Roddy & McNulty Ins. Agency, Inc. v. A.A. Proctor & Co., Inc.

• Decision Date: 30 September 1983
• Citation: 16 Mass.App.Ct. 525,452 N.E.2d 308
• Parties: RODDY & McNULTY INSURANCE AGENCY, INC. v. A.A. PROCTOR & CO., INC.
• Court: Appeals Court of Massachusetts

Page 308

452 N.E.2d 308

16 Mass.App.Ct. 525

RODDY & McNULTY INSURANCE AGENCY, INC. v. A.A. PROCTOR & CO., INC.

Appeals Court of Massachusetts Middlesex.

Argued June 20, 1983.

Decided Aug. 17, 1983.

Further Appellate Review Denied Sept. 30, 1983.

Ronna D. Howard, Boston (Edmund M. Hurley, Boston, with her) for plaintiff.

Alan G. Miller, Boston (Peter C. Knight and D. Alice Olsen, Boston, with him) for defendant.

Before ARMSTRONG, GREANEY and DREBEN, JJ.

GREANEY, Justice.

This lawsuit was brought in the Superior Court by the plaintiff (an insurance agency) alleging that the defendant (also an insurance agency) had committed a breach of contract and violated G.L. c. 93A by refusing to pay commissions on insurance business referred to the defendant by the plaintiff pursuant to the terms of an agreement signed by their respective principals on September 30, 1975. Prior to the commencement of trial before a jury, the judge, on his own motion, ordered the c. 93A claim "severed" from the contract claim and tried "jury waived." A counterclaim by the defendant was dismissed at the close of the evidence and is not involved in the appeal. The jury returned a verdict for the plaintiff on the contract claim in the amount of $171,917.14, and judgment was entered in accordance with the jury's verdict. The defendant filed a timely motion for judgment notwithstanding the verdict (judgment n.o.v.), ¹ which the judge allowed "on the ground that the agreement of September 30, 1975, was an agreement to agree and not a contract." From the superseding judgment dismissing its action, the plaintiff has appealed. After discussing the implications of the severance order, we uphold the judgment notwithstanding the verdict, doing so on a ground different from the one relied upon by the judge.

1. We first consider whether, in view of the fact that the c. 93A claim is still pending under the order of severance, the appeal is premature as one brought from a judgment which adjudicates fewer than all the claims in the case and is not accompanied by a determination by the trial judge that there is no just reason to delay entry of judgment. See Mass.R.Civ.P. 54(b), 365 Mass. 821 (1974); J.B.L. Constr. Co. v. Lincoln Homes Corp., 9 Mass.App.Ct. 250, 252-253, 440 N.E.2d 871 (1980).

The precise basis for the judge's order separating the claims is not clear. While labelling his order an order of severance, the judge may have been acting pursuant to Mass.R.Civ.P. 42(b), which permits the separate trial of any claim "in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy", ² rather than the last sentence of Mass.R.Civ.P. 21, which permits "[a]ny claim against a party [to be] severed and proceeded with separately." ³ Although the two rules appear to confer similar authority, ⁴ the language of rule 21 dealing with severance was inserted by the drafters of the civil rules in the context of provisions addressing misjoinder of parties. This suggests that severance under rule 21 may be principally directed to the separation of claims within multiclaim litigation because of the peculiar relationship or status of parties with respect to particular claims. ⁵ See generally Smith & Zobel, Rules Practice § 21.2 (1975); 3A Moore's Federal Practice par 21.05, at 21-41 to 21-44 (2d ed. 1982). Some examples of the use of the severance power in rule 21 in precisely this manner can be seen in Sporia v. Pennsylvania Greyhound Lines, Inc., 143 F.2d 105, 107 (3d Cir.1944) (severance ordered where defendant sought to implead one of two plaintiffs who had joined to assert individual tort claims); Jennings v. Beach, 1 F.R.D. 442, 443 (D.Mass.1940) (severance ordered to cure misjoinder); and Thee v. Marvin Glass & Associates, 412 F.Supp. 1116, 1117, 1121 (E.D.N.Y.1976) (severance ordered where venue not proper as to all defendants).

