Bruno v. Alliance Rental Group, LLC ( 2023 )

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21-P-985 Appeals Court
MICHAEL BRUNO & another1 vs. ALLIANCE RENTAL GROUP, LLC.
No. 21-P-985.
Middlesex. September 12, 2022. – August 29, 2023.
Present: Desmond, Sacks, & D'Angelo, JJ.
Mechanic's Lien. Statute, Construction. Consumer Protection
Act, Unfair act or practice, Damages, Attorney's fees.
Damages, Consumer protection case, Attorney's fees. Words,
"Improvement of real property," "To become due."
Civil action commenced in the Superior Court Department on
May 23, 2019.
The case was heard by Douglas H. Wilkins, J.
David H. Travers (Mikaela A. Rice also present) for the
defendant.
Joshua M. Looney for Michael Bruno.
Christian W. Habersaat for Great Midwest Insurance Company.
D'ANGELO, J. This dispute arises from the rental of heavy
machinery from a subcontractor, Alliance Rental Group, LLC
(Alliance), to a contractor, Ivester Construction Corp.
1 Great Midwest Insurance Company, as surety to the lien
bonds executed by Michael Bruno.
2
(Ivester), working on property in North Reading (property) owned
by Michael Bruno. Ivester failed to pay Alliance any of the
rental fees. Alliance filed two mechanic's liens on the
property, seeking $697,479.06. See G. L. c. 254, § 4.
Following a bench trial, a Superior Court judge awarded Alliance
$180,000 for the reasonable rental value of the equipment and
awarded Bruno $100,182 for Alliance's violation of G. L. c. 93A.
In this appeal we consider, among other things, whether
G. L. c. 254, § 4, gives a judge the authority to reduce a lien
amount for periods where a subcontractor's rental equipment is
on the work site, but not being used for extended periods of
time. We conclude that it does not. Accordingly, we amend in
part and affirm in part the judgment entered in the Superior
Court.
Background. We take our facts from the findings of fact of
the trial judge and the uncontroverted facts set forth in the
exhibits.
1. The contracts. On March 27, 2013, Bruno and Ivester
entered into a subdivision contract (original contract) for
Ivester to perform subdivision improvements on the property
(project).2 In exchange, Bruno agreed to pay Ivester $300,000
2 The original contract covered work on a road in the
subdivision and "Lots 1 through 11" located at 6, 8, 9, 10, 11,
12, 14, 15, 16, 17, and 19 Charles Street.
3
pursuant to a distribution schedule, and to transfer lots 6 and
7 to Ivester upon completion of the work under the original
contract. To complete the work, Ivester entered into rental
agreements with Alliance for the use of an excavator and loader.
The rental rate for each machine was $6,000 per month, plus
6.25% sales tax and any repair costs. There was no end date
specified in the rental agreements. The rental agreement for
the excavator had a "start date" of January 1, 2015, and the
start date of the rental agreement for the loader began one year
later, on January 1, 2016. The equipment was last used to
perform work under the original contract on October 4, 2018,
although the excavator remained on the property until March 18,
2019, and the loader remained on the property until May 18,
2019. From the start of the rental agreements through those
dates, Ivester did not pay any money to Alliance for the
rentals. The amount Alliance had invoiced Ivester for the
loader was $311,287.91 -- the total of $261,935 in rental
charges and $49,352.91 in repair charges. The invoice amount
for the excavator was $386,191.15 -- the total of $323,820 in
rental charges and $62,371.15 in repair charges. In total, the
invoices stated a balance of $697,479.06 owed by Ivester to
Alliance.
2. Delays in use of the equipment. There were various
periods of "down time" during the project in which construction
4
was paused and the equipment was not used, "including a one-year
period waiting for a street permit, a one-year period waiting
for an electrical permit and a period waiting for broken drains
to be fixed." Additionally, section 350-23-B of the North
Reading subdivision regulations prohibited subdivision
construction between December 1 and March 15 of each year. Both
pieces of equipment were also removed from the property in order
to complete repairs -- the excavator twice and the loader once.
Although required by the rental agreements between Ivester and
Alliance, Ivester did not maintain daily logs to track the use
of the equipment during the construction, so there was no
documentary evidence of how and when the equipment was used.
The judge determined, based on industry practice, the parties'
expectations and estimates, and the amount of down time, that
the equipment was furnished for improvements "for a total period
of one and one quarter years each," i.e., fifteen months each.
