Wessell v. Mink Brook Associates, Inc. , 87 Mass. App. Ct. 747 ( 2015 )


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    14-P-1120                                                Appeals Court
    MARY ELLEN WESSELL       vs.    MINK BROOK ASSOCIATES, INC., & another.1
    No. 14-P-1120.
    Worcester.         April 7, 2015. - August 5, 2015.
    Present:   Kantrowitz, Kafker, & Hanlon, JJ.
    Massachusetts Wage Act. Attorney at Law, Disqualification,
    Attorney-client relationship, Conflict of interest.
    Employment, Retaliation, Termination. Damages, Wrongful
    discharge of employee, Back pay. Practice, Civil,
    Instructions to jury, Damages.
    Civil action commenced in the Superior Court Department on
    June 19, 2012.
    A motion to disqualify the plaintiff's attorney was heard
    by David Ricciardone, J., and the case was tried before him.
    Gregg S. Haladyna for the defendants.
    Steven D. Weatherhead (John F. Welsh with him) for the
    plaintiff.
    KANTROWITZ, J.       This case involves a dispute between an
    employee and her former employer regarding unpaid wages.          The
    plaintiff, Mary Ellen Wessell, successfully sued Mink Brook
    1
    Robert C. Stone.
    2
    Associates, Inc. (Mink Brook), and owner Robert C. Stone under
    the Wage Act for lost wages and retaliatory discharge after
    Stone refused to issue her a paycheck, she complained, and she
    was fired.
    In this appeal, the defendants argue that the trial judge
    improperly denied their pretrial motion to disqualify opposing
    counsel because Wessell's attorney, who was her long-time
    personal friend, had previously provided informal legal advice
    to her on certain topics in Wessell's capacity as an employee of
    Mink Brook.   The defendants also contend that the judge
    improperly instructed the jury on compensatory damages on the
    retaliation claim.     We affirm.
    Background.2    Mink Brook was incorporated in 1993 as a
    franchisee of Paul Davis Restoration, a national company that
    performed restoration work on houses to mitigate damage from
    flooding, fire, mold, or other problems.     Stone was Mink Brook's
    owner and president.     In 2007, Stone contacted Wessell to
    discuss hiring her to work on the company's financial matters
    and record-keeping.     She joined Mink Brook in its Worcester
    office as a subcontractor at an hourly rate, and in 2008 she
    2
    Our recitation includes both evidence put before the judge
    on the defendants' pretrial motion to disqualify Wessell's
    counsel and evidence put before the jury at trial. The latter
    we generally present in the light most favorable to Wessell.
    Much was undisputed, but where there was a relevant conflict, or
    a finding by the judge, we will so note.
    3
    became the company's "business manager" at an annual salary of
    $50,000.   Wessell's duties included managing accounts, human
    resources, payroll, bookkeeping, insurance policies, vehicle
    registration, and licenses.     She would occasionally work from
    home on a laptop computer that Stone purchased.     Wessell also
    performed unpaid work duties during her vacations or at times
    outside of her business hours.     Employees received paychecks
    every two weeks.     Wessell testified that she worked about fifty
    hours per week.3
    During Wessell's employment at Mink Brook, she occasionally
    sought informal legal advice from a close friend, Attorney John
    Welsh, whom she had known for many years.4    In 2008 and 2009,
    Wessell consulted with Attorney Welsh on a former employee's
    breach of postemployment covenants, and Welsh drafted a cease-
    and-desist letter.     In 2010, on matters involving another former
    employee, Wessell exchanged electronic mail messages (e-mails)
    with Welsh, and he reviewed correspondence that Mink Brook sent
    3
    In April, 2011, Wessell was involved in a car accident,
    which required approximately eight weeks of recuperation and
    lost work. When Stone protested the lost time, Wessell worked
    part-time from home. She was paid at an hourly rate.
    4
    Attorney Welsh stated in an affidavit that "I have known
    Ms. Wessell for over 35 years. She has been my sister's best
    friend since grade school." He further stated that "Ms. Wessell
    would call me intermittently (once every 12-18 months) for
    advice concerning personnel issues she was handling on behalf of
    the company."
