Fine v. Guardian Life Insurance Company of America

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

MATTHEW FINE, )

Plaintiff, )

)

)

v. ) Civil No. 3:19-30067-KAR

)

)

THE GUARDIAN LIFE INSURANCE )

COMPANY OF AMERICA, )

Defendant. )

MEMORANDUM AND ORDER ON DEFENDANT’S

MOTION FOR SUMMARY JUDGMENT

(Dkt No. 87)

ROBERTSON, U.S.M.J.

Plaintiff Matthew Fine (Fine) was an insurance salesman for defendant The Guardian

Life Insurance Company of America (Guardian).1 In his amended complaint, Fine alleges that

Guardian violated the implied contractual covenant of good faith and fair dealing when it failed

to pay him renewal commissions after Guardian terminated its agreement with him (First Count).

Fine also asserts a common law claim of unjust enrichment (Second Count) and contends that

Guardian’s failure to pay him commissions was in violation of the Massachusetts Wage Act,

Mass. Gen. Laws ch. 149, § 148 (Third Count) (Dkt. No. 40). Before the court is Guardian’s

motion for summary judgment on all counts (Dkt. No. 87). The parties have consented to this

court’s jurisdiction (Dkt. No. 14). See 28 U.S.C. § 636(c); Fed. R. Civ. P. 73. For the following

reasons, Guardian’s motion for summary judgment is granted in part and denied in part.

1 The court previously dismissed Fine’s claims against Park Avenue Securities (Dkt. No. 65).

I. FACTUAL BACKGROUND2

Except as otherwise noted, the following facts are undisputed. Because this case is

before the court on a motion for summary judgment, the court sets out any disputed facts in the

light most favorable to Fine, the non-moving party, and draws all reasonable inferences in his

favor, Joseph v. Lincare, Inc., 989 F.3d 147, 151 (1st Cir. 2021) (citing Ocasio-Hernández v.

Fortuño-Burset, 777 F.3d 1, 4 (1st Cir. 2015)), reserving some facts for discussion in the

analysis.

A. Fine’s Position with Guardian

Guardian produces insurance policies (life, disability, and long-term care) which it sells,

insofar as pertinent to this case, through field representatives (Def. SOF ¶ 1; Pl. Resp. ¶ 1).

Plaintiff signed a Guardian field representative agreement (FRA) and began selling Guardian

policies in or around 1997 (Def. SOF ¶ 2; Pl. Resp. ¶ 2). Neither party has located a copy of a

Guardian FRA signed by Fine (Def. Resp. at 3-4).3 During Fine’s sales work for Guardian, he

was associated with a general agency, Robert Fine & Associates (Def. SOF ¶ 3). The agency

was established by Fine’s father and, by 2018, was headed by Fine’s brother, Randy Fine (Pl.

SOF ¶ 1).4

2 The facts are taken from Guardian’s Statement of Undisputed Material Facts in Support of

Defendant’s Motion for Summary Judgment (Def. SOF) (Dkt. No. 94); the single document

captioned Plaintiff’s Response to Defendant’s Statement of Material Facts and Plaintiff’s

Statement of Material Disputed Facts in Support of Plaintiff Matthew Fine’s Opposition to

Defendant’s Motion for Summary Judgment (the first section of which is cited as Pl. Resp. and

the second section of which is cited as Pl. SOF) (Dkt. No. 103); Defendants’ Response to

Plaintiff’s “Concise Statement of Material Facts in Support of Plaintiff Matthew Fine’s

Opposition to Defendant’s Motion for Summary Judgment” (Def. Resp.) (Dkt. No. 114); and

from materials cited therein.

3 At the hearing on Guardian’s summary judgment motion, Fine admitted, through counsel, that

he signed a form of a Guardian FRA (Dkt. No. 117 at 40-44). Plaintiff’s position is that, in the

absence of a signed agreement, he is not sure that the copy of the FRA Guardian has filed with

the court is the form of agreement he signed when he joined Guardian (Dkt. No. 117 at 40-44).

4 For the sake of clarity, Randy Fine will be referred to herein as Randy.

B. Fine’s May 6, 2018, Trip to Washington, D.C.

On or around May 6, 2018, Fine traveled to Washington, D.C. to attend Guardian’s

annual conference, which was held at the Marriott Marquis Washington D.C. (Pl. SOF ¶¶ 3-4).

On May 6, 2018, Fine had dinner with some Guardian colleagues, including Jeremy Suarez (Pl.

SOF ¶¶ 5-7). After dinner, Fine and Suarez traveled together to the Marriott, where both had

rooms booked for the night (Pl. SOF ¶¶ 7-8). Fine and Suarez repaired to the hotel’s bar, where

they were approached by two women. Neither Fine nor Suarez was acquainted with either of the

women (Pl. SOF ¶ 10). After having drinks together, the group went to Suarez’s hotel room,

where Fine had a consensual sexual encounter with one of the women (Pl. SOF ¶ 12). With the

woman’s consent, Fine took pictures of the encounter (Pl. SOF ¶¶ 13-15).

C. Report About Fine’s Conduct to the Marriott

Sometime after Fine left Suarez’s room and before 3:00 a.m., a Marriott guest reported a

sexual assault to the Marriott staff at the hotel’s front desk (Pl. SOF ¶ 18). Members of the

Marriott security team went to the room of the guest who had allegedly been sexually assaulted.

Another guest in the room reported that she had heard the woman crying and that the woman

said she had been raped by a guy she met in the Marriott’s bar (Pl. SOF ¶ 19).

Around 3:30 a.m., Fine was woken up by the Marriott security staff and an officer or

officers of the Metropolitan D.C. police force (Pl. SOF ¶ 20). Members of the security staff

remained in Fine’s room until a detective from the D.C. police force arrived to interview him (Pl.

SOF ¶ 20). Fine told the detective that he was being falsely accused of sexual assault and that he

had photographs to prove it, but he wanted to consult a lawyer before he showed the photographs

to the police (Pl. SOF ¶ 21). Members of the Marriott security staff told Plaintiff that he had to

leave the hotel (Pl. SOF ¶ 24). Around 6:00 a.m. on May 7, 2018, Fine called his brother Randy.

When Randy came to Fine’s room, Fine told Randy that he had been falsely accused of sexual

assault (Pl. SOF ¶¶ 22-23).

D. Notification to Guardian and Guardian’s Response

The accusation against Fine sparked a series of internal communications among high-

level Guardian employees. Guardian had arranged with the Marriott that the Marriott would

communicate with Neha Kowal, a Guardian second vice president and head of conference and

event marketing, if there were issues or problems with individuals attending the Guardian

conference (Def. SOF ¶¶ 12, 29). Early on May 7, 2018, Marriott’s general manager and

members of its security department woke up Kowal and informed her that a Guardian

salesperson had been accused of sexual assault (Def. SOF ¶ 30). Kowal, who was distressed by

the conversation, reported what she had been told to Guardian’s general counsel (Def. SOF ¶¶

31-32). Later that morning, Kowal and Dennis Byrne, Guardian’s senior security specialist, met

with members of Marriott’s security department and were told that police officers had been

called to the hotel because Fine had been accused of raping a woman, that someone had heard

screams coming from the room where the alleged rape had occurred, that an ambulance had been

called and had taken the woman from the hotel to the hospital, and that Fine had been evicted

from the Marriott (Def. SOF ¶¶ 33-37; Pl. SOF ¶ 36).5

5 To the extent Fine objects to the court’s consideration of this information on hearsay grounds

notwithstanding its inclusion in his statement of facts, the court does not consider the evidence

for its truth but as evidence of the state of mind of Guardian’s senior managers in the early

morning hours of May 7, 2018, and their motive for discharging Fine. For this purpose, it is

admissible. See SiOnyx, LLC v. Hamamatsu Photonics K.K., 332 F. Supp. 3d 446, 476 (D. Mass.

2018) (discussing the state-of mind hearsay exception and collecting relevant cases). It is not

signficant that the declarants were not specifically identified, because the relevance of the

statements depends on the fact that they reported an accusation of rape against Fine along with

related events. Id. at 477 (citing Callahan v. A.E.V., Inc., 182 F.3d 237, 252 n.11 (3d Cir.

