In August, 1971, the Attorney General in the name of the Commonwealth filed a bill in equity under the authority of G.L.c. 93A, § 4, against the defendants who were alleged to be engaged in the business of renting lots for mobile homes and managing a mobile home park in Peabody under the name of Pine Grove Mobile Park (Pine Grove). The bill sought, with other relief, an injunction prohibiting the defendants from imposing any fee on occupants of mobile homes in Pine Grove on the resale of those mobile homes. The Attorney General also sought an order for restitution of certain resale fees paid to the defendants by persons who had sold mobile homes in Pine Grove.
The defendants appeal from a final decree which enjoined them from requiring or receiving any resale fee
The case was tried in March, 1972. The judge voluntarily filed a report of findings in December, 1972, which the parties have treated as a statutory report of material facts. G.L.c. 214, § 23. The evidence is reported. In this circumstance the findings of fact made by the judge must stand unless they are plainly wrong, and we may find facts not expressly found by the judge. All Stainless, Inc. v. Colby, 364 Mass. 773, 776 (1974), and cases cited. There was ample support in the evidence for the findings made by the judge.
We set forth the following facts found by the judge or by
The Attorney General asserts that the imposition and collection of the so called "service charge" or resale fee is an unfair and deceptive trade practice under G.L.c. 93A. Although the final decree directs the repayment of any resale fee paid since 1965, the first resale fee was collected by the defendants in October of 1968. Eighteen people paid a resale fee of $250, and twenty-one paid a resale fee of ten per cent of the sale price, an amount which was generally larger than $250. One fee was $1,200. In these instances no services were rendered by the defendants in connection with the sale, although the prospective purchaser was interviewed and approved as a new tenant by the defendants or their representative. The judge found that the fee, unrelated to services rendered or the length of tenancy, was arbitrary.
Chapter 93A, which was inserted by St. 1967, c. 813, § 1, is designated as the "Regulation of Business Practice and Consumer Protection Act." St. 1967, c. 813, § 2. This act is one of several legislative attempts in recent years to regulate business activities with the view to providing proper disclosure of information and a more equitable balance in the relationship of consumers to persons conducting business activities. See, e.g., G.L.c. 140C, inserted by St. 1969, c. 517 § 1 (consumer credit cost disclosure); G.L.c. 255D, inserted by St. 1966, c. 284, § 1 (retail instalment sales act); G.L.c. 140, § 32J, as appearing in St. 1973, c. 1007, § 1, and §§ 32L-32Q, inserted by St. 1973, c. 1007, § 2 (regulating the operation of mobile home parks).
1. The defendants first argue that G.L.c. 93A does not apply to their activities occurring during the period dealt with at trial because they were not engaged in "any trade or commerce" as defined in G.L.c. 93A, § 1, as then amended. The unfair or deceptive acts or practices which are declared unlawful by G.L.c. 93A, § 2 (a), are acts or practices "in the conduct of any trade or commerce." As initially enacted, and until an amendment in 1972 (see St. 1972, c. 123), "trade" or "commerce" was defined in G.L.c. 93A, § 1, to "include the advertising, offering for sale, sale, or distribution of any services and any property, tangible or intangible, real, personal or mixed ... and shall include any trade or commerce directly or indirectly affecting
The statutory definition of "trade" and "commerce" recites certain activities which are included within those terms and concludes by incorporating within the statutory words "any trade or commerce directly or indirectly affecting the people of this commonwealth." Clearly the leasing of lots for mobile homes is a "trade" or "commerce." A wide range of activities has been included within the word "commerce" as used in § 5 (a) (1) of the Federal Trade Commission Act. See, e.g., Branch v. Federal Trade Commn. 141 F.2d 31, 34 (7th Cir.1944) (correspondence school); United States Retail Credit Assn. Inc. v. Federal Trade Commn. 300 F.2d 212 (4th Cir.1962) (collection agency). General Laws c. 93A, § 2 (b), states that "[i]t is the intent of the legislature that in construing paragraph (a) of this section the courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to § 5 (a) (1) of the Federal Trade Commission Act (15 U.S.C. § 45 [a]  ), as from time to time amended."
