USCA1 Opinion

United States Court of Appeals

For the First Circuit

____________________

No. 95-1781

CAMBRIDGE PLATING CO., INC.,

Plaintiff-Appellee,

v.

NAPCO, INC.,

Defendant-Appellant.

____________________

No. 95-1782

CAMBRIDGE PLATING CO., INC.,

Plaintiff-Appellant,

v.

NAPCO, INC.,

Defendant-Appellee.

____________________

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. W. Arthur Garrity, Jr., Senior U.S. District Judge]

__________________________

____________________

Before

Selya, Boudin and Lynch

Circuit Judges.
______________

____________________

Thomas K. Christo,
_________________

with whom

David B. Chaffin
________________

and Hare &

_______

Chaffin were on brief, for Cambridge Plating Co., Inc.

_______

Lawrence S. Robbins, with whom Gary A. Winters, Mayer, Brown

___________________
_______________ ____________
& Platt, Richard L. Burpee and Burpee & DeMoura were on
_______ __________________
_________________

brief,

for Napco, Inc.

____________________

June 3, 1996
____________________

-2-

out

LYNCH,
LYNCH,

Circuit Judge.
Circuit Judge.
_____________

of the sale

of a defective

for use in

a damages verdict

the system,

cross-appeals arise

wastewater treatment system

an electroplating operation.

part, there was

purchaser of

These

For want

of a $620

of over $7 million.

The

Cambridge Plating Co.,

Inc., sued

the seller, Napco, Inc., for, among other things,

failing to

reveal that it had knowingly omitted a critical part from the

system.

The

complaint

alleged

breach

of

contract,

intentional

and

negligent

misrepresentation

a violation of Mass. Gen. L. ch. 93A,

2, 11 ("Chapter

93A").

misrepresentation,

After a

twelve-day trial, Cambridge

all counts, with a

Plating won on

jury finding liability on the

common law

counts and the district court finding liability under Chapter

93A.

Both the jury and the district court awarded Cambridge

Plating

significant

challenges

the

damages.

to the verdicts.

striking of

the evidence

reverse the

now

raises

We believe there

post-judgment motions

were timely filed under

find

Napco

various

was error in

and that

the claims

the Massachusetts discovery rule; we

sufficient and

affirm on

multiple damages under Chapter

and remand the award of damages.

liability (but

93A), and vacate

I.

Background

-3-

We recite the facts as the

jury and district court

could have

found them.

See Sampson v. Eaton Corp., 809 F.2d

___ _______
___________

156, 157 (1st Cir. 1987).

Cambridge Plating, as part of its metal plating and

metal finishing

for

bath

operations, uses

solutions

contaminated

with

and

large quantities of

rinsing.

chemicals

and

This

water

metals.

regulations require that Cambridge Plating

water

becomes

Environmental

decontaminate the

wastewater before discharging it into the sewers.

Napco manufactures and

systems

Plating

for commercial

entered

approximately

users.

into

$398,000, a

sells wastewater

In January

contract

to

1984, Cambridge

purchase,

wastewater treatment

would remove the contaminants from the water.

treatment

for

system that

As part of the

contract, Napco provided a "performance warranty" under which

Napco warranted

defined

pollution

that the system, if

limits, would

and

The warranty,

federal

however,

for all consequential damages or business

Cambridge Plating might incur in the event of a breach.

The system

precipitation process

water.

all Massachusetts

abatement requirements.

excluded liability

loss

meet

operated within certain

Napco sold to Cambridge

to

remove the

The wastewater was

with a polymer solution.

The

Plating used a

contaminants from

fed through pipes,

the

and injected

polymers were to attach to the

-4-

contaminants

and

particles, known

then

aggregate

as "floc."

The

them

to

form

floc was to

larger

settle out of

the water and form sludge at the bottom of a clarifying tank.

The clean water

sewer

layer on

and Cambridge

top would be

Plating would

discharged into

properly dispose

sludge left behind in the tank.

"Flocculation,"

of

bigger ones,

the smaller

critical to

particles into

the success of the

the

of the

the joining

was absolutely

wastewater treatment system.

Absent

proper

suspended

flocculation,

contaminants

would

remain

in the water and the water could not be discharged

into the sewer.

solution

For

proper

had

to be

flocculation

thoroughly

stream.

The system needed

in

stream

the

"static

mixer."

containing a

at

an

static

angle inside

static

the waste

mixer.

polymer

wastewater

mixing.

One

the necessary turbulence

is a

mixer

the pipe

stream

the

into the

perform

is

series of "baffles," small

consequently, turbulence.

into

to

to create

mixed

occur,

some means of creating turbulence

sufficient

mechanism designed

to

that

section

resistance and,

The polymer solution

the

pipe

metal plates placed

which create

just before

of

is injected

water reaches

the

Once the water with the polymer solution hits

the baffles, mixing occurs.

There are

the

required

alternatives to static

turbulence

for

mixers to create

precipitation

wastewater

-5-

treatment system.

testified,

As Joseph Aliota, Napco's expert engineer,

proper mixing can occur if the system is designed

with a series of

area

where the polymer is

did not opt for

other

significant bends in the piping

items)

injected into the

that design.

for

the

stream.

The engineering

Cambridge

Plating

around the

Napco

drawings (and

system

clearly

indicate that the system was to include a static mixer.

Napco did not install the static mixer.

tell

Cambridge Plating

installed.

"tech

that the

Nor did it

static mixer had

not been

It did, however, provide Cambridge Plating with a

manual"

containing

instructions for the system.

blueprints

and

operating

This manual, given to Cambridge

Plating upon completion of the system, purported to show what

had actually

been built.1 It contained

indicating that

the static mixer

engineering drawings

had been installed

in the

system.

Napco

also provided a

control panel that

depicted

the static mixer as being part of the system.

Napco's

had

not

been installed.

subcontractor,

install

employees were aware that the static mixer

testified

the static

Bob

that

mixer at

Triplett, Napco's

he

was

instructed

the direction

plumbing

not

of either

to

Carl

____________________

1.

Although

drawings

in

the

parties

the tech

built" drawings as

vigorously

manual can

that term

be

is used

dispute

whether

considered to

the

be "as

among engineers,

the

evidence shows clearly that these drawings were placed in the

manual

to

show Cambridge

Plating

built.

-6-

what

had actually

been

Bredfield,

Napco

employee,

project

manager on the

Napco's

Manager

of

that

although he

he knew

DeBisschop,

Cambridge Plating job.

Pollution

principally responsible

testified

or Bob

Abatement

for the

the

claimed that the

and

design of the

static

mixer was

static mixer was

Napco's

John Eason,

the

person

system, also

not

there,

installed at

first but later removed because it had a tendency to clog.

The system was installed in late 1984.

For several

months

after

applicable

testing

installation,

pollution

limits.

laboratory that

Massachusetts

relevant

Water

system

A series

generally met

the

of reports

from a

Cambridge Plating forwarded

to the

Resources

state regulatory

March 1985 until

the

body)

Authority

showed

("MWRA")

that from

September 1985, the system

(the

roughly

usually met the

applicable discharge limits.

As time

went

on, however,

the

system

regularly

failed to meet the

applicable pollution limits and Cambridge

Plating complained

to Napco about the problems.

early

1986,

responsible

Napco

Edward

Marullo, a

for running

to complain

told Marullo to

the

Cambridge

system,

Starting in

Plating employee

called DeBisschop

about the

poor performance.

manipulate the

polymer and pH

at

DeBisschop

levels.

In

March 1986,

Laurence

Tosi, Cambridge

Plating's

President,

called DeBisschop "yelling and screaming" about the

failures.

Tosi

thought that Napco's

system's

equipment might be

at

-7-

fault,

but

DeBisschop

allayed

his concerns,

saying

operator error was the likely cause of the problem.

that

Based on

DeBisschop's assurances,

the system inspected

called Eason

Tosi took no further

for defects.

at Napco,

steps to have

Again, in 1987,

who, like his

Marullo

colleague DeBisschop,

told Marullo to manipulate the polymer flow and pH level.

some point, Napco told Tosi that it would be willing to

At

send

engineers to examine the system or to train further Cambridge

Plating's operators.

Plating had to agree

Tosi declined.

But there

was a price

to pay $1000 per day

tag: Cambridge

for such service.

At no time did Napco inform Cambridge Plating

that the static mixer was missing.

During

this

series of experts to

1986,

period,

Cambridge

Plating

determine what was wrong.

it hired Patrick Hunt, a

hired

In December

waste treatment operator for

Hewlett-Packard

course for

of

Lowell.

who was

also an

instructor of

wastewater treatment operators

Hunt

inspected

the

a licensing

at the University

system,

recognized

"insufficient floc formation" as a problem, and made numerous

suggestions,

most of which

related to operation.

not discover that the static mixer was missing.

Robert Capaccio, also a wastewater

Cambridge Plating but failed to

was missing.

designs

and

A third

detect that the static mixer

wastewater

-8-

In May 1987,

treatment expert, visited

group of experts

manufactures

Hunt did

from Memtek,

treatment

which

systems,

examined

the

system in

September 1987

proposing a course of action.

overhaul

of the

system

considered prohibitive.

for the

purpose of

They recommended a substantial

at a

cost

During

that Cambridge

Plating

their review, they

did not

notice that the static mixer was missing.

As

solve

Cambridge Plating

the problems with the

consistent violator

1988

the

MWRA

was trying

system, it was

to identify

also becoming a

of the MWRA's regulations.

fined

Cambridge

Plating

and

In December

$682,250

for

discharging

Plating

excessive levels

challenged

$128,500,

but

at

of

the fine,

cost

contaminants.

which

of

was

Cambridge

later reduced

approximately

$54,000

to

in

attorneys' fees.

Cambridge

deficiencies

would

by rigging

the system

as this practice

flocculation

to

considerably.

occur.

the

It also

the retreated

wastewater generated

closed

manage

so that

was

the system's

the wastewater

in the system.

gave more

slowed

down

"Closed

time for

production

looping, the system had

wastewater and

by production.

looping

to

was called,

When there was closed

process both

1989,

tried

be recirculated and retreated

looping,"

to

Plating

the incoming

From 1985

accomplished

to February

by

attaching

flexible hoses

Plating

to the system.

replaced

the flexible

create permanent closed looping.

In February

1989, Cambridge

hoses

hard piping

with

to

Cambridge Plating also shut

-9-

down

its zinc

looping, the

plating operation

system could

because, even

not remove the

with closed

contaminants from

that

operation.

capacity,

Because

of its

slowdown

in

production

Cambridge Plating's business began to deteriorate.

