Opinion
18-P-595
03-07-2019
PETER MERKULOV v. KASPERSKY LAB, INC.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendant, Kaspersky Lab, Inc. (KLI), appeals from the judgment for the plaintiff and from the postjudgment order denying its motion for judgment notwithstanding the verdict or to amend the judgment. We affirm.
Background. Indulging all inferences favorable to the plaintiff, Peter Merkulov, see A.C. Vaccaro, Inc. v. Vaccaro, 80 Mass. App. Ct. 635, 641 (2011), the jury could have found the following facts. Merkulov was the former executive vice-president of KLI. At the commencement of his employment, Merkulov signed an employment and severance agreement, stating that if he was terminated without cause, he would be entitled to a lump sum severance payment and health and dental insurance premiums for eighteen months. Cause was defined in part as "commission of fraud, embezzlement or any other act of gross dishonesty relating to his duties."
While on a company retreat in the Dominican Republic, Merkulov and other KLI executives held a meeting with the chief executive officer, Eugene Kaspersky, in Kaspersky's hotel room. The meeting's purpose was to suggest to Kaspersky that the company be reorganized. After Kaspersky expressed his disagreement with this plan, Merkulov sent him the following e-mail in an attempt to get Kaspersky's attention: "I quit and decline any money that I'm owed. I will explain [to] you why when we meet. Tell me when and where." Merkulov forwarded this e-mail to his coworkers asking them to "please accept my resignation." Realizing that he made a mistake, Merkulov arranged for his e-mail to Kaspersky to be recalled, and sent another e-mail to his coworkers stating, in relevant part: "Dear Friends. I have recalled my e-mail to Eugene. He has never seen it." Kaspersky did not respond to this e-mail.
Merkulov then sent Kaspersky another e-mail, stating in relevant part, "I am ready to leave the company. I don't believe that without changes the company can be successful. I very much want to stay in the company and do everything that I can and that depends on me to make the company successful." Kaspersky responded, "Peter [Merkulov], don't make me laugh," and explained why he thought the plan to reorganize the company would fail.
Upon his return from the retreat, Merkulov e-mailed Kaspersky explaining that he did not recall what he said in the Dominican Republic and that he has no plans to resign. Merkulov continued to work for KLI for approximately two more months, when he was terminated for cause for "continuous willful failure to comply with the assigned duties [and] dishonest behavior towards the company."
Merkulov filed a complaint against KLI, alleging various contract-based claims and violations of the Wage Act. Following a five-day trial, KLI moved for a directed verdict. The judge denied the motion on the breach of contract claims, but found that Merkulov's Wage Act claim failed as a matter of law. The jury returned a special verdict in favor of Merkulov awarding $1,255,500 for severance pay, $24,029 for certain unpaid benefits, $167,400 for the 2013 annual bonus, and $41,850 for the 2014 first quarter bonus. KLI filed a motion for judgment notwithstanding the verdict, or in the alternative to amend the judgment, which was denied. This appeal followed.
Discussion. 1. Standard of review. On appeal of an order denying a motion for a directed verdict or a motion for judgment notwithstanding the verdict, we ask "whether 'anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be made in favor of the [plaintiff].'" A.C. Vaccaro, Inc., 80 Mass. App. Ct. at 641, quoting Global Investors Agent Corp. v. National Fire Ins. Co. of Hartford, 76 Mass. App. Ct. 812, 827 (2010). It is irrelevant whether the evidence could have supported a contrary finding because "[t]he court may not substitute its judgment of the facts for that of the jury." Tosti v. Ayik, 394 Mass. 482, 494 (1985), S.C., 400 Mass. 224, cert. denied sub nom. United Auto Workers, Local 402 v. Tosti, 484 U.S. 964 (1987). The jury are free to weigh conflicting evidence and disregard testimony that they do not believe. Id.
The defendant's brief focuses on the denial of its postjudgment motion.
2. Sufficiency of the evidence. KLI contends that no reasonable jury could have found that Merkulov was terminated without cause, arguing that he was terminated for gross dishonesty pursuant to the severance agreement. The alleged "gross dishonesty" was based on Merkulov's participation in the meeting in the Dominican Republic and the e-mails he sent to Kaspersky while there. The jury, however, found that neither constituted gross dishonesty and that KLI was in breach of the severance agreement. The evidence at trial supported this finding.
The jury could permissibly have found that the purpose of the meeting with Kaspersky was to address concerns that Merkulov and members of the executive board had regarding the company's failure to hit its growth targets, and that Merkulov's intent, as indicated by an e-mail sent to Kaspersky after the trip, was to improve the company's performance. This intent was further supported by the testimony of Merkulov's coworker, who was also involved in the meeting and stated that the purpose of the meeting was "[t]o make Mr. Kaspersky aware of the situation and the trends and issues in the company that we did not believe he was aware of." Accordingly, the jury were presented with evidence that Merkulov's intentions were not to "ambush" Kaspersky in an attempted "coup," as KLI alleges, but, rather, to address legitimate concerns that he and his coworkers had about company performance. Although the parties disputed whether Merkulov engaged in gross dishonesty, this was for the jury to determine. Based on the evidence presented, the jury could have concluded that planning and participating in the meeting did not constitute gross dishonesty.
The jury were also presented with evidence that some of the employees also involved in the meeting were not terminated from KLI.
