NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
22-P-950
ERICA DIPLACIDO & others1
vs.
ASSURANCE WIRELESS OF SOUTH CAROLINA, LLC, & others.2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The defendants jointly appeal from an order of a Superior
Court judge that refused to compel arbitration of the
plaintiffs' claims. In July 2019, the plaintiffs filed a
class action complaint, alleging that the various defendants
violated Massachusetts wage laws and failed to pay the
plaintiffs fully for work performed. As set forth in the
complaint, the defendants fall into two groups: (1) the
defendants Boss Enterprises and Kuralay Bekbossynova (the Boss
defendants), with whom the plaintiffs had a written employment
agreement that contained an arbitration clause, and (2)
defendants Assurance Wireless of South Carolina and Sprint
1 Tyler Keeley and Ryan LaBrie. 2 Kuralay Bekbossynova; Boss Enterprise, Inc.; and Sprint Corporation. Corporation (collectively, Sprint), with whom the plaintiffs
did not have a written agreement but whom the plaintiffs
allege were also their employer. The judge denied arbitration
as to the Boss defendants on the ground that the motion was
moot, due to his (incorrect) understanding that the claims as
to Boss had been settled. He denied arbitration as to Sprint
because Sprint was a nonsignatory to the arbitration
agreement, and because in light of the nature of the
plaintiffs' claims, Sprint could not compel arbitration under
a theory of equitable estoppel. For the following reasons, we
affirm the denial of the motion as to Sprint, although
arbitration is appropriate as to the Boss defendants.
Background. We summarize the relevant background as
follows. Sprint Corporation and Assurance Wireless of South
Carolina, LLC, are corporations that jointly sell wireless
services. Boss Enterprise, Inc. (Boss), is a corporation that
entered a partnership with Sprint to obtain the services of
representatives to go door to door to market Sprint's wireless
services. Appellant Kuralay Bekbossynova is the president and
treasurer of Boss. The plaintiffs are some of the
representatives who went door to door in 2018 to market Sprint's
wireless services.
2 Before performing their door-to-door marketing, each
plaintiff signed a document labeled "Employment Agreement" (the
employment agreements). The employment agreements contained an
arbitration provision which provided that "[a]ny claims that an
Employee may have against the Company (except for worker's
compensation or unemployment insurance benefits), and any claims
the Company may have against Employee shall be resolved by an
arbitrator and not in a court proceeding." The employment
agreements listed "Company/Employer" as Boss Enterprise and each
respective plaintiff as "Employee." The employment agreements
also stated that the arbitration provision in the employment
agreements is explained more fully in a separate document (the
arbitration agreements).
On July 12, 2019, the plaintiffs filed a class action
complaint, alleging nine claims in total, with three claims
against each defendant individually3: failure to pay plaintiffs
all the wages to which they were entitled; violation of minimum
wages laws; and failure to pay one and a half times the regular
hourly rate for overtime. On February 11, 2021, all defendants
jointly moved to compel arbitration, arguing that the employment
agreements and the arbitration agreements compelled the
plaintiffs to arbitrate their claims against all defendants.
3 Defendants Sprint Corporation and Assurance Wireless of South Carolina, LLC are collectively treated as Sprint.
3 The plaintiffs filed an opposition to the defendants' motion to
compel, and the motion judge heard oral arguments on July 21,
2021. On July 29, 2021, the motion judge denied the motion as
to the claims against Sprint. In his decision, the judge
erroneously stated, that the "plaintiffs settled their claims
against Boss and Bekbossynova" and accordingly found that the
motion to compel as it related to those defendants was moot.
Discussion. All parties agree that Sprint was not a party
to the employment agreements or the incorporated arbitration
agreements. The defendants argue that despite this, the judge
erred in denying their motion to compel arbitration as to Sprint
for two reasons. First, they argue that the judge erred in
concluding that the doctrine of equitable estoppel did not apply
in this case. Second, they contend that the judge based his
decision on an untrue fact: that Boss and Bekbossynova had
settled with the plaintiffs. In reviewing this decision, we
defer to the motion judge on questions of fact unless they are
clearly erroneous, Licata v. GGNSC Malden Dexter LLC, 466 Mass.
793, 796 (2014), but we review the denial of the motion to
compel arbitration de novo. Machado v. System4 LLC, 471 Mass.
204, 208 (2015). We address each of the defendants' arguments
in turn.
1. Equitable estoppel. "[I]t remains a fundamental
principle that arbitration is a matter of contract, not
4 something to be foisted on the parties at all costs." Landry v.
