J.A. Sullivan Corp. v. Com.

• Decision Date: 25 June 1986
• Citation: 397 Mass. 789,494 N.E.2d 374
• Parties: J.A. SULLIVAN CORPORATION v. COMMONWEALTH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 374

494 N.E.2d 374

397 Mass. 789

J.A. SULLIVAN CORPORATION v. COMMONWEALTH.

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued March 6, 1986.

Decided June 25, 1986.

Elaine K.M. Denniston, Asst. Atty. Gen., for Com.

David J. Hatem, Boston, for plaintiff.

Before HENNESSEY, C.J., and WILKINS, NOLAN, LYNCH and O'CONNOR, JJ.

NOLAN, Justice.

This is the defendant's appeal from a judgment of the Superior Court in the amount of $154,463.53, plus interest and costs, in favor of the plaintiff, J.A. Sullivan Corporation (Sullivan), following a contract dispute between Sullivan and the defendant, the Commonwealth. We transferred the case here on our own motion and address the following issues: (1) whether, as a matter of law, Sullivan is precluded from recovering against the Commonwealth on quantum meruit; (2) whether, given the terms of the contract, the judge erred in awarding recovery to Sullivan in quantum meruit; (3) whether the judge erred in awarding damages to Sullivan where Sullivan failed to complete construction under the contract; (4) whether the judge erred in ruling that Sullivan was entitled to additional costs for ledge removal. After reviewing the trial judge's findings and rulings under Mass. R. Civ. P. 52 (a), 365 Mass. 816 (1974), we affirm. We summarize the relevant facts drawn from the judge's findings and other portions of the record.

In August, 1973, Sullivan and the Commonwealth, through the Bureau of Building Construction (bureau), entered into a contract for the construction of a building at Salem State College to house the physical education facilities. The original contract price was $5,598,000. The price was later increased to $5,703,457.87. Work commenced in September, 1973, and was scheduled to be completed in August, 1975. The Commonwealth retained the services of an architect, Edward J. Tedesco Associates, Inc., who along with the bureau agreed to extend the completion date on several occasions. On March 17, 1976, Sullivan informed a project architect from Tedesco that the project would be substantially completed by March 31, and requested that a "punch list" be compiled for the remainder of the work. A punch list is an itemized list of finish work, corrections, repairs, and services to be performed in order to complete a construction contract.

On April 6, 1976, Sullivan notified a dean of Salem State College that it was awaiting a punch list, and that it expected to have the project completed by the end of April. On April 28, the project architect from Tedesco notified Sullivan that he was dissatisfied with the paucity of persons at the job site. Between April 6 and June 18, 1976, Tedesco compiled several punch lists covering different zones of the construction project, dated at different times. Some of the lists contained items from previous lists. The last punch list, dated June 18, 1976, was comprehensive, covering the entire project and containing some items that were not included on prior punch lists. John A. Sullivan, president of J.A. Sullivan Corporation, testified that it is a general practice in the construction industry to issue "monetized" punch lists (items are given a money value) to enable contractors to negotiate with subcontractors. The judge found that none of the punch lists which were sent to Sullivan from April to June, 1976, were monetized.

Sullivan continued working on items on the punch lists until the fall of 1976. On September 30, the architect compiled another punch list for the exterior and the roof of the project. In October, he sent another one for the entire project. This list was monetized by category only at a total value of $182,950.00.

On October 15, 1976, the bureau issued a Certificate of Use Occupancy, which provided that the contractor was relieved of responsibility for completion of work on the project except for the remaining items on the punch list. Fourteen days later the bureau complained to Sullivan about the insufficient number of workers at the site and stated that the bonding company would be notified if substantial progress towards completion was not accomplished within thirty days.

In November, Sullivan disputed the accuracy of the punch list which had accompanied the certificate of use occupancy and requested, among other things, a monetized punch list. Also at this time Sullivan submitted Requisition No. 34 for $318,976.15, for work performed between September 25, 1975, and October 31, 1976. No payment was made. In fact, the Commonwealth stated that it was withholding $29,300 in liquidated damages due to the plaintiff's failure to complete construction on time, $154,757.11 for direct payment requests made by subcontractors, and $130,000 representing work remaining to be done.

