DAVID POMPILIO and another [Note 1] v. ARCHITECTURAL FIREPLACE OF NEW ENGLAND, INC.

HAND, P.J. David Pompilio and Chen Lin ("appellants" or "purchasers") appeal the trial court's dismissal of their complaint against Architectural Fireplace of New England, Inc. ("AFNE"). The appellants' claims against AFNE for violations of G.L. c. 142A, § 17 and c. 93A, §§ 2 and 9, arose from alleged defects in AFNE's installation of a gas fireplace in a newly constructed home the purchasers bought from Prime Time Properties, Inc. ("Prime Time"), a developer. AFNE was a subcontractor on the construction of that home.

AFNE's motion to dismiss is in substance, if not explicitly, a motion to dismiss pursuant to Mass. R. Civ. P. 12(b)(6), for failure to state a claim. The trial court treated it as such, dismissing the complaint on the ground that it did "not contain allegations plausibly suggesting an entitlement to relief," and so failed to meet the minimum pleading standard set out in Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). Specific to the appellants' claims under G.L. c. 93A, the court noted a lack of privity between the parties; based on a lack of privity, the court found that the purchasers lacked standing to bring a claim under G.L. c. 93A.

"We review de novo the allowance of a motion to dismiss under rule 12(b)(6). See Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676 (2011). 'For purposes of such review, we accept[] as true the facts alleged in the plaintiff['s] complaint and exhibits attached thereto, and favorable inferences that reasonably can be drawn from them.' Goodwin v. Lee Pub. Schs., 475 Mass. 280, 284 (2016). We need not accept as true 'legal conclusions cast in the form of factual allegations.' Leavitt v. Brockton Hosp., Inc., 454 Mass. 37, 39 n.6 (2009). To survive a motion to dismiss, '[f]actual allegations [in the complaint] must be enough to raise a right to relief above the speculative level.' Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)."

Catalano v. Hassett, No. 17-P-1326 (Mass. App. Ct. May 31, 2018) (unpublished Rule 1:28 decision).

The purchasers' verified complaint, read together with the attachments to that complaint, includes the following allegations: on or about May 20, 2013, the purchasers

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purchased a "new construction" house ("house") from Prime Time. AFNE was contracted to Prime Time to install a gas fireplace in the house, and provided a written warranty, including its contact information, with the installed unit. The gas fireplace is located in a "chase" that "bumps out" from the main house structure; the installation subcontract included insulating the chase around the fireplace.

After taking occupancy of the completed house, the purchasers noticed that the area around the gas fireplace was cold. The purchasers complained to AFNE in January, 2014; AFNE visited the house and applied tape to exposed holes on the fireplace unit. The purchasers hired and paid other contractors to diagnose the reason for the cold, and to try to remedy the underlying problem.

In early 2015, the purchasers contacted AFNE by telephone and e-mail about their dissatisfaction with the fireplace unit; AFNE responded by mailing to the purchasers a copy of its warranty policy.

In 2017, the town building inspector came to the house, inspected the area in which the fireplace had been installed, and notified the purchasers that "[t]he area above the fireplace did not have ceiling or roof insulation above the air barrier and the exterior walls showed that the wall insulation was not completed or covered by an air barrier above the air-barrier ceiling. Failure to install insulation according to the International Energy Code is a violation of the Massachusetts State Building Code." The purchasers sent a G.L. c. 93A demand letter to AFNE on August 31, 2017; AFNE did not respond. The purchasers ultimately paid another contractor to bring the fireplace installation up to code.

The purchasers' verified complaint also states that "[l]egal action against Prime Time Properties was initiated in 2015, prior to Plaintiffs' obtainment of definitive evidence of Defendant's building code violation." Neither party has provided us with a copy of any pleadings or docket from this action. [Note 2]

Although the parties have not raised the issue, we first consider whether the purchasers here are entitled to the particular protections that they claim under G.L. c. 142A, given that they purchased the house at issue as "new construction." Ultimately, we conclude that c. 142A applies to neither the purchasers nor AFNE as a subcontractor to Prime Time.