The trial judge concluded that "[g]iven the inevitability of
some degree of 'down time' on any project, it is likely that
this estimate includes short periods of inactivity during which
it would not be practical to return and re-lease the equipment."
3. Relationship between Alliance's and Ivester's
principals. Kevin Matthews was the sole manager and member of
5
Alliance. Matthews had known Kenneth Ivester,3 the owner and
principal of Ivester, for about fifteen years prior to trial.
Prior to entering into the rental agreements, Matthews had made
two personal loans to Kenneth, the first for $150,000, and the
second for $250,000. These loans were based on Matthews's
understanding that Ivester "would get two lots at the completion
of the [p]roject" and were funded using Matthews's personal home
equity line of credit.
4. Procedural history. To begin the process of
establishing mechanic's liens, Alliance recorded four notices of
contract. The first two, recorded on January 31, 2019, and
March 1, 2019, were eventually dissolved by a Superior Court
judge as untimely and incomplete, and they are not at issue in
this appeal. The subsequent two notices of contract were
recorded on March 27, 2019, regarding the excavator, and on May
3, 2019, regarding the loader, and corresponding statements of
account were recorded within the time required by G. L. c. 254,
§ 8. On May 23, 2019, Bruno brought this action against
Alliance pursuant to G. L. c. 254, § 15A, for summary discharge
of the mechanic's liens. On August 10, 2020, Bruno amended his
We hereafter refer to Kenneth by his first name to avoid
3
confusion.
6
complaint to add a count for violation of G. L. c. 93A.4
Alliance filed a counterclaim to enforce its mechanic's lien
rights. The case proceeded to a bench trial on March 16 and 17,
2021, where the judge ultimately concluded Alliance was owed a
total of $180,000 on the two liens, not the $697,479.06 that
Alliance claimed. The judge based this amount on the fair
market value of the actual use of each piece of equipment, i.e.,
$6,000 per month for fifteen months each. The judge also found
for Bruno on his c. 93A claim, and on August 6, 2021, he awarded
Bruno $100,182 in c. 93A damages, comprised of Bruno's
attorney's fees and expenses in defending against what the judge
found was "a scheme by Alliance, Matthews and Ivester to extract
money from Bruno [through the mechanic's lien process] well
beyond any commercially justifiable amount." This brought
Alliance's net recovery to $79,818. Both parties appealed.5
Discussion. "In reviewing a matter wherein the trial judge
was the finder or fact, [t]he findings of fact . . . are
accepted unless they are clearly erroneous[] [and] [w]e review
the judge's legal conclusions de novo" (quotation and citation
4 Bruno also amended the complaint to add a count alleging
abuse of process, but he waived that claim at trial.
5 After oral argument, this court issued a memorandum and
order remanding the case to the judge to make additional
findings of fact. See Bruno v. Alliance Rental Group, LLC, 101
Mass. App. Ct. 1124 (2022). The judge made the requested
findings.
7
omitted). Allen v. Allen, 86 Mass. App. Ct. 295, 298 (2014).
"A finding is 'clearly erroneous' when although there is
evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a
mistake has been committed." Herson v. New Boston Garden Corp.,
40 Mass. App. Ct. 779, 789 (1996), quoting Freyermuth v. Lutfy,
376 Mass. 612, 615 (1978).
Both parties contest the amount of $180,000 that the judge
awarded to Alliance on its counterclaim to enforce the liens.
Alliance argues that it should be awarded the full $697,479.06
owed on the statements of account, while Bruno argues Alliance
should not be awarded any amount of money because the liens are
invalid. In considering these arguments we must address two
issues: first, whether G. L. c. 254, § 4, authorizes a judge to
reduce a lien amount for periods where a subcontractor's rental
equipment is on the work site but not being used for extended
periods of time; and second, whether the liens are valid. We
must also address whether the judge properly concluded that
Alliance violated G. L. c. 93A.
1. Reduction of the lien amount. a. Use of the rental
equipment. The trial judge reduced the amount of Alliance's
liens from $697,479.06 to $180,000 to reflect the amount of time
that he determined Alliance's rental equipment was furnished for
use for work on Ivester's original contract with Bruno. Under
8
G. L. c. 254, § 4, a person (here, Alliance) who "under a
written contract with a contractor" "furnishes rental equipment
. . . in the . . . improvement of real property" may record a
notice of contract and obtain a lien on the real property being
improved (i.e., the "real property . . . owned by the party who
entered into the original contract," here, Bruno) to secure
payment for the rental equipment. See generally Graycor Constr.