1999)).

Following Kowal and Byrne’s meeting with members of Marriott’s security team, they

reported what they had been told to Guardian executive vice president Chris Dyrhaug, who

reported the information to Guardian’s chief executive officer, Deanna Mulligan (Def. SOF ¶

38). Mulligan, in turn, conferred with Guardian’s general counsel (Def. SOF ¶ 39). Mulligan

also spoke with Byrne and Dyrhaug to confirm what they had heard from the Marriott security

team (Def. SOF ¶ 41). In the morning on May 7, 2018, Dyrhaug told Mulligan that it was

possible Fine would be charged with rape. By the afternoon of that day, Mulligan had been told

that Fine would not be charged at that time (Pl. Resp. ¶ 42). At some point, Dyrhaug called

Randy and told him that Fine’s agreement with Guardian was going to be terminated (Pl. SOF ¶

27). Randy asked whether Guardian had all of the facts, how the decision could have been made

so quickly, and whether there was a way to avoid terminating Fine’s agreement with Guardian

(Pl. SOF ¶ 28; Pl. Resp. ¶ 44).

Deeming that she had an obligation to do so, early on May 8, 2018, Mulligan reported the

information she had been given to Guardian’s board of directors through the board’s crisis

response special committee. The three members of the committee agreed with Mulligan’s

recommendation that Fine’s association with Guardian should end (Def. SOF ¶¶ 45-47).

Guardian’s general counsel and its former general counsel, who continued to work for Guardian

as a consultant, were also of the opinion that Fine’s agreement with Guardian should be

terminated (Def. SOF ¶ 48).

E. Guardian Terminates its Agreement with Fine

Sometime during the evening of May 7, 2018, Fine became aware of rumors that his

agreement with Guardian was going to be terminated (Pl. SOF ¶ 29). Fine retained a defense

attorney during the morning of May 8, 2018, who emailed Dyrhaug and stated that the

allegations against Fine were false, that the attorney could prove it, and that the attorney wanted

Guardian managers to have this information before they made a decision about Fine’s future with

Guardian (Pl. SOF ¶¶ 30-31). The defense attorney spoke with the investigating police detective

and showed the detective photographs that Fine had taken (Pl. SOF ¶ 32). The police detective

told Fine’s attorney that the photographs contradicted what the detective had been told, that Fine

would not be arrested, and that no charges would be brought against him (Pl. SOF ¶ 32).

On May 8, 2018, Mulligan, the board of directors, Guardian’s general counsel, and

Guardian’s former general counsel decided to terminate Guardian’s agreement with Fine in

compliance with the two-week notice provision that appeared in the Guardian FRA (Def. SOF ¶

50). Dyrhaug was tasked with communicating the decision to Fine (Def. SOF ¶ 60). He did so

by telephone on May 8, 2018, informing Fine that Guardian was terminating its agreement with

him because Guardian had “lost faith” in him, and telling him that he would receive a

termination letter by mail (Def. SOF ¶ 61), which he subsequently did. The letter provided that

Fine’s agreement with Guardian was terminated effective May 22, 2018, pursuant to the 14-day

notice provision in the FRA (Def. SOF ¶ 62).6

F. Evidence of Guardian’s Reason for Terminating Its Agreement with Fine

Fine’s amended complaint alleged that Guardian used the report about Fine’s conduct at

the Marriott as a pretext to end its relationship with Fine “to avoid future renewal, pension, and

other payments” (Am. Compl. ¶ 48). At his deposition, Fine testified that he does not “have any

knowledge of” Guardian terminating its agreement with him to avoid paying him commissions,

retirement, pension, or other monies, and that he was “speculating” that the reason Guardian

6 The letter referred to an effective termination date of May 22, 2017. The parties agree that the

reference to 2017 was a typographical error and that Guardian terminated Fine’s agreement with

the company effective May 22, 2018 (Pl. Resp. ¶¶ 65-66).

ended its agreement with him was to avoid making payments required under the agreement (Def.

SOF ¶¶ 72-75). At this time, Fine concedes that his entitlement to commissions and other future

payments were not a factor in Guardian’s May 2018 decision to end its agreement with him (Def.

SOF ¶ 76), and that Guardian terminated its agreement with him exclusively based on the events

that took place from May 6 to May 8, 2018 (Pl. Resp. ¶ 47).

G. Post-Termination Remuneration

While Fine was associated with Guardian, he was paid renewal commissions based his

sales of insurance and other products (Def. SOF ¶ 79). The commission amount varied product-

by-product (Def. SOF ¶ 81; Pl. Resp. ¶ 81). Guardian does not pay its field representatives

renewal commissions based on a percentage of premiums. Renewal commissions are based on a

formula that is dependent on the persistency of a field representative’s book of business that is

referred to as the persistency renewal factor (Def. SOF ¶ 82; Pl. Resp. ¶ 82). Based on the

persistency renewal factor, a field representative earns a varying percentage of the renewal

premiums on his or her block of business depending on how many policies remain in force and

the type of products sold (Def. SOF ¶ 83; Pl. Resp. ¶ 83). The amount of a renewal commission

on a particular policy may also vary if a customer makes an addition to the policy after its

purchase (Def. SOF ¶ 84). A field representative only receives renewal commissions on policies

after the customer pays the renewal premium (Def. SOF ¶ 85). On average, 95 % of Guardian

policies are renewed each year (Pl. SOF ¶ 56; Def. Resp. ¶ 56). Over the twenty years preceding

the termination of Fine’s agreement with Guardian, Fine’s lapse rate was 3%, meaning that,

during Fine’s association with Guardian, 97% of his book of business renewed each year, and his

persistency renewal factor was around 7% (Pl. SOF ¶ 59; Def. Resp. ¶ 59).

II. ANALYSIS

A. Preliminary Matters

1. Field Representative Agreement

As an initial matter, the court considers whether, in the absence of a signed copy, the

summary judgment record should include the FRA attached to the declaration of Gregory

Blazinski, which is represented by Guardian to be the form of FRA that was signed by Fine when

he began his relationship with Guardian (Dkt. No. 9-2 at 1-6).7 Fine does not dispute that he

signed an FRA when he joined Guardian. He apparently objects to the court’s consideration of

the FRA attached to the Blazinski declaration on the grounds that the FRA Guardian has

submitted was not signed by Fine (e.g., Pl. Resp. ¶ 2). For its part, Guardian asserts that it has

submitted sufficient evidence to establish that the agreement attached to the Blazinski declaration

is the form of FRA that Fine signed when he joined Guardian (Dkt. No. 114 at 4-6).

The First Circuit held in 2019 that a document must be authenticated to be admissible at

the summary judgment stage. See G. v. Fay Sch., 931 F.3d 1, 14 (1st Cir. 2019) (citing Carmona

v. Toledo, 215 F.3d 124, 131 (1st Cir. 2000)). In 2021, in the Joseph case, the court, while

accepting the parties’ position that evidence had to be authenticated to be considered on

summary judgment, pointed to rulings from other circuit courts of appeals holding that, after a

2010 revision to Fed. R. Civ. P. 56(c)(2), the party proffering the evidence at summary judgment

is only required to show that the party would be able to authenticate the evidence at trial. See

Joseph, 989 F.3d at 155 n.4 (citing, inter alia, Maurer v. Indep. Town, 870 F.3d 380, 384 (5th

Cir. 2017) (noting that, after the 2010 amendment to Rule 56, all that must be shown is that the

evidence is capable of authentication at trial); Jones v. UPS Ground Freight, 683 F.3d 1283,

1293-94 (11th Cir. 2012) (ruling that a statement could be considered at summary judgment if it

7 Precisely the same document, with identical attachments, also appears at docket number 90.

could be ‘reduced’ to admissible form by the time of trial) (citation omitted)). Assuming,

nonetheless, as the parties do, that Guardian must authenticate the field representative agreement

it submitted if the agreement is to be considered in connection with Guardian’s summary

judgment motion, see Joseph, 989 F.3d at 155, the court turns to the authentication question.

