Kubinec v. Top Cab Dispatch, Inc.

Full title: Jozef Kubinec [1] et al. [2] v. Top Cab Dispatch, Inc. et al. [3] No…

Court: Superior Court of Massachusetts

Date published: Jun 25, 2014

No. SUCV2012-03082-BLS1 (Mass. Super. Jun. 25, 2014)

Opinion

SUCV2012-03082-BLS1

06-25-2014

Jozef Kubinec [1] et al. [2] v. Top Cab Dispatch, Inc. et al. [3] No. 127374

Mitchell H. Kaplan, Justice

Decided June 24, 2014

MEMORANDUM OF DECISION AND ORDER ON (1) DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND (2) PLAINTIFF'S CROSS MOTION FOR SUMMARY JUDGMENT

Mitchell H. Kaplan, Justice

The plaintiffs, Jozef Kubinec, individually and on behalf of all others similarly situated, and Nippon Trans, Inc. (Nippon), filed this class action against the defendants, Top Cab Dispatch, Inc. (Top Cab) and John Ford. The plaintiffs claim that the defendants: (1) breached a contract to provide taxi dispatch services to Nippon at a fixed rate, in perpetuity, and (2) misclassified Kubinec as an independent contractor rather than an employee, even though the plaintiffs own the taxi that Kubinec drives and the associated medallion. On May 15, 2013, the plaintiffs filed a second amended class action complaint in which they assert the following claims: breach of contract (Count I), quantum meruit (Count II), breach of the covenant of good faith and fair dealing (Count III), unjust enrichment (Count IV), misclassification as independent contractors in violation of G.L.c. 149, § 148B (Count V), " violations of payment of wages law" in violation of G.L.c. 149, § 148 (Count VI), non-payment of minimum wages in violation of G.L.c. 151, § § 1, 7 (Count VII), and non-payment of overtime in violation of G.L.c. 151, § 1A (Count VIII). The case is before the court on the defendants' motion for summary judgment dismissing all counts of the complaint and plaintiff Kubinec's cross motion for partial summary judgment establishing that Kubinec is a Top Cab employee and not an independent contractor. For the following reasons, the defendants' motion for summary judgment is ALLOWED and the plaintiff's cross motion for summary judgment is DENIED.

BACKGROUND

The facts as revealed by the summary judgment record are as follows.

Nippon is a Massachusetts corporation with a listed place of business in East Boston, Massachusetts. Nippon is engaged in the business of taxi and delivery services. Its only corporate officers have been Kubinec and his wife, Tomomi Kubinec. Kubinec, who is originally from Czechoslovakia, moved to Boston, Massachusetts in 1990 and began working as a taxi driver. Nippon owns taxi medallion number 1535 and the taxi that uses this medallion. Kubinec has been the only authorized taxi driver for the vehicle associated with taxi medallion number 1535 from 2006 to the present.

Top Cab is a Massachusetts corporation. John Ford was the founder of Top Cab and its president until 2009; he is presently a director. According to Top Cab's Articles of Organization, Top Cab is engaged in the business of radio dispatch and communication services for passengers for hire. It is one of seven cab/radio associations authorized to provide such services in the City of Boston; its only business activity and source of income is providing these services and leasing the related equipment to its " members" for a fixed fee.

In 2007, either Ford or Top Cab acquired the assets of City Cab, ⁴ and, thereafter, Top Cab also began doing business as City Cab. The assets acquired from City Cab included City Cab's existing subscription/member agreements for radio dispatch services and related equipment leases with taxi cab medallion owners; it appears that Top Cab was substituted as the counterparty to these contracts. One such contract was City Cab's member's agreement with Nippon and its president, Tomomi Kubinec. A copy of this agreement is included in the summary judgment record and reads as follows:

4 The record is not clear as to whether Ford personally acquired City Cab's assets and transferred them to Top Cab or Top Cab was the acquirer, but the distinction is not material to any issue raised by the cross motions.

Boston City Cab, Inc.--Member's Agreement

In consideration of mutual promises and covenants, Boston City Cab, Inc. (hereinafter referred to as " City Cab"), and Tomomi Kubinec and/or Nippon Trans., Inc. (hereinafter referred to as " Member" [)], do hereby agree to the following terms and conditions:

If member leaves the Association before one (1) Year of starting date he or she will forfeit the radio deposit of $200.00. Reason: (Cost of decals and labor involved). City Cab agrees to furnish Radio Dispatch Services to its members in good standing.

City Cab agrees to provide new members with the required decals (on clean, all-white cars). Maintenance of the decals to City Cab/Hackney standards is Member's responsibility.

City Cab agrees to provide a two-way radio, antenna and wiring. Radio and accessories remain the property of City Cab, and a refundable deposit of $200.00 is required with installation. City Cab is responsible for maintenance/repair of Member's radio except where to [ sic ] mishandling or unauthorized alteration. Member is responsible for damage due to fire, theft or vandalism of the radio and installation.

For services rendered by City Cab, Member agrees to pay as follows:

For Radio Dispatch Services, $25 weekly, every Monday payable in advance. **Weekly radio fee is due whether cab is operating or is idle/off-road** Member understands that non-payment of dues is cause for immediate termination of this agreement at the discretion of City Cab. Proof of cancelled registration will be required in case of disabling accident or sale.

