In Massachusetts business litigation, Chapter 93A claims often trail behind an ordinary breach of contract claim. Typically, however, a mere breach of contract claim does not give rise to a Chapter 93A claim. In order to do so, a party must allege and ultimately prove more than a simple breach of contract. The conduct alleged must cross the line into an unfair and deceptive business practice where the breaching party attempts to secure benefits for themselves in disregard of known contractual arrangements.
The Massachusetts Appeals Court recently examined this long-standing principle in Filzer v. Pitsick LLC. During a zoning litigation dispute in Massachusetts Land Court, a developer and the owners and abutters of the properties at issue entered into a settlement agreement that agreed to “compromise their differences without further litigation.” Among other things, the agreement required the developer to pay the abutters an agreed upon fee; pursue, with the abutters’ support, a special permit to reconfigure the property at issue; record restrictive covenants and perform restoration work; and ultimately dismiss the ongoing Land Court action once the other conditions in the agreement were met. The parties did not disclose the settlement agreement to the Land Court. The Land Court subsequently issued a decision prior to completion of the terms in the agreement, and as a result, the developer took the position that the rulings rendered the settlement “null and void.”
The abutters then brought this action for breach of the settlement agreement and violation of Chapter 93A. The Appeals Court affirmed the finding that the developer violated Chapter 93A when it attempted to leverage a better deal for themselves against the owners and abutters disregarding the terms of the settlement agreement. In finding the developer acted unfairly, the Court focused on the developer’s refusal to provide written assurances that it would honor the settlement agreement, its attempts to renegotiate a better deal after the Land Court ruling, its declaration that the settlement agreement was void without following the procedures outlined in the agreement, and its refusal to allow its lender to disburse the agreed upon settlement payment. The Court found this conduct crossed the line from a mere contract dispute into one where the developer used improper leverage as a wedge to gain an advantage over the owners and abutters.
