Sigma Systems, Inc. v. Rasamsetti

19 Mass. L. Rptr. 734
Massachusetts Superior Court·Decided August 19, 2005·No. No. 011435·Published

Opinion

Fecteau, Francis R., J.

This is an action brought by the plaintiff against its former employee for his breach of an employment contract between them, by which the plaintiff seeks to obtain damages for losses sustained for the defendant’s having failed to provide a 30-day notice of termination, verified time records and for having left a project on which he was working on behalf of a client and which cost the plaintiff the loss of income from that project upon which it billed for the defendant’s services. This matter came on for trial on June 17, 2005, before me, sitting without juiy, the parties having waived their rights thereto.1 The defendant was granted, at his request, leave until June 29, 2005, to respond in writing to a claim of the plaintiff for attorneys fees, as a part of the breach of contract claim, following which the matter was taken under advisement.

From the summary judgment record, the court sets out for purpose of factual context, the following background information.

In 1997 Sigma, though its president, Mohan Nannapaneni (Mr. Nannapaneni), who testified during the trial, contracted with Rasamsetti for him to provide computer consulting services to Sigma’s clients. At the time the parties entered into the original contract, Rasamsetti was a resident of India and, as a result of Rasamsetti’s employment with Sigma, he was able to gain entrance to the United States by obtaining a temporary work visa. On September 30, 1998 the parties entered into another contract entitled Employment Agreement (Agreement). Pursuant to the agreement, Rasamsetti was to be paid only upon assignment by Sigma to one of its clients and upon submission by him of time record forms to Sigma. The agreement also provided that employment could be terminated by either party upon 30 days notice.

In March 2001, Rasamsetti, who was apparently a computer programmer, was assigned by Sigma, though its primary client Starpoint, to begin a new assignment at Wellington Management, a financial investment company. While the initial contract between Wellington and Sigma/Starpoint was for a period until June 1, 2001, it was extended and was reasonably expected to provide work to Sigma and its employee/consultant through the end of November 2001. On or about June 26, 2001, Mr. Rasamsetti gave notice to Sigma that he would be terminating his employment at the end of June, and refused to provide a 30-day notice of termination, even after repeated requests to him to do so. Upon receipt of this notice, and as a result of his refusal to work out the 30-day notice period, Sigma terminated the employment agreement with Rasamsetti for cause.

As a result of the defendant’s breach of this employment contract, the plaintiff claims it suffered the loss of the billable time for the services that it would have provided to Wellington through the consulting work of the defendant during the remaining 21 days of the 30-day notice period, as well as the additional 85 workdays that the defendant would have been expected to remain on the Wellington project through the end of November 2001. In addition, the plaintiffs claim includes payment to the defendant for 66 hours for services he claimed to have provided to Wellington prior to his termination, but for which he did not provide verified time slips, a prerequisite in order for Sigma to be paid by its customer, Wellington/Starpoint, and a contractual requirement imposed upon the defendant.

The court is satisfied from the credible evidence submitted that the plaintiff has proven its entitlement to damages from the defendant for: (1) his failure to provide verified time records for 66 hours of time he was paid by the plaintiff but for which the plaintiff cannot recover from its customer, at $29.39 per hour,2 for a total of $1,939.74, and (2) the 21 additional workdays that Sigma lost on account of the defendant’s failure to work through the 30-day notice period required by the contract, as it appears reasonably unlikely that the plaintiff would have been able to replace the defendant at Wellington on such short notice. The value of this latter claim totals $4,937.52.

The third area of damage sought by the plaintiff is the reasonably expected net profit lost from the amount that the plaintiff expected to bill Wellington for the defendant’s services during the balance of the project, estimated as approximately 85 days, through November 30, 2001, i.e., $19,985.20. The court is mindful of the contractual obligations of the defendant/employee which include “any and all damages, costs, expenses, lost profits and benefits caused by the failure of the employee to fulfill employee’s obligations hereunder, whether direct or indirect, actual or consequential, and including any remedy available to [735]*735Sigma at law, or equity . . .” (See Paragraph 12B(vi) of employment agreement, ex. 1.) While the court is satisfied that the reasonably expected net profit that the plaintiff would obtain from this project was reasonably foreseeable to the parties at the commencement of the project to which the defendant was assigned, and that the plaintiff has shown though credible evidence that the project would likely have generated the need for its services through the beginning of November, the court is not satisfied that the defendant has waived the plaintiffs duty to mitigate its damages, nor that the plaintiff has proven that it has reasonably mitigated its damages or reasonably attempted to do so. There was no evidence offered by the plaintiff that it had taken any steps towards mitigation of its damages, other than efforts undertaken to tiy to persuade the defendant to return to work, nor any evidence suggestive that the plaintiff was either unable to substitute another consultant to cover some or all the time that remained on the Wellington project on which the defendant was assigned, or that such efforts would have been futile. See Burnham v. Mark IVHomes, Inc., 387 Mass. 575, 586 (1982) (“. . . a plaintiff may not recover for damages that were avoidable by the use of reasonable precautions on his part”); Thayer v. Western Union Telegraph Co., 296 Mass. 494, 501 (1937) (“they [the plaintiffs] were bound, however, to ‘be reasonably active and diligent to recoup’ such loss”). Moreover, given that the contract in question allowed the defendant to terminate his employment by a 30-day notice without recourse, a scenario that did not occur here, it would, nonetheless, be reasonably foreseeable to the plaintiff that such a situation could occur that would require it to respond with replacements in the event of a properly given 30-day notice. Without any evidence suggestive that the defendant’s work on this project was irreplaceable, and/or that the plaintiffs efforts to cover his absence would have been futile, in whole or in "part; it has failed to satisfy its duty to mitigate damages caused by the defendant’s breach for which the court is compelled to deny damages.

Lastly, the plaintiffs contractual claim includes attorneys fees and costs of litigation. See Paragraph 12B(vi): “. . . Sigma shall also be entitled to reimbursement of all legal fees, costs and expenses in pursuing any claim against employee.” The plaintiffs attorney has submitted an affidavit of his billings to the plaintiff which totals $50,037.50, at $200.00 per hour for 253 hours.3 The defendant complains of the excessiveness of these billings.

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Sigma Systems, Inc. v. Rasamsetti, 19 Mass. L. Rptr. 734 (Mass. Ct. App. 2005).

19 Mass. L. Rptr. 734 (Sigma Systems, Inc. v. Rasamsetti) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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