In Hayastan Industries, Inc. v. Guz, the Massachusetts Appeals Court affirmed a finding that a landlord violated Massachusetts General Laws Chapter 93A by demanding more rent than the tenants owed and pursuing eviction based on that demand. The defendants, the Guzes, lived in a mobile-home park for more than two decades. After Hayastan acquired the Guzes’ manufactured home, it accepted below-market monthly payments from them without reserving its right to terminate their occupancy. The court upheld the trial judge’s finding that the parties thereby formed a tenancy at will, at a monthly rent well below the amount Hayastan later demanded.
The Massachusetts Appeals Court rejected Hayastan’s argument that it reasonably relied on an earlier case when it sought payment of the higher amount. According to the court, Hayastan’s acceptance of monthly payments without notifying the Guzes of its reservation to obtain possession failed to preserve Hayastan’s right to terminate the tenancy and that asking for more rent than what was owed was an unfair and deceptive act. In determining whether Hayastan’s conduct violated Chapter 93A, the relevant question was whether the conduct was unfair or deceptive in context — not whether the landlord believed it was acting in good faith. The court concluded that demanding significantly more than the agreed-upon rent could have misled the Guzes into paying money they did not owe and held that this conduct fell within established concepts of unfairness under Chapter 93A. The court also noted that Hayastan’s conduct was a willful violation of Massachusetts G. L. c. 186, § 14 — the statute protecting a tenant’s right to quiet enjoyment — and constituted an unfair or deceptive practice.
The court’s decision in Hayastan also underscores that a small damages award does not, by itself, justify substantially reducing an award for attorneys’ fees under a fee-shifting statute. The trial court reduced the Guzes’ fee award because of the “disproportionality” between the amount requested and the interests at play. The appeals court vacated the fee award and remanded for reconsideration, explaining that the court must assess the documented hours and rates in light of the relevant factors and the interests protected by the statutes — not simply compare the fees to the damages or the length of trial. The appellate court further noted that G. L. c. 186, § 14 independently authorizes attorneys’ fees. In addition, the appellate courtallowed the Guzes to seek appellate fees and costs. This case may serve as a reminder that even when a small amount of damages is at stake, considerable fees may still be involved.
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