Rule 901 of the Federal Rules of Evidence provides that “[t]o satisfy the

requirement of authenticating or identifying an item of evidence, the proponent

must produce evidence sufficient to support a finding that the item is what the

proponent claims it is.” Fed. R. Civ. P. 901(a). In section (b), the rule identifies

examples of ways to authenticate evidence, including through testimony of a

witness with knowledge. Fed. R. Evid. 901(b). Thus, “[a] document can be

authenticated [under Rule 901(b)(1)] by a witness who wrote it, signed it, used it,

or saw others do so.” United States v. Landrón-Class, 696 F.3d 62, 69 (1st Cir.

2012) (alterations in original) (quoting Orr v. Bank of Am., NT & SA, 285 F.3d

764, 774 n.8 (9th Cir. 2002)).

Id. at 156. “The standard the district court must apply in evaluating a document’s authenticity is

whether there is ‘enough support in the record to warrant a reasonable person in determining that

the evidence is what it purports to be.’” United States v. Blanchard, 867 F.3d 1, 6 (1st Cir. 2017)

(quoting United States v. Paulino, 13 F.3d 20, 23 (1st Cir. 1994)). “The authentication

requirement is not demanding and may be satisfied with ‘competent testimony’ indicating that

the document is what it appears to be.” Latimore v. Trotman, CIVIL ACTION N. 14-13378-

MBB, 2021WL 5763009, at *5 (D. Mass. Dec. 3, 2021) (citing Goguen ex rel. Estate of Goguen

v. Textron, Inc., 234 F.R.D. 13, 16-17 (D. Mass. 2006) (stating that the process of authentication

is “rarely onerous”)).

For the following reasons, the court finds that Guardian has sufficiently authenticated the

FRA attached to the Blazinski declaration, even if in a somewhat barebones fashion. First, Fine

does not dispute that he signed an FRA when he joined Guardian, nor does he dispute that the

version submitted by Guardian may be the version he signed (Dkt. No. 117 at 43-44). See

Maurer, 870 F.3d at 384 (ruling that the district court erred when it refused to take into account

an unsigned contract submitted by the plaintiff on summary judgment where it was undisputed

that the parties had entered into an agreement and the defendants did not contend that the

agreement plaintiff submitted was not the parties’ agreement). Second, Guardian employees

with personal knowledge about the operations of the field representative system and documents

related to the system have authenticated the FRA attached to Blazinski’s declaration as the FRA

that was in effect in 1997 and that Fine would, therefore, have signed. See NWS Corp. v. Dish

Network, LLC, No. 13cv2247-GPC (BGS), 2014 WL 769175, at *2 (S.D. Cal. Feb. 25, 2014) (a

witness with personal knowledge about the operations of a sales support division and its

procedures could authenticate an unsigned form contract as the parties’ operative agreement).

Leyla Lesina, Guardian’s Fed. R. Civ. P. 30(b)(6) deponent, who was employed as a senior vice

president and Guardian’s head of agency distribution, testified that Guardian had only one

version of its field representative agreement in effect at any one time (Def. SOF ¶¶ 2, 12).

Blazinski was a lead contracting and licensing consultant for Guardian (Dkt. No. 9-1 at 1). He

had personal knowledge based on his review of relevant Guardian documents and

communications with other Guardian employees sufficient to verify that the FRA attached to his

declaration was the form of agreement that was in effect when Fine joined Guardian (Dkt. No. 9-

1 ¶ 2). See Joseph, 989 F.3d at 156 (citing Fed. R. Evid. 901(b)(1); evidence from a witness with

knowledge that the item is what it purports to be satisfies the requirement of authentication).

Finally, Fine has not identified any provisions in the FRA attached to Blazinski’s declaration that

he claims differ from the FRA he acknowledges he signed. Cf. id. (holding that the trial court

erred in declining to consider documents when, among other things, the party opposing their

admission never claimed that the documents were not authentic). For the foregoing reasons, the

court finds that Guardian has sufficiently authenticated the FRA in the record that it should be

relied on for summary judgment purposes.

As to its content, the FRA purports to classify Guardian field representatives as

independent contractors rather than employees and further provides, in pertinent part, that

Guardian’s field representatives are to solicit applications for life, health, and group insurance

and other company products; aid in the maintenance of insurance in force; and render service to

policyholders and beneficiaries (Dkt. 9-2 at 4). The FRA incorporates by reference provisions of

the Guardian field representative plan (FRP), including provisions that outline “incentive

compensation earned by and payable to [a field representative]” (Dkt. No. 9-1 at 4, 6). The FRA

provides that either party may voluntarily terminate the agreement at any time by written notice,

to be effective not earlier than two weeks from the date of delivery of the notice of termination.

The FRA provides that, “[o]n termination, [Guardian’s] liability for remuneration of any kind

shall cease except as set forth in the Field Representative Plan” and that, except as provided for

in the FRP, “there is no vesting of commissions” (Dkt. No. 9-1 at 5, 6).

2. Standard of Review

Summary judgment is appropriate if “the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). “An issue is ‘genuine’ when a rational factfinder could resolve it either direction.” Mu v.

Omni Hotels Mgmt. Corp., 882 F.3d 1, 5 (1st Cir.), rev. denied, 885 F.3d 52 (1st Cir. 2018)

(citing Borges ex rel. S.M.B.W. v. Serrano–Isern, 605 F.3d 1, 4 (1st Cir. 2010)). “A fact is

‘material’ when its (non)existence could change a case’s outcome.” Id. (citing Borges, 605 F.3d

at 5).

A party seeking summary judgment is responsible for identifying those portions of the

record “which it believes demonstrate the absence of a genuine issue of material fact.” Celotex

Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant can meet this burden either by “offering

evidence to disprove an element of the plaintiff’s case or by demonstrating an ‘absence of

evidence to support the non-moving party’s case.’” Rakes v. United States, 352 F. Supp. 2d 47,

52 (D. Mass. 2005) (quoting Celotex, 477 U.S. at 325). If the moving party meets its burden,

“[t]he non-moving party bears the burden of placing at least one material fact into

dispute.” Mendes v. Medtronic, Inc., 18 F.3d 13, 15 (1st Cir. 1994) (citing Celotex, 477 U.S. at

325). The record is viewed in favor of the nonmoving party, and reasonable inferences are

drawn in the nonmoving party’s favor. See Garcia-Garcia v. Costco Wholesale Corp., 878 F.3d

411, 417 (1st Cir. 2017) (citing Ameen v. Amphenol Printed Circuits, Inc., 777 F.3d 63, 68 (1st

Cir. 2015)).

B. Unjust Enrichment Claim (Second Count)

Because the court has concluded that the FRA submitted by Guardian is admissible as

evidence of the parties’ agreement, the court turns first to Fine’s unjust enrichment claim.

Claims of unjust enrichment and quantum meruit “represent alternative theories of recovery that

can only be awarded where no express contract covers the matter.” Viscito v. Nat’l Planning

Corp., Civil Action No. 18-30132-MGM, 2021 WL 359314, at *6 (D. Mass. Jan. 22, 2021),

appeal docketed, No. 21-1081 (1st Cir. Feb. 2, 2021); see also York v. Zurich Scudder Invs., Inc.,

849 N.E.2d 892, 901 (Mass. App. Ct. 2006) (“It is well settled that quantum meruit relief may

not be granted where an express contract governing the matter exists.”) (citing Boswell v. Zephyr

Lines, Inc., 606 N.E.2d 1336, 1342 (Mass. 1993); Zarum v. Brass Mill Materials Corp., 134

N.E.2d 141, 143 (Mass. 1956)). “’[A] party with an adequate remedy at law cannot claim unjust

enrichment …. It is the availability of a remedy at law, not the viability of that remedy, that

prohibits a claim for unjust enrichment.’” SiOnyx, LLC., 332 F. Supp. 3d at 473 (quoting Shaulis

v. Nordstrom, Inc., 865 F.3d 1, 16 (1st Cir. 2017); citing additional cases).

