When Jim wakes one morning to find his prize winning lamas at the bottom of a 20 foot sinkhole, he suspects something is wrong. He had spent the previous evening sitting on his back porch, watching his lamas and enjoying the lengthening shadows the setting sun cast over his idyllic property. Now, little remains of that vista, the majority of Jim’s backyard having subsided into the deep sinkhole. The lamas, while unhurt, are complaining loudly.
After rescuing his lamas, Jim makes some calls and arranges to have his property inspected by a number of civil engineers. They all agree that the sinkhole has been caused by a lowering of the groundwater table under Jim’s property due to excessive pumping from wells on adjacent property owned by ACME Water Products, Inc. When Jim politely asks ACME to stop destroying his land, ACME responds by increasing its pumping, bulldozing a fence on the property line, and installing a new well, located entirely on Jim’s land.
Jim sues ACME, asserting various tort claims and one for unfair or deceptive trade practices under Massachusetts G.L. c. 93A, §§2, 9, seeking treble damages and attorney’s fees. ACME moves to dismiss the c. 93A claim, arguing that no matter how egregious its conduct may have been, c. 93A simply does not apply because ACME and Jim have no business relationship with each other. Moreover, ACME asserts that such a business relationship requirement applies not only to claims by one business against another under c. 93A, §11, but also to consumer claims under §9. ACME is probably right.
The business relationship requirement.
It is well established that a viable c. 93A claim must allege that the plaintiff and defendant have a preexisting business relationship. In Breneman v. Wolfson, 62 Mass. App. Ct. 1115, 2004 WL 2902454 (12/15/04) (unpublished Rule 1:28 opinion), a case involving claims between neighboring landowners, the Massachusetts Appeals Court stated,
The plaintiffs may invoke c. 93A as a general consumer or business protection statute only if the underlying tort arose in a business context, that is, if the parties were “engaged in more than a minor or insignificant business relationship.” Standard Register Co. v. Bolton-Emerson, Inc., 38 Mass.App.Ct. 545, 551 (1995). See also Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 22-23 & n. 33, cert. denied, 522 U.S. 1015 (1997). But here the defendants had “no contractual or business relationship with the plaintiffs.” Nei v. Boston Survey Consultants, Inc., 388 Mass. 320, 324 (1983). Indeed, insofar as the record shows, other than being abutting landowners the parties had no relationship whatsoever, the underlying tortious conduct was not related to any mutual business concern, and the plaintiffs’ c. 93A claims may be disregarded. See L.B. Corp. v. Schweitzer-Mauduit Intl., Inc., 121 F.Supp.2d 147, 152 (D.Mass.2000) (where abutting landowners both operated businesses on their respective properties but had no business or commercial relationship, the plaintiff could not maintain c. 93A claim against neighbor premised on injuries caused by neighbor’s subterranean water pumping).
Id. at *2. (Emphasis added). Similarly, in L.B. Corporation v. Schweitzer-Mauduit Intern., Inc., 121 F.Supp.2d 147 (D. Mass. 2000), another case involving neighboring landowners, the United States District Court for the District of Massachusetts explained,
Defendants have moved for summary judgment on Count VII of plaintiff’s Amended Complaint, which alleges that the conduct of defendants in their operation of Well # 5 constituted an “unfair or deceptive” business act or practice prohibited by Mass.Gen.Laws ch. 93A §§ 2 and 11. Defendants contend that for Chapter 93A liability to attach, there must be some business relationship between the parties. Here, although both companies were “engaged in trade or commerce” under the statute, they were not engaged in business transactions with each other. Mass.Gen.Laws. ch. 93A § 11. The parties’ only relationship, defendants contend, was as abutting landowners, so the statute is inapplicable. …
… Chapter 93A is a consumer protection law that also encompasses business transactions. It is intended to protect against unfair and deceptive practices in trade, not unfair practices in general. Apart from claims of unfair competition, a plaintiff must allege some sort of transaction between the parties for liability to attach under sections two and eleven…. This is the “common thread” of 93A cases. Plaintiff’s position, if accepted, would run the danger of converting any tort claim against a business into a Chapter 93A claim, because all torts encompass “acts or practices” that could arguably be considered “unfair.” As Judge Keeton noted, this position tests the limits of common sense.
Id. at 151-52. (Emphasis added, citations and internal quotation marks omitted).