Vouchers will be accepted for radio dues payment or cashed by City Cab on a parity basis ($1 for $1) until April 30, 2001. Commencing May 1, 2001, the following percentages will be deducted: Vouchers-8% Airlines-15%. At such time when City Cab is able to process credit card transactions, 10% will be deducted. General Provisions Member agrees to operate said taxicab in compliance with local, state and federal statutes, local ordinances, by-laws and other regulations and with the regulations of the Boston Policy Hackney Carriage unit; that he will clean and maintain his vehicle to Hackney standards; and that failure to comply with these provisions shall be cause for immediate termination of the agreement by City Cab.

Member acknowledges and agrees that he is not a City Cab employee, but rather an independent contractor/agent; City Cab will not exercise control over member's business activities except as it affects his obligations under this agreement. Member also acknowledges that, as an independent business, he is not entitled to any employee-related benefits, and holds City Cab harmless for any such claims made.

With the termination of this agreement, Member is responsible for turning over radio and accessories in working condition, and for removal of all decals pertaining to his association with City Cab. If Member fails to do so forthwith, City Cab may proceed with recovery--with all expenses and legal fees necessary to enforce this provision borne by the Member.

Member agrees that any action of any nature and description instituted against City Cab in which he is involved is the Member's responsibility, and agrees to hold City Cab harmless and indemnify them from all damages, costs, and legal fees in defense of any such action.

City Cab agrees that, if it acts to change the fee for weekly radio service to Member, it will do so by giving thirty (30) days' notice thereof, by mail to the Member's address on file with City Cab. For this and other purposes necessary to conduct normal business operations, Member must maintain current name, address and telephone information of owner(s) and/or operator(s) on file with City Cab.

Member acknowledges that this agreement cannot be transferred and/or assigned to any other party. Such action will cause automatic termination of the agreement.

This agreement will supercede all prior agreements. Termination/Modification of Agreement

This agreement can be terminated by Member with thirty (30) days' notice, in writing, to the City Cab office at 275 Lee Burbank Hwy., Revere MA. If City Cab wishes to modify this agreement, it will contact member by U.S. Mail regarding any changes; Member will have thirty (30) days to respond as to his intention to accept (by signature) the agreement as modified.

The agreement is signed by a representative of City Cab and Tomomi Kubinec and dated September 8, 2003. On the first page of the agreement is a handwritten notation " 6/23/04 4 months free 1 year commitment $900" and the initials of Jozef Kubinec and another individual. On the second page of the agreement is the handwritten notation: " Lifetime $900.00 every year." This note is also initialed by Kubinec and another person, presumably on behalf of City Cab.

Apparently, it was not Top Cab's practice to execute new member agreements each year with existing members. Instead, Top Cab would enter a handwritten note on a card in the medallion owner's file reflecting the date the owner paid its dues, the duration of the membership, and whether the dues were for weekly, monthly, or yearly dispatch services. In any event, the only contract in the summary judgment record pertaining to the plaintiffs is the 2003 agreement between City Cab and Nippon/Kubinec; however, the record also includes a copy of a card with Kubinec's and Nippon's name and medallion number 1535 handwritten on it that lists sums due and payments made between 2006 and 2009. According to Ford, in the spring of 2009, Kubinec came to Ford's office and requested a three-year membership agreement for $2,000. Although Ford initially resisted, Kubinec visited his office " so frequently, and was so intimidating" to his staff, Ford relented. The record contains a copy of a slip dated March 26, 2009 with the number 1535 and the handwritten note " pd three years radio dues 6/19/09 [to] 6/19/12" and the amount " $2,000"; it is signed by Ford. The plaintiffs do not dispute that this three-year fixed fee agreement was agreed upon and performed.

The Police Commissioner of the Boston Police Department promulgated Rule 403, Hackney Carriage Rules and Flat Rate Handbook effective August 29, 2008. Rule 403 sets out the Hackney Carriage Rules and Regulations for the City of Boston, which include the regulations governing radio dispatch associations.⁵ On December 10, 2009, the Commissioner issued Special Order SO-09-037, amending Rule 403, effective immediately. The amendment provided as follows:

5 Under Rule 403, all taxi cab medallion owners are required by the City of Boston to belong to an approved dispatch service or radio association. All radio associations must have distinct colors, markings, designs, decals, or logos, which must be approved by the Inspector of Carriages. All medallion owners are required to paint their hackney carriage in the colors and design of the radio association, company, or radio dispatch service of which they are members.

Section 7, (I), (d) Radio Association Services is hereby amended, adding subparagraph (viii) [All Radio Associations shall provide, at a minimum, the following services to their members:] (viii) Global Positioning System tracking devices are mandatory and all Hackney Carriages shall be equipped with a GPS system approved by the Inspector of Carriages which shall allow the Inspector of Carriages and Medallion Owner to ascertain the whereabouts, activities and fare data of each vehicle via the internet at all times. Said system shall store such information in a retrievable form for 365 days. The association must provide the Inspector of Carriages with the user name and password necessary to access said system. Such information shall be searchable for the following data.

Date, time, and location of passenger pick-up and drop-off

Trip duration measured in time and mileage

Trip number

Itemized fare (tolls, surcharges, and tip amount for card payments)

Payment type (Cash, Credit, Debit, Student ID, Voucher)

Last four (4) digits of customer credit/debit, etc. account number

Hackney Medallion number

Hackney Drivers License number

Status codes

Date and time of taxicab dispatch

" Breadcrumb trail" GPS-based location data. (real-time and historical)

(ix) GPS enhanced dispatch services which enable the radio association to dispatch the Boston Licensed Taxi which can arrive at the location most quickly. Said system shall be equipped with a panic button utilized by the driver which will automatically notify the dispatcher of an emergency and the vehicle's location.

