Abramowitz v. Director of Div. of Employment Sec.
| Citation | 454 N.E.2d 92,390 Mass. 168 |
| Parties | Richard S. ABRAMOWITZ v. DIRECTOR OF the DIVISION OF EMPLOYMENT SECURITY et al. 1 |
| Decision Date | 16 September 1983 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
William H. Baker, Boston, for employee.
Paul E. Stanzler, Boston, for employer.
George J. Mahanna, Asst. Atty. Gen., for Director of the Div. of Employment Sec., was present but did not argue.
Before HENNESSEY, C.J., and LIACOS, NOLAN, LYNCH and O'CONNOR, JJ.
The plaintiff, Richard Abramowitz, appeals from a judgment of a District Court which affirmed a decision of the Division of Employment Security (division) denying the plaintiff unemployment compensation benefits. The appeal was brought directly to this court pursuant to G.L. c. 151A, § 42. The plaintiff argues that the judgment of the District Court should be reversed because the division's denial of benefits was arbitrary, capricious, and unsupported by substantial evidence. He also asserts that the division's decision to deny benefits was based upon an error of law. We disagree with all the plaintiff's contentions. Accordingly, we affirm the judgment of the District Court.
We summarize the relevant evidence presented at the hearing held before a hearing examiner of the division on May 8, 1981, and June 8, 1981. 2 The plaintiff and Edward Tucker founded a company called The Casual Female, Inc., in July, 1979, for the purpose of selling women's apparel through a chain of already existing retail stores. By the fall of 1980, the corporation showed an operating loss of $700,000. At all times material to the present controversy, the plaintiff was a 50 per cent shareholder of The Casual Female, Inc., and was president and chief executive officer. Tucker was the treasurer and the other 50 per cent shareholder. At the time of incorporation, the plaintiff and Tucker entered into a subscription agreement whereby the plaintiff agreed to purchase approximately $18,000 of Class B nonvoting stock by December 15, 1980.
The plaintiff gave the following testimony. In the middle or end of November, 1980, he informed Tucker that he would be selling his shares of stock in the company back to the company as he was permitted to do by the terms of the agreement. He had decided to sell his shares of stock back to the company because of certain disputes he had had with Tucker. These disputes arose because the plaintiff believed that Tucker had been improperly charging certain expenses to The Casual Female, Inc., which should have been charged instead to other related companies owned by Tucker. When he informed Tucker that he would be selling back his shares of stock, the plaintiff also mentioned that he "probably at some future date would be leaving" the employment of the company. However, he never told Tucker that he was resigning nor did he tender a written resignation.
The plaintiff also testified that he spoke with his attorney before actually tendering his shares of stock to the company. His attorney informed him that he could sell his stock in the company under the governing corporate agreements without having to resign his employment. As a consequence, he had a subsequent conversation with Tucker in which he said that "any conversation that transpired between the two of us was in no way ... an indication that I was resigning." The plaintiff explained to Tucker that his decision to sell back his shares of stock was separate from his employment. The plaintiff further testified that at this time Tucker responded by saying "you told me you were leaving."
On December 5, 1980, the plaintiff formally tendered his shares of stock to the company. On the same day, the plaintiff's attorney wrote to Tucker's attorney and informed him that the plaintiff intended to continue to work for the company and that his decision to sell back his shares of stock was not a resignation.
The plaintiff testified that Tucker then attempted to force the plaintiff out of the company. At some point, Tucker told other employees of the company that the plaintiff was leaving the company. On December 10, 1980, Tucker sent the plaintiff an office form which indicated that the plaintiff had voluntarily resigned and that his last day of work would be December 12, 1980.
On approximately December 8, 1980, Tucker's attorney inquired whether the plaintiff intended to purchase the shares of stock as provided in the subscription agreement. The plaintiff's attorney responded at that time, and by letter dated December 15, 1980, that the plaintiff's decision to sell back his shares of stock terminated any obligations he had under the subscription agreement. By letter dated December 16, 1980, Tucker informed the plaintiff that his failure to buy the shares of stock in accordance with the subscription agreement constituted a breach of the agreement. The letter further stated: "As a consequence of your breach you are no longer employed by The Casual Female, Inc., your salary is terminated as of the date hereof, and office space shall no longer be provided to you." When the plaintiff arrived at his office on December 17, 1980, he was treated as though he were no longer an employee and during the course of the day, discovered that all of his belongings had been removed from his office.
In March, 1981, the plaintiff received a notice from The Casual Female, Inc., that it intended to hold a special meeting of the shareholders for the purpose of removing him without cause from office as a director of the corporation. The plaintiff received another letter from The Casual Female, Inc., indicating that he had been removed as a director and that, at a directors' meeting following the special stockholders' meeting, he had been removed as president of the corporation.
Tucker remembered the encounter with the plaintiff in mid-November, 1980, differently than did the plaintiff. Tucker testified that in mid-November, the plaintiff went into Tucker's office and said Tucker testified that the plaintiff said he would be gone within a month. Tucker also testified that during the conversation the plaintiff suggested that Tucker hire a replacement for him and offered some suggestions on how to obtain a replacement. Tucker also denied that the plaintiff spoke with him on a second occasion to clarify that he was not resigning.
1. The plaintiff argues that the decision of the division denying him unemployment compensation benefits was arbitrary, capricious, an abuse of discretion, and unsupported by substantial evidence. See G.L....
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