SCOTT PHILLIPS [Note 1] vs. EQUITY RESIDENTIAL MANAGEMENT, L.L.C.

BUDD, J. Where a landlord's itemized list of deductions from a tenant's security deposit does not comply with the requirements of the Security Deposit Act, G. L. c. 186, § 15B (act), the landlord forfeits the right to retain any part of that deposit. See G. L. c. 186, § 15B (6). In certain circumstances the landlord must pay the tenant treble damages, interest, costs, and attorney's fees, pursuant to § 15B (7). In a certified question, the United States

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Court of Appeals for the First Circuit asks whether a tenant is entitled to treble the amount of the entire security deposit under § 15B (7) where a landlord fails to provide to the tenant a statement of damages that meets the statutory requirements, see § 15B (4) (iii), second sentence, thereby forfeiting the entire security deposit, see § 15B (6) (b), and also fails to return that forfeited deposit within thirty days after the termination of the tenancy. See Phillips v. Equity Residential Mgt., L.L.C., 844 F.3d 1, 7-8 (1st Cir. 2016).

We conclude that the Legislature did not intend for the treble damages provision in § 15B (7) to apply to a landlord's violation of the requirements for an itemized list set out in § 15B (4) (iii), second sentence, or to the amount forfeited for violation of § 15B (6) (b), and accordingly answer the certified question no. [Note 3]

Background. We recite relevant facts presented by the Court of Appeals in its opinion, see Phillips, 844 F.3d at 3-4, along with other facts found by the District Court judge. See Ferri v. Powell-Ferri, 476 Mass. 651, 652 (2017).

Scott Phillips (tenant or Phillips) and a friend [Note 4] entered into a written lease with Equity Residential Management, L.L.C. (landlord or Equity), for an apartment in Waltham, for a term of from July 20, 2012, to May 19, 2013. Phillips paid a security deposit of $750 before moving into the apartment. He moved out of the apartment on May 20, 2013, and requested the return of his deposit. Equity responded with a statement of deposit account (statement), which was signed but not sworn to under pains and penalties of perjury, within thirty days of termination of occupancy. The statement listed charges totaling $968.08 and stated that Phillips owed a balance of $218.02 after subtracting the security deposit and accumulated interest. [Note 5] On June 23, 2013,

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Phillips's father, a guarantor of the lease, notified Equity that the statement did not comply with several requirements of the act.

On August 6, 2013, Phillips filed a class action [Note 6] complaint in the Superior Court, alleging that Equity had violated the act insofar as (1) the statement and attached document were not properly signed and sworn to under the pains and penalties of perjury, (2) Equity did not provide sufficient documentation to support the charges that were deducted from the deposit, (3) Equity impermissibly deducted cleaning charges from the deposit, and (4) Equity failed to return the deposit within thirty days after the termination of the tenancy. He sought recovery under § 15B (7), which provides, inter alia, for treble damages for certain violations of the act. Equity removed the case to the United States District Court for the District of Massachusetts, see 28 U.S.C. § 1441(a), citing diversity of citizenship under the Federal Class Action Fairness Act of 2005. See 28 U.S.C. § 1332(d). Equity also filed a counterclaim against Phillips for the remaining balance listed on the statement: $218.02.

In 2015, the District Court ruled on both parties' motions for summary judgment. [Note 7] The District Court found that Equity's statement did not comply with the itemized deduction provision in the act, see § 15B (4) (iii), second sentence, and therefore Equity had forfeited its right to retain any part of the deposit under § 15B (6) (b). As a result, Phillips was entitled to recover his security deposit. However, the District Court judge also ruled that Phillips was not entitled to treble damages, as she concluded that the Legislature had excluded violations of the itemized deduction provision from the types of violations that qualified for treble damages under § 15B (7). Finally, the judge ruled that Equity was

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entitled to no more than $102.42 for holdover rent, [Note 8] because it had forfeited its right to counterclaim for damage to the premises by violating the act, see § 15B (6), and could not make deductions for a late payment or earlier costs in an unrelated proceeding under § 15B (4).

