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Biewald v. Seven Ten Storage Software, Inc.

Appeals Court of Massachusetts, Essex

October 31, 2018

OLIVER C. BIEWALD
v.
SEVEN TEN STORAGE SOFTWARE, INC., & others.[1]

          Heard: December 4, 2017.

         Civil action commenced in the Superior Court Department on October 18, 2012.

         A motion for summary judgment was heard by Robert N. Tochka, J.; the case was tried before Diane M. Kottmyer, J.; a motion for judgment notwithstanding the verdict was heard by Kottmyer, J.; and a motion for costs was considered by Kottmyer, J.

          Sarah A. Catignani for the plaintiff.

          Bradley L. Croft (Michael J. Duffy also present) for the defendants.

          Present: Green, Maldonado, & Kinder, JJ.

          MALDONADO, J.

         Oliver C. Biewald commenced this action against his former employer, Seven Ten Storage Software, Inc., now known as Brojaban, Inc., and Seven Ten Software, LLC (collectively, Seven Ten), and several of its executives asserting a variety of claims related to the nonpayment of sales commissions. A Superior Court judge dismissed most of those claims on the defendants' motion for summary judgment. A second judge then presided over a trial of the remaining claims, at the conclusion of which the jury found largely in favor of Biewald and awarded him damages for violations of the Wage Act, G. L. c. 149, § 148, and breach of his employment agreement. In response to the defendants' motion for judgment notwithstanding the verdict, however, the trial judge, who had reserved ruling on the defendants' motions for a directed verdict during the trial, vacated the verdict and ordered judgment for the defendants. The judge concluded that Biewald's claims were barred by the unambiguous provisions of his employment agreement. She further concluded that, even assuming the employment agreement was ambiguous, the verdict could not be sustained on any reasonable view of the evidence. On appeal from the final judgment, Biewald challenges that ruling and the dismissal of certain claims on summary judgment.[2]He also appeals from a post judgment order awarding costs to the defendants. We affirm.

         Background.

         On June 22, 2007, Seven Ten, a "startup" company that developed and marketed data storage software, entered into a written agreement (employment agreement) with Biewald to employ him as vice president of strategic sales. Under the terms of the employment agreement, Biewald was entitled to an annual salary of $60, 000 and to commissions as follows:

"3.4 Commissions. The Employee shall receive payment for any sale, purchase, transfer, or contract for the services, licenses, and/or products -- for internal use, distribution or for resale -- of Employer products/services ('Sale') to the companies defined in and agreed upon in the attached Exhibit A (Exclusive List) at such time as any consideration for such sale is provided to Employer, whether in the form of purchase orders, promissory notes, letters of intent, monies, cash, stock, options for stock, or any other consideration in any form whatsoever ('Consideration'); the commission shall be 50% (fifty percent) of said sale. . . .
"3.4.1 Guaranteed contracts. For all OEM/Partner/Reseller/Distributor contracts signed with a committed and guaranteed revenue stream to Employer, Employee shall receive, in addition to the commissions stated in Section 3.4, Five Percent (5%) of the guaranteed revenue payable upon execution of such agreement. Commissions on contract hereunder will be paid upon receipt of payment by OEM/Partner/Reseller/Distributor."

         The employment agreement had no defined term and instead provided that Biewald was an at-will employee, who could be terminated at any time, with or without cause. Upon such termination, the employment agreement further provided, in section 2, that only certain sections of the employment agreement would survive. Sections 3.4 and 3.4.1 were not included among those sections.

         Approximately two years later, on September 2, 2009, Seven Ten, through Biewald's efforts, entered into a distributor agreement (EMC contract) with EMC Corporation (EMC) that fell within section 3.4 of Biewald's employment agreement. However, because the EMC contract did not provide Seven Ten with a committed or guaranteed revenue stream, it did not qualify as a "guaranteed contract" under section 3.4.1 of the employment agreement.[3] In fact, while EMC had the right under the EMC contract to make purchases from Seven Ten, it was not obligated to do so. The only way that Seven Ten could realize revenue under the EMC contract was if EMC subsequently chose to submit a purchase order. Theoretically, the EMC contract could expire without EMC ever having submitted an order. Seven Ten, meanwhile, was obligated to pay EMC $51, 000 over the term of the EMC contract for admittance to EMC's so-called "Select" program.

         At the time, Seven Ten was, like many companies, struggling in the wake of the worldwide financial crisis and facing an uncertain future unless it could secure a fresh infusion of capital. In the summer of 2009, a new investor -- an "angel" investor -- had surfaced. The new investor conditioned its investment on Seven Ten's implementation of various changes, including the reform of existing employment contracts. On October 9, 2009, therefore, ...


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