Maddaloni v. Western Mass. Bus Lines, Inc.

• Decision Date: 10 July 1981
• Citation: 422 N.E.2d 1379,12 Mass.App.Ct. 236
• Parties: , 115 L.R.R.M. (BNA) 4682 Joseph MADDALONI v. WESTERN MASS. BUS LINES, INC.
• Court: Appeals Court of Massachusetts

Page 1379

422 N.E.2d 1379

12 Mass.App.Ct. 236, 115 L.R.R.M. (BNA) 4682

Joseph MADDALONI v. WESTERN MASS. BUS LINES, INC.

Appeals Court of Massachusetts, Hampden.

Argued Nov. 13, 1979.

Decided July 10, 1981.

Donald A. Beaudry, Springfield, for plaintiff.

William F. Lally, Boston, for defendant.

Before HALE, C. J., and GOODMAN and GRANT, JJ.

GOODMAN, Justice.

These are cross-appeals from a judgment after a trial by jury awarding damages to the plaintiff, Maddaloni, for breach of a contract under which the plaintiff was employed by the defendant (WMBL) as general manager and which, as is undisputed, ¹ was terminable at will. Contrast GARRITY V. VALLEY VIEW NURSING HOME, INC., --- MASS.APP. ---, 406 N.E.2D 423 (1980)^A. The jury were instructed that they might find such a breach if the defendant terminated the plaintiff's employment in bad faith. The issues in this case thus depend on the applicability of Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977). ²

Defendant's Appeal

The defendant moved for a directed verdict after both parties had rested. We set out the evidence in its aspect most favorable to the plaintiff to determine " '(i)f upon any reasonable view of the evidence there is found any combination of circumstances from which a rational inference may be drawn in favor of the plaintiff ....' Howes v. Kelman, 326 Mass. 696, 696-697, 96 N.E.2d 394 (1951)." Fortune v. National Cash Register Co., 373 Mass. at 106, 364 N.E.2d 1251. The plaintiff was hired by WMBL as general manager in April of 1964. Prior to that time he had worked for another bus company, Peter Pan Bus Lines, where his duties included getting new operating authorities for his employer, preparing the information and making up the necessary exhibits introduced as evidence at various hearings. He appeared as a witness for the company when it was the applicant or when it was the favoring carrier, the opposing carrier, or a party in interest. While with the Peter Pan Bus Lines, by which he had been employed a total of twenty-eight years, he had appeared before the Department of Public Utilities (DPU) and the Interstate Commerce Commission (ICC) at least fifty times.

Maddaloni was hired by WMBL primarily because John F. Fortier, then its president, was interested in obtaining a grant of interstate charter rights from the ICC. These ICC rights would permit WMBL to transport groups to points outside Massachusetts; WMBL already had intrastate charter rights for transportation within Massachusetts. Interstate charter rights are considered the best income-producing rights that any carrier could receive. Besides dealing with the ICC, Maddaloni's duties included arranging the operating schedule, soliciting and advertising for and quoting prices on charter trips, preparing the billing, checking employee time cards, and generally overseeing the entire operation.

About six weeks after Maddaloni was hired, a written employment contract was executed by Maddaloni and WMBL. It provided that Maddaloni serve as general manager and that he be compensated as set out in the margin. ³ No definite term was mentioned.

WMBL obtained ICC charter rights in June, 1966, and the plaintiff received the payments called for in paragraph 3c of the contract (see note 3) for five and one-half months. In late 1966, however, the grant of ICC rights to WMBL was held erroneous by the United States District Court for the District of Massachusetts and was revoked. The payments under paragraph 3c thereupon ceased.

In September, 1970, Fortier sold his 75% of WMBL stock (the other 25% was owned by the corporation) to Mario Cantalini, who became its president; the plaintiff remained as general manager. The plaintiff had several conversations with Cantalini during the period that he was buying the business and afterwards concerning "transportation matters." In October or November of 1970, the plaintiff met with Cantalini and attorney Abraham Feinstein, apparently WMBL's lawyer, at Cantalini's office in Springfield. ⁴ There they discussed the need for obtaining interstate charter rights from the ICC. Cantalini and Feinstein asked various questions with reference to the applications, and the plaintiff explained the procedures to them. Cantalini then told Feinstein, who had picked up applications for filing with the ICC, to give the applications to the plaintiff. Cantalini then took out the plaintiff's employment agreement and gave it to Feinstein, who read it, returned it to Cantalini, and said, as the plaintiff testified, "(T)his would be all right with the company."

