Rosnov v. Molloy

• Decision Date: 31 August 2011
• Docket Number: SJC–10762.
• Citation: 952 N.E.2d 901,460 Mass. 474,161 Lab.Cas. P 61180
• Parties: Elena ROSNOVv.John H. MOLLOY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

460 Mass. 474

952 N.E.2d 901

161 Lab.Cas. P 61,180

Elena ROSNOV

v.John H. MOLLOY.

SJC–10762.

Supreme Judicial Court of Massachusetts, Essex.

Submitted May 5, 2011.Decided Aug. 31, 2011.

Richard L. Alfred (Barry J. Miller with him), Boston, for the defendant.Jeffrey R. Mazer, Lynnfield (Elena Rosnov, Danvers, with him) for the plaintiff.The following submitted briefs for amici curiae:Shannon Liss–Riordan & Hillary Schwab, Boston, for Massachusetts Employment Lawyers Association & others.William J. Okerman, pro se.John Pagliaro & Martin J. Newhouse, Boston, for New England Legal Foundation & another.Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, & DUFFLY, JJ.BOTSFORD, J.

The issue we address in this case is whether a 2008 amendment to the enforcement section of the Massachusetts Wage Act, G.L. c. 149, § 150 (§ 150), providing for a mandatory award of treble damages to a prevailing employee, should be applied in an action brought by an employee against her employer for violation of the Wage Act before the amendment's effective date. We conclude that the amendment should be read to apply only prospectively, to claims arising on or after the amendment's effective date of July 12, 2008. Because the Superior Court judge applied the amendment retrospectively to this case, we remand to the Superior Court for further proceedings consistent with this opinion.¹

1. Background.² The plaintiff, Elena Rosnov, worked as an attorney in the law office of the defendant, John H. Molloy, from early February, 2006, until her resignation on June 26, 2006. As a term of her employment, Rosnov was to be provided a referral fee of forty per cent of any contingency fee that Molloy or his office received in connection with the settlement or damage award in any case that Rosnov referred to Molloy. In March of 2007, a case that Rosnov had referred to Molloy the preceding year reached a partial settlement of $2.5 million. Ultimately, Molloy received attorney's fees in connection with the partial settlement in the amount of $432,500.

On April 17, 2007, Rosnov filed a complaint in the Superior Court against Molloy, claiming his failure to pay her a referral fee connected to the case was a breach of contract and violated the Wage Act, G.L. c. 149, §§ 148, 150 (Wage Act).³ She sought to recover a portion of the attorney's fees Molloy had received. By agreement of the parties, the trial was bifurcated, and the liability portion of Rosnov's contract claim was tried to a jury without reference to damages; the parties agreed that if there was liability on the contract claim, the amount of contract damages was $173,000, or forty per cent of $432,500. In March, 2009, a jury found that an oral contract for the division of fees existed between Rosnov and Molloy, and that Molloy had breached the contract by not providing Rosnov a referral fee. Thereafter, the trial judge considered, without a jury, whether Rosnov's referral fee constituted a “commission” under the Wage Act, and if so, whether Rosnov was entitled to treble damages under § 150.

The judge found that Rosnov was an employee under the Wage Act and that the fee qualified as a commission. The judge further concluded the version of § 150 amended after this case was filed applied, “because violators of the Wage Act have always been subject to treble damages.... This is not a case where the amendment to the statute substantially changes parties' rights and expectations.” ⁴ The judge thus concluded that Rosnov was entitled to a mandatory award of treble damages, or $519,000, plus interest. Molloy appealed, and we granted his application for direct appellate review.⁵

2. Discussion. As earlier indicated, the only question we address is which version of § 150 should be applied in this case: § 150, as amended through St.2008, c. 80, § 5 (chapter 80), effective July 12, 2008; or § 150, as amended through St.2005, c. 99, § 2, the version of the statute in effect in 2007 when Rosnov filed her complaint. This is a question of statutory interpretation, and therefore one that we review de novo. See, e.g., Commerce Ins. Co. v. Commissioner of Ins., 447 Mass. 478, 481, 852 N.E.2d 1061 (2006). See Commonwealth v. Cintolo, 415 Mass. 358, 359, 613 N.E.2d 509 (1993) (“Statutory interpretation is a pure question of law”).

a. Statutory retroactivity. The presumption that statutes operate prospectively is well established. Fleet Nat'l Bank v. Commissioner of Revenue, 448 Mass. 441, 448–449, 862 N.E.2d 22 (2007) (“To the extent that there may be uncertainty about the application of new legislation, it must be resolved against retroactivity”). See 2 N.J. Singer & J.D. Shambie, Statutes and Statutory Construction § 41.4, at 400–401 (7th ed. 2009) (“Retrospective operation is not favored by courts, and a law is not construed as retroactive unless the act clearly, by express language or necessary implication, indicates that the legislature intended a retroactive application”). As this court has explained, however, statutes may operate retroactively in certain circumstances:

