In Janz Corp. v. Philips N. Am. LLC, 2025 U.S. Dist. LEXIS 153215 (D. Mass. Aug. 8, 2025), the U.S. District Court for the District of Massachusetts addressed important issues regarding summary judgment in commercial contract disputes, including breach of the implied covenant of good faith and fair dealing and Massachusetts Chapter 93A, Section 11 claims. The case provides valuable insights into how courts interpret damages waivers, claims of retaliation, and the strategic use of Chapter 93A demand letters.
Case Background
Janz Corp. and Philips North America LLC entered into a contract for the sale of Philips' products, which included a clause waiving all consequential damages, including lost profits. Janz alleged that Philips breached the implied covenant of good faith and fair dealing and violated Chapter 93A, Section 11, by retaliating against Janz after it raised concerns about the certification of Philips' products. Janz sought consequential damages under both claims.
District Court Analysis
The court found triable issues of fact supporting Janz's allegations of retaliatory conduct. Specifically, Janz claimed Philips resisted or delayed product recertification and failed to inform Janz or its customers about uncertified devices. After Janz pressed for compliance, Philips allegedly responded by proposing contract changes that reduced Janz's product lines and territory, refused to extend the contract, and terminated the agreement before its natural expiration date. The court found that the timing of Philip's actions, combined with Janz's repeated compliance concerns, could allow a jury to find retaliatory intent, which may satisfy the "unfairness" element required under Chapter 93A, Section 2. As a result, the court denied summary judgment for Philips on the Section 11 claim.
Additionally, Philips allegedly deleted key email inboxes after receiving a Chapter 93A demand letter and when litigation was foreseeable. Although the court declined to issue an adverse inference for the alleged spoliation, it noted that such evidence could be used at trial to potentially bolster inferences about the defendant's unlawful motives.
Damages Waiver Clause Enforced – With Limits
The court reaffirmed that contractual clauses waiving consequential damages are enforceable, even as to claims for breach of the implied covenant and violations of Chapter 93A, Section 11. As the plaintiff sought only consequential damages, the court granted summary judgment to the defendant on the implied covenant claim. However, citing H1 Lincoln, Inc. v. S. Washington St., LLC, 489 Mass. 1, 26 (2022), the court concluded that the waiver would not apply if the defendant's alleged unfair actions were found at trial to be willful. With breach of the implied covenant and willfulness constituting triable issues, the court denied summary judgment on the Section 11 claim.
Key Takeaways for Businesses and Litigants
- Chapter 93A's Broad Reach: This decision underscores the potential for Chapter 93A, Section 11, to overcome contractual limitations on damages waivers, especially when willful or unfair conduct is alleged.
- Implied Covenant Claims and Damages Waivers. Parties should carefully review damages waiver clauses in commercial contracts, as Massachusetts courts will generally enforce them unless willful misconduct is proven.
- Strategic Use of Chapter 93A Demand Letters. Even though a demand letter is not strictly required for Section 11 claims, sending one can be a strategic move, particularly when spoliation or other improper conduct may become an issue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
