Category Archives: News

Understanding the Limitations of Chapter 93A – Pursuing Litigation Is Not Unfair or Deceptive

Companies operating or conducting business in Massachusetts are aware of an all-too-familiar statute, Massachusetts General Laws Chapter 93A. This statute provides individual consumers and businesses a right to bring legal action if they are harmed by an unfair business practice. The statute eloquently, although perhaps ambiguously, states that a violation shall exist when a company commits an “unfair or deceptive act or practice, or unfair method of competition,” against another who is engaged in commerce within the Commonwealth.  Violations can cover a litany of topics, such as a company that unfairly demands more money to complete its contract obligations after having already executed the contract (Anthony’s Pier Four, Inc. v. HBC Associates, 411 Mass. 451), or where insurance providers fail to offer a fair and equitable settlement amount within the required time period (Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486), or against landlords who fail to provide habitable units to their residential tenants (Haddad v. Gonzalez, 410 Mass. 855).  Although Chapter 93A is far-reaching, it does have its limitations.

Recently, Strang Scott attorneys Cole Young and Jennifer Lynn argued to the Massachusetts Appeals Court that litigation tactics alone are not unfair or deceptive acts or practices, such that they violate Chapter 93A.  Agreeing, the Appeals Court held that demanding payment under a contract, filing suit, and continuing to litigate a claim over a disputed amount is a simple contract dispute and nothing more. Aggregate Industries ­– Northeast Region, Inc. v. Hugo Key & Sons, Inc., 90 Mass.App.Ct. 146 (2016).   Said another way, the Appeals Court held that plaintiffs should not be punished for deciding to litigate, rather than accepting a lower settlement amount.  The Appeals Court went on to hold that the unfair or deceptive practice must arise from an independent act of trade or commerce, “not tangentially from litigation concerning that conduct.” 

The precedent of this case will be far-reaching and provides security to companies and businesses who choose to file suit, as opposed to being forced into settlement for fear of committing an “unfair” act.  Because the breadth of Chapter 93A can be complicated and nuanced, potential litigants should speak with an experienced Massachusetts litigator.

Keeping up Formalities: Protecting Assets Across Commonly Owned Companies

By Andrea Jacobs, Esq. 

strangscott2015-15A recent Massachusetts Bankruptcy Court decision should serve as a clear reminder to business owners that, in order to enjoy the benefits that limited liability entities afford, one must respect established corporate formalities and comport business accordingly. Briefly, in In Re: Cameron Construction & Roofing Co., Inc. the  Bankruptcy Court held that the assets of a Massachusetts limited liability company, closely related to a Massachusetts construction business subject to Chapter 7 bankruptcy proceedings, could be reached to satisfy the claims of the creditors of the construction business. 

The two separate entities shared a common owner yet were formed as distinct enterprises. In this case, however, the Court determined that the owner controlled both the non-debtor LLC and debtor construction business and had allowed for the intermingling of assets. Further, the Court noted that the common owner “was thinly capitalized, and the two entities observed only minimal corporate formalities by filing separate tax returns and Annual Reports.” Thus, the Court held that ‘substantive consolidation’ was the appropriate remedy- effectively disregarding the sovereignty of the separate entities and combining their assets as a means to satisfy the liabilities of one.  Had the owner resected the separate corporate forms of his commonly owned entities in his everyday operations he likely would have been in a better position to shield assets held by the  non-debtor LLC from creditor access.

Proposed Legislation to Restrict Reasons for Evicting Tenants in Boston

By Attorney Jennifer Lynn.  

strangscott2015-6Mayor Walsh’s administration recently proposed a new bill aimed at limiting the available reasons to evict a residential tenant. The proposal, known as the “Jim Brooks Community Stabilization Act,” would eliminate no-fault evictions in many instances, a common practice used to remove tenants without listing a violation. Proponents of the act claim that it is designed to protect renters from “arbitrary” or unreasonable evictions, without unfairly restricting the landlord. Opponents cite concerns that it would deter further development and hinder private property rights.  

Under current law, landlords may evict tenants for a specific reason, or for no reason at all, depending on the type of rental agreement. For tenancies with an ongoing, written agreement, landlords may give notice to evict for nonpayment of rent or for a specific reason, including violation of a provision of the lease. For tenants who are at-will, meaning those who do not have a written lease for a specific term, landlords may give notice to evict for failure to pay rent or for no reason.

Should the proposed Act pass, the new law would severely restrict the “no-fault eviction,” and limit evictions to instances where the tenant has not paid rent, created a nuisance, used the unit for an illegal purpose, violated the lease agreement, refused to extend or renew the lease, refused to permit the landlord to make necessary repairs, or offered subtenants not approved by the landlord. Exceptions to these restrictions have been offered, but are narrow in scope, applying to sober homes, college housing, or buildings owed by a Massachusetts resident who has six or less residential units. For larger scale, commercial landlords, they would be stuck with a tenant until a material issue arises.

Moreover, if passed, the Act would prevent landlords from clearing an entire building for the purpose of selling, renovating, or converting the use of the building. Under the new law, landlords would have to renovate a building or unit while the tenants continue to reside in their unit or force the landlord to provide alternative housing to the tenant while construction is ongoing.

