Trindade v. Grove Services, Inc.Trindade v. Grove Services, Inc.
Irwin B. Schwartz, with whom BLA Schwartz PC was on brief, for appellants/cross-appellees.
David B. Summer, with whom Law Office of David B. Summer, Alan D. Meyerson, and Law Office of Alan David Meyerson were on brief, for appellee/cross-appellant.
RIKELMAN, Circuit Judge. Convinced that he had been short-changed on his sales commission compensation, Paulo Trindade sued his former employer for breach of contract and violations of the Massachusetts Wage Act. Following a bench trial, the district court ruled in part for Trindade and in part for the employer, Grove Services, Inc., awarding Trindade $330,597 in damages. Both parties appealed. Grove focuses its challenge
We agree with the district court that, under Massachusetts law, Trindade‘s amended complaint relates back to his original complaint. We also conclude that the record abundantly supports the district court‘s decisions to award the damages it did and to decline to award more based on Trindade‘s preferred сalculation. Therefore, we affirm the district court‘s judgment.
I. BACKGROUND
A. Relevant Facts
Our review follows a bench trial, so we give due deference to the district court‘s findings of fact in describing the dispute between the parties. See Duval v. U.S. Dep‘t of Veterans Affs., 69 F.4th 37, 38 (1st Cir. 2023).
Grove is an exporter of frozen meat products that is headquartered in Massachusetts. It also has offices in Atlanta, Georgia and cities abroad, as well as a distribution operation in Ukraine. Victor Spivak is Grove‘s owner and president and the primary salesperson for Russia and Ukraine. Trindade worked for Grove from 2010 to 2017 as the company‘s Product and Sales Director for Latin America, based in the company‘s Atlanta office.
Trindade‘s compensation plan was set out in a written employment contract with Grove, which provided that he would earn a base salary plus an annual sales commission. Any commission would be “equal to fifteen percent (15%) of the Net Profits attributable to [Trindade‘s] sales to the extent that such Net Profits exceed US $150,000.” The contract contained a complex formula for calculating “Net Profits.” But it stated, in essence, that Trindade‘s commission would equal the gross sales order amounts that he generated and managed, minus six categories of deductions.1 The contract further stated that the commission “shall be calculated . . . and paid to [Trindade] within sixty (60) days after the relevant calendar year end.” This contract remained in effect for the entirety of Trindade‘s employment with Grove.
The parties’ dispute centers on Trindade‘s sales commissions for the yеars 2014, 2015, and 2016. In 2014, Trindade received a $47,647.46 sales commission,
Trindade ended his employment with Grove effective December 31, 2017. On March 6, 2019, he filed a complaint for unpaid wages with the Massachusetts Attorney General‘s Office (“AGO“). The complaint stated that he had worked for Grove from 2010 to 2017 and that he was owed “unpaid commissions” from the company. Five days later, Trindade received a letter from the AGO permitting him to sue Grove on his own behalf.
B. Legal Proceedings
1. Original Complaint and Amended Complaint
On Aрril 15, 2019, Trindade brought a diversity action against Grove and Spivak (collectively, “Grove“) in the District of Massachusetts. He alleged that Grove underpaid his commission for calendar year 2015. He asserted two claims: (1) violation of the Massachusetts Wage Act, based on Grove‘s failure to pay him the correct amount of his 2015 commission on time, and (2) breach of contract.
On June 15, 2020, Trindade filed a motion to amend his complaint. He asserted that he had discovered new Wage Act violations and breaches of contract through written discovery. Importantly, the amended complaint added allegations regarding his commission for calendar year 2016. Trindade alleged that Grove subtracted what was supposed to be a one-time deduction from his 2015 commission two years in a row, in 2015 and in 2016.2 He further alleged that Grove reduced the amount of his 2016 commission from 15% of the net profits from his sales to 7.5%. Because of this invalid deduction and reduction, Trindade asserted, Grove failed to pay him the correct amount of his 2016 commission by the date set forth in the employment contract. Like the original complaint, the amended complaint contained two counts: (1) violation of the Massachusetts Wage Act, based on Grove‘s failure to pay the commissions due for the years 2015 and 2016 in a timely fashion, and (2) breach of contract, based on Grove‘s failure to compensate Trindade for his work in accordance with the terms of
The magistrate judge granted Trindade‘s motion to amend. But she limited discovery on the nеw allegations in the amended complaint to a deposition of Grove‘s corporate witness.