2. The defendants next argue that their activities are exempt transactions under § 3 of G.L.c. 93A. Section 3 states that G.L.c. 93A shall not apply, among other things, to "transactions or actions otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of the commonwealth or of the United States." The defendants assert that the terms of their rental agreements were subject to regulation by the
3. The defendants next contend that they engaged in no deception or unfair act or practice. In light of the facts found by the judge and by us such an argument can succeed only if as matter of law their conduct was not an unfair or deceptive act or practice within the meaning of those words in G.L.c. 93A, § 2 (a).
The defendants argue that their actions were not deceptive or unfair because resale charges were uniformly collected by mobile home park operators in the Commonwealth. Such a fact was not proved and, even if it had been, the existence of an industry-wide practice would not constitute a defense to unlawful conduct. Minter v. Federal Trade Commn. 102 F.2d 69, 70 (3d Cir.1939). International Art Co. v. Federal Trade Commn. 109 F.2d 393, 397 (7th Cir.1940), cert. den. 310 U.S. 632 (1939). P.F. Collier & Son Corp. v. Federal Trade Commn. 427 F.2d 261, 275-276 (6th Cir.1970). See Federal Trade Commn. v. Keppel & Bro. Inc. 291 U.S. 304, 313 (1934).
The defendants contend that the Legislature has indorsed the reasonableness and fairness of their resale fee practices by a 1973 amendment to G.L.c. 140, § 32L. See St. 1973, c. 1007, § 2. That amendment provides (in part) that a mobile home park licensee may "upon the proposed sale of such a home, contract with the mobile home owner to sell the home for a fee not to exceed ten per cent of the sale price of such home." Otherwise no such licensee may "impose by any rule or condition of occupancy any fee, charge, or commission for the sale of a mobile home located in a mobile home park." See G.L.c. 140, § 32L, cl. 4, inserted by St. 1973, c. 1007, § 2. This fee authorized by
The closest question presented by the defendants' conduct arises in those circumstances where, before a mobile home owner committed himself in any respect, he knew that the defendants were asserting a right to resale charge. In such a situation, assuming the disclosure was full and fair, the defendants may well not have been engaged in any deceptive act or practice.
Chapter 93A furnishes no definition of what constitutes an unfair act or practice made unlawful by § 2 (a). We are directed by § 2 (b) to consider interpretations of unfair acts and practices under the Federal Trade Commission Act as construed by the Commission and the Federal courts. Unfairness under the Federal act has not been limited to practices forbidden at common law or by criminal statute. Federal Trade Commn. v. Motion Picture Advertising Serv. Co. Inc. 344 U.S. 392, 394 (1953). Federal Trade Commn. v. Colgate-Palmolive Co. 380 U.S. 374, 380, 384 (1965). Cf. P.F. Collier & Son Corp. v. Federal Trade
The existence of unfair acts and practices must be determined from the circumstances of each case. We do not now undertake to establish general rules which may be applied in other situations. The nature of the statute and the development of the law under the comparable Federal statute indicate that such an attempt would be undesirable.
What we can determine is that the collection of resale charges by the defendants was an unfair act or practice. That provision of the Uniform Commercial Code which permits a court to refuse to enforce a contract or a contract provision which is unconscionable provides a reasonable analogy here. See G.L.c. 106, § 2-302. Such a comparison was made by the Supreme Court of New Jersey in Kugler v. Romain, 58 N.J. 522, 545-547 (1971), where the New Jersey Consumer Fraud Act was interpreted to permit the invalidation of consumer sales because of unconscionable prices. In the Kugler case, sales contracts were held to be
4. The defendants argue that it would be constitutionally improper to require them to make restitution as to resale charges collected before G.L.c. 93A became effective and under rental agreements entered into prior to the effective date of G.L.c. 93A. Because on the record before us the defendants state that the first resale charge was collected in October, 1968, and the first resale provision in a rental agreement appeared in 1969, both events occurring long after the effectiveness of the prohibitions of G.L.c. 93A, no retroactive application of G.L.c. 93A seemingly is involved. Thus constitutional arguments based on substantive due process rights and impairment of
5. The defendants raise several objections to the form and scope of the final decree. They argue that the decree is overly broad in providing for an escrow fund, portions of which may escheat to the Commonwealth (see fn. 3 above), and in requiring acceptance of purchasers of mobile homes in Pine Grove on the same terms as former tenants (see fn. 2 above). The defendants also assert that a court of equity does not have the power under G.L.c. 93A to order restitution with respect to resale fees collected prior to the amendment of § 4 of G.L.c. 93A by St. 1969, c. 814, § 3. The 1969 amendment expressly empowered courts to make such orders, in addition to injunctive relief, "as may be necessary to restore to any person who has suffered any ascertainable loss ... [by reason of an unfair act or practice] any moneys or property" lost. The defendants argue also that only those persons who were named in the bill may recover in this proceeding and that a decree in favor of all persons who paid resale fees is not permitted. Finally, the defendants assert that the decree goes beyond the scope of the bill.
