Selfridge v. Jama
| Decision Date | 24 March 2016 |
| Docket Number | CIVIL ACTION NO. 13-11108-DPW |
| Parties | Stacie Selfridge Plaintiff, v. Mohamed Jama, Tricia Murray, Bambie Anderson, Noemi Perez, and Boston Home Health Aides, LLC, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Christopher J. Trombetta, Law Office of Christopher J. Trombetta, Mansfield, MA, for Plaintiff.
Andrew P. Botti, McLane, Graf, Raulerson & Middleton, P.A., Woburn, MA, for Defendants.
This action arises out of the termination of the plaintiff, Stacie Selfridge, from her employment at Boston Home Health Aides, LLC (“Boston Home Health”), where she served as a manager and allegedly anticipated obtaining an ownership interest in the company. Selfridge seeks declaratory and monetary relief for unpaid compensation, emotional distress, and breach of contract and fiduciary duty claims. The defendants—Boston Home Health, Mohamed Jama (the chief executive officer), and employees Tricia Murray, Bambie Anderson, and Noemi Perez—assert counterclaims alleging Selfridge's violation of duties to the company and abuse of process. I have before me the parties' cross-motions for summary judgment, two motions to strike, and the defendants' motion for a protective order to prohibit the plaintiff from taking two supplemental depositions.
Boston Home Health, incorporated on January 4, 2010, is a Massachusetts limited liability company formed for the purpose of providing home health care services, nursing services, and related activities. The company is managed by its members, who are authorized to act on behalf of and manage the company. This authorization includes entering into agreements, executing contracts and documents, engaging employees and agents, defining such employees' duties and compensation, and establishing member and employee benefit and incentive plans. Members are entitled to distributions from the company “from time to time ... after the Members determine in their reasonable judgment that the Company has sufficient cash in excess of the current and the anticipated needs of the Company to fulfill its business purposes.” Such distributions are made in accordance with each member's sharing ratio.
The original members of Boston Home Health were Jama, Abdulkadir Mohamed, and Barlin Hassan. Under the terms of the operating agreement, the original members agreed to make initial capital contributions, with Jama contributing $250 and obtaining an initial sharing ratio of ½, and Mohamed and Hassan contributing $125 each and each obtaining an initial sharing ratio of ¼. The operating agreement permits the addition or withdrawal of members with the written consent of all existing members.1 No additional members have been added since the operating agreement was executed.
Selfridge, Murray, Anderson, and Perez joined Boston Home Health as employees in late 2011, when the company had approximately 25 to 35 patients. Selfridge is a certified occupational therapist assistant who performed primarily administrative work for Boston Home Health. Murray is a physical therapist who took on an administrative management role at Boston Home Health in February 2012; Anderson is a registered nurse who served as assistant director of nursing; and Perez performs marketing work.
a. The Employment Agreement
The employment of the four women at Boston Home Health was governed by an employment agreement that all four signed along with Jama and Liban Abdulle, another employee, on February 1, 2012. This agreement was crafted by Attorney Saul Benowitz with the purported intention of governing the parties' relationships until a dispute between Mohamed (one of the members) and Boston Home Health was resolved. The agreement states that it does not create or confer any membership or ownership interest beyond what is provided for in the operating agreement, and that it is intended “to enable the business of the Company to proceed to the mutual benefit of the parties” without adding new members.
Although the employment agreement does not create new members, it vests management authority for the company in Selfridge and Jama as officers, giving Jama the precedential decision where the two officers disagree.2 The employment agreement also sets forth the compensation (including profit sharing), duties and responsibilities, termination procedures, confidentiality requirements, non-assignment and non-compete requirements, and other employment terms for the employee signatories. It provides that Selfridge, Anderson, Murray, and Perez are each to receive a salary of $2,000, presumably per week. The employee signatories shall also receive “incentive payments” on a quarterly basis or more frequently if the officers determine that “the financial condition of the Company” warrants such payment. Selfridge, Anderson, and Murray are each to receive 14.5% incentive payment shares, and Perez is to receive a 6.5% incentive payment share, presumably of whatever funds are authorized to be used for incentive payments. Finally, the agreement provides for officer approval of overtime hours and additional overtime compensation.
If an employee is terminated, the employment agreement provides for two compensation scenarios: a termination payment or continued payment of the employee's incentive payments. When the employee is terminated by the company for “adequate cause”3 or at the voluntary election of the employee, the company selects the compensation option. When an employee is terminated without adequate cause by agreement of the officers, the employee selects the compensation option.
Incentive payments upon termination are made consistent with the incentive payment shares defined in the agreement. The termination payment consists of “the reasonable present fair market value of the Employee's rights to receive Incentive Payments, to the same extent as if said rights were freely assignable.” If the employee voluntarily left or has been terminated for adequate cause, the termination payment is reduced by “twenty-five (25%) of such determined value” and by “any amounts due to Company on account of [any] acts or omissions of the Employee constituting ‘Adequate Cause,’ ”4 and the company may elect to make the payment either in a lump sum of by delivery of a promissory note. If the employee was terminated without adequate cause and opts to receive a termination payment, he or she is entitled to full payment within thirty days of termination.
Selfridge was terminated on October 15, 2012, after approximately eight months of employment at Boston Home Health, through an email from Jama. She contends that she was never informed that her performance was inadequate and instead that she received positive reviews from Murray, who was apparently her supervisor.5 The defendants have articulated a variety of reasons for her termination, including that she failed to work more than five to ten hours a week at certain times because she was attending a master's degree program, that she engaged in threatening conduct and was difficult to work with, that she wrote checks to at least one vendor that was not a Boston Home Health vendor, that she promised to bring new clients to the company but failed to do so, that she lacked the qualifications to perform her job responsibilities, and that she engaged in fraudulent activity regarding therapy visit notes submitted to MassHealth, for which the company had to return approximately $10,000 in payments. Selfridge denies all of these claims except for her participation in a clinical program for her master's degree, which required her to be away from her office during business hours five days a week for twelve weeks during her employment at Boston Home Health; she claims that she did her work for the company at other times.
The plaintiff filed her complaint on May 5, 2013 seeking recovery for “a freeze out as to her employment at, and ownership of” Boston Home Health. She seeks a declaratory judgment that she is entitled to 14.5% of the value of Boston Home Health, monetary damages for her termination without cause and her unpaid compensation, and an award of attorneys' fees, based on her claims of breach of fiduciary duty, negligent and intentional infliction of emotional distress, breach of contract, violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. , and violation of the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, §§ 148, 150.
The defendants filed their answer and counterclaims against the plaintiff on July 25, 2013, to which Selfridge responded on August 1. The parties then engaged in discovery, including numerous depositions.6 Nearly a year later, on July 22, 2014, the parties provided a joint status report indicating that two depositions remained and would be completed by July 31, document discovery would be completed by July 30, and motions for summary judgment would be filed by July 31. On July 29, the defendants filed a motion for summary judgment pursuant to Fed. R. Civ. P. 56 as well as a motion for a protective order to prohibit the belated depositions of two individuals other than those contemplated by the July 22 status report.
Selfridge opposed the motions for summary judgment and for a protective order, and in so doing filed her own motion for summary judgment, seemingly limited to one issue: her purported right to incentive payments.7 The defendants opposed Selfridge's summary judgment motion, and Selfridge has filed a reply. In addition, Selfridge moves to strike certain statements made by the defendants in their memorandum, and the defendants move to strike portions of Selfridge's affidavit. Both motions to strike are opposed.
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