Our firm was recently featured in a MA Lawyers Weekly. You can read the article on MA lawyers weekly or find the article below:
Home contractor slapped with double damages in $402K award
An arbitrator observed that no amount of damages could compensate Rajiv and Pranoti Gangurde for the “ordeal” they were forced to endure in remodeling their Arlington home. But a $402,000 arbitration award confirmed last month in Suffolk Superior Court should surely help. Judge Robert L. Ullmann confirmed the award against Alireza Nowrouzi after rejecting the defendant’s argument that the arbitrator lacked jurisdiction to award the Gangurdes double damages and attorneys’ fees under the Massachusetts Home
Improvement Contractor Act, G.L.c. 142A.
Ullmann concluded that the arbitrator “clearly” had the authority to order multiple damages, counsel fees and costs because G.L.c. 142A, §17, expressly provides that a contractor’s violation of the act also constitutes an unfair and deceptive practice in violation of G.L.c. 93A, which authorizes such remedies.
The Gangurdes’ tale of woe began in November 2015 when they entered into a contract with Nowrouzi for the remodeling of their single-family home. According to the plaintiffs’ attorney, Christopher P. Hamilton of Waltham, the Gangurdes were particularly excited about the project because Nowrouzi had suggested he could turn their single-car garage into one for two cars, alleviating a thorny parking problem on their hillside property.
The proposed construction in the $350,000 project entailed the Gangurdes and their teenage son moving into a rental property on a temporary basis, so there was an element of urgency added to completing the project on time. But according to the plaintiffs, in the midst of the project Nowrouzi threatened to stop work unless he received additional payments.
“The builder had my clients over a barrel,” Hamilton says. “The house was torn apart, and it was starting to look less and less likely that it would be completed on time.” According to Hamilton, the defendant demanded nearly $50,000 for change orders for work that the plaintiffs
contended were largely contemplated within the scope of the original contract. When the parties couldn’t resolvethe dispute, the plaintiffs terminated Nowrouzi and finished the remodeling project using other contractors.
The plaintiffs initiated binding arbitration pursuant to a term in their contract with the defendant. In December, the arbitrator — retired Superior Court Judge Paul E. Troy — found Nowrouzi had violated the Home Improvement Contractor Act.
In particular, Troy found the defendant demanded an advance of $20,000 for a down payment to order windows for the project. According to the
arbitrator’s decision, it later turned out that the required down payment was only $7,500. In any event, the arbitrator noted the defendant left window openings on the project uncovered for more than seven months, subjecting the interior to rain, mold and other damage.
Troy concluded that the plaintiffs were entitled to consumer protection damages under 93A for the defendant’s violations of the act.
“Respondent’s conduct of demanding additional compensation for unearned work, then stopping work on the Project and refusing to start it until Claimants agreed to pay him for his unearned work, and falsely extracting $20,000 from [the Gangurdes] for needed windows and keeping the money while leaving the House open to the elements was both unfair and deceptive and willful and knowing,” Troy wrote. “It is just the type of improper conduct that the Home Improvement Contractor Statute sought to prevent.”
Accordingly, in his arbitration award Troy doubled the plaintiffs’ $161,893.33 in compensatory damages for breach of contract, and added attorneys’ fees and costs in the amount of $78,417.84. In the Superior Court action to confirm the award, Nowrouzi was represented by Robert E. McLaughlin Jr. of Gilman, McLaughlin & Hanrahan in Boston. McLaughlin, who entered the case after the arbitration, maintains Troy lacked
the authority to include double damages, fees and costs in the award. According to McLaughlin, G.L.c. 142A, §3 makes clear that actions for damages under the act may be brought only in the state’s trial courts or under a non-binding arbitration program approved by the state director of consumer affairs and business regulation.
Because the plaintiffs proceeded through binding arbitration, he argues, the arbitrator did not have subject matter jurisdiction to award multiple damages under 142A.
“We conceded single damages, but didn’t think there was jurisdiction to award double damages because there wasn’t jurisdiction under the Home Improvement Contractor Act,” McLaughlin says.
Hamilton is pleased with the judgment, noting that the defendant rejected his clients’ last offer to settle for $100,000. And he’s hopeful about actually collecting the award. Before the arbitration, Hamilton took the step to secure any judgment by obtaining an injunction against the sale of a home in Weston that Nowrouzi owned as investment property.
“I was concerned he was going to sell it and my clients would be left with no assets to go after,” Hamilton says. The parties later agreed to allow a sale of the defendant’s property under terms that required Nowrouzi to place $350,000 of the proceeds into escrow to secure any judgment obtained by the plaintiffs.
You can also view the article on lawyers Weekly: https://masslawyersweekly.com/2018/05/31/home-contractor-slapped-with-double-damages-in-402k-award/
