Court Opinion

ID: 9961220
Source: CourtListenerOpinion
Date Created: 2024-04-18 14:06:58.592457+00
Date Added: 2024-06-11T08:20:28.327223
License: Public Domain

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28,
as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties
and, therefore, may not fully address the facts of the case or the panel's
decisional rationale. Moreover, such decisions are not circulated to the entire
court and, therefore, represent only the views of the panel that decided the case.
A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25,
2008, may be cited for its persuasive value but, because of the limitations noted
above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260
n.4 (2008).

                       COMMONWEALTH OF MASSACHUSETTS

                                 APPEALS COURT

                                                  23-P-476

                                   ALAN SMITH

                                       vs.

                            DECISIONONE CORPORATION.

               MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

       The defendant, DecisionOne Corporation, appeals from a

 judgment issued after remand from a panel of this Court

 concerning the damages it owes to the plaintiff, Alan Smith, for

 unpaid commissions.        The remand order required the recalculation

 of the plaintiff's damages to account for the effect of the

 defendant's FY2013 commission plan.           See Smith v. DecisionOne

 Corp., 98 Mass. App. Ct. 1106 (2020).           The defendant argues that

 the judge's decision after remand misapplied the FY2013 plan and

 violated the panel's remand order, overpaid the plaintiff for

 commissions due under the FY2010 plan, and wrongly awarded him

 bonuses under the FY2010 plan.         We affirm with a modification.

       Discussion.     1.    Effect of FY2013 plan.       The parties agree

 that from April 1, 2012, the effective date of the FY2013 plan,

 to September 5, 2012, the last day of the plaintiff's
employment, the defendant received revenues totaling

$4,312,806.10 from accounts that the plaintiff had acquired for

the defendant prior to April 1, 2012, when the FY2010 plan was

in effect.   The parties stipulated that the plaintiff did not

qualify for any commissions under the FY2013 plan; however, they

disagree about the effect of that stipulation.       According to the

plaintiff, he was not entitled to any commissions under the

FY2013 plan because it allowed commissions only for new business

acquired after the effective date, and he did not generate any

revenue that qualified.   Nonetheless, he contended that he was

eligible to receive commissions under the FY2010 plan

attributable to accounts opened while the FY2010 plan was in

effect, even if the revenues were received after the FY2013 plan

went into effect.   According to the defendant, not only did the

plaintiff fail to acquire new business under the FY2013 plan,

but once the FY2013 plan went into effect, it also made the

plaintiff ineligible for commissions based on revenue received

after April 1, 2012, attributable to accounts that he had

acquired under the FY2010 plan.       The judge agreed with the

plaintiff.

    The judge's determination was properly based on his

interpretation of the terms of the FY2013 plan, construed in

light of evidence of the parties' past practices.       "The

interpretation of a contract presents a question of law for the

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court, except to the extent disputed facts bear upon such

interpretation."    USM Corp. v. Arthur D. Little Sys., Inc., 28

Mass. App. Ct. 108, 116 (1989).       "Extrinsic evidence bearing

upon the background and purpose of the parties, as well as their

understanding of the meaning of particular language used in the

contract, may be considered both in the construction of

ambiguous contract language and in resolving uncertainties in

applying the terms of the written contract to the subject

matter."   Id.   The interpretation of an unambiguous contract is

a question of law, but the interpretation of the parties' intent

with respect to terms that are "ambiguous, uncertain, or

equivocal in meaning" is a question of fact.       Seaco Ins. Co. v.

Barbosa, 435 Mass. 772, 779 (2002).

    Based on the language of the FY2013 plan, the judge

observed that it applied only to "new business revenue," which

was defined as "the revenue generated for services that are not

already under contract, or a project or service that is not

already under contract at a specific value."       Thus, the FY2013

plan did not affect the commissions owed under the FY2010 plan

for previously existing accounts.      The defendant argues that the

judge violated basic principles of contract interpretation by

failing to give effect to every word and provision and finding

ambiguity where there was none.       See DeWolfe v. Hingham Ctr.,

Ltd., 464 Mass. 795, 804 (2013); Freelander v. G. & K. Realty

                                  3
Corp., 357 Mass. 512, 516 (1970).    Specifically, the defendant

points to language under the heading "Effective Date," which

states that the FY2013 plan is effective from April 1, 2012, to

March 31, 2013, and "supersedes all previous written or verbal

plans."   According to the defendant, this language means that

any revenue from the plaintiff's accounts received after April

1, 2012, must be allocated to the plaintiff's quota associated

with the FY2013 plan.

