The opinion
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17-P-30 Appeals Court
OLIVER C. BIEWALD vs. SEVEN TEN STORAGE
SOFTWARE, INC., & others.1
No. 17-P-30.
Essex. December 4, 2017. - October 31, 2018.
Present: Green, Maldonado, & Kinder, JJ.
Massachusetts Wage Act. Contract, Employment, Performance and
breach, Construction of contract, Condition precedent,
Implied covenant of good faith and fair dealing. Practice,
Civil, Judgment notwithstanding verdict, Summary judgment,
Costs. Employment, Retaliation.
Civil action commenced in the Superior Court Department on
October 18, 2012.
A motion for summary judgment was heard by Robert N.
Tochka, J.; the case was tried before Diane M. Kottmyer, J.; a
motion for judgment notwithstanding the verdict was heard by
Kottmyer, J.; and a motion for costs was considered by Kottmyer,
J.
Sarah A. Catignani for the plaintiff.
Bradley L. Croft (Michael J. Duffy also present) for the
defendants.
1 Seven Ten Storage Software, LLC; Brojaban, Inc.; Robert J.
Moulton; James F. Moulton; and Gary J. LaFreniere.
2
MALDONADO, J. Oliver C. Biewald commenced this action
against his former employer, Seven Ten Storage Software, Inc.,
now known as Brojaban, Inc., and Seven Ten Software, LLC
(collectively, Seven Ten), and several of its executives
asserting a variety of claims related to the nonpayment of sales
commissions. A Superior Court judge dismissed most of those
claims on the defendants' motion for summary judgment. A second
judge then presided over a trial of the remaining claims, at the
conclusion of which the jury found largely in favor of Biewald
and awarded him damages for violations of the Wage Act, G. L.
c. 149, § 148, and breach of his employment agreement. In
response to the defendants' motion for judgment notwithstanding
the verdict, however, the trial judge, who had reserved ruling
on the defendants' motions for a directed verdict during the
trial, vacated the verdict and ordered judgment for the
defendants. The judge concluded that Biewald's claims were
barred by the unambiguous provisions of his employment
agreement. She further concluded that, even assuming the
employment agreement was ambiguous, the verdict could not be
sustained on any reasonable view of the evidence. On appeal
from the final judgment, Biewald challenges that ruling and the
dismissal of certain claims on summary judgment.2 He also
2 Biewald does not challenge on appeal the motion judge's
decision on several of his claims.
3
appeals from a postjudgment order awarding costs to the
defendants. We affirm.
Background. On June 22, 2007, Seven Ten, a "startup"
company that developed and marketed data storage software,
entered into a written agreement (employment agreement) with
Biewald to employ him as vice president of strategic sales.
Under the terms of the employment agreement, Biewald was
entitled to an annual salary of $60,000 and to commissions as
follows:
"3.4 Commissions. The Employee shall receive payment for
any sale, purchase, transfer, or contract for the services,
licenses, and/or products -- for internal use, distribution
or for resale -- of Employer products/services ('Sale') to
the companies defined in and agreed upon in the attached
Exhibit A (Exclusive List) at such time as any
consideration for such sale is provided to Employer,
whether in the form of purchase orders, promissory notes,
letters of intent, monies, cash, stock, options for stock,
or any other consideration in any form whatsoever
('Consideration'); the commission shall be 50% (fifty
percent) of said sale. . . .
"3.4.1 Guaranteed contracts. For all
OEM/Partner/Reseller/Distributor contracts signed with a
committed and guaranteed revenue stream to Employer,
Employee shall receive, in addition to the commissions
stated in Section 3.4, Five Percent (5%) of the guaranteed
revenue payable upon execution of such agreement.
Commissions on contract hereunder will be paid upon receipt
of payment by OEM/Partner/Reseller/Distributor."
The employment agreement had no defined term and instead
provided that Biewald was an at-will employee, who could be
terminated at any time, with or without cause. Upon such
termination, the employment agreement further provided, in
4
section 2, that only certain sections of the employment
agreement would survive. Sections 3.4 and 3.4.1 were not
included among those sections.