Fine’s sole argument in opposition to so much of Guardian’s motion as seeks dismissal of

his unjust enrichment claim is that, lacking an FRA signed by Fine, Guardian cannot rely on

cases where the existence of a signed agreement is undisputed (Dkt. No. 102 at 24). Guardian,

however, has authenticated the FRA attached to the Blazinski declaration as the form of

agreement signed by Plaintiff when he joined Guardian, meaning that the court has found that the

parties’ relationship is governed by the terms of a written agreement. In York, a case in which,

like Fine, the plaintiff claimed to be entitled to recovery for a breach of the implied duty of good

faith and fair dealing, the Massachusetts Appeals Court gave short shrift to the plaintiff’s

quantum meruit claim.8 See York, 849 N.E.2d at 901. Guardian is entitled to judgment on Fine’s

unjust enrichment claim.

C. Wage Act Claim (Third Count)

The third count of Fine’s amended complaint alleges that Guardian violated the

Massachusetts Wage Act by failing to pay Fine renewal commissions on policies he sold while

he was associated with Guardian.

“The purpose of the Wage Act is ‘to protect employees and their right to wages,’

Electronic Data Sys. Corp. v. Attorney Gen., … 907 N.E.2d 635 ([, 641 (Mass.] 2009), by

8 Under Massachusetts law, claims of unjust enrichment and quantum meruit are closely related.

“’[T]he underlying basis for awarding quantum meruit damages in a quasi-contract case is unjust

enrichment of one party and unjust detriment to the other party.’” Liss v. Studeny, 879 N.E.2d

676, 682 (Mass. 2008) (quoting Salaman v. Terra, 477 N.E.2d 1029, 1031 (Mass. 1985)).

requiring employers to pay employees their wages ‘in a timely fashion, according to the

parameters set out in the statute.’ Okerman v. VA Software Corp., … 871 N.E.2d 1117[, 1121

(Mass. App. Ct.] 2007).” Parker v. EnerNOC, Inc., 139 N.E.3d 328, 333 (Mass. 2020) (citing

Mass. Gen. Laws ch. 149, § 148, first par.). “To state a claim under Mass. Gen. Laws ch. 149[,]

§ 148, a plaintiff must allege that (1) []he was an employee under the statute, (2) [his] form of

compensation constitutes a wage under the statute, and (3) the defendants violated the Act by not

paying [him] wages in a timely manner.” 9 Gallant v. Boston Exec. Search Assocs., Inc., Civil

Action No. 13-12081-FDS, 2015 WL 3654339, at *6 (D. Mass. June 12, 2015) (citing Stanton v.

Lighthouse Fin. Servs., Inc., 621 F. Supp. 2d 5, 10 (D. Mass. 2009)); see also Ellicott v. Am.

Capital Energy, Inc., 906 F.3d 164, 169 (1st Cir. 2018) (citing Stanton, 621 F. Supp. 2d at 10).

The Massachusetts Supreme Judicial Court (SJC) has explained that, as it pertains to

commissions, the Wage Act states:

“This section shall apply, so far as apt, to the payment of commissions when the

amount of such commissions, less allowable or authorized deductions, has been

definitely determined and has become due and payable to such employee, and

commissions so determined and due such employees shall be subject to the

provisions of [G.L. c. 149, § 150].”

G.L. c. 149, § 148, fourth par. That is, the act requires that commissions are to be

paid when two conditions are met: (1) the amount of the commission “has been

definitely determined”; and (2) the commission “has become due and payable.”

G.L. c. 149, § 148, fourth par. In contrast, other forms of wages, once earned, are

to be paid on a regular schedule. G.L. c. 149, § 148, first par.

Parker, 139 N.E.3d at 333. To the extent the renewal commissions Fine claims by his amended

complaint are deemed unpaid wages under the Wage Act, they are subject to mandatory trebling.

See id. at 335 (“Wages lost as a result of retaliation are trebled under the Wage Act. G.L. c. 149,

9 For purposes of summary judgment only, Guardian has not disputed that Fine would be able to

show that he was an employee under the statute.

§§ 148A, 150.”); Mui v. Mass. Port Auth., 89 N.E.3d 460, 462 (Mass. 2018) (noting that

violations of the Wage Act result in strict liability and treble damages in the civil context).

“In order to be ‘definitely determined,’ a commission must be ‘arithmetically

determinable.’” McAleer v. Prudential Ins. Co., 928 F. Supp. 2d 280, 287 (D. Mass. 2013)

(quoting Wiedmann v. The Bradford Grp., Inc., 831 N.E.2d 304, 312 (Mass. 2005) (superseded

by statute on other grounds)). “Moreover, a commission is ‘due and payable’ when dependent

contingencies have been met and it is thus owed to the employee.” Ellicott, 906 F.3d at 169

(citing McAleer, 928 F. Supp. 2d at 288). “When a compensation plan specifically sets out the

contingencies an employee must meet to earn a commission, courts apply the terms of the plan

….” McAleer, 928 F. Supp. 2d at 289 (citing Watch Hill Partners v. Barthel, 338 F. Supp. 2d

306, 307-08 (D.R.I. 2004)). See Smith v. Unidine Corp., SUCV20152667, SUCV2015-3417,

SUCV2016-3297, 2017 WL 4411249, at *5 (Mass. Super. July 25, 2017).

The FRA Fine signed provided, as to compensation, that he would be paid a salary and

“incentive compensation earned by and payable to him according to the Field Representative

Plan” (Dkt. No. 9-2 at 4). The FRP set out the formulas by which Fine’s commissions on

various products were calculated based on various factors, including the nature of the product at

issue, the schedule on which premiums were paid, and a persistency factor, meaning the extent to

which policies sold by the agent were renewed (Dkt. No. 119 at 54-59). Guardian’s Rule

30(b)(6) deponent testified that Guardian determined a field representative’s commission rate

annually on the anniversary of the date the field representative entered into his or her agreement

with Guardian, while renewal commissions were paid to the field representative “all throughout

the year” as premium payments were received (Dkt. No. 119 at 48).10

While the extent of Fine’s claims under the Wage Act are not entirely clear, it appears

that he asserts he is entitled to collect commissions on renewals of Guardian insurance policies

he sold for as long as Guardian continues to be paid renewal premiums for any policy Fine sold

during his association with Guardian (Dkt. No. 102 at 22-24). To the extent the FRA and the

FRP end a field representative’s entitlement to renewal commissions after the agreement

between a field representative and Guardian is terminated, Fine argues that these provisions

violate the statutory prohibition against special contracts that purport to exempt an employer

from compliance with the Wage Act. See Mass. Gen. Laws ch. 149, § 148, sixth par. Guardian

argues that the renewal commissions Fine seeks to recover were neither due and payable nor

arithmetically determinable when Guardian ended its association with Fine. Guardian has the

better of the arguments.

1. Fine’s Future Commissions Were Not Due and Payable

“Commissions are due and payable when ‘any contingencies relating to their entitlement

have occurred.’” McAleer, 928 F. Supp. 2d at 288 (quoting Micchie v. N.R.I. Data & Bus.

Prods., Inc., Civil Action No. 09-11661-GAO, 2011 WL 4479849, at *6 (D. Mass. Sept. 27,

2011); Sterling Research, Inc. v. Pietrobono, Civil Action No. 02-40150-FDS, 2005 WL

3116758, at *12 (D. Mass. Nov. 21, 2005)). The FRA and the FRP provided that, with limited

exceptions not at issue here, Fine would not be entitled to remuneration after the termination of

his agreement with Guardian. Continued employment has been identified as a permissible

10 Guardian filed docket number 119 under seal with leave of court. The court can, however, see

no reason why these general statements about Guardian’s compensation practices would warrant

confidentiality.

contingency that must be satisfied for a commission to be deemed due and payable. See Smith,

2017 WL 4411249, at *4 (stating that “[a] bonus that is … contingent upon the employee

remaining with the company for a defined period of time has been held not to be a wage under

the [Wage] Act”) (citing Sheedy v. Lehman Bros. Holdings, Inc., Civil Action No. 11-11456-

RGS, 2011 WL 5519909 (D. Mass. Nov. 14, 2011); Weems v. Citigroup, Inc., 900 N.E.2d 89, 94

(Mass. 2009); Harrison v. NetCentric Corp., 744 N.E.2d 622, 625, 629-30 (Mass. 2001)); see

also Sterling Research, Inc., 2005 WL 3116758, at *13 (granting summary judgment on the

plaintiff employee’s counterclaim for commissions where the plaintiff’s employment agreement

provided that an individual had to be employed to receive a commission, commissions were paid

on a quarterly basis, and the plaintiff was no longer employed when the commission at issue was

paid).

