Napert v. Government Employees Insurance Company

Filing 41

Judge F. Dennis Saylor, IV: MEMORANDUM AND ORDER entered. Defendant's 30 motion for summary judgment is GRANTED as to the Massachusetts Minimum Fair Wage Act claim and DENIED in all other respects. (Cicolini, Pietro)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_______________________________________
)
MICHAEL R. NAPERT,
)
)
Plaintiff,
)
)
v.
)
)
GOVERNMENT EMPLOYEES
)
INSURANCE COMPANY,
)
)
Defendants.
)
_______________________________________)

Civil No.
13-10530-FDS

MEMORANDUM AND ORDER ON
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
SAYLOR, J.
This is a claim under the Massachusetts wage and hour laws. Jurisdiction is based on
diversity of citizenship. Plaintiff Michael Napert worked as an adjuster for defendant
Government Employees Insurance Company (“GEICO”). He alleges that GEICO intentionally
failed to pay him his earned hourly wages as required by the Massachusetts Wage Act, Mass.
Gen. Laws ch. 149, § 148, and intentionally failed to pay him overtime wages as required by the
Massachusetts Fair Minimum Wage Act, Mass. Gen. Laws ch. 151, § 1A.
GEICO has moved for summary judgment, contending that Napert’s position is exempt
from the requirements of the Massachusetts wage and overtime laws. For the following reasons,
that motion will be granted in part and denied in part.
I.

Background
A.

Factual Background

The following facts are undisputed or construed in the light most favorable to the non-

moving party.
In the summer of 2004, Michael Napert began working for GEICO as an auto-damage
adjuster. (Def. SMF ¶ 1). According to a compensation memorandum, GEICO agreed to pay
Napert an annual salary of $58,000 and a premium wage for every hour he worked over 38.75
hours per week. (Compensation Mem., Pl. SMF, Ex. B). He was required to obtain approval for
any overtime compensation. (Id.). However, GEICO was obligated to compensate him for any
overtime hours that he reported, regardless of whether he received prior approval. (Id.).
As an auto-damage adjuster, Napert settled automobile damage claims through
negotiations with GEICO policyholders, claimants, and repair facilities. (Def. SMF ¶ 11). He
also negotiated prices for repairs and replacement parts. (Id.).
When settling claims, Napert traveled to automobile repair shops in New England to
assess the damage to vehicles allegedly damaged by an accident. (Id. ¶ 13). After examining the
vehicle and speaking to the claimant, he would determine how much damage the vehicle
suffered, whether the damage was actually caused by an accident, how much of the vehicle’s
damage existed before the accident, and whether the vehicle should be considered a total loss.
(Id. ¶¶ 8, 9, 15).1 He did so using his judgment, training, and experience. (Id. ¶¶ 16, 18, 23). He
did not speak to any witnesses to the accident other than the claimant. (Pl. SMF ¶ 13).
GEICO issued Napert a laptop with a database and software to assist him in appraising
the damage to a vehicle. (Def. SMF ¶ 7). After making an assessment, he would input the
figures into the database. (Pl. SMF ¶ 8). The software would then aggregate the cost of the
damage. (Id.). Napert would then tell the claimant the amount the database said the claim was
1
A vehicle is considered a “total loss” if repairing it would cost 75 percent or more of the value of the
vehicle. (Def. SMF ¶ 15).