As a result of SO-09-037, all membership associations were required to install GPS systems in the taxicabs operated by its members.

According to Ford, the installation of this GPS based system was " quite costly." Top Cab was required to contract with an outside vendor to install the GPS systems in the taxis that were associated with Top Cab members. The previously installed radio dispatch equipment was insufficient to comply with Special Order SO-09-037, and Top Cab's membership fees were increased to cover the additional costs of the GPS systems. Thereafter, Kubinec " became belligerent about the increase in membership fees, and threatened [Top Cab] staff on numerous occasions."

Top Cab honored its March 26, 2009 agreement with Kubinec/Nippon and did not receive any additional payments until it expired in June of 2012. At that point, Ford demanded that Nippon pay the same rate as other members of the association for services--$39 per week. Kubinec refused, and Nippon paid nothing to Top Cab for nine weeks.⁶ At that point, Top Cab discontinued GPS and dispatch service to Nippon. Thereafter, Kubinec filed this action in the Superior Court. The plaintiffs also became members of another dispatch service.

6 In consequence, Kubinec received nine weeks of free dispatch services from Top Cab.

Top Cab maintains that it does not own or operate any taxi cabs; own any taxi cab medallions; lease taxis or hire individuals to drive taxis; lease taxi cab medallions; receive fares from passengers; tax a percentage of fares earned by drivers; tax a percentage of a driver's tips; set hours of operation for its medallion owners and drivers; or set rates for cab fares. Instead, Top Cab takes calls from individuals who request a taxi and dispatches a taxi to that location. The taxi driver has the sole discretion as to whether he or she will pick up the passenger.⁷

7 Kubinec testified at his deposition that dispatch could penalize a driver for not taking a call or job by not giving the driver any more jobs. There is, however, no evidence in the record that this actually occurred, either with respect to Kubinec or any other driver.

The plaintiffs point to an internet website maintained by Top Cab and City Cab that states that the companies are engaged in the business of dispatching taxis and providing taxi transportation services to passengers. The website touts that Top Cab: has the largest taxi fleet in the greater Boston area; can provide a passenger a taxi in two to four minutes; is family-owned and operated; has a " mission to ensure that [customers] enjoy traveling in our taxis"; and has " over 500 Ford Crown Victorias, Chevy Impalas, Dodge Grand Caravans, Toyota Sienna[s], Ford Windstar[s], and Toyota Camry Hybrid" taxis running twenty-four hours a day. While the website might be construed as suggesting to the public that Top Cab has some ownership interest in taxicabs, the plaintiffs offer no evidence that Top Cab actually does. To the contrary, the record evidence establishes that the defendants' representations concerning the nature of its business and the sole source of its revenues are correct. Moreover, the defendants' motion for summary judgment is directed at Kubinec, and his alter ego Nippon, the only named parties plaintiff. Kubinec does not dispute that Nippon owns the taxi that he drives and the associated medallion and that the only sum that he paid Top Cab/City Cab for the period June 2009 to the present was $2,000 for membership in the dispatch service and lease of the dispatch equipment. He made no payments to Top Cab as a result of any fares he received for transporting passengers, whether the passengers were referred to him by Top Cab or picked up independently of Top Cab. The defendants offer no evidence that Top Cab receives income from any source other than member dues or that those dues are anything other than fixed fees that do not vary regardless of how many fares the medallion owners earn or if the taxi is not driven at all.

Additionally, Neil Greenbaum, president of Top Cab since 2009, reviewed Top Cabs' records and determined that in 2010, taxis that used Top Cab for dispatch services completed 2, 368, 507 rides or fares, and of those, Top Cab dispatched 235, 710 rides or fares (approximately 9.95%). The plaintiffs offered no evidence that this data was inaccurate.

Top Cab also has a voucher program. According to Tiffany Mitchell, a manager at Top Cab, the company has about ten voucher accounts. Companies with a voucher account can use the vouchers to pay a fare to Top Cab. The company receives paper vouchers to use or distribute, and the voucher account holder is billed on a monthly basis. After a passenger with a voucher completes a ride in a Top Cab taxi, he or she will fill out the voucher with the fare amount and optional tip, and present it to the taxi driver. The medallion owner then turns the voucher in to Top Cab. Top Cab either applies the amount written on the voucher to the medallion owner's outstanding dues or, if dues are already paid-up, issues a check to the medallion owner. Pursuant to Boston hackney regulations, Top Cab keeps for itself an eight percent processing fee. If a gratuity is included in a single gross amount entered on the voucher, rather than separately stated, Top Cab deducts the eight percent processing fee from the single amount stated.⁸ Top Cab assumes all risk of nonpayment by the person or company to whom the blank vouchers were issued.

8 Kubinec offers no evidence that this ever happened to him.

DISCUSSION

Summary judgment will be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Corr., 390 Mass. 419, 422, 456 N.E.2d 1123 (1983). To prevail on summary judgment, the moving party must affirmatively demonstrate the absence of a triable issue, and that the summary judgment record entitles it to a judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17, 532 N.E.2d 1211 (1989). " [A]ll evidentiary inferences must be resolved in favor of the [nonmoving party]." Boyd v. AMTRAK, 446 Mass. 540, 544, 845 N.E.2d 356 (2006).

