DANIEL J. O'CONNOR & another 
EDDIE F. KADRMAS. DANIEL J. O'CONNOR
KADRMAS EYE CARE NEW ENGLAND, P.C., & another.
Heard: December 5, 2018.
actions commenced in the Superior Court Department on
September 20, 2013, and January 11, 2016. The cases were
heard by Angel Kelley Brown, J., on motions for summary
Timothy J. Perry for Eddie F. Kadrmas.
Russell J. Fleming for Kadrmas Eye Care New England, P.C.
H. Lamkin for Daniel J. O'Connor & another.
Present: Green, C.J., Wolohojian, & Wendlandt, JJ.
two cases arise out of the unhappy breakup of an
ophthalmology practice. Only two issues are before us. The first is
whether, in no. 18-P-177 (which we shall call the common law
case), summary judgment was properly entered against Eddie F.
Kadrmas on his counterclaims for breach of fiduciary duty and
breach of contract against Daniel J. O'Connor. The second
is whether, in no. 18-P-178 (which we shall call the Wage Act
case), summary judgment was properly entered in favor of
O'Connor on his Wage Act and breach of contract
the common law case, we reverse the ruling on Kadrmas's
breach of fiduciary duty claim because there are genuine
issues of material fact sufficient to go to a jury, and
affirm the dismissal of Kadrmas's contract claim because
he has not shown damages. In the Wage Act case, we conclude
that compensation due under paragraph V(a) of the stock
agreement does not constitute "wages" within the
meaning of G. L. c. 149, § 148 (Wage Act), and therefore
reverse summary judgment in O'Connor's favor on his
Wage Act claim. Also in the Wage Act case, we affirm the
entry of summary judgment in O'Connor's favor on his
contract claim because Kadrmas failed to raise any genuine
issue of disputed fact.
August 8, 2005, Charles T. Post, Kadrmas, and O'Connor
entered into a stock agreement whereby Kadrmas, at
O'Connor's and Post's invitation, joined them in
their ophthalmology practice in Plymouth, which was renamed
Post, O'Connor & Kadrmas Eye Centers, P.C.
stated objectives of the stock agreement were to
"provide for the continuity and maintenance of the
proficient management, control and operation of the business
of the [c]orporation," and to "restrict the
transfer of the shares of the [c]orporation and . . . the
disposition of the shares of a deceased or retiring
[s]hareholder." Consistent with this, most of the
agreement deals with matters of corporate governance and
share ownership, transfer, and disposition.
one paragraph of the stock agreement (paragraph V) concerns
the shareholders' professional responsibilities to POK,
and the compensation they were to receive as shareholders. In
broad summary, paragraph V provides (1) that each shareholder
"agrees to devote his full time and attention ... to
performing medical services on behalf" of POK, (2) that
POK agrees to provide all necessary office, administrative,
medical, and other supplies and support, and (3) a formula
for calculating each shareholder's entitlement to the net
profit of POK. That formula calculated each shareholder's
entitlement to POK's net profit based on his percentage
contribution to the entire "net collections" of the
three shareholders. Thus, to illustrate, if a particular
shareholder's practice generated five percent of the
"net collections" of the three shareholders
collectively, then that shareholder would receive five
percent of the net profit of the entire corporation. Had the
parties not arranged matters in this way, the net profit of
the corporation would instead have been distributed in
thirds, consistent with each shareholder's percentage
ownership of the shares in the corporation, which was a
Subchapter S corporation (S corporation).
parties thereafter profitably operated POK under the stock
agreement, with O'Connor acting as president, Post as
treasurer, and Kadrmas as secretary. POK had nine physicians
and optometrists and a number of other employees. POK also
had a relationship with Plymouth Laser and Surgical Center,
P.C. (PLSC), which was owned by O'Connor and Post (but
not Kadrmas). PLSC provided ophthalmic laser and surgical
services, and granted operating privileges to physicians
(including Kadrmas). PLSC was located in the same building as
POK, and the two entities shared certain costs, although
there was no written agreement to share expenses.
in 2008, O'Connor, Post, and Kadrmas began discussing a
possible merger of POK with Ophthalmic Consultants of Boston,
Inc. (OCB), an ophthalmology practice that was interested in
expanding into the Plymouth market. By the spring of 2011,
Post and O'Connor favored a deal with OCB, but Kadrmas
did not -- at least in part because OCB refused to hire his
(Kadrmas's) wife as part of the deal. O'Connor and
Post decided (secretly, Kadrmas alleges) to try to move
forward without Kadrmas but, in August 2011, OCB stated it
was not interested in a merger until the three shareholders
had resolved their differences.
20, 2012, Candescent Partners -- an unrelated entity -- made
an offer to acquire both POK and PLSC for $7 million and to
employ O'Connor and Kadrmas. Post, who planned to retire,
was in favor of this deal. However, the proposed compensation
for O'Connor and Kadrmas would be less than what they
received from POK; thus O'Connor and Kadrmas did not
favor the deal, and POK rejected Candescent's offer.
long thereafter, on July 10, 2012, OCB notified O'Connor,
Post, and Kadrmas that its board of directors had voted to
terminate merger discussions. OCB, however, continued with
its plan to enter the Plymouth market and, to that end, hired
Kathleen Murphy, the longtime administrator of POK, who had
close and longstanding ties to O'Connor and Post, to help
set up a Plymouth operation. O'Connor then contacted OCB
to reinitiate discussions about himself alone becoming
affiliated with OCB. OCB agreed to discuss this option,
provided O'Connor remove himself from POK after giving
one year's notice as required under the stock agreement.
