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Massachusetts Water Resources Authority v. Harbor Electric Energy Co.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

June 24, 2016

Massachusetts Water Resources Authority
Harbor Electric Energy Company et al Opinion No. 134355

          Filed June 28, 2016


          Kenneth W. Salinger, Justice

         In 1990 the Massachusetts Water Resources Authority entered into a 25-year contract with Harbor Electric Energy Company (" Harbor Electric") and the Boston Edison Company (" NSTAR") for the installation and operation of facilities to transmit electricity through a power cable buried under Boston Harbor to the MWRA's new wastewater treatment facilities on Deer Island.

         The MWRA seeks a declaration (in Count I of its amended complaint) that, if Boston Harbor were dredged to deepen shipping channels and if as a result the Deer Island power cable had to be protected (for example through the placement of concrete mats over the cable), the MWRA would have no financial liability for those cable protection costs under the 1990 contract. Counts II and III of the amended complaint claim that (1) Harbor Electric and NSTAR have breached the 1990 contract by failing to seek a tariff rate schedule from the Federal Energy Regulatory Commission (" FERC") to govern cable operating costs for the period after the contract expired, and instead seeking a tariff from the Massachusetts Department of Public Utilities (" DPU"), and (2) defendants intend to breach the 1990 contract by trying to impose future cable protection costs on the MWRA. Count IV asserts that Defendants have violated G.L.c. 93A by deliberately breaching the 1990 contract, including by failing to negotiate a successor agreement and by filing its tariff petition with the DPU instead of with FERC.

         Harbor Energy and NSTAR move to dismiss all claims against them. The Court concludes that the amended complaint alleges no facts plausibly suggesting that the MWRA is entitled to relief under any of its causes of action. It will therefore allow the motion and dismiss this action without prejudice.

         The claim for declaratory relief in Count I fails because there is no actual controversy between the parties. See Alliance, AFSME/SEUI AFL-CIO v. Commonwealth, 425 Mass. 534, 537-39, 682 N.E.2d 607 (1997). The MWRA does not allege that Defendants have ever billed the MWRA for any cable protection costs, or even that Defendants have incurred any cable protection costs that they seek to recover from the MWRA. In opposing the motion to dismiss, the MWRA points to an August 2004 letter in which a lawyer for Harbor Electric and Boston Edison took the position that the MWRA would be obligated under the 1990 contract to pay any cable protection costs made necessary by any future harbor dredging, and a June 2005 letter in which a lawyer for the MWRA disagreed. But the MWRA alleges no facts suggesting that Defendants have done anything since June 2005 to try to force MWRA to pay any costs for protecting the cable from future dredging. Thus, at most, the MWRA's allegations plausibly suggest that the parties read their 1990 contract differently. Disputes over how to read a statute or contract, " by themselves, do not rise to the level of actual controversy." Entergy Nuclear Generation Co. v. Department of Envt'l Prot., 459 Mass. 319, 325, 944 N.E.2d 1027 (2011), quoting Woods Hole, Martha's Vineyard & Nantucket S.S. Auth. v. Martha's Vineyard Comm'n, 380 Mass. 785, 792, 405 N.E.2d 961 (1980). The Court may not construe a contract, legal instrument, or statute in the abstract and render a declaratory judgment in the absence of some actual controversy that would be resolved by that judgment. See, e.g., Quincy City Hosp. v. Rate Setting Comm'n, 406 Mass. 431, 439, 548 N.E.2d 869 (1990); Commissioner of Correction v. Ferguson, 383 Mass. 651, 653, 421 N.E.2d 444 (1981).

