M. De Matteo Const. Co. v. Maine Turnpike Authority, Civ. No. 5-46.

• Court: United States District Courts. 1st Circuit. United States District Court (Maine)
• Writing for the Court: GIGNOUX
• Citation: 184 F. Supp. 907
• Docket Number: Civ. No. 5-46.
• Decision Date: 29 June 1960
• Parties: M. DE MATTEO CONSTRUCTION CO. v. MAINE TURNPIKE AUTHORITY.

184 F. Supp. 907

M. DE MATTEO CONSTRUCTION CO.
v.
MAINE TURNPIKE AUTHORITY.

Civ. No. 5-46.

United States District Court D. Maine, S. D.

June 29, 1960.

184 F. Supp. 908

Alton A. Lessard, Lewiston, Me., Herman Snyder, Richmond I. Bailen, Boston, Mass., for plaintiff.

H. Warren Paine, Vincent L. McKusick, Portland, Me., Edward F. Merrill, Skowhegan, Me., George D. Varney, Portsmouth, N. H., for defendant.

GIGNOUX, District Judge.

This matter comes before the Court upon defendant's motion for summary judgment in its favor upon the claim set forth in the original complaint and upon plaintiff's motion for summary judgment in its favor upon the additional claim set forth in an amendment to the complaint. Fed.R.Civ.P. 56, 28 U.S.C.A.

The action involves Contract No. 210, by which plaintiff agreed to perform the grading and drainage construction along a ten-mile stretch of the Maine Turnpike from near Mile 87 in the Town of Webster to near Mile 96 in the Town of Litchfield. In its complaint, which was filed May 11, 1957, plaintiff claims $1,087,900 damages for breach of contract, alleging that Howard, Needles, Tammen & Bergendoff,

184 F. Supp. 909

the Engineer named in the Contract to supervise its performance, in violation of the Specifications, refused to let plaintiff use certain material removed in the course of excavation within the Turnpike right-of-way or available in immediately adjacent borrow pits in forming the embankment of the Turnpike, but rather required plaintiff to waste such material, even though suitable for such use under the Specifications, and to haul in its place substitute borrow from much greater distances—all at substantial extra cost to plaintiff. Defendant has set up certain defenses of law to this claim, which are the basis of its summary judgment motion

In its amendment to the complaint, which was filed on November 27, 1959, plaintiff has added to its original claim a claim for a balance of $207,584.53, which has admittedly been earned under the Contract, but is being withheld by defendant as a "retent" until all claims, including the main claim involved in the instant action, have been settled. Plaintiff also claims interest on this amount from the date this action was instituted. Plaintiff's contention that this retent is past due and owing to it at this time is the basis of its summary judgment motion.

The Court will consider the two motions separately in the order of their filing.

I. Defendant's Motion for Summary Judgment

A somewhat detailed recital of the allegations of the complaint and the relevant provisions of the Contract are essential to an understanding of the issues presented by defendant's motion for summary judgment.

Contract No. 210 was a unit-price contract, by which plaintiff was required, among other things, to do the necessary excavation and to haul, place and compact the materials required for embankments and roadbeds at unit prices bid by it. For every yard of earth which plaintiff took from the right-of-way and either placed in the roadbed and compacted or hauled outside the right-of-way and wasted, plaintiff was to be paid 48¢ per cubic yard; for every yard of earth which plaintiff was required to dig from borrow pits to be furnished by defendant outside the right-of-way, and which plaintiff hauled to and placed in the roadbed and compacted, plaintiff was to be paid 58¢ per cubic yard, plus an additional "overhaul" of 7¢ per cubic yard mile if plaintiff was required to haul more than certain minimum distances.

The Contract was executed in April, 1954, and its performance extended through the 1954 construction season and into 1955. The Final Estimate prepared by the Engineer on or about December 4, 1956 showed a total amount due plaintiff for its work under the Contract of approximately $2,100,000, all of which the parties have agreed has been paid to plaintiff except for the above-mentioned balance or retent.

