Opinion
15-P-90
03-07-2016
D.D.S. INDUSTRIES, INC. v. P.J. RILEY & COMPANY, INC. & others.
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
In this complex civil litigation arising from renovations to a wastewater treatment facility located in Nantucket, plaintiff D.D.S. Industries, Inc. (D.D.S.) appeals from an amended judgment entered by a judge of the Superior Court after a bench trial on various claims, cross-claims, and counterclaims between D.D.S. and P.J. Riley & Company, Inc. (Riley), Carlin Contracting Co., Inc. (Carlin), and their respective insurers. D.D.S. appeals from the dismissal of its claims, while Carlin appeals from those portions of the amended judgment that awarded Riley double damages, attorney's fees, and costs on its claims against Carlin. We affirm.
Facts. We summarize the relevant facts as found by the judge. In 2006, the town of Nantucket entered into a general contract with Carlin for replacement of the town's water treatment facility (the project). Carlin subcontracted with Riley for heating, ventilation, and air conditioning (HVAC) work on the project, and Riley sub-subcontracted with D.D.S. for sheet metal fabrication and installation in connection with that work. On Thursday, August 9, 2007, D.D.S. began installing ductwork. On Friday, August 10, D.D.S. employees arrived at the work site and noticed that no one else was there. The D.D.S. employees continued with their installation, until a Carlin site superintendent arrived and told them that the site was closed on Fridays. He also told them to remove the ducts that had been installed, because more finish work needed to be done at that location. The D.D.S. employees left the site without removing what had been installed.
Carlin called Riley and demanded that Riley have D.D.S. remove the ductwork. D.D.S. refused. When Carlin insisted that the ductwork be removed, Riley hired another company and back-charged D.D.S. for that cost. Riley notified D.D.S. when it was time to reinstall the ductwork, but D.D.S. refused to do the work on the basis that it already had been done. Again Riley hired another company to complete the work, and again it back-charged D.D.S. for that company's services. Thereafter, D.D.S. returned to the project and continued its work under the sub-subcontract. However, another dispute arose when Carlin decided that some ductwork did not need to be performed and told Riley to inform D.D.S. that D.D.S. would be taking a deduction in payment. D.D.S. disputed the amount of the deduction, but Carlin refused to authorize a lower amount. When the project was nearly complete, Carlin provided Riley with a "punch list" of unfinished items and Riley notified D.D.S. that it needed to return to the project site to address some of the items. D.D.S. disputed the claims and did not return to the site. Carlin deducted the costs for completing these items from its payment to Riley, and Riley back-charged them to D.D.S.
"A punch list is an itemized list of finish work, corrections, repairs, and services to be performed in order to complete a construction contract." J.A. Sullivan Corp. v. Commonwealth, 397 Mass. 789, 790 (1986).
Pursuant to its subcontract with Carlin, Riley provided "as built" drawings for its work on the project. In June, 2009, Carlin certified completion of the work relative to Riley and its subcontractors. Thereafter, but before Carlin issued its final payment to Riley, Carlin advised Riley that it now considered the drawings to be inadequate. Riley disagreed and demanded final payment of $37,095.77. Carlin refused, stating that it would be withholding $10,000 for the "unfinished" drawings and approximately $27,485 "in order to pay expenses it might incur in connection with the legal action instituted by DDS." Carlin notified Western Surety Company (Western) that Riley was in default under the subcontract, and demanded that Western arrange to complete the "as built" drawings and items on the punch list. Western refused.
D.D.S. filed this lawsuit on March 11, 2009.
Western issued a performance bond on behalf of Riley.
D.D.S. filed suit against Carlin and Riley alleging breach of contract, and seeking recovery in quantum meruit and under G. L. c. 149, § 29. Riley and Carlin cross-claimed against each other for indemnification, with Riley also seeking relief for Carlin's alleged breach of contract and violation of G. L. c. 93A, § 11. In his detailed findings, the judge found that Riley and Carlin had not breached a contract with D.D.S., that D.D.S. could not recover in quantum meruit, and that Carlin was not liable to D.D.S. under G. L. c. 93A. He found that Riley was not required to indemnify Carlin because "Riley was blameless in the controversy between . . . Carlin and DDS," and that Carlin was liable to Riley for breach of contract and violation of G. L. c. 93A. After concluding that Carlin's actions were "wilful and knowing," the judge doubled Riley's damages, and awarded reasonable attorney's fees and costs.
Through an amended complaint, D.D.S. also stated a claim against Carlin under G. L. c. 93A.
Discussion. The judge's findings of fact will not be set aside unless they are "clearly erroneous," giving "due regard" to his "opportunity . . . to judge . . . the credibility of the witnesses." Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). We review de novo the judge's application of the law to the facts as he found them, bearing in mind that "when the judge's conclusions are based on reasonable inferences from the evidence and are consistent with the findings, there is usually no error." Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 510 (1997).