The nonmoving party, however, cannot defeat a motion for summary judgment by merely asserting that facts are disputed. Mass.R.Civ.P. 56(e); LaLonde v. Eissner, 405 Mass. 207, 209, 539 N.E.2d 538 (1989). Rather, to defeat summary judgment, the nonmoving party must " go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Kourouvacilis v. General Motors Corp., 410 Mass. 706, 714, 575 N.E.2d 734 (1991). " Conclusory statements, general denials, and factual allegations not based on personal knowledge [are] insufficient." Cullen Enters., Inc. v. Massachusetts Prop. Ins. Underwriting Ass'n, 399 Mass. 886, 890, 507 N.E.2d 717 (1987), quoting Madsen v. Erwin, 395 Mass. 715, 721, 481 N.E.2d 1160 (1985).

Defendants' Motion for Summary Judgment

The plaintiffs' claims can be divided into two groups: (1) claims premised on Top Cab's refusal to honor its alleged obligation to provide dispatch services to them at the rate " Lifetime $900.00 every year" (Counts I, II, III, and IV); and (2) claims premised on Top Cab's misclassification of Kubinec as an independent contractor rather than an employee and consequent violation of the Massachusetts Wage Act (Counts V, VI, VII, and VIII). The court will address each group separately.

The Lifetime Contract Claims

Count I-Breach of Contract

In Count I, the plaintiffs assert that Top Cab was the obligor on a " lifetime" contract pursuant to which it would provide radio dispatch services to Kubinec or Nippon, or both of them, at the rate of $900 a year and breached that contract when it demanded payment of $39 a week, after the Commissioner's regulations required that radio dispatch services like Top Cab install GPS services in each member taxicab. Whose life would be the measure of this lifetime contract is unclear. Top Cab and Nippon are corporations, and an essential feature of a corporation is continuity of existence notwithstanding the death of shareholders. See State Street Trust Co. v. Hall, 311 Mass. 299, 303, 41 N.E.2d 30 (1942). In any event, Top Cab contends that it was excused from performance of the " lifetime" contract for radio dispatch services under the doctrines of impossibility or frustration of purpose when the Commissioner changed the regulations regarding the equipment that must be provided to medallion holders by all approved radio associations and by requiring GPS tracking and dispatch. The plaintiffs argue that the defendants cannot establish impossibility or frustration of purpose as a matter of law because there is a fact issue as to whether the fees members paid to the association were solely in exchange for the use of radios or whether all or a portion of the fees were in exchange for the right to belong to an association. The plaintiffs also argue that the defendants should have foreseen the possibility of a change in dispatch communication requirements.

Before turning to the application of these principles of contract law to the facts presented by this case, the court briefly notes that it seems unlikely that after June 2012, the parties were actually still bound by an executory contract. The summary judgment record discloses that in March 2009, the plaintiffs, believing themselves to be the beneficiary of a lifetime contract for radio dispatch services, requested that they be granted a three-year contract for such services for the price of $2,000, an amount that was $700 less than Top Cab would be due under the terms of the existing " lifetime" contract. Top Cab agreed and fully performed, providing such services (including GPS) through June 2012 for only $2,000.

The replacement of an executory agreement by another such agreement binds the latter where the changes are material, even if modestly so . . . " The term substituted contract is used to describe the transaction [of consideration-supported discharge] if what the obligee accepts is a promise . . . as long as the promised performance differs in some way from what is due, there is consideration for the discharge." 1 Farnsworth, Contracts § 4.24, at 544 (2d ed. 2000). " A substituted contract is one that is itself accepted by the obligee in satisfaction of the original duty and thereby discharges it. A common type of substituted contract is one that contains a term that is inconsistent with a term of an earlier contract between the parties." Restatement (Second) of Contracts § 279, comment a (1981).

Haskell v. Versyss Liquidating Trust, 61 Mass.App.Ct. 824, 835-36, 815 N.E.2d 225 (2004). In the instant case, the plaintiffs accepted a promise to provide three years of service at a substantially reduced rate than what they would owe under the contract that they allege bound Top Cab. That new term was substantially different and inconsistent from the existing payment term under the " lifetime' contract and to the advantage of the plaintiffs. It therefore appears that the plaintiffs accepted that substituted performance and, in June 2012, when Top Cab completed performance of the substituted contract, its obligation to the plaintiffs had been discharged. See Lipson v. Adelson, 17 Mass.App.Ct. 90, 94, 456 N.E.2d 470 (1983) (recognizing that " a substituted contract or novation may be inferred despite a lack of express language to that effect").

