Opinion
No. 15–P–966.
09-16-2016
ALLIED WASTE SERVICES OF MASSACHUSETTS, LLC v. IMPERIAL DISTRIBUTORS, INC., & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Allied Waste Services of Massachusetts, LLC (Allied), appeals from an order of the Superior Court denying its special motion to dismiss the counterclaims of defendant KLT Industries, Inc. (KLT), pursuant to G.L. c. 231, § 59H (the “anti-SLAPP” statute). We affirm.
Background. Allied and KLT are competitors in the waste removal and recycling business. In February, 2009, Allied entered into certain contracts with Imperial Distributors, Inc. (Imperial), to provide waste removal and recycling services. The contracts contained an automatic renewal provision for successive three-year terms. In December, 2012, Imperial notified Allied that it intended to terminate the Allied contracts. By electronic mail message dated January 22, 2013, Imperial notified Allied of its decision to change to another waste removal provider that offered better pricing, and instructed Allied to remove its equipment from Imperial's property by February 2, 2013. In response, Allied reminded Imperial that their contracts contained a liquidated damages provision, payable upon early termination. Allied refused to remove its equipment from Imperial's property, and informed Imperial that it could not remove the equipment either, thereby preventing the installation of KLT's equipment in its place. Imperial nevertheless arranged to have Allied's equipment removed and switched its business to KLT.
On February 4, 2013, Allied sent correspondence to both Imperial and KLT asserting claims arising from the alleged breach of the Allied contracts. Thereafter, on March 28, 2013, Allied brought this action for breach of contract and breach of the implied covenant of good faith and fair dealing against Imperial, for interference with contract and advantageous business relations against KLT, and for violation of G.L. c. 93A against both defendants. After discovery, KLT successfully moved to amend its answer and brought counterclaims against Allied for abuse of process and violation of c. 93A. Allied filed a special motion to dismiss KLT's counterclaims, pursuant to c. 231, § 59H, which the judge denied, ruling that the counterclaims were not based solely on petitioning activity. This appeal ensued.
Allied originally sought interlocutory review under c. 231, § 118. However, because the denial of a special motion under c. 231, § 59H, is immediately appealable under the doctrine of present execution, see Benoit v. Frederickson, 454 Mass. 148, 151–152 (2009), a single justice of this court ordered Allied to file a notice of appeal in the trial court.
Discussion. We review the denial of a special motion to dismiss under c. 231, § 59H, for abuse of discretion or other error of law. Baker v. Parsons, 434 Mass. 543, 550 (2001). Allied, as the party seeking dismissal under § 59H, must make a threshold showing, based on the pleadings and affidavits, that the claims against it arise solely from protected petitioning activity and have no substantial basis other than the petitioning activity. Duracraft Corp. v. Holmes Prod. Corp., 427 Mass. 156, 167–168 (1998). Wenger v. Aceto, 451 Mass. 1, 5 (2008). Upon review, we discern no error in the judge's determination that Allied failed to meet its burden.
In an attempt to show that KLT's allegations solely concern Allied's petitioning activity, Allied points to portions of KLT's counterclaims that reference the filing of Allied's complaint. When the counterclaims are viewed in their entirety, however, it is apparent that they are directed at Allied's broader efforts to interfere with competition and arise substantially from alleged conduct that preceded Allied's filing of the complaint, as well as from the litigation itself.
KLT's first counterclaim, abuse of process, requires proof that process was used for an ulterior or illegitimate purpose, resulting in damages. Vittands v. Sudduth, 49 Mass.App.Ct. 401, 406 (2000). To survive a special motion to dismiss, however, the claim also must include “a showing of conduct separate and independent from the petitioning activity.” Keystone Freight Corp. v. Bartlett Consol., Inc., 77 Mass.App.Ct. 304, 314 (2010). See Adams v. Whitman, 62 Mass.App.Ct. 850, 857 (2005) (“some nonpetitioning basis” required for abuse of process claim to survive special motion to dismiss).
As recognized in Benoit v. Frederickson, 454 Mass. 148, 156–157 (2009) (Cordy, J., concurring), we interpret § 59H so as to preserve the right to bring causes of action for malicious prosecution and abuse of process; hence the requirement that the claimant allege additional conduct that is separate from the petitioning activity. See Keystone Freight Corp. v. Bartlett Consol., Inc., supra at 312–313.
Here, the counterclaim for abuse of process squarely relies on conduct separate and independent from Allied's bringing suit, i.e., that “Allied willfully and intentionally refused to remove its equipment from Imperial's property because it believed that would force Imperial to reconsider terminating the parties' relationship to switch providers, particularly in light of the liquidated damages provision in the Agreements.” Notably, as in Keystone Freight Corp., supra at 315–316, this separate misconduct not only is distinct from Allied's litigation, it occurred prior to Allied filing its complaint.
Allied endeavors to argue that the allegations regarding its refusal to remove its equipment concern only its contractual relationship with Imperial, and that KLT was not a party to those contracts. The thrust of KLT's abuse of process claim, however, is directed at the misuse of process for the ulterior purpose of thwarting a competitor that was offering lower prices to Allied's customer, as demonstrated by KLT's further allegation that “Allied used legal process for an ulterior or illegitimate purpose to hurt KLT's business and/or to interfere with KLT legitimately competing in the marketplace.”
The same analysis holds true with respect to KLT's counterclaim against Allied for violation of c. 93A. Allied's refusal to remove its equipment from Imperial's property is alleged, along with Allied's lawsuit, to be anticompetitive conduct, in violation of the statute, undertaken to prevent Imperial from switching waste removal companies. KLT alleges that Allied refused to remove its equipment “so as to induce Imperial to have it removed, essentially lying in wait to assert a[93A] claim against KLT.” KLT further alleges that Allied utilized the threat of liquidated damages and the automatic renewal provision in the contracts to prevent Imperial from switching providers. Accordingly, the c. 93A claim is based on alleged misconduct by Allied beyond the filing of its complaint. See ibid. (c. 93A claim alleged billing misconduct and was not based solely on suit for payment). See also Ayasli v. Armstrong, 56 Mass.App.Ct. 740, 748 (2002) (defendants' interference with plaintiffs' use of their property provided independent basis for plaintiffs' complaint for civil rights violation beyond defendants' challenge to plaintiffs' pursuit of special permit).
Conclusion. The judge correctly ruled that KLT's claims for abuse of process and violation of c. 93A do not derive solely from Allied's petitioning activity.