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worth. (Napert Dep. at 83). If the claimant had proof that any of his figures were incorrect, he
could fix those errors. (Id. at 82-87). Each appraisal took, on average, an hour to complete. (Id.
at 120).
Napert also sometimes adjusted the figures to increase the settlement amount if a
claimant complained. (Id. at 124-25). On at least one occasion, his supervisor reprimanded him
for doing so and told him that he could not arbitrarily change the figures in the database. (Id.).
Napert was authorized to settle insurance claims without approval for any amount up to
$15,000. (Def. SMF ¶ 22, 29). He was able to print checks from GEICO to claimants up to that
limit. (Id. ¶¶ 29-30). He was also authorized to declare a vehicle a total loss without approval.
(Id. ¶ 24). If he did declare that a vehicle was a total loss, he was authorized to take possession
of and have the vehicle towed, and reimburse the claimant. (Id. ¶ 25). He was responsible for
negotiating and paying towing and storage charges on GEICO’s behalf for total-loss vehicles.
(Id. ¶ 26). He was also responsible for negotiating the reimbursement price for total-loss
vehicles. (Id. ¶ 31).
Napert’s supervisor at GEICO was Justin Koestler. (Id. ¶¶ 12). Koestler oversaw
Napert’s overall performance, but was not typically involved in his day-to-day decisions. (Def.
SMF ¶ 35). Koestler traveled with Napert on his trips to examine vehicles about once a month.
(Id. ¶ 14). Koestler also required him to keep a log of all the work that he had performed and
send him an e-mail every time he finished a claim. (Napert Dep. at 104, 115).
Napert’s job also involved keeping track of rental cars insured with GEICO through the
company’s Automated Rental Management System, printing out claim-related documents and
mailing them to GEICO customers, making phone calls to set up appointments, and planning

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travel to and from appointments. (Pl. SMF ¶¶ 5, 6, 14, 16). He drove between fifteen to
eighteen hours a week for his job. (Id. ¶ 4).
According to Napert, he worked overtime due to those various obligations. (Id. ¶ 19).
He repeatedly clashed with his supervisor when he worked overtime without prior approval.
(Id., Ex. C).
Napert left GEICO in 2011. (Def. SMF ¶ 4). According to several of Napert’s time
sheets, GEICO fully compensated him for hours that he reported he worked, including overtime
hours. (Pl. SMF, Ex. A).2
B.

Procedural Background

On January 22, 2013, plaintiff filed a complaint in Bristol Superior Court. Defendant
removed the case to this Court on March 8, 2013.
The complaint alleges that plaintiff was “not an exempt employee” of defendant “as
defined under the Massachusetts General Laws.” (Compl. ¶ 14). It alleges that defendant failed
to pay him for time he worked more than 38.75 hours per week in violation of Mass. Gen. Laws
ch. 149 §§ 148, 150. It also alleges that defendant failed to pay him overtime wages for working
more than 40 hours per week in violation of Mass. Gen. Laws ch. 151, § 1A.3 The complaint
seeks damages (including treble damages where applicable), prejudgment interest, attorney’s
fees, and expenses.
On March 31, 2014, defendant moved for summary judgment, contending that the
Massachusetts wage and overtime laws do not apply. Plaintiff contends (1) that defendant is

2

These time sheets do not cover the entirety of Napert’s employment.

3
Although the introduction to the complaint states that GEICO also violated “federal” wage and hour laws,
there is no count asserting a federal claim.

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required to pay him the wages he earned, (2) that defendant is estopped from contending that he
is exempt from being paid overtime, and (3) that he is not exempt from the Massachusetts wage
and overtime laws.
II.

Standard of Review
The role of summary judgment is to “pierce the pleadings and to assess the proof in order

to see whether there is a genuine need for trial.” Mesnick v. General Elec. Co., 950 F.2d 816,
822 (1st Cir. 1991) (internal quotations omitted). Summary judgment is appropriate when the
moving party shows that “there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine issue is “one that
must be decided at trial because the evidence, viewed in the light most flattering to the
nonmovant . . . would permit a rational fact finder to resolve the issue in favor of either party.”
Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990).
In evaluating a summary judgment motion, the court must indulge all reasonable
inferences in favor of the non-moving party. O’Connor v. Steeves, 994 F.2d 905, 907 (1st Cir.
1993). When “a properly supported motion for summary judgment is made, the adverse party
must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986) (internal quotations omitted). The non-moving party may
not simply “rest upon mere allegation or denials of his pleading,” but instead must “present
affirmative evidence.” Id. at 256-57.
III.

Analysis
A.

