Sugarman & Sugarman, P.C. v. Shapiro ( 2023 )

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22-P-850 Appeals Court
SUGARMAN & SUGARMAN, P.C. vs. DANIEL B. SHAPIRO.1
No. 22-P-850.
Suffolk. March 1, 2023. – July 7, 2023.
Present: Green, C.J., Blake, & Englander, JJ.
Damages, Quantum meruit, Breach of contract. Contract,
Attorney, Compensation of attorney, Employment, Performance
and breach. Evidence, Settlement offer. Practice, Civil,
Instructions to jury, Judgment notwithstanding verdict, New
trial.
Civil action commenced in the Superior Court Department on
March 16, 2018.
The case was tried before Peter B. Krupp, J.
Richard B. Reiling for the defendant.
Allen N. David (Avana A. Epperson-Temple also present) for
the plaintiff.
GREEN, C.J. The principal question in this appeal is
whether the trial judge erred in submitting to the jury the
plaintiff's claim for damages under a theory of quantum meruit
1 Doing business as Shapiro & Associates.
2
despite the existence of a fully integrated written contract
between the parties. We conclude that, because the
circumstances giving rise to the plaintiff's claim fell outside
the terms addressed by the parties' agreement, the judge
properly submitted the claim to the jury, and we affirm the
judgment.2
Background. The plaintiff is a Boston law firm that
specializes in personal injury cases. The defendant headed up a
law practice that specializes in federal workers' compensation
cases (OWCP practice). Effective March 1, 2016, the plaintiff
and the defendant entered into an employment and purchase of
practice agreement (agreement) under which they agreed to work
together through at least March 30, 2019, and possibly March 30,
2020, with respect to the defendant's law practice. Under the
parties' agreement, for the year beginning on April 1, 2019, and
continuing through March 30, 2020,3 the defendant held the option
either to continue working or to retire, with differing
compensation depending on which option he chose. Upon the
2 The defendant also raises challenges to (1) the judge's
instructions to the jury on the quantum meruit claim, (2) the
court's jurisdiction over the claims, (3) certain evidentiary
rulings by the trial judge, and (4) the denial of his motion for
judgment notwithstanding the verdict and for new trial.
3 The agreement described various years as running from
April 1 to March 30, despite the fact that March has thirty-one
days. Nothing in our decision turns on this fact.
3
defendant's retirement, the plaintiff was to have control of the
entire OWCP practice. From and after the defendant's
retirement, however, the agreement provided for compensation to
the defendant for seven additional years, in the form of a
portion of revenues from the OWCP practice.
During the first year of the agreement, the plaintiff was
to provide space for the defendant in its office, as well as
"experienced attorney work" to support the OWCP practice. The
agreement "contemplated that sometime prior to the expiration of
[y]ear [one], [the plaintiff] will designate an attorney to
devote [one hundred percent] of his/her professional time to the
OWCP [p]ractice with other attorneys and support staff
continuing to provide sufficient resources to continue to
maintain a high level and quality of service to federal
compensation clients; the designation of such personnel is
subject to the acceptance and approval of [the defendant]." In
return, the defendant was responsible for the salaries of
certain then-current employees and for case and practice
expenses, and had to pay the plaintiff a monthly amount as "a
nominal fee" for office space and services provided by the
plaintiff.4 The defendant was entitled to all profits generated
4 The applicable provision of the agreement stated that the
plaintiff would pay "the sum of [e]leven [t]housand ($12,500.00)
[d]ollars per month." The discrepancy is not material to any
issue in this appeal.
4
from the OWCP practice that first year. Beginning in the
agreement's second year, while the plaintiff was to continue
providing space and attorney work to the OWCP practice, all
income from the OWCP practice was to be deposited in an OWCP
practice operating account, from which the plaintiff and the
defendant were to be compensated pursuant to formulas set forth
in the agreement.