         The contract claims in Counts II and III should be dismissed for several reasons. First, the Court takes judicial notice that on May 5, 2016, the DPU issued an order in the ongoing proceeding regarding Harbor Energy's tariff filing with respect to future cable operating costs. In that order the DPU ruled that it had and would exercise primary jurisdiction to determine whether Harbor Energy was required under the 1990 contract to file its tariff with FERC rather than with the DPU. The DPU declined to dismiss Harbor Energy's tariff filing on this ground and stated that it would make a final decision on whether the Harbor Energy facilities are transmission facilities subject to FERC's jurisdiction, rather than local distribution facilities subject to the DPU's decision, in its final order. The Court exercises its discretion to defer to the DPU's primary jurisdiction over this issue, and will therefore dismiss this portion of the complaint without prejudice. See, e.g., Lumbermens Mut. Cas. Co. v. Workers' Comp. Trust Fund, 88 Mass.App.Ct. 183, 187-88, 36 N.E.3d 594 (2015).

         Second, the MWRA may not sue for breach of contract on the ground that Defendants have threatened to violate the 1990 contract at some unspecified time in the future by billing the MWRA for cable protection costs that Defendants have not yet incurred. See generally Cavanagh v. Cavanagh, 33 Mass.App.Ct. 240, 243, 598 N.E.2d 677 (1992), rev. denied, 413 Mass. 1107, 602 N.E.2d 1094 (1992) (" Massachusetts has not generally recognized the doctrine of anticipatory repudiation, which permits a party to a contract to bring an action for damages prior to the time performance is due if the other party repudiates").

         Turning to Count IV, the allegations of the amended complaint do not plausibly suggest that Defendants have committed any unfair or deceptive acts in violation of G.L.c. 93A. Defendants' failure to negotiate a successor agreement, to cover future cable operating costs after expiration of the 1990 contract, cannot constitute a breach of c. 93A in the absence of reasonable and detrimental reliance on the other side, which is not alleged here. See Lambert v. Fleet Nat'l Bank, 449 Mass. 119, 127, 865 N.E.2d 1091 (2007).

         As to Defendants' decision to seek a tariff from the DPU rather than FERC, as noted above the Court is exercising its discretion to defer to the DPU's primary jurisdiction over that issue. In any case, even if the MWRA could prove that Defendants deliberately breached the 1990 contract by seeking a tariff from the DPU rather than from FERC, that would not plausibly suggest that Defendants violated c. 93A. " [T]he mere breach of a contract, without more, does not amount to a c. 93A violation." Madan v. Royal Indem. Co., 26 Mass.App.Ct. 756, 762, 532 N.E.2d 1214 (1989); accord, e.g., Framingham Auto Sales, Inc. v. Workers' Credit Union, 41 Mass.App.Ct. 416, 418, 671 N.E.2d 963 (1996). A breach of contract would only violate c. 93A if " the nature, purpose, and effect of the challenged conduct is coercive or extortionate." Diamond Crystal Brands, Inc. v. Backleaf, LLC, 60 Mass.App.Ct. 502, 507, 803 N.E.2d 744 (2004); accord, e.g., Zabin v. Picciotto, 73 Mass.App.Ct. 141, 169, 896 N.E.2d 937 (2008), rev. denied, 453 Mass. 1103, 901 N.E.2d 138, 453 Mass. 1105, 902 N.E.2d 947 (2009). " In the absence of conduct having that quality, a failure to perform obligations under a written lease, even though deliberate and for reasons of self-interest, does not" violate c. 93A. Atkinson v. Rosenthal, 33 Mass.App.Ct. 219, 226, 598 N.E.2d 666 (1992) (tenant deliberately abandoned and thereby violated commercial lease); accord Kobayashi v. Orion Ventures, Inc., 42 Mass.App.Ct. 492, 505, 678 N.E.2d 180, rev. denied, 425 Mass. 1102, 680 N.E.2d 101 (1997) (landlord's breach of non-competition clause did not violate c. 93A, as plaintiff presented no evidence that landlord violated lease " to gain an economic advantage" over tenant " or to extort a concession"). The MWRA has not alleged any facts plausibly suggesting that Defendants' purported breach of contract rises to the level of a c. 93A violation.


         Defendants' motion to dismiss Plaintiff's first amended complaint is ALLOWED. Final judgment shall enter ...

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