Opinion
ESCV201401122
08-09-2019
Matthew ORTINS et al.[1] v. LINCOLN PROPERTY CO. et al.[2]
MEMORANDUM OF DECISION AND ORDER ON THE PARTIES’ CROSS MOTIONS FOR SUMMARY JUDGMENT
C. William Barrett, Justice
INTRODUCTION
In this case, the plaintiffs, Matthew Ortins and Olivia Savarino (collectively, the "Plaintiffs"), assert claims against the defendants, Lincoln Property Co. ("Lincoln Property"), Salem Station, LLC ("Salem Station"), and Lincoln Apartment Management, LP ("Lincoln Management") (collectively, the "Defendants"), on their own behalf and on behalf of a class of similarly situated persons. In particular, the Plaintiffs contend Lincoln Property and its affiliate, Lincoln Management, intentionally charged prospective tenants of properties they manage in Massachusetts application fees and lock and key fees in violation of the Massachusetts Security Deposit Law, G.L.c. 186, § 15B (Count I and III), and that these charges constitute per se violations of G.L.c. 93A ("Chapter 93A") (Count II and IV). This matter is currently before the court on the Defendants’ Motion For Summary Judgment (Paper No. 47) and the Plaintiffs’ Motion For Summary Judgment (Paper No. 48). For the reasons explained below, the Defendants’ Motion is DENIED and the Plaintiffs’ Motion is ALLOWED in part and DENIED in part.
BACKGROUND
The Plaintiffs filed the Complaint (Paper No. 1), on July 14, 2014, alleging Lincoln Property and Salem Station charged tenants and prospective tenants application fees and lock and key fees, i.e., re-key fees, above the actual cost of a new lock and key, in violation of the Security Deposit Law and Chapter 93A. There followed a number of disputes between the parties regarding various discovery matters.
On September 19, 2017, the Plaintiffs filed the Stipulation To Amend Complaint (Paper No. 28) and the First Amended Complaint (Paper No. 29), adding Lincoln Management as a defendant.
On February 2, 2017, the Defendants filed the Motion For Protective Order (Paper No. 11), which the court (Lauriat, J.) allowed, without prejudice, on March 1, 2017, stating "[c]lass certification not yet being heard or determined, the requested discovery is presently limited to the property in which the named plaintiffs are involved." Thereafter, on March 22, 2017, the Plaintiffs served the Defendants with the Motion To Compel Production Of Documents And MRCP 30(b)(6) Deponents (Paper No. 13), which limited the documents the Plaintiffs were requesting "to the property in which the named plaintiffs are involved."
After two hearings and a number of submissions by the parties, on June 30, 2017, corrected by order dated July 7, 2017, the court (Tabit, J.) issued the Order Of The Court Relevant To Lincoln Property Company, Salem Station, LLC, And Lincoln Apartment Management, LP (the "Discovery Order") (Paper No. 26), ordering the Defendants to produce within sixty days various categories of documents relative to the "Subject Properties," including: the management agreements for these properties; documents showing which tenants paid application fees and re-key fees, the amounts paid, and the actual cost of all lock changes or new keys; bank records evidencing the depositing and transferring of application fees and re-key fees; and any documents describing policies or guidelines for charging application fees and re-key fees. J.A., Ex. T.
The term "Subject Properties" refers to thirty-one properties identified in the Discovery Order that are located in Massachusetts, for which Lincoln Property and/or Lincoln Management provided management services.
On September 21, 2017, shortly before the expiration of the sixty-day deadline set forth in the Discovery Order, the Defendants filed the Motion For Reconsideration Of Court Order Dated 6/30/2017 (Paper No. 30). In response, the Plaintiffs filed the Opposition To Defendants’ Motion For Reconsideration And Request for Sanctions (Paper No. 30.1), requesting that the court issue sanctions against the Defendants based on their failure to comply with the Discovery Order. On September 26, 2017, the court (Tabit, J.) issued the Memorandum And Decision On Defendants’ Motion For Reconsideration Of The Court’s Discovery Order (Paper No. 32), denying the motion and directing the Defendants to "produce all documents responsive to th[e] court’s 06/30/17 order and the court’s 07/07/17 corrected order by 10/05/17." Therein, for the second time, the court ordered the Defendants to conduct a diligent search of their records, including electronically stored information, and produce documents responsive to the categories outlined in the Discovery Order. The court took no action relative to the Plaintiffs’ request for sanctions.