The agreement included a provision regulating the
termination of the parties' arrangement, and the allocation of
accrued expenses, if they decided at any time before March 30,
2017 (i.e., within thirteen months after inception), not to
continue working together. In the event of such a termination,
and after the allocation of accrued expenses, the defendant was
to retain the OWCP practice, as well as "all practice and case
expenses going forward." The agreement was otherwise silent on
any termination following March 30, 2017. Perhaps predictably
enough (if not so predictably as to have been addressed in the
agreement), at some point after March 30, 2017, the parties
developed irreconcilable differences and, in a telephone
conversation between the defendant's attorney and the
plaintiff's managing partner on November 29, 2017, the
defendant's attorney advised the plaintiff that the defendant
wished to "unwind" the parties' relationship, taking his former
staff and clients with him. Soon thereafter, on or about
5
December 6, 2017, the defendant left the plaintiff's office with
all the cases from the OWCP practice. Importantly for present
purposes, the cases the defendant took with him included more
than eight thousand hours of unbilled work by the plaintiff's
attorneys and paralegals over the approximately twenty months
since the parties had commenced their collaborative arrangement.
The plaintiff brought claims for breach of contract and the
duty of loyalty, and for quantum meruit, and the defendant
counterclaimed for breach of contract and fiduciary duty. The
jury found no breach of contract or breach of the duty of
loyalty or fiduciary duty by either party, but awarded the
plaintiff $350,316.75 on its quantum meruit claim.5 After denial
of the defendant's motion for judgment notwithstanding the
verdict and for new trial, judgment entered on the jury verdict,
and this appeal followed.6
5 Other counterclaims brought by the defendant were resolved
in the plaintiff's favor on motions for summary judgment and for
a directed verdict.
6 Prior to trial, the defendant moved to dismiss the
plaintiff's claims for damages for want of subject matter
jurisdiction, arguing that, under the Federal Employees'
Compensation Act, any claim for the legal fees at issue "is
valid only if approved by the Secretary [of Labor]," 5 U.S.C.
§ 8127(b), and that the Secretary's decision is "final" and "not
subject to review by . . . a court by mandamus or otherwise." 5
U.S.C. § 8128(b). The Superior Court judge denied the
defendant's motion to dismiss, and the defendant renews his
jurisdictional challenge on appeal. There was no error. The
plaintiff's claims do not implicate any decision by the
Secretary of Labor concerning legal fees. Instead, through its
6
Discussion. 1. Quantum meruit. As he argued in his
unsuccessful motion for judgment notwithstanding the verdict and
for new trial, the defendant argues both that the judge should
not have submitted the plaintiff's claim for quantum meruit to
the jury, and that the judge instructed the jury erroneously on
how to consider the claim.
a. Submission of quantum meruit claim to the jury. The
defendant's contention that the plaintiff's quantum meruit claim
was legally precluded relies on the general rule that "[a]
plaintiff is not entitled to recovery on a theory of quantum
meruit where there is a valid contract that defines the
obligations of the parties." Boston Med. Ctr. Corp. v.
Secretary of the Executive Office of Health & Human Servs., 463
Mass. 447, 467 (2012). See Restatement (Third) of Restitution
and Unjust Enrichment § 2(2) (2011) ("A valid contract defines
the obligations of the parties as to matters within its scope,
displacing to that extent any inquiry into unjust enrichment").
Because the relationship of the parties in the present case was
defined by a fully integrated written contract, the defendant
claim for quantum meruit, the plaintiff sought to recover the
value of services it performed for the defendant's benefit, a
claim plainly within the jurisdiction of the Superior Court.
See, e.g., G4S Tech. LLC v. Massachusetts Tech. Park Corp., 479
Mass. 721, 722 (2018); Liss v. Studeny, 450 Mass. 473, 473-474
(2008).
7
asserts that no recovery under an equitable quasi contract
theory is available.