    4
    to the Attorney General's office.   Sometime in 2010, Welsh
    notified Wessell that he would no longer provide legal advice to
    Mink Brook.5   However, on June 15, 2011, Wessell again contacted
    Welsh, who agreed as a "friend" to provide advice on an issue
    involving building access by a Mink Brook job applicant who had
    a physical disability.6
    Wessell testified that as of late 2011, she observed
    numerous problems or irregularities with the company's finances
    and operations.7   She informed Stone of some of her observations,
    including her belief that an employee was "stealing from him."
    Stone said "[b]asically nothing" in response to this
    information.
    5
    Welsh stated in his affidavit that he stopped providing
    legal advice to Mink Brook because he found Stone's treatment of
    Wessell to be unacceptable. Additionally, he had a billing and
    stolen property dispute with Mink Brook regarding work performed
    on his home. The defendants dispute receiving notice that
    Welsh's legal advice stopped in 2010.
    6
    The defendants also alleged that Welsh helped Wessell
    prepare an employee handbook for Mink Brook.
    7
    Regarding Mink Brook's finances, Wessell testified that
    sales were low and customers were complaining. On at least one
    occasion, Wessell had to delay issuing paychecks to herself and
    other employees. Wessell testified that Stone charged personal
    expenses to company credit cards and used company money to pay
    his son large amounts of money for cleaning the bathrooms, to
    provide his wife with a salary, to make payments on his home
    mortgage, and to purchase several items that were unrelated to
    the company's home restoration business.
    5
    Shortly thereafter, in early January, 2012, Stone called
    Wessell into a meeting in which the accused employee was
    present.   At this meeting, Stone accused Wessell of lying about
    her reporting of work hours since her automobile accident (see
    note 
    3, supra
    ).   He demanded financial reports that were
    impossible for her to provide, and he ultimately demoted her
    from business manager, placed the accused employee in that role,
    and required Wessell to report to that employee.
    On March 28, 2012, during a meeting with several employees
    including Wessell, Stone addressed their financial concerns
    about Mink Brook and informed them that the company was not
    closing but was experiencing "just a little bump in the road."
    Stone then named several employees who would still receive their
    upcoming paychecks, but he did not name Wessell.    When she
    inquired about her paycheck, he stated that she would not
    receive it.   Wessell responded that this was unfair and that she
    wanted to meet privately with Stone after the group meeting.
    One hour later, Wessell and Stone met privately in her office.
    Wessell demanded to be paid, and Stone replied that she "could
    afford not to get paid."   The next day, March 29, 2012, Wessell
    again met with Stone and the accused employee.     Stone stated
    6
    that Wessell was stealing money and reimbursing herself without
    authorization, which Wessell denied.   Stone then fired her.8
    Wessell formally retained Welsh who, on June 19, 2012,
    filed the instant complaint against Mink Brook and Stone,
    alleging claims of nonpayment of wages and retaliatory firing in
    violation of the Wage Act, G. L. c. 149, §§ 148, 148A.9    On
    January 2, 2014, nearly one and one-half years after the
    litigation began and eleven days before trial, the defendants
    filed a motion to disqualify Welsh, claiming a conflict of
    interest given Welsh's attorney-client relationship with them.10
    One week later the trial judge, after a hearing, denied the
    motion.   The judge ruled that Welsh's advice to Wessell, given
    when she worked for Mink Brook, was informal, free, and
    unrelated to the issues in her complaint.   The judge concluded
    8
    Wessell testified that she later received a check for a
    portion of the money that Mink Brook owed her for wages.
    9
    Wessell's complaint stated that she received a right-to-
    sue letter from the Attorney General; this letter is not
    included in the record appendix, but the defendants raise no
    issue on this subject. Wessell's complaint also included a
    quantum meruit claim that was eventually dismissed by
    stipulation of the parties.
    10
    The matter of representation by Welsh was apparently
    considered by the defendants when they were defaulted in late
    2012. Counsel for the defendants told the trial judge on
    January 9, 2014, at the hearing on the motion to disqualify,
    that the default occurred because Stone considered the complaint
    "just an intimidation tactic," and believed that Welsh could not
    bring the complaint because of his prior legal assistance to
    Mink Brook.
