MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The plaintiff, 27th Lancers Drum & Bugle Corps., Inc. (Drum & Bugle or the plaintiff), brought this action against the defendants, 27th Lancers Foundation, Inc. (Foundation), and its founders, Janine McWilliams and Denise Bonfiglio, asserting claims of interference with business relations, trademark infringement, and violation of G. L. c. 93A. Following a trial in the Superior Court, a jury returned a verdict in favor of the plaintiff. Thereafter, the trial judge, who had reserved the plaintiffs claim under c. 93A for herself, entered findings, rulings, and an order in which she concluded that the defendants had engaged in unfair and deceptive business practices in violation of c. 93A. She then awarded Drum & Bugle damages in the amount of $29,379.00, attorneys fees in the amount of $57,983.75, and $389.40 in costs. On appeal, the defendants challenge the judges finding that the defendants were engaged in trade or commerce as required for liability under G. L. c. 93A, § 11; they also challenge the award of c. 93A damages.
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We affirm.
Background. We recite the relevant facts from the judges findings, supplemented by details drawn from the testimony as indicated and documentary evidence in the record. See Cavadi v. DeYeso, 458 Mass. 615, 624 (2011). Drum & Bugle is a “musical unit” that was founded by George Bonfiglio, Sr. (George, Sr.) around 1967. According to its articles of organization filed with the Secretary of States office in 1971, the purpose of Drum & Bugle was “[t]o teach young people between the ages of fifteen and twenty-one in the art and appreciation of music and marching as a marching band unit.”
George, Sr. was the father of Patricia Bonfiglio Blake (Patricia) and George Bonfiglio, Jr. (George, Jr.), who brought this suit on behalf of Drum & Bugle, and the two individual defendants, Janine McWilliams (Janine) and Denise Bonfiglio (Denise).
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While George, Sr. was alive, the entire family was involved with the organization; however, only Patricia and George, Jr. served as officers and directors of Drum & Bugle. Over the years, in addition to performing and participating in marching band competitions, Drum & Bugle held various social gatherings and fundraising events such as bowling tournaments and picnics, and, once every five years, held a reunion for its alumni. George, Sr. was essentially in charge of all operations until he died in 2010.
Shortly after the death of their father, the siblings had a disagreement about whether a certain individual should participate in planning the 2012 alumni event in light of that individuals participation in a competing musical group. As a result, the relationship between Patricia and George, Jr., on the one hand, and Janine and Denise, on the other hand, deteriorated to the point where, unbeknownst to Patricia and George, Jr., Denise and Janine established the “27th Lancers Foundation” as a nonprofit organization. The Foundation, which was formed on March 28, 2012, was introduced to the Drum & Bugle alumni at their forty-fifth reunion in October of 2012. The reunion had been organized primarily by Patricia and was held at a hotel in Danvers, Massachusetts. The judge found that Denise, with no prior notice to Patricia, brought merchandise depicting Drum & Bugles logo to sell at the reunion on behalf of the Foundation.
Thereafter, the defendants began advertising and holding separate events identical to those held by Drum & Bugle in the past. Drum & Bugle alumni attended these events where the defendants sold merchandise without the permission of Drum & Bugle and eventually made a modest profit. In regard to the selling of merchandise, the judge found that Denise and Janine did not market the Foundations merchandise to the general public, but instead targeted the alumni and members of Drum & Bugle. In addition, the judge found that “[i]t was the defendants’ sole purpose to market to the Corps members and alumni, and they did that for their own fundraising purposes.” The judge further found that although Janine and Denise claimed they established the Foundation to advance their fathers legacy by awarding one or two $1,000 scholarships per year, the defendants’ primary motive, in fact, was to raise money by marketing their merchandise to Drum & Bugles alumni community and members, and to use those funds to cover expenses that they would have otherwise incurred personally.