Co. v. Pacific Theatres Exhibition Corp., 490 Mass. 636, 640-642
(2022).
Alliance argues that it furnished rental equipment to the
project for the entire duration of the time the rental
agreements until the equipment was removed from the site, i.e.,
from January 1, 2015, until March 18, 2019, for the excavator,
and from January 1, 2016, to May 18, 2019, for the loader.
Bruno argues that Alliance furnished rental equipment only for
those periods of time that the equipment was used to perform
work on the project, and that Alliance last furnished rental
equipment to the project on October 4, 2018, the date that the
equipment was last used to perform work on the project.
Several States have statutes that specifically limit
mechanic's liens for rental equipment to periods of actual use.
See, e.g., Haw. Rev. Stat. § 507-41; N.D. Cent. Code § 35-27-
01(4); S.C. Code Ann. § 29-5-10(a). See also, e.g., Iowa Code
§ 572.2(2) (lien may cover reasonable periods of nonuse if taken
9
into account in rental agreement); Mont. Code Ann. § 71-3-
524(3)(a) (same); Neb. Rev. Stat. § 52-134(3)(a) (same); Ohio
Rev. Code Ann. § 1311.12(C)(1) (same); Tenn. Code Ann. § 66-11-
102(g)(1) (same). However, where the Massachusetts Legislature
has not included such limiting language in G. L. c. 254, § 2, we
should not read it into the statute. "A mechanic's lien is not
a common-law right but a creature of statute, which 'compels
strict compliance in order to obtain relief.'" National Lumber
Co. v. Lombardi, 64 Mass. App. Ct. 490, 492-493 (2005), quoting
Mullen Lumber Co. v. Lore, 404 Mass. 750, 752 (1989).
Bruno urges us to interpret the statute to mean that
equipment is only "furnishe[d] . . . in the . . . improvement of
real property," G. L. c. 254, § 4, during periods of actual use,
thus limiting mechanic's liens to that time -- or at least that
equipment is not so furnished during extended periods of nonuse.
Bruno primarily relies on two cases to support this argument:
Mammoet USA, Inc. v. Entergy Nuclear Generation Co., 64 Mass.
App. Ct. 37 (2005), and John Marini Mgt. Co. v. Butler, 70 Mass.
App. Ct. 142 (2007). However, there are important distinctions
between those cases and the case at hand.
In Mammoet, 64 Mass. App. Ct. at 37, the issue before the
court was whether a subcontractor's transportation and delivery
of a backup transformer, which was stored on the property only
for possible future use and was never actually used, constituted
10
an "improvement of real property" pursuant to G. L. c. 254, § 4.
The court concluded that it did not, reasoning that "something
is not an improvement unless it is itself, in whole or in part,
constructed or assembled in connection with a building or
structure or other construction-related project." Id. at 43. A
backup transformer was never meant to be and was never used in
connection with the actual construction at hand. The court
noted that the transportation and storage of the backup
transformer was also not an improvement because it
"neither made a permanent addition to [the defendant]'s
power plant -- the transformer might be again moved to
another location or sold, despite its large size -- nor
effected anything that actually rendered the facility more
useful or productive, either upon delivery or, indeed,
ever, since the transformer might be sold or moved before
being used, or never used at all."
Id. at 46-47.
Here, unlike the backup transformer in Mammoet, the
excavator and loader were intended to be, and were in fact, used
for the "improvement of real property." Although daily usage
logs were not kept, the judge found that out of the total time
the equipment was on site (more than four years for the
excavator and more than three years for the loader), "Alliance
furnished the [e]xcavator and [l]oader for the improvements for
a total period of one and one[-]quarter years each" based on
testimony about typical industry practice for the duration of
this type of project, as well as evidence of the equipment’s
11
down time. The judge concluded that although some projects may
inevitably include "down time," i.e., "short periods of
inactivity during which it would not be practical to return and
re-lease the equipment," what happened here crossed a line. The
judge reasoned that, "by analogy to Mammoet, long-term storage
of equipment does not qualify as 'furnish[ing]' equipment, even
if the equipment is stored on the project site." Although this
reasoning has some appeal, the statute does not tell us how much
storage is "long-term" storage. The statute does not authorize
judges to draw lines between periods of nonuse that are
reasonable and those that exceed market norms to such a degree
that the corresponding costs become unrecoverable through a
mechanic's lien. If the Legislature wishes to adopt such a
provision, the other State statutes that we have cited supra
provide models for doing so.
