Court Opinion

ID: 9410759
Source: CourtListenerOpinion
Date Created: 2023-07-24 14:05:43.458774+00
Date Added: 2024-06-11T17:21:00.288274
License: Public Domain

NOTICE: Summary decisions issued by the Appeals Court pursuant to M.A.C. Rule
23.0, as appearing in 97 Mass. App. Ct. 1017 (2020) (formerly known as 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 23.0 or 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).

                       COMMONWEALTH OF MASSACHUSETTS

                                 APPEALS COURT

                                                  22-P-283

                       N.E. BRIDGE CONTRACTORS, INC.

                                       vs.

                              CITY OF LAWRENCE.

               MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

       The plaintiff, N.E. Bridge Contractors, Inc. (NEB), brought

 this action against the defendant, the city of Lawrence (city),

 alleging that NEB had a contract with the city to complete

 bridge repairs and NEB fulfilled its obligations under the

 contract, but that the city refused to pay NEB for all materials

 and labor.     NEB sought damages for (1) $324,177.50 for

 additional materials not included in the stated contract price,

 and (2) $18,441.38, which reflected the difference between the

 stated contract price of $326,410 and the amount the city paid

 NEB, $307,968.62.      In an amended order on cross motions for

 summary judgment, a Superior Court judge (motion judge) granted

 summary judgment in the city's favor on the $324,177.50 for

 additional materials but concluded that there were genuine

 issues of material fact as to the $18,441.38 balance.               After a
jury-waived trial, a different Superior Court judge (trial

judge) concluded that the city committed a breach of contract by

not paying NEB the $18,441.38 balance.       Both parties appealed.

We affirm, but remand for recalculation of prejudgment interest.

    Background.      This appeal arises out of the city's

invitation for bids "to make some scour repairs" around the base

of a bridge pier.    The invitation to bid included both detailed

drawings of the project and estimated quantities of materials

needed to perform the work.    Bidders were asked to provide

prices for clearing the site, mobilization, and the following

estimated quantities of materials:       eleven cubic yards of

concrete, nine hundred tons of riprap, and one thousand tons of

modified rockfill.    Before the bid deadline of November 30,

2006, NEB submitted a bid of $286,410.       On May 7, 2008, the city

entered into a contract with NEB to perform the work.

    The contract included several provisions regarding the

scope of NEB's services and how the parties would handle changes

to the scope of those services.       Under the scope of services

provisions, NEB's work "consist[ed] of straightening out a

section of steel sheeting and filling a void . . . underwater in

the Merrimack River with modified fill, riprap and tremie

concrete" using "[t]he quantities of material . . . estimated in

the [s]chedule of [p]rices."    Paragraph 3 of the contract stated

that "[t]he above tasks and items [were] not intended to be all

                                  2
inclusive" and included the following provisions for additions

or deletions to NEB's scope of services:

     "The [c]ity may add to or delete any items, provided that
     any added items are of a similar nature, and provided that
     the total cost of such work does not exceed the total cost
     as specified in [p]aragraph 8 hereof. [NEB] shall
     undertake such work only upon the direction of the [c]ity.
     All directives and changes thereof in conformance with this
     [a]greement shall be in written form, prepared and signed
     by the [c]ity and accepted and countersigned by [NEB] or
     his authorized representatives. Any added tasks or items
     which are not agreed to be within the [s]cope of [s]ervices
     by both the [c]ity and [NEB], or which will incur costs
     beyond the total cost specified in [p]aragraph 8, shall be
     handled in accordance with [p]aragraph 13 hereof."1

Paragraph 13 stated that if NEB provided services "not to the

satisfaction of the [c]ity, the [c]ity [could] request that

[NEB] refurnish services at no additional cost" or "purchase

services in substitution," and that the city could deduct the

cost of substituted services or the nonperformance of services

from the contract price.   In addition, the contract incorporated

by reference the Massachusetts Highway Department's Standard

Specifications for Highways and Bridges, and those

specifications recited the requirements of G. L. c. 30, § 39N.

