Rauhaus Freedenfeld & Associates LLP v. Prince (Lawyers Weekly No. 12-075-17)

Rauhaus Freedenfeld & Associates LLP is an architectural firm based in Boston, Massachusetts, that specializes in designing animal hospitals. It is suing Todd Prince for not paying Plaintiff in full for designing renovations for an animal hospital owned by Prince in Deerfield, Illinois. Prince asserts various counterclaims.
Plaintiff has moved to dismiss four of the five the counterclaims; it does not seek dismissal of the counterclaim for breach of contract (Count I). The Court will allow the motion in part and deny it in part. Specifically, it will dismiss the claim for negligent misrepresentation but otherwise deny the motion to dismiss.
1. Fraud Claim. Plaintiff argues that the counterclaim for fraud (Count II) is not pleaded with the particularity required by Mass. R. Civ. P. 9(b). Under this rule, a claimant must “at a minimum” support their claim for fraud by specifically alleging “the identity of the person(s) making the” allegedly fraudulent “representation, the contents of the misrepresentation, and where and when it took place,” and must also “specify the materiality of the misrepresentation, [his] reliance thereon, and resulting harm.” Equipment & Systems for Industry, Inc. v. NorthMeadows Constr. Co., Inc., 59 Mass. App. Ct. 931, 931-932 (2003) (rescript).
Prince has stated his fraud claim with sufficient particularity. The allegations in the counterclaim plausibly suggest that Plaintiff’s agent made specific and false statements of fact to Prince at a meeting in September 2015, Plaintiff made specific and false promises in the parties’ contract that Plaintiff never intended to perform, Plaintiff made these false statements and promises to induce Prince to sign the contract, Prince did so to his detriment, and as a result Prince was damaged in that he paid $ 126,098.56 for draft drawings that he cannot use. These allegations state a claim for fraud. See Masingill v. EMC Corp., 449 Mass. 532, 540 (2007) (elements of
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fraud); McCarthy v. Brockton Natl. Bank, 314 Mass. 318, 325 (1943) (“A principal is liable for the fraud committed by his agent or servant acting within the scope of his employment.”); Cumis Ins. Society v. BJ’s Wholesale Club, Inc., 455 Mass. 458, 474 (2009) (fraud claim may be based on false promise if “the promisor had no intention to perform the promise at the time it was made”) (quoting Yerid v. Mason, 341 Mass. 527, 530 (1960)).
The Court reminds the parties, however, that an “intention not to perform a promise” cannot be inferred merely from later “nonperformance of the promise.” Galotti v. United States Trust Co., 335 Mass. 496, 501 (1957); accord McCartin v. Westlake, 36 Mass. App. Ct. 221, 230 n.11 (1994); see also Backman v. Smirnov, 751 F. Supp. 2d 304, 316 n.13 (D. Mass. 2010) (“Changing one’s mind is not proof that an earlier statement was false.”) (Stearns, J.) (applying Massachusetts law).
2. Chapter 93A Claim. Plaintiffs’ arguments for dismissing the counterclaim under G.L. c. 93A, § 11 (in Count III) are also without merit.
The plausible allegations of intentional fraud suffice to state a claim that Plaintiff engaged in deceptive conduct that violates c. 93A. See, e.g., Brewster Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass. App. Ct. 582, 605 (2007) (“the finding of intentional misrepresentation (or common law fraud or deceit) … is sufficient foundation for a finding of a c. 93A violation in a business context”); The Community Builders, Inc. v. Indian Motorcycle Assocs., Inc., 44 Mass. App. Ct. 537, 557 (1998) (false promise with no intention to perform would violate c. 93A).
And the allegation that Plaintiff is located in Boston, and presumably did most of its work for Prince in its own offices, is sufficient at this stage to suggest that Plaintiffs’ alleged misconduct occurred “primarily and substantially” within Massachusetts, as required by G.L. c. 93A, § 11. Whether the center of gravity of the parties’ interactions and Plaintiff’s alleged fraud is in Illinois rather than Massachusetts is not an issue that can be resolved on a motion to dismiss, at least not in light of the facts alleged by Prince in his counterclaim. See Resolute Management, Inc. v. Transatlantic Reins. Co., 87 Mass. App. Ct. 296, 300-301 (2015).
3. Negligent Misrepresentation Claim. In contrast, the Court is convinced that Prince has not stated a viable claim for negligent misrepresentation in Count IV.