    7
    that although Welsh's personal relationship with Wessell gave
    Mink Brook a "valuable contact," Mink Brook and Welsh never
    established an attorney-client relationship.11
    On January 14, 2014, the jury found for the plaintiff and
    awarded damages for lost wages and unused vacation time, up to
    the date of her firing, of $3,750.    The jury also awarded lost
    compensation from the date of firing up to the date of the
    verdict, minus earnings from Wessell's subsequent employment
    elsewhere, of $54,880.90.    On January 24, 2014, the court
    entered an amended judgment that trebled the amount, as required
    under G. L. c. 149, § 150,12 and added interest, for an award of
    $187,111.38.    This appeal followed.13
    11
    The judge found:
    "There's a very de minimis interaction between Ms.
    Wessell and Mr. Welsh in terms of some of this informal
    advice and education on legal topics such as handicap
    accessibility and what to do with a competing former
    employee and things of that nature. These contexts to me
    arise out of the personal relationship between the two. I
    think he was representing Mink Brook in only the most
    technical sense, and certainly by going ahead and
    representing Ms. Wessell in this case I don't think that
    there is any basis for an abuse of confidential information
    regarding Mink Brook that he learned in the course of any
    of this advice. The advice Mr. Welsh gave on these few
    exchanges over the course of several years were on clearly
    unrelated matters . . . ."
    12
    The statute states, in pertinent part, "An employee so
    aggrieved who prevails in such an action shall be awarded treble
    damages, as liquidated damages, for any lost wages and other
    benefits and shall also be awarded the costs of the litigation
    8
    Motion to disqualify.   Denial of a motion to disqualify an
    attorney is reviewed for abuse of discretion.    Steinert v.
    Steinert, 
    73 Mass. App. Ct. 287
    , 288 (2008).    A moving party
    must show, first, that the current representation is adverse to
    the interests of the former client, and second that the matters
    of the two representations are substantially related.    Slade v.
    Ormsby, 
    69 Mass. App. Ct. 542
    , 546 (2007), citing Adoption of
    Erica, 
    426 Mass. 55
    , 61 (1997).    See Mass.R.Prof.C. 1.9, 
    426 Mass. 1342
    (1998).14
    An attorney-client relationship "may be, but need not be,
    express; the relationship can be implied from the conduct of the
    parties."   Page v. Frazier, 
    388 Mass. 55
    , 62 (1983).   For an
    implied attorney-client relationship, (1) a party must seek
    advice from an attorney, (2) the advice sought must be within
    the attorney's professional competence, and (3) the attorney
    and reasonable attorneys' fees."    G. L. c. 149, § 150, as
    amended by St. 2008, c. 80, § 5.
    13
    On April 8, 2014, the court further ordered an award of
    Wessell's costs and attorney's fees, which together totaled
    about $40,000. The defendants did not file an appeal from that
    order, and its correctness is not before us.
    14
    Rule 1.9(a) states, "A lawyer who has formerly
    represented a client in a matter shall not thereafter represent
    another person in the same or a substantially related matter in
    which that person's interests are materially adverse to the
    interests of the former client unless the former client consents
    after consultation." The Massachusetts Rules of Professional
    Conduct "specifically incorporate" the substantial relationship
    test. Adoption of 
    Erica, 426 Mass. at 61
    .
    9
    agrees to give, or actually gives, the advice.   DeVaux v.
    American Home Assur. Co., 
    387 Mass. 814
    , 818 (1983).
    Additionally, "the question whether there was an attorney-client
    relationship depends on the reasonableness of the [complaining
    party's] reliance."   
    Id. at 819.
    For matters to be "substantially related," courts have
    consistently found that counsel must possess confidential
    information that could be used against the former client in the
    current representation.   See Masiello v. Perini Corp., 
    394 Mass. 842
    , 847-850 (1985); Adoption of 
    Erica, 426 Mass. at 63
    .15    When
    determining whether matters are substantially related, a judge
    should make a factual determination by comparing "the overlap
    and similarity" between the former and current representations.
    Slade v. 
    Ormsby, 69 Mass. App. Ct. at 547
    .16
    Courts discourage "eleventh hour maneuvers" to disqualify
    opposing counsel where the moving party has advance notice of
    the representation by opposing counsel but waits to raise the
    issue until the eve of trial.   Masiello v. Perini 
    Corp., 394 Mass. at 850
    .   Such tactics "are disruptive to the efficient
    15
    One can envision a scenario where matters are
    substantially related despite a lack of confidential
    information. Such is not the case here.
    16
    "[T]he exact parameters" of when two matters are
    substantially related has not been delineated in the case law.
    Slade v. 
