Maddaloni v. Western Mass. Bus Lines, Inc.

• Decision Date: 27 July 1982
• Parties: Joseph MADDALONI v. WESTERN MASS. BUS LINES, INC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 351

438 N.E.2d 351

386 Mass. 877

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

Supreme Judicial Court of Massachusetts Hampden.

Argued March 3, 1982.

Decided July 27, 1982.

Donald A. Beaudry, Springfield, for plaintiff.

William F. Lally, Boston, for defendant.

Before HENNESSEY, C. J., and LIACOS, ABRAMS, NOLAN and O'CONNOR, JJ.

ABRAMS, Justice.

We consider whether an employee, serving under a contract of employment terminable at will, may recover for lost wages and fringe benefits in addition to commissions related to past services, when the employee is discharged in bad faith. See Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977). After a trial in the Superior Court, the jury returned a verdict for the plaintiff on his claim that he was discharged in "bad faith." By interrogatories accompanying the general verdict, see note 6, infra, the jury determined that the plaintiff would have earned $61,000 in commissions for past services. The judge also submitted the issue of damages to the jury on a quantum meruit theory. The jury determined that on a quantum meruit basis, the plaintiff was entitled to damages in the amount of $28,000.

The judge entered a judgment on the quantum meruit theory. Both parties appealed. The Appeals Court concluded that the plaintiff was entitled to $61,000 in lost commissions, and that the issue of damages for lost wages and fringe benefits should have been submitted to the jury. See Maddaloni v. Western Mass. Bus Lines, Inc., 12 Mass.App. ---, --- - ---, Mass.App.Ct.Adv.Sh. (1981) 1357, 1369-1371, 422 N.E.2d 1379. For the reasons set forth in this opinion, we agree with the Appeals Court that the plaintiff was entitled to $61,000 in damages for lost commissions. A majority conclude that the judge correctly declined to allow the jury to consider the issue of the plaintiff's damages for lost wages and fringe benefits.

We summarize the evidence most favorable to the plaintiff and resolve in his favor all reasonable inferences that could be drawn from that evidence. See Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, ---, Mass.Adv.Sh. (1981) 2287, 2288, 429 N.E.2d 21; Fortune v. National Cash Register Co., supra 373 Mass. at 97, 364 N.E.2d 1251. The plaintiff was hired by the defendant, Western Mass. Bus Lines, Inc. (WMBL), as general manager in April, 1964. At that time, the president of WMBL, John F. Fortier, was interested in obtaining a grant of interstate charter rights from the Interstate Commerce Commission (ICC). ¹ The plaintiff had considerable experience appearing before the Massachusetts Department of Public Utilities (DPU) and the ICC, in order to secure new operating authorities. Besides dealing with the ICC, the plaintiff's duties as general manager of WMBL included arranging the operating schedule, soliciting, 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 the plaintiff was hired, the plaintiff drafted, and the parties executed, a contract setting forth the terms of his employment. ² No definite term of employment was set out in the contract, and thus the contract was terminable at will. See Simons v. American Dry Ginger Ale Co., 335 Mass. 521, 524-525, 140 N.E.2d 649 (1957). See also Fortune v. National Cash Register Co., supra 373 Mass. at 100-101, 364 N.E.2d 1251. ³ The contract provided that the plaintiff would receive a salary of $120 a week plus Blue Cross and Blue Shield insurance benefits. Additional weekly compensation was to be provided at the discretion of the defendant. The contract also provided that after the ICC granted the defendant interstate charter rights, the plaintiff would receive a five per cent commission on the special and charter revenues of the defendant as reported to the DPU and the ICC. The commission was to be paid to the plaintiff on the fifteenth of each month.

The defendant obtained interstate charter rights in June, 1966, and the plaintiff received the commissions called for in the contract for five and one-half months. In November, 1966, the grant was revoked after the United States District Court for the District of Massachusetts held that the ICC had erred in granting the interstate charter rights to the defendant. The plaintiff's commissions under the contract ceased thereafter.

In September, 1970, Mario Cantalini bought WMBL and became its president. The plaintiff remained as general manager. In October or November, 1970, the plaintiff met with Cantalini and his attorney to discuss the need for obtaining interstate charter rights. Cantalini then took out the plaintiff's employment contract and handed it to his attorney to read. The attorney read it and returned it to Cantalini, stating that "this would be all right with the company."