Chapter 142A, titled "Regulation of Home Improvement Contractors," focuses on the conduct of "contractors" and "owners" in the context of "residential contracting work." The statute defines these terms:

"'Contract', a written agreement contained in one or more documents for the performance of certain residential contracting work, including all labor, goods and services set forth under said agreement.

"'Contractor', any person who owns or operates a contracting business who, through himself or others, undertakes, offers to undertake, purports

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to have the capacity to undertake, or submits a bid for, residential contracting work.

"'Owner', any homeowner of a pre-existing owner-occupied building containing at least one but not more than four dwelling units, or tenant thereof, who orders, contracts for, or purchases the services of a contractor or subcontractor.

"'Residential contracting', the reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal, or demolition, or the construction of an addition to any pre-existing owner occupied building containing at least one but not more than four dwelling units, which building or portion thereof is used or designed to be used as a residence or dwelling unit, or to structures which are adjacent to such residence or building.

"'Subcontractor', any person other than a supplier of material or labor, who enters into a contract, written or verbal, with a contractor for the performance of any part of the contractor's contract, or who enters into a contract with any other subcontractor for the performance of any part of the subcontractor's contract, and who does not perform work other than a subcontractor" (emphases added).

G.L. c. 142A, § 1.

Because the property at issue here was new construction, and not a "pre-existing" building, for the purposes of c. 142A and in this instance, Prime Time is not a "contractor," AFNE is not a "subcontractor," and the appellants are not "owners." See G.L. c. 142A, § 1. The definition of each of these terms relies on the definition of "residential contracting," and its requirement that the property at issue be a "pre-existing owner occupied building." Id. Cf. Simas v. House of Cabinets, 53 Mass. App. Ct. 131, 136 (2001) (as purchaser of "pre-existing building" "for use as an owner-occupied dwelling," plaintiff was an "owner" as defined in G.L. c. 142A, § 1).

If, as we conclude, AFNE is not a "subcontractor" as the term is used in the statute, then the prohibitions and sanctions imposed under G.L. c. 142A, § 17(10) of the statute do not apply to AFNE, as those provisions relate only to "contractors or subcontractors." Id. at § 17. Regardless of whether the purchasers, as "owners" or not, could bring suit against a "subcontractor" pursuant to § 3(a) ("Any party may bring an action to enforce any provision of this chapter, or to seek damages subject to the provisions of this chapter, in . . . the district court . . . .") for the subcontractor's violations of § 17, they cannot bring such a claim against AFNE because AFNE is not a "subcontractor" as c. 142A defines and uses that term.

Even if the parties were subject to the requirements and protections of the statute, we conclude that the circumstances here would not support a G.L. c. 93A claim. Although, as the purchasers argue, c. 142A, § 3(a) permits "any party" to seek enforcement of any provision of c. 142A, and pursuant to c. 142A, § 17, any violation of the state building code qualifies as an unfair or deceptive practice for the purposes of c. 93A, nothing in c. 142A relieves a plaintiff seeking relief under c. 93A

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of the usual requirements for bringing a consumer protection claim under c. 93A, including the requirement that the plaintiff have standing to pursue such a claim.