Wage Act Claim

The Massachusetts Wage Act provides that “[e]very person having employees in his

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service shall pay weekly or bi-weekly each such employee the wages earned by him . . . .” Mass.
Gen. Laws ch. 149, § 148. To establish a claim for weekly wages under the statute, a plaintiff
must show that (1) he was an employee under the statute, (2) his form of compensation
constitutes a wage under the statute, and (3) the defendants violated the Act by not paying him
his wages in a timely manner. Stanton v. Lighthouse Fin. Servs., Inc., 621 F. Supp. 2d 5, 10 (D.
Mass. 2009) (citing Allen v. Intralearn Software Corp., 2006 Mass. App. Div. 71, at *1 (2006)).
It is undisputed that plaintiff qualified as an employee under the statute and that his
compensation constituted a wage. Plaintiff contends that because defendant agreed to pay him a
premium wage for any overtime hours he worked, he can recover those wages under the Wage
Act.
Defendant’s compensation memorandum for auto-damage adjusters states that
“[w]orking time beyond 38.75 hours in a week is not allowed without prior approval. However,
if any such work is performed it must be recorded and compensated whether it is approved or
not.” (Compensation Mem. at 3). Defendant contends that plaintiff has not presented any
affirmative evidence that he reported overtime hours but was not compensated for them. It
further contends that the time sheets plaintiff has submitted show the opposite: that defendant in
fact paid plaintiff for all the hours he reported he worked. (See Pl. SMF, Ex. A).4
“[W]here an employer has no knowledge that an employee is engaging in overtime work
and that employee fails to notify the employer or deliberately prevents the employer from
acquiring knowledge of the overtime work, the employer’s failure to pay for the overtime hours”

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Defendant also contends that plaintiff is exempt from the statute because he was paid a weekly salary. It
cites Norceide v. Cambridge Health Alliance, 814 F. Supp. 2d 17, 26 (D. Mass. 2011), for the proposition that the
Wage Act applies only to non-exempt hourly employees. However, the Wage Act does apply to employees who are
paid weekly. See Okerman v. VA Software Corp., 69 Mass. App. Ct. 771, 775 (2007).

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is not actionable. Prime Communications, Inc. v. Sylvester, 34 Mass. App. Ct. 708, 711 (1993)
(internal quotation omitted); see also Warren v. Edgeco, Inc., 8 Mass. App. Ct. 171, 175 (1979)
(employer liable to employee for wages for unreported overtime hours if employer knew or had
reason to know of them).5 “When employer knowledge is at issue, it has consistently been held
that the employee has the initial burden of proving that the employer knew or should have
known of the overtime work.” Prime Communications, 34 Mass. App. Ct. at 711 (collecting
cases).
During his deposition, plaintiff testified that he repeatedly informed his supervisor that he
was working overtime and was denied requests to list those hours on his time sheets. (Napert
Dep. at 99-101, 104-06, 151-53, 158-59). Plaintiff also contends that e-mails between his
supervisors also show that they knew about his requests for overtime. (Pl. SMF, Ex. C).
Although plaintiff did not report those hours in his time sheets, there is evidence that defendant
had notice of them, and there is accordingly a genuine issue of material fact as to whether
defendant failed to pay plaintiff for overtime hours he worked in violation of the Wage Act. See
Souto v. Sovereign Realty Assocs., Ltd., 23 Mass. L. Rptr. 386, at *3 (2007) (Wage Act claim for
overtime wages survived summary judgment where plaintiff stated he worked an average of
fifty-five to sixty hours per week in his deposition and a former supervisor’s affidavit supported
that testimony).6
5

Although the courts in Prime Communications and Warren were interpreting the Fair Labor Standards
Act, 29 U.S.C. § 207 et seq., the Massachusetts courts generally look to guidance from analogous federal statutes
when interpreting state wage and overtime laws. See, e.g., Goodrow v. Lane Bryant, Inc., 432 Mass. 165, 170
(2000); O’Donnell v. Robert Half Int’l, Inc., 250 F.R.D. 77, 80 n.1 (D. Mass. 2008).
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Massachusetts courts have consistently held that the Wage Act imposes strict liability on employers. See,
e.g., Somers v. Converged Access, Inc., 454 Mass. 582, 591 (2009) (holding that employer was liable under the
Wage Act even when it in good faith classified employee as an independent contractor instead of an employee). The
Court does not decide whether defendant is liable even if it did not know, or could not have known, that it failed to

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Accordingly, defendant’s motion for summary judgment will be denied as to plaintiff’s
Wage Act claim.7
B.

