Guldseth v. Family Medicine Associates LLC
Guldseth v. Family Medicine Associates LLC
Opinion
United States Court of Appeals For the First Circuit
No. 21-1212
DAVID GULDSETH, MD,
Plaintiff, Appellant,
v.
FAMILY MEDICINE ASSOCIATES LLC; GREGORY BAZYLEWICZ, MD,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Allison D. Burroughs, U.S. District Judge]
Before
Barron, Chief Judge, Thompson and Howard, Circuit Judges.
Keith L. Sachs, with whom DDSK Law was on brief, for appellant. Guy P. Tully, with whom Jackson Lewis P.C. was on brief, for appellees.
August 16, 2022 THOMPSON, Circuit Judge. Today's case illustrates the
reason why the age-old adage "get that in writing" withstands the
test of time. Following an employment relationship gone wrong,
David Guldseth, MD, brought a seven-count complaint against his
former employer, Family Medicine Associates LLC ("FMA"), and one
of its members, Gregory Bazylewicz, MD (together with FMA, the
"FMA Defendants"). The district court granted the FMA Defendants'
motion for summary judgment on all seven counts. On appeal, Dr.
Guldseth challenges that ruling on six counts, conceding the
futility of one. After careful review, we affirm.
WHAT LED US HERE
A Perfect Match
In the spring of 2012, Dr. Guldseth was a licensed
physician in Tennessee looking for a new job to relocate his family
to either the East Coast or California. A recruiter connected him
with FMA located in Manchester, Massachusetts and Dr. Bazylewicz,
a physician and FMA partner.1 Dr. Bazylewicz was in the market
for a new doctor to take over his practice, as he hoped to retire
in the near future. So Dr. Bazylewicz reached out via email to
1FMA's operating agreement refers to its owners as "members," but the district court and the briefs use the term "partner" to refer to ownership.
- 2 - Dr. Guldseth to inquire about his interest in taking over the
practice at FMA.
In May, the two doctors spoke over the phone about the
opportunity. Dr. Guldseth claims that during this call, very clear
promises were made to him by Dr. Bazylewicz about what would be
included in the deal. If he joined the practice, Dr. Guldseth
would take over Dr. Bazylewicz's practice as well as his
partnership interest after eighteen months, Dr. Bazylewicz
supposedly said. Dr. Guldseth also claims that Dr. Bazylewicz
told him that in addition to the money he would make from seeing
patients, his compensation would include income from a lab that
FMA owned and the rental income on the office building.
Unfortunately for Dr. Guldseth, this conversation was not recorded
or transcribed. After these positive conversations and an in-
person visit, FMA sent Dr. Guldseth a written offer of employment
in July of 2012.
The employment offer from FMA laid out the key terms of
Dr. Guldseth's prospective employment -- but (and this is the brass
ring) it did not mention partnership at all. A few weeks after
receiving the offer document, Dr. Guldseth signed and returned it.
FMA then sent Dr. Guldseth a detailed, formal draft employment
agreement (the "Employment Agreement") spelling out the terms of
the relationship. Dr. Guldseth reviewed the agreement without
seeking advice from legal counsel. After assessing the written
- 3 - proposal, Dr. Guldseth contacted FMA's administrator, Elizabeth
Hill, and posed several detailed questions about specific aspects
of the agreement. He also requested a few changes to the document,
some of which were granted. A revised document with those changes
was sent to Dr. Guldseth, and he finalized it with his John Hancock
and sent it back to FMA.
The Employment Agreement laid out how Dr. Guldseth would
be compensated for his services at FMA. It stipulated that for
the first six months of employment, Dr. Guldseth would be paid
$10,000 biweekly. For the next twelve months after that, Dr.
Guldseth would receive 60 percent of his team's Annualized Net MD
Income.2 Following eighteen months of employment, Dr. Guldseth
would be paid 100 percent of that same Annualized Net MD Income.
The agreement further stated that either party could terminate the
employment relationship without cause with ninety days' written
notice. Significant to this dispute, the Employment Agreement
contained an integration clause that covered any prior agreements,
understandings, and representations, whether oral or written. And
much like the employment offer letter, the Employment Agreement
made no mention of a partnership interest.
2 Annualized Net MD Income is defined in the agreement as "all income received from services rendered by [Dr. Guldseth's] team less all overhead and expenses attributable to the team." Dr. Guldseth's team is defined as including Dr. Guldseth, "a nurse practitioner, a physician's assistant or any other member of [Dr. Guldseth's] team."
