MICHAEL MITCHELL v. LIBERTY CHEVROLET INC.

CRANE, J. This appeal presents the issue of whether the damages that may be awarded pursuant to G.L. c. 93A against an automobile dealer are limited to interest on the arbitration award or loss of use, after the dealer refused to make timely payment in full to a consumer who has prevailed in arbitration pursuant to G.L. c. 90, § 7N 1/4, the so-called Lemon Law. We affirm the trial court's award of damages enforcing the arbitrator's award and its award of damages pursuant to G.L. c. 93A calculated by multiplying the arbitrator's award as well as its award of attorney's fees to the consumer.

Michael Mitchell ("Mitchell") brought this action on November 10, 2017 to enforce an arbitration award against Liberty Chevrolet, Inc. ("Liberty") and seeking damages pursuant to G.L. c. 93A because Liberty failed to comply with the award in a timely manner. The arbitrator's award was issued on June 20, 2017, following a hearing at which a representative of Liberty participated. On July 12, 2017, Liberty filed a purported appeal in the Superior Court, which was abandoned or dismissed because Liberty never paid the filing fee. We summarize the facts contained in the arbitrator's award that were before the trial judge below.

Factual background. On March 5, 2017, Mitchell purchased a used 2010 Jeep Commander ("Jeep") from Liberty for $13,525.81. Mitchell paid $1,000 in cash and the balance with a loan from a bank secured by the Jeep. Mitchell notified Liberty that it was defective because of the condition of the brakes and the loud noise coming from a defective compressor in the air conditioner system. Mitchell brought the Jeep to Liberty on April 14, 2017. Liberty repaired the brakes but did nothing about the defective compressor or the noise it was making. It claimed that it was not responsible for this condition. Mitchell then filed for arbitration through the Office of Consumer Affairs and Business Regulation as authorized by G.L. c. 90, § 7N 1/4. A hearing was conducted on June 16, 2017 at which a representative from Liberty participated despite arriving an hour late. During the hearing, the arbitrator examined the car, and it continually made very loud noise from the air conditioner compressor when it was started. The air conditioner would not work and the defroster would not either because it was part of the same system. The arbitrator did not "accept the contentions of the dealership that the vehicle, in its current condition, can be operated without impairment to use and safety, and that they are not responsible for repairs unless the specific defect appears on an official 'list' of required repairs." He ordered Liberty to repurchase the Jeep from Mitchell within twenty-one days of the award for $13,329.82 [Note 1] and for Mitchell to deliver the Jeep to Liberty upon tender of the full repurchase award. All of these facts are contained in the arbitrator's award issued on June 20, 2017, which was before the judge below.

On July 12, 2017, Liberty purported to file an appeal of the arbitrator's award in the Superior Court, but it was abandoned or dismissed because Liberty never paid the filing fee. After the arbitrator issued the award, Mitchell or his counsel made several calls to Liberty about what it was going to do. They were told that they would have to wait until persons with authority became available before Liberty would take a position or that Liberty was evaluating its options. No one from Liberty responded to Mitchell before his counsel sent a demand letter to Liberty pursuant to G.L. c. 93A, § 9(3) demanding payment of the full award and other relief within thirty days of July 21, 2017. There was no timely response to the demand letter. Finally, on September 20, 2017, an attorney for Liberty contacted Mitchell's counsel and offered to pay the arbitration award forthwith in return for delivery of the Jeep and other documents to release any lender's lien. Mitchell's counsel refused to accept this offer because it was made so long after it was due resulting in additional damages to Mitchell, and attorney's fees. By October 27, 2017, Mitchell's counsel made a demand to which Liberty's counsel responded with a counteroffer that was unacceptable. Mitchell then brought this action.

Procedural history. A hearing on Liberty's motion for assessment of damages was conducted at which no testimony was taken. The parties submitted written exhibits and argument. The trial court judge issued a written decision and order on assessment of damages and attorney's fees. It confirmed the arbitrator's award, assessed damages of $13,329.82, and trebled those damages to a total of $39,989.46. It found that "[d]efendant's decision to ignore its obligations under the Lemon Law was knowing, deliberate, and most egregious. Damages are therefore to be trebled." It

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also invited additional written filings as to an appropriate order for disposition of the car in connection with the final judgment as well as any application for attorney's fees. After further consideration of the written submissions of the parties, it awarded attorney's fees in the amount of $9,219.50 and expenses of $435.53, plus interest. On March 29, 2018, the court conducted a hearing on Liberty's motion to approve disposition of plaintiff's vehicle. Later that day, the court entered a judgment and order directing amounts to be paid and a schedule for payment and for delivery of the Jeep and title documents as well as adjustments for use.

The Lemon Law, G.L. c. 90, § 7N 1/4, sets forth a comprehensive statutory scheme for consumers and used car dealers to resolve disputes concerning any alleged defective condition of a used car purchased by a consumer. Here, the arbitrator found "this vehicle to have been out of service by reason of invalid refusal to repair from April 20, 2017, and continuing to the present date [June 20, 2017]; the consumer has accrued more than 11 business days out of service during the term of protection, and is qualified to receive a refund as per the terms of the lemon law." See G.L. c. 90, § 7N 1/4(3)(A)(ii). The arbitrator awarded damages as specified by the statutory scheme, being the repurchase price as adjusted. [Note 2] Liberty does not contest the confirmation of the arbitration award. [Note 3]

Liberty then failed to make payment to Mitchell within twenty-one days of the arbitrator's award, as required by G.L. c. 90, § 7N 1/4(3)(A)(iii). This violated G.L. c. 93A because "[a] dealer's failure to comply with any of the provisions of this section shall constitute an unfair or deceptive act under the provisions of chapter ninety-three A." Id. at § 7N 1/4(6). Liberty does not contest that its failure to make any response to the arbitrator's award for three months was a violation of G.L. c. 93A. Instead, it contests the amount of damages and attorney's fees awarded pursuant to G.L. c. 93A.