2. Bench Trial
The case proceeded to a bench trial, after which the district court made four critical findings. First, Grove breached the employment contract by deducting $7,041 from Trindade‘s 2014 sales commission to fund his 401(k) account. Second, Trindade did not prove by a preponderance of the evidence that he was owed any commission in 2015 or that Grove engaged in improper calculations to conclude that no commission was owed. Therefore, he could not prevail on his 2015 claims. Third, Grove violated the Wage Act by (1) failing to pay Trindade his 2016 commission by the deadline provided in the employment contract and (2) improperly deducting from his 2016 commission its 401(k) contribution of $6,759 -- which represented an unpaid wage. Fourth, Grove was additionally liable for breach of contract due to the late payment of Trindade‘s 2016 commission and the improper 401(k) deduction that year.
The district court awarded Trindade damages for the 2014 and 2016 breaches of contract and for the 2016 Wage Act violation. It determined that, due to the breach of contract as to the 2014 commission, Trindade was entitled to $7,041 in damages -- the amount Grove deducted from his commission to fund his 401(k). Further, it found that Trindade was entitled to $107,852 in late and unpaid wages as to the 2016 commission -- $101,093 that Grove paid after the deadline in the contract and $6,759 that Grove improperly diverted to his 401(k). The $107,852 was subject to mandatory trebling under the Wage Act, bringing the damages for the 2016 Wage Act claim to $323,556. Adding in the damages for the 2014 401(k) violation, the district court awarded Trindade $330,597 in total damages.
In arriving at the judgment, the district court rejected Grove‘s argument that the Wage Act claim premised on the late payment and underpayment of Trindade‘s 2016 commission was time-barred. It determined that the 2016 claim related back to the original complaint, which was filed well within the statute of limitations applicable to the 2016 claim. But the district court also found that Trindade had failed to prove that, because Grove cut his commission rate in half, from 15% of net profits to 7.5%, he was entitled to an additional $146,538 in unpaid wages for that year.
This timely appeal followed.
II. STANDARD OF REVIEW
“Following a bench trial, this Court reviews the district court‘s findings of fact with deference, overturning them only when clearly erroneous, but reviews its legal conclusions de novo.” Rojas-Buscaglia v. Taburno-Vasarhelyi, 897 F.3d 15, 23-24 (1st Cir. 2018) (internal quotations and citation omitted). A “more flexible standard” governs mixed questions of fact and law. Markham Concepts, Inc. v. Hasbro, Inc., 1 F.4th 74, 79 (1st Cir. 2021). “The more fact intensive the question, the more deferential the level of review,” and “the more law intensive the question, the less deferential the level of review.” Id. (quoting In re IDC Clambakes, Inc., 727 F.3d 58, 64 (1st Cir. 2013)).
The parties dispute the applicable standard of review for the district court‘s relation-back decision. We do not dwell on this dispute, however, because we conclude that we would affirm under either abuse of
As to the decision to award damages and the calculation of the damages amount, we review the district court‘s rulings for abuse of discretion. Banco Popular de Puerto Rico v. Asociación de Compositores y Editores de Música Latinoamericana (ACEMLA), 678 F.3d 102, 113–14 (1st Cir. 2012); Rojas-Buscaglia, 897 F.3d at 32–33. Under this standard, Grove and Trindade “must convince this Court that the district court ‘committed a meaningful error in judgment.‘” Rojas-Buscaglia, 897 F.3d at 24 (quoting Lussier v. Runyon, 50 F.3d 1103, 1111 (1st Cir. 1995)).
With these principles in mind, we turn to the parties’ arguments on appeal.