Net sales declined from a

high of approximately $6.2 million

in 1985 to approximately $4.8 million in 1989.

In

February 1989

Moleux,

another

Moleux

reviewed

expert

photocopy

wastewater

proposal

to look for the

treatment

and

not appear on

copies

Peter

systems.

of

the

the photocopy.

static mixer in the

physically examined the system and

his expertise,

hired

The portion of the drawings that

static mixer did

system where the static

Plating

By chance, Moleux had been given a bad

of the drawings.

depicted the

He decided

in

Napco's

engineering drawings.

Cambridge

He

inspected the area of the

mixer should have been.

he noticed

system.

that the piping

Because of

looked different

than it should have

if the static mixer had

He

that

later confirmed

installed.

He told

the

static

Cambridge Plating

been installed.

mixer

had

that the

not

been

mixer was

missing.

Shortly

Plating sent a

thereafter, on

letter to Napco

March 17,

enclosing a draft

"concerning difficulties" Cambridge

with Napco.

mixer

and

1989, Cambridge

Plating had

complaint

experienced

The draft complaint mentioned the missing static

the letter

requested

-10-

an "amicable

resolution."

Napco ignored the letter, never agreeing to come to a meeting

to

seek

an amicable

resolution

nor

agreeing

to fix

the

Cambridge Plating

did

problem.

Despite Moleux's discovery,

not order the static

mixer until December 1989.

at the plant in January 1990 but

1990.

one day.

Installation required the

Once

was not installed until May

plant to be

the static mixer was installed,

performance improved dramatically,

It arrived

shut down for

the system's

and Cambridge Plating was

able

to discontinue, for the most part, closed looping.

The

static mixer cost $620.

Cambridge

Plating sued

Napco

on

June

22,

1990

charging breach of contract (including willful repudiation of

warranty),

intentional

misrepresentation

and

misrepresentation,

violation

subsequently moved for summary

granted the

were

trial,

see
___

This

Chapter

judgment.

motion, holding that

time-barred.

of

court

holding that a genuine

991 F.2d

93A.

Napco

The district court

Cambridge Plating's claims

reversed

and remanded

Cambridge Plating Co., Inc.

______________________________

(Cambridge Plating I),

______________________

negligent

21,

v.

22 (1st

Napco, Inc.
____________

Cir.

issue of material fact existed

whether Cambridge Plating

could benefit

for

from the

1993),

as to

discovery

rule.

On

remand,

September 1994.

the

case

was

tried

to

jury

in

The district court submitted Fed. R. Civ. P.

-11-

49(b) special interrogatories to

the jury on the

limitations question,

common law counts,

the three

statute of

and the

Chapter

93A

interrogatories

count.

The

in Cambridge

jury

answered

Plating's

all

favor,

of

returned

the

general verdict on each of the common law counts, and awarded

Cambridge Plating $12,183,120.

The district court treated as

advisory the jury's answers to the Rule 49(b) interrogatories

on

the

Chapter 93A

count, and,

on

February 7,

1995, the

district court issued findings of fact and conclusions of law

on the Chapter 93A count.

See Cambridge Plating Co., Inc. v.

___ ___________________________

Napco, Inc. (Cambridge Plating II),

____________________________________

Mass. 1995).

that

the

In that opinion, the

Chapter

93A

count

was

876

F. Supp.

326 (D.

district court concluded

timely,

that

Napco had

violated Chapter 93A, and that Cambridge Plating was entitled

to compensatory

damages in the

amount of $3,363,120.2

The

district court

93A

also concluded that the

violation of Chapter

was "willful or knowing" and ordered a punitive award of

double damages.

Napco filed post-judgment motions for judgment as a

matter

of law, a new trial, remittitur, and amended findings

on the

Chapter 93A

that

the

claim.

After Cambridge

post-judgment motions

sufficient

failed

specificity the grounds

to

Plating argued

set forth

with

for relief, the district

____________________

2.

The

district

court

also

awarded

attorneys'

$345,000 pursuant to Mass. Gen. L. ch. 93A,

-12-

11.

fees

of

court

struck

remittitur.

the

amount

option of

all

of the

motions,

except

the motion

for

The district court then granted a remittitur in

of $7,839,000

accepting

the

reduced damage award on

and

gave

remittitur,

Cambridge Plating

thereby

accepting

the common law counts in

of $4,344,120, or submitting

to a new trial.

the

the amount

See Cambridge
___ _________

Plating Co., Inc. v. Napco, Inc. (Cambridge Plating III), 890

_________________
___________________________________

F.

Supp. 55, 59 (D. Mass. 1995).

Cambridge Plating accepted

the remittitur.

Napco

now

evidence, both

it seeks

argues

damages even

the

as to liability and

a new trial

that

challenges

the

more.

sufficiency

damages.

due to instructional

district

court should

We turn

first to

of

the

Alternatively,

error.

have

It also

limited

the

the question

of our

to strike

Napco's

scope of review.

II.

The

Scope Of Review

district court's

decision

post-judgment motions affects the scope of our review.

Napco

challenges the sufficiency of the evidence to show willful or

intentional misconduct, seeking a judgment as a matter of law

or, in

the alternative,

new trial

on the

"intentional"

counts: intentional misrepresentation, willful repudiation of

warranty

and Chapter

review sufficiency

93A.

This

court will

not, however,

challenges absent a proper

motion in the

-13-

district

trial.

court for

judgment

See Johnson v. New

as a

matter of

York, New Haven

law or

a new

& Hartford R.R.

___ _______

_____________________________________

Co., 344 U.S. 48, 54 (1952) (motion for j.n.o.v.); Pinkham v.

___
_______

Burgess,
_______

933 F.2d 1066, 1070 (1st Cir. 1991) (motion for new

trial);

cf. Hammond v. T.J. Litle & Co., Inc., Nos. 95-1690,

___ _______
______________________

95-1913, slip op.

beyond

peradventure

sufficiency

have

submitted

that

claim to

judgment as a

to the

verdict, Fed. R.

pursuant to

jury and

Cir. April

in

of the evidence

presented the

moving for

trial

at 10 (1st

order

30, 1996) ("It

to

on appeal,

challenge

a party

the district court,

matter of law

renewing

Civ. P. 50(a), (b), or by

Fed. R. Civ.

P. 59.").

the

must first

either by

before the case

that motion

is

is

after the

moving for a new

If the district

court acted properly in striking the motions, the motions are

nullities, and,

from

under Johnson
_______

challenging

the

and Pinkham, Napco

_______

sufficiency

of

the

is barred

evidence.

believe, however, that the district court understandably

We

but

improperly struck the post-judgment motions.

A.
__

Procedural Background
_____________________

The district court entered

1995.

judgment on February 8,

The next day, Napco moved for an extension of time for

filing its memoranda in support of its post-judgment motions,

stating:

Plaintiff has prevailed on

four separate

and distinct legal claims.

Therefore, in

order

to

Napco must

obtain

postjudgment

challenge all four

-14-

relief,
bases for

the judgment.
argue

several

factual
the

This will require Napco to

substantial

issues

legal

including, for

recoverability

of lost

misrepresentation,

sufficiency

of

intentional

limitations

the

evidence

misrepresentation

repudiation of warranty,

example,

profits for

negligent

the

and

of

and

of

the statute

of

(three-year and

four-year),

as well as issues relating to Chapter 93A

and damages.

On February 14, the district court granted the motion, giving

Napco

until

memoranda.

March

1,

On February

1995

to

file

the

post-judgment

17, six days before the

10-day time

limit for filing post-judgment motions expired, Napco filed a

motion pursuant

to Fed. R. Civ. P. 50(b) and 59.

fashion, the motion outlined its

grounds would

be set forth in

filed later in accord

subject matter and said the

the March 1

memorandum to be

with the Court's extension.3

____________________

3.

The text of the motion was:

Pursuant to Fed. R. Civ. P. 50(b) and 59,

the defendant, Napco, Inc., hereby:

(1) renews the motion for entry

of judgment as
that
the

it made

a matter of law
at the

plaintiff's

again at

In summary

close of

evidence

the close of

and

all the

Also on

evidence;
(2)

moves for

a new

the

common law

trial on

counts decided

by the jury; and

(3) moves for a remittitur or a
new

trial

common

law

on

damages on

counts decided

the
by

the jury.

The grounds

for this motion

will be set

forth in Napco's Memorandum in Support of

-15-

February

P.

17, Napco filed a similar motion under Fed. R. Civ.

52(b) and 59 seeking either to amend the district court's

findings of

trial on

fact and

conclusions of

the Chapter 93A claim.

the grounds

law or

to have

a new

This motion also said that

for the motion would be set forth in the March 1

memorandum.

On

period

February 24,

expired,

post-judgment

Cambridge Plating

motions, arguing

"particularity"

accordingly,

1995, one

under

Fed. R.

no "motion"

moved to

that they

Civ.

had been

ten-day period prescribed by

day after

P.

the ten-day

strike Napco's

lacked sufficient

7(b)(1) and

timely filed

that,

within the

Rules 50(b), 52(b) and 59.

In

granting Cambridge Plating's motion, except on the remittitur

issue, the district court

refused to take into consideration

Napco's

extension motion

or

any of

the other

surrounding

circumstances.

B.
__

Analysis
________

Rule

7(b)(1)

requires

that motions

"state

with

particularity the grounds therefor." Fed. R. Civ. P. 7(b)(1).

Napco's post-judgment motions are subject to the requirements

of Rule 7(b)(1).

The particularity requirement, however, is

____________________

Motion for Judgment

as a Matter of

Law,

for a

New Trial or for Remittitur, which

Napco

will

accordance

file
with

on
the

March

1, 1995

in

Court's ruling

on

Defendant's Motion for Additional Time to

File Memorandum.

-16-

to

be

read

flexibly

in

circumstances of the case."

"recognition

opposing

805, 808 (Fed.

because Rule 7 is designed

grounds and prayer

party,

peculiar

that

Cir. 1990).

"to afford notice of the

of the motion to

providing

the

Registration Control Sys., Inc.

_______________________________

v. Compusystems, Inc., 922 F.2d

___________________

This is

of

both the court

party

with

and the

meaningful

opportunity to respond and

the court with enough information

to process the motion correctly."

is

challenged

for lack

"whether any party is

of

Id. at 807.
___

particularity

prejudiced by a lack

When a motion

the question

is

of particularity

or 'whether the court can comprehend the basis for the motion

and

deal with

Wright &

it

fairly.'"

