dinan v. alpha networks, inc, 1st cir. (2014)

7/26/2019 Dinan v. Alpha Networks, Inc, 1st Cir. (2014)

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United States Court of AppealsFor the First Circuit

No. 13- 1976MI CHAEL DI NAN,

Pl ai nt i f f , Appel l ant ,

v.

ALPHA NETWORKS, I NC.

Def endant , Appel l ee.

APPEAL FROM THE UNI TED STATES DI STRI CT COURTFOR THE DI STRI CT OF MAI NE

[ Hon. J ohn A. Woodcock, J r . , U. S. Di st r i ct J udge]

Bef or e

Lynch, Chi ef J udge,Sel ya and Kayat t a, Ci r cui t J udges.

Pat r i ck S. Bedard, wi t h whom Bedard & Bobr ow, P. C. was onbr i ef , f or appel l ant .

Dani el P. Schwar z, wi t h whomJ ackson Lewi s, P. C. was on br i ef ,f or appel l ee.

August 20, 2014


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KAYATTA, Circuit Judge. Mi chael Di nan, a r esi dent of

Mai ne, began worki ng f or Cal i f orni a- based Al pha Net works as a

sal esman i n 2005 pur suant t o a wr i t t en empl oyment agr eement . I n

2010 Di nan ceased worki ng f or Al pha because of a di sput e over how

much he was ent i t l ed t o be pai d i n commi ssi ons. Li t i gat i on

f ol l owed. A j ur y ul t i mat el y f ound t hat t he wr i t t en agr eement

i ncl uded no pr omi se t o pay Di nan commi ssi ons on sal es af t er 2008,

but t hat Di nan was ent i t l ed t o quasi - cont r act damages i n t he amount

of $70, 331. 93 f or sal es made i n 2009 and 2010. The quest i on t hen

r emai ned whet her t o t r ebl e t hose damages and award at t orneys' f ees

under Mai ne' s wage payment l aw, or i nst ead t o add on t o t he damage

awar d onl y l i qui dat ed damages of $7, 799. 97 under Cal i f or ni a l aw.

Fi ndi ng t he quest i on t o be a cl ose one, t he di st r i ct cour t opt ed t o

r el y on a choi ceof - l aw pr ovi si on i n t he wr i t t en agr eement cal l i ng

f or appl i cat i on of Cal i f or ni a l aw i n cer t ai n di sput es. Agr eei ng

t hat det er mi ni ng t he cor r ect choi ce of l aw on t hi s unusual r ecor d

i s not st r ai ght f or war d, we never t hel ess f i nd t hat Mai ne' s hi ghest

cour t woul d most l i kel y deem Di nan ent i t l ed t o t he f ul l ar r ay of

r emedi es set f or t h i n Mai ne' s wage payment l aw. We t heref ore vacat e

t he awar d and r emand t he case so that t he di st r i ct cour t can t r ebl e

damages, cal cul at e i nt er est , and ent er t ai n a r equest f or at t or neys'

f ees under Mai ne l aw.

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I. Background

The par t i es do not di sput e t he basi c f act s on appeal .

Al pha i s a Cal i f orni a- based desi gner and manuf act ur er of modems,

r out ers, swi t ches, and ot her comput er har dware. Rat her t han market

i t s pr oduct s under i t s own br and, Al pha i s a "whi t e- l abel "

manuf act ur er , sel l i ng t o ot her compani es who market t he devi ces

under t hei r br and names. Di nan' s j ob was t o sel l Al pha' s devi ces

t o t hose br ands. When Di nan j oi ned Al pha i n 2005, he l i ved i n

Por t l and, Mai ne. Though he i ni t i al l y t hought he mi ght have t o move

t o Bost on, Al pha ul t i mat el y concl uded t hat he coul d wor k f r omMai ne.

Pr i or t o commenci ng wor k f or Al pha, Di nan si gned a l et t er f r omAl pha

speci f yi ng t he terms of hi s empl oyment ( " t he 2005 agr eement " ) whi ch

pr ovi ded t hat Al pha woul d pay hi m, i n par t , based on a speci f i ed

commi ssi on st r uct ur e.

Af t er he j oi ned Al pha, Di nan spent hi s f i r st week and a

hal f i n Cal i f or ni a l ear ni ng about Al pha and i t s pr oduct s.

Ther eaf t er he wor ked f r om hi s home i n Por t l and except when he

t r avel ed t o meet cust omer s i n ot her st at es, i ncl udi ng Texas,

Al abama, and Massachuset t s. I n 2008, Al pha sent an emai l t o Di nan

cont ai ni ng a new commi ssi on st r uct ur e ( " t he 2008 compensat i on

pl an" ) . Di nan t hought t hat t he 2008 compensat i on pl an was l i kel y

t o compensat e hi m l ess t han t he commi ssi on st r uct ur e i n t he 2005

agr eement . He expr essed hi s unhappi ness t o hi s bosses and,

accor di ng t o hi s t r i al t est i mony, was pr omi sed a new compensat i on

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pl an f or sal es i n 2009, t hough he was not pr omi sed t hat i t woul d

pr ovi de hi m wi t h bet t er t er ms t han t he 2008 compensat i on pl an. No

new compensat i on pl an was ever announced.