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Between 2012 and 2017, the relationship between the siblings continued to deteriorate. In September of 2015, Denise and Janine set a date -- September 15-16, 2017 -- to celebrate the fiftieth anniversary of Drum & Bugle. They planned the event without conferring with Patricia or George, Jr. The defendants then solicited Drum & Bugle alumni to attend what appeared to be Drum & Bugles anniversary celebration without disclosing that the advertised event was sponsored by the Foundation and not Drum & Bugle. At one point, Janine, with Denises knowledge and approval, sent the following notice to Drum & Bugles alumni and members: “The 27th Lancers Foundation is proud to announce that it will be hosting the 50th Anniversary [event] of the Corps and welcome all alumni, family and friends of the organization to join us in celebrating (September 15-16, 2017) its fifty years of heritage and prestige.” The judge described the sending of this notice as “improper, intentional, unfair and deceitful.”
Meanwhile, Patricia, who had no knowledge of the plans made by Denise and Janine, entered into an agreement with Jamsan Hospitality Management, doing business as Four Points by Sheraton Wakefield Boston Hotel & Conference Center (Four Points) to host Drum & Bugles 50th Anniversary event, which was scheduled for August 16-20, 2017. The agreement was executed on February 17, 2017. George, Jr. provided a $1,000 deposit and the judge found that Patricia signed the agreement as an officer of Drum & Bugle.
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The agreement contained a liquidated damages clause relating to “[a]ttrition and [c]ancellation.” The judge found that once Patricia learned of the defendants’ plan to host Drum & Bugles 50th Anniversary event, she had no choice but to cancel the agreement with Four Points. As a result, Drum & Bugle owed Four Points $29,379 in total.
Based on the facts recited above, the judge ruled that the defendants were engaged in trade and commerce and that they had engaged in unfair and deceptive business practices in violation of c. 93A. She reasoned that the “way the two businesses, plaintiff and defendant foundations were set up, they and their officers intended to act and knew that they were acting, in trade or commerce.” She further concluded that the defendants took advantage of Drum & Bugle by “falsely marketing to the plaintiffs alumni and community for the defendants’ benefit,” and that this false marketing amounted to an unfair and deceptive act in violation c. 93A. Lastly, because Drum & Bugle was obligated to pay $29,379 in liquidated damages to the hotel, the judge awarded that amount to Drum & Bugle, as well as attorneys fees and costs.
Discussion. The defendants argue that the judge erred in concluding that they were engaged in trade or commerce primarily because the Foundation is a nonprofit organization with a charitable purpose.
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However, even if we were to assume that the Foundation is a charitable organization, “[a]n entitys status as a charitable corporation is not, in and of itself, dispositive of the issue whether c. 93A applies” (quotations and citation omitted). Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 23, cert. denied, 522 U.S. 1015 (1997). Rather, the appropriate inquiry is whether the entitys activities arose in a “business context.” Id. at 24. The inquiry is highly fact dependent, and turns on an explanation of all the circumstances. Id. We agree with the judge that, in the circumstances of this case, the defendants were engaged in trade and commerce.
As previously noted, the judge found that the defendants’ primary motive in establishing and running the Foundation was to raise money (much more than the $2,000 they were going to award in yearly scholarships) so they could cover expenses that they otherwise would have personally incurred whenever there was any kind of Drum Corps Federation event, or their own events. The evidence supported this finding. Denise agreed at trial that she had become “fairly good at running fundraisers.” In 2013, for example, the Foundations revenue was $12,871.00 with $5,861.00 in expenses, which included travel expenses for a 2013 “Drum Corps gathering” in Indianapolis.
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The defendants contend, nevertheless, that the actions of a charitable corporation can never constitute trade or commerce for c. 93A purposes, as long as those actions were part of the core purpose of the charity. The defendants’ position is not supported by the case law, cited above, nor is it consonant with the purposes of c. 93A. Rather, c. 93A was “designed to encourage more equitable behavior in the marketplace ․ [and impose] liability on persons seeking to profit from unfair practices” (quotation and citation omitted). Linkage Corp., 425 Mass. at 25. “Although by definition, a qualified nonprofit corporation does not earn a ‘profit’ from its activities, such a corporation need not be profitmaking in order to profit from an activity.” Id. While the Foundations status as a nonprofit corporation generally means it does not earn a “profit,”
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it nonetheless was motivated by a desire to make money and to benefit as much as possible from associating itself with Drum & Bugle.