For example, in the Gallant case, the plaintiff was a legal recruiter employed by Boston

Executive Search Associates (BESA). See Gallant, 2015 WL 3654339, at *1. She placed a

partner at the law firm of Reed Smith in or around April 2013. Reed Smith paid BESA for the

placement on June 6, 2013, subject to the condition the BESA would repay Reed Smith 100% of

the placement fee if the attorney left Reed Smith within 6 months; 50% of the fee if the attorney

left Reed Smith within 7 to 9 months; and 25% of the fee if the attorney left within 10 to 12

months. Plaintiff’s agreement with BESA provided that she would be paid percentage

commissions for placements she made, but that any commission would be subject to the terms

and conditions of BESA’s agreement with the law firm where the attorney was placed. Id. at *1,

4. Plaintiff’s employment with BESA was terminated on June 6, 2013. She sued to recover a

commission on the Reed Smith placement as wages. Id. at *5. When plaintiff’s employment

was terminated, the payment to BESA – on which plaintiff claimed the commission – was still

subject to the condition that portions of it might need to be repaid to Reed Smith if the lawyer

left Reed Smith within a year of joining the firm.

The court framed the issue as “whether that commission was both ‘definitely determined’

and ‘due and payable,’ and therefore a ‘wage,’ at the time [plaintiff’s] employment was

terminated.” Id. at *7. The court held that the commission was not “due and payable” to

plaintiff or “definitely determined” because, when her BESA employment was terminated,

BESA was not unconditionally entitled to retain the full payment from Reed Smith. Therefore,

the court held, the commission plaintiff sought to recover was “not a ‘wage’ at the time her

employment was terminated.” Id. at *10. The court granted BESA’s motion for summary

judgment on plaintiff’s Wage Act claim. Id. Contrast Berberian v. G-Form, LLC, Civil Action

No. 14-10422-JCB, 2014 WL 12700578, at *6 (D. Mass. Aug. 29, 2014) (denying so much of

the defendant’s motion to dismiss as was directed at plaintiff’s Wage Act claims for unpaid

commissions where the plaintiff “allege[d] that [the commission] amount [was] presently due to

him, without condition”).

To be sure, there are cases where courts have held that an employee was entitled to a

commission as a wage although the commission was not payable until after the termination of

employment. In those cases, the employee had done the work to earn the commission before his

or her employment was terminated and there were no unsatisfied contingencies that might have

altered the amount of the commission or eliminated the employee’s entitlement to the

commission. For example, in Israel v. Voya Institutional Plan Servs., LLC, Civil Action No. 15-

cv-11914-ADB, 2017 WL 1026416, at *7 (D. Mass. Mar. 16, 2017), notwithstanding a provision

in plaintiff’s compensation plan providing that an employee who resigned would not be entitled

to a pro-rated payment under the commission plan, the court held that “commissions that

[plaintiff] earned during his final months of employment” were wages under the Wage Act

where the plaintiff “did the work to earn the commissions prior to his resignation, and the fact

that it may have taken [the employer] a few months to make a final calculation as to the exact

amount of the commissions [wa]s not sufficient to take them outside the scope of the Wage Act.”

Id. (citing Feygina v. Hallmark Health Sys., No. MICV2011-03449, 2013 WL 3776929, at *2, 5

(Mass. Super. July 12, 2013) (holding that commissions earned prior to termination of

employment were protected by the Wage Act even though they were not calculable until several

months later)); see also Levesque v. Schroder Inv. Mgmt. N. Am., Inc., 368 F. Supp. 3d 302, 314

(D. Mass. 2019) (granting defendant’s motion to dismiss in part and permitting plaintiff’s Wage

Act claims to go forward only insofar as plaintiff sought recovery for earned commissions on

sales he made prior to the termination of his employment).

Here, Fine’s entitlement to renewal commissions was contingent on events that did not,

and could not, occur prior to the termination of his association with Guardian, including, in the

case of a life insurance policy, that the policy holder survived, and, in the case of any policy, that

the policy holder chose to pay the premium to renew the policy. While Fine sold insurance

policies during his association with Guardian that would have entitled him to renewal

commissions had he remained with Guardian, such commissions were subject to unmet

contingencies and were not “due and payable” when his agreement with Guardian terminated as

that phrase has been interpreted by state and federal courts. See Gallant, 2015 WL 3654339, at

*10; Smith, 2017 WL 4411249, at *5 (“Because there is no earned commission after the

termination of employment, a commission is not ‘due and payable’ as required for recovery of an

unpaid commission under the Act.”).

2. The Future Renewal Commissions Were Not Definitely Determinable.

Nor could Fine’s future renewal commissions be “definitely determined” as required by

the statute. See Okerman v. VA Software Corp., 871 N.E.2d 1117, 1124-25 (Mass. App. Ct.

2007). Viewing the record in the light most favorable to Fine, for at least some period of time,

his renewal commissions could be estimated with a high degree of certainty based on his history

of renewals in his block of business and factors Guardian uses to calculate renewal commissions.

The future renewal commissions, however, are not “arithmetically determinable,” see id.,

because the commission amount would vary depending on the number of policies that were

renewed, on Fine’s annual persistency factor, which depended on the rate of renewals in his book

of business, which presumably would not be static over time, and on changes to policies that

could impact commission amounts. Indeed, Fine concedes that attrition would factor into his

entitlement to future renewal commissions (Dkt. No. 102 at 22). Courts have held that only

commission amounts that are arithmetically determinable constitute wages under the Wage Act.

See Gallant, 2015 WL 3654339, at *10 (holding that the commission plaintiff sought to recover

could not be definitely determined when, at the time plaintiff’s employment was terminated,

there were contingencies that might cause a reduction in its amount); contrast Ellicott, 906 F.3d

at 169 (holding that commissions were definitely determined for purposes of the Wage Act

where “[t]he parties do not dispute the figures necessary to calculate [plaintiff’s] sales

commissions to the dime.”); Wiedmann, 831 N.E.2d at 312 (“There is no dispute concerning the

total from which deductions would be taken, or about the other formulas and deductions, thus

making the amount owed the plaintiff arithmetically determinable.”).

3. Fine’s Arguments.

Fine raises two arguments as to why future renewal commissions on the Guardian

policies he sold qualify as wages. First, he contends that he is entitled to recover future renewal

commissions pursuant to Gram v. Liberty Mut. Ins. Co., 429 N.E.2d 21 (Mass. 1981) (Gram I)

and Gram v. Liberty Mut. Ins Co., 461 N.E.2d 796 (Mass. 1984) (Gram II), and “because

Guardian breached the implied covenant of good faith and fair dealing by terminating him

without cause,” future renewal commissions are, by definition, “wages under the Massachusetts

Wage Act” (Dkt. No. 102 at 22). Fine cites no authority in support of this contention, which is

not persuasive. Even if Fine is entitled to recover future commissions pursuant to the Gram

doctrine, a question addressed below, future commissions would not constitute wages for

purposes of the Act, where the statutory definition of wages makes no reference to the Gram

doctrine or the implied duty of good faith and fair dealing and the requirements that commissions

be due and payable and definitely determinable are not satisfied. See Krause v. UPS Supply

Chain Sols., Inc., Civil Action No. 08-10237-DPW, 2009 WL 3578601, at *13-15 (D. Mass. Oct.