The judge also found that "Ivester used both the [l]oader
and [e]xcavator to perform [its] obligations under the contract
with Bruno." Since the equipment was intended to be, and in
fact was, used for the improvement of real property, Mammoet
does not provide justification to reduce the amount of a lien
amount based on periods of nonuse. We conclude that there is no
provision in G. L. c. 254, § 4, that allows a judge to reduce
the amount of a mechanic's lien from the amount due under an
undisputed contract. See Commonwealth v. Brooks, 366 Mass. 423,
12
427-428 (1974) ("statutes must be construed as written and
cannot be rewritten judicially"); Dalli v. Board of Educ., 358
Mass. 753, 759 (1971) ("We have traditionally and consistently
declined to trespass on legislative territory in deference to
the time tested wisdom of the separation of powers . . . even
when it appeared that a highly desirable and just result might
thus be achieved"); King v. Viscoloid Co., 219 Mass. 420, 425
(1914) (we do not "read into the statute a provision which the
Legislature did not see fit to put there, whether the omission
came from inadvertence or of set purpose"); Larkin v.
Charlestown Sav. Bank, 7 Mass. App. Ct. 178, 183-184 (1979) ("As
we read the statute, its terms leave no room for the addition of
such language, and any desired change in the statutory language
would be for the Legislature to make in the first instance, not
a court" [footnote omitted]).
Likewise, this court’s decision in John Marini Mgt. Co.
does not support Bruno's argument. There the court concluded
that the lien "is intended to protect the value of the use of
such equipment during the process of construction. Typically,
that value is the fair rental value of the equipment for the
time it is used in the construction process." John Marini Mgt.
Co., 70 Mass. App. Ct. at 152. Bruno argues that the amount of
the liens, therefore, should be the fair market value of the
use, which would reduce Alliance's liens for the time the
13
equipment was not actively being used for the project. However,
the court in that case did not reduce the lien amount to "the
fair rental value of the equipment for the time it [was] used,"
but instead merely excluded from the recoverable lien amount any
compensation for damage to equipment or for equipment that was
not returned. Id. To reduce the recoverable amount here to the
fair rental value for the period of actual use would be a large
expansion of the existing law without legislative authority,
which we decline to do. Additionally, the court's use of the
word "[t]ypically" to describe a lien's value as the fair market
value of actual use indicates that the court did not intend the
reduction of a mechanic's lien for periods of nonuse to be a
legal rule. Id.
Accordingly, we agree with Alliance that the judge erred in
reducing the amount of the liens for periods of nonuse.
b. Repair of the rental equipment. Bruno also argues that
the cost of repairs cannot be included in the lien amount under
G. L. c. 254, § 4. With this, we agree.6 The mechanic's lien
statute "contains no suggestion that mechanic's liens are
intended to cover . . . negligently inflicted damage" or "the
6 The judge agreed as well, but because of his manner of
calculating the amount Alliance would recover based on market
values, he did not find it necessary to reduce that recovery to
exclude repair costs. Because we have concluded that the
judge's manner of calculation was in error, we must now
separately account for the unrecoverable repair costs.
14
value of [rental] property which was damaged or not returned."
John Marini Mgt. Co., 70 Mass. App. Ct. at 152-153. "[T]he lien
does not cover the total value of the rental equipment . . .
furnished where, under the contract, the equipment is intended
to be returned to the subcontractor to be used in other
projects. Rather, the lien is intended to protect the value of
the use of such equipment during the process of construction."
Id. at 152. Although the issue now before us was not directly
addressed in John Marini Mgt. Co., we think, based on the
parties' limited briefing of the issue, that the principles of
that decision apply to repair costs incurred by the equipment
lessor (Alliance) and charged to the lessee (Ivester).
Here, the excavator and loader were damaged during
construction, presumably by Ivester, and required repairs by
Alliance. During at least some of these repairs, the equipment
was transported off site to a facility in Foxborough. The
excavator underwent eight repairs totaling $62,371.15, and the
loader underwent nine repairs totaling $49,602.91. In total,
the cost of repairs to Ivester for both pieces of equipment was
$111,974.06.
