In Rauhaus Freedenfeld & Associates, LLP v. Carrollton West Pet Hospital, the Massachusetts Appeals Court affirmed a Massachusetts Superior Court judgment awarding unpaid architectural fees for breach of contract and simultaneously affirmed the trial court’s rejection of the plaintiff’s Massachusetts General Law Chapter 93A claim. From a Chapter 93A perspective, the most significant aspect of the Appeals Court’s decision is its agreement with the trial court that the dispute, although hard-fought and commercially consequential, did not rise to the level of an unfair or deceptive act under Chapter 93A.
The plaintiff, Rauhaus Freedenfeld & Associates, LLP (RFA) sued Carrollton West Pet Hospital (CWPH) for breach of contract, violation of Chapter 93A, and related quasi-contract claims following a protracted disagreement over the proper calculation of RFA’s architectural fee. The fee was contractually defined as 8% of the “construction cost,” which the agreement defined as the “total cost or estimated cost” of the project. After bids exceeded CWPH’s initial $3.3 million budget, the parties unsuccessfully attempted to modify their arrangement through an addendum referencing the “lowest responsible bid.” CWPH refused to pay RFA’s invoice, calculated from a $7.29 million bid that RFA deemed reasonable. Following a bench trial, the Superior Court judge found the addendum unenforceable for lack of a meeting of the minds and concluded that CWPH breached the original agreement by refusing to pay the balance due under the contract. The court awarded damages and contractual attorney’s fees to RFA.
However, the trial judge determined that CWPH’s conduct did not violate Chapter 93A, and the Appeals Court left that ruling undisturbed. The trial court found that CWPH’s refusal to pay did not stem from coercion, sharp practice, bad faith manipulation, or other conduct that would fall within the unfairness required for liability under Chapter 93A, Section 11 in a business-to-business dispute. Instead, the court attributed the conduct to CWPH’s manager’s lack of experience with large-scale construction projects and his unrealistic expectations regarding cost. The record reflected a genuine disagreement over how to interpret and apply the fee provisions, compounded by the parties’ failed attempt to redefine their relationship through an ambiguous addendum. Although CWPH’s position was ultimately rejected as a matter of contract interpretation, the courts treated the dispute as a bona fide contractual disagreement rather than an attempt to extract leverage through deception or unfair pressure.
The decision reinforces several settled principles under Chapter 93A, Section 11. First, even a material breach of contract does not automatically constitute a Chapter 93A violation. Second, where the evidence shows a legitimate interpretive dispute rather than bad faith or extortionate conduct, courts may be less likely to impose Chapter 93A liability. Accordingly, while CWPH was held liable for contract damages, it avoided the enhanced exposure associated with multiple damages under Chapter 93A. The Appeals Court’s affirmance underscores that Chapter 93A remains a distinct and heightened cause of action, not a routine add-on to every commercial contract dispute.