Di nan l ef t Al pha i n March 2010, havi ng r ecei ved no

commi ss i ons on hi s sal es i n 2009 or 2010 asi de f r oma $4, 000 payment

t hat he r ecei ved i n December of 2009. Shor t l y t her eaf t er , Di nan

f i l ed sui t i n Mai ne st at e cour t . Af t er Al pha r emoved t he case t o

f eder al cour t i t pr oceeded t o t r i al . At t r i al , t he j ur y was asked

t o consi der , among ot her t hi ngs, Di nan' s cl ai ms f or br each of

cont r act and, al t er nat i vel y, f or so- cal l ed quasi - cont r act damages.

The j ury concl uded t hat Di nan had not "est abl i shed t hat Al pha . . .

and he entered i nto an empl oyment agr eement i n whi ch Al pha . . .

pr omi sed t o pay hi mcommi ssi ons f or 2009 and 2010. " I t never t hel ess

al so f ound t hat Di nan had "est abl i shed t hat he [ was] ent i t l ed t o

damages under quasi - cont r act , " t hat t he amount of t hose damages was

$70, 331. 93, and t hat he had "est abl i shed t hat Al pha . . . f ai l ed t o

pay [ hi m] hi s wages, i ncl udi ng commi ssi ons. "

Af t er t r i al t he par t i es di sagr eed about whi ch st at e' s l aw

gover ned whet her and t o what ext ent t he j ury' s award of damages

shoul d be augment ed wi t h addi t i onal r emedi es. Under Cal i f orni a l aw,

t he part i es agr ee, Di nan woul d be ent i t l ed t o 30 days' wages ( whi ch

t he j ur y val ued at $7, 799. 97) as l i qui dat ed damages i n addi t i on t o

t he $70, 331. 93 i n compensat ory quasi - cont r act damages awarded by t he

j ury. See Cal . Lab. Code 203. The par t i es al so agree t hat , under

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Mai ne l aw, Di nan woul d be ent i t l ed t o a l i qui dat ed damages award of

doubl e hi s compensat ory damages, equal i ng an addi t i onal $140, 663. 86,

as wel l as at t or neys' f ees and cost s. See Me. Rev. St at . t i t . 26,

626. The di st r i ct cour t f ound t hat Cal i f or ni a l aw appl i ed. Di nan

al so ar gued unsuccessf ul l y bel ow t hat he was ent i t l ed t o pr e-

j udgment i nt er est on any l i qui dat ed damages he was awar ded. I d.

II. Standard of Review

Thi s appeal present s excl usi vel y quest i ons of l aw, not

f act or di scret i on, hence our r evi ew i s de novo. See, e. g. ,

Robi doux v. Muhol l and, 642 F. 3d 20, 22 ( 1st Ci r . 2011) . Wi t h

j ur i sdi ct i on i n t he Di st r i ct of Mai ne r est i ng sol el y on di ver si t y

of ci t i zenshi p, we answer t hese subst ant i ve quest i ons of l aw as we

expect Mai ne' s hi ghest cour t , i t s Law Cour t , woul d answer t hem.

See, e. g. , Samaan v. St . J oseph Hosp. , 670 F. 3d 21, 29 ( 1st Ci r .

2012) .

III. Discussion

A. The Choice of Law Question

Resol vi ng t he choi ceof - l aw i ssue cent r al t o thi s appeal

begi ns wi t h consi der i ng t he par t i es' 2005 agr eement speci f yi ng t he

or i gi nal t er ms of Di nan' s empl oyment . That agr eement i ncl uded t he

f ol l owi ng cl ause:

The t er ms of t hi s l et t er shal l be governed by andconst r ued and enf orced i n accor dance wi t h t he l aws of t heSt at e of Cal i f or ni a, wi t hout gi vi ng ef f ect t o any choi ceor conf l i ct of l aw pr ovi si on or r ul e ( whet her of t heSt at e of Cal i f or ni a or any ot her j ur i sdi ct i on) t hat woul d

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cause t he appl i cat i on of t he l aws of any j ur i sdi ct i onot her than t he St at e of Cal i f or ni a. Any t er m orpr ovi si on of t hi s l et t er agr eement t hat i s i nval i d orunenf or ceabl e i n any si t uat i on i n any j ur i sdi ct i on shal lnot af f ect t he val i di t y or enf or ceabi l i t y of t her emai ni ng t er ms and pr ovi si ons her eof or t he val i di t y or

enf or ceabi l i t y of t he of f endi ng t er m or pr ovi si on i n anyot her si t uat i on or i n any ot her j ur i sdi cti on.

See Di nan v. Al pha Networks I nc. , 957 F. Supp. 2d 44, 54 ( D. Me.

2013) . Under Mai ne l aw, t hi s choi ce of l aw pr ovi si on woul d gover n

a cl ai m f or br each of t he 2005 agr eement unl ess ( 1) Cal i f or ni a had

no subst ant i al r el at i onshi p t o t he par t i es or t he t r ansact i on or ( 2)

appl yi ng Cal i f or ni a l aw woul d be cont r ar y t o "a f undament al pol i cy

of a st at e whi ch has a mat er i al l y gr eat er i nt er est " t han Cal i f or ni a

as t o t he "det er mi nat i on" of t hi s par t i cul ar i ssue. Schr oeder v.

Rynel , Lt d. , 720 A. 2d 1164, 1166 ( Me. 1998) ; Rest at ement ( Second)

of Conf l i ct of Laws 187 ( 1971) .

