Dagastino v. Commissioner of Correction

• Citation: 754 N.E.2d 150,52 Mass. App. Ct. 456
• Decision Date: 14 March 2001
• Docket Number: P-701
• Court: Appeals Court of Massachusetts
• Parties: (Mass.App.Ct. 2001) ROBERT A. DAGASTINO vs. COMMISSIONER OF CORRECTION. 99-

754 N.E.2d 150 (Mass.App.Ct. 2001)

ROBERT A. DAGASTINO vs. COMMISSIONER OF CORRECTION.

99-P-701

Massachusetts Court of Appeals

March 14, 2001

September 5, 2001

County: Suffolk.

Present: Perretta, Laurence, & Mason, JJ.

Commonwealth, Contracts, Liability for statements, Officers and employees. Contract, With Commonwealth, Employment.

Civil action commenced in the Superior Court Department on December 2, 1993.

The case was tried before Margaret R. Hinkle, J.

Ernest L. Sarason, Jr., Assistant Attorney General, for the defendant.

Thomas M. Harvey for the plaintiff.

LAURENCE, J.

The Commissioner of the Department of Correction (defendant) appeals from a judgment on a jury verdict in favor of the plaintiff, Robert A. Dagastino, on his breach of contract action. The plaintiff had alleged that, at the end of his interview process for a position as a Department of Correction (DOC) recreation officer at Massachusetts Correctional Institution, Shirley -- during which he had been interviewed by, among others, the facility's recreation director and the superintendent of the institution, but had never discussed salary -- he had spoken with the deputy superintendent, Paul Ruane, who had been his supervisor during a prior nine-year stint as a recreation employee at a State hospital. Upon the plaintiff's reluctant inquiry (he believing it unprofessional to raise the subject of wages), Ruane had told him -- incorrectly, as it turned out -- that, because of his prior service with the Commonwealth, he would receive a salary of $518.01 per week.

After accepting the position and receiving that salary for three weeks, the plaintiff had been compelled to take a reduction to the minimum salary for a new employee in his classification, $420.36 per week.¹ The reduction was the result of a union grievance. Upon learning of the plaintiff's heightened salary, the union had pointed out -- accurately -- that the plaintiff, as a new employee at the facility, was not eligible for the higher rate under the applicable collective bargaining agreement and could not unilaterally be awarded a higher salary by management.

A Superior Court jury agreed with the plaintiff that Ruane nonetheless had apparent authority to bind the defendant and the DOC with regard to the salary the plaintiff was told by Ruane he would receive (even though it was undisputed that Ruane had no actual authority to do so or to commit the Commonwealth contractually in any way). The jury accordingly returned a verdict that the plaintiff's pay reduction had constituted breach of a binding oral contract, resulting in damages of $18,398.00 (the difference between the salary Ruane had mentioned and the correct salary under the collective bargaining agreement over the period before the plaintiff's seniority brought him up to the promised level).

The defendant principally assigns as error the judge's denials of his motions for a directed verdict and a judgment notwithstanding the verdict, as well as the judge's charging the jury that they could consider whether the circumstances gave rise to apparent authority on Ruane's part. He argues that Ruane could not be deemed to possess apparent authority to bind the DOC or the Commonwealth in any way.² We agree that the judge should have directed a verdict for the defendant and should not have allowed the case to go to the jury. The alleged contract for a higher-than-warranted salary was unenforceable as matter of law because Ruane lacked actual authority to bind either the DOC or the Commonwealth to any contractual obligation. We therefore reverse the judgment.

In this Commonwealth, public officials cannot make a binding contract "without express authority," Higginson v. Fall River, 226 Mass. 423, 425 (1917), and "'have authority to bind their governmental bodies only to the extent conferred by the controlling statute.'" Boston v. Back Bay Cultural Assn., Inc., 418 Mass. 175, 184 (1994), quoting from White Constr. Co. v. Commonwealth, 11 Mass. App. Ct. 640, 647 (1981), S.C., 385 Mass. 1005 (1982), which also stated the related principle that "persons who deal with a governmental agency must take notice of limitations upon that agency's contracting power and cannot recover upon a contract which oversteps those limitations." White Constr. Co. v. Commonwealth, 11 Mass. App. Ct. at 648.

In short, the doctrine of apparent authority does not apply to the government, its agencies, or its officials. See Lovering v. Beaudette, 30 Mass. App. Ct. 665, 668 (1991). Accord Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-385 (1947); School Comm. of Providence v. Board of Regents for Educ., 429 A.2d 1297, 1302 (R.I. 1981); Sinclair v. Bow, 125 N.H. 388, 391-392 (1984); Restatement (Third) of Agency § 2.03 comment g (Tentative Draft No. 2, 2001). "[T]hose who contract with the officers or agents of a governmental agency must, at their peril, 'see to it that those officers or agents are acting within the scope of their authority.' . . . Were it otherwise public officials could bind their governmental agencies to unlawful conduct by ready acquiescence in an agreement . . . and, thus, circumvent the restrictions on their powers." Bowers v. Board of Appeals of Marshfield, 16 Mass. App. Ct. 29, 34 (1983) (citations omitted), quoting from Sancta Maria Hosp. v. Cambridge, 369 Mass. 586, 595 (1976). See Dunne v. Fall River, 328 Mass. 332, 335 (1952). See also Heckler v. Community Health Servs. of Crawford County, Inc., 467 U.S. 51, 63-64 (1984) ("[T]hose who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law. . . [The Government cannot] be expected to ensure that every bit of informal advice given by its agents . . . will be sufficiently reliable to justify" the expenditure of substantial sums of money that cannot be recaptured), quoted in Stadium Manor, Inc. v. Division of Administrative Law Appeals, 23 Mass. App. Ct. 958, 962 (1987).

A few cases have intimated a limited, theoretical opportunity for relief for a party in the plaintiff's situation under the doctrine of estoppel, invoked in equity to avoid injustice in particular cases. However, the plaintiff cites to (and we know of) no case in which the doctrine was ever actually applied against a governmental agency in the Commonwealth. "Traditionally, courts have not permitted estoppel of the government," McAndrew v. School Comm. of Cambridge, 20 Mass. App. Ct. 356, 360 (1985), and the public interest in seeing legislative policies adhered to "overrides any equitable considerations." Phipps Prods. Corp. v. Massachusetts Bay Transp. Authy., 387 Mass. 687, 693 (1982). As noted in McAndrew v. School Comm. of Cambridge, 20...