Id. at
___

807-08 (quoting

A. Miller, Federal Practice & Procedure

_____________________________

5 C.

1192, at

42 (1990)).

While Napco's motion

we

believe that it was

conjunction

Although

with the

with the Rule 50(b),

practice,

sufficiently particular when read in

extension

the extension

was at best sloppy

motion and

motion was not

prior

filings.

filed simultaneously

59 and 52(b) motions, it was filed only

a week before,

within the ten-day period, and

closely related to

the Rule

50(b) motion.

was obviously

Compare Lac Du
_______ _______

Flambeau Band of Lake Superior Chippewa Indians v. Wisconsin,

_______________________________________________
_________

957

with

F.2d 515,

517 (7th

Cir.) (supporting

insufficiently particular

U.S. 829 (1992).

motion),

memorandum filed

cert. denied,
_____ ______

506

The extension motion specified the bases of

-17-

the

judgment

sufficiency

that

of

misrepresentation

Napco

"must challenge,"

the

claim

evidence

and

the

on

including

the

willful

the

intentional

repudiation

of

warranty claim, as well as issues relating to Chapter 93A and

damages.

Napco thus

represented

Cambridge Plating the grounds

No

claim is made that

would have

to

both the

court

and

for its post-judgment motions.

there was any

made the representations in

intervening event that

the extension motion

unreliable.

Cambridge Plating

makes a passing

argument in its

brief that it was unable to respond to, or the district court

to process, Napco's motions.

If the Rule 50(b), 59 and 52(b)

motions

are viewed

in

isolation, Cambridge

point.

But the motions cannot

Plating has

be viewed in isolation.

addition to the

closely filed extension motion,

briefing on the

Chapter 93A issues

and

earlier

Napco

had

motion, of which

short,

the

detailed

the Rule 50(b) motion was

record

shows

that

Napco

In

significant

had just been

made quite

completed

Rule 50(a)

a "renewal."

was

taking

In

steps

specifically to make evidentiary challenges to the verdict on

all

Napco

of the

would

major issues

press

sufficiently known.

in

litigated at

its

trial.

post-judgment

The motions

The grounds

motions

under Rules 50(b),

were

59 and

-18-

52(b)

were

adequate,

although

barely,

under

the

circumstances.4

The

district court

premised

its decision

on the

belief that the law prevented it from looking beyond the four

corners of

the motion

to determine

whether the

motion had

stated

its grounds

understandable,

too narrow.

are

with

sufficient

While

such a view of Rule 7(b)(1) is, in our view,

"Overly technical"

disfavored.

particularity.

Wright

evaluations of particularity

& Miller,

supra,
_____

1192, at

Courts routinely take into consideration other closely

pleadings to

determine

whether

sufficient

notice

43.

filed

of

the

grounds for the motion are given and the opposing party has a

fair opportunity to respond.

See Chippewa Indians, 957

___ ________________

at

state

517

(motion failing

to

particular where supporting

the

884,

grounds is

F.2d

sufficiently

memorandum adequately

discusses

grounds); Brown v. United States Postal Serv., 860 F.2d

_____
___________________________

887 (9th

adequate

Cir.

under Rule

1988) (motion

7 even

for reconsideration

though a particular

was

ground was

____________________

4.

As

should be clear, the

with this sort of

litigation.
case

Nevertheless, the circumstances involved in this

are distinguishable

Martinez v. Trainor,
________
_______
the cases upon
those

motions

from

within

Riley v.
_____

Northwestern Bell
__________________

725, 726-27 (8th

556 F.2d 818,

which Cambridge

cases the

other closely
of the

clients at risk

practice and unnecessarily complicates the

Telephone Company, 1 F.3d

__________________

In

bar places its

moving

819-20 (7th Cir.

Plating principally

parties

the specified

filed only

time period.

related documents filed before

time period

making it

Cir. 1993), and

clear

to the

relies.

bare-bones

There

were no

the expiration
court and

opposing party what the moving party would be arguing.

-19-

1977),

the

omitted, where the parties had already briefed and argued the

issue

and

no prejudice

Mordowanec, 46
__________

for Rule

day

result);

F.R.D. 474, 477 (D.R.I.

60(b) motion were stated at

and were

argument,

discussed

motion

particularity

various

would

did

not

requirement).

challenges to

evidence.5

after

v.

oral argument previous

afoul

during

of

Accordingly, we

the sufficiency

also King
____ ____

1969) (where grounds

filing,

run

see
___

in-chambers

Rule

7(b)(1)

reach Napco's

(and weight)

of the

III.

Liability

A.
__

Statute Of Limitations
______________________

1.
__

Sufficiency of the evidence.

___________________________

Napco first argues that

the statute of limitations.

June 22, 1990.

A four-year

the Chapter 93A

and breach

Gen.

L. ch. 106,

Gen. L. ch. 260,

limitations

none of the claims survive

Cambridge Plating filed

suit on

statute of limitations

governs

of warranty claims.

See
___

Mass.

2-725 (contract for sale of goods); Mass.

5A (Chapter 93A).

governs

the

misrepresentation claims.

____________________

A three-year statute of

intentional

See
___

and

negligent

Mass. Gen. L. ch. 260,

2A.

5.

Cambridge Plating has cross-appealed the district court's

decision not to strike

the motion for remittitur.

In light

of our decision that the district court erred in striking the

motions,

we reject

Cambridge

Plating's

argument that

the

district

court should also have struck Napco's request for a

remittitur.

-20-

As

established

Cambridge

in

Cambridge Plating I,
____________________

Plating must rely

991

on the discovery

F.2d at

27,

rule to prove

its

claims

were

timely

"'prescribes as crucial the

or

any

earlier

discovered,

by

date

filed.

The

discovery

rule

date when a plaintiff discovers,

when

she

should

reasonably

have

that she has been harmed or may have been harmed

the defendant's

conduct.'"

Id. (quoting
___

Bowen
_____

v. Eli
___

Lilly & Co., Inc., 557 N.E.2d 739, 740-41 (Mass. 1990)).
_________________

discovery rule

here "turns on

when the company

The

should have

known that Napco might be responsible for the water treatment

system's failing performance."

at 29.

The question

Cambridge Plating "knew

before June

that the

to be

Cambridge Plating I, 991 F.2d

___________________

resolved at

or should have

trial was

whether

known of its

claims

22, 1987 [or June 22, 1986]."

evidence was insufficient

for a

Id.
___

Napco argues

jury to

conclude

that Cambridge Plating

should not have

before the pertinent cut-off dates.

The

warranty and

question of

known of its

claims

We disagree.

the timeliness

Chapter 93A claims under

of the

breach of

the four-year statute

is, we believe, largely answered by the admirable description

of

the evidence provided by

the district court

our previous opinion in Cambridge Plating I.

___________________

in light of

The evidence at

trial showed that Cambridge Plating was aware that the system

was complex and that

the performance warranty Napco provided

contained the implicit condition

-21-

that the system be operated

properly.

At

reasonably

least

at

first,

have believed that

Cambridge

its own

Plating

could

inexperience, rather

than Napco's defective equipment, was to blame.

Of

course,

better, Cambridge

other

point,

when

things were

no

Plating should have thought that something

than operator error was

Napco points out, there

for

at some

Cambridge Plating

causing the problem.

was evidence that such a

either

in early

And as

point came

1986, when

Marullo

complained

to Debisschop

about the

system, or

March 1986,

when Tosi "kept yelling and screaming" at Debisschop that the

problems were due to the equipment.

But

the

critical

question is

whether

Cambridge

Plating reasonably relied on Napco's responses to those early

1986

inquiries that

defect, was the

operator error,

cause of the

complained vociferously

rather than

trouble.

that the

The

equipment

fact that

equipment was at

Tosi

fault is

not dispositive if DeBisschop was reasonably able to convince

Tosi

he

was

wrong.

expertise in this area.

Napco

had

considerably

superior

The absence of the static mixer was

not something Cambridge Plating, with its level of expertise,

should

have

detected.

We

believe

that

under

such

circumstances, when Napco

gave Tosi its "assur[ances]"

that

the problem had to be with the Cambridge Plating's operators,

Cambridge Plating reasonably took Napco at its word.

-22-

The

misrepresentation claims, governed by a three-

year

sit

statute, were also

idle

during

suggestions

did

the

timely.

Cambridge

next twelve

not solve

the

months.

Plating did not

When

Napco's

problem, Cambridge

Plating

hired Patrick Hunt, in late 1986, to evaluate the system.

In

January 1987 Hunt gave Cambridge Plating his recommendations,

which suggested

mixer

were

operational changes but not

was either missing or

unqualified

Plating

to

might have

reasonably.

But

that the static

not working properly.

examine

the

difficulty

system,

arguing that

Hunt was an expert in

then

If Hunt

Cambridge

it was

acting

wastewater treatment

systems and competent to evaluate the system.

Was

Hunt's failure

mixer was missing

F.2d at 29-30.

reasonable?

to

discover

that the

static

See Cambridge Plating I, 991

___ ____________________

We think the jury was

entitled to think so.

First, the absence of the static mixer was not something that

could be easily detected from

system.

system

a physical observation of

the

Indeed, other experts after Hunt who looked over the

were

also fooled.

Second, Napco

had

supplied to

Cambridge Plating drawings representing that the static mixer

had been

installed.

According to Cambridge

drawings were "as built"

drawings.

Plating's

characterization

testimony

that

technically

"as

used, were

built"

of

the

Napco disputes Cambridge

drawings,

drawings,

never prepared.

-23-

Plating, these

as

Yet

pointing

the

term

to

is

regardless of

whether the drawings technically

could be called "as built,"

Napco admitted supplying the drawings to Cambridge Plating in

the tech manual "[t]o show what was built."

Perhaps,

accuracy

of

question

at this

otherwise.

the

the

given the

drawings

time.

problems with the

should

The

jury

have

been

system, the

called

was entitled

to

into

think

The system was extremely complex and the cause of

malfunction

could have

been

any

number of

problems,

including, as

Napco points

out, problems

factfinder could reasonably conclude

of

design.

The

on this record that the

probability the drawings were false was sufficiently low that

questioning

the accuracy

Cambridge Plating's

of the

(or Hunt's)

drawings would

diagnostic checklist.

evidence was sufficient to support

were timely.

Nor was such

be low

on

The

a finding that the claims

a finding against the

weight of

the evidence.

