Perras v. Trane U.S., Inc.

578 F.Supp.3d 193

Nicholas PERRAS, Plaintiff,

v.TRANE U.S., INC., Defendant.

Civil Action No. 19-11321-NMG

United States District Court, D. Massachusetts.

Signed January 6, 2022

John A. Mangones, Godbout Law PLLC, Boston, MA, for Plaintiff.

Douglas J. Hoffman, Keerthi Sugumaran, Jackson Lewis PC, Boston, MA, for Defendant.

MEMORANDUM & ORDER

GORTON, United States District Judge

This case arises from allegations of non-payment of commissions owed to plaintiff Nicholas Perras ("Perras" or "the plaintiff") by defendant Trane U.S., Inc. ("Trane" or "the defendant"). Pending before the Court are cross-motions for summary judgment. For the reasons below, the plaintiff's motion for summary judgment will be denied. The defendant's motion for summary judgment will be allowed, in part, and denied, in part.

I. Background

From August, 2011, until his termination in February, 2019, Perras worked as an account manager for Trane. Trane is a Delaware corporation engaged in the business of selling heavy equipment. Its principal place of business is in Davidson, North Carolina, but it maintains offices globally, including in Massachusetts, where Perras was employed. As an account manager, Perras's primary responsibilities were selling services and equipment to clients and maintaining client relationships. For the performance of those services, Perras was compensated exclusively by commission. At some point during his employment, Perras began to receive a $6,000 monthly draw payment against his future commissions pursuant to Trane's Incentive Compensation Policy ("the Policy").

After his termination in February, 2019, Trane issued a final paycheck to Perras in the amount of approximately $35,700. In addition, on March 1, 2019, Trane accidentally sent Perras his monthly draw disbursement in the amount of $6,000 ("the accidental draw"). Although Trane initially sought reimbursement of the accidental draw, it has since withdrawn that request.

In April, 2019, counsel for Perras sent a demand letter to Trane seeking approximately $167,000 in commissions allegedly due for Perras's work on projects involving: 1) the Acorda Therapeutics Systecon, 2) the Acorda Therapeutics Cooling Tower ("the Cooling Tower project") and 3) Franklin Realty.¹ In May, 2019, Perras sued Trane in Massachusetts state court alleging violations of M.G.L. c. 149, § 148 ("the Wage Act") and seeking the alleged unpaid commissions. Trane timely removed the action to federal court.

Perras moves for summary judgment on approximately $18,000 in allegedly unpaid commissions relating to the Cooling Tower and Franklin Realty projects, attorney's fees and treble damages under the Wage Act. Trane seeks summary judgment that it owes Perras no commissions or, in the alternative, judgment precluding liability for treble damages.

II. Motions for Summary Judgment

a. Legal Standard

The role of summary judgment is "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990) ). The burden is on the moving party to show, through the pleadings, discovery and affidavits, "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists where the evidence with respect to the material fact in dispute "is such that a reasonable jury could return a verdict for the nonmoving party." Id.

If the moving party satisfies its burden, the burden shifts to the nonmoving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the entire record in the light most favorable to the non-moving party and make all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). Summary judgment is appropriate if, after viewing the record in the non-moving party's favor, the Court determines that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548.

b. The Cooling Tower Project

The Cooling Tower project consisted of the installation, dismantling and rental of a 500-ton cooling tower. The parties agree that when Perras was terminated, he was owed a commission of approximately $5,800 on that project which was not included in his final paycheck. Disputed, however, is whether the issuance of the accidental draw constituted payment of the commission. Perras contends that it did not, and that Trane is liable for a violation of the Wage Act, because an accidental draw is not a wage payment. He further submits that Trane is liable in any event because the draw, if considered to be a commission payment, was unlawfully tardy. Trane responds that the accidental draw constituted timely payment of the commission owed and therefore it is not liable under the Wage Act.

With respect to whether the accidental draw was a payment of wages, Perras argues that 1) the accidental draw was a loan and 2) even if the accidental draw were a payment, it was of a different nature than the commission owed to him and therefore did not satisfy Trane's obligation under the Wage Act.