- 4 - To be sure, there was some pre-agreement-signing chatter
in the emails about Dr. Guldseth maybe becoming a partner. In an
email to Dr. Guldseth, Dr. Bazylewicz described the position as "a
tremendous opportunity to eventually be a partner in the group."
In a later email about vacation time, Hill also mentioned that
things would be negotiable "once you are a[n] owner." And in
another email, Dr. Guldseth asked what the difference was between
his eventual compensation as an owner and the 100 percent of
Annualized Net MD Income compensation for months eighteen through
twenty-four -- though Dr. Guldseth's email seems to suggest that
he thought he would become an owner at twenty-four months. Hill's
email in response didn't answer the question, but Dr. Guldseth
claims that two days later at an in-person meeting, Dr. Bazylewicz
and Hill assured him that Dr. Bazylewicz's "practice would
transfer" to Dr. Guldseth after eighteen months.
Nonetheless, Dr. Guldseth signed the agreement that
contained no such promise of partnership (we repeat, without the
advice of counsel). After relocating his family to the Bay State,
Dr. Guldseth started working at FMA in October of 2012. With an
eye towards retirement, Dr. Bazylewicz continued with the group
until some time in late 2012 or early 2013.
Expectation Versus Reality: The Breakup
Over time, Dr. Guldseth came to believe he was not being
paid what he was due. In May of 2014, Dr. Guldseth contacted Hill
- 5 - to inquire, chiefly, about when he would obtain Dr. Bazylewicz's
partnership interest. That same day, another FMA partner, Dr.
Steven Barrett (who had apparently been forwarded the email by
Hill), responded to Dr. Guldseth by disputing his characterization
of the employment arrangement. It was not his understanding, Dr.
Barrett contended, that Dr. Guldseth had ever been offered any
partnership interest in FMA. After this exchange, a simmering
misunderstanding lingered between Dr. Guldseth and FMA, which
eventually came to a head. In June 2014, FMA sent Dr. Guldseth a
letter terminating his Employment Agreement effective October 28,
2014 (the end of his two-year term of employment). The letter
gave no reason for Dr. Guldseth's termination. Days later, Dr.
Guldseth sat down with the partners of FMA and gave them a
presentation about the deal he believed he had struck with Dr.
Bazylewicz. It didn't change FMA's position.
About a week before his departure from FMA, Dr. Guldseth
received a letter from Hill (we'll call it the "Additional Payment
Agreement") stating that he would receive his final paycheck on
October 28, 2014, and that his accounts receivable for services
already performed would be paid out to him within ninety days.
But as Dr. Guldseth tells it, he was not paid all the accounts
receivable that were due to him. He also asserts that he was not
paid the full 60 percent of his team's Annualized Net MD Income
for months seven through eighteen.
- 6 - This Lawsuit
Nearly three years after he was let go, Dr. Guldseth
filed suit against the FMA Defendants alleging breach of contract,
breach of the implied covenant of good faith and fair dealing,
fraud, unjust enrichment/quantum meruit, promissory estoppel, and
nonpayment of wages, and sought an accounting (which is not subject
to this appeal).3 Eventually, the FMA Defendants filed a motion
for summary judgment on all counts, which the district court
granted. Dr. Guldseth appealed, reprising here the arguments he
made below.
OUR LENS
We review the district court's grant of summary judgment
de novo. Brader v. Biogen,
983 F.3d 39, 53(1st Cir. 2020).
Summary judgment should be granted when there is no genuine issue
of any material fact and the moving party is entitled to judgment
as a matter of law. Id.; see also Fed. R. Civ. P. 56(a). When we
look at the evidence, all reasonable inferences are drawn in favor
of Dr. Guldseth. Tutor Perini Corp. v. Banc of America Sec. LLC,
842 F.3d 71, 84(1st Cir. 2016). But he is not permitted to rely
3 In his brief, Dr. Guldseth does not break out how each claim specifically ties to each of the defendants, and in particular, does not explain what contracts were entered into specifically by Dr. Bazylewicz and how he personally breached them. Because he does not make these separate arguments on appeal, we deem them waived. Rodríguez v. Mun. of San Juan,