Under G. L. c. 30, § 39N, all contracts subject to G. L. c. 149,

§ 44A, or G. L. c. 30, § 39M, must set forth the procedure for

1 Likewise, paragraph 12 provided that any changes in the scope
of services, "including any increase or decrease in the amount
of [NEB's] compensation or any change in the work schedule,
which are mutually agreed upon by and between the [c]ity and
[NEB], shall be incorporated in written amendments to this
[a]greement."

                                3
addressing differing subsurface or latent physical conditions

and specify that requests for equitable adjustments due to those

conditions be made in writing.

    The contract also included several provisions regarding

compensation.   "The [c]ity agree[d] to pay [NEB] the

compensation specified in Schedule B, Compensation and Method of

Payment, . . . which shall constitute complete compensation for

all services rendered and for such reimbursable expenses as

authorized per paragraph 9."    By paragraph 9, "[t]he [c]ity

agree[d] to reimburse [NEB] only for those direct costs incurred

by [NEB] pursuant to the performance of work under this

[a]greement as set forth and authorized within Schedule B."

Schedule B provided that payment was "not to exceed $286,410."

    Around the time the parties entered into the contract, NEB

requested a price increase of $40,000, noting that there had

been a significant increase in the cost of supplies, materials,

and fuel since it bid on the project over one year prior.       The

city approved the $40,000 increase, bringing the contract price

to $326,410.    The increase was memorialized in a written change

order signed by the parties at various times in May through July

of 2008.

    Thereafter, two disputes arose between the parties.     The

first dispute, which concerned NEB's claim that it used

                                  4
$324,177.50 in additional materials,2 was resolved on summary

judgment.   We recite the facts pertinent to that dispute in the

light most favorable to NEB.    See HSBC Bank USA, N.A. v. Morris,

490 Mass. 322, 326-327 (2022).   When NEB began its work, its

divers encountered a larger void than the one depicted on the

detailed project drawings, and it "became apparent" to NEB that

"additional quantities of certain materials specified in the

[c]ontract would be required in order to perform the work."      On

or around July 22, 2008, NEB filled the void using 154 cubic

yards of cement, an overrun of 143 cubic yards of cement,

without obtaining a written change order.     NEB also used an

additional 170.54 tons of riprap.    NEB's president, John

Waitkus, submitted an affidavit stating that a city engineer and

a representative of the city's authorized field engineer, Fay,

Spofford & Thorndike, LLC (FST), told him that they had

authority to approve NEB's use of additional materials, and that

they did approve of that use.    On August 6, 2008, the city held

a meeting to discuss the material overruns.    At the meeting, NEB

was asked to submit a written change order request for the

2 In its complaint, NEB alleged that it was owed $324,177.50 for
additional materials and labor, but NEB later asserted on
summary judgment that it was owed $299,734.24 for additional
materials. While the difference between the amounts could,
perhaps, be attributable to labor, NEB also stated at another
point that "[n]one of the amount claimed due [was] for
additional labor or services." Regardless, nothing in our
analysis turns on the difference between the amounts.

                                 5
additional materials.    NEB submitted the written change order

request, which was denied.3

     The second dispute concerned the fact that the city paid

NEB $307,968.62 of the $326,410 contract price, leaving an

$18,441.38 balance.     At trial, the city argued that it was

excused from paying NEB the balance on the basis that NEB did

not straighten the steel sheeting or install modified rockfill

and riprap along the outer side of the sheeting.    As we discuss

infra, the city has not shown that any of the trial judge's

findings are clearly erroneous, and we therefore describe the

material facts as the trial judge found them.    See Kendall v.

Selvaggio, 413 Mass. 619, 620 (1992).    Waitkus inspected the

underwater work site before work commenced and suggested leaving

the steel sheeting in place.    The city agreed to that

suggestion.   An expert witness called by the city also agreed

that (1) "the better decision was . . . to not re-bend the steel

sheeting" into a straight position and (2) not re-bending the

steel sheeting "was proper."    The city "accepted [NEB's] work as

finished," "never complained about [NEB's] work or issued a

3 While we view the facts in the light most favorable to NEB, we
note the following for context, to explain the dispute between
the parties. The city has taken the position that (1) "[its]
engineers did not approve" NEB's use of additional materials,
(2) once NEB filled the void, "a substantive investigation was
impossible," and (3) NEB's claim for $324,177.50 for additional
materials was "immediately circumspect, and summarily rejected."