We believe further that relief under G.L.c. 93A is not intended to be limited in a proceeding under § 4 to those persons who are listed in the Attorney General's bill. The very purpose of the Attorney General's involvement is to provide an efficient, inexpensive, prompt and broad solution to the alleged wrong. Relief in favor of all wronged
We turn next to the form of paragraph 2 of the decree, which in effect directs the defendants to permit each purchaser of a home in Pine Grove to become a tenant on the same terms as those applicable to the seller of that home. See fn. 2 above. This provision appears to restrict the defendants to the collection of the same rent and to the other terms of the tenancy of the former occupant. Such a decree seems overbroad. We believe that the second paragraph of the final decree should be modified to refer to the same terms and conditions of tenancy as those generally available from time to time to tenants of Pine Grove.
Finally, we deal with the defendants' claim that the relief granted exceeds the scope of the bill. The objection that the decree goes beyond the prayers of the bill is without merit. Relief is based on the allegations of a bill, and not on its prayers. North Easton Co-op. Bank v. MacLean, 300 Mass. 285, 295 (1938). Bleck v. East Boston Co. 302 Mass. 127, 130 (1939). Seder v. Kozlowski, 304 Mass. 367, 369 (1939). Moreover, the bill contained a prayer for general relief, which would support any relief consistent with the nature of the case. Alden Bros. Co. v. Dunn, 264 Mass. 355, 363 (1928). Cooperstein v. Bogas, 317 Mass. 341 (1944). The bill not only alleges deceptive acts in connection with the late furnishing of, and in the changing of the terms of, rental
6. The final decree may be modified as provided in the fourth numbered section of this opinion, shall be modified as provided in the fifth numbered section of this opinion and as modified is affirmed.
The reference in the first sentence of paragraph 6 to the "Petitioners" is an error. There is only one "petitioner." It does, however, appear to have been intended that the decree place the burden on the Commonwealth to take diligent steps to locate the defendants' former tenants.
We would not concur with the Commonwealth's argument that because "the Legislature did not confer new substantive rights on consumers, "G.L.c. 93A may be applied retroactively. We disagree with the claim that G.L.c. 93A "merely provided for new procedural methods of prosecution for consumer abuse" which could be applied retroactively. See Hanscom v. Malden & Melrose Gas Light Co. 220 Mass. 1, 3, 6 (1914). Although G.L.c. 93A admittedly established new procedural devices to aid consumers and others (which in this respect could constitutionally be applied retroactively), it also created new substantive rights by making conduct unlawful which was not unlawful under the common law or any prior statute. Indeed in another portion of the Attorney General's brief it is stated that the statutory words "`[u]nfair and deceptive practices' are not limited by traditional tort and contract law requirements."
If, as the Commonwealth argues, there are in fact persons who did pay resale fees prior to the effective date of G.L.c. 93A, as added by St. 1967, c. 813, § 1, the defendants may move to modify the final decree to exempt them from making any refund of a resale fee in any specific case where a named tenant did not have a right (apart from G.L.c. 93A) to a refund of the resale fee paid the defendants. In such a situation, a determination as to each such tenant's rights will be required before the motion to modify may be acted on. The final decree may provide that the court retains jurisdiction of the case for this purpose.