III. DISCUSSION
Both parties object to aspects of the district court‘s judgment. Grove argues that the district court erred in two ways: first, in finding that the Wage Act claim premised on Trindade‘s 2016 commission related back to the original complaint, and second, in determining that Trindade was entitled to damages.3 Trindade, for his part, contends that the district court abused its discretion in not awarding him double the amount of commission for 2016. We address each argument in turn. Ultimately, we affirm the district court‘s relation-back decision and its damages award.
A. Relation Back
We begin with Grove‘s contention that the Wage Act claim founded on Trindade‘s 2016 commission is untimely and that the district court erred in concluding that this claim relates back to the original complaint. We first discuss the applicable statute of limitations for claims brought under the Wage Act and then turn to the issue of relation back.
“The [Massachusetts] Wage Act imposes liability on employers who fail to pay wages earned by their employees.” Ellicott v. Am. Cap. Energy, Inc., 906 F.3d 164, 169 (1st Cir. 2018) (citing
“Wage Act claims are subject to a three-year statute of limitations that attaches separately to each individual violation of the act.” Ellicott, 906 F.3d at 170; see
Grove argues in its reply brief, and argued below, that Trindade‘s Wage Act claim based on his 2016 commission accrued, and the statute of limitations started running, on March 1, 2017.4
We do not focus on the implications of this back-and-forth because, even if the three-year statute of limitations started running on March 17, 2017, it still would have lapsed before June 2020, when Trindade moved to file the amended complaint asserting the 2016 claim. Trindade did initially argue that if, as Grove asserts in its opening brief, March 17, 2017, marks the beginning of the statute of limitations period, his claim is timely because all statutes of limitations in Massachusetts were tolled from March 17, 2020, until June 30, 2020, due to the COVID-19 pandemic. See Mass. Sup. Jud. Ct., Third Updated Order Regarding Court Operations Under the Exigent Circumstаnces Created by the COVID-19 (Coronavirus) Pandemic, No. OE-144 (June 24, 2020). But the Massachusetts Supreme Judicial Court‘s (“SJC‘s“) order tolling limitations periods during the COVID-19 pandemic was issued pursuant to the court‘s “superintendence authority . . . to oversee ‘the administration of all courts of inferior jurisdiction.‘” Dunn v. Langevin, 211 N.E.3d 1059, 1061 (Mass. 2023) (quoting
That is the date that Trindade‘s commission was due under the employment contract, which states that Grove shall pay commissions within sixty days after the end of the relevant calendar year. The parties agreed below that Trindade‘s claims were tolled for five days to account for the time between when he filed a complaint with the AGO, on March 6, 2019, and when he received his right-to-sue letter, on March 11, 2019. Accounting for those five days of tolling, Grove contends that the three-year statute of limitations period for the 2016 Wage Act claim expired on March 6, 2020. Yet, as it points out, Trindade did not assert this claim until he moved to amend his complaint on June 15, 2020. Accordingly, Grove argues, the 2016 Wage Act claim is untimely, and it cannot be liable on that claim unless the claim relates back to the original complaint.
Grove therefore contends that the tolling policy does not apply to an action like Trindade‘s that was brought in federal district court. Trindade did not contest this point in his response/reply brief or at oral argument and thus effectively concеded it.
As the district court noted, the original complaint, filed on April 15, 2019, was filed well within the three-year statute of limitations period for the 2016 claim. Trindade does not seem to dispute that, if his 2016 Wage Act claim accrued on March 1, 2017, it is time-barred unless the amended complaint relates back to the original complaint. Accordingly, we turn our attention to relation back.