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Prince alleges (in paragraph 38) that Plaintiff failed to do everything it had promised in its contract. Those allegations support the counterclaim for breach of contract in Count I. But a promise is not a tortious misrepresentation unless the promising party never intended to perform, in which case the injured party has a claim for intentional misrepresentation. “[P]romises to perform an act cannot sustain a claim for negligent misrepresentation[.]” Cumis Ins. Society, 455 Mass. at 474.
4. Negligence Claim. Finally, the Court will deny Plaintiff’s request to dismiss Prince’s counterclaim for professional malpractice or negligence. Prince alleges that Plaintiff had a duty to ensure that its design met local zoning requirements and that it negligently breached that duty. Plaintiff contends that this claim should be dismissed because it had no duty to ensure compliance with zoning requirements absent a contractual agreement to do so. 1
Whether the standard of care that a reasonably competent architect should follow in this country includes a duty to ensure compliance with zoning requirements is a mixed question of law and fact that cannot be resolved on a motion to dismiss.
“Whether a duty of care exists” at all “is a question of law” and is therefore often “an appropriate subject of a motion to dismiss pursuant to rule 12(b)(6).” Leavitt v. Brockton Hosp., Inc., 454 Mass. 37, 40 (2009) (affirming dismissal of negligence claim because defendant owed no duty of care to plaintiff as a matter of law); accord O’Meara v. New England Life Flight, Inc., 65 Mass. App. Ct. 543, 544 (2006) (same).
1 Plaintiff does not argue that the counterclaim for negligence is barred by the “economic loss doctrine,” which generally provides that “purely economic losses are unrecoverable in tort and strict liability actions in the absence of personal injury or property damage.” Aldrich v. ADD Inc., 437 Mass. 213, 222 (2002), quoting FMR Corp. v. Boston Edison Co., 415 Mass. 393, 395 (1993). This rule “was developed in part to prevent the progression of tort concepts from undermining contract expectations,” on the theory that contracting parties are free to allocate the risk of economic loss as they see fit. Wyman v. Ayer Properties, LLC, 469 Mass. 64, 70 (2014); accord, e.g., Hunt Const. Group, Inc. v. Brennan Beer Gorman/Architects, P.C., 607 F.3d 10, 14 (2d Cir. 2010) (economic loss doctrine “serves to maintain the boundary between contract law, which is designed to enforce parties’ contractual expectations, and tort law, which is designed to protect citizens and their property” from physical harm) (quoting Hamill v. Pawtucket Mut. Ins. Co., 179 Vt. 250, 254, 892 A.2d 226 (2005)). Since Plaintiff has not raised the issue in support of its motion to dismiss Prince’s counterclaims, the Court will not consider it at this stage of the case.
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But whether Plaintiff’s duty of care required it to design a building that would comply with local zoning requirements is a question of fact. The standard of care owed by architects is a duty to do as good a job as one should expect from professionals in the same field in similar circumstances. “Architects, like other professionals, do not have a duty to be perfect in their work, but rather are expected to exercise ‘that skill and judgment which can be reasonably expected from similarly situated professionals.’ ” LeBlanc v. Logan Hilton Joint Venture, 463 Mass. 316, 329 (2012), quoting Klein v. Catalano, 386 Mass. 701, 718 (1982). “Establishing the applicable standard of care” owed by a member of some specialized profession “typically requires expert testimony” by someone with “sufficient knowledge of the practices” of professionals in the same field “to assert that the average qualified practitioner would, or would not, take a particular course of action in the relevant circumstances.” Palandjian v. Foster, 446 Mass. 100, 1045-106 (2006); accord LeBlanc, supra (same as to standard of care applicable to architects).
The counterclaim expressly alleges that Plaintiff “was under a duty to ensure [that] the design met the local zoning requirements,” Plaintiff breached that duty of care, and Prince was injured as a result. Nothing more is needed to state a claim for negligence. Cf. Adams v. Congress Auto Ins. Agency, Inc., 90 Mass. App. Ct. 761, 765 (2016) (elements of claim for negligence are “(1) duty; (2) breach of duty; (3) a causal connection between the breach of duty and damages; and (4) damages”).
Plaintiff’s motion to dismiss part of Defendants counterclaims is ALLOWED IN PART with respect to the counterclaim for negligent misrepresentation and DENIED IN PART with respect to Defendants’ other counterclaims.
June 14, 2017
Kenneth W. Salinger
Justice of the Superior Court

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