    Ormsby, 69 Mass. App. Ct. at 547
    n.11, citing Adoption
    of 
    Erica, 426 Mass. at 62
    .
    10
    administration of justice and are costly."     
    Ibid. "Court resources are
    sorely taxed by the . . . use of disqualification
    motions as harassment and dilatory tactics."    Gorovitz v.
    Planning Bd. of Nantucket, 
    394 Mass. 246
    , 250 n.7 (1985).
    Here, even if an attorney-client relationship existed
    between Welsh and the defendants, the judge properly denied the
    motion to disqualify because Welsh's services, including his
    advice on handicap accessibility and review of certain letters,
    never involved matters "substantially related" to Wessell's Wage
    Act dispute.   See Slade v. 
    Ormsby, 69 Mass. App. Ct. at 546
    .
    Although Welsh advised Wessell on specific Mink Brook employee
    matters, those matters were not substantially related to
    Wessell's complaint because there was no overlap or similarity.
    See 
    id. at 547.
       Also, Welsh never gained confidential
    information in the prior matters that disadvantaged Mink Brook
    at trial here.17   See Masiello v. Perini 
    Corp., 394 Mass. at 847
    -
    850; Adoption of 
    Erica, 426 Mass. at 63
    .18
    17
    Regarding the employee handbook that Welsh was alleged to
    have helped to create for Mink Brook, the judge found the
    defendants' contention to be an "overstatement."
    18
    While Welsh infrequently gave uncompensated legal advice
    to Wessell, the defendants and Welsh never expressly created any
    formal representation agreement. See Page v. 
    Frazier, 388 Mass. at 62
    . Additionally, while a closer question, they never formed
    an implied agreement. Even though Wessell sought and obtained
    advice from Welsh that was within his professional competence,
    and for the purpose of furthering Mink Brook's interests, Mink
    Brook could not reasonably have concluded that based on this
    11
    Lastly, as the judge noted before trial, the defendants'
    motion had all the indications of being an "eleventh hour
    maneuver[]" to disqualify opposing counsel despite numerous
    opportunities before trial to raise the objection.   Masiello v.
    Perini 
    Corp., 394 Mass. at 850
    .   The defendants filed their
    motion on the eve of trial, about one and one-half years after
    Wessell's complaint.   Without a sufficient explanation for the
    extraordinary delay,19 the motion was properly denied not only as
    without merit but also as a dilatory tactic.
    Damages under Wage Act.   The defendants argue that the
    judge erred when he instructed the jury that they could award
    the plaintiff compensatory damages ("back pay") for a violation
    of the Wage Act, specifically for a retaliatory firing
    prohibited under G. L. c. 149, § 148A.20   They maintain that one
    infrequent, informal, and free advice that Welsh represented the
    company. See DeVaux v. American Home Assur. 
    Co., 387 Mass. at 818-819
    .
    19
    At oral argument, counsel for the defendants explained
    that the original claim was for a minimal amount, and there was
    a belief that the matter would be settled prior to trial.
    (Indeed, during the hearing on the disqualification motion,
    defense counsel told the judge that "there was always a hope
    that it would settle or resolve, or it would just go away at
    some point.") Even so, that belief had to dissipate as the
    trial date approached.
    20
    The judge instructed the jury that "if you find that Ms.
    Wessell was terminated unlawfully from making a complaint
    regarding the Wage Act, then she is entitled to damages of the
    amount she would have earned if she had not been wrongfully
    12
    who violates § 148A "shall be punished or shall be subject to a
    civil citation or order as provided in [G. L. c. 149, §] 27C,"
    only, and that § 148A does not enable a private individual to
    obtain compensatory damages because the criminal and civil
    penalties in § 27C are the exclusive remedy, enforceable by the
    Attorney General only, for § 148A violations.21
    The Wage Act has interrelated mechanisms to ensure that
    employees are timely paid and protected when that right is
    asserted.   Under G. L. c. 149, § 148, as amended by St. 1992,
    c. 133, § 502, an employer "shall pay weekly or bi-weekly each
    such employee the wages earned by him to within six days of the
    termination of the pay period during which the wages were earned
    if employed for five or six days in a calendar week . . . ."
    The first paragraph of G. L. c. 149, § 148A, inserted by
    discharged from the date of her termination, forward to this
    date."
