Fay, Spofford & Thorndike, Inc. v. Massachusetts Port Authority

• Decision Date: 02 April 1979
• Citation: 7 Mass.App.Ct. 336,387 N.E.2d 206
• Parties: FAY, SPOFFORD & THORNDIKE, INC. v. MASSACHUSETTS PORT AUTHORITY.
• Court: Appeals Court of Massachusetts

Page 206

387 N.E.2d 206

7 Mass.App.Ct. 336

FAY, SPOFFORD & THORNDIKE, INC. v. MASSACHUSETTS PORT AUTHORITY.

Appeals Court of Massachusetts, Suffolk.

Argued Feb. 21, 1979.

Decided April 2, 1979.

Douglas B. MacDonald, Boston (George W. Stuart, Boston, with him), for defendant.

John M. Reed, Boston, for plaintiff.

Before BROWN, GREANEY and KASS, JJ.

KASS, Justice.

Massachusetts Port Authority (Massport) entered into a written contract engaging the engineering services of Fay, Spofford & Thorndike, Inc. (FST), to design improvements for a runway at Logan Airport. After FST completed the design work and, indeed, after bids had been received from contractors, Massport reduced the scope of the work substantially. The parties ask us to resolve the manner in which Massport should compensate FST for designing that portion of the work which Massport decided not to build.

Procedurally, the case comes to us on Massport's appeal from the entry of a judgment based on allowance of FST's motion for summary judgment under Mass.R.Civ.P. 56, 365 Mass. 824 (1974). We draw the facts of the case from FST's complaint, which sought a declaratory judgment, and FST's affidavit in support of its motion for summary judgment.

The parties entered into a contract drawn by Massport and submitted to FST, which signed it on February 14, 1974. The agreement was countersigned on behalf of Massport on March 8, 1974. FST had earlier outlined the fundamental business terms of the contract in a written response to a request for a proposal from Massport. The contract outlines the scope of the project and the engineer's responsibility in general terms and then provides that FST is to perform its services in two phases, the design stage and the construction stage. The design stage is subdivided into eleven subcategories including preliminary designs and estimates, preparation of long lead construction materials, and preparation of detailed working drawings and specifications "suitable for advertising for bids and award of construction contract," preparation of a final cost estimate, and assistance in the award of a construction contract. Under the caption heading of "Design Stage" are two sub-paragraphs, (j) and (k), which impose on FST the obligation of checking shop drawings of the contractor and subcontractors, consultation and advice during construction, and checking and certifying the "As-Built" drawings of the contractor at the completion of construction. By their nature these duties would, in fact, be performed after the project had been designed and during the time it was under construction. The second, or construction, stage deals with providing the services of a full time resident engineer and assistants to supervise construction. Other than that, the subparagraphs of the section purporting to define the scope of construction stage services speak more of warranties of the professional competence of FST's performance, rather than of the nature of services during the construction stage.

Section 3 of the contract gets to the heart of the matter: the terms and method of payment. Paragraph A provides for a fee to FST based on "a percentage of the Project Construction Cost determined in accordance with and shown on the B Curve contained in the ASCE (American Society of Civil Engineers) Manual No. 45 dated 1972 . . . less 0.4 percent. Said percentage shall then be applied to the total contract price as provided in the construction contract." Paragraph B of section 3 of the contract provides that Massport shall pay for services rendered under the design phase "periodically as the work progresses; provided, however, that the Owner shall retain fifteen (15%) percent which shall be due and payable upon completion of the construction and all services provided for herein."

Section 7 of the contract deals with termination. It gives Massport the right to terminate the agreement with FST at any time, with or without cause. If Massport terminates prior to completion of items (a) through (h) of the design stage, "then the Engineer's entire fee for services rendered hereunder shall be computed, notwithstanding the provisions of Paragraph 3 herein," on the basis of a multiple of payroll.