The general rule, however, is not without exception. In
particular, comment c to § 2 of the Restatement (Third) of
Restitution and Unjust Enrichment explains that "[r]estitution
claims of great practical significance arise in a contractual
context . . . when a valuable performance has been rendered
under a contract that is . . . ineffective to regulate the
parties' obligations. Applied to any such circumstance, the
statement that there can be no unjust enrichment in contract
cases is plainly erroneous."7
As we have observed, the agreement was glaringly silent
concerning the allocation of accrued revenues and expenses in
the event of any dissolution of the parties' arrangement after
the completion of the first year but before the defendant's
retirement during or after the third year.8 Though the parties
acknowledged that the agreement was an integrated contract
7 A claim in quantum meruit is closely related to a claim
for unjust enrichment: "[t]he underlying basis for awarding
quantum meruit damages in a quasi-contract case is unjust
enrichment of one party and unjust detriment to the other
party." Salamon v. Terra, 394 Mass. 857, 859 (1985).
8 The agreement did include provisions regarding expenses
and revenues, but those provisions assumed that the parties
would continue to work together, and that the OWCP practice
would stay with the plaintiff when the defendant retired.
8
"pertaining to the subject matter contained herein,"9 that
summary statement does not supply contractual regulation of the
circumstances giving rise to the parties' current dispute.
In the light of the duties imposed on the plaintiff to
provide office space and attorney work, as well as evidence
presented at trial about the work that the plaintiff's attorneys
actually performed for the defendant's benefit, it was not error
for the judge to conclude that it was appropriate for the jury
to consider the plaintiff's claim for equitable recovery,
through quantum meruit in the absence of a contractual provision
addressing those circumstances. Cf. Zabin v. Picciotto, 73
Mass. App. Ct. 141, 151 (2008) (where attorney's contingency fee
agreement is terminated, attorney may recover fees under theory
of quantum meruit).
b. Jury instructions. The defendant contends that the
judge's instructions to the jury on the plaintiff's quantum
meruit claim were incorrect in two respects. First, the
defendant asserts that the judge mischaracterized the agreement
to suggest that it was not an integrated contract. Second, the
defendant contends that the judge failed to instruct the jury
9 The agreement contained an integration clause which
confirmed that it "constitutes the entire agreement among the
parties pertaining to the subject matter contained herein and
supersedes all prior agreements, representations and
understandings of the parties."
9
that, to establish entitlement to damages in quantum meruit, the
plaintiff was required to prove that it conferred a benefit on
the defendant. We are not persuaded.
A trial judge has wide discretion in framing the language
of jury instructions. See Kiely v. Teradyne, Inc., 85 Mass.
App. Ct. 431, 441 (2014). Additionally, a judge "is not
required to use exact language 'so long as all necessary
instructions are given in adequate words.'" Commonwealth v.
Stewart, 460 Mass. 817, 824 (2011), quoting Commonwealth v.
Marrero, 427 Mass. 65, 72 (1998). "We 'evaluate the charge as a
whole, looking for what meaning a reasonable juror could put to
the words of the trial judge.'" Stewart, supra, quoting
Commonwealth v. Waite, 422 Mass. 792, 804 (1996).
First, as we have explained in the preceding section,
though the agreement stated that it was integrated, it was
silent on the circumstances giving rise to the parties' dispute.
It accordingly was not error for the judge to instruct the jury
that the agreement did not address the parties' obligations as
they related to the plaintiff's claim for damages in quantum
meruit.10 In any event, the jury heard repeatedly from the
10 The judge instructed the jury as follows:
"I instruct you as a matter of law that the employment and
purchase of practice agreement, which was admitted as
[e]xhibit 1, does not cover the dispute in question here.
Specifically, in the event the relationship between [the
10
parties, and the judge reiterated in his instructions,11 that the
agreement was integrated, so the defendant's argument is
misplaced as a matter of fact.