659 F.3d 168, 175(1st Cir. 2011).
- 7 - on "conclusory allegations, improbable inferences, and unsupported
speculation." Theidon v. Harvard Univ.,
948 F.3d 477, 496(1st
Cir. 2020) (quoting Coll v. PB Diagnostic Sys.,
50 F.3d 1115, 1121(1st Cir. 1995)). As we've said before, summary judgment is "the
put up or shut up moment in litigation." Jakobiec v. Merrill Lynch
Life Ins. Co.,
711 F.3d 217, 226(1st Cir. 2013) (quoting Goodman
v. Nat'l Sec. Agency, Inc.,
621 F.3d 651, 654(7th Cir. 2010)).
If the moving party meets their initial burden of showing there's
no genuine factual issue for trial, the non-moving party must come
armed with some evidence to show that a reasonable jury could find
for them,
id.,lest their claims get caught in the summary-judgment
scythe, Theidon,
948 F.3d at 494.
OUR TAKE
Breach of Contract
Dr. Guldseth first claims that he entered into three
separate contracts with FMA, all three of which FMA breached. The
first agreement he alleges was breached is the "Partnership
Transfer Agreement." That agreement isn't your typical ink-on-
paper contract, but rather an oral one: He says Dr. Bazylewicz
agreed to transfer his partnership interest if Dr. Guldseth agreed
to work at FMA for eighteen months. The second agreement is the
written one, the Employment Agreement, which set out the terms of
Dr. Guldseth's employment. Dr. Guldseth says this agreement was
breached when FMA failed to pay him 60 percent of his team's
- 8 - Annualized Net MD Income during months seven through eighteen of
his employment. Finally, he argues that the FMA Defendants
breached the "Additional Payment Agreement" -- where he was told
in a letter that he would be paid for the accounts receivable for
services performed by his team prior to his 2014 departure within
ninety days (less a 6-percent collection fee).
As we take a look at each of those agreements, we keep
in mind that to make out a breach-of-contract claim, Dr. Guldseth
must show that (1) there was an agreement between him and FMA, (2)
he was "ready, willing, and able" to perform his end of the
contract, (3) FMA committed a breach of the contract, and (4) he
suffered harm as a result. See River Farm Realty Tr. v. Farm Fam.
Cas. Ins. Co.,
943 F.3d 27, 41(1st Cir. 2019); Bulwer v. Mount
Auburn Hosp.,
46 N.E.3d 24, 39(Mass. 2016).
The Partnership Transfer Agreement
Dr. Guldseth says the FMA Defendants breached the
Partnership Transfer Agreement by not coughing up the partnership
interest he was owed. According to Dr. Guldseth, the deal was
that he would work for FMA for eighteen months and, for months
seven through eighteen, he would take just 60 percent of his team's
Annualized Net MD Income. That twelve-month stint at a reduced
rate, he says, was his buy-out of Dr. Bazylewicz's piece of the
practice, which the FMA Defendants had to hand over at the end of
the eighteen-month period. Though the district court noted that
- 9 - "a factfinder could find that Drs. Guldseth and Bazylewicz formed
an oral contract," it nonetheless found that Dr. Guldseth's breach-
of-contract claim failed because the Employment Agreement, through
its integration clause, superseded the Partnership Transfer
Agreement.4
Whether the Partnership Transfer Agreement survived the
subsequent signing of the Employment Agreement depends on whether
the Employment Agreement was a complete integration of the parties'
agreement regarding Dr. Guldseth's employment. See Chambers v.
Gold Medal Bakery, Inc.,
982 N.E.2d 1190, 1196(Mass. App. Ct.
2013). By fully integrated, we mean "a statement which the parties
have adopted as a complete and exclusive expression of their
agreement."
Id.(quoting Starr v. Fordham,
648 N.E.2d 1261, 1268
n.8 (Mass. 1995)). Compare that to an only partially integrated
agreement, which means the agreement "is intended as a final
expression of one or more terms, but not as the complete and
exclusive expression of all terms to which the parties agreed."
Id.The degree of integration in turn dictates the degree to which
earlier agreements are discharged by the later-formed agreement.
See
id.Whether an agreement is fully integrated is, under
Massachusetts law, an issue of fact. Realty Fin. Holdings, LLC v.
4The integration clause stated that the Employment Agreement "supersede[d] any and all prior agreements, understandings and representations, whether oral or written."
- 10 - KS Shiraz Manager, LLC,
18 N.E.3d 350, 355(Mass. App. Ct. 2014).
So when there is a genuine dispute of material fact concerning the
integration of the agreement, summary judgment cannot be granted.
