Opinion
No. 03-0381A.
October, 2004.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT JOHN BASSETT'S MOTION FOR SUMMARY JUDGMENT
This is a civil action arising out of an alleged breach of a lease indenture dated November 1, 1995 between Selski, Inc.'s predecessor in interest and the Trustees of Clark University for the ground floor of 912-914-916 Main Street, Worcester. This mater is before the court on defendant John Bassett's motion for summary judgment as to all claims asserted against him. For reasons below, the motion is ALLOWED.
BACKGROUND
The undisputed facts viewed in the light most favorable to the non-moving party are as follows:
John Bassett ("Bassett") is President of Clark University, and is named as a defendant in this action. On November 1, 1995, the Trustees of Clark University ("Trustees"), acting through their agent, Paul Bottis ("Bottis"), Director of Clark University Physical Plant, executed a lease agreement ("Lease") with Kamanitzas, Inc. ("Kamanitzas") for the ground floor of 912-914-916 Main Street, Worcester. The Lease contained a clause that controlled any subsequent assignment of the Lease or transfer of lessee's assets:
The Trustees, although party to the contract from which the entire dispute arises, are not named as defendants in the action.
I. Sale of Business; Assignment of Lease
(a) Lessee agrees that it will not sell substantially all the assets, nor will the stockholders transfer a majority of their stock, nor will Lessee assign this Lease without approval of the Lessor, which shall be granted or withheld at the discretion of Lessor, provided however that said approval shall not be unreasonably withheld.
In 1999, Bottis was approached by Kamanitzas about assigning the Lease to Selski, Inc. ("Selski"). After undertaking a review of Selski's references and business plan, and conducting an interview with Selski's principal, Louis Seligowski ("Seligowski"), Bottis approved the assignment.
Thereafter, the demised premises were operated as a bar (known at various times as "Coco Bongo," "Scarlet O'Hara's," and "Bar Fly"). During Selski's tenancy, Selski allegedly breached material terms of the Lease by serving alcohol to minors, creating noise disturbances, and allegedly undertaking unapproved alterations to the premises. In response to these alleged breaches, the Trustees served a Notice to Quit dated March 7, 2002. Bassett was not involved in the decision to terminate the lease.
Summary Process Summons and Complaint was ultimately served upon Selski sometime before June 27, 2002 (date of hearing). Judgment for Selski entered on January 23, 2003.
On or about November 20, 2002, Bardabing Pizza, Inc. ("Bardabing") and Selski entered into an asset purchase agreement ("Agreement") whereby Bardabing was to purchase substantially all of Selski's assets. The Agreement also obligated Bardabing to "promptly and diligently seek, effectuate and obtain" permission from the Trustees for an assignment of the Lease from Selski to Bardabing.
In late December 2002, Tariq Ellahi ("Ellahi"), principal of Bardabing, approached Bottis at his office to introduce himself as the new owner of Scarlet O'Hara's and to initiate the process of effectuating an assignment of the Lease. Bottis responded that the Trustees were currently in litigation with Selski, and that an assignment of the Lease could therefore not be discussed at that time. Bottis did not inform Bassett of this conversation.
Subsequent to this conversation, Selski, by its attorney, sent two letters dated February 4, 2003 and February 13, 2003 to Bassett, requesting approval of the proposed assignment of the Lease from Selski to Bardabing. This was the first and only time Bassett had been contacted by anyone in regard to the proposed lease assignment. It is assumed, although not indicated in the summary judgment record, that Bassett received those letters.
Community Nat'l Bank v. Dawes, 369 Mass. 550, 559 n. 8 (1976) ("inferences to be drawn from the facts contained in the pleadings, affidavits and other materials must be drawn against the movant and in favor of the party opposing the motion.").