And in Steinmetz v. Coyle & Caron, Inc., 2016 WL 4074135 (D. Mass. 7/29/16), the Court stated,
Apart from claims of unfair competition, a plaintiff must allege some sort of transaction between the parties for liability to attach. Where there [is] no relationship between the plaintiffs and the defendants at all prior to the accident … it is axiomatic that the alleged wrongful conduct did not arise in a business context between them.’ While Plaintiffs correctly note that the absence of privity of contract is not an automatic bar to a Mass. Gen. L. c. 93A claim, [t]he lack of any business relationship between [Plaintiffs] and [Coyle & Caron] is fatal to the 93A claim.
Id. at *11. (Internal citations and quotation marks omitted).
Numerous other Massachusetts and federal cases support the conclusion that a plaintiff has no c. 93A claim where the parties had no pre-litigation business relationship. Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 564 (2008) (“A commercial transaction need not occur in the ordinary course of a person’s trade or business before liability under G.L. c. 93A will be imposed. However, we have held that the mere filing of litigation does not of itself constitute trade or commerce. In the circumstances here, even if we were to assume that Milliken’s efforts to secure the repayment of its trade debt were commercial in nature, Milliken and the defendants were not engaged in trade or commerce with each other and therefore acting in a business context.” (Emphasis added, citations and internal quotation marks omitted)); Chervin v. The Travelers Ins. Co., 448 Mass. 95, 112-13 (2006) (“While the plaintiff correctly maintains that part of the defendant’s business is litigating subrogation claims, he cannot establish that he had any relevant business transaction with the defendant which would serve as a predicate for liability under G.L. c. 93A, §§ 2 and 11.”); Giuffrida v. High Country Investor, Inc., 73 Mass. App. Ct. 225, 238 (2008) (“Privity is not required to maintain an action under c. 93A, § 11, so long as the parties are engaged in more than a minor or insignificant business relationship.” (internal quotation marks omitted)); Foreign Car Center, Inc. v. Essex Process Service, Inc., 62 Mass. App. Ct. 806, 814-15 (2005) (“Foreign Car’s G.L. c. 93A claim against Essex and Curran is disposed of by Cady v. Marcella …, holding there was no conduct of trade or commerce between the plaintiffs and the deputy sheriff who seized the property. Accordingly, the motion judge did not err in granting summary judgment on the claim.”); Cady v. Marcella, 49 Mass. App. Ct. 334, 343 (2000) (“While the Cadys justifiably feel that the seizure of half of their house to satisfy another’s debt was unfair, this statute remains unavailable: There was no conduct of trade or commerce between the Cadys and Adams or Marcella…. This claim was properly dismissed.”); Standard Register Co. v. Bolton-Emerson, Inc., 38 Mass. App. Ct. 545, 551 (1995) (similar to Giuffrida, above); Arthur D. Little, Inc. v. East Cambridge Sav. Bank, 35 Mass. App. Ct. 734, 743 (1994) (“The Superior Court judge correctly determined that the acts complained of did not occur while the parties were engaged in the conduct of trade or commerce…. No commercial relationship ever existed between the parties; their only contact occurred in the context of this litigation.”); Knapp v. Powicki, 2012 WL 11975703, * 2 (Mass. Super. 1/30/12) (“no viable c.93A claim where plaintiff and defendant had no relationship other than that they were abutting landowners”); Mitzan v. Medview Services, Inc., 1999 WL 33105613, *9 (Mass. Super. 1/16/99) (“[T]he history and development of Chapter 93A suggest that it was enacted to protect consumers and business entities against unfair acts and practices in transactions between them. Thus, numerous courts have held that there must be some transactional relationship between the parties in order to sustain a claim under Chapter 93A.” (Citations omitted)); Joe Hand Promotions, Inc. v. Rajan, 2011 WL 3295424, *7 (D. Mass. 7/28/11) (“Plaintiff’s Complaint states that both parties ‘engaged in trade or commerce’ … but does not state that parties engaged in business practice together. Plaintiff’s Ch. 93A claim fails for failing to state a claim” (citations and footnote references omitted)); John Boyd Co. v. Boston Gas Co., 775 F.Supp. 435, 440 (D. Mass. 1991) (“Taken together, these cases demonstrate that, although the Supreme Judicial Court has yet to define the outer limits of the relationship required under Chapter 93A, some business connection between the parties is an essential element of liability under the statute.”).
A pre-existing business relationship is required for both §9 and §11 claims.
