Opinion
No. 11–P–1334.
2012-08-15
NEWLY WEDS FOODS, INC. v. SUPERIOR NUT COMPANY, INC.
By the Court (CYPHER, SMITH & FECTEAU, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Superior Nut Company, Inc. (SNC), appeals from a judgment and from the denial of its postjudgment motions following a 2009 Superior Court jury verdict that awarded Newly Weds Foods, Inc. (NWF), damages for breach of contract and breach of the implied warranty of merchantability and found on an advisory basis that SNC had committed a violation of G.L. c. 93A, § 11. The trial judge doubled the damage award and awarded NWF attorney's fees and costs. The case arose from NWF's allegations that SNC had supplied it with toasted sesame seeds that had been contaminated with peanuts.
Discussion. 1. Violation of G.L. c. 93A, § 11. SNC broadly asserts that there was insufficient evidence to find that SNC committed unfair or deceptive acts. The judge's principal findings are as follows:
“[SNC]'s conduct cannot be classified as a simple breach of contract or warranty. Here, [SNC] engaged in a pattern of unfair and deceptive acts and practices, starting with its failure to disclose to [NWF] that its toasted sesame seeds likely contained peanut and ending with its ongoing attempts to disclaim knowledge of the adulteration and avoid responsibility for it.
“[SNC] first engaged in a commercially unfair practice by failing to disclose that its toasted sesame seeds were being manufactured on equipment shared with peanuts and that its product likely contained peanut.... [SNC]'s Executive Vice–President knew that the toasted sesame seeds it sold contained peanut, was aware that the better practice was to label individual boxes accordingly, and testified that the toasted sesame seeds it sold to other customers were labeled with allergen warning information. The court declines to credit [SNC]'s argument that its labeling practices were justified because the FDA and Massachusetts law did not mandate allergen labeling on individual containers until 2006.... [SNC]'s failure to disclose that its toasted sesame seed product contained peanut was therefore unfair for Chapter 93A purposes. [SNC]'s practice was also deceptive as evidenced by [NWF]'s trial testimony that lack of allergen information relating to peanut content was material to [NWF]'s decision to purchase [SNC]'s product .”
SNC advances a number of scattershot assertions in an effort to show that there was insufficient evidence of unfair or deceptive acts.
These assertions do not constitute reasoned appellate argument and fail to undermine the judge's findings. The judge properly concluded that SNC violated c. 93A, § 11.
SNC objected to the admission of test reports of Neogen Corporation showing that sesame seed samples contained peanut particles and skins. SNC complains that the reports were introduced by NWF's quality control manager and not in accordance with the provisions of G.L. c. 233, § 78. There is no merit in this complaint—“business records of one business are admissible as the business records of another business where such records are integrated into the latter business's records and relied on.” Beal Bank, SSB v. Eurich, 444 Mass. 813, 818 (2005). See McLaughlin v. CGU Ins. Co., 445 Mass. 815, 819–820 (2006). Even if it were error to admit the reports, there was ample cumulative contamination evidence from several other sources at trial.
2. Denial of motion for judgment notwithstanding the verdict. The standard of review of a motion for judgment notwithstanding the verdict requires that we determine whether “anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff.” Raunela v. Hertz Corp., 361 Mass. 341, 343 (1972), quoting from Kelly v. Railway Exp. Agency, Inc., 315 Mass. 301, 302 (1943).
SNC asserts that the evidence was insufficient to support NWF's breach of contract or breach of implied warranty of merchantability claim. There was evidence, including the testimony of two officials of SNC, Hintlian, and Chraibi, that SNC knew that its processing of sesame seeds on the same equipment as peanuts would lead to contamination and that its cleaning procedures were ineffective in removing all traces of peanut when that equipment was used for processing sesame seeds. There was testimony from industry authorities detailing relevant State and Federal regulatory requirements, and testimony particularly describing the expectations and conduct of merchants in the trade. This evidence was sufficient to withstand SNC's motion for judgment notwithstanding the verdict.
NWF argues that SNC failed to preserve several arguments for appeal, and that they therefore should not be considered. It is not apparent that SNC raised these arguments on appeal, and to the extent that they appear in some form, they have insufficient merit for consideration.
3. Damages and attorney's fees. As the judge explained in his denial of SNC's motion to amend findings, “[SNC]'s false and deceptive practices contributed to the amount of [NWF's] monetary loss; [NWF]'s losses [are] attributable to both [SNC]'s breach of contract and Chapter 93A violation.” In evaluating the jury's award of damages, the judge first observed that they awarded $217,556 to NWF as compensatory damages for breach of contract and breach of warranty claims. In awarding damages under c. 93A, § 11, the judge noted that where NWF'S injury was caused by conduct resulting in damage under claims of breach of contract and breach of warranty of merchantability, as well as unfair and deceptive acts under c. 93A, “recovery of cumulative damages under multiple counts may not be allowed.” Calimlin v. Foreign Car Care Center, Inc., 392 Mass. 228, 235–236 (1984). Because the judge found that NWF did not incur any additional damages due to SNC's unfair and deceptive acts, he doubled, for SNC's wilful violation of c. 93A, the $217,556 that the jury awarded as damages on the contract and breach of warranty claims.
In answer to questions, the jury awarded damages of $435,112 caused by SNC's unfair or deceptive act or practice, an amount double that awarded for the breach of contract and warranty of merchantability claims. Because the jury precisely doubled the $217,566 awarded on the other claims, the judge inferred they found no separate c. 93A damages.
The judge also determined that under G.L. c. 93A, § 11, NWF was entitled to attorney's fees and that apportionment between the c. 93A claims and the other claims was not required because the claims are based on the same “chain of events.” Hanover Ins. Co. v. Sutton, 46 Mass.App.Ct. 153, 177 (1999). Clamp–All Corp. v. Foresta, 53 Mass.App.Ct. 795, 813 (2002). Subsequently, the judge held a hearing on NWF's request for attorney's fees and costs. He considered and rejected a number of arguments raised by SNC, and ruled that NWF was entitled to fees and costs, including for the later phases of product recall and investigation into SNC's plant operations. The judge concluded that attorney's fees of $177,927.51 and costs of $39,609.77 were reasonable. There was no error.
4. Denial of motion for new trial. In denying SNC's motion for a new trial, the judge rejected the claim that the jury instructions were inadequate, determining that the instructions “accurately addressed all the elements of breach of contract and breach of implied warranty of merchantability.” He also determined that the jury decided SNC's counterclaim for goods sold and received in favor of NWF. He ruled that SNC's claims of defamation and disparagement of the quality of goods were waived by the failure to properly prosecute them at trial.
We discern no merit in SNC's lengthy argument that although NWF's count on negligence-based claims was removed on directed verdict, the jury were confused and their verdict could not have been based on applicable law. There is no indication that the jury failed to follow the judge's instructions or that the instructions were lacking. The judge did not abuse his discretion in denying SNC's motion for a new trial. See Wojcicki v. Caragher, 447 Mass. 200, 209 (2006).
Corrected judgment dated July 2, 2010, affirmed.
Orders denying postjudgment motions affirmed.