N.E. Bridge Contractors, Inc. v. City of Lawrence. ( 2023 )

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