Approximately two years later, on September 2, 2009, Seven
Ten, through Biewald's efforts, entered into a distributor
agreement (EMC contract) with EMC Corporation (EMC) that fell
within section 3.4 of Biewald's employment agreement. However,
because the EMC contract did not provide Seven Ten with a
committed or guaranteed revenue stream, it did not qualify as a
"guaranteed contract" under section 3.4.1 of the employment
agreement.3 In fact, while EMC had the right under the EMC
contract to make purchases from Seven Ten, it was not obligated
to do so. The only way that Seven Ten could realize revenue
under the EMC contract was if EMC subsequently chose to submit a
purchase order. Theoretically, the EMC contract could expire
without EMC ever having submitted an order. Seven Ten,
meanwhile, was obligated to pay EMC $51,000 over the term of the
EMC contract for admittance to EMC's so-called "Select" program.
At the time, Seven Ten was, like many companies, struggling
in the wake of the worldwide financial crisis and facing an
uncertain future unless it could secure a fresh infusion of
3 Biewald never secured a guaranteed contract or qualified
for a commission under section 3.4.1, but he did qualify for
commissions under section 3.4 on over forty occasions.
5
capital. In the summer of 2009, a new investor -- an "angel"
investor -- had surfaced. The new investor conditioned its
investment on Seven Ten's implementation of various changes,
including the reform of existing employment contracts. On
October 9, 2009, therefore, Seven Ten notified Biewald that his
employment agreement was being terminated, effective at the end
of that month.
Seven Ten also expressed a desire to retain Biewald's
services, if new employment terms could be agreed upon. In the
meantime, it agreed to increase Biewald's annual salary to
$75,000 but reduced his commission rate in stages (forty per
cent for November, thirty per cent for December, and ten per
cent on and after January 1, 2010), effective November 1, 2009.
Over the following weeks, Biewald and Seven Ten engaged in
negotiations, with Biewald primarily expressing concern over
whether he would still be paid commissions he believed he had
already earned under section 3.4 of the employment agreement.
On November 24, 2009, with no new employment agreement in place,
Seven Ten notified Biewald that, forthwith, it was further
reducing his compensation to salary only, with no commissions.
Then, on December 2, 2009, after a meeting that again failed to
result in an agreement, Seven Ten terminated Biewald's
employment altogether, effective the same day.
6
Subsequently, Seven Ten paid Biewald commissions based on
the new forty per cent rate imposed as of November 1, 2009, on
two EMC-related purchase orders received on November 20 and 24,
2009. There was also a third EMC-related purchase order
received on November 30, 2009, on which Seven Ten refused to pay
any commission, citing the "salary only" compensation terms
imposed as of November 25, 2009. Seven Ten also refused to pay
Biewald for any EMC-related purchase orders received after the
December 2, 2009, employment termination date.
In response, Biewald filed a wage complaint with the
Attorney General's office and then commenced this action,
claiming, inter alia, that he was entitled, under section 3.4 of
the employment agreement, to be paid a fifty per cent commission
on all EMC-related purchase orders, whether they were received
before or after the termination of his employment. The jury
agreed with Biewald and awarded him $10,730 under the Wage Act
based on the balance due for commissions on the November 20, 24,
and 30, 2009, purchase orders, and $807,376 under the employment
agreement for unpaid commissions on EMC-related purchase orders
received after December 2, 2009. However, the trial judge
vacated the verdict and ordered judgment for the defendants.
This appeal followed.
Analysis. 1. Judgment notwithstanding the verdict. a.
Standard. A ruling on a motion for judgment notwithstanding the
7
verdict presents a question of law that we review under the same
standard as the trial judge, construing the evidence in the
light most favorable to the nonmoving party -- here, Biewald.
O'Brien v. Pearson, 449 Mass. 377, 383 (2007). The standard is
whether the evidence, construed against the defendants,
justifies the jury verdict against them. Id. "Our duty in this
regard is to evaluate whether anywhere in the evidence, from
whatever source derived, any combination of circumstances could
be found from which a reasonable inference could be made in
favor of [Biewald]" (quotation omitted). Id.
b. Determination of ambiguity. Biewald first argues that
the trial judge erred when she determined that the employment
agreement unambiguously extinguished any right he might have had
under section 3.4 to collect commissions on EMC-related purchase
orders received after the employment agreement was terminated.
The interpretation of a contract, including the determination
regarding ambiguity, presents a question of law for the court,
subject on appeal to de novo review. See Balles v. Babcock
Power Inc., 476 Mass. 565, 571 (2017).4 The rules of
interpretation are well established. "To answer the ambiguity
question, the court must first examine the language of the
4 Given the de novo nature of our review, we need not
address Biewald's claim that the trial judge based her ambiguity
determination, in part, on language that does not appear in the
employment agreement.