The Contract, which incorporates the Specifications, is voluminous, but plaintiff's claim is based primarily upon the provisions of Article 4X.2 of the Specifications, which specified the materials to be used in the embankment construction, and in substance called for Select Subbase¹ from the finished grade of the pavement down to a point generally three feet below, known as Template Grade. In the area from Template Grade down to twenty-five feet below finished grade, Article 4X.2 provided that the Contractor might use any stable material (except rock for the first two feet) which could be properly compacted by the methods and to the extent therein described.² The Contract also permitted

184 F. Supp. 910

the use of so-called "Random Materials", which were defined in Article 4X.2D as follows

"Random Materials shall be considered as a mixture in any reasonable proportion of any or all materials permitted to be used in the embankment, including the materials herein classified, in such quantities that it cannot be classified otherwise."

The complaint alleges that during the summer of 1954 there occurred an extraordinary and abnormal amount of rainfall, culminating in hurricanes in the latter part of the summer, and that as a result the materials to be used for the embankment became moist and presented problems of compaction. However, it is alleged as a matter of fact that the Random Materials intended for use by plaintiff were entirely capable of compaction in the manner and to the extent provided in the Specifications. Nevertheless, the complaint alleges, in violation of the Contract and the Specifications, the Engineer refused to permit the use of such Random Materials in the area between Template Grade and a horizontal plane twenty-five feet below the finished grade as specifically provided for in Article 4X.2, and instead, despite the protests of plaintiff, required plaintiff to furnish, haul, place and compact Select Subbase material in that area. It is charged that as a result, plaintiff was severely damaged by being forced to waste immediately available material and to excavate and haul material which could be obtained only at a considerable distance from the job and was therefore more expensive to it.

Defendant's motion for summary judgment raises two principal defenses of law, which are independent defenses and either of which, defendant contends, entitles it to judgment in its favor as a matter of law upon plaintiff's claim for breach of contract. Briefly stated, defendant's first defense is that the decision of the Engineer as to the suitability of the Random Materials offered for use by plaintiff was a factual determination upon a question which the parties had by their contract committed to the Engineer, and as to which under the law of the State of Maine, which both parties concede to be applicable here, the Engineer's determination was final and binding upon the parties. Defendant's second defense is that, even if the Engineer's determination were not binding, the work for which plaintiff now seeks extra compensation was either "Work" within the Contract for which the unit prices, which plaintiff admittedly has received, were its full compensation, or it was "Extra Work" as defined in the Contract, for which plaintiff has waived any claim to extra compensation because of its admitted failure to comply with the "Extra Work" provisions of the Contract.

In support of its first defense of law defendant relies principally upon the specific provision in Article 4X.2 of the Specifications which reads as follows:

"The suitability of materials with respect to classification, stability and compactibility will be determined by the Engineer."

Defendant also relies upon the first paragraph of Article 1.30 of the Specifications which deals generally with the authority of the Engineer:

"The work shall be done under the supervision of the Engineer to the fulfillment of the Contract requirements. The Engineer shall decide any and all questions which may arise as to the quality or acceptability of materials furnished and work performed, and as to the manner of performance and rate of progress of the work. He shall decide all questions which may arise as to the interpretation of the Plans and Specifications, and all questions as to the satisfactory and acceptable fulfillment of the terms of the Contract on the part of the Contractor. The Engineer shall determine the amount and quantity of the several kinds of work performed and materials furnished under the Contract and his decision shall be final. The

184 F. Supp. 911

Engineer is not authorized to increase the obligation of the Authority to the Contractor, except as specifically set forth in the Specifications."

Upon the basis of the above-quoted language from Article 4X.2 and Article 1.30,³ defendant argues that the decision of the Engineer as to the unsuitability of the Random Materials offered by plaintiff was made pursuant to the authority expressly granted to the Engineer by the parties to the Contract and is final and absolutely binding upon plaintiff in this action.

Plaintiff meets defendant's first defense of law by arguing first of all that a reading of the entire Contract indicates clearly that the decisions of the Engineer with respect to suitability of materials were in no sense intended to be final. In this respect, plaintiff points first to the following provision of Article 1.30, which follows immediately after the above-quoted paragraph:

"The decision of the Authority shall control in the final interpretation of the Contract. If the Contractor considers himself aggrieved by such an interpreting decision, he may require the dispute to be finally and conclusively settled by the decision of arbitrators, the Authority and the Contractor each choosing one out of three persons to be named by the other and a third being selected by the two so chosen. By the decision of these arbitrators, or by that of the majority of them, both parties of this agreement shall be finally

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