“Under the doctrine of relation back, an amended complaint can be treated, for purposes of the statute of limitations, as having been filed on the date of the original complaint.” Pessotti v. Eagle Mfg. Co., 946 F.2d 974, 975 (1st Cir. 1991). When, as here, a plaintiff amends a complaint to add a new claim,
We have explained that this provision “cements in place a one-way ratchet; less restrictive state relation-back rules will displace federal relation-back rules, but more restrictive state relation back rules will not.” Morel v. DaimlerChrysler AG, 565 F.3d 20, 26 (1st Cir. 2009); see also
As the district court properly noted, Massachusetts has “‘liberal’ rules governing the аmendment and relation back of pleadings.” Herrick v. Essex Reg‘l Ret. Bd., 861 N.E.2d 32, 35 (Mass. App. Ct. 2007); see also Hogan v. Fischer, 738 F.3d 509, 518 (2d Cir. 2013) (explaining that
The particular test for relation back is found in
Grove contends that there was neither a sufficient nexus nor sufficient notice here. It argues that Trindade‘s original complaint focused only on the payment of his 2015 commission, and his amended complaint
Massachusetts cases do not appear to precisely define the parameters of the “conduct, transaction, or occurrence” standard set out in
The SJC has explained that “a ‘transaction’ generally ‘connotes a natural grouping or common nucleus of operative facts.‘” Id. at 745-46 (quoting Restatement (Second) of Judgments § 24 cmt. b (Am. L. Inst. 1982)). Massachusetts courts pragmatically determinе what factual grouping constitutes a transaction. Saint Louis v. Baystate Med. Ctr., Inc., 568 N.E.2d 1181, 1185 (Mass. App. Ct. 1991). Factors considered are “whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations.” Smith v. Smith, No. 111386, 2011 WL 7090711, at *5 (Mass. Super. Ct. Nov. 15, 2011) (cleaned up); see also Baystate Med. Ctr., 568 N.E.2d at 1185. Massachusetts caselaw has further explained that whether a factual grouping constitutes a transaction is “perhaps most straightforward when the claims at issue arise from the same contract,” between the same parties, “that was adjudicated in the earlier proceeding.” N. Am. Cath. Educ. Programming Found., Inc. v. Clearwire Spectrum Holdings II, LLC, No. SUCV20153118BLS2, 2020 WL 2198090, at *2 (Mass. Super. Ct. Feb 24, 2020).
Applying this understanding of transaction under Massachusetts law, we conclude that Trindade‘s 2016 Wage Act claim, as asserted in his amended complaint, flows from the same factual nexus as his 2015 Wage Act claim. To be sure, Trindade‘s amended complaint added allegations concerning different events than those alleged in the original complaint, and there is a temporal gap between the two Wage Act claims. But that alone does not defeat relation back. Cf. Rural Fire Prot. Co. v. Hepp, 366 F.2d 355, 361–62 (9th Cir. 1966) (interpreting similar language under the federal rule and holding that an amended complaint seeking unpaid wages owed under an employment contract for one pay period related back to the original complaint seeking unpaid wages for an earlier pay period because the amended pleading arose from the same general transaction, could be established by the same kind of evidence, and did not take the defendant by surprise). Both claims arise out of the same contract and are related in origin -- the late payment and underpayment of commissions, in violation
That nexus, however, does not alone resolve the issue of whether the amended complaint relates back to the original complaint. Massachusetts law also inquires into whether the original pleading provided the defendant with adequate notice of the potential new claims.5 See Weber, 752 N.E.2d at 717–18. The district court found that it was “undisputable that [Trindade‘s] initial pleading provided [Grove] with adequate notice of the potential new claims” because Grove‘s “wage and commission payment practices were the entire subject matter of that first complaint.” Trindade v. Grove Servs., Inc., No. 19-10717, 2023 WL 2157647, at *8 (D. Mass. Feb. 22, 2023). As Grove correctly points out,
Trindade‘s original complaint did not mention the payment of his commission for calendar year 2016. Nevertheless, we agree with the district court that the original complaint alleging underpayment and untimely payment of commission in one year sufficiently notified Grove of the potential for claims based on underpayment and untimely payment of commission in the following year, pursuant to the same compensation plan. The fact that Trindаde‘s 2016 Wage Act claim was based in part on Grove‘s commission calculation for 2015 bolsters this conclusion.