“In the absence of an express legislative directive, this court has usually applied ‘[t]he general rule of interpretation ... that all statutes are prospective in their operation, unless an intention that they shall be retrospective appears by necessary implication from their words, context or objects when considered in the light of the subject matter, the pre-existing state of the law and the effect upon existent rights, remedies and obligations. Doubtless all legislation commonly looks to the future, not to the past, and has no retroactive effect unless such effect manifestly is required by unequivocal terms. It is only statutes regulating practice, procedure and evidence, in short, those relating to remedies and not affecting substantive rights, that commonly are treated as operating retroactively, and as applying to pending actions or causes of action.’ ”

Fontaine v. Ebtec Corp., 415 Mass. 309, 318, 613 N.E.2d 881 (1993), quoting City Council of Waltham v. Vinciullo, 364 Mass. 624, 626, 307 N.E.2d 316 (1974). See Gray v. Commissioner of Revenue, 422 Mass. 666, 670, 665 N.E.2d 17 (1996).

Rosnov argues that the presumption of prospective application does not apply to chapter 80 for two reasons: because the statute relates only to remedies and not to substantive rights; and because the legislative history of this amendment evinces an intent on the part of the Legislature that the amendment be applied retroactively. Conversely, Molloy contends that chapter 80 pertains to substantive rights because it alters the extent of a party's liability; and that in any event there is insufficient evidence of a clear legislative intent that chapter 80 be retroactively applied. For the reasons that follow, we agree with Molloy.⁶

b. Substantive right. Before chapter 80 was passed, the relevant portion of § 150, as amended through St.2005, c. 99, § 2, read as follows:

“Any employee claiming to be aggrieved by a violation of [the Wage Act or certain other statutes] may, at the expiration of ninety days after the filing of a complaint with the attorney general ... institute and prosecute in his own name and on his own behalf, or for himself and for others similarly situated, a civil action for injunctive relief and any damages incurred, including treble damages for any loss of wages and other benefits. An employee so aggrieved and who prevails in such an action shall be entitled to an award of the costs of the litigation and reasonable attorney fees ” (emphasis supplied). In Wiedmann v. Bradford Group, 444 Mass. 698, 831 N.E.2d 304 (2005) ( Wiedmann ), this court concluded that “there is nothing in the plain language” of § 150 requiring an automatic award of treble damages, where “[t]he text of the statute states only that a plaintiff ‘may’ institute a suit for damages that includes a request for treble damages.” ⁷

Id. at 709, 831 N.E.2d 304. We held that an award of treble damages under § 150 lies in the judge's discretion, citing with approval the conclusion in Goodrow v. Lane Bryant, Inc., 432 Mass. 165, 178–179, 732 N.E.2d 289 (2000) ( Goodrow ), that “treble damages are punitive in nature, allowed only where authorized by statute, and appropriate where conduct is ‘outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others.’ ” Wiedmann, supra at 710, 831 N.E.2d 304, quoting Goodrow, supra at 178, 732 N.E.2d 289.

The Wiedmann case was decided on July 21, 2005. Effective July 12, 2008, three years later, the provision of § 150 concerning treble damages was amended as follows:

“An employee so aggrieved who prevails in such an action shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits and shall also be awarded the costs of the litigation and reasonable attorneys' fees” (emphasis supplied).

Chapter 80 effected a critical change in the language of the statute, removing the provision that treble damages “may” be awarded, and replacing it with the directive that treble damages “shall be awarded.” See Wiedmann, supra at 710, 831 N.E.2d 304, and cases cited (“may” is permissive; “shall” imposes mandatory obligation).

We recognize that “the distinction between legislation that concerns ‘substantive rights,’ and legislation that concerns ‘procedures' and ‘remedies,’ has proved to be difficult to draw.” Fontaine v. Ebtec Corp., 415 Mass. at 319, 613 N.E.2d 881. In Fontaine, the court concluded that amendments to G.L. c. 151B, § 9, providing for recovery of punitive damages in a discrimination case and multiple damages in an age discrimination case, could not be retroactively applied. Id. at 317, 320–321, 613 N.E.2d 881. We explained, “legislation limiting or increasing the measure of liability, while arguably remedial in the broad sense of that word, generally is considered to impair the substantive rights of a party who will be adversely affected by the...