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National Business Institute (NBI) Human Resource Law Seminar

Posted on: August 11th, 2017 by admin

 

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On July 12, 2017, Bennett & Belfort partner Eric R. LeBlanc spoke at the National Business Institute (NBI) Human Resource Law Seminar alongside Debra Dyleski‑Najjar, Julie A. Moore, Sarah E. Worley, Laurel M. Gilbert, Richard S. Loftus and Jeffrey S. Siegel.  Attorney LeBlanc and the other speakers shared their knowledge and perspectives on various aspects of human resource law, addressing such topics as “Updates in Employment Law;” “Discipline & Discharge- Necessary Documentation;” “Employee Handbooks & Policies;” “Wage & Benefits Issues;” “Investigating Complaints of Harassment & Other Misconduct;” and “Alternative Dispute Resolution in the Employment.”

Eric spoke about proper procedures to follow and pitfalls to avoid during all phases of the employer-employee relationship:  the hiring process, the period of employment, and the employee’s exit from employment, whether voluntary or involuntary.

Eric’s lecture touched on the following fundamentals:

A. Hiring:  How to craft a clear job description; what to look for, what to say and do, and what not to say and do how during selection and         vetting of candidates.

B. Policies and procedures:  Establishing unequivocal, written policies in the following areas and following them closely:

  1. Employment at Will
  2. Equal Opportunity
  3. Anti- Discrimination/Anti-Harassment/Reporting(including the process for investigating employee complaints of discrimination and harassment)
  4. Payment of Wages
  5. Conduct/Discipline

C. Performance:  Careful, contemporaneous documentation of employees’ job performance.

D. Termination:  Again, careful and contemporaneous documentation of the process as well as the presence of at least one witness to the employer-employee interactions.

Eric emphasized to seminar attendees that no matter how egregious an employee’s performance might be, compassion and respect are crucial elements of an employer’s stance at every point on the employment time line.

We are proud that Eric’s expertise in employment law was recognized by the National Business Institute, and pleased that he was able to contribute to employers’ understanding of practices beneficial to both sides of the employer-employee relationship.

BENNETT & BELFORT WELCOMES ATTORNEY CRAIG LEVEY TO FIRM

Posted on: June 13th, 2016 by admin

 

 

Levey Craig (2)

Bennett & Belfort, P.C. is pleased to announce that Attorney Craig Levey has joined the firm.  Mr. Levey focuses his practice on employment and business matters, representing both individuals and companies.  He litigates claims of discrimination, sexual harassment, retaliation, and wage & hour disputes, as well as partnership and fiduciary duty issues.  Mr. Levey also drafts, reviews, and negotiates non-competition, non-solicitation, and severance agreements, and routinely counsels companies on all facets of the employer-employee relationship, including the drafting and implementation of company policies, procedures, and employee handbooks.

Mr. Levey has experience in a wide variety of cases in Federal, Superior, and District courts, and before administrative tribunals, including the Massachusetts Commission Against Discrimination, Department of Unemployment Assistance, and the Division of Administrative Law Appeals.

Commenting on the move, Mr. Levey said, “Bennett & Belfort offers a creative and collaborative environment to work, which is the perfect platform for me to grow my practice.  I am excited to join such a strong and determined team of attorneys, and I look forward to continuing the firm’s tradition of delivering top-notch service to its clients.”

Mr. Levey is a former associate attorney at Looney & Grossman, LLP and Davis, Malm & D’Agostine, P.C. in Boston.

Attorney Belfort Presents at Two MCLE Employment Law Seminars

Posted on: February 29th, 2016 by admin

 

 

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On February 11, 2016, Bennett & Belfort P.C. partner David E. Belfort again chaired and presented at a seminar entitled “Proving & Valuing Damages in Employment Cases” at Massachusetts Continuing Legal Education’s (MCLE) Boston conference center. Joining Attorney Belfort on the panel were his respected colleagues Attorneys Robert S. Mantell, Esq. of Rodgers, Powers & Schwartz LLP, Mary E. O’Neal, Esq. of Conn Kavanaugh Rosenthal Peisch & Ford LLP and Honorable Kenneth W. Salinger of the Superior Court, Business Litigation Session.  Mr. Belfort moderated the panel and presented on how to effectively introduce damages evidence in a failure to pay wages case, proving emotional distress damages in discrimination cases and the efficacy of spousal testimony in proving emotional injury.