Although ACME argued that the business relationship requirement applies only in business v. business §11 claims, a review of Massachusetts case law leads to the opposite conclusion. In a number of Massachusetts cases, courts have applied the business relationship requirement to §9 claims. In Swenson v. Yellow Transportation, Inc., 317 F. Supp.2d 51 (D. Mass. 2004), the plaintiff was injured in an automobile accident with one of defendant’s trucks. She brought a claim under c. 93A, §9. The Court dismissed the c. 93A claim, noting that, “While 93A is a statute of broad impact, it was not intended to augment every other legal or equitable remedy available to parties injured in automobile accidents.” Id. at 55. The Court held that the c. 93A claim failed because the plaintiff had no business relationship with the defendant. According to the Court,
Plaintiffs’ claim under ch. 93A fails for the additional reason that the conduct complained of was not undertaken in a business context or as part of a business transaction between Yellow (or Thing) and the plaintiffs. Thus, while Yellow, as a business, is itself engaged in trade or commerce, it did not have any commercial dealings involving the plaintiffs and, therefore, ch. 93A is inapplicable.
It is well-established that “the proscription in § 2 of ‘unfair or deceptive acts or practices …’ must be read to apply to those acts or practices which are perpetrated in a business context.” Poznik v. Mass. Med. Prof’l Ins. Assoc., 417 Mass. at 52, 628 N.E.2d at 3 (internal citation omitted, emphasis in original). Thus, ch. 93A “is intended to protect against unfair and deceptive practices in trade, not unfair practices in general. Apart from claims of unfair competition, a plaintiff must allege some sort of transaction between the parties for liability to attach under sections two and eleven.” L.B. Corp. v. Schweitzer–Mauduit Intern., Inc., 121 F.Supp.2d 147, 152 (D.Mass.2000) (summary judgment granted on ch. 93A claim where there was no business relationship between the parties), and cases cited. Accord Miller v. Mooney, 431 Mass. 57, 64–65, 725 N.E.2d 545, 551 (2000) (heirs of deceased client could not maintain a claim under ch. 93A against decedent’s attorney as “[t]he defendant was not engaged in trade or commerce with the plaintiffs within the meaning of G.L. c. 93A.”) (emphasis added). In the instant case, there was no relationship between the plaintiffs and the defendants at all prior to the accident, thus it is axiomatic that the alleged wrongful conduct did not arise in a business context between them (or even between Yellow and any other travelers on the road). Therefore, the claim under ch. 93A fails.
Id. at 56-57. (Emphasis added, footnote references omitted).
Similarly, in Girard v. Triumph Leasing Corp., 2005 WL 48266872 (Mass. Super. 7/1/05), another auto accident case, the plaintiff brought a §9 claim against the defendant. Rejecting that claim, the Court stated,
In Count V, the plaintiff asserts that the defendant has committed unfair and deceptive acts or practices in violation of G.L. c. 93A, §2. That statute reads, in pertinent part, “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.”(Emphasis supplied). Section 9 of c. 93A provides a civil remedy for any person injured by another’s use of any act or practice declared to be unlawful by §2 or any regulation issued thereunder. The Supreme Judicial Court has stated that “[t]he purpose of c. 93A is to improve the commercial relationship between consumers and business persons and to encourage more equitable behavior in the marketplace.” Poznik v. Massachusetts Med. Professional Ins. Ass’n, 417 Mass. 48, 53 (1994). To determine whether a business context is implicated here, the underlying nature of the plaintiff’s claims must be examined. Darviris v. Petros, 442 Mass. 274, 280 (2004). It is clear that the underlying nature of the plaintiff’s claim is in negligence and is unrelated to any business context. Here, there was no business relationship, indeed no relationship at all, between the parties before the accident. Without a business context to the relationship between the parties, c. 93A is inapplicable.
Id. (Emphasis in last two sentences added). See Morrissey v. New England Deaconess Association-Abundant Life Communities, Inc., 90 Mass. App. Ct. 1105, 2016 WL 4723459, *3-4 (9/9/16) (unpublished Rule 1:28 opinion).
In other cases, the plaintiff’s claims obviously were brought under §9, but there is no express reference to that section. In Miller v. Mooney, 431 Mass. 57 (2000), a testatrix’s children sued the attorney who drafted her estate documents for, among other claims, negligence and violations of c. 93A. Their c. 93A claims must have been brought under §9 as they were not engaged in business. There is no reference to §11. The Supreme Judicial Court affirmed the trial court’s entry of summary judgment for the attorney on the c. 93A claim, noting that, “The defendant was not engaged in trade or commerce with the plaintiffs within the meaning of G.L. c. 93A.” Id. at 63-64.