Items (a) through (h) of the design stage work had been completed by FST and, therefore, to the extent that section 7 dealt with partial termination, sub-paragraph B applied. The terms of this paragraph were that if "Owner terminates . . . subsequent to the design stage, then the Owner and the Engineer shall agree in writing upon an estimated construction cost of the Project. The Engineer's fee shall then be computed so as to equal 85% Of the fee provided for in section 3A hereof." There has been no express agreement between the parties as to what constituted the "estimated construction cost of the project" under section 7B.

In connection with its design stage work, FST estimated the cost of the project at $3,195,225. On the basis of this estimate, Massport advertised for bids on the runway improvements job. The lowest of the qualified bids received was for $2,941,717, actually less than the FST estimate. After the bids were opened, Massport for reasons of policy unrelated to FST's work or to the cost estimates decided to delete a major component of the runway improvements. At Massport's request, FST prepared forms for the successful contractor to sign which reduced the scope of the work from the $2,941,717 bid figure to a $1,761,002 contract figure. Massport entered into a construction contract in the amount of the lower figure with the successful bidder, M. DeMatteo Construction Co.

1. Although it filed no counter-affidavit to FST's affidavit in support of the motion for summary judgment, Massport argues that there were, nonetheless, genuine issues of material fact which should have defeated the motion for summary judgment. First, Massport contends FST's complaint and affidavit failed to advance a single consistent theory of interpretation of the payment provisions under the employment contract. This is not, however, an issue of fact. The full text of the agreement, as well as underlying material which FST claimed to be material, were appended to the complaint or affidavit, and in some instances to both. What FST had to say about interpretation of that document was argument and not fact. Similarly, the motion for summary judgment and supporting affidavit did not need, as Massport suggests, to lay an express foundation for treating the DeMatteo bid price as the basis for pricing FST's services. This again involved interpretation of the contract and not a contested issue of fact. Finally, Massport suggests that the supporting affidavit failed to set forth that FST completed work under the design stage. The supporting affidavit, however, did expressly state that FST completed all work which would have been done prior to the commencement of construction. As we have noted, subparagraphs (j) and (k) of the section of the contract captioned "Design Stage" covered work which, by its nature, would be done during construction, not before, e. g. "checking shop drawings, consultation and advice During construction " (emphasis supplied). We think that the complaint, motion for summary judgment, and accompanying affidavit, which Massport left unrebutted, stated all facts necessary to resolve the dispute. If Massport had specific facts to allege establishing that there was a triable issue, it was its obligation so to do by counter-affidavit. Mass.R.Civ.P. 56(e), 365 Mass. 825 (1974). Community National Bank v. Dawes, 369 Mass. 550, 554, 340 N.E.2d 877 (1976).

2. Massport argues that since the contract failed to come to grips expressly with the contingency of partial termination of the work, the proper approach would be to pay FST on the basis of a contract formula for the work which was, in fact, built and to pay FST on the basis of quantum meruit for the work which was cancelled. Generally, parties may invoke the remedy of quantum meruit, that is, asking recovery for the fair value of services and materials, in the absence of a contract or where the party furnishing services and materials, finding the contract is broken by the other party, disaffirms the contract and considers it at an end. Kass v. Todd, 362 Mass. 169, 175, 284 N.E.2d 590 (1972). 12 Williston, Contracts § 1485 (3rd ed. 1970). If the plaintiff has fully performed, the action is for damages on the contract, not on a fair value basis without regard to the contract. Green v. Boston Safe Deposit & Trust Co., 255 Mass. 519, 523, 152 N.E. 107 (1926). 12 Williston, Contracts § 1459 (3rd ed. 1970). See Restatement of Contracts § 350 (1932).

Here, of course, there is a contract and FST performed all the services which the contract required of it. There has been no breach except in Massport's obligation to pay and, under those circumstances FST correctly pursues its remedies "on" rather than "off" the contract. See Stark v. Ralph F. Roussey & Associates, Inc., 25 Ill.App.3d 659, 662, 323 N.E.2d 826 (1975). There is excellent reason...