In any event, as neither of the parties argued the doctrine of substituted contract, the court will go on to address contract frustration/impossibility. The doctrine of frustration of purpose is a companion rule to the doctrine of impossibility. Chase Precast Corp. v. John J. Paonessa Co., 409 Mass. 371, 374, 566 N.E.2d 603 (1991). See Boston Plate & Window Glass Co. v. John Bowen Co., 335 Mass. 697, 700, 141 N.E.2d 715 (1957) (explaining that under doctrine of impossibility, " where from the nature of the contract it appears that the parties must from the beginning have contemplated the continued existence of some particular specified thing as the foundation of what was to be done, then, in the absence of any warranty that the thing shall exist . . . the parties shall be excused . . . [when] performance becomes impossible from the accidental perishing of the thing without the fault of either party"). The doctrines of impossibility and frustration of purpose both " concern the effect of supervening circumstances upon the rights and duties of the parties." Chase Precast Corp. v. John J. Paonessa Co., 409 Mass. at 374. The difference, however, lies in the effect of the supervening event. Id. Under frustration of purpose, " [p]erformance remains possible but the expected value of performance to the party seeking to be excused has been destroyed by [the] fortuitous event . . ." Id., quoting Lloyd v. Murphy, 25 Cal.2d 48, 53, 153 P.2d 47 (1944). In any event, the main question in cases involving impossibility and frustration of purpose is: " whether an unanticipated circumstance, the risk of which should not fairly be thrown on the promisor, has made performance vitally different from what was reasonably to be expected." Chase Precast Corp. v. John J. Paonessa Co., 409 Mass. at 374 (citations omitted). The Supreme Judicial Court has adopted the following definition of frustration of purpose as found in the Restatement (Second) of Contracts § 265 (1981):

Where, after a contract is made, a party's principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.

Id. at 375. In addition, " frustration of purpose may suspend temporarily an obligor's duty to perform, or even discharge such duty if the obligor's performance has been made more burdensome." SMS Financial V, LLC v. Conti, 68 Mass.App.Ct. 738, 744 n.10, 865 N.E.2d 1142 (2007).

On the undisputed facts of this case, frustration of purpose is apparent. The September 8, 2003 agreement that is signed by a representative for City Cab and Tomomi Kubinec and quoted above is an agreement for " Radio Dispatch Services" at a rate of $25 per week. The agreement provided that the weekly " radio fee" was " due whether cab is operating or is idle/off-road." More than six years later, on December 10, 2009, the Boston Police Commissioner issued Special Order SO-09-037, Amendment to Rule 403, Hackney Carriage Rules and Regulations. This amendment made GPS tracking devices mandatory for taxis and required all radio associations to provide, at a minimum, " GPS enhanced dispatch services which enable the radio association to dispatch the Boston Licensed Taxi which can arrive at the location most quickly." Thus, radio based taxi dispatch alone was no longer permitted. It would have been purposeless for Top Cab to have continued to provide radio dispatch without GPS, as Nippon would not have been permitted to operate a hackney carriage without GPS. Moreover, there is nothing in the record to suggest that Nippon was demanding that Top Cab continue to provide radio dispatch without GPS, rather, it wanted the additional GPS technology at the price quoted for radio dispatch only.

In consequence, although performance may not have been impossible, Special Order SO-09-037 undid the essential purpose of the contract providing the service necessary for the lawful operation of a hackney carriage.⁹ The new GPS dispatch requirements fundamentally altered the nature of the radio dispatch agreements and " substantially frustrated" the principal purpose of the agreements for radio dispatch services. The original September 2003 agreement only mentions radio dispatch services; the contract clearly never contemplated the mandated use of different dispatch technology, such as GPS based dispatch services, which came with added benefits but also added costs.¹⁰ The parties' contract did not assign the risk of regulatory change that required upgraded and more costly services.¹¹ For example, the agreement does not state that the lifetime price will be the same no matter what changes in dispatch technology may become applicable in the future. Top Cab cannot be held responsible to continue to provide all of the services required for operation of a hackney carriage at prices set based upon radio dispatch. This was not a risk allocated to Top Cab by the parties' contract a contract which consists of nothing more than a few words scrawled on the bottom of a contract. See Chase Precast Corp v. John J. Paonessa Co., 409 Mass. at 374-75. Top Cab's continued performance under the " lifetime" contract for radio dispatch services is excused, and summary judgment shall enter dismissing Count I.

9 Restatement (Second) of Contracts § 265 (1981), Comment a & Illustration 4, provides the following example of frustration of purpose: " A leases neon sign installations to B for three years to advertise and illuminate B's place of business. After one year, a government regulation prohibits the lighting of such signs. B refuses to make further payments of rent. B's duty to pay rent is discharged, and B is not liable to A for breach of contract." In this case, Special Order SO-09-037 effectively prohibited taxi dispatch by radio alone, thereby frustrating the purpose of the contract between the plaintiffs and Top Cab.

10 Rule 403 required taxis to have a panic button that would notify the dispatch service of an emergency and the vehicle's location based on GPS tracking. This was one example of an added benefit to the taxi driver/medallion owner as a result of the switch to GPS based dispatch.

11 It may be noted that the typed body of the contract gives City Cab the right to change the amount " of the fee for radio" service on thirty days written notice.

Count II-Quantum Meruit and Count IV-Unjust Enrichment

Quantum meruit and unjust enrichment are actually not separate causes of action and neither of them have any application to the facts of this case. " 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." Salamon v. Terra, 394 Mass. 857, 859, 477 N.E.2d 1029 (1985). There is nothing in the record of this case even suggesting that Top Cab received some unjust enrichment from the plaintiffs. To the contrary, for the period 2010 through 2012, the plaintiffs received radio dispatch and GPS services at a price below cost, and for nine weeks, they received that service without paying for it. These claims are dismissed.