Regarding the required elements of the plaintiff's claim
for quantum meruit, the judge instructed the jury that the
plaintiff needed to show that (1) it "provided services to [the
defendant]"; (2) "with a reasonable expectation of being paid by
[the defendant]"; (3) "[the defendant] had reason to believe
that [the plaintiff] expected to be paid"; and (4) "[the
defendant] permitted [the plaintiff] to act without stopping
their work or otherwise objecting to [the plaintiff] expecting
to be paid."
The defendant fixes on the absence of the word "benefit" in
the above elements, but viewing the judge's instructions as a
whole, we perceive no error. Immediately before laying out the
elements, the judge defined the claim of quantum meruit as "the
concept that no one who benefits by the labor or materials of
plaintiff] and [the defendant] terminates and [the
defendant] takes the OWCP practice with him after the first
year of the agreement, the agreement does not address
whether [the defendant] must pay anything to [the
plaintiff] for the services [the plaintiff's] lawyers
provided to [the defendant] or his clients."
11The judge explained that the agreement was "fully
integrated" but that, "[t]o the extent a fully integrated
agreement does not address a particular issue or situation, you
may be required, as I will instruct you below, to prevent the
unjust enrichment of one party or the other."
11
another should be unjustly enriched" (emphasis added). With
this context, the jury would have understood from the judge's
instruction that it was their charge to find whether the
plaintiff conferred a measurable benefit on the defendant. The
charge then required the plaintiff to establish, among other
things, that it "provided services to" the defendant, "with a
reasonable expectation of being paid." In context, the charge
properly conveyed the elements of the claim, and the jury heard
testimony and saw time reports about the amount of work the
plaintiff's attorneys performed in support of the OWCP practice,
as well as evidence of the billing rate charged for the attorney
hours provided for the OWCP practice. See General Dynamics
Corp. v. Federal Pac. Elec. Co., 20 Mass. App. Ct. 677, 683
(1985) (jury could award damages where, among other things, they
could have found or fairly inferred that plaintiff agreed to
provide materials or services).
2. Evidentiary issues. The defendant's claims of error in
certain evidentiary rulings by the judge require only brief
discussion.12 We "do not disturb a judge's decision to admit
12We need not address the defendant's argument that the
judge erred in excluding evidence of his damages, as the jury's
conclusion that the plaintiff did not commit a breach of the
agreement rendered that evidence immaterial. See Karen Constr.
Co. v. Lizotte, 396 Mass. 143, 147 (1985).
12
evidence absent an abuse of discretion or other legal error."
Zucco v. Kane, 439 Mass. 503, 507 (2003).
a. Evidence of settlement discussions. The defendant
first contends that the plaintiff should not have been allowed
to introduce evidence of a conversation between its managing
partner and the defendant's attorney, in which the defendant's
attorney advised the plaintiff of the defendant's desire to
"unwind" their business relationship.13 Contrary to the
defendant's contention, the testimony did not constitute
evidence of settlement discussions, and was properly admitted.14
The testimony on which the defendant bases his challenge
provided background context for the parties' actions as they
began to unwind their relationship. Additionally, the
13The plaintiff's managing partner testified that the
conversation with the defendant's attorney went as follows:
"[The defendant's attorney] said, 'No, [the defendant]
wants to leave with his people and take all the cases and
everything with him.' And I said, 'Well, I think that's
fine as long as, you know, we get paid something fair for
our time.' I didn't really have a number in mind or even a
thought about it. And [the defendant's attorney] said,
'That sounds reasonable to me.' . . . And from then on it
was just trying to work out the details."
14Evidence of settlement discussions is not admissible to
"prove or disprove the validity or amount of a disputed claim."
Mass. G. Evid. § 408(a) (2023). Such evidence may be admitted,
however, if "it 'is relevant for some other purpose' than
proving or disproving the amount or validity of a claim."
Filbey v. Carr, 98 Mass. App. Ct. 455, 461 (2020), quoting Dahms
v. Cognex Corp., 455 Mass. 190, 198-199 (2009). See Mass. G.