2.
__

Special interrogatory.
_____________________

Napco

be

granted

on

alternatively argues that a new trial should

the

misrepresentation

counts

because

the

special interrogatory submitted to the jury on this point was

defectively

worded.

Over

Napco's

objection,

the

court

submitted interrogatory 1(b), which asked:

Cambridge Plating reasonably have

of defendant

Napco's failure

"Should plaintiff

known before June 22, 1987

____

to install the

static mixer?"

(Emphasis in original.)

-24-

Review

of

this

interrogatory

is

for

abuse

of

discretion.

F.2d

See Frank Briscoe Co., Inc. v. Clark County, 857

___ _______________________
____________

606, 614 (9th Cir.

(1989).

Abuse

of

1988), cert. denied,

_____ ______

discretion

may

be

490 U.S. 1048

found

if

the

interrogatories are worded in such a way that they are likely

to

mislead or

issues.

Id.
___

confuse

the jury

or inaccurately

Although Napco's argument has some

state the

merit, the

district court did not abuse its discretion.

Cambridge Plating I
____________________

test

for the

"should

water

discovery rule

have known that

treatment system's

Plating I, 991 F.2d at 29.

_________

stated

that the

was whether

Napco might be

failing

appropriate

Cambridge Plating

responsible for the

performance."

Cambridge
_________

Napco points out that the opinion

drew no specific distinction among the claims and argues that

it was improper to

to

discover

relies on

direct the jury's focus onto

the static

the

mixer

passage from

statute of limitations will

specifically.6

the opinion

not

culprit."

necessarily

Id. at 29-30.
___

warranty,

trigger

date

to

the

also

stating that

"the

plaintiff

defendant as a suspect,

identify

the

defendant

as

Under Napco's reading, all claims -

negligence and

under

Napco

begin to run once the

has enough information to target the

though

the failure

fraud

-- would

discovery rule:

have

when

the same

Cambridge

____________________

6.

Napco

plaintiff

requested

an

interrogatory

"knew or should

Napco before June 22, 1987."

have known of

that

asked

whether

its claims against

-25-

Plating should

have thought

Napco might be

responsible for

the problems with the system.

Cambridge Plating I did not

___________________

does

not

address

the

question

information is needed to "target

for

a breach

of

contract as

say that.

specifically

The opinion

of

what

the defendant as a suspect"

compared to

that information

needed to "target the defendant as a suspect" for fraud.

The

information needed to target the

is,

in

fact,

Plating

different

for

each claim.

may have had reason

that

and Cambridge

Although

to know that

breach of its warranty when the

snuff

defendant as a suspect

Cambridge

Napco might be in

system did not perform up to

Plating had

ruled out

operator error,

does not mean that Cambridge Plating had reason to know

that Napco

had deceived it.

________

Cf. Childers Oil Co., Inc. v.

___ _______________________

Exxon Corp., 960 F.2d 1265, 1275 (4th Cir. 1992) (Luttig, J.,
___________

dissenting) ("[A]lthough appellants knew or should have known

when

construction

of

the

station

began

that

Exxon

had

breached its contract, appellants did not have reason to know

of the possibility

of deception until

they learned in

1988

that

Exxon

had

always

intended

to

build

competing

station.").

Under

Massachusetts

deceit accrues when

of

994,

997

cause

the plaintiff knew or

the misrepresentation.

N.E.2d

law, a

(Mass.

See
___

1976)

-26-

of

should have known

Friedman v.
________

(cause

action for

Jablonski, 358
_________

of

action

for

misrepresentation in the sale of real estate accrues when the

plaintiff

knew

or

reasonably

should

have

known

of

the

misrepresentation); see also Tagliente v. Himmer, 949 F.2d 1,

___ ____ _________
______

5 (1st

Cir. 1991) ("The burden is

that in

have

the exercise of

known of

reasonable diligence she

the misrepresentation

limitations.").7

the

In this

action for

Plating

Thus, under

within the

could not

statute of

case, the misrepresentation was in

failure to disclose that

installed.

on the plaintiff to prove

the static mixer

Massachusetts

misrepresentation did not

law,

had not been

the cause

of

accrue until Cambridge

should have known that the static mixer had not been

installed.

The special interrogatory was not erroneous.8

B.
__

Intentional Misrepresentation
_____________________________

Cambridge Plating

Napco

had

Cambridge

engaged

Plating

in

had the

an

alleged

falsely

promising that

intentional

in

fraudulently induced it to

burden of

its

proving that

misrepresentation.

complaint

that

Napco

purchase the wastewater system by

the

system would

contain a

static

____________________

7.

Indeed, in accordance with that case law, Napco requested

an instruction

stating that the pertinent

"Cambridge Plating
giving rise

knew or

issue was whether

should have known

to its misrepresentation claims

of the

facts

more than three

years before it filed suit on June 22, 1990."

8.

Cambridge Plating I was

____________________

whether

the

plaintiff had

concerned with the

acted

reasonably

question of
diligently in

discovering the claim, rather than whether some theoretically

reasonable

investigation

would have

discovered

the claim.

Such a focus of inquiry does not require that distinctions be

drawn

among

the nature

of

the

claims

the plaintiff

has

asserted.

-27-

mixer.

At trial, however, the district court did not believe

that

Cambridge Plating had

show

such fraudulent

theory

believed

to

the

that

presented sufficient evidence to

inducement,

jury.

Cambridge

The

and did

district

Plating

had

not submit

court,

that

nevertheless,

presented sufficient

evidence to show

charged

the

found, as

had

fraudulent nondisclosure9 and, accordingly,

jury on

that

theory.

framed in the special

The

jury subsequently

interrogatories, that Napco

"intentionally conceal[ed]" its

failure to

install the

static mixer "while aware of the System's failure to meet the

applicable

discharge

limits"

and

was

thus

liable

for

intentional misrepresentation.

Napco

First, it argues

raises

two

challenges

that the evidence was

fraudulent nondisclosure.

this

verdict.

insufficient to show

Second, it argues that, regardless

of

the evidence,

the intentional

was

tainted by a

defective jury

that either judgment

to

misrepresentation verdict

instruction.

be entered in its favor

It requests

or a new trial

granted.

1.
__

Sufficiency of the evidence.

___________________________

Napco argues

to support the

that there was

jury's finding

insufficient evidence

of fraudulent

nondisclosure.

____________________

9.

The parties have used the terms

and "intentional nondisclosure."

"wrongful nondisclosure"
We use the term fraudulent

nondisclosure simply to distinguish the theory from negligent

nondisclosure.

-28-

To set aside a jury verdict and enter a

contrary verdict for

Napco, we

must

examine

in

favorable

to

Cambridge

inferences in its favor.

Transp. Co., 24
____________

aside

verdict and

weight

favorable

miscarriage

to

of

evidence

Plating,

show that the

Cambridge

of justice.

drawing

1483 (1st

remand for

the

the

light

all

most

possible

See Havinga v. Crowley Towing and

___ _______
___________________

F.3d 1480,

evidence, Napco must

great

the

a new

See
___

To set

trial based

on the

verdict was against

evidence, viewed

Plating,

Cir. 1994).

or

in

would

id. at 1482-83.
___

the

the

light most

work

clear

Napco cannot

meet either standard.

Napco's

single

sufficiency challenge

proposition:

that there

largely rests

was insufficient

on a

evidence

from

which a jury could conclude that Napco knew or believed

that

the static mixer was responsible

the system.10

In

Napco's words,

for the problems with

"every
_____

bearing on the issue confirmed that Napco

static mixer was necessary,

might impair
______

But

include

the

static

mixer.

of

(Emphasis in

Napco designed

It

knew

proof

never believed the

_____

and in fact, believed the

system performance."

there was such evidence:

piece

that

mixer

original.)

the system to

the mixer

was

originally included in the system to create the proper mixing

of the polymer solution,

without which flocculation would be

____________________

10.

Napco

also argues

mixer was not a

that the

materiality of

the static

fact susceptible of actual knowledge.

That

argument is without merit.

-29-

hindered.

This

evidence, when

combined with

the evidence

that Napco knew the mixer had not been installed (so that the

omission

was not mere oversight) and that it knew the system

was

not

working, adequately

supports

the conclusion

that

Napco intentionally failed to tell Cambridge Plating that the

static mixer was missing, knowing it was responsible

for the

system's problems.

Napco protests

that it

simply made a

"good faith

(and, at worst, negligent) professional judgment that a mixer

was

not material to the system."

After all, it argues, what

did it have to gain from omitting a $620 part from the system

or from hiding

Napco

a problem that could

relies

on

testimony

subcontractor, Aliota,

Napco's

manager of pollution abatement.

Aliota's testimony

do not

be inexpensively cured.

from

Triplett,

expert, and

Eason,

Napco's

Napco's

But Triplett's testimony and

much help

Napco.

Although

both

Triplett

and Aliota testified

pipe bends,

the

that the use

of "elbows," or

could create the necessary turbulence in lieu of

static mixer, Napco did not show that such "elbows" were

specifically

Aliota, who

designed into the

was not a

what the people

static

mixer,

recollection"

More

fact witness, did

at Napco

were thinking in

and Triplett,

of

system.

at

best,

"some discussion that

-30-

to the point,

not testify as

to

leaving out

the

had only

"vague

when the pumps came

on they hit the

two -- they hit a

90 and a T, and

that was

enough turbulence to mix with the polymer."

And, unfortunately

found Eason's testimony

credible.

to omit

in a

for Napco, the

number of respects

not to

be

His account of the events surrounding the decision

the static mixer

other Napco witnesses.

conflicted somewhat

Eason's

with that

of

Triplett testified that the mixer was

never installed, while Eason said it was

out.

jury could have

testimony that

installed but taken

the static mixer

was omitted

because it was "minor" was damaged by his admission on cross-

examination that he

could not find even one

depicted

on the drawings that

point to

other evidence presented to the

was "minor."

contemporaneous memos showing that

that

the

mixer was

irrelevant)

testimony.

In short,

largely

credibility

aspects

of

Eason's

conclude that

"vague

Napco does not

jury (for example,

Napco had made a judgment

that

corroborates Eason's

the "professional judgment" theory was

question.

testimony,

Eason was

recollection"

circumstantial

other component

evidence

In

light

the jury

not believable and

was

not

enough

(particularly

the

of

was

the shaky

entitled

to

that Triplett's

to

rebut

the

drawings)

that

Napco knew the absence of the static mixer was the problem.

