2018 Mass. App. Div. 69

January 19, 2018 - March 26, 2018

Appellate Division Northern District

Court Below: District Court, Chelsea Division

Present: Coven, P.J., Crane & Nestor, JJ.

Michael A. Satterwhite for the plaintiff.

Christian A. Pahl for the defendant.

CRANE, J. Michael Venditto ("landlord") appeals from a judgment for Matthew Foti [Note 1] ("Foti") on counterclaims for breach of G.L. c. 186, §15B for failure to properly document and notify the tenants [Note 2] of charges against a security deposit and for violation of G.L. c. 93A, § 9 for misrepresentation by the landlord's broker concerning the condition of the premises. We vacate the judgment for Foti on these counterclaims and return the case for further proceedings.

The landlord brought this action to recover for breach of a written residential lease claiming that the tenants moved out before the end of the lease without cause or justification. The landlord sought damages for loss of rent and expenses to obtain a new tenant. The tenants responded that they were justified to leave the apartment and terminate the lease because the landlord breached the covenant of quiet enjoyment because the tenants in another apartment persistently played loud music and engaged in other noisy behavior during evenings and normal sleeping hours that made the tenants' apartment uninhabitable. They also asserted counterclaims for violation of G.L. c. 186, § 15B, which sets forth requirements for returning and accounting for the use of security deposits. Last, they counterclaimed against the landlord for violation of G.L. c. 93A for delivering letters to the tenants, through their counsel, that said that the landlord would seek damages because tenants' counsel failed to agree to pay damages the landlord demanded; attempting to intimidate Foti because he might be required to disclose any pending action in any bar admission application; and for failing to comply with provisions of law for returning and accounting for security deposits. The counterclaims made no mention that any misrepresentation by the broker who showed the apartment to the tenants was a violation of G.L. c. 93A.

After a bench trial, the court found that the tenants were not justified in terminating the lease for breach of the covenant of quiet enjoyment and awarded damages to the landlord in the amount of $150.00 for the tenants' unjustified termination of the lease.

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It also awarded attorney's fees against the tenants as authorized by the written lease. The court found for the landlord on the tenants' counterclaims for breach of quiet enjoyment. However, it awarded the tenants damages in the amount of $600.00 for breach of the security deposit return law, and trebled them and awarded attorney's fees. The court also awarded damages for violation of G.L. c. 93A for the broker's misrepresentation, including a multiple of damages and attorney's fees. It found that the letters and the failure to return the security deposit did not violate G.L. c. 93A.

1. Factual background. Based upon the credible testimony, [Note 3] the trial judge found that the landlord owned a four-unit residential apartment building at Page Street, in Revere. The landlord also owned other residential apartment properties in the area. A broker engaged by the landlord showed the landlord's apartment on the first floor at 27 Page Street twice before the tenants signed a written lease on January 3, 2014. During these showings, Foti told the broker that he was a law student and that his girlfriend worked as an accountant, and that it would be important to them to know that the apartment building be quiet enough for him to work and study. The broker assured them that the tenants in the upstairs apartment were a mother and daughter. This was not true. The broker also told Foti that the tenants in that apartment would not generate excessive noise.

Before the tenants moved in on January 8, 2014, they signed a written lease with a term through July, 2015 with payments of rent in the amount of $1,400.00 due monthly on the first day of each month. They paid the landlord first and last month's rent and a security deposit, each in the amount of $1,400.00, for a total of $4,200.00.

Immediately upon arriving, the tenants encountered noise and vibrations coming from an abutting apartment in the same building occupied by other tenants. The tenants complained to the landlord repeatedly as well as to the other tenants. Despite their complaints, the conduct of the other tenants did not improve. The landlord commenced eviction proceedings against the allegedly noisy tenant(s). Still, the tenants decided that they could not live at the apartment. They notified the landlord on February 14, 2014 that they would terminate occupancy by the end of February. They proposed to pay any rent due for March by authorizing the landlord to apply the money held for last month's rent. The landlord did not accept this proposal and instead informed the tenants he would seek compensation for any damages incurred because of early termination in breach of the lease.