Overtime Wages

The Massachusetts Fair Minimum Wage Act (“MFMWA”) “mandates overtime pay for
hours worked over 40 per week at one and a half times the employee’s regular rate of pay.”
Cavallari v. UMass Memorial Healthcare, Inc., 678 F.3d 1, 9 (1st Cir. 2012); see also Mass.
Gen. Laws ch. 151, § 1A. The statute does not apply to any employee who is employed “as a
bona fide executive, or administrative or professional person.” Id. § 1A(3). Defendant contends
that plaintiff is exempt from the statute because he worked in an administrative capacity.
1.

Whether Defendant Is Estopped

Plaintiff first contends that defendant is estopped from contending that his position is
exempt from the requirements of the MFMWA. “To establish estoppel, a party must show ‘(1) a
representation intended to induce reliance on the part of a person to whom the representation is
made; (2) an act or omission by that person in reasonable reliance on the representation; and (3)
detriment as a consequence of the act or omission.” Reading Co-Op. Bank v. Suffolk
Construction Co., Inc., 464 Mass. 543, 556 (2013) (quoting Bongaards v. Millen, 440 Mass. 10,
15 (2003)). Plaintiff contends that defendant’s compensation memorandum for adjusters states
that they are “salaried nonexempt” employees. (Pl. MF, Ex. B at 1). He further contends that

compensate plaintiff for unpaid overtime hours.
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Plaintiff contends he is entitled under the Wage Act to overtime wages for the overtime hours he worked.
In Crocker v. Townsend Oil. Co., Inc., 464 Mass. 1 (2012), however, the Supreme Judicial Court held that a person
could recover under the Wage Act for overtime hours worked, but that “recovery is limited to uncompensated time
worked at the regular rate.” 464 Mass. at 7. Plaintiff can recover under the Wage Act for his unpaid overtime work
within the three-year limitations period, but only at his regular rate of pay.

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because he worked overtime in reliance on that compensation memorandum, defendant is
estopped from contending he is an exempt employee under the MFMWA.
Defendant’s compensation memorandum states that it pays adjusters a premium wage (in
addition to the regular wage) for overtime hours using the “fluctuating work week method.” (Pl.
SMF, Ex. B at 1). That premium wage was half of the adjuster’s hourly rate, which was
“computed by dividing the adjuster’s weekly salary by the total number of hours worked in that
week.” (Id.). The premium wage promised by defendant’s memorandum for overtime work was
therefore significantly lower than the overtime wage required by state law. See Mass. Gen. Laws
ch. 151, § 1A.
Plaintiff therefore could not have reasonably relied on the memorandum as a commitment
to pay him the state-law overtime wage. Although the memorandum does state that adjusters are
“salaried nonexempt,” the rest of the memorandum makes clear that this does not mean that
adjusters are entitled to overtime compensation of one and a half times their wages.
(Compensation Mem. at 1). There is therefore no genuine dispute about whether it was
reasonable for plaintiff to believe that his job was not exempt from the requirements of the
overtime law.
Even if plaintiff’s reliance was reasonable, “[Massachusetts] law does not regard
estoppels with favor, nor extend them beyond the transactions in which they originate.” Licata
v. GGNSC Malden Dexter LLC, 466 Mass. 793, 804 (2014) (quoting Boston & Albany R.R. Co.
v. Reardon, 226 Mass. 286, 291 (1917) (internal alterations omitted)). While it is possible that
plaintiff could have brought a claim for breach of contract or promissory estoppel based on
defendant’s compensation memorandum, see Lipsitt v. Plaud, 466 Mass. 240, 255 (2013), he

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cannot now use the doctrine of estoppel to recover more wages than he was promised. See Sioufi
v. Youville Rehab. and Chronia Disease Hosp., 1994 WL 879990, at *3 (1994) (“The court will
not, based on promissory estoppel, grant a party more relief that he would have been entitled to
if the promise were enforceable.”). Defendant is therefore not estopped from contending that
plaintiff is exempt from the requirements of the MFMWA.
2.