28, 2009) (the court granted summary judgment on the Wage Act claims because the plaintiff

was not eligible for commissions under the terms of the applicable sales incentive plan, but

declined to grant summary judgment on her claim for the same commissions based on the

implied duty of good faith and fair dealing because she “was substantially involved in the sale of

… three accounts and there [was] a genuine issue as to whether Plaintiff’s termination was

without good cause”).

Second, Fine contends that future renewal commissions constitute wages under the

reasoning of the Parker case, in which the SJC held that “commissions that are not yet due to be

paid [when the plaintiff’s employment is terminated] may nonetheless constitute lost wages if the

employer’s violations of the act prevent payment of those commissions.” Parker, 139 N.E.3d at

335. In essence, Fine contends that Parker changed the legal landscape with respect to recovery

of future commission payments as wages. For its part, Guardian argues that Parker is limited to

its facts.

In Parker, the jury found that EnerNOC, Inc., the plaintiff’s employer, had violated the

Wage Act by: (1) not paying the plaintiff the full amount of an initial guaranteed sales

commission she had earned; and (2) terminating her employment when she complained about

EnerNOC’s failure to pay her the full amount of the guaranteed initial commission, thereby

causing her to lose an additional and substantial “true-up” commission payment to which she

was potentially entitled shortly after the first anniversary of the contract’s effective date. Id. at

330. The services contract on which plaintiff was entitled to these commission payments

included a “termination for convenience” clause, which permitted either party to terminate the

contract within thirty days following the first anniversary of the effective date of the contract.

The plaintiff would not have been entitled to the true-up commission payment had either party

exercised the termination for convenience clause. Id. Under EnerNOC’s sales commission

policy, “a salesperson’s eligibility for ‘any further [c]ommissions’ would cease upon the date of

termination of employment ‘for any reason.’” Id. at 331. Neither party exercised the

termination for convenience clause, but the plaintiff was no longer employed by EnerNOC at the

time at which she would have been entitled to payment of the true-up commission because she

was fired in retaliation for complaining when EnerNOC did not pay her the initial guaranteed

commission payment. Id.

The trial judge treated the shortfall in the guaranteed commission payment as wages,

subject to mandatory trebling. He held that the true-up commission payment was not due and

payable at the time plaintiff’s employment was terminated, and therefore could not be considered

a lost wage. Id. at 334. The SJC reversed this aspect of the trial court judgment on the grounds

that:

the true-up policy, in conjunction with EnerNOC’s retaliatory termination of the

plaintiff, made it impossible for the plaintiff to fulfill the only unmet contingency

required to collect the true-up commission. A policy that conditions payment on

continued employment cannot relieve an employer from the obligation of paying

a commission where the employer terminates its employee in retaliation for

complaining about wage violations in the first place. On these facts, the policy is

therefore unenforceable under the Wage Act.

Id. at 335 (footnote omitted).

The Parker decision does not sweep as broadly as Fine contends. In explaining its

reasoning, the SJC noted that the Wage Act penalizes employers “for failing to pay wages

promptly (including any commissions that have been definitely determined and have become due

and payable),” id. at 335, and “separately” prohibits “retaliation against an employee for seeking

to enforce his or her rights under the act.” Id. The court treated EnerNOC’s termination of the

plaintiff’s employment in retaliation for her complaint about EnerNOC’s failure to pay her the

full amount of her initial sales commission as a violation of the Wage Act separate and apart

from a timely failure to pay wages, holding that “as a result of the retaliation, the plaintiff did not

receive wages [the true-up commission] she otherwise would have received. Wages lost as a

result of retaliation are trebled under the Wage Act.” Id. (footnote omitted) (citing Mass. Gen.

Laws ch. 149, §§ 148A, 150). The instant case is distinguishable from Parker in that Fine has

disavowed any claim that retaliation or any intention on Guardian’s part to deprive him of future

commissions was the reason why his association with Guardian – and his entitlement to future

commissions – ended (Def. SOF ¶¶ 72-76; Pl. Resp. ¶ 47).

The SJC’s observation that it disagreed with the trial court’s instruction that a

commission payment could not qualify as a wage unless it was “’due and payable’ and …

‘definitely determined’ as of plaintiff[’]s last day of employment,” id. at 334 n.10 (emphasis in

original), is consistent with cases such as Israel, Feygina, and Levesque. In those cases, as noted

above, all contingencies for payment of the commissions were satisfied before the plaintiffs

parted company with their employers. In Feygina, the amount of incentive compensation due to

the plaintiff physician was earned but could not be calculated until some months after her

employment ended because the medical practice that employed her needed that time to calculate

the expenses and revenue for her practice during the relevant period. Feygina, 2013 WL

3776929, at *2. There were similar reasons alleged for the delay in commission payments in

Levesque, 368 F. Supp. 3d at 314 (noting that a delay in the calculation of commissions as to

which all contingencies were satisfied before the plaintiff’s employment was terminated did not

take the commissions outside the scope of the Wage Act), and Israel, 2017 WL 1026416, at *7

(noting that the employer needed time to make a final calculation of the commissions owed to

the plaintiff when his employment was terminated).

In Levesque and Israel, the courts held that contractual provisions barring former

employees from recovering commissions were unenforceable where all of the contingencies that

had to be met for the plaintiffs to claim their commissions had been satisfied before their

employment was terminated. See Levesque, 368 F. Supp. 3d at 314; Israel, 2017 WL 1026416,

at *7. That does not mean that a provision barring the recovery of commissions after the

termination of employment is never enforceable. The First Circuit has observed that an

employer might reasonably “desire to close the books on discharged employees,” Bohne v.

Comput. Assocs. Int’l, Inc., 514 F.3d 141, 144 (1st Cir. 2008), and the SJC stated in Parker that

the Court was “not suggest[ing] that a period of continued employment is per se an inappropriate

prerequisite upon which to condition a commission.” Parker, 139 N.E.3d at 335 n.13. Contrary

to Plaintiff’s contention, there is no evidence that Guardian terminated its business relationship

with Plaintiff “in order” to deny him future commissions in reliance on the FRA provision that

barred further remuneration on termination of the Plaintiff’s agreement with Guardian (Dkt. No.

102 at 23-24). See id. (a continued employment contingency “cannot be relied upon by an

employer to create circumstances under which the contingency goes unfulfilled in order to deny

a commission that otherwise would be due and payable to an employee”) (emphasis added).

Indeed, Plaintiff has conceded that Guardian did not terminate its business relationship with him

in order to deny him future commissions. Rather, he has conceded, it did so exclusively because

of events that transpired at the Marriott Marquis in Washington, D.C., during the night of May 6-

7, 2018.

Fine seeks to recover as wages future commissions which, Fine asserts, Guardian would

be able to project in one of two ways, either by relying on industry averages, or based on his

historical renewal rate (Dkt. No. 102 at 11). He does not dispute that, as of the date on which

Guardian terminated its agreement with him, he was not entitled to the renewal commissions he

seeks to recover in this action. He does not dispute, nor could he logically do so, that his

entitlement to these future renewal commissions was contingent on events that would occur after

the termination of his business relationship with Guardian. Plaintiff has not identified any state

(or federal) case treating such future renewal commissions as wages under Mass. Gen. Laws ch.

149, §148A, and the court has found none. “’If [Parker] is to be extended, this is a matter for the

Massachusetts courts, and not for [the federal district court].’” Bohne, 514 F.3d at 144 (quoting

Sargent v. Tenaska, 108 F.3d 5, 10 (1st Cir. 1997)).

Guardian is entitled to judgment on the Third Count in Fine’s amended complaint.

D. Recovery Under Gram

If Fine can recover at all, it is under the doctrine established in Gram I. It bears noting

that, to the extent Fine’s claim is limited to future renewal commissions on insurance policies he

sold before his agreement with Guardian was terminated, Fine seeks recovery for precisely the

same losses as did the successful plaintiff in the Gram cases.11 Thus, Guardian’s contentions

that Fine’s claim for losses representing future renewal commissions is impermissibly

speculative or contingent fail as a matter of law (Dkt. No. 87-1 at 22-23).