In Breneman, 2004 WL 2902454, the plaintiffs were owners of property abutting the defendant’s airport. They sued after the defendant entered their land and damaged it in the course of extending the airport’s runway. Clearly, the plaintiffs were not suing under §11 as persons in business, but were instead individuals suing under §9. The Breneman Court recognized the business relationship requirement applies in consumer actions, stating,
The plaintiffs may invoke c. 93A as a general consumer or business protection statute only if the underlying tort arose in a business context, that is, if the parties were “engaged in more than a minor or insignificant business relationship.” … But here the defendants had “no contractual or business relationship with the plaintiffs.” Nei v. Boston Survey Consultants, Inc., 388 Mass. 320, 324 (1983). Indeed, insofar as the record shows, other than being abutting landowners the parties had no relationship whatsoever, the underlying tortious conduct was not related to any mutual business concern, and the plaintiffs’ c. 93A claims may be disregarded….
Id. at *2. (Emphasis added).
In Cady, the plaintiffs were property owners. They had contracted for installation of a modular home by a contractor, but the contractor’s judgment creditor, with whom the plaintiffs had no relationship, seized a portion of the home with the assistance of a deputy sheriff. Plaintiff property owners sued both the judgment creditor and the deputy sheriff. Again, those claims must have been bought under §9. There is no reference to §11. The Court rejected the c.93A claim due to the lack of any business relationship between the plaintiff and defendant. 49 Mass. app. Ct. at 343.
In Knapp v. Powicki, 2012 WL 11975703 (Mass. Super. 1/30/12), the plaintiff property owners sued neighboring owners. Following Breneman, the Court dismissed the claims, which must have been §9 claims, because the parties had no business relationship.
The business relationship requirement was again applied to a §9 claim in Camacho v. Basteri, 1995 WL 1688631 (Mass. Super. 12/28/95), where the plaintiff homeowners sued their neighbor for, among other things, nuisance, based on the neighbor’s illegal operation of a dog kennel in a residential neighborhood. The Court dismissed the c. 93A claim due to the absence of any business relationship between the parties. Id. at *1-2.
And in Steinmetz, the plaintiff property owners, who were seeking conservation commission approval to build a home, sued a company hired by opponents of the project for allegedly preparing false renderings of the proposed home. Again, the plaintiffs’ claim must have been brought under §9 as they were not engaged in any business. The Court dismissed the c. 93A claim due to the absence of any business relationship between the parties. 2016 WL 4074135 at *11.
More generally, Courts have recognized that, “[t]he purpose of c. 93A is to improve the commercial relationship between consumers and business persons and to encourage more equitable behavior in the marketplace.” Poznik v. Massachusetts Med. Professional Ins. Ass’n, 417 Mass. 48, 53 (1994) (Emphasis added). See also Morrissey, 2016 WL 4723459, *3; Girard, 2005 WL 48266872; Swenson, 317 F. Supp.2d at 57. Similarly, in Mitzan, the Court pointed out that, “the history and development of Chapter 93A suggest that it was enacted to protect consumers and business entities against unfair acts and practices in transactions between them.” 1999 WL 33105613, *9. Thus, the underlying purpose of c. 93A supports the statute’s application only where a commercial relationship exists between the plaintiff and defendant.
The same conclusion follows from the structure of c. 93A. In order to have a viable claim under either §9 or §11, a plaintiff must establish that the defendant engaged in an unfair or deceptive act or practice “in the conduct of any trade or commerce” under §2. The requirement that the claim arise from trade or commerce or in a business context is based in §2 of the statute. And a court determines whether a claim arises from trade or commerce or in a business context by requiring that the parties have a business relationship with each other. See First Enterprises, Ltd. v. Cooper, 425 Mass. 344, 347 (1997); Cady, 49 Mass. App. Ct. at 343; Arthur D. Little, 35 Mass. App. Ct. at 743. Accordingly, the business relationship requirement is not limited to §11 cases, but applies to all c. 93A claims.
The lesson to be drawn from the foregoing discussion is that while c. 93A offers a broad and powerful remedy for many wrongs, it is not a replacement for common law tort claims. Not every form of harmful conduct, no matter how outrageous, falls under c. 93A. At a minimum, c. 93A applies only where the wrongful conduct occurs in the context of a business relationship between the plaintiff and defendant.