                                  6
demand for performance,"4 and "did not offer anyone who testified

to the reasons for partially paying [NEB] and denying the

balance."   "[N]o work has been performed on the site since

[then]."    Based on these findings, the trial judge concluded

that NEB performed under the contract, and that the city

committed a breach of contract by not paying NEB the $18,441.38

balance.

     Discussion.   1.   Summary judgment.   On summary judgment,

the motion judge concluded that, where NEB did not obtain a

written change order for the $324,177.50 in additional

materials, the city was not required to pay NEB for those

additional materials.    NEB argues error in the motion judge's

conclusion.   NEB asserts that its use of additional materials

was contemplated and compensable under the terms of the contract

without a written change order, and that the contract described

the required quantities of materials as estimates "for no other

purpose but to allow for adjustment once the [w]ork had

commenced and a better understanding of what materials were

necessary to complete the [w]ork was ascertained."    NEB also

4 In fact, the city engineer sent a letter "[o]n behalf of the
[city's] Department of Public Works" to the conservation
commission requesting that the conservation commission issue a
certificate of compliance for the pier, noting that "the
[Mass]achusetts Highway Underwater Inspection Team inspected the
work and gave [its] approval that the work performed was
satisfactory to solve the problem."

                                  7
asserts that its use of additional materials was compensable as

a reimbursable expense.    We disagree.

    "The interpretation of a contract . . . presents a question

of law for the court, subject on appeal to de novo review."

Biewald v. Seven Ten Storage Software, Inc., 94 Mass. App. Ct.

376, 380 (2018).     We construe the words of a contract "according

to their plain meaning, in the context of the contract as a

whole."   Lieber v. President & Fellows of Harvard College, 488

Mass. 816, 823 (2022).     "When the words of a contract are clear,

they control."   Id.

    As a whole, the contract did contemplate the possibility

that NEB would need to use additional materials, but the

contract also required NEB to obtain a written change order

before doing so.     Paragraph 3 provided that the city could "add

to or delete any items," but that any such changes had to "be in

written form."     Paragraph 12 provided that the city could

"increase or decrease . . . the amount of [NEB's] compensation,"

but that any such increase or decrease had to "be incorporated

in written amendments to this [a]greement."     NEB plainly

understood the requirement for a writing because it prepared one

for the $40,000 change order.     Where the contract required a

written amendment and it was undisputed that NEB never submitted

one for the additional materials, the judge correctly concluded

that the city was not required to pay for them.     Moreover, NEB's

                                   8
use of $324,177.50 in additional materials, an amount that would

have nearly doubled the contract price, was not compensable as a

reimbursable expense, because "[t]he [c]ity agree[d] to

reimburse [NEB] only for those direct costs incurred by [NEB]

pursuant to the performance of work under this [a]greement as

set forth and authorized within Schedule B."   Schedule B did not

authorize any costs in excess of the stated contract price.

    Our interpretation is consistent with the requirements of

G. L. c. 30, § 39N, which were incorporated in the contract

through the Massachusetts Highway Department's Standard

Specifications for Highways and Bridges.   The requirements of

G. L. c. 30, § 39N, specify that requests for equitable

adjustments due to differing subsurface or latent physical

conditions be made in writing.   This allows a contracting

authority to investigate the physical conditions and "monitor

the additional expenses incurred by the contractor."     Sutton

Corp. v. Metropolitan Dist. Comm'n, 423 Mass. 200, 208 (1996).