Contrary to Guardian’s contention, this court has not held that, to recover for a breach of

the implied duty of good faith and fair dealing, Fine must establish that the termination of his

agreement was without good cause or in bad faith with the purpose of depriving him of benefits

to which he was entitled (Dkt. No. 87-1 at 14). That is an inaccurate statement of Massachusetts

law because “where an at-will employee is discharged without good cause, but the employer has

not acted in bad faith [by terminating an employee to deprive him of a commission which was

due to him], the employer is [still] liable under the obligation of fair dealing ‘for the loss of

compensation that is so clearly related to an employee’s past service.’” York, 849 N.E.2d at 899

(quoting Gram I, 429 N.E. 2d at 29). See Fine v. Guardian Life Ins. Co. of Am., 450 F. Supp. 3d

20, 29 (D. Mass. 2020) (noting that in Gram I, the SJC extended the Fortune doctrine to cover

employees who were not discharged in bad faith but who were deprived of compensation clearly

related to the employee’s past services). The First Circuit has acknowledged that:

Gram extended the Fortune doctrine to require employers who terminate “without

good cause” – even though without bad-faith intent – to pay any compensation

clearly related to employees’ past services, even if not yet contractually due. So

11 To the extent that Fine seeks to recover additional retirement compensation, he is not entitled

to do so under Gram II, which held that damages were “to be measured, in their ‘outer limit,’ by

renewal commissions” measured by the terms set forth in Gram I. Gram II, 461 N.E.2d at 798.

He cannot recover any enhancement to his retirement compensation. See id. The so-called

“renewal runoff” described by Fine appears to be duplicative of the loss of future renewal

commissions. A plaintiff is not entitled to a duplicative recovery. See, e.g., Mailman’s Steam

Carpet Cleaning Corp. v. Lizotte, 616 N.E.2d 85, 89 (Mass. 1993).

(in theory) a lawsuit might fail under Fortune yet succeed under Gram – e.g., if

the employee was fired for a baseless reason – although Massachusetts case law

has interpreted “good cause” very liberally in favor of employers.

Bohne, 514 F.3d at 144 (citations omitted). See also Suzuki v. Abiomed, Inc., 943 F.3d 555, 562

(1st Cir. 2019) (noting that, following the SJC’s decisions in Gram, “[a]lthough termination of

employment without good cause is not alone a breach of the implied covenant, an employer may

sometimes be held liable for lost compensation that ‘clearly related’ to the dismissed employee’s

‘past service’”) (quoting Gram I, 429 N.E.2d at 28-29).

1. Whether Guardian had Just or Good Cause to Terminate its Agreement with

Fine is a Jury Question

Even if Massachusetts case law has interpreted “good cause” liberally in this context,

there is “[n]o doubt that whether a termination was for good cause commonly presents a fact

question for the jury.” York, 849 N.E.2d at 900 (citing Goldhor v. Hampshire Coll., 521 N.E.

1381, 1384 (Mass. App. Ct. 1988)).

Guardian argues that the court should, as a matter of law, find that it had good cause to

terminate its business relationship with Fine, relying on the following undisputed facts:

Guardian had been told that a female guest at the Marriott Marquis had accused Fine of raping

her; someone called an ambulance; the woman went to the hospital to have a rape kit performed;

an unidentified man said he heard screams; Marriott security personnel told Fine he had to leave

the hotel premises where Guardian was conducting the conference; and Guardian had escalated

the issue to the crisis response committee of its board of directors, whose members agreed that

Guardian’s agreement with Fine should be terminated (Dkt. No. 113 at 6).12 For his part, Fine

12 Guardian argues in a footnote that even if the information it had when it decided to end its

agreement with Fine was insufficient to support termination for good cause, information it

subsequently acquired shows good cause as a matter of law (Dkt. No. 87-1 at 20 n.11). The case

Guardian cites in support of this proposition was decided under Delaware law. See Strobek v.

Muggia, No. 14-P-1299, 2016 WL 320215, at *2-3 (Mass. App. Ct. Jan. 27, 2016) (unpublished).

asserts that the facts do not establish good cause as a matter of law because, viewing the record

in the light most favorable to him, he was falsely accused of rape and Guardian had been

informed before it terminated Fine’s agreement that Fine had evidence that the accusation was

false and that the police were not going to arrest or charge him at that time. Fine argues that

good cause is at least a question of fact where “Guardian made no further inquiry, never spoke to

Mr. Fine, and acted solely on the basis of an allegation” (Dkt. No. 102 at 14).

Massachusetts courts have consistently defined good cause (occasionally referred

to as “just” or “due” cause) as the existence of either “(1) a reasonable basis for

employer dissatisfaction with a new employee, entertained in good faith, for

reasons such as lack of capacity or diligence, failure to conform to usual standards

of conduct, or other culpable or inappropriate behavior, or (2) grounds for

discharge reasonably related, in the employer’s honest judgment, to the needs of

[its] business.”

York, 849 N.E.2d at 899 (quoting G&M Emp’t Serv. Inc. v. Commonwealth, 265 N.E. 2d 476,

480 (Mass. 1970), appeal dismissed 402 U.S. 968 (1971); citing additional cases); see also Joyal

v. Hasbro, Inc., 380 F.3d 14, 21 (1st Cir. 2004) (same). Plaintiff was not a new member of

Guardian’s sales force and there is, in any event, no evidence of lack of capacity or diligence. In

York, at least, the ground for discharge that reasonably related to the needs of the business was a

cost-cutting measure that affected multiple employees and the factual record on this issue was

undisputed. York, 849 N.E.2d at 900. It is not so obvious that failing to cut ties with Fine risked

damage to Guardian’s reputation if the accusation against Fine was false.

It is not clear whether this court can rely on after-acquired information. “In the rare

opportunities that [the SJC] and the [Massachusetts] Appeals Court have had to consider the

issue of after-acquired evidence in the context of a termination from employment, neither of the

courts has adopted, or declined to adopt, this doctrine.” EventMonitor, Inc. v. Leness, 44 N.E.3d

848, 851 (Mass. 2016) (citing Flesner v. Tech. Commc’ns Corp., 575 N.E.2d 1107, 1113-14

(Mass. 1991); Prozinski v. Ne. Real Estate Servs., 797 N.E.2d 415, 425 (Mass. App. Ct. 2003)).

The court declines to decide this issue in the absence of developed argument.

The meaning of just or good cause in this area of the law is less than clear, see Weiss v.

DHL Express, Inc., Civil Action No. 10-10705-NMG, 2011 WL 13137940, at *6 (D. Mass. Nov.

16, 2011), recommendation adopted, 2011 WL 13141598 (D. Mass. Dec. 7, 2011), rev’d on

other grounds, 718 F.3d 39 (1st Cir. 2013), and cases addressing justifications for discharge are

highly fact dependent, making generalization difficult. Because Guardian’s decision to sever its

relationship with Fine was premised on what it heard or believed about Fine’s conduct, the court

seeks guidance in cases where the employer’s action was premised on its knowledge or belief

about an employee’s work-related conduct. In Gram I, following a jury trial, the SJC held that

the employer, Liberty Mutual Insurance Company (Liberty), was liable to the plaintiff for future

renewal commissions where the jury reasonably could have found that the termination of

plaintiff’s employment was “bad, unjust, and unkind” because, notwithstanding the supervisors’

belief, the employee did not violate any company policy and the termination was “the product of

inadequate investigation.” Gram I, 429 N.E.2d at 28. In contrast, in Young v. Fid. Research &

Analysis Co., No. 14-P-688, 2015 WL 2401360 (Mass. App. Ct. May 21, 2015) (unpublished),

one of the cases on which Guardian relies, the court held that the defendant employer was

entitled to judgment where the employer took no adverse action until the New York Stock

Exchange (NYSE) had completed disciplinary proceedings and officially sanctioned the plaintiff

for misconduct (a proceeding which took about a year), after which the employer discharged the

employee. Id. at *2. In Young, the Massachusetts Appeals Court affirmed summary judgment

for the employer on the plaintiff’s Gram claim because the plaintiff’s culpable or inappropriate

behavior constituted good cause to terminate his employment and no reasonable factfinder could

have disbelieved the employer’s stated reason for discharging the plaintiff.

