Perras v. Trane U.S., Inc.
1:19-cv-11321
D. Mass.Jan 6, 2022Background
- Perras was an account manager for Trane from Aug. 2011 until his termination on Feb. 5, 2019, paid exclusively by commissions and receiving a $6,000 monthly draw as an advance on commissions.
- After termination Trane issued a final paycheck (~$35,700) and on March 1, 2019 accidentally paid Perras a $6,000 draw; Trane later withdrew its attempt to recover that accidental draw.
- In April–May 2019 Perras demanded ~ $167,000 in unpaid commissions (including Acorda projects, a Cooling Tower project, and Franklin Realty) and sued under the Massachusetts Wage Act; Trane removed the case and both parties moved for summary judgment.
- The parties agree Perras was owed ≈ $5,800 for the Cooling Tower project and dispute whether the accidental $6,000 draw satisfied that obligation and whether treble damages apply.
- The parties dispute commissions for the Franklin Realty contract: whether portions are renewals/expanded-scope (prorated) or new agreements (first-year commissions credited/advanced), and when a “revenue recognition event” occurs for new service-project commissions.
- The court denied Perras’s motion, allowed Trane’s motion in part (Acorda and Cooling Tower and the renewal/expanded-scope portions of Franklin Realty), and denied Trane’s motion as to the service-project portion of Franklin Realty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the accidental $6,000 draw constituted payment of wages/commission (Cooling Tower) and whether late payment yields treble damages | The accidental draw was a loan or a different non-wage payment and does not satisfy wage obligation; if it were a wage payment it was tardy and entitles Perras to treble damages | The accidental draw was a draw/advance (a wage payment under Wage Act) and applied to the commission owed, so no additional liability or treble damages | The draw qualifies as a Wage Act payment, applied to the Cooling Tower commission, and treble damages do not apply because payment occurred before suit was filed; summary judgment for Trane on Cooling Tower |
| Amount owed for Franklin Realty renewal and expanded-scope components and effect of termination (proration) | Perras contends Franklin Realty should be treated as a new agreement and claims full first-year commission (16.5% of $76,012) | Trane treats servicing as renewal/expanded-scope for part and prorates commissions for February 2019 given termination, yielding ~$41 owed | Court treated servicing portion as renewal/expanded-scope where arithmetically determinable; prorated renewal/expanded commissions were calculable and satisfied by the accidental draw; summary judgment for Trane on those portions |
| Whether service-project portion of Franklin Realty (new agreements) produced a due and payable commission when Perras was terminated (meaning of “revenue recognition event” and contingencies) | Perras reads “month of the new contract start date (revenue recognition event)” to mean the contract start month (Feb. 2019), so first-year commission was credited before termination | Trane reads Plan Summary and Policy to require revenue recognition/validation (per internal financial recognition rules and performance/percentage-of-completion) and contends contingencies were unsatisfied, so no commission was due | The Plan Summary and Policy are ambiguous on when the revenue recognition event occurs and whether contingencies were satisfied; reasonable jurors could reach different interpretations; summary judgment denied as to the service-project portion |
Key Cases Cited
- Mesnick v. Gen. Elec. Co., 950 F.2d 816 (1st Cir. 1991) (summary judgment’s role to assess need for trial)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for materiality and genuine dispute at summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (movant’s and nonmovant’s burdens on summary judgment)
- Nadherny v. Roseland Prop. Co., 390 F.3d 44 (1st Cir. 2004) (contract interpretation as a question of law, ambiguity may create jury question)
- Okmyansky v. Herbalife Int’l of Am., Inc., 415 F.3d 154 (1st Cir. 2005) (contract must be interpreted in light of document as a whole)
- Weems v. Citigroup, Inc., 900 N.E.2d 89 (Mass. 2009) (commissions are wages under Wage Act when definitely determined and due and payable)
- Sullivan v. Sleepy’s LLC, 121 N.E.3d 1210 (Mass. 2019) (discussing draws/advances as payment structure)
- Providence Journal Co. v. Providence Newspaper Guild, 271 F.3d 16 (1st Cir. 2001) (avoid contract constructions that render terms meaningless)