Shortly thereafter, the present litigation was commenced by Selski and Seligowski as co-plaintiffs. In the complaint, Selski and Seligowski (collectively, "plaintiffs") allege: defendants' breach of contract; defendants' tortious interference with the Agreement; defendants' tortious interference with an advantageous relationship between Selski and Bardabing; defamation of Louis Seligowski by Paul Bottis and Clark University; and defendants' unfair or deceptive acts or practices as prohibited by G.L. c. 93A, § 2 (2002). Bassett has sought summary judgment on each claim asserted against him.
The plaintiffs do not assert a claim of defamation against Bassett in their complaint, but in a response to an interrogatory, assert Bassett's implicit liability for Bottis's allegedly defamatory remarks by stating, "neither Bassett nor Clark has attempted to disclaim any responsibility or involvement with Mr. Bottis's actions." Because defendant has briefed the issue, we will dispose of it, to the extent any claim for defamation has been asserted against Bassett. To prevail on a claim for defamation, a plaintiff must prove that " the defendant was at fault for the publication of a false statement regarding the plaintiff, capable of damaging the plaintiff's reputation in the community, which either caused economic loss or is actionable without proof of economic loss." White v. Blue Cross Blue Shield of Massachusetts, Inc., 442 Mass. 64, 66 (2004) (emphasis added). Here, plaintiffs do not plead a claim of defamation against Bassett in their complaint. The summary judgment record is entirely devoid of any showing that Bassett was at fault for the publication of a defamatory statement against Seligowski. Bassett is therefore entitled to summary judgment as to any claim of defamation that might be asserted against him.
DISCUSSION
Summary judgment shall be granted where there is no genuine issue as to any material fact and where the moving party is entitled to judgment as a matter of law. Mass R. Civ. P. 56(c);Community Nat'l Bank v. Dawes, 369 Mass. 550, 553 (1976).
The moving party bears the burden of affirmatively demonstrating the absence of a triable issue, and that the record entitles the moving party to judgment as a matter of law.Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). A moving party who does not have the burden of proof at trial may satisfy this burden either by submitting affirmative evidence that negates an essential element of the opposing party's case or by demonstrating by reference to undisputed summary judgment material that the opposing party has no reasonable expectation of proving an essential element of their case at trial.Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711-712, 714, 716 (1991).
Once the moving party has met their burden of demonstrating the absence of a triable issue, the opposing party may not rest upon the allegations of their pleadings and mere assertions of disputed facts. Mass. R. Civ. P. 56(e); LaLonde v. Eissner, 405 Mass. 207, 209 (1989); Community Nat'l Bank, 369 Mass. at 554. Rather, the opposing party must set forth, by affidavit or as otherwise provided in Mass. R. Civ. P. 56(c), specific facts establishing a genuine issue of material fact. Mass. R. Civ. P. 56(e); Pederson, 404 Mass. at 17 (1989); Community Nat'l Bank, 369 Mass at 554.
I. Beach of Contract
To maintain a claim for breach of contract under Massachusetts law, a party must demonstrate: (1) that a contract existed between the parties; (2) that one party failed to perform an obligation under the contract; and (3) that the non-breaching party suffered damages as a result of the failure to perform. SeeGuckenberger v. Boston Univ., 957 F. Supp. 306, 316 (D. Mass. 1997). It is undisputed in the summary judgment record that the parties to the Lease are the Trustees and Selski. Therefore, as a matter of law, Bassett cannot be directly liable for breach of contract because Bassett is not a party to the contract that has allegedly been breached.
Plaintiffs, however, alluded to a theory at oral argument, without citing any authority, that high-level officers of private educational institutions may be held implicitly liable for their institution's breach of contract. This court finds plaintiffs' argument expressly rejected by Massachusetts case law. InGuckenberger, a group of students sued Boston University, the president of the university, the chancellor of the university, and the president's assistant for breach of contract, among other claims. In ruling that the chancellor and president's assistant could not be held liable for Boston University's alleged breach of contract, the court stated that under Massachusetts law "the officer ordinarily is not liable for the corporation's breach of contract." Guckenberger, 957 F. Supp. at 324 (quoting Union Mut. Life Ins. Co. v. Chrysler Corp., 793 F.2d 1, 11 (1st Cir. 1986) (citing G.L. c. 156, § 38 ("[N]o suit shall be maintained against a stockholder or officer for the debts or contracts of the corporation."))).