8
contract by itself, independent of extrinsic evidence concerning
the drafting history or the intention of the parties." Bank v.
Thermo Elemental Inc., 451 Mass. 638, 648 (2008). "The words of
a contract must be considered in the context of the entire
contract rather than in isolation. . . . When the words of a
contract are clear, they must be construed in their usual and
ordinary sense . . . ." General Convention of the New Jerusalem
in the U.S. of Am., Inc. v. MacKenzie, 449 Mass. 832, 835
(2007). "[A]n ambiguity is not created simply because a
controversy exists between the parties, each favoring an
interpretation contrary to the other." Boazova v. Safety Ins.
Co., 462 Mass. 346, 351 (2012), quoting Citation Ins. Co. v.
Gomez, 426 Mass. 379, 381 (1998). "Language is ambiguous where
the phraseology can support a reasonable difference of opinion
as to the meaning of the words employed and the obligations
undertaken" (quotation omitted). Ferri v. Powell-Ferri, 476
Mass. 651, 654 (2017).
According to Biewald, the language of section 3.4 of the
employment agreement is reasonably susceptible to more than one
interpretation, thereby rendering it ambiguous. Specifically,
he contends that one reasonable interpretation is that his right
to a commission vested the moment he made a "Sale," and that
only his right to payment of that commission had to await Seven
Ten's receipt of "Consideration." In the case of the EMC
9
contract, therefore, he contends his right to a commission
vested the moment the EMC contract was executed on September 2,
2009, while only his right to payment of that commission had to
wait until EMC provided a purchase order. We disagree.
There is no distinction in section 3.4 of the employment
agreement between a right to a commission and a right to be paid
a commission. The plain language provides that Biewald was
entitled to be paid a commission on a "'Sale' . . . at such time
as any consideration for such sale [was] provided to [Seven
Ten]." Clearly, there were two conditions precedent, a "Sale"
and "Consideration." And, whether one views it as a right to a
commission or a right to be paid a commission, that right did
not arise (or vest) until both conditions were satisfied. The
employment agreement also plainly provided, in section 2, that
only certain sections of the employment agreement survived
termination. Section 3.4 was not one of those sections.
Whatever rights Biewald had under section 3.4, therefore, did
not survive unless there had already been a "Sale" accompanied
by "Consideration."
Even assuming, as we do, that the EMC contract qualified as
a "Sale" under section 3.4 of the employment agreement,5 it is
5 While the defendants suggest otherwise, there is a
reasonable argument that the EMC contract was a "contract for
the services, licenses, and/or products -- for internal use,
distribution or for resale -- of [Seven Ten] products/services."
10
undisputed that no "Consideration" was provided at the time the
EMC contract was executed. EMC did not commit to make any
purchases from Seven Ten and only became obligated to pay Seven
Ten if and when EMC submitted a subsequent purchase order.
"Consideration," therefore, was provided, and Biewald's
commission rights vested, only when a purchase order was
submitted. Therefore, once Biewald's employment agreement was
terminated, he was entitled to commissions in the rates
specified under that agreement only for those purchase orders
submitted, with consideration, on or before October 31, 2009.
We conclude, therefore, that under the plain language of the
employment agreement, Biewald was not entitled to commissions at
the rates provided under section 3.4 on the November 20, 24, or
30, 2009, purchase order, or on any EMC-related purchase orders
received thereafter. The jury verdict, therefore, could not
stand.6
c. Assuming an ambiguity. Biewald further argues that the
trial judge erred when she determined that, even if the
employment agreement was ambiguous, the jury verdict was not
supported by any view of the evidence. However, Biewald has not
6 Contrary to Biewald's assertion, the defendants adequately
relied on the language of sections 2 and 3.4 of the employment
agreement when they moved for a directed verdict. The argument,
therefore, was not waived.
11
identified, and we have not located, any extrinsic evidence that
supports his interpretation of the employment agreement.7 Even
assuming an ambiguity, therefore, he failed to sustain his
burden of proof, and judgment notwithstanding the verdict
properly issued for the defendants.