Napco properly

makes

the point

that it

"strains

credulity" to suppose that Napco would expose itself

drastic

liability

over a

$620 part

that

took one

to such

day to

-31-

install.

could

Why Napco would do so is something of

raise questions

about the

reliability of

a puzzle and

the jury's

finding that Napco intentionally concealed the absence of the

mixer.

But Napco's behavior is not wholly inexplicable.

might

the

It

be explained in terms of the theory of "agency costs":

aberrant

conduct

occurred when

Napco's

interests

in

avoiding exposure to drastic liability diverged from those of

its

employees.

Cf.
___

AMPAT/Midwest, Inc.
___________________

v. Illinois Tool
______________

Works, Inc., 896 F.2d 1035, 1043 (7th Cir. 1990) (Posner, J.)
___________

(seemingly irrational

may be

the

explained by

corporation

designer Eason

have

behavior on the part

the "divergence of

and

and the

its

employees).

of a corporation

objectives" between

For

example,

project manager DeBisschop

the

may each

wished to avoid individual blame for the defects in the

system.

Finally, Napco's current focus on plaintiff's proof

of scienter represents a shift

from its defense at

trial.11

____________________

11.

At trial

worked

fine,

warranty.

Napco's principal defense was

that the system

i.e.
____

any

after the

never

was

contested.

away

these reports

were

often

different,

jobs but not others.

The importance

that the

of these
explained

the materials

using different

chemicals, and

the system

Cambridge Plating

by noting that

of

1985 (shortly

installed) indicating that

the discharge limits.

was hotly

breach

on discharge reports

from March 1985 to September

system was

was meeting

types of

there

Napco placed great reliance

sent to the MWRA

reports

that

it plated

concentrations

system could

and

handle some

Cambridge Plating also noted

that its

closed looping masked the inadequacies of the system, but did

not

solve them.

The finding that the system did not perform

as warranted is not challenged on appeal.

-32-

Its

defense

focussed

the

to

Moreover, Napco's

warranty claim,

was

not

count

defense to

which rested in large part

never had any

meeting

considerable

idea that Cambridge

the

tension

misrepresentation

problems,

misrepresentation

principally

on whether the static mixer was in fact material to

problem.

that it

the

effluent

with

claims

Napco made

any

that,

a judgment

the breach

on the assertion

Plating's system

requirements,

defense

once

it

of

made

heard

that the static

was

in

on

the

about

the

mixer was

unimportant.

Not

surprisingly,

then,

specific testimony that Napco seriously

there

was

little

considered Cambridge

Plating's complaints and then made a judgment that the static

mixer was the problem.

position at trial

Napco principally chose to

that it did not know there

take the

was a problem,

rather than that it thought there was a problem but the cause

was

something

showing that

problems with

else.

Since

Eason and

there

was competent

DeBisschop were contacted

____

evidence

about the

the system on numerous occasions, and that the

system worked after the static mixer was installed, Napco was
_____

vulnerable on the intentional misrepresentation count.

Cambridge

Plating

misrepresentation only by

needed

to

a preponderance

show

of the

intentional

evidence.

See Compagnie De Reassurance D'Ile De France

___ _________________________________________

Reinsurance Corp., 57 F.3d 56, 72

__________________

116

S. Ct.

564

(1995).

Under

v. New England
___________

(1st Cir.), cert. denied,

_____ ______

this standard,

there

was

and

the

-33-

sufficient

evidence of

fraudulent

nondisclosure,

district court was entitled to submit the theory to the jury.

The verdict was also

not against the weight of

the evidence

and a new trial is not warranted.

2.
__

Instructional error.
___________________

In

instructed

its

the

misrepresentation

that

initial

charge,

jury

was

that

in its

"[t]he question to

the

Napco's

"silence."12

be decided

here is

[the] defendant

willfully concealed from

absence of

static mixer

the

district

when

court

intentional

It instructed

whether .

. .

the plaintiff

the

it knew . . .

that

the

discharge limits were not being met and that the inclusion of

the static mixer would,

system

to

perform as

at least to some extent,

it

initial charge, plaintiff's

was

intended."

enable the

Following

this

counsel requested an instruction

specifying

that materiality

objective standard.

was to

be measured

against an

In response,the court gave the following

supplemental instruction:

____________________

12.

The charge was:

The fraud
that

is

in the

characterizes

silence, you
the

conduct of

see,
the

defendant; that is, their failure to tell

the

plaintiff

static

the

absence

while

the

discharge limits were not being met.

You

see, that's

And

when the

when

aware

of this
that

that's

mixer

of

duty arises.

the

intentional,

is

"actionable,"

that

concealment,
what
is,

lawsuit.

-34-

if

we

call

basis

for a

[I]n discussing the state of

defendant with regard
of the static

mind of the

to the

importance

mixer to the system .

the standard is objective.

. .

It's not what

the defendant did or did not subjectively

think

about

reasonable

it.

It's

manufacturer or

what

would

seller under

the same circumstances have thought about

it.

Napco argues

that this

intentional

and

"manifestly

instruction "conflated the

negligent

erroneous."13

misrepresentation"

In

Napco's view,

torts of

and

it cannot

was

be

held liable

unless it

actually knew

the

static mixer

was

material.

The

standard under

depends upon whether Napco

Plating protests

which we review

this argument

properly preserved it.

that Napco has not

Cambridge

preserved this argument

because it failed to lodge a proper objection before the jury

retired to

consider its verdict.

objections

must "stat[e] distinctly

and the grounds of

objection

based on

Under

the objection."

one ground

review of a different ground.

Fed. R. Civ. P. 51,

the matter

objected to

Fed. R. Civ. P.

does not

51.

An

preserve appellate

See Wells Real Estate, Inc. v.

___ _______________________

Greater Lowell Bd. of Realtors, 850 F.2d 803, 809 (1st Cir.),
______________________________

cert. denied, 488 U.S. 955 (1988).

_____ ______

____________________

13.

This

point is

important because

compensable

for

negligent

Massachusetts

law,

see
___

represent

the

bulk

lost profits

are not

misrepresentation

under

Section

IV-D,

the

damages

of

and

lost

in

profits

this

case.

Additionally, Napco claims that this instruction tainted both

the

willful

breach of

warranty

verdict

and the

district

court's Chapter 93A decision.

-35-

Napco states that

the instruction

was given

over

its "opposition."

identified three

But Napco's objection to the

charge only

problems with the instruction,

and not the

issue it now raises.

did

not fairly

Napco complained that (1) the complaint

disclose the

theory was not supported

no obligation on

nondisclosure theory,

by the evidence, and (3)

the part of the seller

did not object that the instruction was

(2) the

there was

to disclose.

Napco

incorrect because it

failed to make clear that actual knowledge of materiality was

required

for

liability,

instruction

conflated

misrepresentation.

distinctly"

nor

the

Napco

negligent

Thus,

argument

did

it

object

and

Napco

failed

makes

now,

that

the

intentional

to

i.e.,
____

"state[]

that

instruction imposed an incorrect scienter requirement.

the

Napco urges

that colloquies occurring

the charge satisfy Rule 51.

colloquies

may

colloquies Napco

be

used

days before

Without considering whether such

to

determine

directs us to

compliance,

do not contain

the

any specific

statement that Napco needed to have "actual knowledge" of the

static mixer's materiality to

that this lack

fraudulent

be liable.

of specificity should be

nondisclosure theory

Napco's contention

excused because the

was "novel"

and came

as a

"surprise" to counsel is contrary to what the record shows.14

____________________

14.

Napco

characterizes

the

nondisclosure

theory

as

an

"eleventh-hour reformulation" which was "improvised literally

at the final hour -- at the end of the ninth day of trial and

-36-

In

any

court charged the

event, Napco

concedes

that

jury correctly on the scienter

_________

the district

element of

intentional misrepresentation during its initial charge.

was only

that

after plaintiff objected to

It

the charge, suggesting

the court make clear that materiality be viewed from an

objective point of view, that the court gave the supplemental

instruction.

The supplemental instruction thus created a new

___

issue,

independent

of

the

supposed

fraudulent nondisclosure theory.

surprise

Despite this,

over

the

Napco's only

objections to the supplemental charge related to the charging

of the fraudulent nondisclosure

theory generally, not to the

new

created

ambiguity the

instruction

over

the

scienter

____________________

on

the eve

of closing

"foreshadowing."
court

had

the

fifth

But as early as

asked

nondisclosure.

arguments" to

counsel

to

which counsel

the third day of trial the

research

The nondisclosure theory

day

misrepresentation

of

trial

count,

where,
the

the

in

court

static mixer,

things:

first, to

plaintiff that it

it

became

install

discussing

stated

defendant's

it; and

wasn't in."

which was a Friday, the district

question

of

was foreshadowed on

plaintiff's theory was that "upon learning of

the

had no

that

the
the

the absence of
duty to

secondly,

do

two

to tell

the

On the eighth day

of trial,

court asked counsel whether

"the

lack of disclosure or

[could] serve as

the absence of

the static mixer

a basis of a misrepresentation

and fraud,"

and asked them to think about the issue over the weekend.
the

ninth day of trial, the

fraudulent

nondisclosure

liability.
objections

theory, Napco
gave

to

court announced its view that a

theory

might

be

After having a chance overnight

it

would

lodge

against

the

lodged basically the same

the supplemental

On

instruction.

basis

for

to consider the
district

court's

objections it later
In

light

of this

record, we do not agree that Napco's failure to object should

be excused because the

fraudulent nondisclosure theory was a

surprise.

-37-

requirement.

On

the question

of scienter,

Napco remained

silent.15

Absent

error.

On

a proper

this record, the

for Napco to overcome.

civil litigation."

710,

712 n.1

Gay
___

(1st Cir.

(1982); see also Clausen

___ ____ _______

(1st

Cir. 1994)

event,

. .

objection,

. is

the

too high

v. P.K. Lindsay Co., Inc.,

______________________

1981), cert.
_____

666 F.2d

denied, 456
______

v. Sea-3, Inc., 21 F.3d

___________

near its

fairness,

plain

"Plain error [ ] is a rare species in

U.S. 975

1181, 1196

error standard, high

zenith in

(internal quotations omitted)).

affects

for

plain error hurdle is

("[T]he plain

error results in a clear

review is

the Rule

in any

51 milieu."

