Percia v. VBenx Corp.

29 Mass. L. Rptr. 107
CourtMassachusetts Superior Court
DecidedOctober 20, 2011
DocketNo. WOCV200902614B
StatusPublished

This text of 29 Mass. L. Rptr. 107 (Percia v. VBenx Corp.) 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
Percia v. VBenx Corp., 29 Mass. L. Rptr. 107 (Mass. Ct. App. 2011).

Opinion

Ricciardone, David, J.

This is an action by Salvatore C. Percia (Percia) in which he claims that VBenx Corporation (VBenx) breached a contract to pay him wages as a senior executive officer for a period beginning in March 2004 through February 2007. Percia alleges that he fully performed his obligations pursuant to the contract, and that VBenx failed to make any wage payments despite owing same upon its termination of Percia’s employment in 2007. VBenx denies the existence of a valid and enforceable contract. The defendant also contends, alternatively, that any work Percia actually did was performed poorly, and furthermore that VBenx never terminated Percia’s employment which was required to trigger any obligation to pay Percia.

This action was tried to the court, sitting without a jury, from August 29, 2011 through September 1, 2001. The parties each filed proposed findings of fact and rulings of law with the court. Arguments of counsel were heard on September 19, 2011, the court thereupon took the matter under advisement.

Now, upon consideration of such testimony of the witnesses as the court determines to be credible, the exhibits, and the written memoranda and arguments of counsel, the court makes the following findings of fact, rulings of law, and order for entry of judgment in this action.

FINDINGS OF FACT

1. Plaintiff, Salvatore Percia, is a resident of Florida.

[108]*1082. Defendant, VBenx Corporation, is a Delaware corporation.

3. VBenx offers entities a single destination Internet portal for employee benefits.

4. VBenx was formed in early 2004 when the five original investors involved here, Percia, J. Brent Finnegan, Peter Marcia, Kenneth F. Phillips, and Richard Baker, agreed that they would acquire from Ace Insurance the business known as YouDecide.

5. Finnegan, Baker, Philips, Marcia and Percia were the only shareholders and Directors of VBenx, at least through the time period relevant to this litigation. All were experienced businessmen.

6. The five VBenx founders each invested approximately $225,000.00 for the purchase and operation of the YouDecide business. YouDecide was formally acquired on February 28, 2004.

7. Marcia, Finnegan, and Philips at that time had employment positions with other companies that limited their day-to-day involvement with VBenx, beyond their investments. It therefore was decided that Percia and Baker would assume operational roles.

8. Percia and Baker began working full time for VBenx/YouDecide in March of 2004; Percia was its President and Chief Executive Officer while Baker became Chief Financial Officer.

9. Percia testified that he worked 40-60 hours a week, seven days a week, based at a home office in Sterling, Massachusetts. The Company was headquartered in Georgia, so Percia traveled there several times a month to supervise operations. He also traveled regularly to other cities including Hartford, Baltimore and New York to “stabilize relationships with provider partners” which were mostly insurance companies. Twelve or thirteen VBenx employees reported to Percia, and he reported regularly to the Board of Directors. In December of 2005 his title became Chief Operating Officer of VBenx, a position he maintained until February 28, 2007 when he claims that the company terminated him.

10. Percia never received payment for his work, although the company paid all of his expenses.

11. Philips’s testimony generally supported Percia’s own high assessment of his work, claiming he performed “faithfully and diligently” for the company. He praised Percia’s work in what he termed a “complicated integration” or acquisition of a company known as “Rewards Plus” during 2006. He felt that he was “thrifty” in negotiations on behalf of the company, and that he maintained positive relationships with insurance companies such as Liberty Mutual and MetLife, as well as the company’s employees.

12. Nevertheless, VBenx was never profitable from March 2004 though February of 2007, the period involved here; its losses were in the hundreds of thousands each year and appears to have survived only through regular infusions of cash through loans by the original investors, mostly Marcia and Finnegan.

13. The Board of Directors did not run VBenx with a great deal of formality. Meetings were not conducted on a regular basis apparently with little notice.

14. There is no evidence that there were any discussions in 2004 concerning compensation for the work that Percia and Baker did for VBenx.

15. By the spring of2005, the issue had been raised as evidenced by an email sent by Percia to the other four original investors/board members on May 26th of that year (Exhibit 6). The email states in part:

We have all discussed that Richard and Sal should be compensated for their efforts to date. Discussions about equity have been on the table. Richard and I would rather we all stay equal partners on the equity side and be paid cash for our efforts. We obviously recognize that we do not have any cash and would offer to defer payment until such time as there is cash available. We feel that for the efforts through March 2005 we should get $200,000. This can be paid out as first dollar as it becomes available or when we sell, paid as first dollar after all initial investments and loans have been repaid . . . (Id.)

16. Although Percia testified that there were discussions during this timeframe concerning the compensation issue, there was no evidence at trial of any negotiations or developments with regard to specific terms of such compensation, let alone an actual agreement.

17. The next occurrence with regard to the plaintiffs compensation took place when he and Baker had the law firm representing VBenx (Foley Hoag & Eliot) draft documents to address the issue late in 2005. (Percia claims it was all Baker’s doing; this is dubious, it is clear that the plaintiff played a part in the preparation of the agreement.)

18. Baker and Percia were motivated by their own interests in having a contract for payment when they interacted with the attorney, and that they wanted the contract to be approved at an upcoming board meeting. None of the other original investors were involved in the drafting of the compensation documents.

19. This interaction resulted in the formation of the document which is at the heart of this controversy, and which was admitted into evidence here (Ex. 2). The document is entitled “Employment Agreement” and provides in relevant part;

That the term of employment began on the “as of’ date of March 1, 2004, i.e., it was retroactive to the time of the acquisition.
That the term of employment was to run to February 2007, with Percia acting in a “senior executive officer capacity, initially as President and CEO with the responsibilities normally associated with such position.”
[109]*109That Percia was to perform his duties “in a manner which will faithfully and diligently further the business and interests of the Company.”
That the term would renew automatically by one-year periods absent advance written notice of non-renewal.

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Cite This Page — Counsel Stack

Bluebook (online)
29 Mass. L. Rptr. 107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/percia-v-vbenx-corp-masssuperct-2011.