WALTER BEDNARK & others [Note 1] vs. CATANIA HOSPITALITY GROUP, INC., [Note 2] & another. [Note 3]

LENK, J. We are once again called upon to interpret the provisions of the Massachusetts Wage Act protecting wages and tips,

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as most recently amended in 2004. See G. L. c. 149, § 152A, as appearing in St. 2004, c. 125, § 13 (Tips Act or Act). The matter is before us on the plaintiffs' appeal from a summary judgment dismissing all the claims in their (amended) class action complaint. [Note 4]

The plaintiffs are bartenders who prepared and served alcoholic and other beverages for guests at special functions held at the defendants' hotel, the Cape Codder Resort and Spa, at various times between February 1, 2003, and November 27, 2006. The defendants (hotel) in that period assessed function event customers an additional charge of eighteen or nineteen percent of the amount invoiced for food and beverages. The charge appeared on the invoices below the charge for food and beverages and above the total charged. The hotel identified this charge on the invoices (and also on function contracts and function menus) simply as an "administrative fee," without providing further written explanation or description.

The plaintiffs contend that the "administrative fee" imposed by the hotel was in fact a "service charge" as defined in the 2004 version of the Tips Act, [Note 5] because it was "a fee that a patron or other consumer would reasonably expect to be given to a wait staff employee, service employee, or service bartender." G. L. c. 149, § 152A(a). [Note 6] If the "administrative fee" was such a service charge, then the hotel violated the statute by failing to distribute the proceeds to the plaintiffs. See G. L. c. 149, § 152A(d), first

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par. [Note 7] The hotel maintains that its written designation of the imposed fee as an "administrative fee," without more, brought it within the safe harbor provision contained in § 152A(d), and that the amounts collected are thus not tips or service charges payable to the plaintiffs. [Note 8]

In reviewing whether summary judgment for the hotel was warranted, we determine whether, on the undisputed material facts of record, the hotel was entitled to judgment as matter of law. Zang v. NRT New England Inc., 77 Mass. App. Ct. 665, 669-670 (2010). Given the procedural posture, the motion judge was not in a position to make factual findings to which we need defer, and his legal analysis, while of great interest to us, is not binding upon us. See Clean Harbors, Inc. v. John Hancock Life Ins. Co., 64 Mass. App. Ct. 347, 357 n.9 (2005). Many of the material facts are undisputed, and for summary judgment purposes, we view the evidence as to any disputed facts in the light most favorable to the plaintiffs as the nonmoving parties. [Note 9] Gennari v. Reading Pub. Schs., 77 Mass. App. Ct. 762, 763 (2010).

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Discussion. The Supreme Judicial Court had occasion in DiFiore v. American Airlines, Inc., 454 Mass. 486 (2009), to examine closely the current version of the Tips Act applicable to the dispute now before us. The 2004 amendment replaced in its entirety the predecessor act, last amended in 1983, and expanded both the scope and the protections afforded by the predecessor act. Both versions, however, share the same basic purpose -- to protect the wages and tips of certain employees who fall within the ambit of the statute. [Note 10] Id. at 492. "The Legislature's intent in enacting the Act can be plainly discerned from its language and history -- to ensure that service employees receive the tips, gratuities, and service charges that customers intend them to receive" (emphasis supplied). Id. at 491.

The 2004 amendment, like the predecessor Act, essentially imposes strict civil liability upon the employer, which, irrespective of its intent, will suffer the consequences [Note 11] if, as the result of its statutory noncompliance, protected employees do not

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receive the tips, gratuities, and service charges to which they are entitled. See Somers v. Converged Access, Inc., 454 Mass. 582, 591-592 (2009); Cooney v. Compass Group Foodservice, 69 Mass. App. Ct. 632, 638-639 (2007). [Note 12] In addition to defining key terms and setting forth what employers may and may not do with respect to tips and service charges, the Legislature enacted § 152A(g) of the Tips Act, [Note 13] "demonstrat[ing] that the Legislature was cognizant, in general, of the risk that employers or other persons may seek to find ways . . . to attempt to avoid compliance with the Act, and intended to thwart such schemes." DiFiore, supra at 497.

