Opinion
No. 11–P–1592.
2012-11-2
John J. BABCOCK & others v. CITY OF NEWTON.
By the Court (MILLS, BROWN & SIKORA, JJ.),
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In 2007, 120 police patrol officers of the city of Newton (city) and their collective bargaining representative, the Newton Police Association (collectively, the officers) brought this action in the Superior Court against the city upon a claim of breach of contract. The contract was a 2002 settlement agreement designed to resolve a prior lawsuit brought by the officers in the United States District Court for the District of Massachusetts against the city upon allegations of violation of the compensation standards of the Federal Fair Labor Standards Act of 1938 (FLSA). In Superior Court the officers claimed that the city had breached the settlement agreement by failure to compensate officers at the agreed overtime rate of pay for “city details” worked between September 1, 2001, and July 2, 2003. A judge of the Superior Court entertained the parties' cross motions for summary judgment. He granted the city's motion, denied the officers', and entered a conforming final judgment. This appeal followed. The case turns on the meaning of certain language in the settlement agreement. For the following reasons, we affirm. Background. The officers' Federal court complaint of January, 2000, presented the claim that the city had deprived them of “all straight time compensation and overtime compensation due them under the FLSA and its implementing regulations.” According to the complaint, the city had “not properly credited [the officers] for their work time” and “[the officers were] not paid for all their hours of work as defined under 29 C.F.R. Part 785.” The officers alleged specifically (1) that the city had failed to credit them for mandatory training time and for periods during which the city “required [the officers] to come to work early ... and to attend roll call”; and (2) that it had miscalculated the officers' regular rate of pay upon which their rate of overtime pay depended.
The regulation credits an employee with compensable work time for intervals of inactivity and waiting resulting from causes beyond his or her control.
8. Justice Mills participated in the deliberation on this case prior to his retirement. 3. If the detailed officer worked at a municipal event or location, the city would typically provide compensation. If he or she worked at a private event or site, the private vendor would furnish payment.
4. Section 10 of the settlement agreement adds a countervailing guide for interpretation: “The language of this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against either party.”
5. In the judge's words, “The careful description of so many types of pay that the parties did intend to include for the calculation of overtime pay demonstrates that the parties never intended to address the important issue of detail pay in the Agreement. See Stop & Shop, Inc. v. Ganem, 347 Mass. 697, 701 (1964) (omission of a provision is evidence that the parties reached no such understanding).”
6. The officers' Superior Court complaint acknowledges that, after the twenty-two months in question, the parties resolved the question of city details. We need not, and do not, include this point in our purely textual analysis.
7. The unqualified release language also tends to contradict the claim of the Superior Court action for greater compensation for the twenty-two months of September 1, 2001, through June 30, 2003, the first ten of which preceded the date of the settlement agreement execution in May of 2002.
The Federal complaint contained no reference to the subject of paid detail work generally or to the topic of city details specifically. The latter category lies at the core of our case. The parties agree that city details are “details worked by [an officer]: (a) for one or more departments of the City such as the City's school department or the City's Department of Public Works; and (b) details for which [an officer] was ordered (or ‘forced’) to work by the City even if performed for private vendors.”
The FLSA commands payment for overtime work (more than forty hours per week) at the rate of one and one-half times the worker's “regular rate” of pay. The statutory regular rate is an average hourly rate calculated on a weekly basis and including all forms of regular compensation and not merely the base rate of pay. The parties agree that city details, whether compensated by the city or by a private vendor, exceed base pay. Consequently their inclusion in the FLSA's regular rate will enlarge the average hourly figure to which the one and one-half overtime multiplier will apply. The Federal court complaint included the broad allegation that the city had “miscalculated the regular rate of pay for [the officers].” However, it did not specify any elements wrongly omitted from the regular rate.
The parties subsequently engaged in settlement negotiations and executed an agreement on August 30, 2001. Shortly thereafter, as a result of disagreement over language unrelated to this appeal, they entered into mediation to complete a new agreement. They executed the final settlement agreement in May, 2002. Like the complaint, the settlement agreement contains no mention of detail work. Two provisions are especially pertinent. Section 6(b) addresses whether certain activities performed by officers constituted hours worked; and § 6(d) provides an enumeration of eight elements of compensation for inclusion in calculation of the officers' regular rate of pay. The settlement agreement also contains a merger clause and broad language releasing the city of all liability for any and all claims embodied in or related to the complaint. Under the settlement agreement, the city paid the officers $220,000.