The Court is unpersuaded. First, the accidental draw was a payment within the meaning of the Wage Act. Massachusetts law recognizes draws as a method of payment. See M.G.L. c. 151, § 1A (listing "drawing accounts" along with commissions and bonuses as "sums paid"), Sullivan, 482 Mass. at 228, 121 N.E.3d 1210 (describing payment structure for salesperson paid "entirely in commissions or draws (i.e., advances on commissions)").

Second, application of the draw to the commission due does not violate the Wage Act. The draw payment is essentially an advance and has no contemplated application other than as a future earned commission. For that reason, the draw differs from the payments in the cases cited by Perras, Dixon v. Malden, 464 Mass. 446, 984 N.E. 2d 261 (2013) and Sullivan v. Sleepy's LLC, 482 Mass. 227, 121 N.E. 3d 1210 (2019), in which a defendant employer attempted to re-allocate as wages a payment given gratuitously or in satisfaction of another legal obligation. No similar re-allocation has occurred here: Perras alleges he is owed commissions, and draw payments offset commissions and only commissions.

Finally, Perras claims that, regardless of whether the draw was a payment of wages, he is owed treble damages because it was late. The Wage Act provides that any terminated employee shall be paid in full on the day of his or her discharge. M.G.L. c. 149, § 148. Liability for treble damages under the Wage Act attaches, however, only after the filing of a claim. See Dobin v. CIOview Corp., 16 Mass. L. Rep. 785 at *20, 2003 WL 22454602 (Mass. Super. Ct. 2003) (holding that an employer "is not required to pay treble the lost wages and benefits if the ... payments were tardy but made before suit was brought"), Clermont v. Monster Worldwide, Inc., 102 F. Supp. 3d 353, 358-59 (D. Mass. 2015) (same). Here, payment in the form of the accidental draw was made before the plaintiff filed suit in state court. Therefore, treble damages are unwarranted to the extent that the accidental draw satisfies Trane's liability which it does as to the Cooling Tower project.

Because Perras has received the commission to which he is entitled, summary judgment will enter for Trane with respect to the Cooling Tower project commission.

c. The Franklin Realty Project

The Franklin Realty project consisted of a five-year contract for servicing industrial chillers and for other service projects. It guaranteed Trane revenue of $297,864.67 over five years, $76,012 of which was payable in the first year. Trane argues that Perras is owed about $41 as commission for the Franklin Realty project, an amount reimbursed by the portion of the accidental draw not already allocated to the Cooling Tower project commission.² Perras contends, however, that he is owed $12,542, trebled under the Wage Act. The sums differ because of the parties’ disagreement as to 1) whether the Franklin Realty agreement was a wholly new agreement or, instead, partly a renewal and expansion of a prior agreement and 2) how commissions with respect to new agreements are to be calculated under Perras's Commission Plan Summary ("the Plan Summary") and the Policy.

i. Arguments of the parties

Perras argues that his commission for the Franklin Realty project should be calculated pursuant to the "New Agreements" section of the Plan Summary. That section provides that the commission for the first 12 months of a new agreement is credited to the salesman at the later of the "month of the new contract start date (revenue recognition event)" and its entry into company data systems. Perras submits that 1) he was credited the agreement before his termination and, accordingly, is owed $12,542, i.e. 16.5% (his commission rate) of $76,012, and 2) Trane's failure to pay that sum constitutes a violation of the Wage Act entitling him to treble damages on that amount.

Trane disagrees and asserts that, with respect to the servicing component, Perras is entitled to commissions under the "Renewals" and "Expanded Scope Agreements" provisions of the Plan Summary. With respect to the service projects, Trane agrees that the "New Agreements" provision governs but maintains that Perras is not entitled to a commission because certain contingencies had not occurred at the time Perras was terminated.

As to the "Renewals" and "Expanded Scope Agreements" provisions, Trane asserts that commissions payable thereunder are credited to the...