The alleged contract between plaintiffs and Boston University arose from (1) Boston University's publication and dissemination of promotional materials regarding the accommodations that students with learning disabilities were entitled to receive at Boston University, (2) written assurance that those accommodations would be available for the duration of plaintiffs' academic careers at Boston University, and (3) plaintiffs' decision to attend Boston University based in significant part upon the written assurance. Guckenberger 957 F. Supp. at 317.
Boston University's president did not seek to dismiss the claim asserted against him for breach of contract.
Accordingly, plaintiffs' claim for breach of contract lies solely against the Trustees, the entity with whom the Lease was entered into, and not with Bassett, a stranger to the contract. See Guckenberger 957 F. Supp. at 324-325 ("In the absence of malice, one who knowingly and voluntarily contracts with a corporation must look to the corporation, not to its officers, for redress, even for 'obvious' failures to perform contractual promises.") (quoting Union Mut. Life Ins. Co., 793 F.2d at 11-12). Summary judgment for Bassett on the breach of contract claim is therefore appropriate.
II. Intentional Interference with Contract/Advantageous Relationship
To maintain a claim for intentional interference with contract, the plaintiff must prove: (1) existence of a contract with a third party; (2) that defendant knowingly and improperly induced the third party to breach their contract; and (3) that injury was caused by the third party's breach. See United Truck Leasing Corp. v. Geltman, 406 Mass 811, 812, 816 (1990).
Plaintiff has produced no evidence that Selski and Bardabing actually had a contract, or, if such a contract existed, that Bardabing breached that contract. Indeed, one possible reading of Section 5.1 of the Agreement is that Bardabing's contractual obligations were expressly conditioned upon the Trustee's approval of the assignment — in other words, that Bardabing would not be contractually bound to perform until a transfer of the Lease was approved. There can be no breach without contractual obligation. This point, however, was not argued by the parties. For purposes of resolution of this claim only, we assume a contract existed between Selski and Bardabing, and that Bardabing breached that contract.
By plaintiffs' own admission, Bottis was the only defendant who ever conversed with anyone regarding Bardabing's attempt to acquire Selski's business. This conversation with Bardabing occurred in December 2002. It is undisputed that Bottis never told Bassett that this conversation occurred. Furthermore, it was not until Selski's February 4, 2003 and February 13, 2003 letters that Bassett first received knowledge that an assignment of the Lease was sought. These letters, however, only referenced an "agree[ment] to purchase the business from Selski, Inc." and made no explicit reference to any contractual obligation which Bardabing was bound to perform. Additionally, there is a complete absence of evidence that Bassett ever communicated with Bardabing. This action commenced on February 24, 2003.
In response to defendant/movant's 9A(b)(5) statement ¶ 20, "Bottis did not discuss that conversation with President Bassett," plaintiffs neither "admit" nor "deny;" rather, they reply, "this statement is immaterial." This court reads such a response as an admission — in order for something to be immaterial, it must first exist as a fact. Therefore, plaintiff has implicitly admitted the fact that Bottis did not discuss with Bassett his conversation with Tariq Ellahi concerning the Agreement and the request for an assignment of the Lease.
Upon examining these undisputed facts, this court is unable to fathom how Bassett could have knowingly induced Bardabing to breach its contract with Selski when Bassett clearly never knew the contract existed and never communicated with Bardabing. Accordingly, Bassett has demonstrated, by reference to undisputed summary judgment material, that plaintiffs have no reasonable expectation of proving an essential element of their case — that Bassett knowingly and improperly induced Bardabing to breach a contract between Selski and Bardabing. SeeKourouvacilis, 410 Mass. at 716. Summary judgement for Bassett on the intentional interference with contract claim is therefore appropriate.