Second, Merkulov also testified that the e-mails he sent to Kaspersky were an attempt to get Kaspersky's attention so that he could understand the issues presented in the meeting. In an e-mail sent after the meeting, Merkulov told Kaspersky that he "very much want[s] to stay in the company and do everything that I can and that depends on me to make the company successful." Further the evidence showed that after the retreat, the company did not treat Merkulov as having resigned and he continued to work "as usual" as a member of the executive board. Although KLI argues that stating an intention to resign constitutes gross dishonesty, it is clear from the verdict that that jury found Merkulov credible and believed that he did not intend to resign. See Windross v. Village Automotive Group, Inc., 71 Mass. App. Ct. 861, 870 (2008) ("it is outside our appellate function to reconcile conflicting evidence or consider issues of credibility"). See also DeSantis v. Commonwealth Energy Sys., 68 Mass. App. Ct. 759, 763 (2007) ("It is unavailing for a defendant to argue that there was evidence warranting a contrary finding by the jury").
Based on the judge's instructions to the jury, it is evident that "he was leaving to the fact finder the decision as to what the expression [gross dishonesty] meant." Quinn v. Mar-Lees Seafood, LLC, 69 Mass. App. Ct. 688, 695 (2007). The contested provision of the severance agreement provided that Merkulov could be terminated without severance for "Cause," including "fraud, embezzlement, or any other act of gross dishonesty relating to his duties." A reasonable jury could find that Merkulov's conduct did not rise to the level of gross dishonesty within the meaning of the severance pay agreement. See Previews, Inc. v. Everets, 326 Mass. 333, 335-336 (1950) (question whether services called for in a contract were performed in "a reasonably diligent, skillful, workmanlike, and adequate manner" was for the jury). Thus, we affirm the judge's denial of KLI's motion for judgment notwithstanding the verdict.
3. KLI's defenses. KLI argues that even if Merkulov did provide sufficient evidence that KLI breached the severance agreement, Merkulov waived the breach and is estopped from enforcing his rights under the agreement. We disagree.
Whether or not Merkulov waived the compensation owed to him pursuant to the severance agreement was a question of fact for the fact finder. KACT, Inc. v. Rubin, 62 Mass. App Ct. 689, 695 (2004). Even though there was conflicting testimony about whether or not Kaspersky received Merkulov's first e-mail, a reasonable juror could have found that Merkulov did not intend to relinquish his rights under the agreement. Merkulov testified that he had no intention of resigning from KLI, and that the e-mails sent to Kaspersky were designed to get his attention. Merkulov explained that he had not slept during the retreat, and later explained to Kaspersky that he could not recall what he said to him on the retreat. Nor did Merkulov's personnel file contain any e-mail indicating that he waived his rights, or one stating that he had resigned. See Suburban Land Co. v. Brown, 237 Mass. 166, 168 (1921) ("Waiver is an intentional relinquishment of a known right").
This supported Merkulov's testimony that he recalled the first e-mail that he sent to Kaspersky.
Similarly, based on this evidence the jury could have also concluded that KLI did not rely on Merkulov's e-mails that he was leaving the company. See Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, 448 Mass. 15, 27-28 (2006) (listing elements for equitable estoppel). KLI continued to pay Merkulov after these e-mails were sent and no one confronted him about his resignation, further indicating that KLI did not rely on Merkulov's e-mails to its detriment. Therefore, it was reasonable for the jury to reject KLI'S defenses presented at trial. See Moran v. Gala, 66 Mass. App. Ct. 135, 141 (2006) ("the question of reliance is often a question of fact"); Simon v. Simon, 35 Mass. App. Ct. 705, 712 (1994).
4. 2013 bonus award. Lastly, KLI argues that the judge erred in denying its motion to amend the judgment because there was no evidence supporting the jury award for Merkulov's 2013 annual bonus award.
We review a judge's decision to deny a motion to amend judgment pursuant to Mass. R. Civ. P. 59 (e), 365 Mass. 827 (1974), for an abuse of discretion. R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. 66, 79 (2001). An abuse of discretion occurs only where the judge "made 'a clear error of judgment in weighing' the factors relevant to the decision such that the decision falls outside the range of reasonable alternatives" (citation omitted). L.L. v. Commonwealth, 470 Mass. 169, 185 n.27 (2014). Here, we discern no such abuse.
The jury awarded Merkulov $167,400 for KLI's failure to pay the 2013 bonus. Although KLI argues that the bonus amount was $124,345 based on Merkulov's testimony, the jury were also presented with Merkulov's employment agreement. This agreement specifically stated that he was "eligible for a bonus of $334,800 per year paid out quarterly and annually." Merkulov testified to this amount, specifying that his annual bonus was half of the total bonus amount of $334,800. On the special verdict form, the jury even took the initiative to explain that they reached their damage amount by calculating one-half of $334,800. Therefore, the jury's award was justified by the evidence and there was no abuse of discretion in the judge's denial of KLI's rule 59 (e) motion. See Page v. New England Tel. & Tel. Co., 383 Mass. 250, 252 (1981) (Rule 59[e] is designed for situations where a judgment lacks both "legal and factual justification" [citation omitted]).
Judgment affirmed.
Order denying postjudgment motion affirmed.
By the Court (Hanlon, Sullivan & Lemire, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 7, 2019.