Al pha i n f act sought t o bui l d i t s def ense at t r i al on t he

f oundat i on of t he 2005 agr eement . I t argued t hat t he 2008

compensat i on pl an was a modi f i cat i on of t he 2005 empl oyment

agr eement , t hat Di nan accept ed t he modi f i cat i on by cont i nui ng t o

work f or Al pha, and t hat t he 2005 agr eement , as modi f i ed by t he 2008

compensat i on pl an, set f or t h t he t er ms of Al pha' s promi se t o pay

commi ssi ons f or 2009 and 2010. Consi st ent wi t h t hi s appr oach, Al pha

agr eed t o a j ur y i nst r uct i on as f ol l ows:

The par t i es have present ed evi dence of a 2005compensat i on pl an and a 2008 compensat i on pl an. I f youdet ermi ne t hat an agr eement was i n f or ce i n 2009 and2010, you must det ermi ne t he t erms of t hat agr eement .Al pha cont ends t hat a 2008 compensat i on pl an modi f i ed t he

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2005 empl oyment agreement . An empl oyee who cont i nues t owork f or hi s empl oyer af t er t he empl oyer has gi ven not i ceof changed t erms and condi t i ons of empl oyment hasaccept ed t he changed t er ms and condi t i ons. I f you f i ndt he 2008 pl an was i n pl ace dur i ng 2009 and 2010, you mayf i nd t hat Mr . Di nan i s ent i t l ed t o compensat i on under

t hat pl an.

Thi s was a seemi ngl y sol i d ar gument , but t he j ury r ej ect ed

i t . The j ur y f ound t hat Al pha and Di nan had no agr eement t hat Al pha

woul d pay commi ss i ons f or 2009 and 2010. I n one r espect , t hi s meant

t hat Al pha won t he br each of cont r act cl ai m. I n another r espect ,

t hough, t he j ur y' s ver di ct i s mor e cl ear l y r ead as a f i ndi ng t hat

t he 2005 agr eement si mpl y di d not govern t he t erms of t he par t i es'

r el at i onshi p i n 2009 and 2010 ( i . e. , i n t he wor ds of t he di st r i ct

cour t ' s i nst r uct i on, i t was not "i n f or ce i n 2009 and 2010") .

The ver di ct f or m, accor di ngl y, r equi r ed t he j ury t o

pr oceed f ur t her and consi der an al t er nat i ve cl ai m of

"quasi - cont r act " i f i t f ound t hat t her e was no pr omi se i n an

empl oyment agr eement t o pay commi ssi ons f or 2009 and 2010. The j ury

ver di ct f or Di nan t hus r est ed ent i r el y upon a cl ai m f or "breach of

a quasi - cont r act . " The j ur y i nst r uct i ons, t o whi ch Al pha di d not

obj ect , st at ed as f ol l ows:

Mr . Di nan cl ai ms t hat even i f he di d not have a val i dcont r act wi t h Al pha t hat ent i t l ed hi m t o bonuses, he i sent i t l ed t o payment f or t he ser vi ces he r ender ed. Thi s

amount s t o a cl ai m t hat he and Al pha had a quasicont r act .

To prove a cl ai m of breach - - f or br each of a quasicont r act , Mr . Di nan must pr ove by a pr eponderance of t heevi dence t hat : One, he r ender ed servi ces t o Al pha; t wo,t he ser vi ces were r endered wi t h Al pha' s knowl edge and

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consent ; and, t hr ee, t he servi ces wer e r ender ed underci r cumst ances t hat make i t r easonabl e f or t he pl ai nt i f ft o expect payment .

I n f i ndi ng Al pha l i abl e on t hi s t heor y al one, t he j ur y f ound Al pha

i ndependent l y l i abl e not by f or ce of pr omi se, but by vi r t ue of

knowi ngl y havi ng accept ed ser vi ces "under ci r cumst ances t hat make

i t r easonabl e f or [ Di nan] t o expect payment . "

Thi s br i ngs us back t o t he choi ceof - l aw cl ause i n Al pha' s

l et t er t o Di nan t hat const i t ut ed t he 2005 agr eement . Whi l e Al pha

cl ai ms t hat t he cl ause gover ns " di sput es about t he par t i es'

empl oyment r el at i onshi p, " i t i s i n f act nar r ower t han t hat . I t

st at es onl y t hat "[ t ] he t er ms of t hi s l et t er " ar e t o be "gover ned

by and const r ued and enf orced" under Cal i f orni a l aw. The quest i on

of what f ai r compensat i on i s due Di nan under a quasi - cont r act t heor y

cal l s f or no const r uct i on or enf or cement of t he t er ms of t hat

l et t er . Rat her , i nst ead of t el l i ng t he j ur y t o cal cul at e damages

based on a readi ng of t he 2005 agr eement , t he cour t ( agai n wi t hout

chal l enge) t ol d t he j ur y t o det er mi ne " t he r easonabl e val ue of t he

ser vi ces. "

