Opinion
No. 12–P–1269.
2013-09-27
SAR GROUP LTD., & another v. E.A. DION, INC.
By the Court (KAFKER, VUONO & FECTEAU, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs, SAR Group Ltd. and Raymond Audette, appeal from a judgment, entered after remand, in favor of the defendant, E.A. Dion, Inc. (Dion), on the plaintiffs' breach of contract and breach of the covenant of good faith and fair dealing claims to recover commission payments. Following a jury-waived trial, a Superior Court judge dismissed the plaintiffs' claims, finding that the duration and the amount of Dion's commission payments to the plaintiffs, of approximately $300,000 over approximately six years, were fair and reasonable under the parties' agreement. We affirm.
For background we refer to this court's memorandum and order pursuant to our rule 1:28, SAR Group Ltd. v. E.A. Dion, Inc., 79 Mass.App.Ct. 1123 (2011). In that decision we remanded the case after determining that the plaintiffs' claims for breach of contract and breach of the covenant of good faith and fair dealing were erroneously dismissed. The remand essentially required the judge to determine what constitutes a reasonable duration for Dion to make commission payments to the plaintiffs, which was omitted from the parties' agreement. See, e.g., Plymouth Port, Inc. v. Smith, 26 Mass.App.Ct. 572, 575–576 (1988), citing Powers, Inc. v. Wayside, Inc., 343 Mass. 686, 691 (1962) (in the absence of a provision specifying a contract's duration, a court will supply a reasonable period of time, as determined by “the nature of the contract, the probable intention of the parties, and the attendant circumstances”). In addition, in our prior decision we noted that Dion's right to terminate commission payments to the plaintiffs was “inseparable from the question of appropriate compensation.”
On remand, the trial judge permitted additional evidence on the issue, and the plaintiffs introduced the testimony of Edward Weygand, a former commissioned salesman for Dion, who had received commission payments from Dion for over twenty years on Dion's Pray account. The judge rejected the plaintiffs' argument that Weygand's arrangement with Dion was comparable to that of Audette, and found that the six-year period that Dion had made commission payments to the plaintiffs constituted a reasonable duration.
On appeal, the plaintiffs challenge the distinction drawn by the judge between the respective roles that Weygand and Audette played in relation to Dion and its customers. The plaintiffs claim that the judge's findings that Weygand was openly and actively involved in the Pray account while Audette's involvement with the MedicAlert account was of a clandestine nature were clearly erroneous.
Here, the judge took into account the appropriate factors in deciding a reasonable duration for the commission agreement. A contract's reasonable duration is to be decided “in light of the provisions of the original contract, the circumstances under which it was executed, and the nature of the property which was its subject.” Ibid. In addition, a contract that is missing an essential term is interpreted in a similar manner to a contract that is ambiguous. Fay, Spofford & Thorndike, Inc. v. Massachusetts Port Authy., 7 Mass.App.Ct. 336, 342 (1979). Any determination of meaning or of an ambiguity is to be made “in the light of the relevant evidence of the situation and relations of the parties, the subject matter of the transaction, preliminary negotiations and statements made therein, usages of trade, and the course of dealing between the parties.” Boston v. Professional Staff Assn., 61 Mass.App.Ct. 105, 111 n. 5 (2004) (citation omitted).
The evidence supported the judge's findings that Audette's services to Dion were limited to providing a lead as to the MedicAlert account, and that Audette (due to his relationship with the company that serviced the MedicAlert account prior to Dion) had no overt involvement in Dion's pursuit of MedicAlert's business. The judge specifically relied on the parties' stipulated facts, which set forth the limited nature of Audette's involvement. The evidence indicated that, unlike Weygand, Audette was at no time actively engaged with MedicAlert itself; indeed, Audette's sole contact was an initial telephone call to MedicAlert in which he posed as Dion. By contrast, Weygand testified that he worked “with the Pray people in New York” and on the designs for the products that Dion sold to Pray. He further testified, “[My work on the Pray account began in the] [l]ate '70's or early '80's. And it went on until we had completed all the designs for their product, which I helped to-worked on, of course.” Weygand also indicated that for approximately twenty years, he continued to receive commissions from Dion on the Pray account and, in 2001, in exchange for continued payments on the Pray account, he gave up another account because the customer was in New York and he “was not able to get to” his accounts in New York.
“[Audette] said something like, ‘If I give you the name of this potential customer—I cannot be involved in it—but if I give you the name and something comes of it, can there be some kind of compensation?’ “
Weygand's testimony supported the judge's finding that “Weygand was openly and actively involved with the [Pray] account as to which he testified, at least through the development of the product.” Taken together, the evidence supported the judge's finding that Weygand had a far different relationship with Dion and its Prayer account than Audette had with regard to the MedicAlert account.
In addition, we are mindful that when the parties omit an essential term from their agreement, “the court should supply a term which comports with community standards of fairness and policy.” President & Fellows of Harvard College v. PECO Energy Co., 57 Mass.App.Ct. 888, 896 (2003), quoting from Restatement (Second) of Contracts § 204 comment d (1979). Browning–Ferris Indus., Inc. v. Casella Waste Mgmt. of Mass., Inc., 79 Mass.App.Ct. 300, 312 (2011). A reasonable duration in these circumstances may be “gathered from the [parties'] subsequent course of performance.” Vita v. Berman, DeValerio & Pease, LLP, 81 Mass.App.Ct. 748, 755 (2012) (citation omitted). See Browning–Ferris Indus., Inc. v. Casella Waste Mgmt. of Mass., Inc., supra at 309 (citation omitted) (“There is no surer way to find out what parties meant, than to see what they have done”). As stated in our prior decision, the parties' termination rights in this instance were inseparable from the question of appropriate compensation. As such, in setting a reasonable duration for the commission agreement, the judge properly considered the total amount of approximately $300,000 paid to Audette, in light of the very limited services he provided. It also was proper for the judge to rely on evidence that Dion, for its part, determined that the payment of commissions of approximately $300,000 over approximately six years was reasonable to compensate Audette for the lead on the MedicAlert account.
The judge's determination as to Dion's amount and duration of commission payments to the plaintiffs, including the two years of reduced payments after notice, “treats the parties even-handedly and serves the professed business objectives of both.” Id. att. at 312. See Amsco, Inc. v. Foze, 8 Mass.App.Ct. 796, 797–798 (1979) (citation omitted) (duration determined “from all the circumstances according to the reasonable inferences presumably entertained by normal business men”). As we previously stated, “while Dion's repeated payments ... effectively operate as an admission that Dion owed [Audette] compensation ..., the parties' course of performance does not establish that Dion had an obligation to pay commissions in perpetuity or that Dion was barred from lowering commissions during the course of phasing out payments.”
That there was evidence to support the plaintiffs' position does not undercut the judge's findings. “Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.” Taylor v. Beaudry, 82 Mass.App.Ct. 105, 118 (2012) (citation omitted). The judge was in the best position to assess the credibility of the witnesses and the weight of the evidence, and his reasons for rejecting Weygand's agreement with Dion as comparable to that of Audette were supported by the record. See generally Custody of Eleanor, 414 Mass. 795, 799–800 (1993), and case cited.
Judgment affirmed.