Plaintiff also alleges "interference with prospective advantage." The more familiar phrasing of this common law tort in Massachusetts is "intentional interference with advantageous relationship." Its elements are similar to those required to show an intentional interference with contract: (1) the existence of a business relationship or contemplated contract of economic benefit; (2) the defendant's knowledge of such relationship; (3) the defendant's intentional and improper interference with the relationship; and (4) the plaintiff's loss of advantage directly resulting from the defendant's conduct. See Comey v. Hill, 387 Mass. 11, 19 (1982); Owen v. Williams, 322 Mass. 356, 360 (1948); Miniter v. Ohio Indem. Co., 112 F.3d 1240, 1250 (1st Cir. 1997) (interpreting Massachusetts law).
As discussed above, it is undisputed in the summary judgment record that Bassett only learned of the advantageous business relationship between Selski and Bardabing after Bottis had rejected Bardabing's request for an assignment. In other words, Bassett did not learn of the Selski-Bardabing relationship until that relationship had already been, or was in the process of, allegedly being destroyed. Accordingly, Basset has demonstrated by reference to undisputed summary judgment material that the plaintiffs have no reasonable expectation of proving an essential element of their case — knowledge of the advantageous relationship between Selski and Bardabing. See Kourouvacilis, 410 Mass. at 716. Furthermore, assuming arguendo that Bassett knew of the relationship, Bassett has also shown that there is no evidence in the summary judgment record, nor any inferences that can be drawn therefrom, that he intentionally interfered with that relationship. Id. at 711-712. Summary judgement for Bassett on the intentional interference with advantageous relationship claim is therefore appropriate. III. G.L. c. 93A, § 2
To the extent plaintiffs might also be claiming Bassett's indirect liability for the allegedly intentional interference torts of Clark University and Bottis, we also grant summary judgment for Bassett. Union Mut. Life Ins. Co., 793 F.2d at 11 ("Under Massachusetts law, a high corporate officer may be personally liable for the torts a corporation commits at his direction.") (emphasis added). Bassett has shown that there is no evidence in the summary judgment record, nor any inferences that can be drawn therefrom, that Bassett directed Clark University, though its agents, to intentionally interfere with either the contract or advantageous relationship between Selski and Bardabing.
"[U]nfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." G.L. c. 93A, § 2 (2002) ("93A").
The outer boundaries of what constitutes an "unfair or deceptive" act or practice is a question of law to be resolved by the court. See Commercial Union Ins. Co. v. Seven Provinces Ins. Co., 217 F.3d 33, 40 (1st Cir. 2000) (citing Schwanbeck v. Federal-Mogul Corp., 31 Mass. App. Ct. 390, 414 (1991)) rev'd on other grounds, 412 Mass. 703 (1992). But whether specific conduct, in the totality of the circumstances, is "unfair" or "deceptive" is a question of fact to be resolved at trial. See, e.g., Martin v. Factory Mut. Research Corp., 401 Mass. 621, 623 (1988) ("Unfairness within the meaning of 'unfair . . . acts or practices,' in [93A], is determined from all the circumstances."); Spence v. Boston Edison Co., 390 Mass. 604, 615 (1983) ("[T]he existence of unfair or deceptive acts and practices 'must be determined from the circumstances of each case.'"); Schwanbeck, 31 Mass. App. Ct. at 414 ("[W]hether a particular set of acts, in their factual setting, is unfair or deceptive is a question of fact. . . ."); Fraser Eng'g Co. v.Desmond, 26 Mass. App. Ct. 99, 103 (1988) ("[T]he possible existence of [an unfair act or practice is] to be determined on a case-by-case basis.").
The Supreme Court has given some guidance as to what a fact finder should look for when examining whether an act or practice is "deceptive." See, e.g., Lowell Gas Co. v. Attorney General, 377 Mass. 37, 51 (1979) (defining a "deceptive" act or practice as that which "could reasonably be found to have caused a person to act differently from the way he otherwise would have acted.").