"[I]t applies only where the

miscarriage of justice or seriously

integrity or

public

reputation

of

judicial proceedings."

quotations omitted).

miscarriage of

corrected.

conclude

problem

Clausen,
_______

21 F.3d at

1196 (internal

Napco cannot show on this record that a

justice

will

result if

the

error

is

not

There was sufficient evidence adduced at trial to

that

Napco

knew that

with the system.

the

Nor can

seriously affects the integrity

static

mixer

was the

Napco show that the error

or impairs public confidence

____________________

15.

Jerlyn Yacht Sales, Inc.

___________________________

Brokerage, 950 F.2d

_________

60 (1st

Napco

reliance,

places great

Yacht Sales there was at

____________
include

an

instruction

appeal.

Id. at 64.

v.

Wayne R. Roman Yacht

_______________________

Cir. 1991), a

case upon

is inapplicable.

least some request

____
on

the specific

In

which
Jerlyn
______

that the court

issue

raised

There was no such request here.

on

Despite

___
Napco's

claims to

the contrary,

this

is a

garden variety

failure to object situation.

-38-

in

the

proceedings.

supplemental

instruction

Under

did

not

the

reach

circumstances,

the "pinnacle

fault" envisioned by the plain error standard.

C.
__

Willful Breach Of Warranty

__________________________

See id.16
___ ___

the

of

____________________

16.

Because

Napco cannot satisfy the discretionary elements

of the plain error

standard, we need not decide

instruction was

"plainly" incorrect.

Olano, 507 U.S.

_____

725, 734 (1993)

clear or,
under

Napco argues
of

law"

is

Massachusetts law,
knew that his
____

does

"[a]bsent

the tort

there must be an

court

a showing
false, and

with

be "clear
omitted)).

clear that knowledge

to

Napco,

that the

under

defendant

intended to
________

induce

misrepresentation simply

in original.)

Napco argues that

"intent to deceive" to be liable for fraud.

fraud law does

not require an

"intent to

Snyder v. Sperry & Hutchinson Co., 333 N.E.2d 421,

______
_______________________

428 (Mass. 1975).

statement

marks

According

of intentional

(Emphases

But Massachusetts

sense that

quotation

required.

statement was

not lie."

deceive."

(internal

the error must

that Massachusetts law is

materiality

reliance,

Cf. United States v.

___ ______________

("Plain is synonymous

equivalently, obvious";

current

whether the

Moreover, "knowledge

Napco urges -is false -- is

of falsity" in

that defendant actually

also probably not

the

know the

required.

This

has said that "[n]othing is clearer than the fact that

under Massachusetts
defendant] knew

law, plaintiff need not

his statement

to be false."

prove that [the

Nickerson

v.

_________
Matco Tools Corp., 813 F.2d 529, 530 (1st Cir. 1987) (citing
__________________
Powell
______

v.

Rasmussen,
_________

(holding that

243

N.E.2d

167,

168

knowledge or reckless disregard

not required for an action of intentional

it is enough if

(Mass.

1969)

of falsity is

misrepresentation;

representation was false and susceptible

actual

knowledge)); see
___

Corp.,
_____

642 N.E.2d 587, 593 n.9 (Mass. App. Ct. 1994) (same);

Zimmerman
_________
(same).

also
____

v. Kent, 575 N.E.2d

____

VMark Software, Inc. v.

_____________________

of

70, 74 (Mass.

EMC
___

App. Ct. 1991)

The case upon which Napco principally relies, Danca

_____

v. Taunton Savings Bank, 429 N.E.2d 1129, 1133 (Mass. 1982),

_____________________
does list "knowledge
does not

of falsity"

help Napco.

as an element.

But

Either there is lack of clarity in the

Massachusetts case law, see In re Friedlander, 170 B.R.

___ _________________
476-78

(Bankr. D.

Mass.

1994) (noting

"knowledge of falsity" does

Roadmaster Indus., Inc.
_______________________
Supp.

1162, 1176

under Danca
_____

(D.

does not

this

the confusion),

not mean what Napco urges.

v. Columbia Mfg. Co., Inc., 893

________________________
Mass. 1995)

("knowledge of

require that defendant

its statement was false").

-39-

472,
or
See
___
F.

falsity"

"actually knew

Napco's

warranty

consequential damages.

provision

bars

enforceable.

Cambridge

See
___

liability

for

By its terms, this damages limitation

consequential damages and,

be

excludes

Plating

from

recovering

under usual circumstances,

Mass. Gen.

Deerskin Trading Post, Inc.

_____________________________

v.

L.

ch. 106,

would

2-719(3);

Spencer Press, Inc.,

____________________

495

N.E.2d 303,

however,

306 (Mass.

that

enforceable

willfully

the

if

1986).

damages

Napco

dilatory in

Massachusetts

limitation

either

provision

willfully

performing its

law provides,

is

not

repudiated or

was

warranty obligations.

Cf. Canal Elec. Co. v. Westinghouse Elec. Corp.,

___ ________________
________________________

182,

186

(Mass.

1990).

willfully

repudiated

warranty

obligations.

supported

by the

The

or

was

Napco

evidence

tainted by the district

jury

concluded

dilatory

in

claims this

and, in

548 N.E.2d

that

Napco

performing

its

finding was

not

any event,

was fatally

court's "state of mind" supplemental

instruction.

These

Napco

arguments

are

worth

only

brief

comment.

concedes that evidence it knew the static mixer was to

blame "might

well amount

Cambridge Plating

the willful

to 'willful repudiation.'"

adduced sufficient evidence of

breach of

warranty

Since

this fact,

verdict stands.17

As

for

____________________

17.

Other

example,
mixer was

evidence is

also relevant

once Cambridge Plating

"meeting" to

asking for

"explore the

count.

discovered that

missing, its attorney wrote

Herbert Fishman,

to this

the static

to Napco's president,

"an amicable resolution"

prospects of such

-40-

For

and a

a resolution."

Napco's

claim

suffers

the

of

same

instructional

fate

misrepresentation count:

as

error,

it

did

Napco's

on

the

challenge

intentional

there was no objection and no plain

error.

D.
__

Chapter 93A
___________

Upon making independent

the

jury verdict,

violated

warranted.

Chapter

Napco

court's decision.

findings of fact following

the district

93A

and

court held

that

challenges both

that

punitive

aspects of

Napco had

damages

were

the district

Review of the district court's findings of

fact is for clear error, see Fed. R. Civ. P. 52(a); review of

___

its

conclusions of

law

is de
__

novo.
____

Pullman-Standard
________________

v.

Swint, 456 U.S. 273, 287 (1982).

_____

1.
__

Chapter 93A liability.

_____________________

____________________

Napco ignored the letter and a meeting was never held.

Napco

disparages this evidence as a "red herring[]" saying that any

inference that Napco refused to meet "misreads" the testimony
Fishman gave about
letter was
light on

the letter

turned over

and that, in

to lawyers

whether Napco

willfully

and

any event,

the

therefore sheds

repudiated its

no

warranty.

Fishman's testimony on this point, however, is hardly helpful

to

Napco.

Fishman testified that

he personally ignored the

letter because it raised only a "minor" issue.

meant

that there

attention.

At

wasn't enough
the

time,

problems with a "dollar volume

By "minor" he

money involved

Fishman

apparently

to

get his

had

[that] was much greater

other
than

what this was here" and "people were supposedly handling this
for [him]."

Napco does not seriously dispute that, whatever

Fishman thought about the

problem, his "people" did nothing.

Napco's awareness

problem, its consideration

scope

as "minor,"

of the
and

its failure

to respond,

of its

support at

least to some degree an inference of willful repudiation.

-41-

Section

engage

in

"unfair

of Chapter

methods

93A

makes

of competition

it unlawful

to

and

unfair

or

93A,

2,

deceptive acts or practices."

Mass. Gen. L. ch.

11

2 applicable

(section 11

Perhaps by

makes section

design, the

dimensions of Chapter

to businesses).

93A liability

are difficult

nor "deceptive"

has

to discern

with precision.

is specifically defined in

the case law supplied

rubric:

rascality that would

observed,

396 N.E.2d 149, 153 (Mass.

F.2d 1510, 1513 (1st Cir.

Supreme Judicial Court

rhetoric of

"rascality"

to

Levings v.
_______

Quaker State Oil Refining Corp. v.

________________________________

But, as the

the

level of

of someone inured

tumble of the world of commerce."

Oil Co., Inc., 884

_____________

Levings).
_______

There is a

must attain a

raise an eyebrow

Forbes & Wallace, Inc.,

______________________

1979); see also

________

the statute; nor

precise definitions.

"The objectionable conduct

the rough and

Neither "unfair"

App. Ct.

Garrity
_______

1989) (quoting

has recently

is "uninstructive."

Massachusetts Employers Ins. Exch. v. Propac-Mass, Inc.,

__________________________________
_________________

648

N.E.2d 435, 438 (Mass. 1995).

Chapter 93A

conduct falls "within

law, statutory,

liability may exist if the defendant's

at least the penumbra of

or other established concept

or is "immoral, unethical,

Assoc., Inc. v.
_____________

(Mass. 1975).

necessary

for

of unfairness"

oppressive or unscrupulous."

Globe Newspaper Co., 321

____________________

Thus, proof of

liability,

some common-

a common law

see
___

-42-

N.E.2d 915,

PMP
___

917

tort, while not

Massachusetts Farm Bureau

___________________________

Federation, Inc.
________________

v. Blue Cross of Massachusetts, Inc., 532

___________________________________

N.E.2d 660, 664 (Mass. 1989)

11, need not

common

law

be premised

or statutory

("a violation of G.L. c. 93A,

on a violation

duty"),

may be

of an

independent

sufficient.

See
___

Anthony's Pier Four, Inc. v. HBC Assoc., 583 N.E.2d 806, 822
__________________________
__________

(Mass.

faith

1991) (breach

of

implied contractual

and fair dealing gave

duty of

good

rise to Chapter 93A liability);

VMark Software, Inc. v. EMC Corp., 642 N.E.2d 587, 594 (Mass.
____________________
_________

App. Ct. 1994)

(intentional misrepresentation provided basis

for Chapter 93A liability).

Under

Chapter

this

93A follows

precedent,

almost

Napco's

liability

under

matter

of course.

The

as a

district court appropriately found that:

NAPCO,

which

knew

throughout that

static mixer was

not installed,

that

was

the system

reveal
which
damages

knowledge
would

being

1) failed

within its

have

learned

not performing

warranted and nevertheless

stemmed the
caused

by

the

as
to

possession
tide
its

of
own

misconduct and 2) misdirected plaintiff's

attention to operator error as the source
of the System's shortcomings.

Cambridge Plating II,

____________________

876 F.

Supp. at 337.