Guardian argues that, even if Fine was falsely accused of rape, his conduct at the Marriott

Marquis demonstrated poor judgment, resulted in disruption to the schedules of senior-level

Guardian managers, and was judged by the Guardian board’s crisis committee and its chief

executive officer to pose a risk to Guardian’s reputation. A reasonable jury could conclude that

Guardian’s grounds for severing its relationship with Fine were reasonably related, in Guardian’s

honest judgment, to the needs of its business and that the termination of its agreement with Fine

was for just or good cause. York, 849 N.E.2d at 899. A jury could also reasonably find

otherwise. Fine contends that he was falsely accused, that he promptly arranged to provide

information demonstrating to law enforcement that the accusation was false, that the company

had been informed that Fine would not be arrested or charged, at least at that time, and that Fine

asked Guardian (through his brother Randy) to hold off on discharging Fine. Guardian’s

decision to move forward immediately with terminating its agreement with Fine, without further

investigation, might be found to be arbitrary or capricious and, therefore, lacking good or just

cause. See Weiss, 2011 WL 13137940, at *6. In short, this is a jury question.

2. Any Limits on Recovery in the FRA Cannot Bar Fine’s Recovery of

Future Renewal Commissions

Guardian argues with some force that the terms of the FRA preclude Fine’s post-

termination recovery of future renewal commissions (Dkt. No. 113 at 14-15). The FRA provided

that “[o]n termination, [Guardian’s] liability for remuneration of any kind shall cease except as

set forth in the Field Representative Plan” and that, “except as provided in the [FRP], there is no

vesting of commissions” (Dkt. No. 9-1 at 5, 6). As a general proposition, the implied covenant

of good faith and fair dealing “may not be ‘invoked to create rights and duties not otherwise

provided for in the existing contractual relationship ….’” Ayash v. Dana-Farber Cancer Inst.,

822 N.E.2d 667, 684 (Mass. 2005) (quoting Uno Rests., Inc. v. Boston Kenmore Realty Corp.,

805 N.E.2d 957, 964 (Mass. 2004)). In Gram II, the SJC declined to consider Liberty Mutual’s

contention that the plaintiff “was limited by his compensation agreement to certain final

adjustments and no more” on the grounds that Liberty Mutual had not raised the argument on a

timely basis, Gram II, 461 N.E.2d at 798, leaving the question unresolved.

There are two factors that the court cannot overlook as it considers Guardian’s argument.

The first is the SJC’s decidedly skeptical view of the contention. In declining to consider Liberty

Mutual’s argument that the terms of the parties’ agreement prohibited Gram’s recovery of future

renewal commissions, the SJC observed that the Court “need not … consider … whether, by

agreement, an employer and an employee may restrict the rights of an at-will employee to

compensation based on the windfall to an employer who, by discharging the employee without

good cause, deprives the employee of clearly identifiable future compensation reflective of the

employee’s past services.” Id.

The second is that, although Gram II was decided in 1984, more than 35 years ago,

neither the SJC nor the Massachusetts Appeals Court, has, in the interim, held – or implied – that

an insurance company in Guardian’s position can, by agreement, restrict the rights of a member

of its salesforce to recover future renewal commissions to the extent set forth in Gram II when

the salesperson has been discharged without just or good cause, as is alleged by Fine. The cases

cited by Guardian are all distinguishable. In Harrison v. NetCentric Corp., 744 N.E.2d 622

(Mass. 2001), the plaintiff sought to recover the full market value of shares to which his rights

had not vested when his employment with the company was terminated. The Court held that the

defendants had not violated the implied duty of good faith and fair dealing by paying him the

nominal amount to which he was entitled for the unvested shares under his employment

agreement because “[h]is shares vested over time only if he continued to be employed; thus, the

unvested shares [were] not earned compensation for past services, but compensation contingent

on his continued employment.” Id. at 630. The court distinguished an employee’s right –

established in Fortune and Gram I – to recover commissions for sales made during an

individual’s tenure as an active employee. Id. at 631. See also Suzuki, 943 F.3d at 564-66

(holding that the employee was not entitled to recover additional incentive compensation where

his employment agreement only entitled him to the compensation if the required milestones were

achieved during his active employment). Maddaloni v. W. Mass. Bus Lines, Inc., 438 N.E.2d

351 (Mass. 1982), another case cited by Guardian, represents a straightforward application of the

Fortune doctrine: the Court held that the plaintiff, who had obtained interstate charter rights for

the defendant corporation, “could reasonably expect that his employment would not be

terminated by the defendant in order to deny him commissions.” Id. at 354. Consistent with

Fortune (and the subsequent Gram cases), the Court held that the plaintiff, as an at-will

employee, was entitled, on the strength of Fortune, to recover future commissions, but was not

entitled to recover for lost wages and fringe benefits even though the jurors reasonably found

that his employment was terminated in bad faith. Id. at 355-56. In Barsamian v. Corp. Express

Office Prods., Inc., No. 05-P-1054, 2006 WL 2506216 (Mass. App. Ct. Aug. 30, 2006)

(unpublished), the Massachusetts Appeals Court carefully distinguished the facts in Gram,

noting that the panel could “discern nothing in the payment of commissions by Corporate

Express that in any way [was] comparable to the scheme of ‘renewal commissions’ in Gram.”

Id. at *5.

So far as the court has been able to determine, Krause is the only case in which a court

has addressed an employer’s motion for summary judgment on a plaintiff’s claims for unpaid

commissions under both the Wage Act and the implied duty of good faith and fair dealing where

the employer argued that the plaintiff was ineligible for commissions based on a compensation

plan that required continued employment as a condition for paying commissions. Krause, 2009

WL 3578601, at *3-4. The plaintiff in Krause was terminated as an employee of UPS Supply

Chain Solutions, Inc. (UPS) in a downsizing. She alleged that her discharge was the result of

gender discrimination and retaliation and she asserted claims under the Wage Act and the

implied contractual duty of good faith and fair dealing for commissions for which she had done

the work prior to the termination of her employment and that would have been awarded had she

remained employed. Id. at *1-4. At the summary judgment stage, the judge held that a provision

in UPS’s 2006 sales incentive plan, which “expressly state[d] that a terminated employee would

not be eligible for any [commission] payments due after the date of termination” barred the

plaintiff’s Wage Act claim because the commissions were neither “due and payable” nor

“definitely determined” when the plaintiff’s employment was terminated. Id. at *13-14.

Calling the Fortune/Gram doctrine “’well established under Massachusetts law,’” id. at

*14 (quoting Bohne, 514 F.3d at 143), the judge denied summary judgment to UPS on the breach

of contract claim on the following grounds:

Because the Plaintiff was substantially involved in the sale of these three accounts

and there [was] a genuine issue as to whether the Plaintiff’s termination was

without good cause, [the court] concludes that a factfinder could determine that

Plaintiff should recover commissions under the implied covenant of good faith

and fair dealing, even if those commissions were not yet due under the strict terms

of the [governing incentive plan].

Id. at *15.

This court’s ruling is consistent with the ruling of the court in Krause. Unless and until

the Massachusetts courts rule that a company may restrict the right of an at-will employee or

independent contractor to recover future renewal commissions following a discharge that is

without just cause, a claim such as the one advanced by Fine in the First Count in his amended

complaint remains viable under Massachusetts law.

III. CONCLUSION

For the foregoing reasons, Guardian's motion for summary judgment (Dkt. No. 87) is

DENIED with respect to the First Count in the amended complaint and ALLOWED with respect

to the Second and Third Counts in the amended complaint. The Clerk’s Office is directed to

schedule a status conference on a date mutually convenient to the parties and the court.

It is so ordered.

March 7, 2022 /s/ Katherine A. Robertson

KATHERINE A. ROBERTSON

U.S. MAGISTRATE JUDGE