Heffernan v. Robeco Investment Management, Inc.

23 Mass. L. Rptr. 237
CourtMassachusetts Superior Court
DecidedOctober 25, 2007
DocketNo. 072116BLS2
StatusPublished
Cited by1 cases

This text of 23 Mass. L. Rptr. 237 (Heffernan v. Robeco Investment Management, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heffernan v. Robeco Investment Management, Inc., 23 Mass. L. Rptr. 237 (Mass. Ct. App. 2007).

Opinion

Fabricant, Judith, J.

INTRODUCTION

This action arises from the termination of the plaintiffs employment as a sales manager for investment products. The plaintiff claims that he was not paid promised commissions, that his supervisor interfered with his commission contract to usurp commissions for himself, and that his employer’s corporate parent also interfered with his commission contract for its own financial benefit. Before the Court are the motion of all defendants to dismiss for failure to state a claim on which relief may be granted, and a separate motion of defendant The Robeco Group to dismiss for lack of personal jurisdiction and inadequate service of process. After hearing, and review of all materials submitted, for the reasons that will be explained the motions will be denied.

THE ALLEGATIONS OF THE COMPLAINT

The plaintiff s complaint presents the following factual allegations. The Robeco Groep, N.V, an entity based in Rotterdam, markets and sells investment products to institutions worldwide, under the name of Robeco Group. Robeco Investment Management, Inc. (“RIM”), a Delaware corporation with an office in Boston, is a wholly owned subsidiary of Robeco Group. From late 2003 until early 2005, RIM recruited the plaintiff, Paul Heffernan, for employment.

During the recruitment process, Michael Jones, RIM’s Director of Global Marketing “stated that the compensation plan for RIM sales professionals consisted of a base salary and a commission. The base salary started at $175,000. Jones informed Heffernan that RIM sales professionals received commissions on their sales of investment products based on a percentage of revenue generated by the product sale over three years. The RIM commission structure was as follows: 20% of first year revenue, 10% of second year revenue, and 5% of third year revenue. In total, a commission constituted 35% of the revenue generated by a product sale over a three-year period. Jones indicated to Heffernan that RIM sales professionals made a yearly income between $750,000 to $1,000,000.” Heffernan joined RIM in February of 2005, with a base salary of $175,000. He “was promised a guaranteed payment of $250,000 in his first year of employment as a draw against commissions to be paid quarterly.” William Supple was his direct supervisor.

In early 2006, Heffernan made contact with PSP Investments, which was interested in making a large investment in Robeco Group’s Emerging Markets Equity (“EME”) product. After Heffernan had devoted [238]*238substantial effort to that potential sale, Supple injected himself into the process, and told Heffernan that the two of them would split the commissions. Heffernan continued to devote substantial effort to this potential sale, which culminated in a large-scale transaction in the summer of 2006.

In early 2006, Heffernan learned of a request for proposals from CalPERS, a large pension fund. Heffernan “led and managed RIM’s preparation and submission of a response to the RFP,” and then engaged in a “complex and time intensive” process of preparing for a presentation regarding Robeco’s EME product, including training Robeco Group personnel in Rotterdam to make the presentation. His efforts culminated in a large-scale contract with CalPERS, signed in the fall of 2006.

In early 2006, Heffernan heard rumors that Robeco Group “planned to change RIM’s commission structure for all sales of EME Product” by allocating two thirds of revenue on sales of EME to Robeco Group, and only one third to RIM. That allocation of revenue would effectively cut commissions for RIM sales personnel by two thirds. Supple assured Heffernan that he would prevent the change, and Heffernan continued his sales efforts “based on Supple’s assurances.” Heffernan was never informed that the rumored change had occurred.

On December 7, 2006, Heffernan was abruptly fired, without cause. He has never been paid any commissions on the PSP and CalPERS sales. The complaint alleges on information and belief that after Heffernan’s termination RIM has paid commissions on the revised basis that had been rumored, “at the direction of’ Robeco, and that Supple has received commissions on the PSP contract. The complaint further alleges on information and belief that Supple “characterized Heffernan as a dissenter and malcontent to promote his own scheme of minimizing Heffernan’s contributions to encourage his termination, and take Heffernan’s commissions for himself... motivated by his personal animus toward Heffernan and his professional successes.”

Based on these factual allegations, the complaint asserts claims of breach of contract and of the implied covenant of good faith and fair dealing against RIM and Robeco Group (counts I and II), promissory estop-pel or unjust enrichment against RIM and Robeco Group (count III), and interference with contractual relations against Supple and Robeco Group (counts IV and V).

DISCUSSION

1. The Motion of All Defendants to Dismiss for Failure to State a Claim.

All defendants move to dismiss all counts for failure to state a claim. As to counts I and II, they contend that the alleged contract is unenforceable under the statute of frauds, and that the factual allegations do not identify the Robeco Group as a party to it. As to count III, they contend that the alleged representations regarding commissions are insufficient to support reasonable reliance. Regarding Count IV, defendants argue both that the complaint fails to allege an enforceable contract, and that it does not sufficiently allege that Supple acted with actual malice. Finally, as to count V, defendants argue that the claim is inconsistent with Heffernan’s allegation against Robeco Group that it breached his commission contract, and that the complaint does not sufficiently allege that Robeco Group acted with malice.

In considering a motion to dismiss, the Court must take the well-pleaded allegations in the complaint as true and must make all reasonable inferences in favor of the plaintiff. See Harvard Law Sch. Coalition for Civil Rights v. President & Fellows of Harvard College, 413 Mass. 66, 68 (1992); General Motors Acceptance Corp. v. Abington Cas. Ins. Co., 413 Mass. 583, 584 (1992); Okerman v. VA Software Corporation, 69 Mass.App.Ct. 771, 774-75 (2007). A complaint may properly be dismissed for failure to state a claim when it appears certain “that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Nader v. Citron, 372 Mass. 96, 98 (1977), quoting from Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The Court applies this standard here.

A. The Statute of Frauds.

The parties agree that the contract alleged in the complaint is subject to the statute of frauds, G.L.c. 259, §1, 5, in that it could not be fully performed within one year. See Meng v. Trustees of Boston Univ., 44 Mass.App.Ct. 650, 651-52 (1998). Relying on the statute, the defendants contend that the contract-based claims in the complaint must be dismissed because the complaint does not allege that the contract was in 'writing. A plaintiff need not affirmatively allege a writing to survive a motion to dismiss; to the contraiy, the statute of frauds is an affirmative defense, as to which the burden of pleading and proof is on the defendant. See Mass.R.Civ.P. 8(c).

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Bluebook (online)
23 Mass. L. Rptr. 237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heffernan-v-robeco-investment-management-inc-masssuperct-2007.