Count III-Breach of the Covenant of Good Faith and Fair Dealing

Similarly, the implied covenant of good faith and fair dealing is totally inapplicable to the facts of this case. " The covenant of good faith and fair dealing is implied in every contract. Kerrigan v. Boston, 361 Mass. 24, 33, 278 N.E.2d 387 (1972), quoting Clark v. State St. Trust Co., 270 Mass. 140, 152-53, 169 N.E. 897 (1930). The covenant is preserved so long as neither party injures the rights of another to reap the benefits prescribed by the terms of the contract. See Druker v. Roland Wm. Jutras Assocs., Inc., 370 Mass. 383, 385, 348 N.E.2d 763 (1976), and cases cited. The duty of good faith and fair dealing concerns the manner of performance. See Hawthorne's, Inc. v. Warrenton Realty, Inc., 414 Mass. 200, 211, 606 N.E.2d 908 (1993); 23 S. Williston, Contracts § 63:22 (4th ed. 2002)." Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385, 805 N.E.2d 957 (2004). This is not a case in which Top Cab took some action not literally forbidden by the terms of the contract that impaired the plaintiffs' ability to enjoy the benefits of the contract. It was the Police Commissioner that changed the services that dispatch companies like Top Cab were required to provide to medallion owners. Count III is dismissed.

Misclassification and Wage Act Claims

Counts V, VI, VII, and VIII are all predicated on Kubinec's contention that he was actually an employee of Top Cab within the meaning of G.L.c. 149, § 148B. In this case, Top Cab provided the service to Kubinec and his alter-ego corporation Nippon; Kubinec and Nippon owned the medallion and the taxi that Kubinec drove; Kubinec decided when to drive it and what fares to pick up; and Top Cab received the same modest weekly fee regardless of whether Kubinec had his cab on the road twenty-four hours a day and himself employed additional drivers, or left it parked in his driveway. Simply stated, Kubinec's assertion that he is Top Cab's employee makes no sense. Indeed, if you divide the sum that the plaintiffs paid to Top Cab for the three-year period June 2009 through June 2012--$2,000--by the number of weeks in that period, you compute a weekly fee of approximately $12.75. Under the plaintiffs' theory, Top Cab was nonetheless responsible for paying Kubinec minimum weekly wages, even if he decided not to drive, and potentially overtime as well, if he decided to drive in excess of forty hours. That would be nice work if you could get it.

" The purpose of the independent contractor statute is 'to protect workers by classifying them as employees, and thereby grant them the benefits and rights of employment, where the circumstances indicate that they are, in fact, employees.' " Depianti v. Jan-Pro Franchising Int'l, Inc., 465 Mass. 607, 620, 990 N.E.2d 1054 (2013) (citation omitted). The Supreme Judicial Court has recognized the importance of proper employee classification because " [m]isclassification not only hurts the individual employee; it also imposes significant financial burdens on the Federal government and the Commonwealth in lost tax and insurance revenues." Id. at 620-21, quoting Somers v. Converged Access, Inc., 454 Mass. 582, 593, 911 N.E.2d 739 (2009). " Moreover, it gives an employer who misclassifies employees as independent contractors an unfair competitive advantage over employers who correctly classify their employees and bear the concomitant financial burden." Somers v. Converged Access, Inc., 454 Mass. at 593.

" General Laws c. 149, § 148B, establishes a standard to determine whether an individual performing services for another shall be deemed an employee or an independent contractor for purposes of our wage statutes." Id. at 589. If an individual is performing services for another, he will " be considered an employee, for purposes of G.L.c. 149 and G.L.c. 151, unless the employer satisfies its burden of proving by a preponderance of the evidence that

(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact;

(2) the service is performed outside the usual course of the business of the employer; and

(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

Id., quoting G.L.c. 149, § 148B (internal quotations omitted).

In consequence, the three-part test that determines whether an individual is an employee or an independent contractor must be undertaken only if the plaintiff is providing a service for the defendant. In this case, the summary judgment record fails to provide any evidence that Nippon or Kubinec were providing services for Top Cab. Indeed, the facts suggest just the opposite relationship, i.e., Nippon pays a modest weekly fee to be a member of a dispatch " service, " without which it could not lawfully operate a taxi even though it owns a medallion. Under Rule 403, all taxis operating in Boston must belong to an authorized cab association, such as Top Cab, which is, in turn, required to provide dispatch services, including GPS, to members to qualify as a dispatch service. It is true that Top Cab provided dispatches, i.e., potential passengers to its members; however, Top Cab's members were not required to accept a dispatch. In fact, Top Cab's dispatches constituted only approximately 9.95% of all fares driven by Top Cab members in 2010.

While it may be the case that if some number of Top Cab's members repeatedly refused dispatches and no cabs were willing to pick up potential passengers calling in to Top Cab, with the result that over time, the public stopped calling, then Top Cab might cease to be an attractive dispatch service to members. Top Cab's members might then choose to belong to one of the other several dispatch services available to Boston medallion owners. ¹² Top Cab therefore might be said to receive an incidental benefit when some member accepted a dispatch. However, more importantly for this case, Top Cab received no income from that dispatch. Indeed, it received only the same weekly payment from its members regardless of whether dispatches were accepted or passengers simply hailed member cabs from the street. Moreover, in the real world taxi drivers compete for fares, and it is Top Cab that provides the service of offering dispatches to its members, in addition to the service of providing and maintaining the communications and GPS equipment that every medallion owner must have in its cab.

12 For example, in this case, when Top Cab refused to provide radio/GPS services to the plaintiffs for $900 a year, they became members of an alternative dispatch service.