Phillips appealed from the ruling, arguing that the District Court misinterpreted the act, and that he was entitled to recover treble the amount of the entire security deposit under § 15B (7). Concluding that there was no controlling precedent to decide the question, the Court of Appeals certified the following question to this court, pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981):

"With respect to the Massachusetts Security Deposit Law, [G. L. c.] 186, § 15B, when a lessor violates the [itemized list requirements] of [§ 15B (4) (iii)], does the lessor's corresponding violation of [§ 15B (6) (b)], which 'forfeit[s] his right to retain any portion of the security deposit for any reason,' id. [at § 15B (6)], also constitute a violation of [§ 15B (6) (e)] -- 'fail[ing] to return to the tenant the security deposit or balance thereof to which the tenant is entitled . . . within thirty days after the termination of the tenancy' -- thereby triggering the statute's treble damages provision, [§ 15B (7)]?"

Phillips, 844 F.3d at 7-8.

Discussion. The act, G. L. c. 186, § 15B, protects tenants by providing clear guidelines for landlords to follow with regard to handling security deposits. See Hampshire Village Assocs. v. District Court of Hampshire, 381 Mass. 148, 151-153, cert. denied, 449 U.S. 1062 (1980). In passing the act, the Legislature recognized that tenants have less bargaining power than landlords and are less able to vindicate their rights in court. See Mellor v. Berman, 390 Mass. 275, 282 (1983), quoting Goes v. Feldman, 8 Mass. App. Ct. 84, 91 (1979).

The act provides, inter alia, that a landlord must take care in making deductions from a tenant's security deposit. The deductions must fall into specifically authorized categories, which the act limits to unpaid rent or water charges, certain unpaid increases in real estate taxes, and repairs for damages caused by the tenant;

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any remaining balance must be returned to the tenant within thirty days of termination of the tenancy. See G. L. c. 186, § 15B (4) (i), (ii), (iii), first sentence. [Note 9] Taking improper deductions from a tenant's security deposit leads to forfeiture

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of the entire security deposit, pursuant to § 15B (6) (e). [Note 10] In addition, when making deductions for damages, the landlord must provide the tenant with an itemized list, sworn to under the pains and penalties of perjury, as well as written evidence of the cost of repairs. See G. L. c. 186, § 15B (4) (iii), second sentence. [Note 11] Violations of this second obligation, like violations of the first, also lead to forfeiture of the entire security deposit, pursuant to § 15B (6) (b). [Note 12] There are some violations of the act, including the taking of improper deductions in violation of § 15B [6] [e], that result in the tenant being entitled to treble damages, interest, court costs, and attorney's fees. See G. L. c. 186, § 15B (7). [Note 13]

In this case, as previously recounted, the landlord made deductions for unpaid rent and damage to the property that exceeded the value of the tenant's security deposit; thus, the landlord did not return any portion of the security deposit within thirty days. The District Court judge found that although the landlord sent an itemized list of damages to Phillips within thirty days, this list was faulty because it was not sworn to under pains and penalties of perjury, was not sufficiently detailed, and was unsupported by written evidence of the costs of repairs. These failings qualify as a violation by the landlord of § 15B (6) (b), and accordingly result in the forfeiture of its right to retain any portion of Phillips's security deposit under § 15B (6). [Note 14]

Phillips argues that because the landlord forfeited the entire security deposit under § 15B (6) (b) by providing a faulty list, it was required to return the entire security deposit within thirty days of termination of the tenancy. The crux of the case is that Phillips further argues that the landlord's failure in this regard triggered a violation of § 15B (6) (e), which, in his view, calls for damages in the amount of three times the entire security deposit as well as other awards pursuant to § 15B (7). The landlord

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disagrees, arguing that the tenant's interpretation would make § 15B (6) (b) redundant and would overlook the Legislature's intent to limit the number of § 15B (6) violations that would give rise to treble damages and other penalties under § 15B (7). The question certified by the Court of Appeals asks us for the correct interpretation.