Sometime later the plaintiff and Cantalini sought to obtain from the ICC a grant of interstate charter rights. On October 1, 1973, the ICC again granted interstate charter rights to the defendant. About a week later, the plaintiff told Cantalini, "[N]ow that we [have] received the operating authority from the I.C.C., ... that portion of my agreement on the commission [is] now in effect." Cantalini replied that "he didn't understand it to be that way, but that ... he would check the agreement." On November 14, 1973, a day before the plaintiff's commissions for October became payable under the contract, Cantalini telephoned the plaintiff and asked him if he had to pay the five per cent commission for the month of October. The plaintiff responded, "[Y]es, that was in accordance with the agreement he [Cantalini] had accepted." Cantalini replied "that it was a lot of money, that it was cream off the top." Cantalini sought to postpone the discussion, but the plaintiff stated, "We are not going to talk about it later because tomorrow is the day that I am supposed to be paid ...." The last thing Cantalini said before he hung up was "all right."

In addition to the payment for October, the plaintiff received commissions for November and December. On January 19, 1974, Cantalini discharged the plaintiff from his employment. Cantalini stated that he was discharging the plaintiff because the plaintiff was responsible for the poor profit statement which Cantalini claimed was inhibiting his attempt to sell the company. "[B]esides," stated Cantalini, "you wanted to get paid the commission under the agreement you made with Jack [Fortier]." Thereafter, the plaintiff filed a complaint in the Superior Court alleging that the defendant's termination of the contract was based on a bad faith attempt to avoid paying the plaintiff his commissions.

1. Liability of defendant for breach of contract. The defendant claims that there was insufficient evidence to support the jury's verdict, and that the judge should have granted its motion for a directed verdict or judgment notwithstanding the verdict. The Appeals Court concluded that "[f]rom the evidence as set out above, the jury could have found facts which bring this case within Fortune." Maddaloni v. Western Mass. Bus Lines, Inc., 12 Mass.App. ---, ---, Mass.App.Ct.Adv.Sh. (1981) 1357, 1362, 422 N.E.2d 1379. We agree.

In Fortune, we held "that an employer may not in every instance terminate without liability an employment contract terminable at will.... [W]e upheld the plaintiff's claim for future commissions based on past service when the employer terminated the plaintiff's employment without good cause and for the purpose of retaining the sales commissions for itself." Cort v. Bristol-Myers Co., 385 Mass. 300, 303, 431 N.E.2d 908 (1982). Fortune v. National Cash Register Co., 373 Mass. 96, 104-105, 364 N.E.2d 1251 (1977). In that case we declined to "speculate as to whether [a] good faith requirement is implicit in every contract for employment at will." Fortune v. National Cash Register Co., supra at 104, 364 N.E.2d 1251. We believe that the plaintiff in this case, like the plaintiff in Fortune, could reasonably expect that his employment would not be terminated by the defendant in order to deny him commissions.

The defendant argues that there was insufficient evidence of bad faith in this case, and that the judge should have granted its motion for a judgment notwithstanding the verdict. We do not agree. The evidence and the reasonable inferences to be drawn therefrom support the jury's verdict. ^{4 4} At the time of his discharge the plaintiff had been in the transportation business for approximately thirty-eight years. He had been the defendant's general manager for six years before Cantalini acquired WMBL, and for approximately four years since Cantalini acquired the company. After Cantalini acquired another bus company, he made the plaintiff its general manager, and the two companies were run out of the same office. By January, 1974, the plaintiff's salary was $250 a week. It is not clear from the record how much of the increase in salary was authorized by Cantalini. (The record indicates that he authorized at least $50 a week.) In 1972, the plaintiff was provided with pension benefits, apparently authorized by Cantalini. ⁵ In addition, for the four years that Cantalini owned WMBL, the plaintiff was provided each year with a new, fully equipped automobile with all expenses paid. Finally, although there was evidence of poor profits prior to the time that the plaintiff's commissions became payable under the contract, Cantalini did not discharge the plaintiff until after the commissions became payable. From this evidence, the jurors could conclude that Cantalini discharged the plaintiff to avoid paying the plaintiff's commissions. The jurors were not required to believe Cantalini's testimony that the plaintiff was discharged for legitimate business reasons. When evidence on a contested matter is conflicting, the issue is for the trier of fact. See Fortune, supra at 106, 364 N.E.2d 1251; Howes...