But even if this court assumes, arguendo, that the plaintiffs were providing a service to Top Cab for purposes of G.L.c. 149, § 148B, for the reasons discussed below, Top Cab has met its burden of establishing all three indicia that it has an independent contractor relationship with Kubinec/Nippon; indeed, that it has an independent contractor relationship with all its members under G.L.c. 149, § 148B(a)(1)-(3).

(i) Control and Direction

First, Top Cab must show that Kubinec/Nippon were " free from control and direction in connection with the performance of the service, " both under the contract for the performance of the service and in fact. G.L.c. 149, § 148B(a)(1). The summary judgment record establishes that. Under the September 8, 2003 contract, the parties agreed that " City Cab will not exercise control over Member's business activities except as it affects his obligations under this agreement." Although the contract did require members to paint their taxis a certain color (white) and use particular logos and decals, this signage was required by regulation. See Rule 403. In addition, as discussed above, Top Cab could not: require Kubinec to pick up a passenger or accept a dispatch; set his hours; or require him to work on a particular day or at a certain location. The contract made clear that Top Cab received the same membership fee from Kubinec regardless of whether he worked one hundred hours a week or zero. Kubinec was free to drive where he chose and as often or little as he chose.

(ii) Service Outside Usual Course of Employer's Business

Next, Top Cab must demonstrate that " the service is performed outside the usual course of the business of the employer." See G.L.c. 149, § 148B(a)(2). According to Top Cab's Articles of Organization, it is engaged in the business of radio dispatch and communication services for passengers for hire. See Athol Daily News v. Board of Review of the Div. of Employment & Training, 439 Mass. 171, 179, 786 N.E.2d 365 (2003) (relying on employer's own definition of its business in determining whether services were performed in " the usual course of . . . [the employer's] business"). The undisputed facts in the summary judgment record confirm this stated purpose. Top Cab provides a communication and referral service and leases equipment for a flat fee. It generates no revenue from passenger rides, nor does it own or lease taxi medallions or taxis.

The plaintiffs rely on an advisory opinion from the Massachusetts Office of the Attorney General in support of their contention that Top Cab cannot establish the second prong of the independent contractor test. See An Advisory from the Attorney General's Fair Labor Division on M.G.L.c. 149, § 148B, 2008/1, available at, http://www.mass.gov/ago/docs/workplace/independent-contractor-advisory.pdf (last visited June 23, 2014) (2008 Advisory). In particular, the plaintiff directs the court to footnote four of the 2008 Advisory, which quotes a passage from a case decided by the Supreme Court of Illinois: Carpetland U.S.A., Inc. v. Illinois Department of Employment Security, 201 Ill.2d 351, 386, 776 N.E.2d 166, 267 Ill.Dec. 29 (2002). In footnote four, the Attorney General omits the citations that support the Illinois Supreme Court's reasoning. They have been added below so that the quoted material appears as it does in the reported decision.

The washing of windows or mowing of grass for a business is incidental. But when one is in the business of selling a product, sales calls made by sales representatives are in the usual course of business because sales calls are necessary. See Murphy, 387 Ill. at 417, 56 N.E.2d 800. When one is in the business of dispatching limousines, the services of chauffeurs are provided in the usual course of business because the act of driving is necessary to the business. See O'Hare-Midway Limousine Service, Inc., 232 Ill.App.3d at 113, 173 Ill.Dec. 171, 596 N.E.2d 795.

It is instructive actually to read the Illinois decision that discusses the application of the Illinois independent contractor statute to the limousine dispatch service example. In O'Hare-Midway Limousine Service, Inc. v. Baker, 232 Ill.App.3d 108, 110-14, 596 N.E.2d 795, 173 Ill.Dec. 171 (1992), the limousine drivers leased limousines from the defendant, drove the customers who had ordered limousine services from the defendant, and directly paid a percentage of the fares collected from the customers to the defendant. In consequence, unlike this case, the defendant's revenues were derived directly from the services that were performed by the drivers for the defendant's customers. Moreover, in O'Hare-Midway Limousine Service, Inc. v. Baker, the court expressly recognized that this limousine case was substantially different than another Illinois Supreme Court case involving taxicab drivers where that court " found that no services were rendered and therefore no employment relationship existed between cab drivers and a cab company, where the cab company leased cab licenses to cab drivers, held title to and carried insurance on the vehicles and maintained a garage for the cab driver while the drivers operated the cabs, paid for their expenses and gasoline, and paid the company $60 a week." See O'Hare-Midway Limousine Service, Inc. v. Baker, 232 Ill.App.3d at 111. See also Parks Cab Co. v. Annunzio, 412 Ill. 549, 550-55, 107 N.E.2d 853 (1952) (determining that under unique circumstances of case, taxicab drivers were not employees of the " Parks Cab Company"). Of course, in the case before this court, Kubinec's activities have even less effect on Top Cab's revenues than those of the drivers in Parks Cab Co.

Having cited the O'Hare-Midway Limousine Service case as an example of how to draw a distinction between services that are incidental to, rather than a necessary part of, a company's business, the court is convinced that the Attorney General would draw the same distinction as the Illinois Supreme Court did between (i) a limousine service that leases cars to its drivers and derives revenue directly from the passengers referred to the limousine drivers and (ii) a taxi dispatch service that receives a flat fee for communication/GPS equipment and provides passenger referrals that a driver can accept or reject, and which in any event receives no additional income when a referral is accepted. This court certainly draws that distinction between these two very different businesses.