See Rivera-Rivera v. Medina & Medina, Inc.,
898 F.3d 77, 87(1st
Cir. 2018) (courts resolving summary-judgment motions cannot
resolve disputes of fact but rather must leave those to the trier
of fact); see also Green v. Harvard Vanguard Med. Assocs., Inc.,
944 N.E.2d 184, 192(Mass. App. Ct. 2011) (stating as much
concerning an integrated agreement under Massachusetts' summary-
judgment standard).
A contract's integration clause (sometimes also called
a zipper clause or merger clause) is a good hint that the parties
intended it to be fully integrated -- but Massachusetts courts
have consistently said that integration clauses are "not
dispositive." Realty Fin. Holdings,
18 N.E.3d at 355; see
Chambers,
982 N.E.2d at 1196; Green,
944 N.E.2d at 191("[E]ven
apparently straightforward contractual language asserting
integration will not always compel a conclusion that a writing
reflects a complete and integrated agreement."). The integration
clause could bear less weight when, for example, the agreement is
boilerplate or the parties were mismatched in negotiating power.
Realty Fin. Holdings,
18 N.E.3d at 356(collecting cases). And
it's possible an integration clause may not "discharge[] a prior
- 11 - agreement on an entirely unrelated topic." Chambers,
982 N.E.2d at 1197.
Yet here, the Partnership Transfer Agreement and
Employment Agreement did cover the same topic. According to Dr.
Guldseth, the gist of the Partnership Transfer Agreement was that
if he came to work at FMA for eighteen months, then he'd get Dr.
Bazylewicz's chunk of the practice. But the Employment Agreement
specifically covered the terms and compensation of Dr. Guldseth's
employment at FMA -- and even went so far as to cover the terms of
employment (not partnership) and compensation for six months after
his claimed eighteen-month milestone. Nowhere in that agreement
did it mention any transfer of a partnership interest, whether
after eighteen months or some other period. The Employment
Agreement also stipulated that Dr. Guldseth agreed to accept the
compensation figures in the agreement "as full compensation for
services rendered pursuant to this Employment Agreement." Not to
mention the fact that the agreement expressly provided that Dr.
Guldseth's "employment" -- again, not partnership -- "w[ould]
automatically be renewed for successive one year terms . . . until
terminated in accordance with th[e Employment] Agreement." And it
gave either party the option to terminate the agreement on ninety
days' notice, without cause, leaving Dr. Guldseth to collect only
the compensation owed to him under the Employment Agreement when
the two parted ways. See Realty Fin. Holdings,
18 N.E.3d at 356- 12 - (finding an agreement integrated where the final agreement
"specifically addressed" the topic later litigated).
The history of the negotiations here further reveals
that the Employment Agreement was (as it said it was) integrated.
The agreement was neither brief nor boilerplate. See Antonellis
v. Northgate Constr. Corp.,
291 N.E.2d 626, 628(Mass. 1973)
(brevity of the agreement suggested non-integration); Wang Labs.,
Inc. v. Docktor Pet Ctrs., Inc.,
422 N.E.2d 805, 808(Mass. App.
Ct. 1981) (standard form contracts may not readily allow for the
insertion of special agreements, which "may have significance" to
the integration question). And it was drawn up and negotiated at
arm's length between two sophisticated parties. See Chambers,
982 N.E.2d at 1197(when contracts are "negotiated at arm's length
between sophisticated parties," it helps give the integration
clause more force); see also Realty Fin. Holdings,
18 N.E.3d at 357(unequal bargaining power and sophistication might give the
integration clause less force); Green, 944 N.E.2d at 187–88, 192
(finding material issue of fact as to integration in agreement
between medical secretary with an associate's degree and his
employer).5 Dr. Guldseth is well educated (holding a doctorate).
5 Dr. Guldseth faults the district court for "inventing a new standard" of the "sophisticated individual." But nothing the district court said broke new ground -- it came directly from precedent from the Massachusetts Appeals Court. See Chambers,
982 N.E.2d at 1197.
- 13 - Throughout the negotiation process, Dr. Guldseth carefully
reviewed the Employment Agreement (albeit without a lawyer) and
asked questions, demonstrating he was a sophisticated individual
and "evidenc[ing] a capacity to review the contract cautiously and
with an eye towards protecting his interests." Cf. Turner v.
Johnson & Johnson,
809 F.2d 90, 97(1st Cir. 1986) (where a
contract is "fully negotiated and voluntarily signed," a plaintiff
cannot introduce evidence of a prior oral agreement "inconsistent
with a contract provision that specifically addressed the
particular point at issue").
