MURPHY v. DADMUN (2022)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

In this dispute over the sale of a business, the plaintiff, Maureen Murphy, appeals from a Superior Court amended judgment, entered after trial, insofar as it denied relief on her claims of promissory estoppel and under G. L. c. 93A. The defendant, Jennifer Dadmun, cross-appeals insofar as the amended judgment also denied relief on Dadmun's counterclaim under G. L. c. 93A. We conclude that the judge, to whom those claims were tried, correctly denied relief on the claims at issue, and we therefore affirm the amended judgment.

Background. Murphy and Dadmun each operated telephone answering services in Somerville. Murphy's complaint alleged that in September of 2017, she and Dadmun entered into a contract whereby Dadmun would purchase Murphy's business and would pay Murphy, for a period of three years and one week, twenty-five percent of Dadmun's gross revenues from customers previously served by Murphy. Murphy alleged that although she had transferred the business to Dadmun, Dadmun had not paid the amounts required by the contract. As relevant here, Murphy asserted claims for breach of contract, quantum meruit, promissory estoppel, and violation of G. L. c. 93A, § 11. Dadmun asserted counterclaims, including one for violation of G. L. c. 93A, § 11, based on the actions of Murphy and her attorney in the course of negotiations and the subsequent payment dispute.

Murphy's contract and quantum meruit claims were tried to a jury, which found that there was no contract but that Murphy was entitled to recover $41,701.25 on the quantum meruit claim. Murphy's promissory estoppel claim and both parties’ c. 93A claims were reserved for the judge, who ruled that there was insufficient evidence to support any of those claims. Both parties appealed.³

1. Estoppel. Murphy's promissory estoppel claim relied on the principle that “[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.” Restatement (Second) of Contracts § 90(1) (1981). See Turnpike Motors, Inc. v. Newbury Group, Inc., 413 Mass. 119, 123-124 & n.9 (1992); McAndrew v. School Comm. of Cambridge, 20 Mass. App. Ct. 356, 363-364 & n.11 (1985). Importantly, “this cause of action is infused with equitable considerations.” Johnny's Oil Co. v. Eldayha, 82 Mass. App. Ct. 705, 714 (2012). Consistent with the Restatement (Second) of Contracts, our courts have limited the remedy to what is necessary to avoid injustice. See, e.g., Barrie-Chivian v. Lepler, 87 Mass. App. Ct. 683, 685-686 (2015); Johnny's Oil Co., supra at 714-716; McAndrew, supra at 363, 365.

Here, despite the lack of clarity in the judge's findings and rulings on Murphy's claims tried to him,⁴ it appears that one of his reasons for denying relief on the promissory estoppel claim was that Murphy “did not sustain any detriment” from transferring her client list to Dadmun in reliance on any payment promise Dadmun had made. This would mean that no relief was necessary to avoid injustice.

More particularly, the judge found that Murphy “wished to retire ․ and lacked the ability to maintain her business in the short run due to equipment failures.” There was evidence that the parties had agreed on December 4, 2017, that the transfer of the business was worth payments of $2,000 per month for three years, or a total of $72,000, but that no final agreement to settle the dispute on that basis was reached. Dadmun “was making payments to [Murphy] between December 2017 and September 2018, while in the process of paying fair value for the client list, which payments were discontinued only when [Murphy] filed suit in August 2018.” There was evidence that Dadmun's payments totaled $30,298.75, leaving $41,701.25 left to pay against the $72,000 total. The jury awarded Murphy that exact amount, $41,701.25, on her quantum meruit claim.⁵ The judge could therefore reasonably determine that no further relief on the promissory estoppel claim was necessary to avoid injustice. On this record, that conclusion is unassailable.⁶