Rule 42(b), on the other hand, appears to be devoted to the convenience of adjudication, the avoidance of prejudice and the interests of expedition and economy as dictated by the characteristics and elements of proof of the claims themselves. See Smith & Zobel, Rules Practice § 42.4 (1977). The following sampling shows the utilization of rule 42(b) to further these purposes: Western Geophysical Co. of America, Inc. v. Bolt Associates, 50 F.R.D. 193, 194 (D.Conn.1970) (separate trial ordered for counterclaim for patent infringement brought in breach of contract action); Cohen v. District of Columbia Natl. Bank, 59 F.R.D. 84, 88 (D.D.C.1972) (separate trials ordered as to each of the several defendant banks in usury case because of the potential for prejudice inherent in keeping track of the banks' differing practices and policies with respect to the subject loans); Washington Whey Co. v. Fairmont Foods Co., 72 F.R.D. 180, 182 (D.Neb.1976) (separate trial ordered for counterclaims alleging antitrust violations and unfair competition brought in contract action). Although both rules have different objectives and ordinarily should not overlap, they share a common bond by conferring discretion upon trial judges to deal with the exigencies of litigation by separating parties, claims, and issues in order "to secure the just, speedy, and inexpensive determination of every action." Mass.R.Civ.P. 1, 365 Mass. 730 (1974).

The question of which rule governs is not without significance. Respected authorities on civil procedure agree that claims properly severed under rule 21 take on lives of their own and become independent actions upon which separate appealable judgments may enter. See 9 Wright & Miller, Federal Practice and Procedure § 2387 (1971); 3A Moore's Federal Practice, supra at 21-39. The separate trial procedure of rule 42(b), however, "usually" results in one judgment, Wright & Miller, supra, which would not be appealable until all the claims in the case have been wrapped into it. ⁶ "Unfortunately this distinction, clear enough in theory, is often obscured in practice since at times the courts talk of 'separate trial' and 'severance' interchangeably." Ibid.

The separation for trial by the court of a c. 93A claim from a companion contract claim being tried to a jury is not based upon party-oriented issues such as joinder. Rather separation in the typical case (i.e. one involving a c. 93A and a common law claim from which the c. 93A claim arises) is premised on the nature of the c. 93A action, specifically the lack of a right to jury trial on the underlying assertion of unfair, deceptive or anticompetitive conduct. See Nei v. Burley, 388 Mass. 307, 311-315, 446 N.E.2d 674 (1983). As a consequence, the separation of claims in the conventional c. 93A setting appears more appropriately made under rule 42(b) than under rule 21. This case represents the common-place litigation described in which separation should have been handled under rule 42(b) with final judgment to await resolution of all the claims. The parties appear to agree, however, that if the judgment n.o.v. is upheld, the c. 93A claim fails. To put the parties through the exercise of "trying" the c. 93A case in these circumstances would be contrary to the purposes of the Massachusetts Rules of Civil Procedure expressed in rule 1, supra. We conclude that the merits should be decided despite the possibility that the judgment is not a complete adjudication by rule 54(b) standards.

2. In deciding whether the judge acted properly in entering the judgment n.o.v., we apply the same standard of review as would apply to a review of a motion for a directed verdict. D'Annolfo v. Stoneham Housing Authy., 375 Mass. 650, 657, 378 N.E.2d 971 (1978). Moran Travel Bureau, Inc. v. Clair, 12 Mass.App. 864, ---, Mass.App.Ct.Adv.Sh. (1981) 1075, 1076, 421 N.E.2d 103. The weight of the evidence standard is not involved, the determination focusing instead on whether "anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff." Raunela v. Hertz Corp., 361 Mass. 341, 343, 280 N.E.2d 179 (1972), quoting from Kelly v. Railway Exp. Agency, Inc., 315 Mass. 301, 302, 52 N.E.2d 411 (1943). Miles v. Edward O. Tabor, M.D., Inc., 387 Mass. 783, 785-786, 443 N.E.2d 1302 (1982).

Viewed in this light, the jury could have found the following facts. Beginning in 1973, the parties were jointly engaged in marketing a package of insurance coverages for automobile dealers which was known as "Auto-Pac." At some point in 1974 there apparently was an expression of interest by the Massachusetts State Automobile Dealers Association (MSADA) in sponsoring the parties' insurance program. Up to this point the parties had conducted their mutual business pursuant to an oral understanding. In anticipation of the sponsorship, John F. McNulty, president of the plaintiff, prepared a draft agreement under date of November 20, 1974, covering such topics as the division of costs and commissions and other aspects of the relationship with respect to insurance business which would be written as a consequence of obtaining MSADA sponsorship. The proposed agreement was extensively negotiated and modified by McNulty and by David A. Proctor, president of the defendant, but was never executed.

MSADA sponsorship did not materialize in 1974. The prospect of sponsorship arose again in 1975, however, and a draft of a new agreement was prepared. McNulty and Proctor met in Proctor's office on September 30, 1975, to discuss the draft. After approximately four hours of discussion and negotiation, which led to numerous handwritten changes and additions to the typed document, the two men signed the agreement. The agreement provided that the plaintiff would receive one third of the net commissions for business written by the defendant as a result of the sponsorship for as long as the accounts continued to be written with the defendant, with contingent...