On April 1, 2014, the landlord delivered a letter addressed to Foti to his attorney. It contained a check for $800.57 with an explanation for not returning the full amount of the security deposit. This communication was not under oath. It did give as reasons for returning only part of the security deposit that the landlord incurred a cleaning fee of $250.00 and another $350.00 for repairs for a ceiling fan and window pins. This communication did not include any invoices, receipts, or estimates for these deducted costs. The court found that the apartment was clean when the tenants terminated possession on February 27, 2014, and that the tenants had not damaged the apartment

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in any way. The court concluded that the landlord violated G.L. c. 186, § 15B by returning less than the full amount of the security deposit.

On May 22, 2014, the landlord sent an affidavit to the tenants itemizing repairs to the apartment, including charges for the ceiling fan and window pivot pins in the amount of $350.00. It was not accompanied by any written estimates, such as bills, estimates, invoices, or receipts indicating the actual cost of repairing any alleged damage.

2. Standard of review. The trial judge made findings and rulings in response to the parties' requests for the same made pursuant to Mass. R. Civ. P. 52(c). We accept the judge's findings of fact as true unless they are "clearly erroneous." Kendall v. Selvaggio, 413 Mass. 619, 620 (1992). "We will uphold [the judge's] findings unless we have a 'definite and firm conviction that a mistake has been committed.' Kendall v. Selvaggio, supra at 620-621. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 510 (1997), quoting T.L. Edwards, Inc. v. Fields, 371 Mass. 895, 896 (1976) ('we do not "review questions of fact found by the judge, where such findings are supported" on any reasonable view of the evidence, including all rational inferences of which it was susceptible' [emphasis added]). 'It is the appellant's burden to show that a finding of fact is clearly erroneous.' Demoulas v. Demoulas Super Mkts., Inc., supra at 509. It is not sufficient to challenge the judge's findings by reciting other evidence in the record that she may not have credited." Millennium Equity Holdings, LLC v. Mahlowitz, 456 Mass. 627, 637 (2010). The clearly erroneous standard "does not protect findings of fact or conclusions based on incorrect legal standards." Kendall, supra at 621. See also Barboza v. McLeod, 447 Mass. 468, 469 (2006).

3. Discussion. (a) Security deposit. Landlord argues that the trial court's finding of a violation of G.L. c. 186, § 15B(4)(iii) was erroneous because of the partial return of the security deposit on April 1, 2014, together with landlord's affidavit delivered on May 22, 2014. The tenants respond that the evidence supported the court's finding that the security deposit was returned only in part and that because the landlord failed to provide an affidavit and supporting documentation within thirty days of the termination of the tenancy, the court was correct in awarding damages, trebling them, and attorney's fees.

The evidence supports the trial court's finding that the tenancy was terminated on February 29, 2014, and that the landlord violated G.L. c. 186, § 15B(4)(iii) by failing to provide a sworn itemized list of damages within thirty days of February 29, 2014. However, it went on to award the tenants $1,800.00 for this violation, being treble the amount of the security deposit withheld. This was error because relief for failing to provide a sworn and itemized statement of damages is authorized only by G.L. c. 186, §15B(6)(b), and it provides only for forfeiture of the security deposit. Phillips v. Equity Residential Mgt., LLC, 478 Mass. 251, 258 (2017). [Note 4] The following paragraph (7) in G.L. c. 186, §15B provides for trebling of damages and an award of attorney's fees only for conduct prohibited in clauses (a), (d), or (e) of paragraph (6). Consequently, the award of damages for failing to provide a timely sworn and itemized statement of damages shall be vacated and returned for an appropriate award of damages based upon forfeiture only and without any for multiple damages or attorney's fees.

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When the matter is considered below, because the court found that the tenants did not damage the apartment and left it clean, the court may wish to consider whether the tenants are entitled to any award pursuant to clause (e) of c. 186, § 15B(6) and, if so, award damages consistent with Phillips, supra. Specifically, it states, in pertinent part:

"It is important to note that if Phillips [tenant] were to prevail on the argument that the landlord made certain deductions that were not authorized by the statute -- such as the late payment fee, costs of unrelated litigation between the parties, and any cleaning or repair charges that were not fairly due to damages attributable to Phillips [tenant] -- he would get treble damages, attorney's fees, and other penalties under § 15B(7) on those amounts. (Citation omitted.) However, Phillips [tenant] would not be entitled to treble damages on the remainder of the forfeited security deposit."

