Breaching Implied Warranty Violates Chapter 93A

The Massachusetts Supreme Court found a manufacturer liable for unfair trade and practices after the manufacturer refused to give a refund on a defective motorcycle. Plaintiff claimed the manufacturer breached the implied warranty of merchantability in all Massachusetts contracts for the sale of consumer goods. The manufacturer claimed that only the dealer was responsible for curing the defects and the implied warranty did not apply to the manufacturer since it had no contract with the plaintiff. The court found that the warranty did apply to the manufacturer and it was liable under Chapter 93A for refusing to cure the defects. Plaintiff was awarded triple damages.

Why This Is Important . . . Under Massachusetts law, every contract for the sale of consumer goods carries an implied warranty of merchantability. This means the seller warrants that the goods will be free from material defects. Any attempt to disclaim the warranty is ineffective. This case makes it clear that the warranty applies to both the manufacturer of the consumer goods and the seller.

Prior Tenant Not Liable For Contamination

A release of oil from underground tanks contaminated leased premises. The plaintiff had argued that the defendant, a prior tenant, was responsible for the contamination because the lease said the defendant was liable for the repair and maintenance of the leased premises that included the tanks. The Massachusetts Supreme Court reversed the decision finding there was no showing that the defendant's conduct caused the release and contamination. Evidence that the defendant was a prior tenant is insufficient, by itself, to hold the defendant liable under Chapter 21E. The court also found that the definition of "premises" did not mention the tanks and therefore did not include the tanks.

Why This Is Important . . . Landlords leasing property to tenants with tanks should specifically provide in the lease that the tenant is responsible for the repair and maintenance of the tanks and will be liable for any contamination that occurs due to a failure to maintain.

MCAD Should Give Weight To Arbitrator's Findings

A unionized employee was fired. He invoked his right to an arbitration. The arbitrator found the discharge was not motivated by race. The employee then filed a charge of race discrimination with the Massachusetts Commission Against Discrimination ("MCAD"). The MCAD found the employee had been the victim of racial discrimination and that the firing was wrongful. In reaching that decision, the MCAD refused to consider the arbitrator's findings. The Massachusetts Appeals Court ruled that the MCAD made a mistake in not giving the arbitrator's findings consideration.

Why This Is Important . . . If an employee chooses to arbitrate under a collective bargaining agreement and later files a complaint with the MCAD, the MCAD must give the arbitrator's findings the weight that seems appropriate under the circumstances. This decision gives collective bargaining arbitrators greater importance when it comes to discrimination.

Overtime Exemptions Tightening

Courts are redefining and narrowing overtime exemptions tests, making overtime exemption harder to maintain. Active Nicolai Law Group clients recently received a memorandum outlining what the new standards mean.