Long-standing Massachusetts case law has clearly held that 93A creates new rights and forbids conduct not unlawful under established common and statutory law. See, e.g., Slaney v.Westwood Auto, Inc., 366 Mass. 688, 703-704 (1975) ("[T]he definition of an actionable 'unfair or deceptive act or practice' goes far beyond the scope of the common law action. . . . [93A] is neither wholly tortious nor wholly contractual in nature, and is not subject to the traditional limitations of preexisting causes of action. . . ."); Commonwealth v. DeCotis, 366 Mass. 234, 244 n. 8 (1974) ("[93A] created new substantive rights by making conduct unlawful which was not unlawful under the common law or any prior statute."); Schwanbeck, 31 Mass. App. Ct. at 413 (holding that although plaintiff's common law claims were "not soundly based," 93A § 11 "affords businessmen certain remedies 'that elude conventional definitions and categories.'").
As such, 93A proscribes conduct that does not necessarily correlate with whether a defendant has complied with or violated other statutes, regulations, or common law requirements. See e.g., Schubach v. Household Fin. Corp., 375 Mass. 133, 137 (1978) ("We reject the argument that an act or practice which is authorized by statute can never be an unfair or deceptive act or practice under [93A]."); Mechanic's Nat'l Bank of Worcester v.Killeen, 377 Mass. 100, 109 (1979) ("[N]ot every unlawful act is automatically an unfair (or deceptive) one under [93A].").
In order for Bassett to be potentially liable under 93A, this court would first have to endorse the notion that a university president has a duty to act upon a direct request arising from a contract between the university and a third party when that request would ordinarily be directed to another university department in the normal course of business. Upon the facts of this case, the court declines to create such a broad and burdensome duty. Specifically, it is undisputed that Bottis, the Physical Plant Director, had been Selski's exclusive contact for all issues concerning the Lease, and that the two letters sent to Bassett immediately prior to litigation were the first and only contact Selski ever had with him. It was also argued by defense counsel at oral argument that plaintiffs' counsel directed the second letter to Bassett after having been notified that Bassett was represented by counsel.
Although this court can envision a circumstance in which the president of a private university would have a duty to act upon a request even when that request would ordinarily be directed to another university department, this is not such a case. The court is particularly wary of actions designed solely to drag an otherwise foreign party into litigation. The two letters appear to be such an action: the court takes particular note of the fact that Bottis, not Bassett, had been Selski's exclusive contact at all times regarding the lease, and that the two letters were sent immediately prior to the commencement of this action (letters dated February 4 and 13, 2003; action commenced February 24, 2003).
Accordingly, because Bassett had no duty to consider the two letters, his failure to respond to them cannot be, as a matter of law, an unfair or deceptive act or practice. Summary judgement for Bassett on the 93A claim is therefore appropriate.
Alternatively, plaintiffs once again argue that Bassett is implicitly liable for Clark University's and Bottis's allegedly unfair or deceptive acts. Plaintiffs incorrectly cite Mohamad v. Fast Forward, Inc. for the proposition that a corporate officer, in addition to the corporation, is automatically liable for 93A violations committed by corporate employees. 43 Mass. App. Ct. 207 (1997). This assertion contravenes commonly understood principals of agency and corporate law; furthermore, it is also clear upon the face of Mohamad that the corporate president was found directly liable for his own unfair and deceptive act, independent of the unfair and deceptive act of the company committed vicariously through another employee. Accordingly, the appeals court affirmed separate judgments against the president and corporation for their separate unfair and deceptive acts. Id. at 211.
In Mohamad, the corporation and its president each "knowingly purchased counterfeit certificates of origin, which they used to transfer title to two of the plaintiff's vehicles with the intent of depriving him of his property. . . ." Id. at 208. "[I]n addition to [the president], another employee of [the corporation]. . also acted in a fraudulent manner." Id. at 210 (emphasis added).
ORDER
For the foregoing reasons, it is hereby ORDERED that summary judgment enter for defendant Bassett on all counts.