The hotel maintains that it is in compliance with the Act, as the § 152A(d) safe harbor provision permits an employer to impose on a patron "any house or administrative fee in addition to or instead of a service charge or tip, if the employer provides a designation or written description of that house or administrative fee, which informs the patron that the fee does not represent a tip or service charge for wait staff employees, service employees, or service bartenders." The hotel argues, and the motion judge agreed,

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that mere "designation" of the charge as an "administrative fee," without more, is enough to bring the charge within the § 152A(d) safe harbor provision because the statute should be read as permitting an employer either to provide a "designation" or to provide a "written description" of the fee that expressly informs the patron that the fee is not a tip or service charge for wait staff. On this view, by the very act of identifying the charge as an "administrative fee," the hotel was automatically exempted from any statutory requirement to pay to protected employees amounts thereby collected, regardless of whether patrons reasonably believed the charge to be in the nature of a gratuity for such employees.

The plaintiffs, in contrast, contend that to come within this statutory safe harbor (i.e., to impose upon patrons a fee that categorically cannot be considered a "service charge" or "tip" as defined in § 152A[a]), the employer must do more than just label a charge as an "administrative fee" or a "house fee." On this view, whether the employer provides the customer a "designation" of such a fee or a "written description" of the fee charged, it must in either event do so in a way that informs the patron that the fee so designated or described does not represent a tip or service charge for the protected employees. For the reasons that follow, we think the reading of the statute urged by the plaintiffs is the correct one.

As in DiFiore, "familiar principles of statutory construction guide our interpretation. We look to the intent of the Legislature 'ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated.' Industrial Fin. Corp. v. State Tax Comm'n, 367 Mass. 360, 364 (1975), quoting Hanlon v. Rollins, 286 Mass. 444, 447 (1934). In addition, our respect for the Legislature's considered judgment dictates that we interpret the statute to be sensible, rejecting unreasonable interpretations unless the clear meaning of the language requires such an interpretation. See Commonwealth v. Dodge, 428 Mass. 860, 865 (1999), quoting Beeler v. Downey, 387 Mass. 609, 616 (1982) ('we must read the statute in a way

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to give it a sensible meaning'). Where possible, we construe the various provisions of a statute in harmony with one another, recognizing that the Legislature did not intend internal contradiction. Locator Servs. Group, Ltd. v. Treasurer & Receiver Gen., 443 Mass. 837, 859 (2005)." DiFiore, 454 Mass. at 490-491.

We engage first with the text of the § 152A(d) safe harbor provision (see note 8, supra), attending in particular to the grammar and punctuation of the relevant language. The hotel chiefly relies for its proposed reading of the provision on the last antecedent rule, "the general rule of statutory as well as grammatical construction that a modifying clause is confined to the last antecedent unless there is something in the subject matter or dominant purpose which requires a different interpretation." Druzik v. Board of Health of Haverhill, 324 Mass. 129, 133 (1949), quoting from Hopkins v. Hopkins, 287 Mass. 542, 547 (1934). Citing to this rule, the hotel maintains that the phrase, "which informs the patron that the fee does not represent a tip or service charge," should modify only the last antecedent, "written description of that house or administrative fee," and should not modify the first antecedent, "designation." [Note 14]

The rule, however, has little ready application here since its common and most powerful use occurs where a list of multiple, distinct antecedents precedes the modifying clause. [Note 15] See Druzik, supra at 132-133; Moulton v. Brookline Rent Control Bd.,

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385 Mass. 228, 230-232 (1982); Herrick v. Essex Regional Retirement Bd., 77 Mass. App. Ct. 645, 646 n.2, 650 (2010). See generally 2A Singer & Singer, Statutes & Statutory Construction § 47:33 (7th ed. 2007), collecting cases. In this case, there is no such list of distinct antecedents preceding the modifying clause, but rather a single phrase ("a designation or written description of that house or administrative fee") consisting of two terms ("designation or written description") that are not separated by a comma. The absence of a comma suggests that the Legislature intended the words "of that house or administrative fee" to modify both "designation" and "written description." [Note 16] See Taylor v. Burke, 69 Mass. App. Ct. 77, 81 (2007) (punctuation, though not determinative of legislative intent, may be considered as indication of purpose of legislation). [Note 17]

A more pertinent grammatical rule is provided by Justice Brandeis, writing for the United States Supreme Court in Porto Rico Ry., Light & Power Co. v. Mor, 253 U.S. 345, 348 (1920): "When several words are followed by a clause which is applicable as much to the first and other words as to the last, the natural construction of the language demands that the clause be read as applicable to all." In keeping with this rule, we read § 152A(d) as containing a single antecedent clause ("a designation or written description of that house or administrative fee") followed by a general modifying clause that applies to the entire antecedent clause ("which informs the patron that the fee does not represent a tip or service charge for wait staff employees, service employees, or service bartenders"). This reading neither

