Date March 21, 2016
MEMORANDUM OF DECISION AND ORDER
J. Curran, Associate Justice.
defendant Dailybreak/CP, LLC's has filed a motion to
dismiss, that has since been converted into a motion for
summary judgment. It asserts that, under the language of its
Asset Purchase Agreement with Dailybreak Inc., it is
not its successor-in-interest. Therefore, Dailybreak/CP
argues that it cannot be liable to Mr. Pontacolini for unpaid
wages. For the reasons that follow, the defendant's
motion for summary judgment is DENIED.
take, as we must, all evidence and reasonable inferences
drawn from that evidence, in the light most favorable to the
non-moving party (here, Mr. Pontacolini).
13, 2013, Nicholas Pontacolini entered into an employment
agreement with Dailybreak, Inc. under which he was hired as
its Regional Sales Director. The agreement specified the
terms of Mr. Pontacolini's employment, his duties, and
detailed a compensation plan which included both a
semi-monthly base salary of $5, 000 and a commission-based
salary. The latter was based on a quarterly sales plan, and
allowed Mr. Pontacolini to earn up to $105, 000.
the agreement, Mr. Pontacolini began his employment as
Regional Sales Director with Dailybreak, Inc. on July 9,
2013. However, the relationship between the two parties
quickly unraveled. By October 7, 2013, Dailybreak, Inc. no
longer employed Mr. Pontacolini. The parties offer
conflicting reasons for the dissociation. Dailybreak, Inc.
stated that Mr. Pontacolini resigned from his position, but
Mr. Pontacolini claims that Dailybreak, Inc. wrongly
terminated him after he gave notice he would be moving to
Portland, Maine. After the separation, Mr. Pontacolini, under
the impression he was entitled to commissions earned during
the course of his employment, attempted to settle the issue
with Dailybreak, Inc. but that effort bore no fruit.
Dailybreak, Inc. denied that it owed Mr. Pontacolini any
compensation for his work, and communications between the
parties broke down.
Pontacolini subsequently filed a Non-Payment of Wage and
Workplace Complaint with the Office of the Attorney
General's Fair Labor Division, alleging that Dailybreak,
Inc. wrongfully withheld $13, 125 in sales commission owed to
him under the employment agreement. After review, the Fair
Labor Division authorized Mr. Pontacolini to pursue his case
against Dailybreak, Inc. through a " private right of
action." That process took some months to complete.
September 4, 2014, however, Dailybreak, Inc. and
Dailybreak/CP, LLC entered into an Asset Purchase
Agreement. In relevant part, the Agreement stated that
Dailybreak, Inc. agreed to sell all of its assets--including
the rights to the name " Dailybreak" and its
website, " dailybreak.com" --to Dailybreak/CP for
$175, 000 plus earned payouts. Dailybreak/CP also agreed to
assume specific liabilities of Dailybreak, Inc., to operate
the business in its ordinary course and as a separate
business unit apart from the other businesses of Connelly
Partners, to fund the operating deficit of Dailybreak, Inc.
up to $825, 000, and to sublease Dailybreak, Inc.'s
Boston office. Furthermore, the Agreement was conditioned on
Dailybreak, Inc.'s termination of all employees, but
curiously required Dailybreak/CP to hire those same
employees--including Chief Executive Officer John Federman,
Chief Technology Officer Jared Stenquist, Chief Marketing
Officer Nancy Liberman, and co-founder Boris Revsin--at the
13, 2015, Mr. Pontacolini commenced this action under G.L.c.
149, § 148 for the unpaid commissions owed to him. He
alleges that Dailybreak/CP is a successor-in-interest to
Dailybreak, Inc., and is therefore liable for unpaid wages
court should grant summary judgment when, viewing the
evidence in the light most favorable to the nonmoving party,
all material facts have been established and the moving party
is entitled to a judgment as a matter of law. Bank of
N.Y. v. Bailey, 460 Mass. 327, 331, 951 N.E.2d 331
(2011). The party moving for summary judgment has the burden
of establishing that there is no genuine issue of material
fact on every relevant issue, even if the party would not
have the burden on the issue if the case were to go to trial.
Matthews v. Ocean Spray Cranberries, Inc., 426 Mass.
122, 127, 686 N.E.2d 1303 (1997). This burden may be
satisfied by affirmative evidence negating an essential
element of the opposing party's case or by establishing
that proof of that element is unlikely to be forthcoming at
trial Flesner v. Technical Commc'ns Corp., 410
Mass. 805, 809, 575 N.E.2d 1107 (1991).
Massachusetts adheres to the corporate law principle that the
liabilities of a selling predecessor corporation are not
imposed on the successor corporation which purchases its
assets unless: 1) the successor expressly or impliedly
assumes liability of the predecessor; 2) the transaction is a
de facto merge or consolidation; 3) the successor is
a mere continuation of the predecessor; or 4) the transaction
is a fraudulent effort to avoid liabilities of the
predecessor. Cargill, Inc. v. Beaver Coal & Oil Co.,
Inc., 424 Mass. 356, 359, 676 N.E.2d 815 (1997). In
determining whether to characterize an asset sale as a de
facto merger, courts consider: 1) whether there is a
continuation of the enterprise of the seller corporation so
that there is continuity of management, personnel, physical
location, assets, and general business operations; 2) whether
there is a continuity of shareholders which results from the
purchasing corporation paying for the acquired assets with
shares of its own stock, this stock ultimately coming to be
held by the shareholders of the seller corporation so that
they become a constituent part of the purchasing corporation;
3) whether the seller corporation ceases its ordinary
business operations, liquidates, and dissolves as soon as
legally and practically possible; and 4) whether the
purchasing corporation assumes those obligations of the
seller ordinarily necessary for the uninterrupted
continuation of normal business operations of the seller
corporation. Milliken & Co. v. Duro Textiles,
LLC, 451 Mass. 547, 557, 887 N.E.2d 244 (2008). Finally,
no single fact is necessary or sufficient to establish a
de facto merger. Id.
support of its motion for summary judgment, Dailybreak/CP
thrusts forward its Asset Purchase Agreement with Dailybreak,
Inc., alleging that the Agreement has immunized itself from
liability as against Mr. Pontacolini's claim. However,
viewing the Agreement in the light most favorable to Mr.
Pontacolini, this language is insufficient to ...