Our answer turns on an interpretation of § 15B (6) (e), and whether that provision covers a landlord's failure to return the security deposit forfeited under other clauses of § 15B (6) within thirty days of the termination of the tenancy. For the reasons we discuss below, we answer the certified question no.

1. Rules of statutory interpretation. [Note 15] As the question turns on a matter of statutory interpretation, we begin with the text of the statute. International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 853 (1983). "[A] statute must be interpreted according to the intent of the Legislature ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated." Board of Educ. v. Assessor of Worcester, 368 Mass. 511, 513 (1975), quoting Industrial Fin. Corp. v. State Tax Comm'n, 367 Mass. 360, 364 (1975). Where the text of the statute is clear and unambiguous, we must apply its ordinary meaning. Bronstein v. Prudential Ins. Co. of Am., 390 Mass. 701, 704 (1984), citing Hashimi v. Kalil, 388 Mass. 607, 610 (1983). "But we look to the language of the entire statute, not just a single sentence, and attempt to interpret all of its terms 'harmoniously to effectuate the intent of the Legislature.'" Commonwealth v. Hanson H., 464 Mass. 807, 810 (2013), quoting Commonwealth v. Raposo, 453 Mass. 739, 745 (2009). Further, although "matters of punctuation are not necessarily determinative," Globe Newspaper Co. v. Boston Retirement Bd., 388 Mass. 427, 432 (1983), punctuation "may be considered as an indication of the purpose of the legislation where different readings might result in ambiguity."

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Taylor v. Burke, 69 Mass. App. Ct. 77, 81 (2007), citing Greenough v. Phoenix Ins. Co., 206 Mass. 247, 252 (1910) (interpreting importance of comma and grammatical construction in G. L. c. 186, § 15B [3] [a]). Finally, so long as it yields a "logical and sensible result," we do not interpret a statute so as to render any portion of it meaningless. Adamowicz v. Ipswich, 395 Mass. 757, 760 (1985), quoting Lexington v. Bedford, 378 Mass. 562, 570 (1979).

2. Interpretation of § 15B (6) (e). Section 15B (6) (e) requires a landlord to forfeit the entire security deposit if the landlord "fails to return to the tenant the security deposit or balance thereof to which the tenant is entitled after deducting therefrom any sums in accordance with the provisions of this section" (emphasis added). Phillips considers the "balance . . . to which the tenant is entitled" to be the entire forfeited security deposit rather than the security deposit less any proper deductions. He argues that the entire security deposit amount must be trebled under § 15B (7) because the landlord violated § 15B (6) (e) by failing to return the forfeited deposit within thirty days of the end of the tenancy.

We conclude, however, that § 15B (6) (e) cannot be triggered by failing to return the amount forfeited under other subsections of § 15B (6). This means that the landlord must pay treble damages only on the amount that the landlord improperly deducted under § 15B (4) (i), (ii), and (iii), first sentence. [Note 16] Thus, the landlord is not otherwise automatically liable for treble damages on the entire security deposit. Any other interpretation of this provision would ignore the context and placement of § 15B (6) (e) within the statute. See Castenholz v. Caira, 21 Mass. App. Ct. 758, 760-764 (1986) (analyzing differences between obligations under § 15B [3] [a] and [6] [a] to determine which acts by landlord justified treble damages under § 15B [7]). In fact, three aspects of § 15B indicate that a landlord's failure properly to document the deductions does not lead to a violation of § 15B (6) (e). [Note 17]

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First, § 15B (7) imposes treble damages only on violations of § 15B (6) (a), (d), and (e), rather than on all violations of § 15B (6). This implies that the Legislature intentionally omitted documentary violations from treble damages. See Castenholz, 21 Mass. App. Ct. at 761-762. [Note 18] See also Brady v. Brady, 380 Mass. 480, 484 (1980), quoting Harborview Residents' Comm., Inc. v. Quincy Hous. Auth., 368 Mass. 425, 432 (1975) ("a statutory expression of one thing is an implied exclusion of other things omitted from the statute"). [Note 19]