Whether Plaintiff Was Employed in an Administrative Capacity

Under regulations promulgated pursuant to the FLSA, an “employee employed in a bona
fide administrative capacity” means any employee:
(1) Compensated on a salary or fee basis at a rate of not less than $455 per week . . .
exclusive of board, lodging or other facilities;
(2) Whose primary duty is the performance of office or non-manual work directly related
to the management and general business operations of the employer or the employer’s
customers; and
(3) Whose primary duty includes the exercise of discretion and independent judgment
with respect to matters of significance.
29 C.F.R. § 541.200(a).8
The regulations further state:
To qualify for exemption under this part, an employee’s “primary duty” must be the
performance of exempt work. The term “primary duty” means the principal, main, major
or most important duty that the employee performs. . . . Factors to consider when
determining the primary duty of an employee include, but are not limited to, the relative
importance of the exempt duties as compared with other types of duties; the amount of
time spent performing exempt work; the employee’s relative freedom from direct
supervision; and the relationship between the employee’s salary and wages paid to other
employees for the kind of nonexempt work performed by the employee.
29 C.F.R. § 541.700(a). “[E]mployees who spend more than 50 percent of their time performing

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“Massachusetts law mirrors federal law with respect to the definition of exempt employees and the
overtime pay provisions.” O’Donnell, 250 F.R.D. at 80 n.1 (citing 455 Mass. Code Regs. 2.02(3) and Swift v.
AutoZone, 441 Mass. 443, 447, 449 (2004)).

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exempt work will generally satisfy the primary duty requirement,” but “[e]mployees who do not
spend more than 50 percent of their time performing exempt duties may nonetheless meet the
primary duty requirement if other factors support such a conclusion.” Id. § 541.700(b).
There is no dispute that plaintiff was compensated more than $455 per week. Plaintiff
contends that there is a genuine issue of material fact as to whether his primary duty was the
performance of management and general business operations and whether his primary duty
included exercise of discretion and independent judgment. Defendant contends that under
Robinson-Smith v. Government Employees Ins. Co., 590 F.3d 886 (D.C. Cir. 2010), plaintiff
meets the requirements of the administrative exemption.
In Robinson-Smith, GEICO was sued by two of its auto-damage adjusters for overtime
benefits under the FLSA. Id. at 887-888. GEICO contended that its auto-damage adjusters were
exempt from overtime pay as administrative employees. Id. at 888. The Robinson-Smith court
entered summary judgment in favor of GEICO. Id. at 897. In doing so, it found that “the
primary duty of a GEICO auto-damage adjuster, which consists of the assessment, negotiation
and settlement of automobile damage claims, includes the exercise of discretion and independent
judgment.” Id. at 893. It also found that “the auto damage adjuster has the power to make
independent choices ‘free from immediate direction or supervision.’” Id. at 894 (quoting 29
C.F.R. § 541.207(a)). Finally, the court found that “the adjuster makes choices with respect to
matters of significance” because “[h]e is empowered to negotiate with claimants and body shops
and settles claims up to $10,000 or $15,000—all actions that bind GEICO financially.” Id. at 895
(internal quotations omitted).
The facts in this case are virtually indistinguishable from the facts in Robinson-Smith.

