Breach of contract suit filed Friend alleges financier didn’t pay for work done in Bar Harbor

BANGOR – A longtime friend of one of the richest financiers in the world has filed suit at U.S. District Court, claiming the head of Fidelity Investments in Boston failed to pay him thousands of dollars for construction projects he managed at a luxurious vacation-home complex in Bar Harbor.

Richard W. Larson, 71, of Florida claims Edward C. Johnson III, also 71, broke promises, failed to pay wages, breached a contract and committed various forms of misrepresentation during a five-year business arrangement.

In a lawsuit filled with descriptions of elaborate lifestyles, Larson seeks punitive and compensatory damages, back pay, front pay and all court costs and attorney’s fees.

Johnson is chairman of the board and chief executive officer for Fidelity Investments, one of the largest financial institutions in the world. The company has assets of nearly $900 billion, according to information obtained on the Internet.

The lawsuit describes exquisite homes and a globetrotting lifestyle apparently lived by Johnson, whose father founded Fidelity in 1946. It also contains a few surprises, such as the fact the Fidelity titan helped restore Fort Knox in Prospect and once had considered acquiring and renovating the Bangor Waterworks site for business purposes.

But the main focus of the civil lawsuit is on a friendship that apparently hit the rocks over money.

Johnson denies the lawsuit’s allegations. In fact his attorney, Bernard Kubetz of Bangor, calls the litigation “frivolous.”

The case “has nothing to do with Fidelity Investments or its businesses,” Kubetz said.

“It’s unfortunate when someone uses the courts to take unfair advantage of a personal relationship. We’re confidant a Maine jury will see the case for exactly what it is,” Kubetz said. The attorney also is representing three people named as defendants who are managing Johnson family trusts.

Larson’s attorney, John McCarthy of Bangor, called the situation “unfortunate, but not one I want to present in the newspaper. Our view is this is best left for the court to decide. That’s where we prefer to have it resolved if it can’t be resolved amicably between the parties.”

Larson claims he and Johnson had been friends for 30 years though they were not always linked professionally. In earlier years, Larson was a plumbing contractor until he retired in 1988, the lawsuit states. In 1989, Larson met Johnson again at an exclusive club in Boston, when, he claims, Johnson asked him to come to work for Fidelity. Larson was employed at the firm’s Boston headquarters for the next six years, retiring again in 1995. A few months after he retired, Johnson called Larson in Florida and asked him to manage a personal construction project on Mount Desert Island, according to the lawsuit.

Larson agreed to the proposal after asking for 8 percent of the project’s worth as payment. Johnson estimated the project would cost, at most, $1 million, and that Larson would receive $80,000. Larson asked for payments of $6,700 a month.

The 28-page lawsuit then details a number of projects that Larson oversaw, from constructing Johnson’s seasonal home in the Long Pond area – a project that increased in scope from $1 million to $7 million when completed – to securing and renovating two more vacation homes, one, a $695,000 mansion for Johnson’s son and the other, a $265,000 home for himself, and his wife.

These projects took about three years and total costs were close to $10 million.

During this time, Larson and Johnson spoke by telephone frequently, often with Johnson calling “at all hours of the day or night from wherever on the globe his business took him, including Hong Kong, Taiwan, China and England,” the lawsuit states.

Signs of trouble began cropping up when Johnson balked at buying furniture for Larson’s new home. Larson claims he and his wife had come to Bar Harbor with the agreement that Johnson would provide furnished housing for the couple. The Larsons spent $55,000 to furnish the home, the lawsuit states.

In June 1998, Larson agreed to discount his 8 percent construction management fee. Under the agreement, a management firm representing Johnson would pay Larson a little more than $200,000 total for his services.

Smaller projects followed and then Johnson asked Larson to supervise the building of a shop on his Long Pond property with an estimated completion date of December 2000. When Larson mentioned payment arrangements to a third party – one of the trustees of a Johnson trust fund – Johnson canceled the arrangement. Two months later, in November 1999, he asked Larson to join the project again because little progress had been made with an alternate manager, according to the lawsuit.

Johnson reportedly asked Larson to tell everyone he was working as a volunteer on the shop project and in return, Johnson would “take care” of him, according to the lawsuit.

“Mr. Johnson referred to himself as the ‘Great Oracle’ and told Mr. Larson to trust him,” the lawsuit states.

Nine months later, Larson asked Johnson for payment at a fateful tennis match.

On Aug. 22, 2000, he and Johnson played tennis as opponents in a doubles match and Larson told him he needed $50,000.

“Mr. Johnson did not respond. However, at about 2 p.m. that same afternoon, Mr. Larson received a telephone call from Patricia Hurley in Boston.” Hurley, who worked for Johnson’s agents and was a trustee of one of his trusts, “informed Mr. Larson that she was acting for Mr. Johnson. She summarily fired Mr. Larson from working on the construction project,” the lawsuit states.

Hurley also ordered Larson and his wife to vacate their house within a month, a demand that eventually was extended to two months. The Larsons left the home before Oct. 31, 2000.

In a Sept. 11, 2000, letter, Larson demanded payment for his services. “No payment has been made for Mr. Larson’s services between July, 1998, and the present,” the lawsuit states.

Pending various court motions, the case could be ready for trial within a year.