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Tam v. Federal Management Co.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

November 30, 2016

Siew-Mey Tam, on Behalf of Herself and Others Similarly Situated et al.
v.
Federal Management Co., Inc. et al No. 135570

         Filed December 1, 2016

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTION FOR DECERTIFICATION OF CLASS ACTION

          Edward P. Leibensperger, Justice

         On December 16, 2015, this court (Brieger, J.) allowed a motion to certify a class of current and former employees of Federal Management Co., Inc. (" Federal") alleging the failure of Federal to pay them for overtime hours worked. The class of employees certified was " all current and former Property Managers" employed by Federal from January 1, 2005, to the present.[1] The Court carefully reviewed each of the prerequisites for class certification under Mass.R.Civ.P. 23 and found that they were satisfied. Among other findings, the Court concluded that on the pre-discovery record plaintiffs, Siew-Mey Tam and Mary Jane Raymond, were adequate representatives of a class of approximately 40 current or former property managers. Defendants took an interlocutory appeal of the class certification order. The Appeals Court affirmed. Following the certification, discovery by both sides ensued, including the depositions of the named plaintiffs.

         Federal, and the individual defendants, now move to decertify the class based, principally, on the ground that discovery has shown that Tam and Raymond are not adequate class representatives. Defendants also take the opportunity to ask the Court to re-visit all of the other criteria for class certification. For the reasons stated below, the motion will be allowed.

         BACKGROUND

         In the Class Cert. Order, Judge Brieger noted that the facts of this case are relatively straightforward and undisputed. Federal manages seventeen residential, commercial and retail properties, providing building operations, financial administration, leasing and regulatory compliance services. For each property Federal employs a property manager who may have anywhere from two to seventeen employees reporting to her/him. Raymond was employed by Federal as a property manager from February 1990 to March 2011. Tam was employed by Federal as a property manager from May 2005 to May 2012.

         Tam and Raymond allege that they were paid a salary and an annual bonus, but no additional amount for overtime hours worked. According to the Class Cert. Order, Tam and Raymond acknowledge that upon inquiring to Federal about overtime pay, Federal informed them that, as property managers, they were exempt from the legal requirement to pay overtime. That is because they were allegedly employed, as described in the pertinent statute, G.L.c. 151, § 1A, " as a bona fide executive, or administrative or professional person earning more than eighty dollars per week." Plaintiffs now contest that categorization. They assert that they should proceed as a class consisting of all persons employed by Federal as property managers to challenge Federal's position that they are exempt employees.

         In the Class Cert. Order, the court rejected plaintiffs' argument that they were entitled to class treatment under a " similarly situated" theory based on the language in G.L.c. 149, § 150 and c. 151, § 1B. Instead, the court analyzed whether plaintiffs met the requirements for a class action under Mass.R.Civ.P. 23. The court discussed each element required for class certification and concluded that class certification was appropriate. The court also noted that discovery might affect the class certification calculus. For example, defendants' argument that some putative class members may be barred by the statute of limitations was deferred for consideration " [i]n light of ongoing discovery." Class Cert. Order, p. 7 n.7. Also, with respect to the " commonality" requirement, the court noted that " Federal contends that Plaintiffs' common law claims fail to satisfy the 'commonality' requirement because not all of the individual Property Managers seeking to be joined to the potential class performed the exact same duties as the other property managers. In light of ongoing discovery such arguments are better addressed at the summary judgment stage. Here, the court assesses only whether Plaintiffs have made the baseline showing for class certification under Rule 23." Class Cert. Order, p. 8 n.8.

         Defendants appealed the certification of the class. On February 9, 2016, the Appeals Court denied defendants' petition. The court wrote " I discern no error in the judge's careful exercise of her 'broad discretion to certify or decertify a class.' The factual bases alleged by the defendants to support decertification are appropriate subjects for continued discovery, properly consigned to the judge's superintendence of the case, and may provide the basis for additional motions at an appropriate time." (Citation omitted.)

         On June 21, 2016, the parties appeared before the court (Ames, J.). The purpose of the hearing was to determine the substance of class notice and process. Defendants used the occasion to bring before the court the deposition of Tam that had been taken on May 26, 2016. Defendants alleged that Tam's deposition testimony was grossly and materially inconsistent with her affidavit that had been submitted to the court in connection with plaintiffs' motion to certify the class. The court agreed that the deposition testimony " calls into credibility essential issues that were considered by the court in certification." Transcript, June 21, 2016, p. 1-32. As a result, the court stayed the issue of class notice and gave leave to defendants to serve and file a motion to decertify the class.

         Subsequently, this action was transferred to the Business Litigation Session. On September 23, 2016, defendants filed their motion for decertification. Oral argument was heard on the motion on October 26, 2016.

         Defendants provided as Exhibit F to the Affidavit of Michael C. Birch a copy of the Affidavit of Siew-Mey Tam, dated September 5, 2014, submitted by plaintiffs in support of their motion to certify the class. Next to the paragraphs of the Affidavit, defendants inserted citations to Tam's deposition testimony that contradict or concede as error or as unsupported, key portions of the Affidavit. I have reviewed the deposition testimony cited by defendants.[2]

         In her Affidavit, Tam stated that she did not interview, select, train or supervise any employees. In her deposition, however, she testified that she did interview potential employees, and supervise and evaluate the performance of employees. When confronted with her Affidavit, she admitted that her statements in the Affidavit were not true. In her Affidavit, Tam stated that she was not responsible for preparing and/or planning the budget for her property. In her deposition, however, she testified that she did prepare budgets. She admitted in her deposition that her Affidavit was " wrong" and " incorrect." These are two significant examples of numerous other inconsistencies in her Affidavit as compared to her deposition.

         For class certification, it was also important to know whether other property managers employed by Federal were similarly situated with Tam such that their factual presentation would be common to all property managers. In her Affidavit, Tam averred that " all" property managers regularly worked more than 40 hours per week and their duties did not include the exercise of discretion and independent judgment. Specifically, she stated that property managers did not carry out major assignments, formulate, affect, interpret or implement policies or operating practices and were not involved in planning long or short-term business objectives. In her deposition, however, Tam admitted that she ...


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