2. Murphy's c. 93A claim. Murphy's claim under G. L. c. 93A, § 11, was premised on (1) Dadmun's failure to pay amounts due under the alleged September 2017 contract; and (2) Dadmun's efforts to renegotiate that alleged contract, after Murphy had transferred her business, in order to pay less to Murphy.⁷ See Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 474 (1991) (conduct in disregard of known contractual arrangements and intended to secure benefits for breaching party constitutes unfair or deceptive act or practice under c. 93A). The problem, among others, with Murphy's theory is that the jury found there was no such contract. And there was ample evidence that, despite the parties’ having attempted to reach agreement in September 2017, no final contract was agreed upon.⁸ Absent a contract, Dadmun's conduct was not unfair or deceptive under Murphy's c. 93A theory. The judge so determined, and Murphy does not show how it could be clearly erroneous for the judge to find, as did the jury, that no contract was formed.⁹

3. Dadmun's c. 93A claim. Dadmun's claim under G. L. c. 93A, § 11, was premised on allegations that Murphy, largely through counsel, committed three unfair or deceptive acts. First, Murphy attempted in October of 2017 to “intimidate and bully” Dadmun into signing a contract different from what the parties initially contemplated. Second, Murphy demanded payment in October of 2017, despite the absence of a contract and despite Dadmun's having not yet received any revenues from Murphy's former customers. Third, Murphy agreed on December 4, 2017, that her business was worth fixed payments of $2,000 per month for three years (a total of $72,000), but then rejected that agreement, demanded additional concessions, and commenced this litigation when Dadmun would not make those payments.

As to Murphy's first two allegedly unfair acts, however, the evidence before the judge did not require him to find that those acts caused Dadmun any loss of money or property -- an essential element of Dadmun's c. 93A claim. See Halper v. Demeter, 34 Mass. App. Ct. 299, 303-304 (1993). Even if Murphy attempted in October 2017 to bully Dadmun to sign a less favorable contract than what Dadmun initially contemplated, the jury found that Dadmun never entered into such a contract. And even if Murphy demanded payment in October of 2017 despite no contract having been signed and Dadmun having received no revenues from Murphy's former customers, Dadmun never made the payments that were demanded; it was undisputed that Dadmun had paid nothing until late December of 2017.

This left Dadmun with only her third allegedly unfair act: that Murphy, after having agreed on December 4, 2017, to accept fixed payments totaling $72,000 as the fair value of her business, essentially repudiated that agreement and attempted to extract additional benefits from Dadmun.¹⁰ Dadmun relied on the same c. 93A principle discussed supra, that conduct in disregard of a contract and intended to secure benefits for the breaching party constitutes an unfair or deceptive act or practice under c. 93A. See Anthony's Pier Four, 411 Mass. at 474. If there was no such agreement to settle the dispute, however, then Murphy's conduct in refusing to settle unless Dadmun made additional concessions would not be unfair or deceptive in that sense.

The judge was not required to find the existence of such an agreement. The evidence included an e-mail exchange from December 4, 2017, in which Dadmun reported to Murphy's counsel that Dadmun and Murphy themselves had met to discuss settlement, that “[w]e want to agree” to the fixed payments totaling $72,000, and that “[w]e would like to set up a meeting [that included counsel for both parties] to draw up an agreement.” Murphy's counsel promptly replied by stating that Dadmun's message was “only partially accurate,” accusing Dadmun of having “leaned on” Murphy to persuade her to accept the fixed payments arrangement, and asserting that Murphy had agreed only to discuss the proposal with counsel. The judge could well have found this evidence insufficient to establish that the parties had agreed to the fixed-payments settlement. Without such an agreement, Murphy's insistence on additional concessions was not unfair or deceptive under Anthony's Pier Four, meaning Dadmun's c. 93A claim failed. We thus see no error of fact or law in the judge's rejection of that claim.¹¹

Amended judgment affirmed.

FOOTNOTES

3.   The operative notices of appeal were filed after the judge ruled on the claims tried to him but before those rulings were embodied in an amended judgment. Although the notices were therefore technically premature, no party has been prejudiced, and we treat the notices as sufficient to bring the amended judgment before us. See Swampscott Educ. Ass'n v. Swampscott, 391 Mass. 864, 865-866 (1984).