    We agree with the judge that the effective date and

"superseding" language does not unequivocally settle the issue;

therefore, the judge properly considered evidence of the

parties' intent.   Based on the testimony of the defendant's sole

witness at the remand trial, its general counsel Sandra Ross,

the judge found that the defendant's settled practice was that

commissions generated under a prior year's plan would be paid

according to that plan for at least the twelve-month period in

which the revenues were received, even if a new plan went into

effect in the interim.    The evidence fully supports this finding

and resolves any ambiguity in the plaintiff's favor.    We do not

consider the judge's construction or application of the FY2013

plan in any way to disregard or violate the remand order.    Nor

does this interpretation permit the plaintiff to earn

commissions on the same revenue under two different plans, as

the defendant contends.

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    2.   Commissions earned under the FY2010 plan.    The

defendant claims that the judge erred in calculating commissions

owned under the 2010 plan.   In addition to its assertion that

the judge should not have considered the revenues received from

the plaintiff's accounts after April 1, 2012, the defendant

contends that commissions are paid for only one year after the

first sale attributed to a new account; after one year, however,

the salesperson is no longer eligible for commissions from that

account, even if it continues to generate revenues.   The

defendant goes so far as to assert, in a new calculation

prepared for the remand hearing, that it overpaid the plaintiff

by about $60,000.

    The judge gave five reasons for rejecting the contention

that commissions were earned for only one year.    Limiting our

discussion to the arguments raised in the defendant's brief, we

agree with the judge that the FY2010 plan has no unambiguous

language limiting commissions to a one-year period, and that

both the parties' practices and the drafting history support

that conclusion.    We also agree with the judge's rejection of

the defendant's claim that it, through its "Administrators," is

the sole arbiter and interpreter of what the plan means.    The

defendant offered no evidence of any "decisions, determinations

[or] interpretations" made by any Administrator of the FY2010

plan.   As the judge pointed out, Ross was not an Administrator

                                  5
as defined by the plan, and her "post-remand assertions" did not

reflect the exercise of any power of the plan's Administrators,

but were merely legal opinions.

     In addition, the defendant argues that the judge erred by

awarding the plaintiff commissions on what the defendant

characterized at the remand trial as "ineligible" and "non-

designated" revenues.   In a chalk created by Ross for trial

purposes, the defendant allocated certain revenue streams

previously credited to the plaintiff in these categories and

omitted them from its commission calculation.1   The judge

discredited the defendant's methodology and Ross's testimony,

which he found to be different from the methodology the

defendant used when the plaintiff was an employee.   Likewise,

the judge discredited the plaintiff's inflated claim of unpaid

commissions.   The judge's credibility determinations are

entitled to deference, and we do not set them aside unless

clearly erroneous.   See Brandao v. DoCanto, 80 Mass. App. Ct.

151, 155-156 (2011); Rood v. Newberg, 48 Mass. App. Ct. 185, 191

(1999).   Except in one minor respect, the judge's calculation of

commissions under the FY2010 plan is not clearly erroneous.

     1 While the data underlying Ross's calculations may have
been supported by business records, Ross's summary and color-
coding of Exhibit 72, prepared after the fact for trial
purposes, do not qualify as business records. See Mass. G.
Evid. § 803(6)(A) (2023).

                                  6
     We do agree with the defendant that the judge made a clear

error in adding the revenue for calendar year 2012 -- coming up

with a sum of $7,489,466.41 instead of $7,484,466.41 -- which

resulted in awarding the plaintiff an extra $133.34 in

commissions.2   The judgment should be reduced by that amount.

     3.   Bonuses.   Finally, the defendant argues that the judge

erred in crediting the plaintiff's testimony and finding that he

was owed $17,500 in unpaid bonuses.     Based primarily on the

defendant's treatment of the Sears/Kmart, Best Buy, and Hilton

accounts in its business records, the judge rejected the

defendant's argument that the extension of the IBM account to

these new end users did not qualify as new accounts.     We discern

no error of law or clear error of fact in the judge's

determination that the plaintiff was entitled to bonuses for

those three accounts.

     Conclusion.     The judgment is modified to reflect that the

plaintiff is entitled to damages in the amount of $166,051.44,

together with statutory costs and interest at the rate of twelve

     2 Accordingly, the judge should have multiplied
$4,484,466.41 by the commission rate of .02667, resulting in a
product of $119,600.72 instead of $119,734.06 -- a difference of
$133.34.

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percent per annum from the date of the breach of contract,

October 31, 2012, and as so modified, the judgment is affirmed.

                                     So ordered.

                                     By the Court (Vuono,
                                       Massing & Toone, JJ.3),

                                     Assistant Clerk

Entered:   April 18, 2024.

    3   The panelists are listed in order of seniority.

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