    21
    The second paragraph of § 148A, which the defendants cite
    as support for their argument, states,
    "Any employer who discharges or in any other manner
    discriminates against any employee because such employee
    has made a complaint to the attorney general or any other
    person, or assists the attorney general in any
    investigation under this chapter, or has instituted, or
    caused to be instituted any proceeding under or related to
    this chapter, or has testified or is about to testify in
    any such proceedings, shall have violated this section and
    shall be punished or shall be subject to a civil citation
    or order as provided in section 27C."
    G. L. c. 149, § 148A, as amended by St. 1999, c. 127, § 144.
    13
    St. 1977, c. 590, mandates that "[n]o employee shall be
    penalized by an employer in any way as a result of any action on
    the part of an employee to seek his or her rights under the
    wages and hours provisions of this chapter."   Completing the
    circle, G. L. c. 149, § 150, authorizes an employee faced with a
    violation of § 148 or § 148A to bring a civil action "for any
    damages incurred, and for any lost wages and other benefits."22
    See Fernandes v. Attleboro Hous. Authy., 
    470 Mass. 117
    , 126-127
    (2014).
    The defendants' view, that the remedy under § 148A is
    limited to criminal and civil penalties and not damages from the
    date of retaliation up to the date of judgment, is overly
    restrictive, essentially ignores G. L. c. 149, § 150, and leaves
    those aggrieved with no option other than a complaint to, and
    action by, the Attorney General.   The Wage Act, when read as a
    whole to ensure payment and to protect employees who assert that
    right, does not support the defendants' assertion that the § 27C
    22
    "An employee claiming to be aggrieved by a violation of
    [§ 148, § 148A, or other specified sections] may, 90 days after
    the filing of a complaint with the attorney general, or sooner
    if the attorney general assents in writing, and within 3 years
    after the violation, institute and prosecute . . . a civil
    action for injunctive relief, for any damages incurred, and for
    any lost wages and other benefits." G. L. c. 149, § 150, as
    amended by St. 2008, c. 80, § 5. (We note that the 2014
    amendments to § 150, even had they not postdated the events at
    issue in this litigation, did not change the language applicable
    here. See St. 2014, c. 260, § 11; St. 2014, c. 292, § 1.)
    14
    language is exclusive and only allows actions by the Attorney
    General.   In so arguing, the defendants ignore the authorization
    in § 150 for a private cause of action for retaliation
    prohibited by the first paragraph of § 148A.
    In sum, read in totality, for wage claims under § 148, an
    employee may recover earned wages that an employer has withheld.
    For retaliation claims under § 148A, an employee terminated by
    an employer for asserting a wage right may recover damages
    stemming from the termination.   Damages for retaliation may
    include earnings from the date of termination up to trial.     See
    Johnson v. Spencer Press of Me., Inc., 
    364 F.3d 368
    , 379 (1st
    Cir. 2004) ("An award of back pay compensates plaintiffs for
    lost wages and benefits between the time of the discharge and
    the trial court judgment").23
    Here, the defendants' retaliatory firing of Wessell
    violated § 148A, which triggered Wessell's § 150 remedy for
    23
    While the defendants failed to object after the judge
    delivered his final instructions to the jury, it appears that
    defense counsel throughout challenged the back pay jury
    instruction. At a precharge hearing, defense counsel objected
    to the proposed instruction, and the judge acknowledged his
    objection. Although a judge may save or preserve rights at an
    earlier time that might, in some circumstances, excuse the need
    for a timely objection later, "we discourage the practice."
    Commonwealth v. Almele, 
    87 Mass. App. Ct. 218
    , 224 (2015). See
    Rotkiewicz v. Sadowsky, 
    431 Mass. 748
    , 751 (2000), citing Flood
    v. Southland Corp., 
    416 Mass. 62
    , 66-67 (1993). See also 
    id. at 67
    ("Cautious counsel, however, wisely will renew any earlier
    objection with specificity after the charge unless the judge
    then instructs otherwise"); Mass.R.Civ.P. 51(b), 
    365 Mass. 816
    (1974).
    15
    recovery of "any damages incurred, and . . . any lost wages and
    other benefits."   The judge correctly instructed the jury that
    if they found that the defendants fired Wessell in retaliation,
    the jury could award her damages based on her earnings from the
    date of her termination until the date of the jury's decision.
    See Fernandes v. Attleboro Hous. 
    Authy., 470 Mass. at 130
    &
    n.11.
    Amended judgment affirmed.