15
Because G. L. c. 254 does not permit recovery of the repair
costs of the rental equipment, $111,974.06 shall be excluded
from the total judgment awarded to Alliance.7
2. Validity of liens. Bruno argues that there are three
reasons Alliance’s liens are invalid: (1) the notices of
contract were not timely filed, see G. L. c. 254, § 4; (2)
Alliance willfully and knowingly claimed amounts more than what
was due, see G. L. c. 254, § 11; and (3) there was no amount due
or to become due from Bruno to Ivester under the original
contract at the time Alliance's notices of contract were filed
and Bruno had actual notice of them, see G. L. c. 254, § 4. We
address each in turn and conclude that none is persuasive.
a. Timeliness. Bruno first argues that the judge erred in
finding that Alliance's notices of contract were timely filed.
General Laws c. 254, § 4, provides, as relevant here, that a
subcontractor (Alliance) is required to file a notice of
contract within "ninety days after the last day a person
entitled to enforce a lien under section two or anyone claiming
by, through or under him . . . furnished rental equipment." The
date from which the ninety days began to run is at issue here
7 Bruno has not requested that the liens be reduced to
account for the time the equipment was off site for repairs, so
we need not consider that issue in this case. This is not to
say, however, that a lien may not be reduced by the amount of
time equipment is offsite being repaired in future cases.
16
and depends on when the equipment was last furnished for
Ivester's work under the original contract. Bruno argues that
October 4, 2018, is the date from which ninety days should be
measured because that is the last day Alliance's equipment was
used for work on the project.8 Under this theory, Alliance's
filings on March 27, 2019, and May 3, 2019, were more than
ninety days after October 4, 2018, and thus the filings were
untimely.
Bruno's argument presents questions of law and fact. As to
the legal question, Bruno argues that the equipment cannot be
considered to have been "furnished" during periods when it was
not actually being used, an argument that we have rejected for
the reasons stated above. As to the factual question, the issue
is whether the rental equipment was last "furnished" for use
under the original contract no more than ninety days before
Alliance's filings.
The trial judge determined that the filings were made
within ninety days of when Alliance last furnished the rental
equipment for such use because "in the absence of any contrary
directive from Bruno, Ivester continued to have the obligation
to provide services on the original contract as of March 15-18,
8 Kenneth testified that he believed that the excavator was
used on the project in March and May of 2019, but the judge
found that this work was not within the scope of the original
contract.
17
2019," under section 2.1 of the original contract.9 Under
section 2.1, Ivester was required "to furnish sufficient
administration and superintendence of the [w]ork and use best
efforts to furnish at all times an adequate supply of workmen
and materials, and to perform the [w]ork in the best and
soundest way in the most expeditious manner consistent with good
construction and trade practices." The judge found that Ivester
could not "reasonably or safely predict" that it could comply
with its obligations under section 2.1 without the rental
equipment being available. That, coupled with the fact that
Bruno did not notify Ivester "in a reasonable way" that its
obligations were relieved or seriously look for a replacement
contractor until February or March 2021, made it reasonable for
Ivester to keep the equipment on the site in case there was
further work to be done. The judge found that Alliance and
Ivester determined by March 18, 2019, that the "[e]quipment was
not needed on the [p]roject in the near term and could be
removed without jeopardizing Ivester's compliance with [s]ection
2.1."
Based on the evidence as a whole, we are not "left with the
definite and firm conviction that a mistake has been committed"
9 March 16 was the date that construction work could resume
each year under section 350-23-B of the North Reading
subdivision regulations.
18
(citation omitted), Herson, 40 Mass. App. Ct. at 789, and
conclude that the judge's finding that Alliance last furnished
the rental equipment for the improvement of the property on
March 18, 2019, was not clearly erroneous, and thus, the notices
of contract were timely filed by Alliance.
b. Willfully and knowingly. Under G. L. c. 254, § 11,
"[t]he validity of the lien shall not be affected . . . by an
inaccuracy in stating the amount due for labor or material . . .
unless it is shown that the person filing the [lien] has
wilfully and knowingly claimed more than is due him." Bruno
argues the liens are invalid because Alliance willfully and
knowingly claimed an inflated amount.
