SULIEYMAN OMAR & another [Note 1] vs. RAYMOND L. SABBAG & others. [Note 2]

BROWN, J. This case arises from a business deal, completed in 1999, when Abysina, Ltd., and its principal, Sulieyman Omar ("plaintiffs" or "buyers"), purchased a coffee shop business from the sellers, Coast to Coast Coffee, Ltd. (Coast), and its principals, Raymond Sabbag and Patrick Doyle (collectively, "defendants").

In 2002 the plaintiffs commenced an action in the Superior Court against the defendants, raising claims of fraud, violation of G. L. c. 93A, and misrepresentation. The defendants, in turn, counterclaimed, seeking to recover a debt due on a promissory

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note. Amendments to the complaint followed, with the plaintiffs adding new claims, the details of which are not pertinent to this appeal.

After the case had been narrowed as a result of a partial summary judgment ruling, the matter was tried to a Superior Court jury, who heard the plaintiffs' fraud and c. 93A claims, and the defendants' counterclaim to collect a debt due under a promissory note made by the plaintiffs in connection with the sale.

As memorialized by the verdict slip, the jury determined the defendants had not only made a misrepresentation in the course of the business deal but had also run afoul of c. 93A. [Note 3] That said, the jury found that the plaintiffs had not been harmed as a result of the defendants' conduct.

Separately, on the defendants' counterclaim, the jury found that the subject promissory note had not been the product of a fraud committed by the defendants or of a c. 93A violation. The jury determined the plaintiffs owed the defendants the sum of $146,022 under that note. No attack is made upon the jury's findings or resulting judgment as to the various claims pressed by the parties below.

Acting on the defendants' request for attorney's fees and costs, [Note 4] the trial judge awarded $70,341 to the defendants for such fees and costs.

The trial judge, however, refused to award additional fees to the defendants, insofar as their request related to expenses incurred in connection with defending against the plaintiffs' fraud

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and c. 93A claims. [Note 5] (The jury determined that the plaintiffs' fraud and c. 93A claims as related to the plaintiffs' purchase of the business were well-founded, on the evidence, even though the jury concluded that no harm was suffered by the plaintiffs as a result of this wrongful conduct.) [Note 6]

The defendants contend the amount of the fee award was not consistent with the terms of the promissory note and governing legal standards for such fee awards.

Here, the trial judge concluded that the defendants' counsel fees incurred in connection with the enforcement of the note could "fairly be separated" from the fees incurred by them in defending against the plaintiffs' fraud and c. 93A claims related to the purchase of the business. Ultimately, the trial judge determined that the $70,341 sum constituted a "reasonable" fee award to the defendants, under the terms of the note and related guaranty. The underlying note provided for "reasonable attorney['s] fees" "in enforcing [the] note." The judge fairly decided that counsel fees attributable to the defense against the plaintiffs' fraud and c. 93A claims as related to the purchase of the business were not intrinsic to the defendants' collection claim on the note. This determination is supported by the meager record on appeal. It is apparent from the verdict slip that the jury were asked to make two discrete findings pertaining to fraud and c. 93A violations -- one concerning whether the defendants committed fraud or violated c. 93A in the sale of the business (to which the jury responded "yes," but found no harm), and the second specifically concerning whether "the defendant obtain[ed] the . . . note from the plaintiffs by fraud

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or by a Chapter 93A violation" (to which the jury responded "no"). The fact that the jury answered one question as to c. 93A and fraud "yes," and the other "no," is some evidence that the two matters were not inextricably intertwined. Compare Northern Assocs. v. Kiley, 57 Mass. App. Ct. 874, 880-881 (2003).

However, the judge made no findings as to the second question, which asked the jury to determine, with respect to the defendants' counterclaim on the note, "Did the defendant obtain the . . . note from the plaintiffs by fraud or by a Chapter 93A violation?" This aspect of the trial on fraud and c. 93A could not be separated from the expense of enforcing the note, as "the successful resistance of these claims was intrinsic to [collecting] on the note . . . ." Covich v. Chambers, 8 Mass. App. Ct. 740, 752 (1979). Compare Penney v. First Natl. Bank of Boston, 385 Mass. 715, 723 (1982). As the judge made no mention of this aspect of the case in his memorandum and order on attorney's fees, we are unable to determine whether he correctly applied the terms of the note requiring that the note holder be paid for "all of its costs and expenses in enforcing this Note, including reasonable attorney['s] fees." A remand is therefore necessary. [Note 7]

The award of fees and costs in the judgment entered September 7, 2006, is vacated, and the matter is remanded for further proceedings consistent with this opinion.

So ordered.