Cutting Edge Homes, Inc. v. Mayer

229 N.E.3d 613

CUTTING EDGE HOMES, INC.

v.Alan J. MAYER.

No. 23-P-388

Appeals Court of Massachusetts, Norfolk.

Argued November 6, 2023

Decided February 27, 2024

Contract, Interference with contractual relations. Unlawful Interference. Practice, Civil, Summary judgment.

Civil action commenced in the Superior Court Department on March 4, 2020.

The case was heard by Joseph F. Leighton, Jr., J., on a motion for summary judgment.

James W. Simpson, Jr., for the plaintiff.

Jon C. Cowen, Boston, for the defendant.

Present: Ditkoff, Englander, & Walsh, JJ.

ENGLANDER, J.

The plaintiff, Cutting Edge Homes, Inc. (Cutting Edge) appeals from a summary judgment dismissing its claim for intentional interference with contractual or advantageous business relations against the defendant, Alan J. Mayer.¹ The case re- quires us to consider the element that the defendant (Mayer) must have acted with "improper motive or means," Psy-Ed Corp. v. Klein, 459 Mass. 697, 716, 947 N.E.2d 520 (2011); United Truck Leasing Corp. V. Geltman, 406 Mass. 811, 816-817, 551 N.E.2d 20 (1990), in the context where Mayer was hired by one party to a contract to advise regarding the performance of the other contracting party. Here, Cutting Edge, a general contractor, contracted with residential homeowners, Rory and Sharon Shapiro, to perform a multimillion-dollar renovation of their home. The Shapiros retained Mayer to perform architectural services, including reviewing Cutting Edge’s work and Cutting Edge’s invoices. Mayer regularly criticized Cutting Edge’s invoices, among other things stating to the Shapiros that they were being "overbilled" by hundreds of thousands of dollars. Eventually, the Shapiros terminated their contract and relationship with Cutting Edge before the project was complete, and finished the project using a different contractor suggested by Mayer.

[1] At summary judgment, the central question was whether Cutting Edge had presented sufficient evidence to support a genuine issue of material fact that Mayer’s conduct was "improper in motive or means." The judge ruled that the evidence was not sufficient; he concluded that there was no evidence that Mayer acted with improper motive, and with respect to improper means, "at most, … Mayer carried out his review of the [i]nvoices and conveyed his findings to the Shapiros negligently." We agree that negligent (or even grossly negligent) conduct in this context is insufficient to meet the "improper means" element; rather, the plaintiff is required to show conduct amounting to deceit or dishonesty. See Cavicchi v. Koski, 67 Mass. App. Ct. 654, 658, 855 N.E.2d 1137 (2006); Restatement (Second) of Toris § 772 (1979).² Here, after reviewing the summary judgment record, we agree that Cutting Edge failed to adduce evidence that could support a finding of deceit or dishonesty, and we accordingly affirm.

Background.³ The Shapiros engaged Cutting Edge in the spring of 2018, and entered into a "Service Agreement" dated April 27, 2018 (service agreement). The scope of the project included, among other things, rebuilding one half of the Shapiros’ residence, replacing the heating, plumbing, and air conditioning systems, and repairing the roof and the exterior of the home. The total initial contract price was $2,150,000 (it was thereafter substantially increased, as was the scope of work), to be paid in a series of installments. Under the service agreement, Cutting Edge was to provide the Shapiros with an account summary every thirty days, indicating the amount budgeted for and actual cost of specific aspects of the project. Cutting Edge was to begin its work on May 1, 2018 and substantially complete the same by December 31, 2018. In fact, Cutting Edge continued to work on the project until October 2019, when the Shapiros terminated the relationship.

At or near the inception of the project, the Shapiros informed Cutting Edge that it must collaborate with Mayer, an architect whom the Shapiros had hired to provide architectural, interior design, and administration services. Importantly, the Shapiros requested that Mayer review the invoices provided by Cutting Edge. Cutting Edge began submitting itemized invoices to the Shapiros in late 2018. The invoices included a spreadsheet that tracked progress, costs, and modifications to the project, Mayer began reviewing those invoices in December 2018, and after analyzing the first invoice, Mayer concluded that Cutting Edge had overbilled the Shapiros by approximately $250,000. As of the time Mayer began reviewing invoices he had not reviewed the service agreement, and it is inferable that Mayer’s conclusion was influenced, at least in part, by his view that the Shapiros should be paying Cutting Edge based upon a percentage of work completed to date, and invoicing using a form used by the American Institute of Architects. In fact, the service agreement provided for payment based on a set schedule of monthly payments rather than a percentage of work completed.