It contends that (a) the amount of money refunded for rescission of a sale is not subject to multiplication pursuant to G.L. c. 93A; (b) there is no proof that any unfair or deceptive act caused injury to the plaintiff that deprived him of an amount equal to the vehicle's total purchase price; (c) it was unreasonable to award attorney's fees after Mitchell rejected Liberty's offer of compensation; and (d) Mitchell is not entitled to equitable relief of the refund of the full purchase price of the vehicle because he should also bear the cost of any decline in the value of the vehicle because of his own conduct.

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Standard of review. We apply the standard of review following a bench trial and review the judge's findings of fact under the clearly erroneous standard and his conclusions of law de novo. Casavant v. Norwegian Cruise Line Ltd., 460 Mass. 500, 503 (2011); City Rentals, LLC v. BBC Co., 79 Mass. App. Ct. 559, 560 (2011). We do so because Liberty moved for an assessment of damages and presented no testimony but only exhibits and argument from which the trial judge made findings about the culpability of Liberty before awarding damages and attorney's fees. Where the judge made findings based upon the exhibits presented, we decline to conduct de novo review of questions of fact as we would for a "case stated." Massachusetts Bay Transp. Auth. v. City of Somerville, 451 Mass. 80, 84 (2008).

Discussion. The provisions of G.L. c. 93A, § 9(3) are: "For the purposes of this chapter, the amount of actual damages to be multiplied by the court shall be the amount of the judgment on all claims arising out of the same and underlying transaction or occurrence, regardless of the existence or nonexistence of insurance coverage available in payment of the claim." Liberty contends that the amount of any actual damages suffered by Mitchell as a result of Liberty's violation of G.L. c. 93A is the loss of use of money or the interest on the arbitrator's award. It cites Schwartz v. Rose, 418 Mass. 41, 47 (1994) in support of this position. This case involved rescission of a sale of land and violation of G.L. c. 93A for misrepresentation concerning building restrictions on the land in connection with the sale. By contrast, Liberty violated G.L. c. 93A for its failure to comply timely with the arbitrator's award for rescission and refund of the price. When a court enters a judgment for damages and other conduct that constitutes an unfair act or practice in the same transaction or occurrence, it is to multiply the amount of damages awarded in the judgment if the conduct was wilful or knowing. R.W. Granger & Sons, Inc. v. J&S Insulation, Inc., 435 Mass. 66, 81-83 (2001). In these circumstances, an uncontested arbitrator's award confirmed by the court is the functional equivalent of a judgment. Drywall Sys., Inc. v. ZVI Constr. Co., 435 Mass. 664, 669 (2002). The arbitrator's award constituted actual damages as defined by G.L. c. 93A, § 9(3), and there was no error in multiplying the arbitrator's award to calculate punitive damages.

For the same reasons, Liberty's argument that there was no proof that any unfair or deceptive act caused injury to the plaintiff that deprived him of an amount equal to the vehicle's total purchase price also fails. It urges that the damages that Mitchell may be entitled to for violating G.L. c. 93A by failing to pay the award timely are limited to interest on the arbitrator's award or interest on the amount of equity Mitchell had in the Jeep since he had financed it. With this argument, Liberty seeks to revisit the measure of damages originally awarded to Mitchell by the arbitrator, not whether there were "actual damages" that may be multiplied and awarded to Mitchell because of Liberty's conduct. This is because Liberty failed to pay Mitchell the amount of the arbitrator's award in a timely manner. As a result, Liberty damaged Mitchell by continuing to leave him with the Jeep that was out of service, unless and until he could buy another; loss of use of the money he paid (interest); and the continued obligation to pay interest on his own car loan. These elements of damages were incurred as a result of the violation of G.L. c. 93A. However, where there has been the equivalent of a judgment, the arbitrator's award, G.L. c. 93A, § 9(3) directs us to calculate these based upon the arbitrator's award, not these other elements. R.W. Granger & Sons, Inc., supra; Drywall Sys., Inc., supra. The court then properly

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evaluated Liberty's culpability for failure to make timely payment to Mitchell and awarded treble the award as punitive damages. There was no error.

Next, Liberty argues that it was error to award attorney's fees for services rendered to Mitchell after Liberty made an offer to pay the arbitrator's award. Liberty seeks to avail itself of the limitation upon punitive damages and attorney's fees when a reasonable response is made within thirty days of a consumer demand. G.L. c. 93A, § 9(3). See Kohl v. Silver Lake Motors, Inc., 369 Mass. 795 (1976). Liberty's offer to pay the arbitrator's award almost three months after it was due was too late to benefit from this provision. [Note 4] There was no error in the award of fees. They were awarded as authorized by G.L. c. 90, § 7N 1/4(3)(A)(iii) and G.L. c. 93A, § 9.

Last, Liberty argues that any award to Mitchell must be diminished by any decline in value of the Jeep because he has kept it. Liberty never raised this issue before the trial court and did not include it in its original or amended notice of appeal. It is raised for the first time in its brief on appeal. This argument has been waived because the defendant failed to raise it below. Kennie v. Natural Resource Dep't of Dennis, 451 Mass. 754, 760 n.13 (2008). Consequently, we do not reach this issue. [Note 5]

Mitchell has requested and shall be awarded appellate attorney's fees. He has fourteen days from the issuance of this decision to submit any application and supporting documentation. Yorke Mgt. v. Castro, 406 Mass. 17, 20 (1989). Liberty shall have fourteen days thereafter to respond.

Judgment affirmed.