4.   The judge, by margin endorsement, ruled that “for the reasons stated by [Dadmun]” in her proposed findings and rulings on Murphy's claims, “the evidence at trial was insufficient” to support Murphy's promissory estoppel and c. 93A claims. Dadmun's proposed findings and rulings on Murphy's claims totaled six pages and included alternative (although not necessarily mutually exclusive) grounds for rejecting those claims. Rule 52 of the Massachusetts Rules of Civil Procedure, as amended, 423 Mass. 1408 (1996), “does not require extensive detail, but does impose on the judge an independent duty to articulate the essential grounds of his decision.” Schrottman v. Barnicle, 386 Mass. 627, 638 (1982). The rule's “purpose is to ensure that the judge may be satisfied that he has dealt fully and properly with all the issues and that the parties involved and [the appellate court] may be fully informed as to the bases of his decision” (quotations omitted). Id. at 639. The judge's margin endorsement suggests that the judge adopted each one of the numerous factual and legal grounds proffered by Dadmun as reasons to reject Murphy's claims. It is possible the judge intended otherwise, and additional clarity on the point would have assisted the parties in deciding whether to appeal and would have assisted us in ruling on the appeal that in fact ensued. Nevertheless, we do not remand for further findings or rulings. The parties bypassed their opportunity to seek amended or additional findings under Mass. R. Civ. P. 52 (b), and neither party has asked us to remand for further findings or rulings. We proceed on the basis that the judge adopted each of Dadmun's proposed findings that relate to Murphy's claims tried to the judge.

5.   The jury could have found that the parties’ tentative agreement on a valuation of $2,000 per month for three years reflected both parties’ more informed view of the fair value of Murphy's business, as compared to the parties’ tentative agreement three months earlier on a valuation of twenty-five percent of gross revenues from Murphy's customers for three years and one week.

6.   We reach this conclusion even after “subject[ing] to stricter scrutiny” the findings adopted wholesale from those proposed by Dadmun. Cormier v. Carty, 381 Mass. 234, 237 (1980).

7.   Our characterization of Murphy's c. 93A claim accepts arguendo her own explanation of the claim in her appellate brief. We need not explore the extent to which that explanation tracks the evidence and arguments she actually put before the judge. The same is true of our characterization, infra, of Dadmun's c. 93A claim.

8.   Among other evidence, the jury and the judge had before them an e-mail message dated September 26, 2017. In that message, Murphy's counsel asked Dadmun to review an attached draft of an agreement, which added terms to what the parties had previously discussed, and “[i]f there is any major disagreement[,] call me to work it out.” From this a finder of fact could reasonably infer that Murphy, at least, recognized that major disagreements might remain. There was no evidence that Dadmun ever expressly indicated her acceptance of that draft agreement.

9.   Murphy's brief includes numerous variations on the theme that a contract was formed. Nevertheless, Murphy's brief insists that she “is not appealing the jury verdict,” which found otherwise. And Murphy does not argue that the judge erred in denying her motion for judgment notwithstanding the verdict on her contract claim.

10.   Dadmun advanced a somewhat novel damages theory. She argued that she would voluntarily have paid Murphy the full $72,000 as agreed on December 4, 2017, but that Murphy's unfair or deceptive acts caused Dadmun to cease payments after having paid only $30,298.75. This resulted not only in the jury's award to Murphy of the remaining amount, $41,701.25, but also -- importantly, in Dadmun's view -- the requirement that Dadmun pay prejudgment interest on that amount, plus Murphy's costs. The amount of interest and costs, apparently $17,177.08, is what Dadmun claimed as damages. Cf. Smith v. Caggiano, 12 Mass. App. Ct. 41, 44-45 (1981) (loss of interest may constitute loss of money under G. L. c. 93A, § 11).

11.   The parties’ requests for appellate attorney's fees are denied.