MCLE BLOG

On February 25, 2016 Mr. Belfort served as an invited panelist for an MCLE seminar entitled “Top 25 Critical Cases Every Employment Litigator & Counselor Must Know.”  Mr. Belfort’s colleague Nina J. Kimball, Esquire of Kimball Brousseau LLP chaired the seminar and Jaclyn L. Kugell, Esquire of Morgan, Brown & Joy served as a fellow panelist.

The panelists reviewed 25 key cases in Massachusetts employment law and highlighted issues central to effective employment litigation in the Commonwealth, including a detailed discussion of foundational and developing case law in the field.  Attorney Belfort was charged with discussing cases relating to discrimination damages, associational discrimination and wage and hour disputes in addition the fiduciary duty issues and developments in the rights of shareholder – employees in closely held corporations.  There was a rigorous discussion as to a number of other relevant topics, including: proving liability in discrimination cases; retaliation and whistleblower protections; the continuing violation doctrine and Cat’s Paw Theory; and disability and reasonable accommodation law.

Here is a list, by general topic, of the top 25 (really 27) Massachusetts cases that were discussed at the Seminar:

Basic Protected-Class Discrimination Law

1.         Lipchitz v. Raytheon Co., 434 Mass. 493 (2001)

2.         College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

3.         Thomas O’Connor Constructors, Inc. v. MCAD, 72 Mass. App. Ct. 549 (2008)

4.         Mole v. Univ. of Massachusetts, 442 Mass. 582 (2004)

5.         Psy-Ed Corp. v. Klein, 459 Mass. 697 (2011)

6.         GTE Products Corp. v. Stewart, 421 Mass. 22 (1995)

7.         Sarni Original Dry Cleaners, Inc. v. Cooke, 388 Mass. 611 (1983)

8.         Haddad v. Wal-Mart, 455 Mass. 91 (2009)

9.         Stonehill Coll. v. MCAD, 441 Mass. 549 (2004)

10.        Massachusetts Elec. Co. v. MCAD, 375 Mass. 160 (1978)

11.        Flagg v. AliMed, Inc., 466 Mass. 23 (2013)

 

Disability Accommodation, Interactive Dialogue, and Leaves of Absence

12.        Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443

(2002)

 

Harassment

[2.]          College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

13.        Muzzy v. Cahillane Motors, Inc., 434 Mass. 409 (2001)

14.        Cuddyer v. Stop & Shop Supermarket Co., 434 Mass. 521 (2001)

 

Defenses

15.           Dziamba v. Warner & Stackpole LLP, 56 Mass.App.Ct. 397 (2002)

16.           Warfield v. Beth Israel Deaconess Med. Ctr, 454 Mass. 390 (2009)

17.           City of Boston v. MCAD, 39 Mass. App. Ct. 234 (1995)

 

Wage & Hour Law

18.        Okerman v. VA Software, 69 Mass. App. Ct. 771 (2007)

19.        Boston Police Patrolmen’s Ass’n, Inc. v. City of Boston, 435

Mass. 718 (2002)

20.        Camara v. Attorney General, 458 Mass. 756 (2011)

21.        Smith v. Winter Place LLP, 447 Mass. 363 (2006)

22.        Crocker v. Townsend Oil Co., 464 Mass. 1 (2012)

23.        Lipsitt v. Plaud, 466 Mass. 240 (2013)

 

Common Law Claims

24.        Awuah v. Coverall, 460 Mass. 484 (2011)

25.        Hobson v. McLean Hosp. Corp., 402 Mass. 413 (1988)

26.        Fortune v. National Cash Register Co., 373 Mass. 96 (1977)

27.        Selmark Assoc. v. Ehrlich, 467 Mass. 525 (2014)

B&B Attorneys Secure Win in Federal Court Jury Trial Involving Pizza Delivery Tips

Posted on: November 20th, 2015 by admin

On October 23, 2015, B&B partners, Eric LeBlanc and Todd Bennett, obtained a favorable jury verdict for their client in the United States Federal District Court in Boston.  Mr. Bennett and Mr. LeBlanc represented PMLRA Pizza, Inc. (“PMLRA”), a franchisee of Domino’s Pizza, and Henry Askew (individually), the President of PMLRA Pizza, Inc.