The judge's finding that Alliance did not knowingly claim
more than was due was not clearly erroneous. For the liens to
be invalid, Alliance must have "knowingly" sought or "had
knowledge" that it was seeking to recover amounts that were not
due to it. See Still v. Commissioner of Dep't of Employment &
Training, 39 Mass. App. Ct. 502, 510 (1995), S.C., 423 Mass. 805(1996) (discussing "dictionary definitions and decisional
precedent" that accord "knowing" "basic intentional, cognitive
content"). As the trial judge found, given that judicial
guidance on G. L. c. 254 is scarce, Alliance reasonably could
have believed that under c. 254 it was due "the monthly rental
for the entire period when the equipment was at the site, even
19
if idle -- even if the result exceeded market rents." Alliance
did not know that the judge would ultimately conclude that
c. 254 limited the amount due Alliance on its liens to market
rents (a conclusion that we have now determined was erroneous in
any event). This is the case regardless of whether, viewed
under G. L. c. 93A, Alliance and Ivester were operating a scheme
against Bruno to "run up" the rental charges, as discussed
infra. See Slaney v. Westwood Auto, Inc., 366 Mass. 688, 693
(1975) (G. L. c. 93A liability can be found regardless of
whether underlying conduct is unlawful). This is also the case
even if repair costs cannot be included in the value of the
lien, as discussed supra, for the same reason -- there has been
limited judicial guidance on whether equipment repair costs were
recoverable and "due" under G. L. c. 254.
c. Amount due or to become due. Lastly, Bruno argues that
there was no amount due or to become due under the original
contract, thus invalidating Alliance's liens. General Laws
c. 254, § 4, limits the amount of a subcontractor's lien to "the
amount due or to become due under the original contract as of
the date notice of the filing of the subcontract [was] given by
the subcontractor to the owner."
Bruno argues there is no evidence of the date that Alliance
gave him actual notice that it filed the notices of contract, as
required by G. L. c. 254, § 4, and thus no date as of which to
20
determine whether an amount was due or to become due. While we
acknowledge the mechanic's lien statute requires strict
compliance, see Hammill-McCormick Assocs., Inc. v. New England
Tel. & Tel. Co., 399 Mass. 541, 543-544 (1987), the judge found
that Bruno had actual notice of the contract filings before May
23, 2019, when he filed this action to discharge the liens.
We must consider the threshold question whether there was
an amount due or to become due to Ivester under the original
contract. "The statute is strictly construed against the party
claiming the lien, and that includes establishing that money is
due or to become due." Superior Mechanical Plumbing & Heating,
Inc. v. Insurance Co. of the West, 81 Mass. App. Ct. 584, 588
(2012). The original contract obligated Bruno to pay Ivester
$300,000 pursuant to a distribution schedule and to transfer to
Ivester lots 6 and 7 upon completion of the project. By March
27, 2019, when the liens were filed, Bruno had already paid
Ivester $300,000. However, Bruno had not transferred lots 6 and
7 to Ivester. The issue is whether those lots were still due to
Ivester when Bruno received notice of the liens.
Bruno urges us to conclude there was no amount "to become
due," citing BloomSouth Flooring Corp. v. Boys' & Girls' Club of
Taunton Inc., 440 Mass. 618 (2003), and Superior Mechanical
Plumbing & Heating, Inc., 81 Mass. App. Ct. at 589. However,
these cases are inapposite. In BloomSouth Flooring Corp., the
21
contractor abandoned the job before substantial completion. As
a result, the owner terminated the contract, and the contractor
was not entitled to final payment under the original contract,
meaning the plaintiff subcontractors could not recover on their
liens. See BloomSouth Flooring Corp., supra at 619-620, 624.
Here, the judge found that Bruno's search for a new
contractor had only just begun by the time of trial and that,
prior to that point, his actions reflected an expectation that
Ivester would continue as the contractor. The judge found that
"Ivester had an amount to become due under the [original
c]ontract, namely the two lots that [it] would receive upon
[p]roject completion. There was a reasonable expectation
at the time that Ivester would complete the [p]roject, as
evidenced by the absence of any effort to terminate the
[original] [c]ontract or to terminate Ivester and the fact
that, nearly two years later, Bruno's search for a
contractor to replace Ivester's role on the [p]roject had
just commenced" (footnote omitted).
These findings distinguish this case from BloomSouth Flooring
Corp. because Bruno did not terminate Ivester and there was a
reasonable expectation, at the time Alliance filed its notices
of contract, that Ivester would complete the original contract
and receive the valuable lots that were "due."
While it is true that formal termination is not the only
factor used to determine whether an owner owes additional
payments to a contractor, see Maverick Constr. Mgt. Servs., Inc.
v. Fidelity & Deposit Co. of Md., 80 Mass. App. Ct. 264, 269-270
(2011), Bruno's argument is not supported by Superior Mechanical
22
Plumbing & Heating, Inc., 81 Mass. App. Ct. at 585-586, either,
where the notice of contract was filed before the contract was
terminated. In that case, the contractor committed a material
breach of the contract by not timely paying the subcontractors -
- a requirement that was emphasized in multiple provisions of
the contract, making it "abundantly clear that [the
contractor]'s failure to pay its subcontractors . . . relieved
[the owner] of its obligation to make any further payments" and
as a result there was no amount due or to become due. Id. at
590.
