Opinion
11-P-1313
04-04-2012
ATTORNEY GENERAL v. SUSAN L. BACH & others.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The Attorney General (AG) brought this action against Susan Bach and two of her now defunct corporations (collectively, defendants), seeking to enforce the provisions of G. L. c. 68, §§ 18 to 35 (act). A Superior Court judge granted summary judgment for the AG, finding that the defendants violated the act. , The defendants appeal from the judgment, which permanently enjoins them from '[f]ailing to comply with all registration and filing requirements of [the act]; [c]ommencing charitable solicitations as commercial co-venturers . . . [or] [u]sing a charitable organization's name and emblems for the purpose of soliciting the contribution of funds from the public until they have complied with the requirements of [the act].' We affirm.
The judge found that the defendants:
(1) failed to file agreements with the AG, as required by G. L. c. 68, § 22;
(2) commenced charitable solicitations as commercial co-venturers without having made the required filings with the AG, in violation of G. L. c. 68, § 22;
(3) acted as commercial coventurers without first paying a fee and registering with the AG, in violation of G. L. c. 68, § 24(a);
(4) failed to file with and have approved by the AG a bond in the amount of $10,000, as required by G. L. c. 68, § 24(b) (prior to its amendment in 2010); and
(5) used a charitable organization's name and emblems for the purpose of soliciting the contribution of funds from the public without first having been authorized to do so, in violation of G. L. c. 68, § 28(d).
Additional counts against the defendants, including allegations of G. L. c. 93A violations, were voluntarily dismissed by the AG after the summary judgment order.
Bach is an entrepreneur and the president of both corporate defendants in this action. In 2003, in conjunction with her companies, Bach sponsored a 'show house,' an extensively redecorated home for which the public purchased tickets to tour. Bach contacted Mickey Lawrence, whom she thought was an authorized representative of the Susan G. Komen Breast Cancer Foundation (Komen), and Philip Graceffa, the president of the Boston chapter of Komen, to participate in the event. Bach and Graceffa reached an agreement in which Bach was given permission to use Komen's logos in the marketing of the house tour. Although Bach had a letter from Graceffa agreeing to this basic deal, she never signed the letter agreement herself, and she and her companies never registered with the AG or paid the required filing fee. The show house was unsuccessful, with ticket sales far below what Bach and others had hoped. As a result, both of Bach's corporations dissolved and she was rendered unemployed.
More than two years after the show house tour, the AG brought this enforcement action, claiming that Komen never authorized Bach to solicit on its behalf and that Bach otherwise failed to register properly under the act.
On appeal, the defendants argue that the judge erred by (1) granting summary judgment, where Bach did not solicit contributions to a charity and because the defendants were not 'commercial co-venturers' within the meaning of the act; (2) ordering a permanent injunction; and (3) not deciding the defendants' posthearing motion under Superior Court Rule 9A.
Summary judgment. The defendants assert that neither Bach nor her companies are subject to the act's requirements because they did not solicit contributions for a charity and were not 'commercial co-venturers' within the meaning of G. L. c. 68, § 18.
General Laws c. 68, § 24(a), inserted by St. 1985, c. 790, § 1, provides that '[n]o person shall act as a professional fund-raising counsel, commercial co-venturer[ ] or professional solicitor for a charitable organization required to have a certificate of registration pursuant to the provisions of section nineteen, unless first having registered with the division [of public charities in the Department of the AG].' In Attorney Gen. v. International Marathons, Inc., 392 Mass. 370 (1984), the Supreme Judicial Court found that the act did not apply, and thus was not violated, by a fund-raising corporation that was organized to solicit sponsors for the Boston Marathon. There, notwithstanding the fact that the Marathon is organized by a nonprofit corporation, the court concluded that the sale of the sponsorships was not a solicitation under the act because the sponsorships were strictly marketed as 'a commercial rather than a philanthropic opportunity.' Id. at 374. The court held that the language of the act was 'not broad enough to include the sale of sponsorships, advertising, and promotional rights.' Id. at 373.
General Laws c. 68, § 18, defines a commercial coventurer as 'any person who for profit or other commercial consideration, conducts, produces, promotes, underwrites, arranges or sponsors a performance, event, or sale to the public of a good or service which is advertised in conjunction with the name of any charitable organization or as benefiting to any extent any charitable purpose. Any such person who will benefit in good will only shall not be deemed a commercial co-venturer if the collection and distribution of the proceeds of the performance, event or sale are supervised and controlled by the benefiting charitable organization[.]'
This case differs, however, because here the defendants' activities were not commercial transactions with corporate sponsors. Rather, the defendants were selling tickets to the public, and their promotional materials indicated that the proceeds from the show house were going to Komen; thus, the defendants were 'commercial co-venturers' with Komen, within the meaning of the act. Bach was admittedly operating commercial, for-profit enterprises and using Komen's logos and marks to promote the show house. She did not simply give tickets to the charities to sell on their own behalf; she marketed her event to the public using Komen's name, indicating to the public that the proceeds would go to charity. As a result, the statute is applicable and summary judgment was appropriate.
Permanent injunction. The defendants also argue that a permanent injunction is not an available remedy in these circumstances because the act authorizes an injunction only to prohibit threatened prospective violations, a threat not present here where Bach and her companies are out of business. The defendants also claim that the judge's findings are inadequate to support the injunction, particularly with respect to necessity issues and the public interest. We disagree.
Where the AG requests injunctive relief, a judge need only conclude that such relief would be 'in the public interest.' Commonwealth v. Mass. CRINC, 392 Mass. 79, 88 (1984) (preliminary injunction). See Commonwealth v. ELM Med. Labs., Inc., 33 Mass. App. Ct. 71, 83 (1992) (permanent injunction). Additionally, although G. L. c. 68, § 32(e), authorizes an injunction where there are active, ongoing violations, it also explicitly authorizes 'such other relief as to the court seems appropriate.'
Here, the injunction merely requires that the defendants obey the act. Because, by its very nature, the act is enforced for the benefit of the public, the injunction is 'in the public interest.' As to the statutory authority issue, there is no merit to the defendants' assertion that there is nothing in the act authorizing an injunction where violations are not ongoing. General Laws c. 68, § 32(e), explicitly permits any relief deemed appropriate by the court. The judge acted within her discretion in issuing the injunction requiring the defendants to comply with the requirements of the act.
The defendants' claim that the judge violated Superior Court Rule 9A by 'ignoring' their posthearing motion to submit a supplemental affidavit is also without merit. The motion was untimely, as it was submitted some three weeks after the hearing. Additionally, Rule 9A does not provide that motions submitted after a summary judgment hearing will themselves be given a hearing. Lastly, as the AG points out, any error would necessarily be harmless in the present circumstances. See Viriyahiranpaiboon v. Department of State Police, 52 Mass. App. Ct. 843, 847 (2001).
For these reasons, as well as for substantially those in the brief of the AG, we affirm.
Judgment affirmed.
By the Court (Kantrowitz, Milkey & Sullivan, JJ.),