At issue in the case, was:

a)      Whether or not delivery charges are “Service Charges” under the Massachusetts Tips Act,

and

b)   Whether a reasonable customer would be aware that a delivery charge was not a gratuity.

The case was brought by a former PMLRA food delivery driver, seeking compensation under the Massachusetts Tips Act and the Massachusetts minimum wage statute.

As to the issue of whether delivery charges were “service charges” under the Tips Act, PMLRA argued that the evidence showed that that these charges were not service charges under the law but, instead were used to address rising operational costs, versus payment for the actual service of delivery.

The case was tried over the course of one week before Hon. Judge William G. Young, and the jury returned its verdict in favor of PMLRA.

Congratulations to Mr. LeBlanc and Mr. Bennett for a hard fought federal court trial victory.

 

Pizza

Supreme Court Clarifies Rules for Accommodating Pregnant Employees

Posted on: June 10th, 2015 by admin

BellyUPS driver Peggy Young became pregnant in the fall of 2006 and was advised by her doctor to restrict lifting to 20 pounds.  Young’s job typically required her to lift up to 70 pounds, and she sought accommodations from UPS to comply with her doctor’s advice.  UPS denied her request and told her to return to work after the pregnancy.  UPS took the position that it could only accommodate lifting restrictions for employees in three specific groups: employees who were considered disabled under the Americans with Disability Act, employees who were injured on the job, and employees who lost their Department of Transportation Driving Certification.  In the past, UPS accommodated workers who were unable to lift heavy objects due to job related injuries only, not physical reasons.  In justifying its denial of Young’s request, UPS asserted that it was exercising neutrality and fairness. 

As a result, Young lost out on several months of pay without medical coverage.  She sued UPS in July 2007 under the Pregnancy Discrimination Act (“PDA”).  The PDA states that pregnant employees “shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work.”  According to Young, the refusal of UPS to temporarily reassign her job duties or allow co-workers to assist with heavy lifting tasks constituted discrimination in violation of the PDA.  She argued that the PDA required employers to accommodate pregnancy in the same manner they accommodate any temporary disability.  UPS countered that since it only accommodated lifting restrictions for workers who were injured on the job, its refusal to accommodate Young was in keeping with its policy and was not discriminatory.   Both a federal court judge and an appeals court ruled in favor of UPS, stating that the company’s policy was neutral, and the employees whom UPS had accommodated were not comparable to Young because their restrictions were related to distinguishable, job-related factors.  Not satisfied with the interpretation of the PDA, Young took the matter to the Supreme Court which ruled 6-3 in her favor.

Justice Breyer, who authored the decision for the Court, found both the arguments of Young and UPS wanting.  While he didn’t agree with Young that the PDA grants pregnant women a blanket right to accommodations, he also didn’t agree that UPS’ neutrality argument was viable.  Rather, Justice Breyer’s opinion clarified that if an employer chooses to accommodate restrictions caused by some temporary disabilities, the employer must also accommodate the same restriction if caused by pregnancy.

Following the Court’s ruling, Young must now return to Virginia courts and prosecute her discrimination claim under this clarification of the law.  Meanwhile, employers who are subject to the PDA are now on notice that they must accommodate pregnancy-related restrictions to the same extent that they accommodate other disabling conditions when they arise.

Attorney Belfort Invited Panelist in MCLE’s Top 25 Employment Cases Seminar

Posted on: March 17th, 2015 by admin

2013 David B photo On February 25, 2015, Bennett & Belfort P.C. partner David E. Belfort served as a panelist for an MCLE seminar entitled “Top 25 Keys Cases Every Employment Litigator & Counselor Must Know.” Joining Attorney Belfort on the panel were his esteemed colleagues Attorneys Andrea C. Kramer (Chair) of Hirsch Roberts Weinstein LLP and Nina J. Kimball of Kimball Brousseau LLP.

