Opinion
14-P-950
05-29-2015
RICHARD J. HAYES v. MASSACHUSETTS TURNPIKE AUTHORITY.
NOTICE: Summary decisions issued by the Appeals Court pursuant to its rule 1:28, as amended by 73 Mass. App. Ct. 1001 (2009), are primarily directed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28 issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass. App. Ct. 258, 260 n.4 (2008).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Richard J. Hayes brought suit against the Massachusetts Turnpike Authority (MTA) for breach of contract for nonpayment of attorney's fees for legal services he rendered to the MTA. After a jury trial in which Hayes was awarded nearly $400,000 in fees, a partial remittitur was granted but not accepted by Hayes. The case then settled, resulting in a judgment in favor of Hayes in the amount of $315,000 plus interest. As part of the judgment the trial judge determined, in accordance with G. L. c. 231, § 6C, that prejudgment interest began to accrue at the rate of twelve percent with the filing of the complaint, but that the twelve percent interest rate ended when the MTA was absorbed by the Massachusetts Department of Transportation (MassDOT), an agency of the Commonwealth. See St. 2009, c. 26, § 52. See also G. L. c. 231, § 6I. We affirm the judgment.
Discussion. Start date. Hayes contends that interest should accrue effective July 31, 2002, the date by which he asserts he sent a bill for services to the MTA.
In its pretrial statement the MTA disputed that it had received the bill at that time. Also, in their agreed statement of facts, the parties stated that Hayes submitted one invoice for legal services in the amount of $391,185, but the parties did not specify the date when the invoice was submitted. The parties continue to dispute on appeal when the bill was received. The plaintiff asserts that the only proper view of the trial evidence is that the bill was received no later than July 31, 2002. The clarity, or lack thereof, of the date of receipt was for the finder of fact. "In a jury trial, it is for the jury to establish the date of breach or demand for purposes of assessing prejudgment interest." Aimtek, Inc. v. Norton Co., 69 Mass. App. Ct. 660, 668 (2007).
General Laws c. 231, § 6C, provides that interest on contract damages should begin to accrue on the date of breach or demand, if established; otherwise it should begin on the date of the commencement of the action. The date of breach or demand is a fact to be determined by the finder of fact. Deerskin Trading Post, Inc. v. Spencer Press, Inc., 398 Mass. 118, 125 (1986). The parties did not submit a special jury question regarding either the date of breach or the date of demand. Where the plaintiff did not submit a special question regarding the date of breach or demand to the jury nor object to any omission from the jury instructions, the plaintiff may not raise that issue on appeal. See id. at 125-126; Aimtek, Inc. v. Norton Co., 69 Mass. App. Ct. 660, 668 (2007), citing Karen Constr. Co. v. Lizotte, 396 Mass. 143, 148-149 (1985).
Further, where a case has gone to a jury, and the jury has not made a finding as to a date of breach or demand, in the absence of a stipulation by the parties, "neither the judge nor an appellate court can make such a determination." Deerskin Trading Post, Inc., supra at 125, citing Karen Constr. Co., supra at 149 (where fact finder did not determine a breach date, prejudgment interest began on date of commencement of the action). See Starr v. Fordham, 420 Mass. 178, 194-195 (1995).
Bank v. Thermo Elemental Inc., 451 Mass. 638, 662-663 (2008) (Thermo), and USM Corp. v. Marson Fastener Corp., 392 Mass. 334, 350-351 (1984) (USM), cited by Hayes for the proposition that equity should be our guide, are inapplicable. Both cases involve private parties, unique facts, and equitable considerations not present here. Thermo involved a reduction of interest where expenses due to a contract breach were not incurred until after the action was commenced. In USM, no interest was awarded due to the nature of the claim and the damages awarded.
We discern no principle of fairness which would require us to depart from the plain meaning of the statute and the cases interpreting it. Even if we were to accept Hayes's assertion that he sent the bill in July of 2002, the record is devoid of explanation for the six-year delay in seeking payment. Where, as here, Hayes could have, but did not, submit the date of breach to the jury, there has been no windfall to the defendant such that equity requires a departure from statutory requirements.
End date. The MTA was absorbed by MassDOT on November 1, 2009, by operation of statute. St. 2009, c. 26, §§ 52, 60. The question presented on appeal is whether, as of that date, the prejudgment interest rate applicable to Hayes's claim remained the twelve percent rate established by G. L. c. 231, § 6C, or whether the rate established under G. L. c. 231, § 6I, applies.
In part to "protect[] the public treasury against [depletion by] money judgments," the Commonwealth "cannot be impleaded in its own courts except with its consent." Smith v. Massachusetts Bay Transp. Authy., 462 Mass. 370, 373 (2012) (citations omitted). The Commonwealth may be impleaded "only in the manner and to the extent expressed [by] statute." Ibid. (citation omitted). General Laws c. 231, § 6C, provides for the award of prejudgment interest in contract cases against the Commonwealth, to be calculated under § 6C if there is an established interest rate, and under § 6I if there is not. Here, the contract did not specify an interest rate, no findings were made by the jury, no stipulation was made by the parties, and § 6I governs.
Interest accrues daily, and thus the plaintiff had no vested right to carry forward a particular rate of interest in the future because the plaintiff "had not yet suffered that period of delay." Smith, supra at 378, citing Trinity Church in Boston v. John Hancock Mut. Life Ins. Co., 405 Mass. 682, 684 (1989). Here, as in Smith, Hayes had no substantive right to future interest at the original rate, and thus the new, lower statutory interest rate properly applies to interest accrued after the MTA was subsumed by MassDOT. Cf. Porter v. Clerk of Superior Ct., 368 Mass. 116, 118 (1975) (new statutory interest rate not retroactively applied in tort case). Contrast Verrochi v. Commonwealth, 394 Mass. 633 (1985) (permitting retroactive application of interest rate in a takings case, which is constitutional in nature), and M.B. Claff, Inc. v. Massachusetts Bay Transp. Authy., 59 Mass. App. Ct. 669 (2003) (same).
Finally, the plaintiff argues that the Legislature clearly intended to carry forward the twelve percent interest rate after November 1, 2009, because the statute established a fund to be used in part "for expenditures to meet any debt obligations of [MassDOT] following the dissolution of the [MTA] and assumption of . . . [its] obligations and liabilities." G. L. c. 6C, § 4(a), inserted by St. 2009, c. 25, § 8. The quoted language does not express a clear legislative intent to depart from the normal rule that interest accrues daily, and that the rate of interest does not vest. See Ferullo's Case, 331 Mass. 635, 637 (1954) ("Statutes are to be construed in the light of the preexisting common and statutory law with reference to the mischief probably intended to be remedied"). See also Woods Hole, Martha's Vineyard & Nantucket Steamship Authy. v. Falmouth, 74 Mass. App. Ct. 444, 447-448 (2009). In light of the purpose of the statute -- to bring the MTA under the umbrella of the sovereign -- the interpretation urged by Hayes would appear to be affirmatively at odds with the statutory scheme. The establishment of a general transportation trust fund designed, in part, to pay MTA liabilities does not express a legislative intent to except interest from the limited waiver of sovereign immunity established in G. L. c. 231, §§ 6C & 6I. See generally Smith, supra at 373.
Judgment entered December 12, 2012, affirmed.
By the Court (Fecteau, Agnes & Sullivan, JJ.),
The panelists are listed in order of seniority.
Clerk Entered: May 29, 2015.