NEB's interpretation, that $324,177.50 in additional materials

was compensable as a reimbursable expense, would run counter to

the statutory requirements.   See G. L. c. 30, § 39N.5

5 Furthermore, the Supreme Judicial Court has interpreted G. L.
c. 44, § 31, to prohibit "a contractor [from] recover[ing] for
work not contemplated by a contract" but allow the contractor to
"recover for damages suffered as a result of the municipality's
breach of contract." Perseus of N.E., MA, Inc. v. Commonwealth,
429 Mass. 163, 166 (1999). Here, NEB seeks payment for

                                 9
     We are unpersuaded by NEB's alternative argument that the

city engineer and the FST representative had apparent authority

to waive the written change order requirement.6    "[T]he doctrine

of apparent authority does not apply to the government, its

agencies, or its officials."   Dagastino v. Commissioner of

Correction, 52 Mass. App. Ct. 456, 458 (2001).7    Even if that

were not true, the summary judgment record does not support an

inference of apparent authority.     "Apparent authority exists

additional materials not contemplated by the contract, not
damages suffered as a result of the city's breach of contract.
Given the statutory limitations at issue, NEB's equitable claims
also fail. "[A] party cannot evade the statutory limitations on
a municipality's contracting power by rendering services and
subsequently seeking recovery based on alternative theories"
(citation omitted). Celco Constr. Corp. v. Avon, 87 Mass. App.
Ct. 132, 136 (2015).
6 Relatedly, NEB argues that the city waived the requirement of a

written change order for the additional materials by accepting
NEB's work as finished. This argument is meritless. Regardless
of whether the city accepted NEB's work as finished, a question
we address infra, the city promptly questioned NEB's use of the
additional materials, required NEB to submit a written change
order request for the additional materials, and did not waive
the requirement of a written change order for the additional
materials.
7 Costonis v. Medford Hous. Auth., 343 Mass. 108 (1961), on which

NEB relies, is not to the contrary. That case involved a
housing authority, which is "a public body politic and
corporate" and is "liable in contract or in tort in the same
manner as a private corporation" (citations omitted). Ryan v.
Boston Hous. Auth., 322 Mass. 299, 300 (1948). Thus,
"Massachusetts courts have permitted the presentation of
evidence to demonstrate that an agent of a housing authority had
implied or apparent authority to enter a contract on the housing
authority's behalf and have at times found such implied or
apparent authority to exist." Lowell Hous. Auth. v. PSC Int'l,
Inc., 692 F. Supp. 2d 180, 189 (D. Mass. 2010).

                                10
when the principal, by his or her words or conduct, causes a

third person to reasonably believe that the principal consents

to the agent acting on the principal's behalf."     Fergus v. Ross,

477 Mass. 563, 567 (2017).    "[O]nly the words and conduct of the

principal, . . . and not those of the agent, are considered in

determining the existence of apparent authority" (citation

omitted).   Id.    On summary judgment, NEB relied on conclusory

statements that the city engineer and the FST representative

"supervised and directed" the project and that they purported to

be the city's "authorized agents and representatives," and not

on any words or conduct of the city.     This was insufficient to

support an inference that the city engineer or the FST

representative had apparent authority to waive the written

change order requirement, especially for a change that would

have effectively doubled the contract price.8

     2.   Trial.   Following a jury-waived trial, the trial judge

concluded that NEB performed under the contract and that the

8 We note that NEB also argues that the law of the case doctrine
required the motion judge to defer to a motion to dismiss ruling
in which another Superior Court judge stated that NEB's use of
additional materials did not require a written change order.
This argument is unavailing. The dispositive question before us
-- how to interpret the contract language using the materials
described in Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404
(2002) -- is a question of law that we review de novo and is
fundamentally different from the question posed by a motion to
dismiss -- whether the allegations of the complaint, if true,
plausibly suggest an entitlement to relief. Iannacchino v. Ford
Motor Co., 451 Mass. 623, 636 (2008).

                                  11
city committed a breach of contract by not paying NEB the

$18,441.38 balance.   The city argues that (1) NEB waived its

claim for the $18,441.38 balance, (2) some of the trial judge's

findings are clearly erroneous, and (3) NEB may not recover

under the contract where NEB did not straighten the steel

sheeting or install riprap along the outer side of the sheeting.

