulation. We focus instead on the particular language of the limitation of liability provision and the different liability standards set out in G.L.c. 93A, section11, itself. …

“Because multiple damages under c. 93A ‘serve the twin “goals of punishment and deterrence,”‘ … enforcement of a limitation of liability provision that would allow a defendant in a c. 93A, section11, action to immunize itself in advance from liability for unfair or deceptive conduct that is done willfully or knowingly would do violence to the public policy protected by the statute. … Such willful and knowing misconduct is not entitled to contractual protection from c. 93A, section11, liability. …

“The defendants’ conduct surrounding their threatened and actual decision to terminate the lease, as well as their conduct after Majestic began to enforce the lease, involved numerous acts prohibited as unfair or deceptive by G.L.c. 93A, section11. Because these unlawful acts delayed the development and operation of Majestic’s planned dealership, the trial judge properly awarded damages to compensate for the resulting lost profits. The defendants’ unfair and deceptive conduct was, moreover, engaged in willfully, warranting the award of double damages under the statute’s multiple damages provision. Considering the willful character of the defendants’ c. 93A, section11, violations, the limitation of liability provision in the lease is ineffective to preclude Majestic from recovering damages for those violations. For the foregoing reasons, the judgments of the Superior Court are affirmed.”

H1 Lincoln, Inc. vs. South Washington Street, LLC, et al. (Lawyers Weekly No. 10-006-22) (46 pages) (Kafker, J.) The case was tried before Mark D. Mason, J., in Superior Court. Robert J. Cordy (Annabel Rodriguez also present) for the defendants; John J. Egan (Michael G. McDonough also present) for the plaintiff; the following submitted briefs for amici curiae: Daniel A. Ford for Retailers Association of Massachusetts, Inc.; Michael C. Gilleran for National Retail Tenants Association; David J. Hatem and Patricia B. Gary for American Council of Engineering Companies of Massachusetts and another (Docket No. SJC-13088) (Jan. 24, 2022).

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