On October 31, 2017, the court (Tabit, J.) issued the Memorandum And Order On Plaintiffs’ Motion For Class Certification (Paper No. 34), granting certification to a class of plaintiffs defined to include "[a]ll individuals who paid rent application fees and lock and key fees to [Lincoln Property] or [Lincoln Management] in the Commonwealth of Massachusetts[,]" including "all tenants or perspective [sic] tenants of Jefferson, at Salem Station, who paid such fees." J.A., Ex. S. In addition, therein, the court formally appointed Ortins and Savarino to represent the class.
On December 28, 2017, the Plaintiffs filed the Motion For Sanctions Against All Defendants (Paper No. 36). J.A., Ex. U. The court (Tucker, J.) conducted hearings relative to this motion on March 1, 21, and 27, 2018. Following the hearing on March 1st, the court deferred ruling on the Motion For Sanctions in order to grant the Defendants "additional time to make further diligent searches for documents and records, both in paper and electronic form, in response to plaintiffs’ request." J.A., Ex. V. The court also "admonished" Defendants for failing to comply with the Discovery Order, stating they were "required to fully comply with [the Discovery Order] or set forth by sworn affidavit the reasons for non-production." J.A., Ex. V.
On March 30, 2018, the court issued the Order On Plaintiffs’ Motion For Sanctions (the "Sanction Order") (Paper No. 41), concluding the Plaintiffs were entitled to reasonable attorneys fees, and sanctioning the Defendants for their willful non-compliance with the Discovery Order and/or spoliation of evidence. J.A., Ex. V. More specifically, as a sanction for their discovery violations, the court ordered that the Defendants were "precluded from attempting to rebut" certain factual assertions, including:
a) That [Lincoln Property] and [Lincoln Management] were the property managers at no less than 27 apartment complexes, totaling no less than 6,500 residential units during the time period of July 8, 2010 to date (hereinafter "the Time Period");
b) That during the Time Period, [Salem Station] owned and managed 266 apartments[sic] units;
c) That the defendants [Lincoln Property], [Lincoln Management], and [Salem Station] charged tenants a $250 application fee and a $150 rekey fee on new leases executed during the Time Period; and
d) The defendants [Lincoln Property], [Lincoln Management], and [Salem Station] possess no documents that establish the actual cost of new lock and key changes.
These unrebuttable assertions establish the undisputed material facts for purposes of the pending summary judgment motions. To the extent additional relevant facts apply, the court will address those facts during its discussion of the parties’ arguments.
DISCUSSION
The Plaintiffs contend they are entitled to judgment as a matter of law for two reasons. First, on their claims for violation of the Security Deposit Law (Counts I and III), the plaintiffs assert that charging an application fee and any amount other than the actual cost of the purchase and installation of a lock constitutes a violation of the Law. Second, the Defendants’ violations of the Security Deposit Law constitute per se unfair and deceptive acts or practices in violation of Chapter 93A (Counts II and IV). Additionally, the Plaintiffs argue that the Defendants’ conduct was "knowing and willful," entitling them as a matter of law to an award of double or treble damages under Chapter 93A.
The Defendants argue judgment should enter in their favor on the claims for violation of the Security Deposit Law. Lincoln Property and/or Lincoln Management claim they cannot be liable for violation of the Security Deposit Law because it only applies to property owners, not managers. In addition, they join with Salem Station in arguing that the Security Deposit Law does not bar the fees at issue in this case. Finally, the Defendants argue that, if the court decides they are not liable for violation of the Security Deposit Law, the claims for violation of Chapter 93A (which are, based entirely on violation of that Law) also fail. Alternatively, if the court decides they are liable for violation of the Security Deposit Law, the Defendants contend entry of judgment on the claims for violation of Chapter 93A is inappropriate because issues of fact remain concerning whether their conduct was willful and knowing.