The district court did not err in finding that the
Employment Agreement's integration clause superseded the prior
oral Partnership Transfer Agreement.6 And Dr. Guldseth makes no
argument on appeal that he has a viable claim against Dr.
Bazylewicz individually for breach of any agreement to transfer
his partnership interest to Dr. Guldseth. So any breach-of-
contract claim on that agreement fails.
Had the contract contained an ambiguity, the integration 6
clause, as Dr. Guldseth suggests, would not bar the introduction of extrinsic evidence to explain the meaning of the ambiguous contract terms. See Kobayashi v. Orion Ventures, Inc.,
678 N.E.2d 180, 184(Mass. App. Ct. 1997). But Dr. Guldseth does not point to any provision of the contract he deems ambiguous, and in our de novo review, we see none. See Weiss v. DHL Exp., Inc.,
718 F.3d 39, 44(1st Cir. 2013) ("Interpretation of a contract is ordinarily a question of law for the court.").
- 14 - The Employment Agreement and Additional Payment Agreement
Next, Dr. Guldseth argues that the Employment Agreement
and Additional Payment Agreement (which is a reference to an
October 20, 2014 letter regarding his remaining payments prior to
termination) were breached by failing to pay him "the amounts owed"
under both agreements.
Problem is that to show a breach of contract, Dr.
Guldseth had to show (among other things) that there was a breach
by FMA -- that it didn't do something it agreed to. See River
Farm Realty Tr.,
943 F.3d at 41. Yet aside from his conclusory
deposition testimony, Dr. Guldseth presented no evidence below
that FMA didn't pay him what he was owed (his claimed breach).7
See Brader,
983 F.3d at 53(to defeat a motion for summary
judgment, a "nonmovant cannot rely on conclusory allegations,
improbable inferences, and unsupported speculation" (internal
quotation omitted)).
Deflecting his lack of evidentiary support, Dr. Guldseth
points the finger at FMA for withholding "critical documents during
discovery." But that argument has no teeth. What the record makes
clear is that Dr. Guldseth served overbroad discovery requests,
7Dr. Guldseth thought that because revenue in 2012 was higher than the numbers Dr. Bazylewicz gave him for the 2011 revenue, that meant his income should've been correspondingly higher. But as the district court identified, Dr. Guldseth's compensation was based on revenue minus expenses, not just revenue. And Dr. Guldseth produced no evidence regarding expenses.
- 15 - the FMA Defendants objected, and he did not make any effort to
narrow his requests or meet and confer with the FMA Defendants to
obtain information he says he needed to prove his claims, nor did
he a file a motion to compel.8 Dr. Guldseth cannot get his
evidentiary arrears in the green by blaming others -- he failed to
appropriately request the discovery materials he needed to survive
the summary-judgment scythe and faced the consequences.
Breach of the Implied Covenant of Good Faith & Fair Dealing
Dr. Guldseth's next claim is that the FMA Defendants
breached the implied covenant of good faith and fair dealing in
each of the three agreements.
That covenant of good faith and fair dealing between the
parties is implied in all agreements under the Commonwealth's laws.
Harrison v. NetCentric Corp.,
744 N.E.2d 622, 629(Mass. 2001).
The covenant provides "that neither party shall do anything [that]
will have the effect of destroying or injuring the right of the
other party to receive the fruits of the contract." Druker v.
Roland Wm. Jutras Assocs.,
348 N.E.2d 763, 765(Mass. 1976)
8 Nor did he move, as he could have, under Rule 56(d) for an order giving him some time to get the records he needed after the FMA Defendants filed their summary-judgment motion. See Fed. R. Civ. P. 56(d) ("If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.").
- 16 - (quoting Uproar Co. v. Nat'l Broadcasting Co.,
81 F.2d 373, 377(1st Cir. 1936)). The aim "is to ensure that neither party
interferes with the ability of the other to enjoy the fruits of
the contract, and that, when performing the obligations of the
contract, the parties remain faithful to the intended and agreed
expectations of the contract." Eigerman v. Putnam Invs., Inc.,
877 N.E.2d 1258, 1264(Mass. 2007) (internal citation omitted)
(quoting Uno Rests., Inc. v. Bos. Kenmore Realty Corp.,
805 N.E.2d 957, 964(Mass. 2004)). To show a breach of the implied covenant,
one party has to show that the other violated her "reasonable
expectations . . . concerning the obligations of the contract."
477 Harrison Ave., LLC v. JACE Bos., LLC,
134 N.E.3d 91, 101 (Mass.
2019).