The panelists reviewed 25 key cases in Massachusetts employment law and highlighted issues central to effective employment litigation in the Commonwealth, including a detailed discussion of foundational and developing case law in the field.  Attorney Belfort was charged with discussing cases relating to discrimination damages and wage and hour disputes.  There was a rigorous discussion as to a number of other relevant topics, including:  proving liability in discrimination cases; retaliation and whistleblower protections; the continuing violation doctrine and Cat’s Paw Theory; and disability and reasonable accommodation law. 

There was a lively dialogue regarding associational discrimination: an evolving and active area of employment law in which the individual experiencing discrimination is not a member of a protected class, but is related to (or associated with) someone who is.  The panelists also discussed the interesting procedural history and standards of appellate review of these central cases – often involving the interplay between various tribunals such as the Supreme Judicial Court’s review of lower Courts’ decisions or the Trial Court’s review of MCAD (Massachusetts Commission Against Discrimination) decisions.  One theme was the fight among litigants as to what standard of review governed each circumstance.  While in some cases the Courts conduct a “de novo” review (completely new trial on the merits) in others there is only a limited 30A administrative review available.  This 30A process is conducted without a jury, is a far more deferential standard to the underlying Agency decision, and considers only facts already in the record.

Here is a list, by general topic, of the top 25 Massachusetts cases that were covered in the Seminar:

 

Discrimination Law – General

1.         Abramian v. President & Fellows of Harvard College, 432 Mass. 107 (2000)

2.         Lipchitz v. Raytheon Co., 434 Mass. 493 (2001)

3.         College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

4.         Thomas O’Connor Constructors, Inc. v. MCAD, 72 Mass. App. Ct. 549 (2008)

5.         Mole v. Univ. of Massachusetts, 442 Mass. 582 (2004)

6.         King v. City of Boston, 71 Mass. App. Ct. 460 (2008)

7.         GTE Products Corp. v. Stewart, 421 Mass. 22 (1995)

8.         Sarni Original Dry Cleaners, Inc. v. Cooke, 388 Mass. 611 (1983)

9.         Haddad v. Wal-Mart, 455 Mass. 91 (2009)

10.       Stonehill Coll. v. MCAD, 441 Mass. 549 (2004)

11.       City of Boston v. MCAD, 39 Mass. App. Ct. 234 (1995)

12.       Massachusetts Elec. Co. v. MCAD, 375 Mass. 160 (1978)

13.       Flagg v. AliMed, Inc., 466 Mass. 23 (2013)

 

Disability Accommodation, Interactive Dialogue, and Leaves of Absence

14.       Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443 (2002)

 

Harassment

15.       Muzzy v. Cahillane Motors, Inc., 434 Mass. 409 (2001)

16.       Cuddyer v. Stop & Shop Supermarket Co., 434 Mass. 521 (2001)

 

Wage & Hour Law

17.       Okerman v. VA Software, 69 Mass. App. Ct. 771 (2007)

18.       Boston Police Patrolmen’s Ass’n, Inc. v. City of Boston, 435 Mass. 718 (2002)

19.       Camara v. Attorney General, 458 Mass. 756 (2011)

20.       Smith v. Winter Place LLP, 447 Mass. 363 (2006)

21.       Crocker v. Townsend Oil Co., 464 Mass. 1 (2012)

22.       Depianti v. Jan–Pro Franchising Int’l, Inc., 465 Mass. 607 (2013)

23.       Lipsitt v. Plaud, 466 Mass. 240 (2013)

 

Common Law Claims

24.       Hobson v. McLean Hosp. Corp., 402 Mass. 413 (1988)

25.       Fortune v. National Cash Register Co., 373 Mass. 96 (1977)

 

The webcast of this program can be accessed through the MCLE website (http://www.mcle.org/product/catalog/code/2150165WBA).