The purchasers' claims against AFNE are not based on any breach of warranty; had they been, the lack of privity would not be an issue. See, e.g., Standard Register Co. v. Bolton-Emerson, Inc., 38 Mass. App. Ct. 545, 551 (1995), citing Canal Elec. Co. v. Westinghouse Elec. Corp., 756 F. Supp. 620, 629 (D. Mass. 1990) ("It is well settled that chapter 93A claims for breach of warranty can proceed in the absence of privity of contract."). Instead, the purchasers' claims are based on AFNE's failure to install the fireplace properly, in a way that complied with the building code. While a lack of privity between the parties is not necessarily a bar to recovery under c. 93A in nonwarranty-based claims, see, e.g., Canal Elec. Co., supra at 628 (noting "possib[ility]" that in absence of privity, certain contractual claims "might conceivably give rise to a claim under Chapter 93A"), to bypass privity as a requirement, a plaintiff must show that "the parties [were] engaged in more than a minor or insignificant business relationship." Standard Register Co., supra at 551, citing Mongeau v. Boutelle, 10 Mass. App. Ct. 246, 247-248 (1980). See Chestnut Hill Dev. Corp. v. Otis Elevator Co., 653 F. Supp. 927, 933 (D. Mass. 1987) (summary judgment for subcontractor based on lack of privity between itself and developer inappropriate on G.L. c. 93A claim where facts suggest developer was "active participant" in three-way negotiations over contractor-subcontractor subcontract).

Whether the contacts between a homeowner and a subcontractor are sufficient in a given case in order to allow the homeowner to proceed on G.L. c. 93A claims to enforce an action pursuant to c. 142A is a fact-specific determination. For example, in Chestnut Hill Dev. Corp., supra, the court ruled that a developer had standing to bring c. 93A claims against a subcontractor for faulty installation of certain elevators, emphasizing that the developer, general contractor, and elevator subcontractor engaged in "active, three-way negotiation," and that the developer had, in fact, selected the elevator subcontractor for the job. Id. at 933. Similarly, in Petruzziello v. Ares Structures LLC, Middlesex Superior Ct., No. 08-3915 (June 8, 2009), the Superior Court found the plaintiff-homeowner had standing under c. 93A where, despite having hired a general contractor to oversee the work on her home, the plaintiff-homeowner was in constant contact with the subcontractor during the building process, and paid the subcontractor directly for its work on her home. Analogously, in Reisman v. KPMG Peat Marwick LLP, 57 Mass. App. Ct. 100 (2003), the Appeals Court reversed summary judgment in favor of the defendant-auditor and against the plaintiff-investor where the parties did not have a direct contractual relationship, but the investor's c. 93A claims for deficient financial reporting were supported by a showing that the auditor encouraged the investor to purchase certain stocks by remaining in contact with the investor throughout the transaction, and sitting at the investor's side during an "all-hands" meeting at the negotiation table. Id. at 101, 125. The court reasoned that because the auditor was "responsible for the structure of the transaction" between the investor and the seller, a relationship existed that was "more than trivial" and was sufficient "to meet the Standard Register standard." Id. at 125.

By contrast, where the contacts between noncontracting parties are limited, a lack of privity has been fatal to the plaintiff's claims. In Nei v. Boston Survey Consultants, Inc., 388 Mass. 320 (1983), the Supreme Judicial Court held that the fact that the

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homeowner received and relied upon a surveyor's assessment was insufficient to establish a business relationship between the homeowner and surveyor where the two had had no communications until after the homebuyer bought the house at issue. Id. at 321, 324. Similarly, in Imprimis Investors, LLC v. KPMG Peat Marwick LLP, 69 Mass. App. Ct. 218 (2007), the Appeals Court ruled that where the defendant-auditor "played no active role" in a transaction between the auditing firm and its client, the contacts necessary to sustain a c. 93A claim by the client against the auditor, where the parties had no contractual relationship, was insufficient to meet the Standard Register criteria. Id. at 230-231.

Here, the business relationship between AFNE and the purchasers was limited to a single visit by AFNE to the purchasers' home to make an unsuccessful attempt at remedying the problem with the fireplace, AFNE's provision of written warranty materials to the purchasers, and a limited number of e-mail and telephone contacts initiated by the purchasers after they moved into the house. These contacts are insufficient to support the purchasers' G.L. c. 93A claims against AFNE pursuant to c. 142A.

Judgment of dismissal affirmed.