Aiello Const., Inc. v. Nationwide Tractor Trailer Training and Placement Corp.

Citation122 R.I. 861,413 A.2d 85
Decision Date10 April 1980
Docket NumberNo. 77-327-A,77-327-A
PartiesAIELLO CONSTRUCTION, INC., et al. v. NATIONWIDE TRACTOR TRAILER TRAINING AND PLACEMENT CORP. ppeal.
CourtUnited States State Supreme Court of Rhode Island
OPINION

WEISBERGER, Justice.

This case comes before us on appeal from a judgment of the Superior Court which awarded damages to the plaintiffs for a breach of contract allegedly committed by the defendant when it failed to make certain installment payments required by the contract. The case was tried by a justice sitting without the intervention of a jury. The facts as found in his decision are as follows.

The plaintiffs, Aiello Construction, Inc., and Smithfield Peat Co., Inc., as joint venturers, entered into a written contract with defendant in March of 1973. The contract required plaintiffs to haul fill and perform grading work in order to bring a large area owned by defendant to an approximately level condition. The contract further provided that plaintiffs would remove ledge on a portion of the premises, grade eight inches of bank run gravel over the entire yard, grade two inches of crushed run gravel over the entire yard, and finally apply penetration and seal coats of oil topped by application of peastone. The surface was then to be rolled. The defendant was in the trucking business and also engaged in the training and instruction of tractor-trailer operators. The yard area was to be used in the operation of this training enterprise.

In payment for the work to be performed and the material to be furnished, defendant agreed to pay $33,000 in five monthly installments of $6,600 each. The installments were to become due on April 15, May 15, June 15, July 15, and August 15, all during the year 1973. The contract provided that any amount not paid would bear a service charge of 11/2 percent per month.

The plaintiffs began work in late March 1973 and continued the work until on or about May 10, 1973, at which time all of the preliminary work had been done save applying and grading the two inches of crushed run gravel, which was a prerequisite to the performance of the oiling. The plaintiffs then stopped work to allow the ground to settle. Meanwhile, defendant paid the monthly installment that was due on April 15. Thereafter, defendant did not pay the May installment, although over a period from June to August of 1973 it did make partial payments which, when added to the April installment, aggregated $10,500. No further payments were made, and the president of the defendant company indicated that funds were not available to make the payments that were due. As a result of the failure to make payments, plaintiffs did not resume work. The plaintiffs brought the instant action for breach of contract. The defendant filed a counterclaim which alleged that plaintiffs were in breach of the agreement between the parties because they did not complete the work for which they had received payment. The defendant's counterclaim also contained a count which sounded in negligence.

The trial justice found as a fact that defendant was in breach of the contract and that this breach relieved plaintiffs of the obligation to perform any further work under the contract. He further found that defendant was not entitled to recover on its negligence claim. The trial justice awarded damages for the breach of contract by calculating the costs which plaintiffs had incurred in the performance of the work up to the time they withdrew from the project as a result of the breach. He found that the costs amounted to $21,500. To this sum he added $3,000 which he determined from the testimony to be the profit which plaintiffs would have made had the contract been completely performed by both parties. From the sum of $24,500 the trial justice deducted the payments made by defendant in the amount of $10,500. He ordered judgment to enter for plaintiffs in the amount of $14,000 together with interest at the rate of 8 percent per annum from the time of filing of the complaint to the date of judgment. He found the theories underlying defendant's counterclaim difficult to perceive and determined that defendant was entitled to no compensation or diminution of the award of damages. Thus judgment was entered for the plaintiffs for $16,800. This appeal ensued.

The defendant raises a number of points in support of its appeal. It first argues that the trial justice erred as a matter of fact and law in finding that defendant had breached the contract in such a way as to excuse plaintiffs for not completing the work. In regard to the findings of fact, this case involved conflicting testimony offered by witnesses presented by both parties. The trial justice found plaintiffs' witnesses more credible and in some instances found the testimony of defendant's witnesses of little or no probative value. It is well settled that we cannot disturb the finding of a trial justice unless the adverse party is able to show that in resolving testimonial conflicts the trial justice misconceived or overlooked material evidence or was otherwise clearly wrong. Salo Landscape & Construction Co. v. Liberty Electric Co., R.I., 376 A.2d 1379, 1381 (1977); Gim v. Jan Chin, Inc., 117 R.I. 39, 43, 362 A.2d 143, 146 (1976); Silvia v. Wicks, 116 R.I. 545, 547-48, 359 A.2d 33, 34 (1976). In respect to the challenge to the legal validity of the trial justice's holding that failure to pay installments on a construction contract is a breach that would excuse further performance, our holding in Salo Landscape & Construction Co. v. Liberty Electric Co., R.I., 376 A.2d 1379 (1977), is dispositive. There we observed that in the event an owner fails to pay an installment due on a construction contract, such owner "is guilty of a breach that goes to the essence of the contract and that entitles the injured party to bring an action." 376 A.2d at 1382. A similar holding may be found in Pelletier v. Masse, 49 R.I. 408, 410-11, 143 A. 609, 610 (1928), wherein the court noted that nonpayment of an installment due may justify the contractor in refusing to continue the work and in bringing an action on the contract for damages for its breach or quantum meruit for reasonable compensation for what the contractor has done. Under such circumstances, the court suggested, an action on the contract for the amount of the installment due would be inappropriate. Id. at 411, 143 A. at 610. See also 3A Corbin on Contracts § 692 (1960); Restatement Contracts § 346 (1932). Thus, the determination by the trial justice that defendant was solely responsible for the breach of the contract was amply supported by the evidence in the case and by the applicable law.

The defendant next contends that ambiguities in the contract should be resolved against plaintiffs. However meritorious this principle may be, the trial justice found no ambiguities in the contract, and neither do we. Hence, this argument is unavailing.

The defendant further argues that the contract was indivisible and that failure to pay an installment would not excuse the refusal on the part of plaintiffs to complete the work. Our holding in respect to the first argument is also dispositive of this contention. Since the breach by defendant went to the essence of the contract, plaintiffs were excused from further performance.

The defendant argues that the trial justice did not correctly assess damages. He cites in support of his argument George v. George F. Berkander, Inc., 92 R.I. 426, 169 A.2d 370 (1961). In that case the rule of damages for breach of contract was stated to be such "as will serve to put the injured party as close as is reasonably possible to the position he would have been in had the contract been fully performed." Id. at 430, 169 A.2d at 372. It is precisely this rule that the trial justice attempted to apply. Although the measure of damages may be variously stated under the principle of our holding in Berkander, certain alternatives are well set forth in Restatement Contracts § 346(2) as follows:

"For a breach by one who has promised to pay for construction, if it is a partial breach the builder can get judgment for the instalment due, with interest; and if it is a total breach he can get judgment, with interest so far as permitted by the rules stated in § 337, for either

"(a) the entire contract price and...

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