I. Standard of Review
A motion for summary judgment may be granted if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Mass.R.Civ.P. 56(c); see also Barrows v. Wareham Fire Dist., 82 Mass.App.Ct. 623, 625 (2012), citing Cassesso v. Commissioner of Corr., 390 Mass. 419, 422 (1983). The party opposing a request for summary judgment must respond and allege specific facts establishing the existence of a genuine issue of material fact for trial. Polaroid Corp. v. Rollins Envtl. Servs. (N.J.), Inc., 416 Mass. 684, 696 (1993). The court views the evidence in the light most favorable to the nonmoving party, but does not weigh evidence, assess credibility, or find facts. Drakopoulos v. United States Bank Nat’l Ass’n, 465 Mass. 775, 788 (2013), quoting O’Connor v. Redstone, 452 Mass. 537, 550 (2008).
II. Analysis
A. The Security Deposit Law
The arguments asserted in the parties’ summary judgment motions raise questions that require the court to interpret the meaning of the Security Deposit Law. In undertaking this analysis, the court follows well-established precepts of statutory construction.
1. Principles of Statutory Interpretation
First, "[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." Phillips v. Equity Residential Mgmt., L.L.C., 478 Mass. 251, 257-58 (2017), quoting Board of Educ. v. Assessor of Worcester, 368 Mass. 511, 513 (1975).
Second, "because [the language of a statute] ... ‘is the principle source of insight into legislative intent[,]’ " Norfolk & Dedham Mut. Fire. Ins. Co. v. Morrison, 456 Mass. 463, 468 (2010), quoting O’Sullivan v. Secretary of Human Servs., 401 Mass. 190, 194 (1988), "[w]here the text of the statute is clear and unambiguous," the court gives the statutory language its "ordinary meaning," Phillips, 478 Mass. at 257-58, citing Bronstein v. Prudential Ins. Co. of Am., 390 Mass. 701, 704 (1984). In doing so, however, "[the court] look[s] to the language of the entire statute, not just a single sentence, and attempt[s] to interpret all of its terms harmoniously to effectuate the intent of the Legislature." Id., quoting Commonwealth v. Hanson H., 464 Mass. 807, 810 (2013).
Finally, a court must give "[e]very word in [the] statute ... meaning[.]" Commonwealth v. Disler, 451 Mass. 216, 227 (2008), quoting Matter of a Civil Investigative Demand Addressed to Yankee Milk, Inc., 372 Mass. 353, 358 (1977). "[S]o long as it yields a ‘logical and sensible result,’ ... [the court does not] interpret a statute so as to render any portion of it meaningless." Phillips, 478 Mass. at 257-58, quoting Adamowiez v. Ipswich, 395 Mass. 757, 760 (1985), quoting Lexington v. Bedford, 378 Mass. 562, 570 (1979).
2. Application of the Security Deposit Law
As an initial matter, Lincoln Property and Lincoln Management contend that the Security Deposit Law does not apply to them because they are merely managers, they do not own the properties in question, and the individual property owners decided what fees to charge and determined the amounts to charge for these fees. The court disagrees.
First, while the Security Deposit Law states that no "lessor" may require a tenant or prospective tenant to pay any amount in excess of certain enumerated charges, the statute does not define the term "lessor." Thus, entities such as Lincoln Property and Lincoln Management that provide management services for residential rental properties are not specifically excluded under the Security Deposit Law. Moreover, the Attorney General’s regulations that address what conduct can constitute "unfair ... competition," 940 Code Mass.Regs. § 3.00 et seq., including in connection with the landlord-tenant relationship, 940 Code Mass.Regs. § 3.17, specifically state that "the term ‘owner’ shall include one who manages, controls, and/or customarily accepts rent on behalf of the owner." 940 Code Mass.Regs. § 3.01.
Here, in carrying out the management services they provide, Lincoln Property and Lincoln Management are clearly entities that "manage[ ], control[ ], and/or customarily accept[ ] rent" on behalf of a variety of Massachusetts property owners. Moreover, the court’s conclusion that the Security Deposit Law applies to Lincoln Property and Lincoln Management is consonant with the purpose underlying enactment of the statute.