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As the judge observed, the defendants chose a similar name for their nonprofit corporation (27th Lancers Foundation), and then proceeded to raise money at the expense of Drum & Bugle. For example, the judge found that the defendants acted in a deceptive manner by “intentionally” marketing and misusing Drum & Bugles fiftieth anniversary as a way of getting Drum & Bugles alumni and members to sign up for what would have been the Foundations five-year anniversary. By establishing a nonprofit with a name similar to the Drum & Bugle company, organizing a reunion commemorating Drum & Bugles fiftieth anniversary without Drum & Bugles consent, and then deliberately targeting Drum & Bugles alumni and members in an attempt to increase attendance at their own event, the defendants were seeking to “profit from unfair practices” (citation omitted). Linkage Corp., supra at 26. See also id., quoting Planned Parenthood Fedn of Am., Inc. v. Problem Pregnancy of Worcester, Inc., 398 Mass. 480, 499 (1986) (Abrams, J., concurring in part and dissenting in part) (“defendant charitable corporation operated in a ‘business context’ where it engaged in competitive marketplace ‘activities ․ designed to damage or destroy its competitor’ ”).
Next, the defendants argue that the judge erred in awarding damages because the agreement with Four Points was signed by Patricia on behalf of 232 FP Wakefield 2017 Social Events and not “in any noted capacity” for Drum & Bugle.
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While it is true that the agreement states “[t]his Agreement [is] between 232 FP Wakefield 2017 Social Events (“Customer”) and ․ [Four Points],” the defendants’ argument ignores the judges finding, which is supported by the evidence, that Patricia entered into the agreement for the benefit of Drum & Bugle.
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Moreover, the defendants’ claim that “there is no mention of the [p]laintiff [Drum & Bugle] Corps in the contract document” is incorrect. The subject line of the contract refers to the “Lancers 50th reunion.” We discern no error in the judges determination that Patricia signed the Four Points contract as an officer of Drum & Bugle.
Corrected judgment dated October 15, 2019, affirmed.
FOOTNOTES
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. The defendants raise no claim of error with respect to the jury verdict or to the award of attorneys fees and costs.
4
. Because some parties share a surname, we use first names to avoid confusion.
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. The judge wrote: “George Bonfiglio Sr. was on to something that turned out to be very helpful for kids ages [twelve and eighteen]. ․ But the defendants, for purposes of money making, so that they would have access to cash to pay some personal items that they wanted, like their trip this past summer to Indianapolis, and also as a way of awarding one or two scholarships, marketed where they should not have marketed, where they are not legally entitled to market. The marketing of merchandise to raise cash they could use was their primary motive. Advancing the legacy of their parents may have been a minor motive, but marketing their merchandise and bringing money in for much more than the $2[,]000 they are going to award in two scholarships is these defendants’ primary purpose in establishing and running the defendant Foundation.”
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. Patricia was president of Drum & Bugle and testified that after signing the contract with Four Points for Drum & Bugles fiftieth reunion, the Drum & Bugle Corps had to cancel the reunion “[b]ecause of the confusion that was set by the Foundation,” which claimed to be hosting Drum & Bugles fiftieth reunion.
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. “We review a judges findings of fact [on a c. 93A claim] under the clearly erroneous standard and [her] conclusions of law de novo” (citation omitted). Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 171 (2013).
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. Denise testified that the travel expenses included “the car, rental car, [and] airline tickets.”
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. Our use of the term “profit” here is meant colloquially, in the sense of revenues that exceed expenses.
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. The judge found that the defendants “individually understood” that they did not have much of an audience to market to without addressing Drum & Bugles alumni and members. In fact, as the judge observed, the defendants ignored Drum & Bugles cease and desist demand as well as its subsequent c. 93A demand letter and then failed to comply with a preliminary injunction. The judge further noted that “[t]he defendants d[id] not stop their marketing in plaintiffs name until after the contempt trial.”
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. In his closing argument before the judge on the c. 93A claim, counsel for the defendants also argued that “damages related to the hotel should not be considered because the plaintiff hasnt shown by a preponderance of the evidence that they are on the ‘hook’ for that amount of money.” The defendants have not made this argument on appeal and, therefore, we need not consider it.
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. Patricia testified that she was president of Drum & Bugle and that she signed the Four Points contract to host Drum & Bugles “[fiftie]th reunion at the Sheraton Four Points in Wakefield.”