Transworld Sys. Inc., 485 Mass. 334, 338 (2020) (citations and
quotations omitted). Despite this general principle,
"[e]quitable estoppel typically allows a nonsignatory to compel
arbitration in either of two circumstances: (1) when a
signatory must rely on the terms of the written agreement in
asserting its claims against the nonsignatory or (2) when a
signatory raises allegations of substantially interdependent and
concerted misconduct by both the nonsignatory and one or more of
the signatories to the contract." Machado, 471 Mass. at 211
(citations and quotations omitted). Defendants argue, as they
did below, that the second circumstance applies because the
plaintiffs' claims against the Boss defendants and Sprint are
substantially interdependent and alleged concerted misconduct.
We disagree.
To determine whether the claims of misconduct are
substantially interdependent and concerted, we first look to the
face of the complaint. See Machado, 471 Mass. at 215. Here,
the plaintiffs have crafted separate counts in the complaint
against each defendant based upon their individual actions and
have not alleged that the misconduct was conducted in concert.
Compare Id. at 215-216 (finding equitable estoppel applies where
"plaintiffs have lumped the two defendants together[and]. . .
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NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule 23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as rule 1:28, as amended by 73 Mass. App. Ct. 1001 [2009]), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 23.0 or rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
COMMONWEALTH OF MASSACHUSETTS
APPEALS COURT
22-P-950
ERICA DIPLACIDO & others1
vs.
ASSURANCE WIRELESS OF SOUTH CAROLINA, LLC, & others.2
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The defendants jointly appeal from an order of a Superior
Court judge that refused to compel arbitration of the
plaintiffs' claims. In July 2019, the plaintiffs filed a
class action complaint, alleging that the various defendants
violated Massachusetts wage laws and failed to pay the
plaintiffs fully for work performed. As set forth in the
complaint, the defendants fall into two groups: (1) the
defendants Boss Enterprises and Kuralay Bekbossynova (the Boss
defendants), with whom the plaintiffs had a written employment
agreement that contained an arbitration clause, and (2)
defendants Assurance Wireless of South Carolina and Sprint
1 Tyler Keeley and Ryan LaBrie. 2 Kuralay Bekbossynova; Boss Enterprise, Inc.; and Sprint Corporation. Corporation (collectively, Sprint), with whom the plaintiffs
did not have a written agreement but whom the plaintiffs
allege were also their employer. The judge denied arbitration
as to the Boss defendants on the ground that the motion was
moot, due to his (incorrect) understanding that the claims as
to Boss had been settled. He denied arbitration as to Sprint
because Sprint was a nonsignatory to the arbitration
agreement, and because in light of the nature of the
plaintiffs' claims, Sprint could not compel arbitration under
a theory of equitable estoppel. For the following reasons, we
affirm the denial of the motion as to Sprint, although
arbitration is appropriate as to the Boss defendants.
Background. We summarize the relevant background as
follows. Sprint Corporation and Assurance Wireless of South
Carolina, LLC, are corporations that jointly sell wireless
services. Boss Enterprise, Inc. (Boss), is a corporation that
entered a partnership with Sprint to obtain the services of
representatives to go door to door to market Sprint's wireless
services. Appellant Kuralay Bekbossynova is the president and
treasurer of Boss. The plaintiffs are some of the
representatives who went door to door in 2018 to market Sprint's
wireless services.
2 Before performing their door-to-door marketing, each
plaintiff signed a document labeled "Employment Agreement" (the
employment agreements). The employment agreements contained an
arbitration provision which provided that "[a]ny claims that an
Employee may have against the Company (except for worker's
compensation or unemployment insurance benefits), and any claims
the Company may have against Employee shall be resolved by an
arbitrator and not in a court proceeding." The employment
agreements listed "Company/Employer" as Boss Enterprise and each
respective plaintiff as "Employee." The employment agreements
also stated that the arbitration provision in the employment
agreements is explained more fully in a separate document (the
arbitration agreements).
On July 12, 2019, the plaintiffs filed a class action
complaint, alleging nine claims in total, with three claims
against each defendant individually3: failure to pay plaintiffs
all the wages to which they were entitled; violation of minimum
wages laws; and failure to pay one and a half times the regular
hourly rate for overtime. On February 11, 2021, all defendants
jointly moved to compel arbitration, arguing that the employment
agreements and the arbitration agreements compelled the
plaintiffs to arbitrate their claims against all defendants.
3 Defendants Sprint Corporation and Assurance Wireless of South Carolina, LLC are collectively treated as Sprint.
3 The plaintiffs filed an opposition to the defendants' motion to
compel, and the motion judge heard oral arguments on July 21,
2021. On July 29, 2021, the motion judge denied the motion as
to the claims against Sprint. In his decision, the judge
erroneously stated, that the "plaintiffs settled their claims
against Boss and Bekbossynova" and accordingly found that the
motion to compel as it related to those defendants was moot.