Al pha al so ar gues t hat what r eal l y happened here i s t hat

t he j ur y came up wi t h a mi ssi ng t er m of t he 2005 agr eement ( i . e. ,

a compensat i on pl an f or 2009 and 2010) . Such an appr oach cer t ai nl y

woul d have made much sense i n t he abst r act . The pr obl emi s t hat t he

j ury cl ear l y f ound no breach of any promi se of any t ype, whether

expr ess or i mpl i ed, under t he 2005 agr eement , i nst ead ef f ect i vel y

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f i ndi ng t hat t he agr eement si mpl y di d not deal wi t h 2009 and 2010

commi ss i ons. And t he 2005 agr eement on i t s f ace di savows havi ng any

unexpr essed t er ms, st at i ng t hat i t " f orm[ s] t he compl et e and

excl usi ve st atement of [ Di nan' s] empl oyment wi t h [ Al pha] . " I n any

event , si nce Al pha agr eed t hat t he j ur y coul d consi der a cl ai m f or

br each of quasi - cont r act even where t he part i es had an act ual

cont r act , and si nce t he j ur y f ound no br each of any pr omi se i n t he

2005 agr eement , i t cannot now say t hat t he j ur y shoul d onl y have

been al l owed t o hol d i t l i abl e f or a br each of a ter m of t he 2005

agr eement , whet her expr ess or "mi ssi ng. "

I n sum, t he part i es' 2005 choi ceof - l aw agr eement about

t he l aw t o be appl i ed i n const r ui ng and enf orci ng t he 2005 agr eement

does not appl y t o a dut y that , t he j ur y f ound, ar ose out si de of t hat

agr eement . And whi l e Al pha argues t hat t he j ur y' s ver di ct seems

har d t o r econci l e wi t h t he f act s, Al pha has f i l ed no cr oss- appeal

chal l engi ng ei t her t he j ur y i nst r ucti ons or t he j ur y' s f i ndi ng on

t he quasi - cont r act cl ai m, and so we must accept t hat f i ndi ng of

l i abi l i t y as a gi ven.

Ant i ci pat i ng t hat we mi ght f i nd t hat t he choi ceof - l aw

pr ovi si on i n t he 2005 agr eement does not di r ect l y appl y t o Di nan' s

quasi - cont r act cl ai m, Al pha advances t wo argument s f or appl yi ng t he

choi ceof - l aw agr eement i ndi r ect l y. Fi r st , i t ar gues t hat because

quasi - cont r act cl ai ms are a t ype of cont r act cl ai m, we shoul d appl y

t o t he quasi - cont r act cl ai mt he same choi ce of l aw t hat t he par t i es

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agr eed woul d appl y to a cl ai m f or br each of t he 2005 agr eement .

Whi l e we agr ee wi t h Al pha t hat a quasi - cont r act cl ai m shar es much

i n common wi t h a br each of cont r act cl ai m, see Paf f hausen v. Bal ano,

708 A. 2d 269, 271 n. 3 ( Me. 1998) , i t does not f ol l ow t hat a choi ce-

of - l aw cl ause i n t he 2005 agr eement must t her ef ore appl y t o any

i ssues ar i si ng under t he quasi - cont r act cl ai m. For exampl e, even

i f par t i es have t wo act ual cont r act s, onl y one of whi ch has a

choi ceof - l aw cl ause concer ni ng i t s enf or cement , t her e i s no r eason

si mpl y t o assume t hat t he choi ceof - l aw cl ause al so appl i es t o the

second cont r act . I nst ead, we woul d l i kel y i nf er t hat t he par t i es

l ef t out such a cl ause i n t he second cont r act because t hey di d not

want i t . Her e, si mi l ar l y, gi ven t he f act t hat t he par t i es di d not

agr ee t o a br oad choi ceof - l aw cl ause cover i ng al l deal i ngs t hey

mi ght have, i t makes sense t o i nf er j ust t he opposi t e of what Al pha

woul d have us i nf er .

Second, Al pha al so poi nt s t o deci si ons t hat appl y

cont r act ual choi ceof - l aw pr ovi si ons t o non- cont r act cl ai ms t hat ar e

r el at ed t o a cont r act br ought by one par t y t o t he cont r act agai nst

t he other . See Ne. Data Sys. , I nc. v. McDonnel l Dougl as Comput er

Sys. Co. , 986 F. 2d 607, 610 ( 1st Ci r . 1993) ( " [ W] hen par t i es agr ee

t hat ' cont r act r el at ed' cl ai ms wi l l be t r i ed under , say, t he l aw of

Cal i f or ni a, t hey do not mean t hat a cl ai m of ' ser i ous' or

' r ascal - l i ke' br each of cont r act wi l l be t r i ed under . . .

Massachuset t s [ Gener al Laws Chapt er 93A] . " ) ; St onyf i el d Far m, I nc.

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v. Agr o- Farma, I nc. , 08- CV- 488, 2009 WL 3255218 at *6 ( D. N. H. Oct .