MCLE Top 25

MASSACHUSETTS PARENTAL LEAVE LAW ESTABLISHES IMPORTANT RIGHTS FOR PARENTS OF BOTH GENDERS

Posted on: February 24th, 2015 by admin

On January 7, 2015, Governor Deval Patrick signed into law An Act Relative to Parental Leave (Parental Leave Act).  Effective April 7, 2015, the new law essentially makes the existing Massachusetts Maternity Leave Act (MMLA) gender neutral, so that the protections under the MMLA apply equally to both men and women.  The Massachusetts Parental Leave Act also extends benefits to the placement of a child pursuant to a court order, in addition to coverage for birth and adoption, both of which protections are covered for women under the MMLA.

man-holding-newbornThe Massachusetts Parental Leave Act requires employers with six or more employees to provide eligible employees with 8 weeks of unpaid leave after the birth or adoption of a child. Full-time employees become eligible for leave after the completion of an initial probationary period set by the employer, but no longer than three months.  If no period is set, employees become eligible after three consecutive months of work. Part-time employees are not eligible for leave under the law. Employees must provide employers with notice at least two weeks prior to the date he or she plans to begin leave, or as soon as possible if the delay is outside the employee’s control.

The law generally requires that employees be returned to the same or similar position with the same salary and benefits after leave ends, though exceptions apply where layoffs occur.  If two employees of the same employer are parents of the same child, the employees will only receive a total of 8 weeks between them, rather than 8 weeks each (for a total of 16 weeks).  Where applicable, parental leave may be taken more than once annually under the Parental Leave Act.

Parental leave may be paid or unpaid, or may exceed 8 weeks at the discretion of the employer.  If an employer provides more than 8 weeks of leave, but does not extend status and benefit protections beyond the required 8 weeks, the employer must inform the employee in writing before leave begins that loss of reinstatement or benefits will result from taking longer than 8 weeks.

Employers must post notice of employees’ rights under the Parental Leave Act and the employer’s related polices in an area where employees can see them.  Similar to the Maternity  Leave Act, the Massachusetts Commission Against Discrimination is responsible for enforcing provisions of the Parental Leave Act, and employees who believe their rights have been violated under the law must file a complaint with the MCAD within 300 days of the alleged violation in order to protect their rights.

RECENT RULING HIGHLIGHTS THE IMPORTANCE OF DAMAGES PROVISIONS IN COMMERCIAL LEASE CONTRACTS

Posted on: May 2nd, 2012 by admin No Comments

A recent Massachusetts Appeals Court ruling highlights the importance of negotiating and drafting applicable damages provisions in commercial lease contracts.  When possible, landlords must seek a well-drafted liquidated damages provision in each commercial lease agreement, providing for the landlord’s ability to accelerate rent for the balance of the lease term in the event of a tenant default.  Conversely, tenants will want to eliminate or, at the very least, “water down” such a clause as much as possible. 

In 275 Washington Street Corp. v. Hudson River Intern., LLC, 81 Mass.App.Ct. 418, 963 N.E.2d 758 (2012) (Lawyers Weekly No. 11-038-12) the Appeals Court ruled that a commercial landlord whose tenant broke a 12 year lease after only 24 months, must wait until the expiration of the entire lease term before suing for damages.

The relevant commercial lease agreement had only a basic indemnification provision, entitling the landlord to be indemnified by the tenant for any losses that occurred as a result of the tenant’s breach of the lease agreement.  Noticeably absent from the lease was a liquidated damages clause, allowing the landlord, in the event of the tenant’s breach, to accelerate the balance of the unpaid rent owed by the tenant through the end of the lease term. 

Following the tenant’s default only 2 years into the 12 year lease agreement, the landlord re-entered the property and took possession of the commercial lease space.  Shortly thereafter, the landlord filed a breach of contract suit against the tenant, seeking unpaid rent for the balance of the 12 year lease term and other damages, including for money spent by the landlord on a build out sought by the tenant.  While the landlord’s breach of contract lawsuit against the former tenant was pending, the landlord entered into a 10 year lease agreement with a separate, replacement tenant for the same leased space.  The new lease term with the replacement tenant went beyond the original 12 year term, but was for less monthly rent.

Traditionally, the law has been that pursuant to a standard indemnification provision, a commercial landlord must wait until the end of the lease term to file suit to recover its damages.  The rationale for this law, is that an indemnification provision limits a landlord to recovery for those damages actually incurred.  Accordingly, if a lease term has not yet expired, the landlord’s damages technically remain unknown until the lease term expires. 