In passing the Security Deposit Law, "the Legislature recognized that tenants have less bargaining power than landlords and are less able to vindicate their rights in court." Phillips, 478 Mass. at 254, citing Mellor v. Berman, 390 Mass. 275, 282 (1983) ("[b]y enacting [the Security Deposit Law] ... ‘the Legislature manifested a concern for the welfare of tenants in residential property who, as a practical matter, are generally in inferior bargaining positions and find traditional avenues of redress relatively useless’ "), quoting Goes v. Feldman, 8 Mass.App.Ct. 84, 91 (1979). For this reason, the statute is "strictly" construed, Hermida v. Archstone, 826 F.Supp.2d 380, 384 (D.Mass. 2011), citing Mellor, 390 Mass. at 279, to "protect[ ] tenants by providing clear guidelines for landlords to follow[,]" Phillips, 478 Mass. at 254, which limit "the amount and purpose for which the landlord can legally collect moneys." Hermida, 826 F.Supp.2d at 387. It would be contrary to the legislative intent behind enactment of the Security Deposit Law to interpret the provision not to apply to entities such as Lincoln Property and Lincoln Management that provide management services, including the charging and collection of fees the owner and management company could blame each other for any wrongdoing while the tenant was left without recourse.
To the extent Lincoln Property and Lincoln Management argue they did not charge the fees at issue in this case, but merely collected the fees for the various property owners for whom they provided management services, the argument is without merit. Pursuant to the Sanction Order, it is undisputed that Lincoln Property and Lincoln Management "charged tenants a $250 application fee and a $150 rekey fee," when executing new leases at the properties they managed.
Next, the Defendants argue section 15(B)(1)(b) of the Security Deposit Law does not apply to the fees at issue in this case; rather, it only applies "to non-refundable deposits," which, prior to enactment of the Law, were often illegally retained by owners. In response, the Plaintiffs contend charging tenants an application fee or any amount in excess of the actual cost for a lock change constitutes a clear violation of the Security Deposit Law. The court agrees with the Plaintiffs.
The Security Deposit Law states, in relevant part, as follows:
At or prior to the commencement of any tenancy, no lessor may require a tenant or prospective tenant to pay any amount in excess of the following: (i) rent for the first full month of occupancy; and, (ii) rent for the last full month of occupancy calculated at the same rate as the first month; and, (iii) a security deposit equal to the first month’s rent ...; and, (iv) the purchase and installation cost for a key and lock.
G.L.c. 186, § 15B(1)(b)(i)-(iv).
The terms of this provision are "unambiguous[.]" Hermida, 826 F.Supp.2d at 384, citing Mellor, 390 Mass. at 279 (1983) (holding that the language of the Security Deposit Law is unambiguous); Cote v. Sylvia, 2008 Mass.App.Div. 27, 2008 WL 217396, at *1 (Jan. 22, 2008) (stating that the requirements imposed by the Security Deposit Law are "unequivocal"). "Giving the statute’s words their ordinary meaning ‘consonant with sound reason and common sense,’ ... section 15B(1)(b) simply is not susceptible of more than one reasonable construction." Perry v. Equity Residential Mgmt., L.L.C., 2014 WL 4198850, at *3 (D.Mass. 2014) (Zobel, J.), quoting Harvard Crimson, Inc. v. President & Fellows of Harvard Coll., 445 Mass. 745, 749 (2006). "The statute is a list. If a fee is on the list, then it is a permissible up-front charge; if it is not on the list, then it is impermissible." Id.
Here, the undisputed facts establish that Lincoln Property and/or Lincoln Management charged tenants of the 6500 residential units they manage in Massachusetts a $250 application fee; and that, likewise, Salem Station charged tenants of its 266 apartments a $250 application fee. These charges constitute a clear violation of the Security Deposit Law, as application fees are not included on the list of permissible charges. See G.L.c. 186, § 15B; see also Perry, 2014 WL 4198850, at *4 ("section 15B(1)(b) does not authorize landlords to charge prospective tenants an application fee"); Dolben v. Friedmann, 2008 Mass.App.Div., 2008 WL 81549, at *4 (Mass.App.Div. Jan. 2, 2008) (Brennan, J.).