Discussion. All parties agree that Sprint was not a party
to the employment agreements or the incorporated arbitration
agreements. The defendants argue that despite this, the judge
erred in denying their motion to compel arbitration as to Sprint
for two reasons. First, they argue that the judge erred in
concluding that the doctrine of equitable estoppel did not apply
in this case. Second, they contend that the judge based his
decision on an untrue fact: that Boss and Bekbossynova had
settled with the plaintiffs. In reviewing this decision, we
defer to the motion judge on questions of fact unless they are
clearly erroneous, Licata v. GGNSC Malden Dexter LLC, 466 Mass.
793, 796 (2014), but we review the denial of the motion to
compel arbitration de novo. Machado v. System4 LLC, 471 Mass.
204, 208 (2015). We address each of the defendants' arguments
in turn.
1. Equitable estoppel. "[I]t remains a fundamental
principle that arbitration is a matter of contract, not
4 something to be foisted on the parties at all costs." Landry v.
Transworld Sys. Inc., 485 Mass. 334, 338 (2020) (citations and
quotations omitted). Despite this general principle,
"[e]quitable estoppel typically allows a nonsignatory to compel
arbitration in either of two circumstances: (1) when a
signatory must rely on the terms of the written agreement in
asserting its claims against the nonsignatory or (2) when a
signatory raises allegations of substantially interdependent and
concerted misconduct by both the nonsignatory and one or more of
the signatories to the contract." Machado, 471 Mass. at 211
(citations and quotations omitted). Defendants argue, as they
did below, that the second circumstance applies because the
plaintiffs' claims against the Boss defendants and Sprint are
substantially interdependent and alleged concerted misconduct.
We disagree.
To determine whether the claims of misconduct are
substantially interdependent and concerted, we first look to the
face of the complaint. See Machado, 471 Mass. at 215. Here,
the plaintiffs have crafted separate counts in the complaint
against each defendant based upon their individual actions and
have not alleged that the misconduct was conducted in concert.
Compare Id. at 215-216 (finding equitable estoppel applies where
"plaintiffs have lumped the two defendants together[and]. . .
consistently charged both [defendants] with equal wrongs, [and]
5 fail[ed] to distinguish them."). Moreover, it is evident from
the complaint that the claims against the two defendants
actually rely on differing facts: the claims against the Boss
defendants are based upon an express contractual agreement and
allegations of what the plaintiffs did for Boss; the claims
against the Sprint defendants are not based upon that
contractual agreement, but instead are based upon factual
allegations regarding actions of Sprint, and upon the contention
that the plaintiffs were "actually the employees" of Sprint, and
that Sprint misclassified them as independent contractors.
Accordingly, the complaint expressly does not "lump
together" the Boss defendants and Sprint, and the theory of
liability as to Sprint is distinct, requiring proof of facts
that are not necessary as to the claims against Boss. The case
is thus quite different than Machado, supra. While we recognize
that the claims against the Boss defendants and the claims
against Sprint will have some overlap of witnesses and evidence,
that is not the test for whether a nonsignatory to an
arbitration agreement can compel arbitration.4 A plaintiff who
did not enter an arbitration agreement with another party should
not be forced to arbitrate their separate and distinct claims
4 Our de novo review of this motion to compel arbitration is not, and cannot be, solely based on judicial economy. See Miller v. Cotter, 448 Mass. 671, 684-685 (2007).
6 against that party. Here the plaintiffs have treated the
defendants differently for substantive reasons, and equitable
estoppel does not bind the plaintiffs to arbitrate their claims
against Sprint in this case.
2. Untrue fact. All parties agree that the judge's
factual finding that that "plaintiffs settled their claims
against Boss and Bekbossynova" was erroneous. The record does
not support, however, the defendants' argument that the judge's
ruling against Sprint as to the motion to compel was based on
that fact. Even if it was, our review of the motion to compel
is de novo and does not rely on this error. For that reason, we
affirm the judge's ruling as it relates to Sprint. However,
inasmuch as the plaintiffs agree that they had an express
arbitration agreement with Boss, and because the plaintiffs did
not settle their claims with the Boss defendants, we hold that
the motion to compel as it related to the Boss defendants was
not moot. Accordingly, the denial of the motion to compel
arbitration as to the Boss defendants was in error and must be
reversed.
Conclusion. So much of the order as denied the motion to
compel arbitration as to the defendants Assurance Wireless of
South Carolina, LLC, and Sprint Corporation is affirmed. So
much of the order as denied the motion to compel arbitration as
to the defendants Boss Enterprises, Inc. and Kuralay
7 Bekbossynova is reversed. The matter is remanded to the
Superior Court for further proceedings consistent with this
decision.
So ordered.
By the Court (Blake, Englander & Walsh, JJ.5),
Clerk
Entered: April 21, 2023.
5 The panelists are listed in order of seniority.