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"add[s] words to the statute that the Legislature did not see fit to put there," Cooney, 69 Mass. App. Ct. at 638, nor renders superfluous any words that the Legislature did see fit to include, Commonwealth v. Wellesley Toyota Co., 18 Mass. App. Ct. 733, 735 (1984). [Note 18]

This reading is buttressed by examining it in the context of the statute as a whole and, especially, in connection with § 152A(a), which defines the term "service charge" (see note 6, supra). The definition includes two ways in which an employer-imposed fee to patrons may constitute a service charge that must be remitted to protected employees. First, "any fee designated as a service charge, tip, [or] gratuity" -- regardless of the employer's, employee's, or patron's intent or expectation -- is automatically rendered a "service charge" under the current Tips Act. G. L. c. 149, § 152A(a). See Cooney, 69 Mass. App. Ct. at 637 (interpreting prior version of Act as meaning that "any fee that the invoicing entity chooses to call a 'service charge' on an invoice for food or beverage service [is] the functional equivalent of a tip or gratuity, thereby subjecting the fee to the statute"). Second, "a fee that a patron or other consumer would reasonably expect to be given to a wait staff employee, service employee, or service bartender in lieu of, or in addition to, a tip" also constitutes a "service charge." Section 152A(a) notably does not exclude from this category of "service charge" a fee designated as an "administrative" or "house" fee under § 152A(d), leaving open the possibility that a patron, depending on the particular circumstances,

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would reasonably expect such a fee to be given to protected employees. [Note 19]

In support of its reading of the language at issue, the hotel argues that just as any charge designated by an employer as a "service charge, tip, [or] gratuity" under § 152A(a) must be automatically remitted to protected employees, so too must any charge designated an "administrative fee" or "house fee" automatically fall under the safe harbor provision of § 152A(d). We discern no such equivalence in the effect of the terms, either as a practical matter or in the context of the statute.

The terms "tip" and "service charge" are defined in the statute and are generally well understood as being in the nature of a gratuity. "[A] customer reasonably would expect a fee 'designated as a service charge' to be given to service employees . . . ." DiFiore, 454 Mass. at 494. In contrast, the terms "house fee" and "administrative fee," notably undefined in the statute, are not self-explanatory and do not enjoy a uniform or commonly understood meaning. Depending on the context and absent further explanation, a "house fee" could as easily be understood to be one imposed for services provided by house staff as it could one imposed in connection with, say, facilities maintenance. Likewise, a fee labeled an "administrative fee," particularly one like that at issue here in the eighteen or nineteen percent range, could refer to a service fee collected by the employer for distribution to the service staff, as well as to such things as general overhead and restocking costs.

The employer's designation of a fee as a "house" or "administrative" fee, then, neither indicates whether all or any part of the fee is in the nature of a gratuity nor necessarily comports with customer expectations. Section 152A(d) of the Tips Act requires an employer to do something more than simply label a fee as "house" or "administrative," in order to dispel the possibility that a patron would reasonably believe that the fee is a gratuity. [Note 20]

Interpreting § 152A(d) as we have done renders it consistent

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with and complementary to § 152A(a), and preserves the plain patron-centric focus of both § 152A(a) and § 152A(d) as to the nature of the employer-imposed fee. "Where two statutory provisions relate to the same subject matter, . . . 'they should be construed together so as to constitute an harmonious whole consistent with the legislative purpose.' " Dowling v. Registrar of Motor Vehicles, 425 Mass. 523, 525 (1997), quoting from Registrar of Motor Vehicles v. Board of Appeal on Motor Vehicle Liab. Policies & Bonds, 382 Mass. 580, 585 (1981). The hotel's interpretation of § 152A(d), on the other hand, would lead to the untenable result that fees designated, without more, as "administrative" or "house" fees would never qualify as service charges under § 152A(a), despite the fact that patrons might, in some circumstances, reasonably believe them to be service charges. Such an interpretation, shielding potential abuses within the safe harbor of § 152A(d), would fly in the face of the "express purpose" of the Act: to "protect gratuity payments given to, or intended for, service employees." DiFiore, 454 Mass. at 496.

Accordingly, we conclude that summary judgment was incorrectly entered for the hotel, which did not establish as matter of law that it had satisfied the requirements of the § 152A(d) safe harbor or that the designated "administrative fee" it billed and collected within the relevant period was not a "service charge" within the meaning of § 152A(a). There are material issues of fact in dispute, including whether the hotel informed relevant patrons that the administrative fee was not in the nature of a tip or gratuity. We accordingly reverse the summary judgment

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dismissing the plaintiffs' claims [Note 21] and remand the matter for further proceedings not inconsistent with this opinion.

Judgment reversed.