Because the implied covenant is all about the
expectations concerning the obligations actually in the contract,
the scope of the covenant is only as broad as the contract that
governs the particular relationship. Eigerman,
877 N.E.2d at 1264.
The covenant does not supply terms that the parties were free to
negotiate but failed to include.
Id.Nor does it create rights
and duties not otherwise provided for in the contract.
Id.In
other words, the covenant cannot create rights and duties that are
not already present in the existing contractual relationship.
Id. at 1265. And as a result, the covenant governs only conduct of
parties that have actually entered into a contract -- without a
- 17 - contract, there is no covenant to be breached. Mass. Eye & Ear
Infirmary v. QLT Phototherapeutics, Inc.,
412 F.3d 215, 230 (1st
Cir. 2005).
With all that in mind, we can make quick work of Dr.
Guldseth's implied-covenant claims.
First, there can be no breach of the implied covenant in
the Partnership Transfer Agreement because it was superseded by
the Employment Agreement. See id. (no contract, no implied
covenant to be breached).9
Second, although not a beacon of clarity, we understand
Dr. Guldseth's brief to claim that the implied covenants in the
Employment Agreement and the Additional Payment Agreement were
breached when the FMA Defendants didn't reimburse him all the
greenbacks he was owed for his services. But as we've already
discussed, since Dr. Guldseth (through his own fault) came empty-
handed of evidence supporting that allegation by the time the put-
up-or-shut-up moment of summary judgment came, his claim couldn't
survive. See Jakobiec,
711 F.3d at 226.
And third, to the extent Dr. Guldseth claims the
Employment Agreement's implied covenant was breached because the
9 Dr. Guldseth develops no argument as to how a jury could find that the covenant of good faith and fair dealing in the Partnership Transfer Agreement was breached prior to the integration of his agreements with FMA through his signing of the Employment Agreement.
- 18 - FMA Defendants didn't make him a partner, that claim fails, too.
The implied covenant isn't a prophylactic for contractor's remorse
-- the covenant doesn't inject terms the parties could've included
but chose not to. Eigerman,
877 N.E.2d at 1264. And the Employment
Agreement says nothing about any transfer of a partnership interest
to Dr. Guldseth after eighteen months' employment. Indeed, it
explicitly gives FMA the option to terminate Dr. Guldseth's
employment without cause at any point in the first twenty-four
months of the relationship, which it did. See
id.at 1264–65 (a
plaintiff cannot reasonably understand or expect the obligations
to be contrary to what the contract provides).
Fraud
Chugging along, Dr. Guldseth believes he was defrauded
because he received assurances from Dr. Bazylewicz that the
practice would be transferred after eighteen months (which never
happened), he was paid less than he was entitled, and -- to add
insult to injury -- he was fired. He also claims that Dr.
Bazylewicz told him that his compensation would include a share of
the rental income, which turned out not to be the case. He contends
that the district court erroneously relied on the integration
- 19 - clause and ignored these representations "even though there was
fraud in the inducement."10
To establish a claim of common-law fraud (the claim made
in his complaint), Dr. Guldseth must show (1) a false
representation by FMA, (2) that is related to a matter of material
fact, (3) that FMA knew was false, (4) that FMA made this
representation with the purpose of inducing action by Dr. Guldseth,
and (5) that Dr. Guldseth relied on this false representation as
true and acted upon it to his detriment. See Balles v. Babcock
Power Inc.,
70 N.E.3d 905, 913(Mass. 2017). As the SJC has made
clear, "[a]n integration clause in a contract does not insulate
automatically a party from liability where he induced another
person to enter into a contract by misrepresentation." Starr,
648 N.E.2d at 1268. But it's also added (quoting us) that "if the
contract was fully negotiated and voluntarily signed, plaintiffs
may not raise as fraudulent any prior oral assertion inconsistent
with a contract provision that specifically addressed the
particular point at issue."
Id.(cleaned up) (quoting Turner,
809 F.2d at 97). Any reliance on an understanding inconsistent with
the written terms of the agreement is unreasonable as a matter of
law. See Masingill v. EMC Corp.,
870 N.E.2d 81, 89(Mass. 2007)
The complaint does not make any allegation of fraud in the 10
inducement -- only common-law fraud, which is what Dr. Guldseth's brief on appeal focuses on.
- 20 - (calling this "a rule of long standing"); HSBC Realty Credit Corp.