The Plaintiffs contend the Defendants also violated the Security Deposit Law by charging a lock and key fee in excess of the actual cost to change and install a new lock and provide a key. In response, the Defendants claim that the Security Deposit Law allows an owner to charge the anticipated average cost of purchasing and installing a new lock. In support, the Defendants point to the fact that the Security Deposit Law allows the owner to charge the rekey fee prior to the commencement of the tenancy, i.e., according to the Defendants, before the lock has actually been changed. The court finds the Defendants’ argument unpersuasive.
The Security Deposit Law provides, in relevant part, that a lessor may not require a tenant or prospective tenant "to pay any amount in excess of ... the purchase and installation cost for a key and lock." This provision is "unambiguous," requiring "strict compliance[.]" Hermida, 826 F.Supp.2d at 384. In accord with its plain terms, a landlord is not permitted to charge any amount aside from the cost for the purchase and installation of a lock and key. As the Plaintiffs assert, the only reasonable interpretation of this provision is that it prohibits charging any amount above the actual cost for changing and installing a new lock.
First, if the Legislature had wanted to permit a landlord to charge the "average" cost or the "reasonable" cost or the "anticipated" cost for a lock change, it could have included such modifiers in the provision at issue. It chose not to do so, however, and the court will not add such terms at this juncture. See Commissioner of Corr. v. Superior Court Dept. of Trial Court For County of Worcester, 446 Mass. 123, 126 (2006) ("[w]e do not read into the statute a provision which the Legislature did not see fit to put there, nor add words that the Legislature had an option to, but chose not to include").
Second, the legislative intent behind enactment of the Security Deposit Law- protecting tenants in inferior bargaining positions by providing clear guidelines to landlords about what is and is not permissible- supports restricting the amount that a landlord can charge for a rekey fee to the actual cost for changing and installing a new lock. It would be contrary to the protective purposes underlying adoption of the Security Deposit Law to allow a lessor to charge a tenant more than what it actually cost for a new lock and key.
Finally, as to the Defendants’ argument that the Security Deposit Law must allow for the charging of the average anticipated cost of rekeying, because it permits charging the rekey fee before the start of the tenancy and before the lock has been changed, the court disagrees with the Defendants’ reading of the statute. While the Security Deposit Law permits a lessor to charge the rekey fee "at or prior to commencement" of the tenancy, there is no requirement that the rekey fee must be charged before the tenancy has begun. In the court’s view, if charging the rekey fee before the tenancy has commenced results in the lessor charging the tenant an amount different than what it actually costs to change and install a new lock, in violation of the Security Deposit Law, it is the timing of when the charge is levied that must be adjusted.
Here, the undisputed facts establish that Lincoln Property and/or Lincoln Management charged tenants of the 6,500 residential units they manage in Massachusetts a $150 rekey fee; and that Salem Station, likewise, charged tenants of its 266 apartments a $150 rekey fee. Further, it is undisputed that the $150 fee constituted the "average" cost to replace the lock and key, not the actual cost, and that the Defendants "possess no documents that establish the actual cost of new lock and key changes." Because the Defendants charged rekey fees in amounts different than what it actually cost to change and install a new lock, they violated the Security Deposit Law.
In Defendants’ Statement Of Material Facts In Support Of Defendants’ Motion For Summary Judgment (Paper No. 47.2), SOF 11, Defendants assert that "residents ... were charged a key/lock fee of $150.00 which represents the average cost to replace the lock and key."
In sum, for the reasons explained, the Plaintiffs are entitled to judgment as a matter of law as to liability on their claims that the Defendants violated the Security Deposit Law (Counts I and III).
B. Chapter 93A
The Plaintiffs contend that violations of the Security Deposit Law constitute per se violations of Chapter 93A, and that the Defendants’ violations were knowing and willful, entitling them to double and/or treble damages under Chapter 93A. The Defendants argue the Plaintiffs’ claims for violation of Chapter 93A fail because their demand letter was insufficient.
