Nekoroski v. Mathai

30 Mass. L. Rptr. 485
CourtMassachusetts Superior Court
DecidedSeptember 28, 2012
DocketNo. SUCV201104315BLS1
StatusPublished
Cited by1 cases

This text of 30 Mass. L. Rptr. 485 (Nekoroski v. Mathai) 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
Nekoroski v. Mathai, 30 Mass. L. Rptr. 485 (Mass. Ct. App. 2012).

Opinion

Billings, Thomas P., J.

OpenRisk LLC (“OpenRisk”) is a Delaware limited liability company. It was formed to develop a platform to estimate the potential financial loss to a portfolio of real property resulting from natural disasters such as earthquakes, floods, tornadoes, and hurricanes. The plaintiffs (herein, the “Derivative Claimants,” collectively with OpenRisk, the “OpenRisk Parties”) are members and managers of OpenRisk. They brought this derivative action against the defendants, former high-level OpenRisk employees (the “Former Employees”) who resigned their employment on October 11, 2011. OpenRisk, on whose behalf the claims are brought, is a nominal defendant.

Greatly summarized, the complaint alleges that the Former Employees misappropriated the intellectual property comprising the OpenRisk platform, and are working toward taking it to market ón their own. The former Employees, on the other hand, claim that Mathai developed the source code in question before joining OpenRisk, and that his claim to it was preserved in a Prior Inventions Agreement between himself and OpenRisk. At the heart of the dispute, then, is the question of who actually owns the intellectual property that both sides are attempting to develop as a commercially viable product.

This Motion concerns the claims that the Former Employees have asserted; by way of an amended counterclaim and an amended cross claim (the “Counterclaim” and the “Cross Claim”), against the Derivative Claimants and OpenRisk, respectively. There are eight counts in the Counterclaim and seven in the Cross Claim, as follows.

Amended Counterclaim:

1. Violation of G.L.c. 149, §148 et seq.
2. Defamation.
3. Tortious Misrepresentation.
4. Breach of Contract.
5. Conversion.
6. Intentional and Negligent Interference with Advantageous and/or Prospective Business Relationships.
7. Breach of Fiduciary Duty.
8. Fraud, Negligent, and Intentional Misrepresentation.
Amended Cross Claim:
(Same as in the Counterclaim, except that Count 7, “Breach of Fiduciary Duty,” is omitted and the count for “Fraud, Negligent, and Intentional Misrepresentation” is numbered 7.)

The allegations of each count (which are substantially identical as between the matching counts in the Counterclaim and the Cross Claim) are further summarized below, to the extent necessary.

[486]*486DISCUSSION

1. Procedural Matters

To withstand a Rule 12(b)(6) motion to dismiss, a plaintiffs complaint must contain “allegations plausibly suggesting (not merely consistent with) an entitlement to relief, in order to reflect [a] threshold requirement . . . that the plain statement possess enough heft to sho[w] that the pleader is entitled to relief.” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007) (internal quotations omitted). While a complaint need not set forth detailed factual allegations, a plaintiff is required to present more than labels and conclusions, and must raise a right to relief “above the speculative level . . . [based] on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id.

A Rule 12(b)(6) motion to dismiss is addressed primarily to the face of the complaint. The Court may also consider documents attached to or explicitly referenced in the complaint and, in an appropriate case, matters of public record. See Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43, 45 n.4 (2004); Harhen v. Brown, 431 Mass. 838, 840 (2000); Schaer v. Brandeis University, 432 Mass. 474, 477 (2000). 1

With these principles in mind, I turn to the various Counts asserted by way of counterclaim and cross claim.

2. Count One: The Wage Act

The Counterclaim and Cross Claim allege that OpenRisk is a Delaware Limited Liability Company with its principal office in Belmont, Massachusetts. The individual Derivative Claimants are all Massachusetts residents. Mathai, a New Jersey resident, served as OpenRisk’s Executive Vice President and Chief Technology officer; Mumane, a Maryland resident, was its Senior Vice president; and Ott, a New Jersey resident, was its President. The Service Agreements with all three provided that their “principal location will be at the OpenRisk office” in Cranbury, New Jersey.2 There is no allegation that any of them performed any substantial services in Massachusetts.

Count One asserts claims under the Wage Act for unpaid salaiy, vacation benefits, and retirement funds for the three-and-one-half-month period from July 2011 through October 11, 2011. It appears undisputed in the pleadings that the Former Employees were not paid after June of 2011. The primary question on the Motions to Dismiss, therefore, is whether the Act applies to these employees.

The Wage Act imposes obligations on “[e] very person having employees in his service .. .” G.L.c. 149, §148. It does not expressly define its intended territorial reach; nor does any appellate decision of which I am aware.3 At least two trial court decisions, however, have held that applicability of the Wage Act is determined by the situs of the work. Telford v. Iron World Mfg. LLC, 680 F.Sup.2d 337, 342 (D.Mass. 2010) (holding the Act applicable where employee worked three days a week in Massachusetts); Hadfield v. A.W. Chesterton Co., 2009 WL 3085921, 26 Mass. L. Rptr. 101 (Mass.Super. 2009; Fremont-Smith, J.) (Act did not apply to sales manager for Massachusetts company’s sub-Saharan Africa territory, even though he traveled regularly to the home office in Woburn; “Generally, statutes are presumed not to apply ex-traterritorially unless there is clear legislative intent to the contrary”).

More recently, a colleague in this session has held that a salesman who lived in Florida and “conducted his business largely via the internet..., but who also traveled throughout the United States, as salesmen are wont to do, in order to serve the company’s customers and further the company’s business” was protected by the Wage Act, where “his business address was in Massachusetts and his contact information was a Massachusetts telephone number and Massachusetts fax number.” He “had customers in at least thirty states, including between eleven and nineteen customers in Massachusetts . . . , traveled to at least twenty of those states, including Massachusetts,” and used a cubicle in the company’s only office, located in Massachusetts, when he was in town. The court deemed these to be “more than sufficient contacts with Massachusetts to afford [the employee] the protection of the Wage Act.” Dow v. Casale, 2011 WL 6379286 (Mass.Super. 2011; Lauriat, J.) [29 Mass. L. Rptr. 132].

Plainly, the work of a traveling salesman such as Mr. Dow does not easily lend itself to a traditional “situs” test. The Former Employees, however, were not traveling salesmen; they were IT professionals working out of a New Jersey office and/or their homes in New Jersey and Maryland.

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Bluebook (online)
30 Mass. L. Rptr. 485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nekoroski-v-mathai-masssuperct-2012.