Moreover, allowing Trindade to proceed with his 2016 Wage Act claim would not contravene what the SJC has described as “‘the major policy’ behind a statute of limitations -- the collection and preservation of evidence.” Weber, 752 N.E.2d at 718 (quoting 6 James W. Smith & Hiller B. Zobel, Mass. Rules Practice § 15.9 (1974 & Supp. 2001)). Discovery was still open and ongoing when the district court permitted Trindade to amend his complaint. And the trial in the case did not occur until nearly two years later. Thus, Grove had ample time to gather evidence to refute Trindade‘s 2016 Wage Act claim. Meanwhile, as a condition of amending his complaint, Trindade was prohibited from seeking any additional written discovery or production of documents rеlating to that claim.
The Weber court also emphasized that the plaintiff “offered no explanation” for the delay in raising her claim. Id. But Trindade did offer a reason for amending his complaint to add the 2016 Wage Act claim: he asserted that he did not discover Grove‘s duplicate deduction until discovery. Trindade‘s trial testimony supports that assertion. He stated at trial that, in contrast to other years, he never received a summary of his commission calculations for the 2015 year in which Grove‘s deduction was improperly made until discovery in this case.
In addition, permitting Trindade to advance his 2016 Wage Act claim, when the above requirements are satisfied, accords with the goal of Massachusetts’ liberal relation-back doctrine: to avoid depriving plaintiffs of a valid claim. See Go Best Assets Ltd. v. Goldings, No. 010577BLS1, 2007 WL 3054814, at *3 (Mass. Super. Ct. Sept. 19, 2007) (finding that, although defendants’ argument that they lacked notice of the later-asserted claim had “some force,” Massachusetts’ policy that “regard[s] indulgently any amendment whose denial would deprive the plaintiff of a claim” weighed in favor of allowing an otherwise untimely claim to relate back (citation omitted)).
Having reviewed the relevant cases, we see no reason to disturb the district court‘s holding that Massachusetts law permits relation back in these circumstances.6
B. Grove‘s Challenge to the Damages Award
Having determined that Trindade‘s 2016 Wage Act claim relates back to his original complaint, we next turn to Grove‘s argument that Trindade is not entitled to damages. Grove raises several points in contending that the damages award was unsupported by the district court‘s findings of fact and the evidence. The record amply supports the damages award, so we see no abuse of discretion.
Grove‘s primary contention is that its payment of the 2016 commission did not violate the Wage Act because Trindade failed to demonstrate the amount of commission that Grove owed him under the contract for that year or demonstrate that Grove owed him any commission at all for that year. As support, it points to the district cоurt‘s finding that Trindade had “not demonstrated how much in wages he was actually owed in 2016 under the terms
Grove, however, expressly conceded below that it owed Trindade a commission for 2016. The only dispute between the parties at trial was which formula applied to calculate that commission. For instance, in its proposed findings of fact and conclusions of law submitted after trial, Grove stated that “[f]or 2016, under its new commission calculation system, Grove owed Mr. Trindade commissions of $146,538.” Similarly, it stated that “[f]or 2016 Grove paid Mr. Trindadе his $130,000 base salary[,] and he earned $146,538 in performance commission under its new methodology.” Grove has waived any argument that the damages award lacks an evidentiary basis on the ground that it did not owe Trindade commission for 2016.
It is true that, at trial, Grove introduced testimony that Trindade‘s 2016 net commission under the new formula was more than it would have been under the old formula provided in the employment contract, mainly because the new methodology eliminated deductions based on overhead costs and working capital. But regardless of the differences between what Trindade earned under the new formula and under the old formula, Grove never contested that it did, in fact, owe Trindade a commission for 2016, and it stated below that the commission was due on March 1, 2017. The parties agreed that Grove paid $101,093 in commission after March 1, 2017. Given these undisputed facts, the district court acted within its discretion when it awarded $101,093 as late-paid wages.