(USA) v. O'Neill,
745 F.3d 564, 571(1st Cir. 2014). Put
differently, a written agreement made from an arm's-length deal
can't be undone just because one party later claims she thought
the deal was something other than what the signed contract reduced
to ink. McCartin v. Westlake,
630 N.E.2d 283, 289(Mass. App. Ct.
1994). Courts and juries won't "rewrite a fully negotiated
contractual agreement that so precisely sets out the rights and
obligations of two sophisticated parties." HSBC Realty,
745 F.3d at 572(quoting Turner,
809 F.2d at 97). Instead, as we've
cautioned before, "a knowledgeable buyer should not sign a contract
that conflicts with his or her understanding of the agreement."
Turner,
809 F.2d at 97-98.
Dr. Guldseth would have done well to heed that warning
here, and his decision not to do so dooms his fraud claims. Dr.
Guldseth may well have been promised a share of the partnership
after eighteen months' labor at FMA. But the Employment Agreement,
which superseded the Partnership Transfer Agreement, should've
alerted him that something was off here. As we've detailed
already, the Employment Agreement provided that Dr. Guldseth's
initial term of employment (not partnership) ran for twenty-four
months -- making nose-to-face plain that Dr. Guldseth would still
- 21 - be an employee, not a partner, after eighteen months' employment.11
If that's not enough, the Employment Agreement permitted Dr.
Guldseth to be terminated at any point in the first two years, and
it laid out in detail the compensation he would receive over that
period. Which all flies right in the face of Dr. Guldseth's
expectation that he would've gotten the partnership nod at eighteen
months -- meaning he couldn't reasonably rely on any
representations to the contrary. See Masingill,
870 N.E.2d at 89.12
His fraud claim based on the supposedly missing revenue
streams in his compensation calculations suffers a similar fate.
Dr. Guldseth claims that Dr. Bazylewicz and Hill told him that the
revenue used to calculate his compensation after month six of
employment included certain rental incomes. But the Employment
Agreement makes clear that the relevant revenue included only money
The email exchanges further reflect that Dr. Guldseth 11
understood the Employment Agreement's timeline. He sent an email during the contract negotiations to Hill asking her what the difference was between the compensation for months eighteen through twenty-four listed in the contract and what he would get when he "bec[a]m[e] an owner at 24 months." That question came in response to an email from Hill giving him his proposed schedule, which would be effective "until [he] bec[a]me an owner in 2 years." To be clear, we need not (and do not) decide whether Dr. 12
Guldseth could have reasonably relied on a promise of receiving a partnership share at some point in the future. We decide only that he could not have reasonably relied on the promise he claims here -- that he would become a partner after eighteen months' employment with FMA.
- 22 - "collected by FMA that is attributed to professional services
rendered by the Doctor, a nurse practitioner, a physician's
assistant or any other member of the Doctor's team" -- not any
real-estate income. So he could not reasonably rely on any
representations to the contrary.
Promissory Estoppel
For the same reason his fraud claim on the transfer of
the partnership fails, Dr. Guldseth's promissory-estoppel claim
fails, too. As with the fraud claim, Dr. Guldseth has to show
(among other things) that his reliance on the promise of Dr.
Bazylewicz's partnership share after eighteen months' work was
reasonable. See Sullivan v. Chief Justice for Admin. & Mgmt. of
the Trial Ct.,
858 N.E.2d 699, 711-12 (Mass. 2006) (listing the
three elements of a promissory-estoppel claim and noting the
plaintiff has a "heavy burden" in showing them). But that he
cannot do. The Employment Agreement details Dr. Guldseth's
compensation for his work at FMA, stipulates that he will accept
that compensation as his sole compensation for work performed,
provides that he could be terminated for any reason before twenty-
four months' employment, expressly says the employment (not
partnership) would be renewed after that twenty-four-month period,
and tells him not to rely on prior oral representations. The
written Employment Agreement explicitly conflicted with the idea
that he'd be a partner at eighteen months -- and "[e]xplicit
- 23 - conflict engenders doubt," which causes a reasonable person to
investigate further, not to "gamble with the law of the excluded
middle." Trifiro v. N.Y. Life Ins. Co.,
845 F.2d 30, 33-34(1st
Cir. 1988); see Coll,
50 F.3d at 1124(an employee cannot
reasonably rely on a pre-employment oral promise where the later-
inked employment agreement was at odds with that promise, and thus
no promissory-estoppel claim lies).