Alternatively, the Defendants argue that entry of judgment as a matter of law on the Plaintiffs’ claims for violation of Chapter 93A is inappropriate because there are issues of fact concerning whether their conduct was willful and knowing. The court addresses these arguments below.
1. The Demand Letter
Chapter 93A requires that:
At least thirty days prior to the filing of the action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent.G.L.c. 93A, § 9(3). The purpose of the demand letter is to provide the defendant with enough information regarding the alleged action so as to encourage investigation, communication, and ultimately, settlement between the parties. Casavant v. Norwegian Cruise Line, Ltd., 460 Mass. 500, 505 (2011). "Sending such a letter is a ‘condition precedent to commencing an action under [Chapter 93A].’ " Lingis v. Waisbren, 75 Mass.App.Ct. 464, 468 (2009), quoting Spilios v. Cohen, 38 Mass.App.Ct. 338, 342 (1995).
In this case, on November 20, 2013, Ortins and Savarino sent, on their own behalf and on behalf of "all other persons ... similarly situated," to "Lincoln Property Company" a "DEMAND LETTER PURSUANT TO MASSACHUSETTS GENERAL LAWS CHAPTER 93A[.]" J.A., Ex. G. Therein, Lincoln Property "and the various housing complexes it owns or manages," including Salem Station, were identified as the "Respondents[.]" At the time the Demand Letter was sent, the putative class had not yet been certified. Lincoln Property responded to the Demand Letter on December 10, 2013, offering Ortins and Savarino $1,400.00, "$400 representing their application fee and lock fee, as well as $1,000 of attorneys fees and costs." J.A., Ex. H. Ortins and Savarino rejected this offer and filed the current action on July 14, 2014.
In fact, the Demand Letter included an addendum identifying a number of Massachusetts properties, allegedly managed by Lincoln Property, to which the Demand Letter was also sent.
The Defendants assert various arguments regarding the sufficiency of the Demand Letter. First, they argue the Demand Letter cannot support the Chapter 93A claim asserted against either Salem Station or Lincoln Management because it was not legally served on these entities. The court rejects this contention.
The Demand Letter clearly identifies Lincoln Property and the complexes it manages as the appropriate respondents. Moreover, as to Salem Station, it was identified in the addendum attached to the Demand Letter as one of the properties to which the Demand Letter was specifically sent. Thus, Salem Station clearly received notice of Ortins and Savarino’s allegations of unfair and deceptive conduct, as well as an opportunity to negotiate possible settlement of these claims. As to Lincoln Management, the court concludes sending the Demand Letter addressed to Lincoln Property was sufficient to put Lincoln Management on notice of Ortins and Savarino’s claims. The two entities are affiliates that work cooperatively to provide management services to various rental properties throughout Massachusetts, and other states nationwide.
Next, the Defendants seem to argue that the Demand Letter was not sufficient to put them on notice of the pending class action, and a new demand letter should have been filed after class certification. The court disagrees.
Under Chapter 93A, a claimant may "bring the action on behalf of himself and such other similarly injured and situated persons." G.L.c. 93A, § 9(2). And, "a demand letter that identifies the particularized injuries of one class representative claimant and gives notice to the defendant of the pendency of the class action is sufficient." Bosque v. Wells Fargo Bank, N.A., 762 F.Supp.2d 342, 354 (D.Mass. 2011). A plaintiff may commence a Chapter 93A class action claim without specifically identifying the claim as a class action in the demand letter. See Baldassari v. Public Fin. Trust, 369 Mass. 33, 42 (1975) ("[i]f a proper demand is made by one plaintiff, ... we think he and others similarly situated may join in a class action to redress that injury and similar injuries caused by the same act or practice"). Ultimately, a demand letter need only be made on the plaintiff’s own behalf, even if the plaintiff is proposing to represent a class of similarly situated persons. See Richards v. Arteva Specialties S.A.R.L., 66 Mass.App.Ct. 726, 731-32 (2006).
Applying the above principles to the instance case, it is clear that the Plaintiffs were not required to send the Defendants a second demand letter after the class was officially certified. The initial demand letter was sufficient to put the Defendants on notice regarding the pending class action, especially in this case, since, in the Demand Letter, Ortins and Savarino specifically stated they intended pursuing a claim on behalf of themselves and others similarly situated.