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Here, plaintiff’s primary duty consists of the assessment, negotiation, and settlement of
automobile damage claims. Although there is some dispute about how much time plaintiff spent
on those duties, as opposed to paperwork and other duties, there is no dispute that his work
settling insurance claims was the most important of his duties. Plaintiff was also able to make
independent choices free from immediate direction or supervision. Although he was
reprimanded once for changing a loss value after it had been entered into defendant’s database,
freedom from immediate direction “does not necessarily imply that the decisions made by the
employee must have a finality that goes with unlimited authority and a complete absence of
review.” 29 C.F.R. § 541.207(c). Finally, like the adjusters in Robinson-Smith, plaintiff was
empowered to settle claims for up to $15,000. (Def. SMF ¶ 29).
Plaintiff attempts to distinguish Robinson-Smith on two grounds. First, he contends that
he merely exercised his skill in applying certain techniques, procedures, and standards when
performing damage adjustments for defendant, and that therefore his claim-adjustment work was
not administrative. See 29 C.F.R. § 541.207(b)). This contention was rejected by the RobinsonSmith court, as well as the Ninth and Seventh Circuits in similar cases. See Robinson-Smith, 590
F.3d at 891; In re Farmers Ins. Exch., Claims Representatives’ Overtime Pay Litig., 466 F.3d
853 (9th Cir. 2006), as amended, 481 F.3d 1119, 1132 n.9 (9th Cir. 2007); Roe-Midgett v. CC
Servs., Inc., 512 F.3d 865, 874-75 (7th Cir. 2008). Here, as in Roe-Midgett, plaintiff exercised
independent judgment to verify whether actual damage was consistent with the claimed damage,
was “on the lookout for fraud,” and assessed the value of the damage to the vehicles. 512 F.3d at
874. There is therefore no genuine dispute as to whether plaintiff’s claim-adjustment work was
administrative.

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Second, plaintiff contends that he merely input figures into defendant’s database and
settled insurance claims for the dollar amount that the software calculated. However, the
adjusters in Robinson-Smith also used the same software to assist in their appraisal process. See
590 F.3d at 888-89 (describing adjuster’s work process). The Robinson-Smith court noted that
“[a]n adjuster makes decisions that are not dictated by the software . . . such as interviewing
insureds about pre-existing damage, determining whether damage was caused by a covered event
and recommending that payment be withheld on a claim if the damage did not result from a
covered loss.” Id. at 889. Plaintiff here also performed all of these tasks. (See Def. SMF ¶¶ 11,
15).9
The holding in Robinson-Smith is buttressed by guidelines under the FLSA regarding
insurance adjusters, which state as follows:
Insurance claims adjusters generally meet the duties requirements for the administrative
exemption, whether they work for an insurance company or other type of company, if
their duties include activities such as interviewing insureds, witnesses and physicians;
inspecting property damage; reviewing factual information to prepare damage estimates;
evaluating and making recommendations regarding coverage of claims; determining
liability and total value of a claim; negotiating settlements; and making recommendations
regarding litigation.
29 C.F.R. § 541.203(a). Plaintiff performed all those tasks except for interviewing witnesses and
physicians, evaluating or determining coverage, and making recommendations regarding
litigation. He therefore performed a majority of the activities the FLSA regulations list as
administratively exempt from the statute.

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Plaintiff also contends that unlike the adjustors in Robinson-Smith, he did not interview witnesses, spend
time negotiating with shops over repair times for body work, check for indicia of fraudulent claims, or make
independent determinations as to whether to repair or replace a part. However, both plaintiff and the adjusters in
Robinson-Smith only interviewed insureds about loss claims, not witnesses. See Robinson-Smith, 590 F.3d at 897;
(Def. SMF ¶ 8, 9). Moreover, plaintiff here did in fact negotiate with repair shops, check for fraudulent claims, and
negotiate with defendant’s customers. (Def. SMF ¶¶ 15, 19, 33).

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There is therefore no genuine dispute as to whether plaintiff worked in a position that is
exempt from the Massachusetts overtime wage statute. Accordingly, defendant’s motion for
summary judgment will be granted as to that claim.
IV.

Conclusion
For the foregoing reasons, defendant’s motion for summary judgment is GRANTED as to

the Massachusetts Minimum Fair Wage Act claim and DENIED in all other respects.
So Ordered.

/s/ F. Dennis Saylor
F. Dennis Saylor IV
United States District Judge

Dated: July 22, 2014

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