7, 2009) ( appl yi ng cont r act ual choi ceof - l aw pr ovi si on t o t or t

cl ai ms pr edi cat ed on br each of cont r act ) . I t i s pr eci sel y t hi s

ar gument t hat t i pped t he bal ance ( al bei t wi t h "some hesi t at i on" ) f or

t he abl e di st r i ct cour t j udge. Di nan v. Al pha Net wor ks I nc. , 957

F. Supp. 2d 44, 55 ( D. Me. 2013) . I f Di nan' s cl ai m cal l ed f or

enf or ci ng obl i gat i ons ar i si ng f r om t he t er ms of t he 2005 agr eement

( even usi ng non- cont r act t heor i es) , t hi s ar gument woul d get t o f i r st

base. Her e, t hough, t he obl i gat i on bei ng enf or ced woul d have

exi st ed even had t her e never been a cont r act . I n ot her words, whi l e

t he concept of quasi - cont r act l i abi l i t y i s cer t ai nl y r el at ed t o t he

concept of l i abi l i t y f or br each of cont r act, t he speci f i c i mpl i ed

agr eement f ound t o exi st her e does not r est on t he 2005 agreement

bet ween t he par t i es t hat i s t he sol e subj ect of t he choi ceof - l aw

cl ause. I t i s, i n shor t , not a "breach- of - t he- 2005- agr eement - pl us"

cl ai m; i t i s an "even- t hough- no- br each- of - t he- 2005- agr eement " cl ai m.

Havi ng t hus r ej ect ed t he ar gument t hat t he 2005 agreement

r esol ves t he choi ceof - l aw i ssue, we must l ook el sewher e t o

det er mi ne what l aw appl i es t o enf or ci ng t he f r ee- st andi ng, i mpl i ed

obl i gat i on upon whi ch t he j ur y r est ed i t s ver di ct . Mai ne l aw

pr ovi des no cer t ai n answer . Whi l e we mi ght t her ef or e cer t i f y t he

quest i on t o Mai ne' s Law Cour t pur suant t o Mai ne Revi sed St atut es

t i t l e 4, sect i on 57, nei t her par t y so r equest s, t he case has al r eady

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once t aken such a det our t o r esol ve a quest i on of st at e l aw, 1 and

our anal ysi s, descr i bed bel ow, l eaves us suf f i ci ent l y conf i dent t hat

our own answer accur at el y pr edi ct s how t he Law Cour t woul d resol ve

t hi s quest i on.

To deter mi ne what st at e' s l aw appl i es t o enf or ci ng t he so-

cal l ed quasi - cont r act , Di nan poi nt s t o sect i on 196 of t he

Rest at ement ( Second) of Conf l i ct of Laws ( 1971) , whi ch st at es:

The val i di t y of a cont r act f or t he r endi t i on of ser vi cesand t he r i ght s cr eat ed t her eby ar e det er mi ned, i n t heabsence of an ef f ect i ve choi ce of l aw by t he par t i es, byt he l ocal l aw of t he st at e wher e t he cont r act r equi r est hat t he ser vi ces, or a maj or por t i on of t he ser vi ces, ber ender ed, unl ess, wi t h r espect t o t he par t i cul ar i ssue,

some ot her st at e has a mor e si gni f i cant r el at i onshi punder t he pr i nci pl es st at ed i n 6 t o t he t r ansact i on andt he par t i es, i n whi ch t he event t he l ocal l aw of t heot her st at e wi l l be appl i ed.

Comment b t o sect i on 196 expl ai ns f ur t her t hat :

The i mpor t ance i n t he choi ceof - l aw pr ocess of t he pl acewher e t he ser vi ces, or a maj or por t i on of t he ser vi ces,ar e t o be r ender ed . . . enj oys gr eat est si gni f i cancewhen t he work i s t o be more or l ess st at i onary and i s t oext end over a consi der abl e per i od of t i me. Thi s i s t r ueof a cont r act f or empl oyment on t he or di nar y l abor f or ceof a par t i cul ar f act or y. By way of cont r ast , t he pl acewher e t he servi ces are t o be r ender ed i s of l esseri mpor t ance when t he servi ces are t o be of r el at i vel ybr i ef dur at i on, such as when a workman i s empl oyed t o doa mi nor r epai r j ob i n a gi ven st at e, or when t heempl oyee' s dut i es wi l l r equi r e hi m t o t r avel wi t h f ai rf r equency bet ween t wo or more st at es.

1 The di st r i ct cour t cer t i f i ed t o t he Law Cour t t he quest i onof whet her Mai ne' s wage payment st at ut e, Me. Rev. St at . t i t . 26, 626, i s appl i cabl e t o quasi - cont r act damages. See Di nan v. Al phaI nc. , 60 A. 3d 792 ( Me. 2013) .

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Mai ne has not expr essl y adopt ed sect i on 196, but t her e i s

no reason t o t hi nk i t woul d not l ook t o sect i on 196 i n t he absence

of any Mai ne pr ecedent t o t he cont r ary. See Schr oeder v. Rynel ,

Lt d. , 720 A. 2d 1164, 1166 ( Me. 1998) ( col l ect i ng "past [ Mai ne]

deci si ons f avor i ng t he use of t he Rest at ement t o r esol ve choi ce of

l aw di sput es") .

Al pha does not di r ect l y respond t o Di nan' s r el i ance on

sect i on 196. I ndeed, i t does not even ment i on sect i on 196 i n i t s

br i ef . I t does ar gue i n a f oot not e, however , t hat al t hough Di nan

made hi s cal l s f r om hi s home i n Mai ne, Al pha per f or med i t s

obl i gat i ons f r om Cal i f or ni a. Sect i on 196, t hough, l ooks pr i mar i l y

t o wher e t he par t y render i ng servi ces r ender s t hose ser vi ces, not

t o wher e the par t y payi ng f or t he servi ces oper at es.

