Wright, et al. v. Balise Motor Sales Company, et al. (Lawyers Weekly No. 12-042-17)

DEREK WRIGHT and NATHANIEL TOWSE, on behalf of themselves and all others similarly situated
Derek Wright previously sold cars at Balise Hyundai in Hyannis, Massachusetts, for Cape Hy, Inc. Nathaniel Towse sold cars in West Springfield, Massachusetts for Balise Motor Sales Company. Wright and Towse claim that they are owed unpaid overtime, Sunday premium pay, and minimum wages. They assert a variety of statutory claims as well as common law claims for breach of contract and unjust enrichment or quantum meruit. They seek to assert the same claims on behalf of a putative class of similarly situated salespeople.
Defendants have moved to dismiss the four common law claims and to compel a more definite statement as to the scope of the putative class. The Court will allow the partial motion to dismiss but deny the motion for a more definite statement.
The Court concludes that Defendants are entitled to dismissal of the common law claims because the facts alleged in the complaint do not plausibly suggest that Defendants entered into an implied contract to pay hourly wages of any kind. Instead, the complaint indicates that the parties understood that all salespeople would be paid commissions only. The existence of an implied contract to pay commissions bars Plaintiffs’ claims for unjust enrichment or quantum meruit.
1. Motion to Dismiss. To survive a motion to dismiss under Mass. R. Civ. P. 12(b)(6), a complaint must allege facts that, if true, would “plausibly suggest[] … an entitlement to relief.” Lopez v. Commonwealth, 463 Mass. 696, 701 (2012), quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). For the purpose of deciding the pending motion
1 Cape Hy, Inc.; James E. Balise, Jr.; William Peffer; Steven M. Mitus; and Allen Thomalla.
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to dismiss, the Court must assume that the factual allegations in the complaint and any reasonable inferences that may be drawn in Plaintiffs’ favor from the facts alleged are true. See Golchin v. Liberty Mut. Ins. Co., 460 Mass. 222, 223 (2011). In so doing, however, it must “look beyond the conclusory allegations in the complaint and focus on whether the factual allegations plausibly suggest an entitlement to relief.” Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, 473 Mass. 336, 339 (2015), quoting Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 676 (2011).
1.1. Implied Contract Claim. In Count VI, Plaintiffs claim that Defendants breach an implied contract with Plaintiffs by failing to pay them an amount at least equal to Plaintiffs’ statutory entitlement to a lawful minimum wage for all the hours they worked plus time-and-a-half for any hours they worked on Sundays and for any overtime they worked in excess of forty hours per week.
“In the absence of an express agreement, a contract implied in fact may be found to exist from the conduct and relations of the parties.” Sullivan v. O’Connor, 81 Mass. App. Ct. 200, 212 (2012), quoting LiDonni, Inc. v. Hart, 355 Mass. 580, 583 (1969).
The facts alleged in the complaint would support a finding that Plaintiffs had an implied contract with the corporate defendants, but do not plausibly suggest that Defendants had impliedly agreed to pay amounts equal to the minimum hourly wage, overtime, and Sunday pay required by statute. To the contrary, the complaint alleges Defendants had a policy of paying salespeople “based solely on commissions that they earned from selling vehicles” and not paying any additional amounts if needed to compensate salespeople for overtime, Sunday pay, or a minimum hourly wage. According to the complaint, Defendants paid salespeople a weekly draw, with the understanding that any amounts paid through the draw would be deducted from future commissions earned on sales. The course of conduct alleged in the complaint may have violated statutory pay requirements, as Plaintiffs claim in Counts I through V. But a policy and practice of paying commissions only, and never compensating salespeople on an hourly basis, cannot give rise to an implied contract to hourly wages that meet certain standards.
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Since the facts alleged do not plausibly suggest that Defendants had implicitly agreed through their conduct to pay Plaintiffs on an hourly basis, the implied contract claim must be dismissed.
1.2. Implied Covenant of Good Faith and Fair Dealing. In Count IX, Plaintiffs claim that Defendants breached the implied covenant of good faith and fair dealing. Under Massachusetts law, this covenant “is implied in every contract.” See Weifer v. PortfolioScope, Inc., 469 Mass. 75, 82 (2014), quoting Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004).
This claim adds nothing to Plaintiffs’ other contract claim. The implied covenant “does not create rights or duties beyond those the parties agreed to when they entered into the contract.” Boston Med. Ctr. Corp. v. Secretary of Executive Office of Health & Human Servs., 463 Mass. 447, 460 (2012) (affirming dismissal of claim), quoting Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 680 (2011). Instead, the implied covenant only governs “the manner in which existing contractual duties are performed.” Eigerman v. Putnam Investments, Inc., 450 Mass. 281, 289 (2007).
Since the implied contract alleged in the complaint was to pay sales commissions, not to pay any kind of hourly wages, nothing in the implied covenant would require Defendants to pay hourly wages for overtime, time worked on Sundays, or as a minimum hourly wage. See Boston Med. Ctr., supra, at 459-460 (where plaintiff hospitals agreed in their contract to accept certain rates of payment for serving Medicaid patients, “the Secretary cannot be found to have acted in bad faith or to have dealt unfairly by failing to provide reimbursement at higher rates”).
1.3. Unjust Enrichment and Quantum Meruit. There is no need to analyze Plaintiffs’ quantum meruit and unjust enrichment claims separately, as these claims are essentially indistinguishable. “The underlying basis for awarding quantum meruit damages in a quasi-contract case is unjust enrichment of one party and unjust detriment to the other party.” Liss v. Studeny, 450 Mass. 473, 479 (2008), quoting Salamon v. Terra, 394 Mass. 857, 859 (1985).
The facts alleged in the complaint establish that Plaintiffs cannot recover a minimum wage, overtime, or Sunday premium pay on a quantum meruit or unjust
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enrichment theory because they were employed under an implied contract that governed their compensation and did not provide for such wages.
“A plaintiff is not entitled to recovery on a theory of quantum meruit [or unjust enrichment] where there is a valid contract that defines the obligations of the parties.” Boston Med. Ctr. Corp. v. Secretary of Executive Office of Health & Human Servs., 463 Mass. 447, 467 (2012) (affirming dismissal on this ground). “A valid contract defines the obligations of the parties as to matters within its scope, displacing to that extent any inquiry into unjust enrichment.” Id., quoting Restatement (Third) of Restitution and Unjust Enrichment § 2 (2011); see also Santagate v. Tower, 64 Mass. App. Ct. 324, 329 (2005) (“An equitable remedy for unjust enrichment is not available to a party with an adequate remedy at law.”).
2. Motion for a More Definite Statement. There is no need to order Plaintiffs to provide a more definite statement. The complaint makes clear that Plaintiffs are asserting claims in part on behalf of other salespeople who were paid commissions and not paid on an hourly basis. These allegations are detailed enough for Defendants to understand and respond to the complaint. More detail can wait until after Plaintiffs have had a chance to conduct discovery.
Defendants’ motion to dismiss the contract and equitable claims in Counts VI through IX of the complaint is ALLOWED. Defendant’s motion for a more definite statement is DENIED.
April 18, 2017
Kenneth W. Salinger
Justice of the Superior Court

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