November 16, 2012, O'Connor gave notice of his intent to
terminate his services, sell his shares in accordance with
the stock agreement, and resign as an officer, director, and
shareholder of POK. Not until five months later, however, did
O'Connor disclose that he intended to leave POK in order
to go to OCB. In response to the information that
O'Connor intended to leave for a direct competitor,
Kadrmas demanded to know O'Connor's departure date
and stated that "[i]t is not in the best interests of
the practice for us to simply allow you to plan to go into
competition with POK, lay the groundwork for that
competition, keep us guessing at your departure date and then
walk out the door when a competing entity is set to go."
"I am glad that you finally stated the obvious in your
email, i.e, that it is your 'intent is [sic] to
join OCB' after you depart. Your prior lawyers had denied
you were negotiating with OCB even after it became clear that
that denial was not true. The fact that you are planning to
join our direct competitor is not consistent with furthering
the best interests of POK. Because of this, I believe it only
makes sense that you resign your position as a shareholder
during the pendency of your planned exit -- i.e. immediately.
Otherwise, you have an impermissible and irresistible
conflict of interest."
further stated that he would not allow O'Connor to
solicit POK employees or doctors.
Kadrmas's protests, O'Connor, Post, and Murphy
continued with their plans to join OCB. Accordingly, on June
28, 2013, O'Connor signed "term sheets"
concerning his future affiliation with OCB. On the same day,
O'Connor and Post executed a term sheet for the sale of
some PLSC shares to certain members of OCB. On August 1,
2013, Post sold twenty percent of his PLSC shares, and PLSC
merged with OCB. Kadrmas's surgical privileges at PLSC
were not renewed, thus leaving him no convenient venue for
between the three shareholders, which were already
acrimonious, deteriorated further as O'Connor's and
Post's departures solidified and approached. On October
4, 2013, Post notified O'Connor and Kadrmas that he
wished to retire and gave his one-year notice under the stock
agreement; he asked whether they would buy his shares
immediately. O'Connor was set to depart on or before
March 1, 2014. Murphy began employment with OCB on January 1,
2014, and immediately began to help with the process of
filling positions for OCB's new office, which was located
in the same office complex as POK.
January 29, 2014, the pictures and biographies of six POK
doctors appeared on OCB's website, where they were seen
by a patient who informed Kadrmas. All six were still
employees of POK. Kadrmas's counsel immediately e-mailed
O'Connor's counsel and demanded that the information
be taken off the website and that O'Connor cease and
desist from soliciting POK physicians and other employees.
O'Connor was still the president of POK when this
occurred but took no action to remove the information from
the website. However, the pictures and biographies were
removed the same day.
than one month before O'Connor's departure date, on
what came to be referred to as "D-day," February
12, 2014, twelve POK employees (who included some, but not
all, of the doctors who had previously appeared on OCB's
website, as mentioned above) gave written notice of their
resignation from POK, effective at the end of February or
early March. This mass departure was timed to coincide with
O'Connor's departure from POK, which occurred on
February 28, 2014. All twelve employees left to join
O'Connor at OCB, and began working at OCB the first week of
supplemental response to an interrogatory seeking disclosure
of experts and their opinions, Kadrmas identified three
experts and their expected testimony regarding (1)
Kadrmas's loss of income on and after December 31, 2013,
as caused by the actions of O'Connor and others, and (2)
the fair market value of Kadrmas's one-third interest in
POK at different points in time. In summary, the experts'
opinion was that, as a consequence of the departures of
O'Connor and other POK doctors and staff, Kadrmas lost
$1, 990, 000 in income for 2014 through 2016. Further, the
experts opined that POK's fair market value as of June
19, 2012 (the date of Candescent's offer to purchase POK)
was $3, 262, 000, and Kadrmas's one-third interest was
accordingly valued at $1, 087, 333.33. As of December 31,
2016, however, POK had a value of negative $210, 000, and
Kadrmas's one-third interest had no value. In reaching
this conclusion, the experts pointed to (among other things):
(1) Kadrmas had received virtually no compensation for three
years after December 31, 2013, despite there being no
diminishment in his collections or workload, (2) there was no
market for an ophthalmology practice operating in this
manner, where the industry expectation was a thirty-five
percent return on billable collections, and (3) there had
been no offers to purchase POK or its stock since the mass
departure of O'Connor and others.
The common law case.
and OCB brought the common law case against Kadrmas asserting
a variety of claims in order to resolve various patient and
practice separation issues that the parties could not resolve
among themselves. In response, Kadrmas asserted numerous
counterclaims, only two of which are currently at issue:
O'Connor breached his fiduciary duty as a shareholder in
a close corporation, and O'Connor breached the terms of
the stock agreement. Kadrmas's breach of fiduciary duty
counterclaim rested on three theories: first, that
O'Connor breached the duties of full disclosure and
fidelity with respect to his dealings with OCB; second, that
O'Connor breached the duty to promote POK's interests
and those of his fellow shareholders over his own
self-serving interests; and third, that O'Connor failed
to refrain from self-dealing at the expense of POK and
Kadrmas. Kadrmas's breach of contract counterclaim did
not specifically ...