(iii) Independently Established Trade, Occupation, Profession, or Business

Finally, Top Cab must demonstrate that the plaintiffs were " customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed." G.L.c. 149, § 148B(a)(3). " Under the third prong, the court 'is to consider whether the service in question could be viewed as an independent trade or business because the worker is capable of performing the service to anyone wishing to avail themselves of the services or, conversely, whether the nature of the business compels the worker to depend on a single employer for the continuation of the services.' " Coverall North America, Inc. v. Commissioner of the Div. of Unemployment Assistance, 447 Mass. 852, 857-58, 857 N.E.2d 1083 (2006), quoting Athol Daily News v. Board of Review of the Div. of Employment & Training, 439 Mass. at 181. To make this determination, the court considers " whether the worker is wearing the hat of an employee of the employing company, or is wearing the hat of his own independent enterprise." Id. at 858, quoting Boston Bicycle Couriers, Inc. v. Deputy Director of the Div. of Employment & Training, 56 Mass.App.Ct. 473, 480, 778 N.E.2d 964 (2002).

In this case, Kubinec is quintessentially his own boss. He (or Nippon) owns the medallion and the taxi. He is free to set his own work schedule and to drive where he wishes. He can take advantage of referrals that Top Cab sends him or reject them if he thinks that he can earn more picking up other fares that he finds himself. He is not accountable to Top Cab and need not explain his choices to Top Cab. He is also free to take his taxi and medallion and join another dispatch service if he is dissatisfied with Top Cab, as he did in this case. See Coverall North America, Inc. v. Commissioner of the Div. of Unemployment Assistance, 447 Mass. at 858.

The plaintiffs cite Oliveira v. Advanced Delivery Systems, Inc. , 27 Mass. L. Rptr. 402, 2010 WL 4071360 (Mass.Super.Ct. July 16, 2010) (Murtagh, J.), in support of their argument that Top Cab cannot meet its burden of establishing the third prong of the independent contractor test; they assert that Oliveira " is on all fours with the instant matter." The facts of that case actually aptly demonstrate why the plaintiffs' case fails.

In Oliveira, the court allowed plaintiff Oliveira's motion for partial summary judgment on the issue of whether the plaintiff was an independent contractor or an employee of defendant Advanced Delivery Systems, Inc. (ADS). As in this case, Oliveira filed claims against ADS for nonpayment of wages in violation of G.L.c. 149, § 148. ADS was in the business of providing home furniture delivery management services to furniture retailers by using a system of " owner-operators." ADS initially hired Oliveira as a " temporary helper employee" to help other drivers making deliveries to ADS customers. After a few weeks, he became a driver, delivering furniture for Bob's discount furniture. He reported to ADS each morning and received a report that instructed him where to make deliveries. Through this point in his employment, ADS deducted payroll taxes from Oliveira's paycheck. After Oliveira had been an employee for approximately six weeks, ADS required Oliveira to execute a contract that identified him as an independent contractor and an " owner-operator." Thereafter, Oliveira's independent business continued to deliver furniture for Bob's in a truck that Oliveira leased from ADS. Although Oliveira was responsible for fueling and maintaining the truck and paying his own workers' compensation and insurance expenses, his job responsibilities did not significantly change. Oliveira was provided with a truck delivery report for his Bob's deliveries, and ADS contacted Oliveira to monitor his progress in making deliveries. He was also required to send ADS GPS transmissions from each delivery stop and was fined by ADS if he did not. On these facts, the court found that ADS failed to establish the second and third prongs of the independent contractor test:

Oliveira was not an entrepreneur operating an independently established business. Oliveira did not have his own furniture delivery business prior to joining ADS. Oliveira never solicited his services nor did he work for anyone other than ADS during his time as an Owner-Operator. His earnings and deliveries stemmed from his account with Bob's [a furniture retailer], which was originally supplied by ADS. Furthermore, since leaving ADS, Oliveira has not operated his own furniture-delivery business. These undisputed facts indicate that he was " wearing the hat" of ADS as an Owner-Operator. The court, therefore, finds that summary judgment is warranted under the third element.

Oliveira v. Advanced Delivery Systems, Inc. , 27 Mass. L. Rptr. 402, 2010 WL 4071360 at *7.

By contrast, in this case, Kubinec had already established himself as an independent entrepreneur before entering into any agreement with the defendants. He owned his own taxicab and medallion before contracting with City Cab or Top Cab. Kubinec decided when to drive that cab and where he would drive it. Even when Top Cab sent him dispatches regarding passengers in need of his services, he was not required to accept them. Kubinec's passengers paid him, and he did not remit any part of the fare to Top Cab. When he became dissatisfied with Top Cab, he joined a different dispatch service and continued his taxicab business. Top Cab has met its burden under the third prong of the independent contractor test.

Since Kubinec was an independent contractor and not an employee of Top Cab, within the meaning of G.L.c. 149, § 148B, his claims for wage and overtime violations also fail, and summary judgment will enter dismissing Counts V, VI, VII, and VIII.

ORDER

For the foregoing reasons, the Defendants' Motion for Summary Judgment is ALLOWED and the Plaintiff's Cross Motion for Summary Judgment is DENIED. Final judgment will enter dismissing the Plaintiffs' Second Amended Class Action Complaint.