2. Unfair and Deceptive Acts or Practices
The Plaintiffs contend the Defendants’ violations of the Security Deposit Law constitute per se violations of Chapter 93A, and that the intentional nature of these violations entitles them to double or treble damages as a matter of law. The Defendants argue there are disputed issues of fact about whether their conduct was willfully and knowingly unfair and deceptive. The court agrees with the Defendants.
Chapter 93A makes unlawful "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." G.L.c. 93A, § 2(a). The Attorney General is permitted to make rules and regulations interpreting the meaning of this provision. G.L.c. 93A, § 2(c). Relevant for purposes of the current action, is 940 Code Mass.Regs. § 3.17, which addresses conduct the Attorney General has deemed unfair and deceptive in connection with the landlord-tenant relationship. In essence, this regulation mirrors, in part, G.L.c. 186, § 15B, stating it is "an unfair or deceptive practice" for an owner to:
[R]equire a tenant or prospective tenant, at or prior to commencement of any tenancy, to pay any amount in excess of the following: 1. rent for the first full month of occupancy; and 2. rent for the last full month of occupancy calculated at the same rate as the first month; and 3. a security deposit equal to the first month’s rent; and, 4. the purchase and installation cost for a key and lock.940 Code Mass.Regs. § 3.17(4). However, "the Attorney General is not empowered to issue regulations rendering certain statutory violations ‘per se ’ Chapter 93A violations." Sharp v. Hylas Yachts, LLC, 872 F.3d 31, 50 (1st Cir. 2017), quoting McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 775 F.3d 109, 120 (1st Cir. 2014) (discussing Klairmont v. Gainsboro Rest., Inc., 465 Mass. 165, 174 (2013)).
"The reach of the [Attorney General’s] regulation[s] ... is ‘bound by the scope of [Chapter 93A], § 2(a).’ " McDermott, 775 F.3d at 119, quoting Klairmont, 465 Mass. at 174. "This means that ... ‘a violation of a law or regulation ... will be a violation of [Chapter 93A], § 2(a), only if the conduct leading to the violation is both unfair or deceptive and occurs in trade or commerce.’ " Id., quoting Klairmont, 465 Mass. at 174. Further, "[w]hether a party’s actions violate [Chapter 93A] and whether that violation is willful or knowing are questions of fact[.]" Nannan v. Nevins, 95 Mass.App.Ct. 1107, 2019 WL 1560844, at *3 (2019) (Unpublished Rule 1:28), citing Squeri v. McCarrick, 32 Mass.App.Ct. 203, 207-08 (1992).
Here, there are issues of fact concerning whether the Defendants’ conduct was unfair and deceptive and, if so, whether that conduct was willful and knowing. On the one hand, the Plaintiffs claim the Defendants knew about the Security Deposit Law’s restrictions and they purposely chose to charge fees contrary to the restrictions contained therein. On the other hand, the Defendants contend that they did not know that charging the fees at issue in this case might be illegal until after the Hermida decision. And, even now, the appropriateness of these fees presents a novel question of law for which there is no direct appellate authority, supporting their contention that their conduct was not willful and/or knowing.
The disputed issues of fact regarding the Defendants’ knowledge and intent prevent entry of summary judgment on the Plaintiffs’ claims for violation of Chapter 93A. Vitali v. Reit Management & Research, LLC, 88 Mass.App.Ct. 99, 105 (2015) ("knowledge and intent often ‘require[ ] the [fact finder] to weigh the credibility of conflicting explanations.’ Thus, the determination of what a person knows or should have known under a specific factual situation is typically ill-suited for resolution by summary judgment") (internal citations omitted).
CONCLUSION AND ORDER
For the reasons stated above, it is hereby ORDERED that: Defendants’ Motion For Summary Judgment (Paper No. 48) is DENIED ; and Plaintiffs’ Motion For Summary Judgment (Paper No. 47) is ALLOWED, as to liability on the claims for violation of the Security Deposit Law (Counts I and III), but DENIED, as to the claims for violation of Chapter 93A (Counts II and IV).
SO ORDERED.