More than five years later, in June of 2007, the officers brought the present action in Superior Court. The gravamen of their complaint was that “[b]etween September 1, 2001, and June 30, 2004, the city did not count the hours that [the officers] spent working City Details in calculating the total hours that the Plaintiffs worked per week for purposes of determining entitlement to overtime compensation under the FLSA and the settlement agreement.” The officers acknowledged that the city had included city detail compensation in the calculation of the statutory regular rate of pay and therefore in the resulting overtime level of pay from July 3, 2003, onward. For the twenty-two months in question the officers sought backpay damages “well in excess of $300,000.”
The motion judge analyzed the text of the settlement agreement. He determined that “there is no provision of the Agreement that can be fairly read as covering the effect of detail pay on the overtime rate, and indeed a reading of the document as a whole indicates a notable omission of the issue. Any claim for breach of the Agreement for failure to calculate overtime pay in the manner advocated by the [officers] must consequently fail as a matter of law.”
Discussion. 1. Standard of review. In review of a grant of summary judgment, we examine de novo the record presented to the motion judge. See Miller v. Cotter, 448 Mass. 671, 676 (2007); Eastern Holding Corp. v. Congress Financial Corp. (New England), 74 Mass.App.Ct. 737, 740 (2009). In the light most favorable to the party losing the contest of cross-motions, De Liddo v. Oxford St. Realty, Inc., 450 Mass. 66, 70 (2007), we examine the record to determine whether all material facts and questions of law are resolved. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).
2. Contract interpretation. The officers contend that an accurate grasp of the settlement agreement reveals the inclusion of city detail compensation as an element of their statutory regular rate of pay and therefore of their overtime rate of pay. Alternatively, they insist that a correct view of the agreement shows at least an ambiguity amounting to a triable issue.
Several established guidelines assist our inspection of the settlement agreement. The interpretation of an unambiguous contract is a question of law. See Robert Indus., Inc. v. Spence, 362 Mass. 751, 755 (1973); Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 779 (2002). The preliminary question of the presence of an ambiguity is also a question of law. See Bank v. Thermo Elemental, Inc., 451 Mass. 638, 648 (2008); Quinn v. Mar–Lees Seafood, LLC, 69 Mass.App.Ct. 688, 695 (2007). We weigh the words of an agreement in light of the entire document and not in isolation. See Starr v. Fordham, 420 Mass. 178, 190 (1995); MacDonald v. Hawker, 11 Mass.App.Ct. 869, 872–873 (1981). “In interpreting a contract, ‘the objective is to construe [it] as a whole, in a reasonable and practical way, consistent with its language, background, and purpose.’ “ Downer & Co., LLC v. STI Holding, Inc., 76 Mass.App.Ct. 786, 792 (2010), quoting from Massachusetts Property Ins. Underwriting Assn. v. Wynn, 60 Mass.App.Ct. 824, 827 (2004). Genuine ambiguity requires language reasonably susceptible to more than one meaning; the parties' conflicting interpretations, by themselves, do not create an ambiguity. See Citation Ins. Co. v. Gomez, 426 Mass. 379, 381 (1998); Colorio v. Marx, 72 Mass.App.Ct. 382, 388 (2008).
3. Textual analysis of the 2002 settlement agreement. We begin with the text of the critical clauses and work outward. See Bank v. Thermo Elemental Inc., 451 Mass. at 648. The officers rely heavily upon two provisions of the settlement agreement. The introductory paragraph of § 6 states, “Should there be any questions of interpretation or ambiguities concerning any of the following [terms of creditable hours and pay], it is the parties' intent to adopt and maintain policies and practices conforming to the requirements of the Fair Labor Standards Act and related regulations, including but not limited to any regulations specifically cited.” Section 6(b) provides, “Effective September 1, 2001, in conformance with [cited Federal regulations], police officers engaged in the performance of their duties before or after their actual shift hours will be credited with hours worked for the time spent in the performance of their duties.” The officers' position is that these clauses import into creditable time and the statutory regular rate the hours and compensation of city details during the twenty-two month span of September 1, 2001, through June 30, 2003.
Preliminarily, and as did the motion judge, we view the introductory reference to the FLSA not as the creation of additional entitlements, but rather as a guide for contract interpretation in the event of ambiguity. Our survey of the settlement agreement does not reveal any genuine ambiguity. An assessment of the settlement document as a whole produces multiple textual points negating the treatment of the phrase “hours worked” as an implicit inclusion of city details within the statutory regular rate.