Originally, in 275 Washington Street Corp., the Superior Court awarded the landlord summary judgment, holding that because a replacement tenant was found, the landlord’s full damages were now known because the premises was currently rented.  The trial judge ruled that the landlord was entitled to immediately recover the difference between all unpaid rent through the balance of the 12 year lease term due to the original tenant’s default, less the rent the landlord expected from the replacement tenant. 

Unfortunately for the landlord, the Appeals Court overturned the Superior Court’s ruling, holding that because the indemnification agreement limited the landlord to reimbursement for losses actually incurred as a result of the tenant’s breach, and the full scope of the tenant’s breach could not be ascertained until the end of the lease term (notwithstanding the lease with the replacement tenant).  The court concluded that the landlord had to wait until the expiration of the lease term before calculating what its actual damages would be.  The landlord argued unsuccessfully, that because it secured a replacement tenant, its damages were fully ascertainable and it did not have to wait until the end of the 12 lease term.  The Appeals Court disagreed, finding that even though a replacement tenant was found, that replacement tenant could also default, thus making the landlord’s damages once again unknown until the end of the full lease term. 

Importantly, the Appeals Court noted that if the landlord’s commercial lease contract contained a liquidated damages provision, providing for the landlord’s ability to accelerate rent for the balance of the lease term in the event of the tenant’s default, the landlord would be able to secure damages through the end of the lease term by filing suit immediately.

Obviously, this ruling highlights the importance of proper language in a commercial lease contract.  Landlords will want to include a comprehensive liquidated damages provision, allowing them to accelerate rent through the balance of the lease term in the event of a tenant’s default.  Tenants will try to eliminate such lease provisions, or at least attempt to minimize the exposure they may incur.  There are several creative ways that tenants can attempt to negotiate such provisions.  However, ultimately, the ability to negotiate a commercial lease contract typically depends upon the commercial lease market (higher vacancy rates is often equated with flexible landlords), the personality and relative aggressiveness of the landlord and the amount of space and length of the tenant’s lease term (the larger the space and longer the lease term, the more bargaining power a tenant might have).

Bennett & Belfort, P.C. will strive to continue to update you on the varied developments in this rapidly evolving area of real estate litigation which significantly impacts commercial lease drafting and lease negotiations.

UNLIKE BEAUTY, CONTRACT AMBIGUITY DOES NOT LIE “IN THE EYE OF THE BEHOLDER”: READ YOUR REAL ESTATE CONTRACTS CLOSELY

Posted on: December 13th, 2011 by admin No Comments

Anyone who has bought or sold property is aware of the overwhelming amount of paperwork exchanged between the buyer and the seller.  Many people gloss over these important real estate contracts and other documents without fully reading them.

While many purchase and sales agreements provide for a fixed amount of damages (liquidated damages) in the event the buyers do not live up to their contractual obligations, not all “standard form” purchase and sales agreements are the same.

The typical liquidated damages deposit clause in the Massachusetts purchase and sale agreement looks like this:

If the BUYER shall fail to fulfill the BUYER’s agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages, which shall be the SELLER’S sole remedy at law or in equity.

Given the downturn of the real estate market, and in order to deter buyers from backing out of a transaction, sellers and attorneys often try to provide for sellers to be able to recover larger amounts of damages, above and beyond what might be otherwise recoverable pursuant to a liquidated damages provision.

In Avery v. Hughes, Docket No. 10-2379, (1st Cir. Nov. 18, 2011), the liquidated damages deposit clause provided for the seller to CHOOSE whether she wants to accept liquidated damages OR pursue actual damages.  This provision read as follows:

If BUYER shall default in the performance of their obligation under this Agreement, the amount of the deposit may, at the option of SELLER, become the property of SELLER as reasonable liquidated damages.

Recently, the First Circuit Court of Appeals upheld the real estate contract and found that where (1) defendant failed to close on a real estate purchase and sale agreement, (2) the seller retained its deposit, sold the property to a third party for a lower price and then assigned its claim for the price differential to plaintiff and (3) when the plaintiff sued, plaintiff was entitled to recover the difference between the original real estate contract price and the ultimately received contract price.