Recycling its above arguments, Grove also disputes the district court‘s award of damages for the 401(k) deductions in 2014 and 2016. But that award too finds sufficient basis in the record. At trial, Trindade claimed that Grove was supposed to fund his 401(k) account with its own money, not with the money he earned through his sales, and that nothing in his employment contract allowed Grove to deduct what should have been its employer retirement contribution from his total commission. Yet Grove insists that, because Trindade failed to establish a definitive amount of commission owed to him for 2014 or 2016, the 401(k) deductions cannot be an unpaid wаge or a breach of contract. But the district court awarded damages for breach of contract as to the 2014 commission after finding that (1) Grove paid Trindade $47,647.46 in sales commission that year, (2) the evidence showed that Grove diverted its 401(k) contribution of $7,041 from Trindade‘s commission, and (3) such diversion was not permitted by the contract. Grove does not contest those factual findings, and we see no error in the district court‘s judgment to award damages for breach of contract.7
The same is true for the Wage Act claim and the breach of contract claim as to the 2016 commission. Even if Trindade did not carry his burden of proving he was owed
Grove advances one more argument. It asserts that, of the $146,538 it paid Trindade in addition to his base salary in 2016, it paid $38,686 over the course of 2016. That is, it paid $38,686 before the deadline provided in the employment contract, meaning in a timely manner. Grove argues that the district court failed to account for this payment and that there is no proof that Trindade was owed anything more than thе $38,686 it timely paid. But Grove never made this argument below, so it is not properly preserved for appeal. Even if it were, it mirrors the arguments above -- that there was no proof that Grove owed Trindade the $101,093 that Grove paid late. As we have explained, Grove admitted below that it owed Trindade $146,538 in commission for 2016, so any claim that it owed him less than that amount fails.
The record evidence amply supports the district court‘s damages award. Consequently, we reject Grove‘s challenge.
C. Trindade‘s Challenge to the Damages Award
Trindade launches his own challenge to the damages award for the 2016 Wage Act claim. We conclude his challenge also lacks merit.
According to Trindade, the district court erred in not awarding him an additional $146,538 in unpaid wages for 2016. He argues that, when Grove calсulated his 2016 commission under the new formula, it used a rate of 7.5%, but the employment contract stated that he was entitled to receive his commission at a rate of 15%. Therefore, he contends, he is entitled to double the commission to make up the difference between the amount he was paid and the rate set forth in the contract.
But Trindade cannot establish that the district court abused its discretion in declining to award him additional damages because he did not introduce evidence to support his requested damages calculation. We do not know if the total amount that Grove paid Trindade was more or less than what was required under the contract‘s formula because Trindade never established the specific amount Grove should have paid under that formula. To put it simply, Trindade failed to prove what he was owed for 2016 under the contract‘s terms. Without proof demonstrating what that specific amount should be, there was no way for the district court to evaluate whether what Grove paid Trindade exceeded or fell short of that amount. Further, the $146,538 that Grove paid Trindade did not include any of the deductions permitted in the contract. And Trindade offered no estimate of those deductions. So, again, the district court in no way erred in refusing to award Trindade additional damages when he failed to prove if he was owed more or less under the contract‘s terms.
IV. CONCLUSION
For all these reasons, we affirm the district court‘s judgment.
Notes
(a) the gross sales order amounts generated and managed by [Trindade] (tracked by [Grove] under [Trindade‘s] employee number), minus (b) the actual costs of goods sold attributable to such sales orders, minus (c) all transportation and freight charges relating to the transportation of product and all storage charges, demurrage charges, insurance and other costs and expenses directly relating to such sales orders, minus (d) a proportionate amount of the salary, bonus, benefits and other compensation paid to or on behalf of employees and consultants, including [Trindade], working out of or for [Grove‘s] Atlanta office, minus (e) proportionate amount of the overhead, costs and expenses оf [Grove‘s] Atlanta office and a proportionate amount of the overhead, costs and expenses of [Grove] reasonably apportioned to [Grove‘s] Atlanta office, minus (f) a proportionate amount of all interest expenses (internal or external) calculated as a function of the working capital needs of [Grove‘s] Atlanta office, and minus (g) a proportionate amount of a fifteen percent (15%) return on the capital investment of [Grove] in its Atlanta office.