In December, 1976, another updated punch list was compiled by Tedesco and sent to the Commonwealth and Sullivan. Correspondence between the Commonwealth and Sullivan reflected the Commonwealth's dissatisfaction with Sullivan's performance, and Sullivan's dispute with many items on the December punch list. Sullivan contended that many of the items had already been completed, and offered credit for those which could not be done.

On March 2, 1977, Sullivan received another updated, monetized punch list. This was the first list monetized on an item-by-item basis. Nine days later the Commonwealth informed Sullivan that its contract had been terminated. John A. Sullivan testified that at that time the total value of the punch list was $32,000.

The Commonwealth instructed Tedesco to draw up plans and specifications for a new contract and to include the uncompleted punch list items. The contract was submitted for bidding and was taken by T.G. Driscoll Construction Company.

On appeal, our review of the findings, rulings, and judgment of the trial judge, entered in this nonjury case on November 14, 1984, is governed by Mass. R. Civ. P. 52 (a), 365 Mass. 816 (1974), which provides that "[f]indings of fact shall not be set aside unless clearly erroneous." "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). This court must also examine the findings and rulings to make sure that the conclusions are not inconsistent with legal standards. Marlow v. New Bedford, 369 Mass. 501, 508, 340 N.E.2d 494 (1976).

1. Claim for quantum meruit against the Commonwealth. We find no error in the judge's ruling that a quantum meruit claim can lie against the Commonwealth in this case. See Albre Marble & Tile Co., Inc. v. Goverman, 353 Mass. 546, 233 N.E.2d 533 (1968). See also Arthur A. Johnson Corp. v. Commonwealth, 318 Mass. 88, 89, 60 N.E.2d 364 (1945). The Commonwealth relies primarily on Lewis v. Commonwealth, 332 Mass. 4, 6, 122 N.E.2d 888 (1954), where this court said that "[t]here is no implied obligation upon the part of the Commonwealth to pay for the petitioner's services merely because they might have been beneficial ...." The Commonwealth misses the point in Lewis, supra, which was that extra services rendered outside the contract were not compensable. There was no such claim here.

The Commonwealth's argument is founded on the doctrine of sovereign immunity. The origin of sovereign immunity lies in an English principle in early common law that "the King can do no wrong." Governmental Tort Immunity in Massachusetts: The Present Need for Change and Prospects for the Future, 10 Suffolk U.L.Rev. 521, 527 & n. 28 (1976), citing 1 W. Blackstone, Commentaries on the Laws of England, 242-246 (1765). Without consent to jurisdiction, a suit against the king was procedurally impossible. Id. "The king's immunity from process was ... personal and compelled by the structure of feudal society rather than by the nature of sovereignty." Id. As the monarchy evolved from a personal status into a "personification of sovereignty" the doctrine evolved into the theory that because the king could do not wrong no one else could do wrong on his behalf. The doctrine carried over after the American Revolution and was adopted by the original States. Id.

However, even prior to the abrogation of sovereign immunity with the enactment of G.L. c. 258, § 1, in 1975, the Commonwealth was amenable to suit in contract. See Murdock Parlor Grate Co. v. Commonwealth, 152 Mass. 28, 30, 24 N.E. 854 (1890). The theory was that a State consents to jurisdiction by voluntarily entering into a contract.

Quantum meruit is a theory of recovery, not a cause of action. It is a claim independent of an assertion for damages under the contract, although both claims have as a common basis the contract itself. Recovery under this theory is derived from the principles of equity and fairness and is allowed where there is substantial performance but not full completion of the contract. See generally, 5 S. Williston, Contracts § 805 (3d ed. 1961). In a case involving an unenforceable contract, we allowed quantum meruit recovery, basing our reasoning on the theory of unjust enrichment. Salamon v. Terra, 394 Mass. 857, 859, 477 N.E.2d 1029 (1985). "A person who has been unjustly enriched at the expense of another is required to make restitution to the other." Id., quoting Restatement of Restitution § 1 (1937). As in Salamon, supra, we have considered the principles of equity and morality in reaching our decision today. To bar recovery in this case on the basis that the defendant is the Commonwealth would produce a windfall for the Commonwealth which received the benefit of the plaintiff's services, especially where (as the judge found) the Commonwealth was partially responsible for Sullivan's nonperformance and failure to complete its obligations under the contract.

Moreover, in First Nat'l Ins. Co. of America v. Commonwealth, 376 Mass. 248, 249-251,...