Second, § 15B (6) (e) requires the landlord to return the amount to which the tenant is entitled within thirty days of the termination of the tenancy, whereas § 15B (6) (b) requires the landlord to provide the tenant with proper documentation within thirty days as well. This means that, under the tenant's interpretation, a landlord who made authorized deductions for damages but returned a deficient itemized list on the thirtieth day would automatically be liable for treble damages because there would be no time left to return the forfeited amount.

Third, Phillips's proposed interpretation of § 15B (6) (e) -- i.e., that it is triggered when a landlord fails to return the forfeited

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amount within thirty days of termination of the tenancy -- overlooks the placement of § 15B (6) (e) within the statute. The Legislature placed the forfeiture provision in the main clause of § 15B (6), rather than within the individual subsections. Because both § 15B (6) (b) and (e) are parallel clauses that can both trigger forfeiture of the security deposit, it does not make sense for one to trigger the other. More fundamentally, Phillips's argument would mean that forfeiture under any provision of § 15B (6) could trigger a violation of § 15B (6) (e). Taken to its logical conclusion, this would mean that every time a landlord violated § 15B (6) (e) by improperly withholding a portion of the security deposit the landlord could simultaneously trigger a second violation of § 15B (6) (e) because he had forfeited the rest of the security deposit and failed to return the balance within thirty days. This is nonsensical, as a landlord who returned the deposit on the thirtieth day and made proper deductions for unpaid rent, but also withheld ten dollars for a cleaning charge, would be liable for treble damages not only on the cleaning charge but also automatically for the failure to return the amount that was properly deducted but forfeited within thirty days. See Castenholz, 21 Mass. App. Ct. at 762 (declining to construe § 15B as "a minefield of potential multiple penalties").

Thus, the context provided by the rest of § 15B demonstrates that it would not make sense for § 15B (6) (e) to apply to the amount forfeited by other provisions of § 15B (6).

As the concurrence notes, the act does not go as far as it might with regard to holding landlords responsible. Our job, however, is to interpret the statute as written and in accordance with our previous cases. See Mellor, 390 Mass. at 277 (trebling solely difference in damages between what landlord charged and what was attributable to tenants); McGrath v. Mishara, 386 Mass. 74, 77, 79-80 (1982) (awarding multiple damages only on amount that "had been unlawfully withheld from the tenants' security deposit"). See also Hampshire Village Assocs., 381 Mass. at 148-149 (tenants were entitled to multiple damages where landlord failed to return any portion of security deposit or itemized list within thirty days).

It is important to note that if Phillips 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

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Phillips -- he would get treble damages, attorney's fees, and other penalties under § 15B (7) on those amounts. See note 14, supra. However, Phillips would not be entitled to treble damages on the remainder of the forfeited security deposit.

Even apart from the remedies provided by § 15B, we note that similarly situated tenants have further recourse, as they may have rights under G. L. c. 93A, § 9, including to multiple damages where the landlord fails to return the forfeited amount or offer a settlement in response to a demand letter from the tenant. See 940 Code Mass. Regs. § 3.17(4) (1993) (interpreting c. 93A to cover landlord's misconduct under § 15B); McGrath, 386 Mass. at 86-87 (affirming award of multiple damages under c. 93A in security deposit dispute).

3. Conclusion. We conclude that a landlord violates § 15B (6) (e) only where the landlord fails to return or account for any portion of the security deposit within thirty days, or where the landlord makes a deduction that does not fall within the categories authorized by § 15B (4) (i), (ii), (iii), first sentence. A violation of § 15B (6) (e) does not apply to any portion of the security deposit that was forfeited under another provision of § 15B (6). [Note 20] As a result, our answer to the certified question is no.