We recogni ze t hat sect i on 196 appl i es t o cont r act s, maki ng

no ment i on of quasi - cont r act s. However , Mai ne l aw ( pur suant t o

whi ch we under t ake t hi s conf l i ct - of - l aw i nqui r y, see, e. g. , But l er

v. Bal ol i a, 736 F. 3d 609, 612 ( 1st Ci r . 2013) ) r ecogni zes t hat

quasi - cont r act cl ai ms "i nvol ve[ ] r ecover y f or ser vi ces or mat er i al s

pr ovi ded under an i mpl i ed cont r act . " Paf f hausen v. Bal ano, 708 A. 2d

269, 271 ( Me. 1998) . Whi l e a quasi - cont r act i nvol ves no act ual

agr eement , t he part i es her e bear t he same rel at i onshi ps t o Mai ne and

Cal i f orni a, and have behaved t oward each other , f or t he most part ,

as t hey woul d have i f t hey had a cont r act governi ng payment of

commi ss i ons f or 2009 and 2010. Nor i s t here any ot her sect i on of

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t he Rest at ement mor e appl i cabl e t o a quasi - cont r act cl ai m t han

sect i on 196. I n shor t , t he l ogi c under l yi ng sect i on 196 suppor t s

t he appl i cat i on of t he same pr i nci pl es t o quasi - cont r act cl ams.

We have al so r evi ewed t he recor d as a whol e, not i ng that

Di nan' s cust omer s wer e most l y or ent i r el y l ocat ed out si de of Mai ne.

Ther e i s no i ndi cat i on, t hough, t hat ser vi ces wer e r ender ed mor e

f r equent l y i n any of t hose st at es t han t hey wer e f r om Di nan' s home

base i n Mai ne. I ndeed, Di nan pr esent ed uncont est ed t est i mony t hat

"most of [ hi s] work and t i me was spent i n Mai ne. " To t he ext ent

t hat t he appl i cabi l i t y of sect i on 196 i s never t hel ess uncl ear i n

t hi s oddl y posed case, t he ver y natur e of Mai ne subst ant i ve l aw

al i gns wi t h sect i on 196' s f ocus on t he pl ace wher e servi ces ar e

r ender ed by t he empl oyee. Mai ne' s wage payment l aw, Me. Rev. Stat .

t i t . 26, 626, mani f est s on i t s f ace a l egi sl at i ve i nt ent t o

prot ect empl oyees f r om empl oyers who f ai l t o pay wages. We doubt

t hat Mai ne' s hi ghest cour t woul d f i nd that a company pr ocur i ng

servi ces f r oma Mai ne r esi dent per f ormed most l y i n Mai ne can avoi d

compl i ance wi t h Mai ne' s f ai r wage l aws merel y because the company

pr ocur i ng t he servi ces conduct s i t s own oper at i ons out si de of Mai ne.

For al l of t he f or egoi ng r easons, we f i nd t hat Mai ne

subst ant i ve l aw gover ns enf or cement of t he quasi - cont r act ual

r el at i onshi p f ound to exi st bet ween the par t i es i n 2009 and 2010.

B. Pre-Judgment Interest on Liquidated Damages

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Di nan has pr eser ved f or r evi ew hi s ar gument , r ej ect ed by

t he di st r i ct cour t , t hat pr ej udgment i nt er est shoul d be cal cul at ed

on t he basi s of hi s ent i r e j udgment f or unpai d wages and l i qui dat ed

damages, r ather t han j ust on t he basi s of t he unpai d wages. The

wage payment st at ut e i t sel f st at es t hat :

An empl oyer f ound i n vi ol at i on of t hi s sect i on i s l i abl ef or t he amount of unpai d wages and, i n addi t i on, t hej udgment r ender ed i n f avor of t he empl oyee or empl oyeesmust i ncl ude a r easonabl e r at e of i nt er est , an addi t i onalamount equal t o t wi ce t he amount of t hose wages asl i qui dat ed damages and cost s of sui t , i ncl udi ng ar easonabl e at t or ney' s f ee.

Me. Rev. St at . t i t . 26, 626. 2 Sect i on 626- A, whi ch governs

gener al l y penal t i es f or vi ol at i ng a number of st at ut or y r ul es

gover ni ng t he payment of wages, i ncl udi ng sect i on 626, cont ai ns

al most i dent i cal l anguage. 3 Thi s f or mul at i on i mpl i es, but by no

means di ct at es, t hat i nt er est i s assessed f i r st , bef or e addi ng

2

I n answer i ng t he di st r i ct cour t ' s cer t i f i ed quest i on, t heLaw Cour t hel d t hat sect i on 626 i s appl i cabl e t o quasi - cont r actdamages i f " t he ser vi ces r ender ed . . . ar e of t he t ype f or whi chan empl oyee woul d have been due wages. " Di nan, 60 A. 3d at 797.Al pha does not di sput e on appeal t hat t he di st r i ct cour t wascor r ect t o concl ude t hat sect i on 626 t her ef or e appl i es t o Di nan' squasi - cont r act damages.

3 Speci f i cal l y i t r eads i n r el evant par t :

Upon a j udgment bei ng r ender ed i n f avor of any empl oyeeor empl oyees, i n any act i on br ought t o r ecover unpai d

wages or heal t h benef i t s under t hi s subchapt er , suchj udgment i ncl udes, i n addi t i on t o t he unpai d wages orheal t h benef i t s adj udged t o be due, a reasonabl e rat e ofi nt er est , cost s of sui t i ncl udi ng a r easonabl e at t or ney' sf ee, and an addi t i onal amount equal t o t wi ce t he amountof unpai d wages as l i qui dat ed damages.