This

finding,

which was not clearly erroneous, supports the conclusion that

Napco behaved both "deceptively" and "unfairly" under Chapter

93A.18

____________________

18.

Because the

Chapter 93A claim is

amounting

to an

breach of

warranty, Napco's limitation

does

intentional

predicated on conduct

misrepresentation and

willful

of damages provision

not bar consequential damages on this count.

Cf. Canal
___ _____

-43-

Moreover,

Napco's argument

--

that

Chapter

93A

liability is

inappropriate because its decision

to omit the

static mixer was simply a professional judgment -- misses the

mark.

Even

if at

the time of

installation Napco

that the

probability was small

that the static

make

difference

system's

probability was

to

the

large enough

ignored once Napco learned

problems.

Yet even

about

system's

the

also knew

Plating with inaccurate

Cambridge Plating

conclusion

the

should not have

been

that Cambridge Plating was having

performance,

all along

on the matter.

Napco

that it

had complained

never

judgment about the

drawings.

would be

mixer would

performance,

after Cambridge Plating

reconsidered its professed

Napco

that it

believed

static mixer.

had provided

So

seriously

Cambridge

Napco also knew

handicapped in reaching

Where Napco knew

that

its own

the system was

not performing as warranted, Napco was not free to ignore the

fact that

the

Cambridge Plating might benefit

mixer

had

been

omitted.

Napco's

from knowing that

silence

became

sufficiently "unscrupulous" to fall within a

"penumbra . . .

of

PMP Assoc., 321

__________

[an] established concept of unfairness."

N.E.2d

at 917.

We

therefore affirm

the district

court's

judgment of liability for single damages under Chapter 93A.

2.
__

Punitive damages.
________________

____________________

Elec., 548 N.E.2d at 186.

_____

-44-

We

question of

only

part company

with

punitive damages.

for "willful

or knowing"

the district

Punitive

Mass. Gen. L. ch. 93A,

to three, but

not less

or knowing

district court

than two, times

violations

imposed double

the

damages are awarded

violations of

Chapter 93A.

willful

court on

section 2

of

11 (providing for up

actual damages

of section

damages based

2).

Here,

for

the

on essentially

the same finding upon

under Chapter 93A:

knew

about

material

Supp.

346.

given

statute.

that

Napco failed to

static

mixer

to the problem.

at

sound,

the

which it imposed substantive liability

blush,

"willful

Napco's conduct,

misrepresentation (and

while knowing

that

it

it

was

See Cambridge Plating II, 876 F.

___ _____________________

At first

the

disclose what

or

this conclusion

knowing"

may seem

language

of

the

which also amounts to intentional

willful breach of

warranty), clearly

involves a certain level of deliberateness.

But shades of culpability are supposed to

in applying

the punitive

See Kansallis Fin. Ltd.

___ ___________________

1996)

damages provision of

the statute.

v. Fern, 659 N.E.2d 731,

____

("[T]he Legislature

envisaged multiple

matter

738 (Mass.

damage awards

against those defendants with

a higher degree of culpability

than that sufficient to ground simple liability."); Heller v.

______

Silverbranch Constr. Corp.,

___________________________

382 N.E.2d

1978)

intentional

(only

"callous

multiple damages);

and

1065,

violations"

VMark Software, 642 N.E.2d

______________

-45-

1070

(Mass.

merit

at 596 (court

refused

case

to multiply damages in intentional misrepresentation

stating

that

section

"extraordinary remedy"

11

multiple

are

an

to a case

of "dogged

bumbling");

cf. International Fidelity Ins. Co.

___ ________________________________

v. Wilson,
______

443

1308,

N.E.2d

legislature

[Chapter

not applicable

damages

1317

(Mass.

consciously enacted

93A] liability

1983)

("The

a rule

is measured

Massachusetts

whereby defendant's

by the

degree

of his

culpability.").

Liability under

Chapter 93A for

conduct amounting

to intentional misrepresentation (or breach of warranty

that here) does

not automatically trigger

There must be something more.

like

punitive damages.

See VMark Software, 642 N.E.2d

___ ______________

at 595 (liability for intentional misrepresentation supported

Chapter 93A liability, but

misrepresentations were not "made

so 'knowingly' as to warrant the punitive sanctions of double

damages under Chapter

Inc.
____

93A"); International Totalizing Sys.,

_______________________________

v. Pepsico, Inc., 560

_____________

1990) (defendant

liable for "knowing"

failure to disclose

liable

"willful

for

multiple

or

N.E.2d 749, 757

misrepresentation and

also violated Chapter

damages

intentional

because

conduct

(Mass. App. Ct.

93A, but was

not

of

the

absence

of

within

the

purview

of

[Chapter 93A]" (internal quotation omitted)).

The district court

principles.

It

appropriately recognized

See Cambridge Plating II, 876 F. Supp.

___ _____________________

believed,

however,

that

its

findings

these

at 346.

supported

the

-46-

conclusion that Napco's conduct was sufficiently egregious to

warrant a punitive sanction.

conduct was fraud

was only marginally

We do not think so.

and a willful repudiation

so.

Napco had reason

If Napco's

of warranty, it

to believe

that

operator error was the cause of Cambridge Plating's problems.

The system, after all, had worked for

its

installation.

nearly a

Cambridge

missing.

and

there

Napco did not stand

was

no

maliciously towards Cambridge

that

it

Rather,

Plating itself

took

year and a half to install the static mixer once it

found it was

actions,

Indeed,

a period of time after

could watch

evidence

that

Napco

Plating or remained

Cambridge

as the district court

to profit by its

Plating

go into

noted, this was

acted

silent so

distress.

a case where

Napco simply ignored the problem hoping that it would somehow

resolve itself.

Id.;
___

("The inept blend of

displayed by

cf. VMark Software, 642 N.E.2d

___ ______________

at 596

hopeful dissembling and dogged bumbling

VMark does

not, however, reflect

state of mind required for imposition of

the culpable

11's extraordinary

damage penalty." (internal quotation omitted)). This evidence

does not rise to the level of callousness or meretriciousness

that

would justify

multiple

damages.19

See Wasserman
___ _________

v.

____________________

19.

That Napco

not be

raises a legitimate argument

liable for

finding

of

multiple damages

liability

for

does

intentional

considerations discussed above mitigate

they do not excuse Napco.
596

(intentional

disruptive

to

the

not undercut
misconduct.

extent

-47-

the
The

Napco's culpability;

See VMark Software, 642

___ ______________

misrepresentation
same

that it should

"is

whether

surely
the

N.E.2d at
market

promisor

is

Agnastopoulos, 497 N.E.2d 19, 24-25 (Mass. App. Ct.) (setting

_____________

aside award of multiple damages because facts as found by the

trial

court

did

not

rise

culpability" contemplated

to

by the

the

"purposeful

statute),

level

rev. den.,
____ ____

of

499

N.E.2d 298 (Mass. 1986).

IV.

The

district

$3,363,120

in

violation.

The district

court

compensatory

Damages

awarded

damages

for

Cambridge

the

Plating

Chapter

93A

court then remitted the $12,183,120

jury award on the common law counts to $4,344,120,

reasoning

that no

rational jury

lost profits.20

See
___

could award

more than

$4,161,000 in

Cambridge Plating III, 890 F.

_____________________

Supp. at

____________________

genuinely

hopeful

deliberately

of

fulfilling

deceptive

and

his

entirely

contract,
disdainful

commitments."); accord
______

AMPAT/Midwest, Inc. v.
___________________

Works, Inc., 896 F.2d

____________

1035, 1044 (7th

damages
deemed

not awarded,
to

be fraud,

assumption
was

but
even

though

of

is
[its]

Illinois Tool
_____________

Cir. 1990) (punitive

disclose defects

the court

indulged

was
the

that (1) there was some reason to believe that it

the plaintiff's

installation,

that was responsible for

honestly believed
deep

failure to

or

of the

the defect,

the problem, and (2) the

that the

conviction

rather than

plaintiff was to

rightness of

defendant

blame; "[e]ven

one's cause

does not

justify fraud").

20.

The

$183,120

profits awarded
counts

and the

represents

Cambridge Plating
the cost of

difference

the

between the

total damages
MWRA

fine,

amount

awarded on
the

mixer.

Also,

lost

the jury

attorneys'

incurred in connection with

the static

of

fees

the fine, and

the district

court's

lost profits award for

the lost profits

the 93A count was $981,000

awarded after

the remittitur

award because

the court believed

profits

an

was

reasonably differ.

amount

over

less than

of the

that the $981,000

which

fact

Cambridge Plating III,

_____________________

finders

jury

in lost
might

890 F. Supp.

at

-48-

59.

Napco

"exceeds any

argues

that the

award

rational appraisal

of lost

profits

or estimate of

that could be based upon the evidence."

still

the damages

See Eastern Mountain

___ ________________

Platform Tennis, Inc. v.

_____________________

492,

502

(1995).

(1st Cir.

1994),

Napco argues

should be set

Cambridge

cert. denied,
_____ ______

115 S.

that the entire award of

aside or

Plating's

Sherwin-Williams Co., Inc., 40 F.3d

__________________________

be further remitted

failure

Cambridge Plating's failure to

to

mitigate

Ct. 2247

lost profits

to reflect

(1)

damages and

(2)

account for selling,

general

and administrative ("SG&A") expenses associated with the lost

profits.

Napco

separately

argues that

the award

of lost

profits for the negligent misrepresentation count must be set

aside

because

such

damages

are

not

cognizable

under

Massachusetts law.

A.
__

Sufficiency Of The Evidence On Lost Profits

___________________________________________

Cambridge

reasonably

certain

conduct caused

Plating had

basis to

the loss

the burden

believe that

but for

certainty

must prove

the wrongful

the amount

Napco's wrongful

of anticipated profits,

Inc. v. Aegis, Inc. (Augat I), 565 N.E.2d

____
_______________________

1991) (plaintiff

of providing

cf. Augat,
___ ______

415, 421

losses would not

(Mass.

have occurred

conduct), and proving

with sufficient

of

profits.

nature of the business

profits are claimed must

those anticipated

"The

or venture upon which the anticipated

be such as to support

____________________

59.

-49-

an inference

of definite profits grounded upon

facts."

Augat, Inc.
___________

a reasonably sure basis of

v. Aegis, Inc. (Augat II), 631 N.E.2d

_______________________

995, 998 (Mass. 1994) (internal quotations omitted).

every

calculation

of

lost

profits

has

some

Because

element

of

uncertainty, a plaintiff need not calculate lost profits with

"mathematical exactness."

speculative

[or]

Id.
___

hypothetical."