Evid. § 408(b) (2023).
13
conversation took place before any claim was made by either
party or any litigation loomed on the horizon. It merely showed
how the parties' business relationship ended, without any
discussion of liability or damages. See, e.g., Slive & Hanna,
Inc. v. Massachusetts Comm'n Against Discrimination, 100 Mass.
App. Ct. 432, 442 n.19 (2021) (statements admissible where they
were relevant to claim that did not exist when statements were
made).
b. Time and billing records. To support its quantum
meruit claim, the plaintiff introduced time records of three
attorneys who worked for the OWCP practice. At trial, the
defendant objected to the evidence on the basis of inadequate
foundation, contending that the witness through whom the records
were introduced had inadequate understanding of the billing
software through which the time records were entered, stored,
and reported. We discern no abuse of discretion in the judge's
ruling that the plaintiff's managing partner was competent to
describe how the firm's time records were maintained. See Mass.
G. Evid. § 901(a) (2023) (authentication satisfied where
proponent "produce[s] evidence sufficient to support a finding
that the item is what the proponent claims it is"). The
managing partner also testified to the manner in which the
records were created, using the plaintiff's billing software
program. This testimony, along with the testimony describing
14
and authenticating the records, laid a sufficient foundation for
the introduction of the evidence; the omission of additional
information, such as custody of the records, went to the weight,
not the admissibility, of the evidence.15 There was no error in
admitting the time records.16
3. Motion for judgment notwithstanding the verdict and for
new trial. Following the jury's verdict, the defendant moved
unsuccessfully for judgment notwithstanding the verdict and for
new trial on the ground that, among other things, the verdict
was against the weight of the evidence. A judge may set aside a
verdict as against the weight of the evidence only when, drawing
all inferences in favor of the nonmoving party, the judge
determines that "the jury 'failed to exercise an honest and
reasonable judgment in accordance with the controlling
principles of law.'" O'Brien v. Pearson, 449 Mass. 377, 384
(2007), quoting Robertson v. Gaston Snow & Ely Bartlett, 404
15To the extent the defendant separately asserts, for the
first time on appeal, that the records were inadmissible
hearsay, we note that the defendant's argument devolves to a
challenge to the judge's finding that the evidence met the
foundational requirements for admission as a business record.
16The defendant's argument that the time records were
"unethically obtained" is unavailing. See Commonwealth v.
Clerk-Magistrate of the W. Roxbury Div. of the Dist. Court, 439
Mass. 352, 361 n.7 (2003) ("Arguments relegated to a footnote do
not rise to the level of appellate argument"). It fails in any
event, since the time records were business records of the
plaintiff, not confidential client information the plaintiff was
prohibited from disclosing.
15
Mass. 515, 520, cert. denied, 493 U.S. 894 (1989). We review
the defendant's claim of error for an abuse of discretion. See
O'Brien, supra.Assuming (without deciding) that the defendant is correct
in his contention that the agreement required the plaintiff to
designate an attorney to devote one hundred percent of the
attorney's professional time to the OWCP practice,17 the evidence
at trial was sufficient to establish that three different
attorneys were designated to support the defendant's OWCP
practice at various times and were prepared to devote one
hundred percent of their time to the practice. Though the
defendant approved each designation, he thereafter refused to
work with each of the three. The evidence was sufficient to
support the jury's conclusion that the plaintiff did not commit
a breach of the agreement by failing to designate an attorney to
devote one hundred percent of their time to the OWCP practice,
and we discern no abuse of discretion by the trial judge in
denying the defendant's motion to set aside the verdict.
Judgment affirmed.
17As the plaintiff observes, the relevant provision of the
agreement stated that "[i]t is contemplated that sometime prior
to the expiration of [y]ear [one], [the plaintiff] will
designate an attorney to devote [one hundred percent] of his/her
professional time to the OWCP Practice" (emphasis added).