Unjust Enrichment/Quantum Meruit
Moving along, Dr. Guldseth urges that the district court
was wrong on his unjust-enrichment (a/k/a quantum meruit) claim13
where it found that the Employment Agreement foreclosed his claims.
He flags all his testimony about the representations Dr. Bazylewicz
and Hill made about his partnership plan. Without rehashing the
past, we'll cut to the chase and say we agree that summary judgment
was appropriate on this claim.
To establish a claim for quantum meruit or unjust
enrichment, Dr. Guldseth is required to demonstrate: (1) that he
"conferred a measurable benefit upon" the FMA Defendants; (2) that
he "reasonably expected compensation from" them; and (3) that the
FMA Defendants "accepted the benefit with the knowledge, actual or
chargeable, of [his] reasonable expectation." Finard & Co., LLC
These are two ways of describing the same theory of 13
recovery, as we've said before. Santangelo v. N.Y. Life Ins. Co.,
785 F.3d 65, 73(1st Cir. 2015).
- 24 - v. Sitt Asset Mgmt.,
945 N.E.2d 404, 407-08(Mass. App. Ct. 2011).
Whether or not receipt of a benefit is unjust turns on the
reasonable expectations of the parties. Metro Life Ins. Co. v.
Cotter,
984 N.E.2d 835, 850(Mass. 2013).
But here's the thing: A plaintiff is not entitled to
recovery on an unjust-enrichment or quantum-meruit theory where
there is a valid contract that covers the same subject matter and
defines the obligations of the parties. Bos. Med. Ctr. Corp. v.
Sec'y of Exec. Off. of Health & Hum. Servs.,
974 N.E.2d 1114, 1132
(Mass. 2012) (citing York v. Zurich Scudder Invs., Inc.,
849 N.E.2d 892, 901(Mass. App. Ct. 2006)); Zarum v. Brass Mill Materials
Corp.,
134 N.E.2d 141, 143(Mass. 1956); see also Cotter,
984 N.E.2d at 849(noting that there could be a claim where one party
to the contract demands performance not due under the contract).
Instead, "[a] valid contract defines the obligations of the parties
as to the matters within its scope, displacing to that extent any
inquiry into unjust enrichment." Restatement (Third) of
Restitution and Unjust Enrichment § 2 (2011); see Shaulis v.
Nordstrom, Inc.,
865 F.3d 1, 16(1st Cir. 2017) ("Massachusetts
law does not permit litigants to override an express contract by
arguing unjust enrichment." (cleaned up)).
On appeal, Dr. Guldseth regurgitates his prior argument
that the Employment Agreement was breached by not completing
transfer of the practice to him, thereby leading to him working
- 25 - for less than he expected. Yet the Employment Agreement clearly
delineated the obligations of Dr. Guldseth (that he'd work at FMA)
and the FMA Defendants (that FMA would pay him as specified in the
contract). So we agree with the district court that because the
Employment Agreement (which was comprehensive, carefully drafted,
and thoroughly negotiated) was clear on its face as to the
obligations of each party -- which did not include any agreement
to transfer any piece of the FMA partnership to Dr. Guldseth after
eighteen months' work -- there can be no quantum-meruit or unjust-
enrichment claim. See Zarum,
134 N.E.2d at 143(no quantum-meruit
claim where a "carefully drawn" agreement "specifically cover[ing]
the subject matter" at issue didn't include the relief sought by
the plaintiff); York,
849 N.E.2d at 901(no quantum-meruit claim
where there was an agreement governing the plaintiff's
employment).
Non-Payment of Wages
Finally, Dr. Guldseth asserts a claim under the
Massachusetts Wage Act for underpaid wages. See
Mass. Gen. Laws ch. 149, § 148. He premises that claim (as he puts it) "on the
same set of operative facts as his claim of breach of the
Employment Agreement and Additional Payment Agreement." And he
again complains that the FMA Defendants did not give him all of
the relevant legal records he needed to prove his claim. For the
same reasons that we affirmed summary judgment as to the contract
- 26 - claims based on the underpaid wages, we affirm summary judgment on
this claim, too. Dr. Guldseth simply did not produce record
evidence (aside from his unsupported speculation) that he was
underpaid, and doing so was his burden to carry. See Ellicott v.
Am. Cap. Energy, Inc.,
906 F.3d 164, 169(1st Cir. 2018).
ZIPPING THINGS UP
For all these reasons, the judgment is affirmed. The
parties shall bear their own costs.
- 27 -
Reference
- Cited By
- 16 cases
- Status
- Published