Standard Register Co. v. Bolton-Emerson, Inc.

649 N.E.2d 791, 38 Mass. App. Ct. 545, 1995 Mass. App. LEXIS 427
CourtMassachusetts Appeals Court
DecidedMay 12, 1995
DocketNo. 94-P-31
StatusPublished
Cited by62 cases

This text of 649 N.E.2d 791 (Standard Register Co. v. Bolton-Emerson, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standard Register Co. v. Bolton-Emerson, Inc., 649 N.E.2d 791, 38 Mass. App. Ct. 545, 1995 Mass. App. LEXIS 427 (Mass. Ct. App. 1995).

Opinion

Warner, CJ.

This controversy arises out of an order placed on March 1, 1988, by the plaintiff Standard Register Company (Standard Register) with the defendant Bolton-Emerson, Inc. (Bolton), for the manufacture and delivery of a label machine known as a hot melt coater. We summarize the facts (none of which is challenged) as set forth by the [546]*546trial judge in his memorandum of decision. Prior to the order, Standard Register informed Bolton that delivery of the coater by September 1, 1988, was critical to correspond with a move to a new production facility. Bolton officials John Fitzgerald, president, and Glen Urquhart, vice president of sales and marketing, intending to induce Standard Register into granting Bolton the contract, assured Standard Register that the coater would be completed in the required six months even though they knew at the time that performance by the agreed date was not possible because of undisclosed corporate cash flow problems. In reliance on Bolton’s assurances that it could deliver in a timely fashion, Standard Register contracted with Bolton for the purchase of a new coater. Bolton never delivered the coater. After the original delivery date expired, Fitzgerald and Urquhart falsely represented to concerned Standard Register officials on numerous occasions that completion of the coater was imminent when they knew that Bolton’s financial difficulties rendered construction of the coater impossible. In reliance on these false assurances, Standard Register refrained from obtaining a substitute coater for almost one year and instead used its old coater which was moved to the new plant. Standard Register was not able to achieve its anticipated production with the old, slower coater.

Tired of the pattern of delay and empty promises perpetrated by Fitzgerald, Urquhart, and Bolton, Standard Register finally cancelled the contract, obtained a coater from another source, and sued for damages. Standard Register filed a two-count complaint claiming breach of contract against Bolton seeking a return of its deposit, cost of the replacement coater, moving expenses, and lost profits; and claiming a violation of G. L. c. 93A, § 11, against both the corporation and Fitzgerald and Urquhart individually for their misrepresentations seeking multiple damages and attorney’s fees. Following a bench trial, a judge of the Superior Court ruled in favor of Standard Register on both counts. Judgment entered against all defendants in the amount of $1,163,474 on both the contract and G. L. 93A, § 11, counts combined, includ[547]*547ing $985,297 in lost profits. This total was doubled for a knowing and wilful violation of chapter 9 3A, plus an additional $160,000 in attorney’s fees.

The defendants raise two issues on appeal, both limited to an attack on the amount of damages that the trial judge determined Standard Register was legally entitled to recover on its complaint. First, all defendants argue that Standard Register was not entitled to damages for lost profits under either count since the limitation of liability provisions of the contract precluded recovery of all such consequential damages.2 Second, defendants Urquhart and Fitzgerald argue that, even if consequential damages were properly allowed, the judge erroneously assessed against them a portion of lost profits resulting from the breach of contract for which Bolton as the corporate defendant is solely liable. We affirm.

1. Lost profits damages. Bolton and Standard Register, as commercially sophisticated parties, were free to limit or exclude prospective consequential damages arising from a breach of the coater contract so long as the waiver was not unconscionable. G. L. c. 106, § 2-719(3). See also Deerskin Trading Post, Inc. v. Spencer Press, Inc., 398 Mass. 118, 124 (1986). However, Standard Register alleged, and the judge ruled, that the lost profits damages suffered by Standard Register were caused by the defendants’ unfair or deceptive acts of misrepresenting Bolton’s ability to perform the coater contract in violation of G. L. c. 93A, § 11, and not a result [548]*548of Bolton’s breach of contract. The question is whether the limitation of liability provisions in the coater contract preclude Standard Register from recovering lost profits under its complaint for a violation of G. L. c. 93A, § 11, based on the defendants’ intentional misrepresentations.3

An action pursuant to G. L. c. 93A is “neither wholly tortious nor wholly contractual in nature.” Slaney v. Westwood Auto, Inc., 366 Mass. 688, 704 (1975). See also York v. Sullivan, 369 Mass. 157, 164 (1975); Heller v. Silverbranch Constr. Corp., 376 Mass. 621, 626 (1978). Even so, claims of unfair or deceptive acts or practices may be founded on activities that more closely resemble either a traditional breach of contract action, see Linthicum v. Archambault, 379 Mass. 381, 387 (1979) (breach of warranty), or an action in tort. See Levings v. Forbes & Wallace, Inc., 8 Mass. App. Ct. 498, 504 (1979) (misrepresentation). See also Computer Sys. Engr., Inc. v. Qantel Corp., 571 F. Supp. 1365, 1370 (D. Mass. 1983), affd., 740 F.2d 59, 70 (1st Cir. 1984). Such a classification of a chapter 93A claim as either a contract or tort action has been dispositive, for instance, in determining the scope and effect of a choice-of-law provision in a contract. See Worldwide Commodities, Inc. v. J. Amicone Co., 36 Mass. App. Ct. 304, 307-308 (1994). See also Computer Sys. Engr., Inc. v. Qantel Corp., supra; Northeast Data Sys. Inc. v. McDonnell Douglas Computer Sys. Co., 986 F.2d 607, 610 (1st Cir. 1993).

Likewise, two recent cases involving the interaction of contractual limitation provisions and § 11 claims show that a determination of whether a limitation of remedies provision precludes recovery under chapter 93A depends on the classification of the G. L. c. 93 A, § 11, claim as one in contract or tort. First, in Canal Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. 369, 379 (1990), the court held that a limitation [549]*549of liability provision in a commercial contract could bar recovery for a claim under G. L. c. 93A, § 11, arising from a breach of contract warranty. The court expressly recognized that a chapter 93A claim founded on a breach of warranty is “duplicative of a traditional contract claim.” Id. at 378, citing Linthicum v. Archambault, 379 Mass. at 387. Since the limitation of liability provision limited remedies to actual damages under the claim for breach of contract,4 Canal Elec. Co. v. Westinghouse Elec. Corp., supra at 372, the provision likewise barred any additional remedies under the chapter 93A claim which was “merely an alternative theory of recovery under the contract.” Id. at 378-379. In contrast, this court recently ruled in VMark Software, Inc. v. EMC Corp., 37 Mass. App. Ct. 610, 619-621 (1994), that a limitation of liability provision in a software licensing agreement was not effective to preclude recovery for a claim under G. L. c. 93A, § 11, arising out of intentional misrepresentation, a tort-based theory of recovery.

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Bluebook (online)
649 N.E.2d 791, 38 Mass. App. Ct. 545, 1995 Mass. App. LEXIS 427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-register-co-v-bolton-emerson-inc-massappct-1995.