2. Summary judgment. a. Standard. We review a decision
to grant summary judgment de novo, construing all facts in favor
of Biewald as the nonmoving party. See Miller v. Cotter, 448
Mass. 671, 676 (2007). The defendants, as the moving parties,
have the burden of establishing that there is no genuine issue
as to any material fact and that they are entitled to judgment
as a matter of law. See Drakopoulos v. U.S. Bank Nat'l Ass'n,
465 Mass. 775, 777 (2013).
b. Retaliation. Biewald argues that the motion judge
erred by granting summary judgment to the defendants on his
claim (count II) that the defendants violated G. L. c. 149,
§ 148A, by retaliating against him after he had expressed
concerns about payment for earned commissions. "Lacking any
direct evidence of a retaliatory motive, [Biewald] had the
7 Instead, Biewald merely notes that the jury obviously
agreed with his interpretation. He further argues that the jury
were entitled to construe the employment agreement against Seven
Ten as the drafter. See James B. Nutter & Co. v. Estate of
Murphy, 478 Mass. 664, 669 (2018). However, Biewald actually
prepared the initial draft employment agreements, including the
language that ended up forming the basis for section 3.4.
12
burden of establishing a prima facie case of retaliation, and,
in the wake of the defendants' introduction of nonretaliatory
reasons for the various actions taken, the burden of proving
that the articulated nonretaliatory reasons were pretext." Mole
v. University of Mass., 442 Mass. 582, 591 (2004).
To make out a prima facie case, Biewald "had to show that
[he] engaged in protected conduct, that [he] suffered some
adverse action, and that 'a causal connection existed between
the protected conduct and the adverse action.'" Verdrager v.
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., 474 Mass.
382, 406 (2016), quoting Mole, 442 Mass. at 591-592. Even
assuming that Biewald could satisfy the first two elements,
however, he could not satisfy the third. Contrary to Biewald's
assertions, a causal connection cannot be inferred in this case
from the timing and sequence of events. Rather, the critical
adverse action -- the October 9, 2009, notice of the upcoming
termination of the employment contract that Biewald claimed gave
him a right to vested commissions -- does not postdate any
alleged protected activity.
Still, Biewald contends that, after he raised his concerns,
the defendants went on to reduce his commission rate, eventually
reduce his compensation to "salary only," and then terminated
his employment altogether. Because these actions came after
Biewald protested the loss of compensation, we apply the
13
familiar three-part test for determining whether his termination
was for an improper motive. Verdrager, 474 Mass. at 406. We
assume that the timing of the adverse action was sufficient to
make out Biewald's prima facie case. See id. at 409
("[T]emporal proximity . . . is one form of 'circumstantial
evidence that . . . . can demonstrate' the required causal
connection"). The defendants presented evidence in support of
their claim that they took these actions only because they could
not come to terms with Biewald on a new employment agreement.
Biewald claims that this reason was pretextual, but as the judge
aptly noted, the defendants were not required to retain Biewald,
an at-will employee, indefinitely and on his terms. On this
unique factual record, therefore, the defendants were entitled
to summary judgment.
c. Good faith and fair dealing. Biewald further argues
that his claim (count VII) for breach of the implied covenant of
good faith and fair dealing should have survived summary
judgment given his assertion that Seven Ten terminated the
employment agreement to deprive him of commissions under the EMC
contract. See Fortune v. National Cash Register Co., 373 Mass.
96, 104-105 (1977). Seven Ten, however, offered evidence of a
legitimate business reason for terminating the employment
agreement, namely, to satisfy the demands of the "angel"
investor. Biewald, in turn, has not offered any evidence that
14
calls that explanation into question. Summary judgment was
therefore proper on this count. See York v. Zurich Scudder
Invs., Inc., 66 Mass. App. Ct. 610, 618 (2006) (whether
termination was for good cause typically presents question of
fact for jury, but not if it is undisputed that action was
"reasonably related, in the employer's honest judgment, to the
needs of [its] business" [quotation omitted]).
3. Costs. Finally, Biewald appeals from the trial judge's
order awarding costs in the amount of $3,464.60 to the
defendants, pursuant to Mass. R. Civ. P. 54 (e), as amended, 382
Mass. 829 (1981). The costs related to six depositions, at
least four of which were of named parties, and two document
subpoenas. While only one transcript may have been used at
trial, and no documents may have been produced in response to
the subpoenas, we see no basis for concluding that the award
amounted to an abuse of discretion. See Scholz v. Delp, 473
Mass. 242, 254 (2015), cert. denied, 136 S. Ct. 2411 (2016).
Judgment affirmed.
Order awarding costs
affirmed.