On the last point, the city argues that separate and apart from

the contractual provisions requiring written change orders,

G. L. c. 30, § 39I, bars NEB from recovering under the contract

where NEB did not obtain written authorization.    We disagree.

    First, the city argues that NEB waived its claim for the

$18,441.38 balance.   By way of background, the motion judge

initially allowed the city's motion for summary judgment on

NEB's claims in their entirety.    NEB moved for relief from that

summary judgment order, arguing that there were genuine issues

of material fact with respect to the $18,441.38 balance.     The

motion judge agreed, and an amended order so entered.   The city

contends that this was the first time NEB asserted a claim for

the $18,441.38 balance, but that is not correct.   NEB's

complaint alleged that the city agreed to pay NEB the undisputed

amount of $326,410, that NEB incurred $324,177.50 in disputed

costs for additional materials, and that the city paid NEB

$307,968.62.   NEB went on to allege that the sum of the

undisputed and disputed amounts was $629,117.46, which we note

                                  12
is not the sum of $324,177.50 and $326,410, and that the city

therefore owed NEB $321,148.84.    Despite the apparent

mathematical error, NEB's complaint plainly set forth a claim

for the balance on the undisputed amount.    The city also

contends that, early in the litigation, NEB explicitly stated

that it was seeking reimbursement solely for the additional

materials, but the city reads NEB's statement out of context.

NEB's statement was made in the context of clarifying that it

was seeking reimbursement for the additional materials, not any

extra labor, and did not affect a waiver of its claims for the

$18,441.38 balance.

     Second, the city challenges the trial judge's finding that

the city's expert witness agreed that (1) "the better decision

was . . . not to re-bend the steel sheeting" into a straight

position and (2) not re-bending the steel sheeting "was proper."

The city also challenges the trial judge's finding that the city

"did not offer anyone who testified to the reasons for partially

paying [NEB] and denying the balance," contending that the

city's expert witness provided this testimony.   We review for

clear error, and discern none.    See T.W. Nickerson, Inc. v.

Fleet Nat'l Bank, 456 Mass. 562, 569 (2010).9

9 In addition, the city asserts that the trial judge "failed" to
find that no riprap was present on the outer side of the metal
sheeting. However, that finding is implicit in the trial
judge's analysis. The trial judge noted two deviations:

                                  13
    The city's expert witness testified that he agreed with

"Waitkus in the sense that that was too hard to do that," i.e.,

straighten the steel sheeting.   It is true, as the city notes,

that the expert went on to testify that the "best thing" would

have been to "cut [the bent part] and make a new steel

sheeting," but that does not alter the fact that, on the key

issue of whether NEB should have straightened the steel

sheeting, the expert testified that it would have been "too

hard" to do so.   Regarding whether the expert testified to the

city's reasons for partially paying NEB and denying the balance,

the expert agreed that, in his opinion, NEB was "not entitled to

payment for work [it] did not complete."   However, the expert

did not testify to any firsthand knowledge regarding the city's

specific reasons for partially paying NEB and denying the

balance, or why the city decided to pay NEB the precise amount

of $307,968.62.   In sum, the trial judge's findings are not

clearly erroneous.

    Third, the city argues that NEB may not recover under the

contract where NEB did not straighten the steel sheeting or

install riprap along the outer side of the sheeting as called

for by the contract.   In resolving this question, we are bound

by the trial judge's factual findings.   The trial judge's

keeping the metal sheeting in place and the "placement of
riprap."

                                 14
analysis turned in part on the idea that the city waived the

contractual requirement of a written change order for the

deviations at issue.   That finding is supported by subsidiary

findings that the city "accepted [NEB's] work as finished" --

which included not re-bending the sheeting or installing riprap

along its outer side -- and "never complained about [NEB's] work

or issued a demand for performance," which findings are

supported by the evidence.10   See Parks v. Johnson, 46 Mass. App.

Ct. 905, 906 (1998) (appellate court does not retry facts).