Here, the trial judge found that "while Ivester certainly
failed in many respects, Bruno himself was responsible for many
delays and, if he intended to relieve Ivester from the
obligation to be ready when called upon, did not act in a
reasonable way to relieve Ivester of the obligation to act in
the 'most expeditious manner consistent with good construction
and trade practices.'" The judge did not find that Ivester
committed a material breach of the contract and in fact placed
responsibility of the delays on Bruno as well. Bruno did not
relieve Ivester of its responsibilities, and Ivester continued
to keep the equipment on the work site, which the trial judge
said was "a reasonable way to comply with Section 2.1 of the
original contract as long as future work was reasonably likely
to be needed in the near term." Because the trial judge in this
23
case found that Ivester was still prepared to complete the work,
and Ivester did not have any additional material breaches of the
contract, the reasoning in Superior Mechanical Plumbing &
Heating, Inc., does not apply to this case.10
Therefore, as of May 23, 2019, when Bruno filed suit to
discharge the liens at issue (and therefore must have had notice
of them), lots 6 and 7 were "to become due" to Ivester. Bruno
and his real estate broker testified at trial that lots 4, 5,
and 6 were sold for $450,000 each. This amount is confirmed in
the trial judge's findings. The judge found that the value of
lots 6 and 7 together was $900,000, which exceeded the amounts
Alliance claimed under the liens.
3. Chapter 93A. General Laws c. 93A, § 2 (a), prohibits
"unfair or deceptive acts or practices." When considering a
c. 93A claim, "[a]lthough whether a particular set of acts, in
10Bruno also contends that Ivester failed to meet a
condition precedent of the original contract by not completing
the work, that his obligation to pay Ivester therefore did not
arise, and that there is no amount due or to become due for this
reason. This argument is unavailing, because almost every
construction contract requires the work to be completed before
full payment is required. Were we to invalidate any lien where
the work had not been completed, this would significantly
diminish the usefulness of the mechanic's lien statute, which
has as its primary purpose "to provide security to contractors,
subcontractors, laborers, and suppliers for the value of their
services and goods provided for improving the owner's real
estate." NES Rentals v. Maine Drilling & Blasting, Inc., 465
Mass. 856, 860 (2013), quoting Hammill-McCormick Assocs., Inc.,
399 Mass. at 542-543.
24
their factual setting, is unfair or deceptive is a question of
fact . . . the boundaries of what may qualify for consideration
as a c. 93A violation is a question of law" (citation omitted).
Milliken & Co. v. Duro Textiles, LLC, 451 Mass. 547, 563 (2008).
Factual findings underpinning a c. 93A claim are reviewed for
clear error. See Klairmont v. Gainsboro Restaurant, Inc., 465
Mass. 165, 171 (2013).
To determine if a practice is unfair, we consider
"(1) whether the practice . . . is within at least the penumbra
of some common-law, statutory, or other established concept of
unfairness; (2) whether it is immoral, unethical, oppressive, or
unscrupulous; [and] (3) whether it causes substantial injury to
consumers (or competitors or other businessmen)" (citation
omitted). PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass.
593, 596 (1975). That conduct is not independently unlawful is
not a defense to a G. L. c. 93A claim, as the statute "created
new substantive rights by making conduct unlawful which was not
unlawful under the common law or any prior statute" (citation
omitted). Slaney, 366 Mass. at 693.
The trial judge determined that Matthews and Ivester had
devised and executed a "scheme . . . to extract money[] from
Bruno well beyond any commercially justifiable amount." The
judge's conclusion was based on his findings that
25
"Alliance and [Kenneth] had a pre-existing personal
relationship. [Kenneth] owed Alliance's principal,
Matthews, hundreds of thousands of dollars, which they both
knew [Kenneth] almost certainly could not repay except with
funds from Bruno in connection with Ivester's work on the
project. Ivester and Alliance entered into open-ended
equipment rentals, lacking any end date. They then allowed
monthly charges to accrue well beyond what they knew were
Ivester's ability to pay, well beyond the expected period
of equipment use for the project. Alliance made no efforts
to secure return of the equipment. Ivester failed to keep
contractually required activity logs, which prompted no
action by Matthews to enforce that requirement. Then
Alliance filed notices of contract for amounts grossly in
excess of market rentals and, indeed, more than twice the
entire purchase price of the equipment. It made no effort
to deduct charges for time when the equipment was idle,
furnishing nothing to the improvements at issue."