Id. at 260-261.

Any amount of multiple damages awarded for violation of §15B(6)(e) may require adjustment to avoid duplicate recovery for amounts forfeited for violation of §§ 15B(4)(iii) and 15B(6)(b). See discussion in Taylor v. Beaudry, 75 Mass. App. Ct. 411, 417-418 (2009).

(b) Violation of G.L. c. 93A. Landlord also challenges the award of damages for violation of G.L. c. 93A for misrepresenting the condition of the premises. Landlord argues that count three of the counterclaim alleges a violation of G.L. c. 93A for various conduct, none of which involves any allegation of misrepresentation by any agent of the landlord. Landlord asserts that awarding damages against him for violation of G.L. c. 93A for misrepresentation without any notice of this allegation in the counterclaim was error. The tenants respond that the landlord was on notice of an alleged violation of G.L. c. 93A and that under liberal principles of pleading, it was not necessary to provide greater specificity so long as any award was supported by the evidence. Tenants also argue that because the landlord did not object to testimony about alleged misrepresentations by the landlord's broker, by implication landlord waived any right to more specific notice of the nature of the claims for violation of G.L. c. 93A.

There was no motion to amend the pleadings to conform to the evidence. "When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised by the pleadings." Mass. R. Civ. P. 15(b). "Because of the nexus between consent and a proceeding's fundamental fairness, careful examination of the entire record is required before one reaches a conclusion that an issue was tried by implied consent. Moreover, to warrant such a conclusion, the record must, at a minimum, show that the parties knew the evidence bearing on the unpleaded issue was in fact aimed at that issue and not some other issue the case involved." Jensen v. Daniels, 57 Mass. App. Ct. 811, 816 (2003).

We have examined the entire record and found nothing in the parties' opening statements, closings, requests for findings and rulings, or elsewhere that would put the landlord fairly on notice that the basis for the claims of violation of G.L. c. 93A involved alleged misrepresentation by the broker. The testimony about noise and any

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communications that sound conditions were important to the tenants was the basis for the claims and defenses involving breach of quiet enjoyment. Had the landlord known that the violation of G.L. c. 93A was based upon alleged misrepresentation by the broker, he was likely to pursue other strategy depending upon what the broker's testimony may have been. Landlord was denied that opportunity because he and his counsel had no reason to believe that the tenants were claiming that any violation of G.L. c. 93A involved misrepresentation by the broker or that the court was even considering awarding damages on that basis. Consequently, the finding for the tenants on the counterclaim for violation of G.L. c. 93A is reversed.

(c) Other matters. Because of our decision on the foregoing issues, we need not address any other issues that the landlord raised on appeal. Landlord's request for appellate attorney's fees is denied. We follow the "American Rule" and do not award attorney's fees unless authorized by an agreement of the parties or a provision of law. Police Comm'r of Boston v. Gows, 429 Mass. 14, 17 (1999). Landlord has directed us to neither. Landlord was awarded attorney's fees in connection with his claim for breach of the lease. However, tenants did not appeal from that award. The issues on which the landlord appealed solely involved the landlord's alleged misconduct and not tenants' breach of lease.

Judgment on the counterclaims reversed in part and otherwise partially vacated and returned for further proceedings consistent with this opinion.


[Note 1] No judgment was entered for or against Danielle Bacon ("Bacon"), although all of the decisions of the trial judge referred to both Foti and Bacon as defendants. It appears that the failure to enter any judgment involving Bacon was a clerical error that will be corrected on return of this case to the trial court.

[Note 2] We use the term "tenants" to refer to Foti and Bacon, collectively, consistent with the trial judge's reference to them as defendants throughout his decisions.

[Note 3] The court precluded admission of any documents that were not produced during discovery. It appears from the record that none were offered. On appeal, neither party has raised objection to testimony that was offered about the content of documents that were not in evidence. Consequently, we do not address that issue.

[Note 4] This decision was issued while this matter was on appeal and was not addressed in either parties' brief or at argument or otherwise when this Division invited them.