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l i qui dat ed damages. On t he ot her hand, Mai ne' s general pr ej udgment

i nt er est st at ut e, Me. Rev. St at . t i t . 14, 1602- B( 1) - ( 3) , pr ovi des

br oadl y, wi t h l i mi t ed except i ons not her e appl i cabl e, f or

pr ej udgment i nt er est i n ci vi l act i ons, and r ef er s t o i nt er est on t he

j udgment , not a por t i on of t he r ecover y maki ng up t he j udgment .

The i ssue t hus posed i s whet her t he gener al r ul e of

sect i on 1602- B i s t r umped by t he i mpl i ed l i mi t at i on one mi ght , but

need not , i nf er f r om t he l anguage of sect i ons 626 and 626- A. The

di st r i ct cour t f ound t hat sect i ons 626 and 626- A di d i ndeed l i mi t

an award of pr ej udgment i nt er est t o t he act ual damages port i on of

t he j udgment , and t hat t hi s i mpl i ed l i mi t at i on, r at her t han t he

gener al r ul e of sect i on 1602- B, cont r ol l ed. On bal ance, we

di sagr ee.

Chr onol ogy gui des our anal ysi s. Sect i on 1602- B ( f or mer l y

sect i on 1602) cont ai ns t he backgr ound r ul e t hat pr edated t he cur r ent

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ver si on of 626 and ent i r el y pr edat ed sect i on 626- A. 4 I t i s

st r uct ur ed as a gener al r ul e t hat appl i es t o al l act i ons ot her t han

cer t ai n act i ons expr essl y except ed. I t appl i es as wel l t o al l

damages, even puni t i ve damages. See Hawor t h v. Fei gan, 623 A. 2d

150, 159 ( Me. 1993) . Sect i ons 626 and 626- A, as t her eaf t er enacted,

cont ai n no l anguage expr essl y i ndi cat i ng any i nt ent i on t o cr eat e a

new except i on t o t he gener al r ul e. Fur t her more, when t he

l egi sl at ur e l at er amended sect i on 1602- B t o add, i n sect i on 1602-

B( 1) , a new except i on t o t he gener al r ul e ( f or smal l cl ai ms act i ons)

4 Pr i or t o 1975, sect i on 626 r ead si mpl y:

Any empl oyee, l eavi ng hi s or her empl oyment , shal l bepai d i n f ul l wi t hi n a reasonabl e t i me af t er demand at t heof f i ce of t he empl oyer wher e payr ol l s ar e kept and wagesar e pai d. Whoever vi ol at es any of t he pr ovi si ons of t hi ssect i on shal l be puni shed by a f i ne of not l ess t han $25nor mor e t han $50.

1975 Me. Laws 724. I n 1975 sect i on 626 was revi sed t o add t hel anguage about pr ej udgment i nt er est t hat i t cont ai ns t oday. Al soi n 1975, sect i on 626- A was f i r st enact ed cont ai ni ng t he samel anguage about prej udgment i nt er est t hat i t cont ai ns t oday. Att hat t i me sect i on 1602 r ead:

I n al l ci vi l acti ons, except t hose acti ons i nvol vi ng acont r act or not e whi ch cont r act or not e cont ai ns apr ovi si on r el at i ng t o i nt er est, i nt er est shal l beassessed f r omt he dat e on whi ch t he compl ai nt i s f i l ed i ncour t , pr ovi ded t hat i f t he pr evai l i ng par t y at any t i mer equest s and obt ai ns a cont i nuance f or a per i od i n excess

of 30 days and t he l osi ng part y at no t i me request s andobt ai ns a cont i nuance, i nt er est wi l l be assessed f r omt het i me of ent r y of j udgment . From and af t er dat e ofj udgment , i nt er est shal l be al l owed at t he r at e of 10%per year .

Me. Rev. St at . Ann. t i t . 14, 1602 ( West 1972) .

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and, i n sect i on 1602- B( 5) , a pr ovi si on t hat al l ows a t r i al cour t t o

wai ve pr ej udgment i nt er est f or good cause, i t di d not add an

except i on cover i ng wage payment cl ai ms or l i qui dat ed damages. Of

cour se, an al t er nat i ve r eadi ng of t hi s chr onol ogy i s possi bl e. One

coul d ar gue t hat t he l egi sl at ur e, i n amendi ng sect i on 1602- B, di d

exempt l i qui dat ed damages i n wage payment act i ons because i t

r egarded sect i on 626 as al r eady cr eat i ng such an exempt i on. Such

an argument , t hough, pl aces a gr eat deal of wei ght on t he not i on

t hat , mer el y by l i st i ng i nt er est second i n t he l i t any of r emedi es,

sect i on 626 cr eated such a new- - and unusual - - exempt i on f r oma l ong-

st andi ng gener al r ul e. I t seems unl i kel y, t oo, t hat mer el y by

addi ng i nt er est t o the l i st of r emedi es avai l abl e i n wage payment

act i ons t he l egi sl at ur e i nt ended t o subt r act f r om t he scope of t he

r emedi es i ndependent l y avai l abl e under sect i on 1602- B. We t hi nk i t

mor e l i kel y t hat i n enact i ng sect i on 626- A, t he l egi sl at ur e f ocused

on sect i on 626- A, and want ed t o be sur e i nt er est was avai l abl e.

