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Roma v. Raito, Inc.

United States District Court, D. Massachusetts

March 31, 2015

JOHN R. ROMA, Plaintiff,
RAITO, INC., Defendant.


LEO T. SOROKIN, District Judge.


This case arises out of an alleged breach of employment agreement, whereby the defendant Raito Inc. ("Raito") employed the plaintiff, John R. Roma ("Roma") in connection with its "deep soil mixing" construction business. Specifically, Roma alleges Raito breached the "Profit Sharing/Bonus Program" provision of the agreement. Raito now moves for Partial Summary Judgment as to Count I (Breach of Contract), Count II (Quantum Meruit), and Count III (Violation of M.G.L.c.149, §§ 148, 150). For the reasons set forth herein, Raito's Motion for Partial Summary Judgment is DENIED, in part, and ALLOWED, in part.


Raito is a construction company that specializes in "deep soil mixing." Doc. 42-1 ¶ 1.[1] It is a subsidiary of Raito Kogyo Co., Ltd., a publicly traded engineering and construction company in Japan. Id. ¶ 2. Raito is headquartered in Northern California. Id. ¶ 3.

In November of 2004, Raito hired Roma to establish its New England District Office. Id. ¶ 6. Raito and Roma entered into a letter agreement dated November 18, 2004 ("Letter Agreement"), which set forth the terms of Roma's compensation. Id. ¶ ¶ 7-9. The Letter Agreement provided, in part, that Roma would receive a starting salary of $120, 000 per year, a car allowance, and other benefits. Doc. 1-2. In addition, the Letter Agreement provided:

You will participate in the following Profit Sharing/Bonus Program. Company profit has to be $600, 000.00 at minimum. Last years [sic] lost [sic] (if any), and all taxes due will be deducted from the profit. You will receive 4% of the New England district profit after taxes.


Shortly after the Letter Agreement was signed in 2004, Roma went to work for Raito and was head of the New England District Office. Doc. 42-1 ¶ 6. He was the only person at Raito with such a profit-sharing provision. Doc. 38 ¶ 14. The "Profit Sharing/Bonus Program" provision forms the crux of Roma's Complaint. Doc. 1. at 3-5. Essentially, Roma claims that Raito failed to include certain amounts collected by Raito for projects Roma worked on, and that in failing to include those amounts, Raito breached the terms of the Letter Agreement. Id. Roma claims he is owed $273, 616.00. Id. Raito counters that it abided by the Letter Agreement in calculating any and all amounts owed to Roma. Doc. 36 at 2-3.[2] Raito did not create separate financial documents or track specifically amounts that may have been owing to Roma under the Letter Agreement until or around March of 2011. Doc. 42-2 ¶ ¶ 26, 50-52.

Part of Roma's duties was to manage a pre-existing project, the Providence River Bridge project known as the "PBS" project. Doc. 42-1 ¶ ¶ 10, 11, 13. The project, as inherited by Roma, had financial problems and substantial cost overruns. Id. ¶ ¶ 12, 13. In or about 2007, Raito filed a lawsuit against two other entities involved with the PBS project. Id. ¶ 15. One of the lawsuits settled in or around March 23, 2012, for $1.5 million and the second lawsuit settled for $2.127 million in or around February of -. Doc. 42-1 ¶ ¶ 59, 61. These amounts were not included in Raito's Profit Sharing/Bonus Program calculation. Doc. 37 ¶ 48. Raito never included any profits or losses with respect the PBS project as part of the New England District Office's financial statements as the PBS project was always tracked separately. Id. ¶ ¶ 28, 30, 32. Roma objected to the financial statements, but only insofar they related to issues unrelated to the PBS project. Doc. 42-3 ¶ ¶ 7, 8.

In February of 2011, Raito decided to close the New England District Office. Doc. 42-3 ¶ 28. Once Raito had made its final decision in 2011 to close the New England District Office, Roma and representatives of Raito met in Woburn, Massachusetts, to discuss the amounts that Roma contended were owing to him pursuant to the Letter Agreement.[3] Doc. 42-3 ¶ 28. Raito states that Roma asked Raito for "additional" financial incentives for his work on the then, still pending, PBS lawsuits. Doc. 42-1 ¶ 42. Roma denies that he asked for additional incentives, and instead, he states he put forth alternative methods of compensation in an attempt to resolve the differences he had with Raito's upper management with respect to the Profit Sharing/Bonus Program. Id.

In or around November of 2011, Raito sold certain equipment to Weeks Marine ("Weeks"). There is no dispute that the sale of the equipment was, in large part, due to the efforts of Roma. Doc. 42-2 ¶ 36. The equipment was purchased with funds from Raito's headquarters in California. Doc. 36 ¶ ¶ 11, 12. Raito never included on the financial statements provided to Roma, any capital expenditures or capital gains. Roma, however, argues the capital gains should be attributable to the New England District Office. He relies, in part, on his accounting expert, Justin Amico who opines that under Generally Accepted Accounting Principles ("GAAP") non-operating financial and expenses should be included in the calculation of net profits. Doc. 43 at 86. (filed under seal).[4]

The office officially closed in fall of 2011, Doc. 42-1 ¶ ¶ 6, 18, 40, 51, and Roma was hired by Weeks. Doc. 42-4 at 29. By agreement between Roma, Raito and Weeks, from October of 2011 and May 15, 2012, Roma worked for both Raito and Weeks and Raito paid his salary. Id. After May 15, 2012, Roma continued to do some work for Raito in order to ...

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