Liability of Corporate Officer for Personal Involvement in Causing Corporation to Violate Massachusetts G.L. c. 93A, § 11.

Massachusetts G.L. c. 93A § 11 creates a special statutory claim for a business that has suffered damages as the result of another business’ use of an unfair method of competition or an unfair or deceptive act or practice. Because a corporation can act only through the actions of its officers and directors, who make decisions for the corporation, plaintiffs sometimes sue not only the corporation itself under c. 93A, but also seek to hold liable individual officers or directors who were involved in the corporate acts complained of. In appropriate situations, a court will impose this kind of personal liability.

For example, in 1998, the Massachusetts Appeals Court considered a case in which the defendant corporation was alleged to have violated c. 93A by stringing along the plaintiff company to which it owed money, and attempting to extort a settlement of the amount owed. With respect to the individual liability of the corporate officers who had caused the defendant corporation to act as it did, the court stated: “It is settled that corporate officers may be held liable under c. 93A for their personal participation in conduct invoking its sanctions....”

A corporate officer may be held personally liable based on personal involvement in a c. 93a violation even where the officer was acting within the scope of his or her employment (i.e. doing the kinds of things he or she was hired to do). According to the Massachusetts Appeals Court:

Although acting within their authority as [corporate] officers ..., [defendants] are "personally liable for their own misrepresentations made to [the plaintiff] in violation of G.L. c. 93A, § 11 ....

While an officer is not personally liable simply because the corporation has violated c. 93A, the corporate form will not insulate from liability a corporate officer who was involved personally in the unfair or deceptive business conduct.

If you have questions regarding this or any other legal real estate matter, please contact Attorney Roger T. Manwaring, Esq. at rtm@barronstad.com or (617) 531-6584.

<<< Go back to the resources page.