Thereafter, the plaintiff and Cantalini took two or three trips to Washington to hire counsel. The plaintiff obtained all the evidence to be included in affidavits prepared by counsel for presentation to the ICC. He canvassed schools (e. g., Smith College) and other organizations (e. g., a Golden Age Club) which he knew would be interested in using interstate services as they became available. He also sought the support of various local officials and local political bodies.

On October 1, 1973, WMBL was again granted ICC charter rights, and began operating under those rights. About a week or so later, Maddaloni and Cantalini had a conversation about the forthcoming payments under paragraph 3c of the contract. The plaintiff testified that he told Cantalini, "(N)ow that we had received the operating authority from the ICC, ... that portion of my agreement on the commission was now in effect." Cantalini replied that he didn't understand it to be that way, but that he would check the agreement. On November 7 or 8, as a matter of routine, comparable charter figures for the month of October, 1973, and the month of October, 1972, were sent to Cantalini. Thereafter, on November 14, 1973, a day before the plaintiff's payment under paragraph 3c of the contract was due for October, Cantalini telephoned him and asked him if he had to pay the 5% commission for the month of October, 1973. Maddaloni testified that he "told him (Cantalini) that yes that was in accordance with the agreement he had accepted." Cantalini replied "that it was a lot of money, that it was cream off the top." Cantalini sought to postpone the matter. Maddaloni replied, "We are not going to talk about it later because tomorrow is the day that I am supposed to be paid and I am going to tell the girl to make out the check so that I will get my commission." ⁵ The last thing Cantalini said was "all right" and hung up. Beside the payment for October, the plaintiff received checks on December 15 and January 15 for the months of November and December, respectively. He was fired on January 19, 1974. He testified that Cantalini said that he was responsible for the poor profit statement that was inhibiting Cantalini's attempt to sell the company "and beside you wanted to get paid the commission under the agreement you made with Jack (Fortier)." ⁶ Maddaloni also produced figures from reports to the DPU indicating profits for the years 1970 through 1976.

From the evidence as set out above, the jury could have found facts which bring this case within Fortune. Maddaloni, like the plaintiff in Fortune, participated in obtaining a substantial benefit ICC rights for his employer, contributing his expertise. For this his contract provided, in addition to a weekly salary, compensation based on revenue from charter rights while the ICC rights were in effect. The plaintiff knew, of course, when he entered into the contract, that his employment could be terminated. He had a right to assume, however, that the employer would not exercise his prerogative "to avoid the payment of compensation attributable to past services." Cheney v. Automatic Sprinkler Corp., 377 Mass. 141, 148, 385 N.E.2d 961 (1979). ⁷ Thus, in Fortune, the Supreme Judicial Court "held that an employer may not in bad faith discharge an employee, employed at will, so as to prevent the employee from earning commissions which would have been payable in the normal course." Cheney, 377 Mass. at 148-149, 385 N.E.2d 961. Dunn v. Holladay, 6 Mass.App. 842, 372 N.E.2d 286 (1978) (cause of action stated where complaint alleged the defendant insurance company "induced annuitants to replace annuity contracts generated by the plaintiff (an agent) with new ones for the purpose of causing the plaintiff to lose 'persistency' commissions and service fees on the replaced contracts"). Hoefel v. Atlas Tack Corp., 581 F.2d 1, 6 (1st Cir. 1978), cert. denied sub nom. Atlas Tack Corp. v. Mahoney, 440 U.S. 913, 99 S.Ct. 1227, 59 L.Ed.2d 462 (1979). McKinney v. National Dairy Council, 491 F.Supp. 1108, 1121-1122 (D.Mass.1980). Horrigan v. General Motors Corp. ^b Cf. Zapatha v. Dairy Mart, Inc., --- Mass. ---, ---, ^c 408 N.E.2d 1370 (1980); WILSON V. BROOKLINE HOUSING AUTHY., --- MASS. ---, 420 N.E.2D 314 (1981)^D; A. John Cohen Ins. Agency, Inc. v. Middlesex Ins. Co., 8 Mass.App. ---, --- - ---, ^e 392 N.E.2d 862 (1979). Whatever the reason for termination, Maddaloni could reasonably expect that it would not be the evasion of payments based on the plaintiff's past services. "Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party." Restatement (Second) of Contracts § 205, comment a (1981). ^f Implicit in the very concept of a contract as a meeting of the minds for a common purpose is the principle that "in every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing." Druker v. Roland Wm. Jutras Assoc., 370 Mass. 383, 385, 348 N.E.2d 763 (1976). A. JOHN COHEN INS. AGENCY, INC. V. MIDDLESEX INS. CO., 8 MASS.APP. AT ---, 392 N.E.2D 862.^G See also Sechrest v....