But they cannot

Id.
___

be "remote,

Napco argues

that

Cambridge Plating failed to establish the critical connection

between

the

defective

wastewater

Cambridge Plating's inability

treatment

system

to do plating

work.

provided evidence

of

On

and

this

point Napco is wrong.

Cambridge Plating

principally through

and Joseph

three witnesses

Finn, Cambridge

testified that, in the

quick

treatment

the

amount

consequently

of

slowing

Plating's damages expert.

He

Tosi

also testified that because the

system

Cambridge Plating had to

down

Tosi, Moleux

plating business, customers insist on

turn-around time.

wastewater

-- Mssrs.

causation

was

not

working

properly

employ closed looping, which slowed

wastewater

down

confirmed that closed looping

the

fed

through

plating

the

process.

system,

Moleux

"required Cambridge Plating to

either partially

or totally shut down."

testified that the zinc

system was

Additionally, Tosi

plating operation closed because the

unable to remove

sufficiently the

contaminants.

-50-

Further,

Debisschop directly linked the wastewater treatment

system to a plating operation's profitability.

Finally, Finn testified that until 1985, the

full

year the

wastewater treatment system

Cambridge Plating

sales.

He also

installation

decreased

million in

had generally

from approximately

Cambridge

During

Plating's

in 1985

revenues

to $4.8

declined from approximately

a net loss of approximately

this time

in

years following the

$6.2 million

1989, and net income

$284,000 in 1985 to

1989.

system,

was operational,

experienced an increase

testified that for the

of the

first

period, the plating

$131,000 in

industry as

whole averaged modest growth.

Cambridge

Plating

after financial picture

provided

a simple

before-and-

of an established company.

It also

provided

testimony

from people

wastewater treatment

to

a slowdown

limitations,

of

which

malfunctioning wastewater

to

present

an expert

of

and failure

could be

its own

in

profits was due

to meet

traced

back

effluent

to the

Napco chose not

to break

the connection

and the malfunctioning system.

Napco was content to try to poke holes in Cambridge

Plating's damages

and it

plating and

treatment system.

between the financial decline

Instead,

in

that the difference in

in production

both

expert

failed."

testimony.

"This [was]

AMPAT/Midwest,
_____________

-51-

a risky strategy,

896 F.2d at

1046 (internal

citation

omitted).

There

was

sufficient

evidence

of

causation to support an award of lost profits.

B.
__

Mitigation
__________

"The general principle is well settled that a party

cannot recover for harms

would have avoided."

Corp.,
_____

72 F.3d

that its own reasonable precautions

Knapp Shoes, Inc. v. Sylvania Shoe Mfg.

_________________
__________________

190, 204-05

(1st

Cir. 1995),

petition for
________ ___

cert.
_____

filed, 64 U.S.L.W. 3709 (U.S. April 11, 1996) (No. 95_____

1650).

Cambridge Plating did

not install the

static mixer

until 15 months after it knew in February 1989 that the mixer

was

missing.

Installation

took one

day.

This was

an

inexcusable failure to mitigate damages.

The

Plating had

district

failed to mitigate

Plating II, 876

___________

Cambridge

court

F.

Supp.

recognized

that

its damages.

at 345

("Once

Cambridge

See Cambridge
___ _________

Moleux

informed

Plating that the System was missing a vital part .

. . . [t]he obvious next step was to buy and install a

immediately.").

Nevertheless, in its Chapter

mixer

93A decision,

the district court awarded damages for both 1990 and 1991 and

then discounted them.

It also did

not adjust the jury award

in

its

mitigate.

remittitur

to

We agree with

take

account

of

this

failure

to

Napco that both the Chapter 93A and

the remittitur rulings were in error.

Cambridge Plating argues that it should be absolved

for its failure to mitigate after February 1989 because there

-52-

would have, in any

time,

it

event, been recovery time.

says, was

needed

in order

The recovery

to offset

the damage

resulting from its new

reputation as a polluter, and

word

that it could fill

out to customers

complying

with the

plausible theory.

type or

environmental

to get

their needs while

regulations.

But Cambridge Plating did

This is

not provide the

quantity of proof that Massachusetts law requires to

support damages for this "reputational"

injury sufficient to

overcome its failure to mitigate.

Cambridge

customers

business

that it

Plating

would

because of its

customer who

not

points

to

no

have

been

evidence

able

to

reputation as a polluter.

testified, Alfred Jacques

from

recover

The one

of General Electric,

did

not

support

theory.

The

Cambridge

evidence

Plating's

Cambridge Plating relies

statement from DeBisschop agreeing

lose

business when they

testimony

that

polluter,"

and

touting

its

proposition

evidence

Finn's

of

system

that

wastewater treatment

upon --

became

"known

from

Cambridge

--

scant

support

provides

any

if

reputational

is

also

it

business "almost immediately."

could

to

as

for

harm.

have

had a

Plating

the

This

in tension

Cambridge Plating

system,

polluters, Tosi's

advertisement

reputational injury

testimony that

to be

Plating

there was

injury

that companies "tend"

are found

Cambridge

an

reputational

with

working

replaced

its

Even Cambridge Plating states

-53-

in its brief

services

strong

that "demand

such as

those

throughout

the

for plating

provided by

late

1980s

and metal

finishing

Cambridge Plating

and

to

the

was

time

of

theory

of

trial."21

On

reputational

Augat II,

this

record,

injury is,

to

631 N.E.2d at 998.

Cambridge

say

Plating's

the least,

Cambridge

"speculative."

Plating can find no

________

comfort in the case

proving damages

law that allows for some

in tort

cases.

See,
___

uncertainty in

e.g., Computer Sys.

____ ______________

Eng., Inc. v. Qantel Corp., 740 F.2d 59, 67 (1st Cir.

__________
____________

Those cases

reason that some uncertainty

1984).

is allowed because

it has been created by the defendant's wrongful conduct.

Here,

however,

February 1989

the

uncertainty

for the

was largely caused by

period

Id.
___

following

Cambridge Plating's own

wrongful conduct in failing to mitigate.

Still, Napco has conceded

November 1989, or nine

have

installed the

period.

that the period

through

months after Cambridge Plating should

static mixer,

is a

reasonable recovery

In the absence of evidence showing Cambridge Plating

mitigated

its damages, the

the record before

the trial

outer limit for

such damages on

court was November

1989.

Cf.
___

____________________

21.

Although

Cambridge

decline after May

notes that

its sales

1990, the booming economic

to an end by then.

continued to
times had come

Indeed, the declining sales following the

installation of the static mixer might even suggest

missing

static

mixer

had

nothing

Plating's financial problems.

-54-

to

do

with

that the
Cambridge

Augat II, 631 N.E.2d at 1000 (reducing period of lost profits

________

to six months).

We also

and the

believe that both the

remittitur should equally take

Plating's

district

failure

to mitigate.

court's award of Chapter 93A

eliminate all damages occurring

vacate

that

the order

the

eliminate

U.S.C.

We

district

of remittitur

court

damages occurring

2106

remand to require

account of Cambridge

therefore vacate

the

damages and remand to

after November 1989; we also

and remand

grant

after

(appellate court

Chapter 93A damages

with directions

further

remittitur

November 1989.

may vacate any

such further proceedings as

See
___

to

28

judgment and

may be just);

Anthony v. G.M.D. Airline Servs., Inc., 17 F.3d 490, 495 (1st

_______
___________________________

Cir. 1994)

grant

(remanding with

a remittitur).22

directions to district

Of course,

court to

plaintiff has the option

to seek a new trial on damages in lieu of the remittitur.

C.
__

SG&A Expenses
_____________

Cambridge

Plating

terms of net profits,

Inc.
____

v. Crampton, 385
________

Generally, this

SG&A

expenses.

had to

prove

lost profits

not gross profits.

Jet Spray Cooler,

__________________

N.E.2d 1349, 1359

n.15 (Mass. 1979).

requires that gross profits

In

in

this case,

be adjusted for

however, Cambridge

Plating

____________________

22.

Because we believe both the district court damages award

and

the jury award

need

not address

must be adjusted in
Napco's argument

the same manner, we

that the

district court

erred in allowing damages on the jury award that exceeded the

damages under Chapter 93A.

-55-

argued that SG&A

expenses would

not have

increased as

its

sales increased and thus the anticipated gross profits should

not be reduced by SG&A expenses.

The district court accepted

Cambridge Plating's argument, as do we.

Cambridge Plating relies

that "lost

same

gross profit for

number

question."

financial

as

the

lost

on the testimony of

Cambridge Plating is

net

profit

Although, as Napco points

statements

from

1980

to

for

Finn

the exact

the

years

in

out, the consolidated

1985

show

general

increase in both sales and SG&A expenses, Finn testified that

SG&A expenses

for

the

increased only 10%-11% as

period

1982

expenses decreased

evidence,

Finn

relationship

expenses

profits

slightly as

believed

between

would

to 1984.

not

increased.

S G

have

that

and

Moreover,

in 1984,

sales increased.

there

A and

necessarily

Although

sales increased 30%

these

was

SG&A

From this

"no

dependent

sales" and

that SG&A

increased

inferences

as

from

gross

the

evidence are weak, they are sufficiently plausible to survive

Napco's challenge on appeal.

D.
__

Negligent Misrepresentation
___________________________

Lost

negligent

$4,161,000

misrepresentation

Massachusetts

damages for

profits of

law does

were

count.

not allow

awarded on

This

"benefit of

negligent misrepresentation.

error.

the bargain"

Danca v.
_____

Sav. Bank, 429 N.E.2d 1129, 1134 (Mass. 1982).

_________

-56-

was

the

Taunton
_______

Lost profits,

which

are a species

therefore prohibited.

of benefit of the

bargain damages, are

See also Redstone v. Goldman, Sachs &

___ ____ ________
_________________

Co., 583 F. Supp. 74, 76-77 (D. Mass. 1984) (lost profits not
___

available for

negligent

lost

on

profits

misrepresentation).

the negligent

The award

misrepresentation

of

count is

reversed.

V. Conclusion

For the foregoing reasons,

(save for 93A

multiple damages), but

we affirm on

liability

vacate and remand

the

Chapter

93A

remittitur

opinion.

single

for

and

further

multiple

proceedings

damages

award

consistent

Parties to bear their own costs.

and

with

the

this

It is so ordered.
________________

-57-