Alliance contends that the judge's conclusion was unsupported by
the evidence. We disagree.
Other findings further support the judge's conclusion that
there was a scheme, including that the leases "had no
termination date and no maximum rental amount," that Alliance
had knowledge that the equipment was sitting idle for long
periods of time, and that Ivester declined to purchase the
equipment because the price was too high, which showed "Alliance
never reasonably expected [Ivester] to pay amounts well in
excess" of the full price. Instead, Alliance sought to have
Bruno become financially liable for the amount. The judge also
considered that Matthews and Kenneth had a preexisting
relationship, where Kenneth owed Matthews hundreds of thousands
of dollars with no clear means to repay the money. In our view,
26
the judge's findings were "supported by [a] reasonable view of
the evidence, including all rational inferences of which it was
susceptible" and there was no clear error (citation omitted).
FOD, LLC v. White, 99 Mass. App. Ct. 407, 412 (2021).
We also do not accept Alliance's argument that the judge
erred by including in the G. L. c. 93A damages award Bruno's
attorney's fees for defending against the two liens on which
Alliance ultimately recovered, instead of limiting the award to
the fees related to two other liens that were dissolved near the
outset of the case. The judge expressly rejected this theory,
finding that Alliance's actions were unfair and deceptive with
regard to all four liens, including the two that proved viable.
As the judge found, "there was no clear authority making this
unfair scheme unlawful under c. 254." However, Ivester
continued to keep the equipment on the work site for long
periods of time, taking "no steps to return the equipment to
save rental charges." The judge further found that Alliance
knew Ivester was doing this, and accumulating fees for Bruno,
but "made no efforts to secure breturn of the equipment." This
failure to act or at least notify Bruno was, at a minimum,
immoral, unethical, oppressive, and unscrupulous and thus
justified finding a c. 93A violation.
We recognize that, as a result of this appeal and the
limitations of G. L. c. 254, Alliance's recovery under the liens
27
will include amounts that the trial judge concluded were
"unreasonably, unfairly[,] and deceptively inflated."
Consequently, we think it appropriate to give the judge an
opportunity to consider whether Bruno may recover those amounts
as additional damages on his G. L. c. 93A claim, and we remand
for reconsideration of the c. 93A damages. See, e.g.,
Nemirovsky v. Daikin N. Am., LLC, 488 Mass. 712, 729 (2021) ("On
remand, the judge should . . . determine whether the G. L.
c. 93A damages . . . should be enhanced"); Klairmont, 465 Mass.
at 185-186 ("substantial reduction in the amount of damages the
plaintiffs may recover on remand" may warrant reconsideration of
attorney's fees awarded under c. 93A).
Conclusion. We conclude that Alliance's liens were valid
and that the judge erred by reducing the lien amount without
authorization from G. L. c. 254, § 4, but that the amount of the
liens should have been reduced by $111,924.06 in equipment
repair costs. Accordingly, that portion of the judgment related
to Alliance's liens shall be amended to provide an award to
Alliance in the amount of $585,505 (the total of the lien
amount, $697,479.06, minus repair costs, $111,974.06). With
respect to the portion of the judgment related to Bruno's claim
for violation of G. L. c. 93A, we affirm, but we remand the
matter so the trial court can reconsider the appropriate amount
28
of c. 93A damages consistent with this opinion. The judgment is
otherwise affirmed.
Bruno is entitled to recover attorney's fees and expenses
incurred in defending against Alliance's unsuccessful cross-
appeal as to the G. L. c. 93A claims. See Bonofiglio v.
Commercial Union Ins. Co., 412 Mass. 612, 613 (1992). See also
Yorke Mgt. v. Castro, 406 Mass. 17, 19 (1989) (language in
c. 93A making "provisions for a 'reasonable attorney's fee'
would ring hollow if it did not necessarily include a fee for
the appeal").11
So ordered.
11In accordance with the procedure specified in Fabre v.
Walton, 441 Mass. 9, 10-11 (2004), Bruno may, within fourteen
days of the issuance of the rescript in this case, submit an
application for attorney's fees with the appropriate supporting
materials in defending the G. L. c. 93A claims. Alliance shall
have fourteen days thereafter to respond. See Fariello v. Zhao,
101 Mass. App. Ct. 566, 573 n.5 (2022).