     The question remains whether G. L. c. 30, § 39I,

nonetheless bars NEB from recovering under the contract for

steel sheeting it did not straighten and riprap it did not

install.   That statute requires every contractor having a

contract for the repair of any public works to "perform all the

work required by such contract in conformity with the plans and

specifications contained therein," and that "[n]o wilful and

substantial deviation from said plans and specifications shall

be made unless authorized in writing."   In arguing that G. L.

c. 30, § 39I, bars NEB from recovering, the city relies on this

court's statement in Glynn v. Gloucester, 9 Mass. App. Ct. 454,

461 (1980), that "[i]f any claim arises from the contractor's

10In contrast, with respect to NEB's use of additional
materials, the city promptly questioned the overruns and
required NEB to submit a written change order request.

                                 15
wilful and substantial deviation from the plans and

specifications, there can be no recovery without a showing of

compliance with the requirements of G. L. c. 30, § 39I."    The

city reads this statement too broadly.   In the same paragraph,

id. at 460, the court stated that if a contractor must "perform

extra work or incur added expense," the contractor must follow

proper procedures "before unilaterally accruing expenses to be

pursued later," and that public authorities are expected to

address legitimate problems in good faith and to compensate

contractors "for bona fide extras."   In Glynn, supra at 455,

460-461, a contractor asserted a claim for extra expenses

incurred in connection with a municipal construction contract,

and the court's statement, that "there can be no recovery

without a showing of compliance with the requirements of G. L.

c. 30, § 39I," specifically pertained to claims for extra

expenses.

    This case presents a different question:    whether NEB may

recover the stated contract price where the city accepted NEB's

work as finished but did not provide written authorization for

certain contract deviations.   We note that the city had ample

opportunities to challenge whether NEB should have straightened

the steel sheeting and installed riprap along the outer side of

the sheeting.   If NEB provided services "not to the satisfaction

of the [c]ity," the contract permitted the city to "request that

                                16
[NEB] refurnish services at no additional cost" or "purchase

services in substitution."   Having chosen instead to accept

NEB's work as finished, the city may not avoid its contractual

payment obligations solely on the basis that it did not provide

written authorization for deviations it approved.

     3.   Prejudgment interest.   Lastly, the parties dispute the

date from which prejudgment interest should have begun to

accrue.   General Laws c. 231, § 6C, provides that "[i]n all

actions based on contractual obligations, . . . interest shall

be added by the clerk of the court to the amount of damages, at

the contract rate, if established, or at the rate of twelve per

cent per annum from the date of the breach or demand."    However,

"[i]f the date of the breach or demand is not established, such

interest shall be added . . . from the date of the commencement

of the action."   G. L. c. 231, § 6C.   Here, interest was added

from the date of the commencement of the action.    Both parties

argue that this was error.   NEB argues that interest should have

been added from August 15, 2008, the date it sent a letter

requesting full payment on the stated contract price.    That

letter was introduced in evidence, and the city does not dispute

its authenticity or offer any other reason why it could not be

relied on to establish the date of demand.11   The city instead

11The city does suggest that we are bound by the trial judge's
finding that there was no "credible evidence" of the date of

                                  17
argues that NEB did not assert a claim for the $18,441.38

balance until March 8, 2017, when NEB filed its motion for

relief from the original summary judgment order, and that

interest should have been added from that date.     As we have

explained, the city's argument that NEB did not assert a claim

for the $18,441.38 balance until moving for relief from the

original summary judgment order is without merit.    In light of

the August 15, 2008 letter establishing the date of NEB's

demand, we conclude that interest should have been added from

that date.

    Conclusion.    So much of the judgment as awarded prejudgment

interest from the date of the commencement of the action is

vacated, and the matter is remanded for recalculation of

prejudgment interest running from August 15, 2008.    In all other

respects, the judgment is affirmed.

                                      So ordered.

                                      By the Court (Meade, Blake &
                                        Brennan, JJ.12),

                                      Clerk

Entered:   July 24, 2023.

demand. Given the undisputed documentary evidence and the lack
of further explanation by the judge, we do not find this
argument persuasive.
12 The panelists are listed in order of seniority.

                                18