(a) After the general provision for payment for hours worked beyond regular shifts, § 6(b) proceeds to define with particularity the components of the statutory regular rate. Section 6(d) furnishes the following specific and explicit itemization:
“Effective September 1, 2001, the City will include all elements of regular compensation as part of the statutory ‘regular rate’ for purposes of calculating the rate of pay for overtime work. The elements will include: (1) ‘Quinn bill’ and/or education incentive pay; (2) clothing allowance; (3) shift differential pay; (4) longevity pay; (5) holiday pay; (6) defibrillator stipend; (7) specialty assignment pay; and, (8) the Police Coordinators stipend. Additional forms of compensation added in the future will be included as part of regular compensation for purposes of calculating the statutory ‘regular rate’ to the extent required to maintain compliance with the Fair Labor Standards Act and related regulations .”
The opening sentence refers to “all elements.” The second sentence begins with the words, “ The elements will include.” The article “the” appears to refer to the antecedent “all” and to treat the itemization as exhaustive. Also, the language introducing the itemization does not employ the lawyer's usual cautionary phrase, “shall include, but not be limited to.” That phrase of reservation does appear at other points in the settlement agreement. See § 6 (“it is the parties' intent to adopt and maintain policies and practices conforming to the requirements of the [FLSA] and related regulations, including but not limited to any regulations specifically cited below”). It is undisputed that lawyers for both sides negotiated and then cosigned the agreement. The omission of the phrase “not limited to,” or similar language, is meaningful.
Most importantly, as the motion judge observed, the catalogue of eight specific elements conspicuously omits city details. It naturally belonged among them. We too conclude that the inclusion of very particularized items in a list indicates the intended exclusion of related omitted items.
(b) The final sentence of § 6(d) contemplates the inclusion of “[a]dditional forms of compensation ... in the future.” Section 15 closes the settlement agreement with the proviso that “the prospective terms of this Agreement are subject to future changes via the process of collective bargaining.” These clauses show that the parties deferred certain elements of compensation and strongly suggest that the omitted element of city details fell within the category of deferred issues.
(c) Section 8 of the settlement agreement constitutes a categorical release of the city by the officers “from any and all claims, ... including but not limited to claims for improper or insufficient overtime payment under federal or state law ... which they may ever have or claim to have, ... except that which arises from conduct occurring after the execution of this Agreement” (emphasis supplied). The gravity of that surrender of rights indicates the officers' satisfaction with the specific itemization of the “elements of regular compensation” and the unlikelihood of their reliance upon the inclusion of city details as an implied element of the general phrase “hours worked.”
(d) Section 13 consists of an integration clause: “This Agreement sets forth the entire agreement between the parties pertaining to the subject matter hereof.” Again, the finality of such a provision militates against the view that the officers were entrusting the benefit of city details to an implication from general language. Rather, it suggests their satisfaction with the explicit enumeration of the elements of regular pay.
(e) Section 14 reports that each of the plaintiff officers in the Federal court case had received a copy of the settlement agreement, had had the opportunity to discuss it with counsel, and was voluntarily entering into it. The entirety of the officers, then, were able to observe the omission of a desirable, discrete reference to city details and to accept its absence from the explicit text. That process further diminishes the view that the officers were relying upon the risky general expression of hours worked and favors the alternate view that they were deferring that term to a later solution.
Conclusion. In sum, our textual analysis leads to the conclusion that the settlement agreement, as a matter of law, does not include city details as an element of the statutory regular rate of pay, and that it does not treat that subject with any ambiguity. Consequently, even though the motion judge addressed parol evidence as an independent and additional ground of decision and even though the parties have invoked information generated by discovery, we conclude that the unambiguous aggregate language of the settlement agreement eliminates the need to resort to extrinsic evidence of the meaning of their agreement. See General Convention of New Jerusalem in the United States of America, Inc. v. Mackenzie, 449 Mass. 832, 835 (2007); Brewster Wallcovering Co. v. Blue Mountain Wallcoverings, Inc., 68 Mass.App.Ct. 582, 617–618 (2007) (excluding parol evidence offered for an “afterthought” argument seeking to alter unambiguous contract language). A mere claim of ambiguity, without more, will not defeat a motion for summary judgment “if the documents do not reflect ambiguity on the point in question, and the party resisting summary judgment adduces no evidence of ambiguity or fraud.” USTrust v. Henley & Warren Mgmt ., Inc., 40 Mass.App.Ct. 337, 343 (1996).
Judgment affirmed.