Mayer reached similar conclusions regarding overbilling after analyzing each subsequent invoice, and he discussed his conclusions with the Shapiros, providing his own comments and conclusions in the margins of Cutting Edge’s spreadsheets. The Shapiros discussed the alleged overbilling with Sean Cutting, the president of Cutting Edge, on several occasions. Despite Mayer’s advice, the Shapiros continued to pay Cutting Edge the amounts Cutting Edge invoiced until at least August 2019. The Shapiros stated that they did so because they wished to have the project completed as soon as possible.

Mayer also regularly communicated with Cutting Edge. In July 2019, Mayer addressed his concerns regarding overbilling with Cutting Edge directly; at that time Cutting Edge agreed to update the invoices to reflect Mayer’s desired format. Mayer nevertheless continued to disagree with Cutting Edge’s estimate of the percentage of work completed, and repeatedly asked Cutting Edge to provide "backup" documentation detailing expenses and work completed on specific line items. Similar disagreements between Mayer and Cutting Edge continued until October 2019. In e-mails Mayer sent to Rory Shapiro in October 2019, Mayer commented that "[Cutting Edge]’s invoice is $680,000 more than what they currently are due," that as to certain entries Cutting Edge was "just making this stuff up and [it] has done [so] for every previous invoice," and that Mayer believed "that [was] sufficient grounds for dismissal."

On October 25, 2019 the Shapiros, through counsel, sent Cutting Edge a "Notice of Termination of Service Agreement." The notice cited several reasons for the termination, the very first of which stated: "[Cutting Edge] routinely overbilled [the Shapiros] based on the claimed completion of work that was not done or even properly invoiced." After terminating Cutting Edge and on Mayer’s recommendation, the Shapiros engaged a different contractor to complete work on the remodeling project. Mayer did not review any of the new contractor’s invoices.

In March of 2020 Cutting Edge brought suit in Superior Court, alleging intentional interference with advantageous business relations on the part of Mayer.⁴ After discovery, a Superior Court judge entered summary judgment for Mayer, reasoning that Cutting Edge had not adduced sufficient evidence of either improper means or causation. This appeal followed.

[2] Discussion. "We review a grant of summary judgment de novo." Blake v. Hometown Am. Communities, Inc., 486 Mass. 268, 272, 158 N.E.3d 18 (2020), quoting DeWolfe v. Hingham Centre, Ltd., 464 Mass. 795, 799, 985 N.E.2d 1187 (2013). To survive summary judgment on its claim of intentional interference with contractual relations, Cutting Edge needed to adduce sufficient evidence to meet four elements: (1) it had a contract (or prospective business relations) with the Shapiros, (2) Mayer knowingly induced the Shapiros to break the contract (or prospective business relations), (3) Mayer’s interference was improper in motive or means, and (4) Cutting Edge was harmed by the interference (causation and damages). See Psy-Ed Corp., 459 Mass. at 715-716, 947 N.E.2d 520.⁵

Here, it is undisputed that Cutting Edge and the Shapiros were parties to a contract, that Mayer knew of the contract, that Mayer acted intentionally in providing his advice with respect to that contract, and that the Shapiros terminated their relationship with Cutting Edge. The next question is whether Mayer’s actions could be found to be "improper in motive or means." This element of a tortious interference with contractual relations claim -- that is, that the conduct must be "improper" -- has proved difficult to capture in a universal standard. The element is critical because it is not enough to show that the defendant intentionally advised a party to breach or forego a contract;⁶ rather, the defendant must have acted improperly, with "improper" generally meaning "innately wrongful, [and] predatory in character," Restatement (Second) of Torts § 766B comment (d), deceitful, or involving "threats, misrepresentation, or defamation." Cavicchi, 67 Mass. App. Ct. at 658, 855 N.E.2d 1137. See also Williamson v. Barlam, 103 Mass. App. Ct. 727, 733-735, — N.E.3d—(2024).

As we discussed in Cavicchi, supra at 660-661 & n.10, 855 N.E.2d 1137, the Restatement (Second) of Torts addresses the "improper" element at length, and dedicates an entire section to the circumstances at issue here, where a defendant was specifically asked to advise a contracting party regarding its contractual relationship. Section 772 of the Restatement states:

"One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other’s contractual relation, by giving the third person

(a) truthful information, or

(b) honest advice within the scope of a request for the advice."

In its "comment[s]," the Restatement...