1. Appeal by D.D.S. There was no error in the judge's conclusion that D.D.S. cannot recover for breach of contract or in quantum meruit. In executing the sub-subcontract, D.D.S. agreed that "[i]f work is installed before coordinating with other trades so as to cause interference with the work of such trades, [it would] make all necessary changes in Work . . . at no additional cost." D.D.S. does not dispute that it installed ductwork which interfered with the work of other trades, and the record shows that D.D.S. flatly refused, without additional compensation, to remove the ductwork so that other trades could access the area. D.D.S.'s argument, that its position is justified by Carlin's negligent coordination of the trades and its failure to advise D.D.S. of the unusual work schedule, is unavailing in light of D.D.S.'s agreement to make necessary changes "at no additional cost." See Proprietors of Mill Dam Foundery v. Hovey, 21 Pick. 417, 430-431 (1839) ("[W]here [a] duty is created by the act of the party, he must perform it notwithstanding he was in no fault"). "[T]he importance of holding those who engage in public contracts to act in strict accord with their undertakings is well recognized," Albre Marble & Tile Co. v. Goverman, 353 Mass. 546, 549 (1968), and D.D.S. agreed, "upon notice from the Subcontractor, either oral or in writing, . . . to begin, prosecute and complete the Work described in th[e] Subcontract." D.D.S. refused to remove and reinstall ductwork upon Riley's oral and written requests, and it refused, upon Riley's written request, to address incomplete items on the punch list. "The law of this Commonwealth precludes recovery by one who wilfully commits a breach of a contract regardless of whether the breach goes to the essence of the contract." Service Publications, Inc. v. Goverman, 396 Mass. 567, 573 (1986). "Contractors like the plaintiffs 'cannot recover on the contract itself without showing complete and strict performance of all its terms.'" Peabody N.E., Inc. v. Marshfield, 426 Mass. 436, 441 (1998), quoting from Andre v. Maguire, 305 Mass. 515, 516 (1940). "The absence of any finding that the plaintiff intended completely to perform the contract is fatal to its claim in quantum meruit," C. C. & T. Constr. Co. v. Coleman Bros. Corp., 3 Mass. App. Ct. 372, 375 (1975), and D.D.S.'s claims properly were dismissed. See J.A. Sullivan Corp. v. Commonwealth, 397 Mass. 789, 797 (1986), quoting from Andre v. Maguire, supra ("Generally, . . . an intentional departure from the precise requirements of the contract is not consistent with good faith in the endeavor fully to perform it"); Fay, Spofford & Thorndike, Inc. v. Massachusetts Port Authy., 7 Mass. App. Ct. 336, 341 (1979) (where contract exists and only alleged breach is of obligation to pay, party "correctly pursues its remedies 'on' rather than 'off' the contract").
The work schedule for the project was ten hours per day Monday through Thursday. The judge explicitly credited testimony that D.D.S. was advised of this schedule, and D.D.S. has not sustained its burden of convincing us "that a mistake has been committed." Building Inspector of Lancaster v. Sanderson, 372 Mass. 157, 160 (1977). See Demoulas v. Demoulas Super Mkts., Inc., supra at 509 ("It is the appellant's burden to show that a finding of fact is clearly erroneous").
Although the judge did not address D.D.S.'s claims under G. L. c. 149, § 29, they too were properly dismissed. See, e.g., Albre Marble & Tile Co., supra ("The plaintiff cannot recover from the defendant bonding company its expenses for faulty performance in wilful violation of the contract").
2. Appeal by Carlin. Carlin does not challenge the judge's findings of fact, but argues error in his conclusions that Carlin knowingly and wilfully violated G. L. c. 93A, § 11. There was no error.
Carlin agreed to pay Riley $1,800,000 for completion of HVAC work on the project. It agreed to pay Riley $643,100 for completion of plumbing work on the project. The judge found that, although Carlin certified completion of Riley's work in June, 2009, it did not pay Riley the total amount due under the contracts. Instead, Carlin withheld monies to "protect" itself from D.D.S.'s suit, and stated that "[i]f Riley were to indemnify and hold Carlin harmless, as requested previously, this withholding would not be necessary." The judge concluded that Carlin had no right to indemnification in the circumstances presented. In light of the June, 2009, certification, Carlin's statement that "Riley can do better by doing the work itself than by alleging the withholding is excessive," supports the judge's conclusion that Carlin knowingly withheld monies due Riley with the intent to secure for itself benefits to which it was not entitled under the parties' contracts. See Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 474 (1991), quoting from Wang Labs., Inc. v. Business Incentives, Inc., 398 Mass. 854, 897 (1986) ("[C]onduct 'in disregard of known contractual arrangements' and intended to secure benefits for the breaching party constitutes an unfair act or practice for c. 93A purposes"). In concluding that Carlin's violation of G. L. c. 93A was wilful and knowing, the judge found that "Carlin's action in withholding funds from Riley without justification appears to have been actuated by a desire to leverage the more significant amount it owed Riley to force the latter into settling the small dollar amount claim that DDS had advanced against Carlin." "[T]he matter presented a credibility choice, resolved by the fact finder[] squarely in favor of [Riley]." Linkage Corp. v. Trustees of Boston Univ., 425 Mass. 1, 27 (1997). "This result, at the appellate level, is uncontestable in the absence of clear error of fact or law, which has not been made to appear," ibid., and the judge properly awarded punitive damages. See Kapp v. Arbella Mut. Ins. Co., 426 Mass. 683, 686 (1998) ("Punitive damages are proper where the evidence warrants a finding of a wilful or knowing violation of G. L. c. 93A").
Amended judgment affirmed.
By the Court (Katzmann, Carhart & Kinder, JJ.),
The panelists are listed in order of seniority. --------
/s/
Clerk Entered: March 7, 2016.