The Reporter of Decisions is to furnish attested copies of this opinion to the clerk of this court. The clerk in turn will transmit one copy, under the seal of this court, to the clerk of the United States Court of Appeals for the First Circuit, as the answer to the question certified, and will also transmit a copy to each party.

LENK, J. (concurring). While I agree with the court's conclusion, I write separately to highlight the dichotomy between the remedial legislative purpose behind G. L. c. 186, § 15B, and the outcome that the court is constrained to reach today.

In enacting G. L. c. 186, § 15B, "the Legislature manifested a concern for the welfare of tenants in residential property who, as a practical matter, are generally in inferior bargaining positions" to landlords and "find traditional avenues of redress relatively useless." See Hampshire Village Assocs. v. District Court of

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Hampshire, 381 Mass. 148, 152-153, cert. denied, 449 U.S. 1062 (1980), quoting Goes v. Feldman, 8 Mass. App. Ct. 84, 91 (1979). This asymmetry of power stems from the "legal expense of chasing a security deposit," which often amounts to "more than the amount of the deposit." Hampshire Village Assocs., supra at 153, quoting Goes, supra. In light of this imbalance, the Legislature enacted G. L. c. 186, § 15B, "to make resort to litigation feasible for tenants" and thereby to "establish an equitable relationship between tenants and landlords" (quotations and citations omitted). Castenholz v. Caira, 21 Mass. App. Ct. 758, 763 (1986).

There is a considerable disparity between the evident legislative purpose and the plain language of the statutory provision at issue here. One need look no further than Scott Phillips's situation to perceive the difficulties this creates. Phillips first asked his landlord for the return of his security deposit on May 28, 2013. As the court notes, the landlord violated its obligations under G. L. c. 186, § 15B (6) (b), by providing an insufficiently detailed list of damages unsupported by written evidence or a sworn affirmation, thereby forfeiting any right to the deposit by June 20, 2013. See ante at 252-253. After four years of litigation in Federal and State court, Phillips has yet to receive a cent of it. Despite this, when all is said and done, he will likely walk away with only his $750 deposit for his troubles. This is hardly the sort of "feasible" litigation that the Legislature contemplated when it enacted G. L. c. 186, § 15B.

If this outcome is extrapolated to encompass tenants across the Commonwealth, what is at stake becomes even more clear. Without resource to the treble damages and attorney's fees available under G. L. c. 186, § 15B (7), tenants seeking the return of their security deposits due to violations of G. L. c. 186, § 15B (6) (b), are confronted with a Hobson's choice. They either can pursue expensive litigation which may cost them more than the amount of the deposit, or they can abandon any claim to what likely amounts to at least one month's additional rent, allowing the landlord to reap the unearned windfall. Many will of necessity choose the latter course. [Note Lenk-1]

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This in turn may well embolden certain landlords to ignore their statutory obligations under G. L. c. 186, § 15B (6) (b). The Legislature established those obligations to "ha[ve] the effect of ensuring that landlords do not make spurious and unfounded deductions for damage." See McGrath v. Mishara, 386 Mass. 74, 80 (1982). Without the specter of the treble damages and attorney's fees provided by G. L. c. 186, § 15B (7), unscrupulous landlords might well evade compliance with these requirements of § 15B (6) (b) in order to ensure that tenants lack the necessary information to challenge unfounded deductions. This outcome does not resemble the "equitable" result that the Legislature intended when it enacted G. L. c. 186, § 15B. See Castenholz, 21 Mass. App. Ct. at 763. Indeed, by leaving tenants with a right that is without a practical remedy, G. L. c. 186, § 15B (6) (b), permits precisely the sort of inequitable conduct that the penalties provided in G. L. c. 186, § 15B (7), were meant to deter.

If this is not the result the Legislature intends, I urge it to consider amending the statute to ensure that landlords who unlawfully retain a security deposit forfeited pursuant to G. L. c. 186, § 15B (6) (b), suffer the penalties provided in G. L. c. 186, § 15B (7).