If you are a landlord renting residential units in Boston, make sure you continue to monitor the Jim Brooks Community Stabilization Act. If it becomes law, your ability to remove tenants from a unit may become dramatically restricted. Should you have questions about evicting a residential tenant, you should contact a Boston property management attorney.

Attorney Fees Awards are Mandatory for Prevailing Massachusetts Subcontractors and Suppliers Under MGL c. 149, s. 29

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In Aggregate Industries – Northeast Region, Inc. v. Hugo Key & Sons, Inc., 90 Mass.App.Ct. 146 (2016), the Massachusetts Appeals Court ruled in favor of Strang Scott’s position, reversing part of the trial court’s earlier decision. The Massachusetts Supreme Judicial Court (“SJC”) recently declined to further review the case. As such, the Appeals Court’s decision is now clear precedent on the standard for attorney fees under the Massachusetts Payment Bond Statute, G.L. c. 149, § 29 (“Section 29”).

The case arose over materials and services that a subcontractor / material supplier provided to a general contractor for use on a public construction project in Salem, Massachusetts. The general contractor refused to pay in full, so the subcontractor brought suit against it and the payment bond surety. The trial court awarded damages to the subcontractor for the value of certain services provided but refused to include an award of attorneys’ fees. The trial court incorrectly held that Section 29, which provides for mandatory attorneys’ fees awards to prevailing subcontractors and material suppliers, was inapplicable.

On appeal, the plaintiff argued, through counsel (Cole Young and Jennifer Lynn, at Strang Scott), that Section 29 is a remedial statute with a clear purpose of protecting unpaid subcontractors and material suppliers on state-owned projects.  Said another way, an attorneys’ fee award is mandatory for prevailing claimants and is not within the court’s discretion. The statutory purpose is clearly to level the playing field where general contractors could otherwise hold back payment to deserving subcontractors and material suppliers, using litigation costs as leverage to deter them from filing suit. Now they have greater incentive to make those payments when they become due, or face greater consequences.

The precedent of this case will be far-reaching and will benefit Massachusetts suppliers and subcontractors for years to come.  To learn more about securing payment on construction projects, contact an experienced Massachusetts construction attorney.

Strang Scott Welcomes Claudia Campbell to the Firm

ccStrang, Scott, Giroux & Young, LLP, with offices in Massachusetts and New Hampshire, welcomes Claudia Campbell to the Firm as its new Office Manager.  Ms. Campbell brings a wealth of experience in the management of a law practice, knowledge and enthusiasm with her to the Firm.  The Firm looks forward to utilizing Ms. Campbell’s vast experience and knowledge to the benefit of its clients and practice.  Welcome aboard, Claudia!

 

 

 

 

 

 

 

Chris Strang Elected Treasurer of Boston Bar Foundation

ds&sheadshots22The Boston Bar Foundation (BBF) Board of Trustees elected Strang Scott partner Chris Strang to the office of Treasurer for the organization.  Chris has already served the BBF in many capacities, including being a member of the Executive Committee, Board of Trustees, Society of Fellows, Young Lawyers Advisory Council and many ad hoc or fundraising event planning committees.

The BBF is the charitable arm of the Boston Bar Association. It raises money to provide grants for many community organizations that further the mission of the BBF. These include providing legal services and access to justice to those in need, as well as a variety of public service activities.  To learn more, please visit the BBF: http://bostonbarfoundation.org/

 

Strang, Scott honored in 2016 Edition of Super Lawyers

Strang Scott is honored to announce the selection of Christopher Strang as a 2016 Super Lawyer and Jordan Scott as a 2016 Rising Star by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the eighth consecutive year, first as a Rising Star and then as a Super Lawyer, while Mr. Scott has earned his second consecutive recognition for his employment practice. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

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Strang Scott Prevails on Summary Judgment in Case Involving Falsified Payroll Reports on Federal Construction Project

     In the case of United States for the Use and Benefit of Metric Electric, Inc. v. CCB, Inc. and the Hanover Insurance Company, Civil Action No. 15-11934, in the United States District Court in Massachusetts, the court ruled in favor of Strang Scott’s motion for summary judgment, dismissing all of the plaintiff’s claims.

     The case arose over construction work in the John F. Kennedy Federal Building in Boston. The electrical subcontractor submitted periodic certifications that it paid its employees for work performed on the project. These statements turned out to be false. Six of the subcontractor’s employees brought suit against it for failure to pay wages over several months.

     The general contractor terminated the subcontract shortly thereafter. The electrical subcontractor brought suit against the general contractor and its payment bond surety, claiming an unpaid subcontract balance was due. The claims were brought under the Miller Act, as well as for breach of contract, quantum meruit, and violations of M.G.L. c. 93A (the Massachusetts law governing unfair or deceptive business practices).

     Attorney Christopher Strang argued that intentionally submitting false certified payroll documents constitutes a material breach of contract, justifying termination and also extinguishing any right to further payment. The judge agreed, finding “[i]ts failure to pay its employees in a timely fashion as required by state and federal law (as well as by the terms of the Subcontract), compounded by Sampson’s filing of perjured certifications of payment, bars Metric from entering any chamber of equity.”

     Contractors should use caution when submitting certifications on public, or any, construction projects. Making false statements on these documents can preclude any future recovery of contract payments. Concerned contractors should contact an experienced Massachusetts construction attorney.

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