This ultimately cost the defendant over $250,000; not just the $25,000 that the buyer thought was contemplated under the purchase and sales agreement.

As you can see, the changes in contract language between the standard form purchase and sales agreement and the one used in Avery are minimal; however, as is clear from the Avery decision, the effects of these minimal changes are huge.  In fact, the Court of Appeals found that defendants’ deposit was not liquidated damages at all, and instead was merely consideration for the commitment to extend purchase money financing.  Moreover, the Court found that in absence of the “sole remedy at law” language, defendant was on the hook for the entire difference between what he offered to buy the house for, and what the house ultimately sold for.

These effects of minor changes in contract language exhibit the importance of having binding contracts carefully reviewed for both form and substance.  As the First Circuit Court of Appeals noted, contract interpretation is not as open ended as many think, and certainly is not based on what one party believes the agreement to mean.  Instead, the agreement must be looked at rationally, and analyzed by an independent party who can offer a fair interpretation of contract terms and make suggestions for clarity.  This is especially true in contracts where one party has altered the form of a pre-existing, “form” real estate contract.

Court Narrows Homeowners’ Ability to Obtain Relief Under Home Improvement Contractor Statute

Posted on: March 1st, 2011 by admin No Comments

Due to a recent shift in the judicial interpretation of the Massachusetts Home Improvement Contractor law, M.G.L. c. 142A (“the Act”), homeowners will no longer be able to recover triple damages and attorney’s fees for mere technical violations of the Act by a contractor, where those technical violations do not cause harm to the homeowner.

The Act was designed to protect homeowners, and to give them a remedy to address unscrupulous practices by home improvement contractors.  The Act places numerous requirements upon the contractor.  For example, agreements between contractors and homeowners must contain the contractor’s social security number, a time schedule of payments, the date for the completion of the work, the total cost of the work, and other consumer protection-oriented disclosures.  The Act also requires that the material terms of the agreement and any change orders must be in writing for contracts over $1,000.  As a remedy for violations of the Act, homeowners are able to obtain orders from the court requiring the contractor to complete work under the contract or damages for violations of the Act.  Violations of the Act constitute almost automatic (per se) violations of Chapter 93A, Massachusetts’ consumer protection statute, permitting the homeowner to seek multiple damages (up to triple damages) and reimbursement of their attorneys’ fees.

Historically, homeowners could avail themselves of these powerful damages and attorney’s fees, even for a relatively innocuous, technical violation of the Act, such as the contractor’s failure to include his/her social security number on the contract.  Because of the threat of significant damages and the potential to have to pay the homeowner’s attorney’s fees arising from a technical violation of the Act, contractors were at a disadvantage.  A contractor who substantially completed a project may have been forced to waive all or a portion of monies owed by a homeowner due to an inconsequential oversight.  In certain cases, the threat of triple damages and attorney’s fees may have resulted in a windfall to a homeowner, who otherwise had received the benefit of her bargain.

In the recent case of  DeBettencourt v. Aronson,  the homeowner alleged that the contractor violated the Act by failing to include in the contract between the parties the contractor’s social security number, the date for completion of the work, the total cost of the work, a schedule of payments, and a recitation of the homeowners’ three-day right of rescission (cancellation).  Although the appellate court recognized that the contractor had committed numerous violations of Chapter 142A, the court also observed that none of those statutory violations caused any harm to the Aronsons.  Therefore, the court reversed the award of statutory damages and attorneys’ fees to the homeowner.

In doing so, the Court appears to have sent a message that, although the Home Improvement Contractor law is a powerful remedy for consumers who are harmed by unscrupulous contractors, Chapter 142A cannot be used by homeowners to avoid paying their contractor where no harm is caused by the contractor’s technical violations of the statute.  To obtain relief under Chapter 142A, homeowners will need to identify how a violation of the statute harmed them or caused them specific financial injury.  Contractors and consumers alike are strongly advised to have their contracts and procedures reviewed by a capable attorney to ensure compliance with Chapter 142A before problems arise.