Our concl usi on f i nds mor e suppor t , al bei t i ndi r ect l y, i n

Aver y v. Kennebec Mi l l work, I nc. , 861 A. 2d 634 ( Me. 2004) . Aver y

addr essed an anal ogous i ssue: Mi ght one i nf er f r om sect i on 626' s

gr ant of i nt er est at a " r easonabl e r at e" an except i on t o

sect i on 1602- B( 3) ' s gener al r ul e pr ovi di ng f or a par t i cul ar ( and

r el at i vel y hi gh) r at e ( "t he one- year Uni t ed St at es Tr easur y bi l l

r at e pl us 3%" ) ? The Law Cour t answered "no, " f i ndi ng t he general

r ul e of sect i on 1602- B cont r ol l i ng. I d. at 636. Even mor e

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si gni f i cant l y, i n so r ul i ng t he Law Cour t st r essed t hat

secti on 1602- B "appl i es t o al l ci vi l acti ons except [ t he l i st ed

except i ons] , " and t hat an act i on under sect i on 626 i s a "ci vi l

act i on. " I d. at 636 ( emphasi s i n or i gi nal ) . And whi l e t he Law

Cour t di d not expr essl y addr ess t he quest i on posed her e, i t di d

expr essl y and wi t hout qual i f i cat i on or der t hat "t he cl er k . . .

shoul d cal cul at e t he i nt er est on t he j udgment . . . i n accor dance

wi t h 14 M. R. S. A. 1602- B. " I d. The j udgment i ncl uded both

compensat ory and l i qui dat ed damages. I n shor t , even wi t hout

pr ompt i ng by t he par t i es, or t he t r i al cour t ( whi ch i t sel f appear ed

t o have assessed i nt er est on onl y the act ual wages, i d. at 636 n. 2) ,

t he Law Cour t i n Avery never t hel ess appear s t o have presumed t hat

i n a wage payment act i on i nt er est i s cal cul ated under 1602- B based

on the ent i r e j udgment , i ncl udi ng al l damages.

More gener al l y, Mai ne recogni zes t hat one pur pose of

pr ej udgment i nt er est i s t o "encour age[ ] t he def endant t o concl ude

a pr et r i al set t l ement of [ a] cl ear l y mer i t or i ous sui t [ ] . " J asch v.

Anchorage I nn, 799 A. 2d 1216, 1219 ( Me. 2002) ( i nt er nal quotat i on

mar ks omi t t ed) . Pr ej udgment i nt er est f ur t her s t hi s pur pose by

r educi ng t he benef i t of del ay to a def endant ( and si mul t aneousl y

pr eser ves t he r eal economi c val ue of t he ent i r e cl ai m) . Thi s

pur pose i s under cut i f pr ej udgment i nt er est r uns onl y on par t of t he

j udgment .

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Fi nal l y, even i f secti on 1602- B cont r ol s, t he t r i al cour t

st i l l r et ai ns t he di scret i on t o wai ve pr ej udgment i nt er est on al l

or par t of t he j udgment . See 1602- B( 5) ( "On pet i t i on of t he

nonpr evai l i ng par t y and on a showi ng of good cause, t he t r i al cour t

may or der t hat i nt er est awar ded by t hi s sect i on be f ul l y or

par t i al l y wai ved. " ) . Fami l i ar wi t h how and why a case went t o

t r i al , t he r especti ve posi t i ons of t he par t i es, and t he si ze of t he

l i qui dat ed damages, a t r i al j udge can exer ci se t hi s di scret i on t o

el i mi nat e any act ual unf ai r ness f r omt he avai l abi l i t y of pr ej udgment

i nt er est on l i qui dat ed damages i n any par t i cul ar case.

Conf i dent enough i n t he f oregoi ng anal ysi s t o r ever se t he

cont r ar y rul i ng of t he di st r i ct cour t , we never t hel ess make no cl ai m

t hat t he cor r ect answer i s cl ear . To t he cont r ar y, we consi der ed

cer t i f yi ng t he i ssue t o t he Law Cour t , deci di ng not t o do so because

no part y so r equest ed, t he case has al r eady t r avel ed t hat r out e

once, and we do not want t he t ai l t o wag t he dog as t he pl ai nt i f f

st i l l awai t s r ecei pt of even hi s wages. Cer t ai nl y not hi ng i n our

deci si on can pr event Mai ne' s cour t s f r om set t l i ng on a di f f er ent

answer i n t he many wage payment cl ai ms t hat come bef or e them. Unt i l

and unl ess Mai ne' s cour t s so concl ude, however , our best j udgment

i s t hat pr ej udgment i nt er est appl i es, as i n Aver y, t o t he j udgment .

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IV. Conclusion

For t he f oregoi ng r easons we vacat e t he j udgment of t he

di st r i ct cour t and remand the case f or f ur t her pr oceedi ngs

consi st ent wi t h t hi s opi ni on. Cost s ar e awar ded t o Di nan.

So order ed.

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dinan v. alpha networks, inc, 1st cir. (2014)

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