Rentals v. Bbc Co. Inc.

• Decision Date: 24 May 2011
• Docket Number: No. 09–P–1388.,09–P–1388.
• Citation: 947 N.E.2d 1103,79 Mass.App.Ct. 559
• Court: Appeals Court of Massachusetts
• Parties: CITY RENTALS, LLCv.BBC CO., INC., & another.1

79 Mass.App.Ct. 559

947 N.E.2d 1103

CITY RENTALS, LLC

v.BBC CO., INC., & another.1

No. 09–P–1388.

Appeals Court of Massachusetts, Middlesex.

Argued May 12, 2010.Decided May 24, 2011.

John J. McNamara, Framingham, for the defendants.Steven Shane Smith, Boston, for the plaintiff.Present: McHUGH, SMITH, & SIKORA, JJ.SIKORA, J.

In this case we address the application of the Commonwealth's labor and material payment bond statute for publicly funded construction projects, G.L. c. 149, § 29 (bond statute). At the conclusion of a bench trial, a judge of the Superior Court found that a general contractor had detained certain construction equipment rented to a terminated subcontractor by a supplier; and that the general contractor had therefore rendered its surety company and itself liable under the statutory bond for rental charges accrued and unpaid until the time of the general contractor's release of the equipment. In addition, as directed by the statute, the judge awarded the supplier “reasonable legal fees” caused by the litigation. For the following reasons, we affirm both the judgment and the order awarding attorney's fees with a slight modification of the fees amount.

Facts. The reviewing court examines the findings of a bench trial under the “clearly erroneous” standard of Mass.R.Civ.P. 52(a), as amended, 423 Mass. 1402 (1996). The following material facts emerge from the record as undisputed or as express or implied findings of the judge resting upon ample evidence.

In May of 2002, the town of Canton and the defendant BBC Co., Inc. (BBC), executed an agreement for BBC's performance as general contractor for the renovation and expansion of the Canton Public Library facilities (project). As required by the bond statute,² BBC as principal provided to the town a payment bond in the amount of $7,295,000 furnished by defendant Centennial Insurance Company (Centennial) as surety.³ BBC immediately executed a subcontract with Kevton Corporation (Kevton) for the performance of site clearance and earthwork.

The plaintiff City Rentals, LLC (City Rentals), supplies trucking services and heavy equipment to construction projects. At the request of Kevton, it entered an oral open account agreement by which it delivered services and equipment to the project upon twenty-four hour telephone notice. From late June to early August, City Rentals provided trucks and a trailer for removal of rock ledge, tree stumps, and other obstacles on the project site; excavation machinery; a bulldozer; and a four-wheel, front-end loader machine. After mid-August only the front-end loader remained at the project.

During that summer BBC became dissatisfied with the pace of Kevton's work. On October 2, it terminated the subcontract and reported that under the terms of the general contract and subcontract it would “take possession of all materials, [m]achinery, and tools of Kevton from the site to complete Kevton's work.” A term of the general contract between the town and BBC and a corresponding term of the subcontract between BBC and Kevton authorized the general contractor to take possession of the equipment of a terminated subcontractor in order to complete the subcontractor's work. No term permitted the general contractor to seize equipment rented by the subcontractor from a third-party supplier. No evidence indicated that City Rentals had accepted the risk of the seizure of its equipment or had received any notice of the term in the general contract.

In early October, City Rentals made several efforts to recover the front-end loader from the site. It dispatched a low-bed truck to retrieve it. BBC personnel turned the truck away at the project gate. City Rentals' equipment manager made two telephone calls to separate BBC personnel at the site to arrange retrieval; each of the BBC personnel responded simply that BBC had seized all equipment used by Kevton. On at least three occasions during October and November, Kevton's general manager and its accountant visited the site to confirm the presence and the condition of the seized equipment. From outside the gate they took photographs of the front-end loader (admitted in evidence). On November 4, the City Rentals equipment manager again telephoned the BBC site manager to arrange for repossession of the loader; the site manager responded that the Kevton subcontract permitted BBC to seize the rental equipment on site. The trial judge appropriately found that “City Rentals sought to recover its equipment from the project site, but was rebuffed in its attempts to retrieve the ... loader until at least November 29, 2002.”

In late November, Kevton brought suit (separate from the present litigation) against BBC in the Superior Court for, inter alia, conversion of Kevton's “personal and leased property, equipment and materials ... on the [p]roject site,” including the front-end loader, and for an affirmative injunctive order compelling the release of all seized equipment. On November 30, BBC released the equipment.

Meanwhile, on October 22, City Rentals had sent BBC written notice of an unpaid equipment rental balance through September 22 of $15,377.50, and indicated its intention to seek payment under the statutory bond, if necessary. BBC received, but did not answer, the notice.

On December 4, counsel for City Rentals forwarded to BBC and Centennial an updated claim for labor, material, and equipment of “no less than $30,857.50.” BBC received, but again did not answer, the billing. Centennial acknowledged the notice, reserved its defenses, and proposed to investigate the claim.

On December 26, 2002, City Rentals began the present action against BBC and Centennial for unsatisfied rental charges of $35,910 payable under the statutory bond, and for violation of G.L. c. 93A.⁴ After a long gestation, the parties conducted an efficient bench trial. The judge awarded City Rentals the full amount of its requested damages under the bond, $35,910, plus interest and costs. The judge rejected the c. 93A claim (a result not appealed). After examination of extensive subsequent papers (affidavits, verified time sheets, supporting and opposing memoranda), she entered a final order for attorney's fees in the sum of $78,136.75, as mandated by G.L. c. 149, § 29, sixth par.⁵ Both assessments applied jointly and severally against BBC and Centennial. Both defendants have timely appealed.

Analysis. 1. Liability. Against the judgment of liability, BBC and Centennial (hereafter collectively BBC⁶) argue that City Rentals failed to provide notice sufficiently specific or timely under the requirements of G.L. c. 149, § 29. In relevant part, the third paragraph of the statute provides that a claimant engaged contractually with a subcontractor (but not with the general contractor) may pursue its remedy under the bond “only if [it] gives written notice to the contractor principal [the general contractor] within sixty-five days after the day on which the claimant last ... furnished ... equipment ..., stating with substantial accuracy the amount claimed [and] the name of the party for whom such ... equipment ... [was] furnished ...” (emphasis supplied). Ibid., as amended by St.1972, c. 774, § 5. BBC contends that City Rentals maintained four separate contractual relationships with Kevton: one for trucking and trailer services; one for an excavator; another for the bulldozer; and a final one for the front-end loader. It points out that City Rentals leased each category of equipment at different rates and that it invoiced them separately. It concludes that “City Rentals was required to give separate notices for [each of] the four separate and distinct subcontracts at issue”; that it should have particularly identified the front-end loader and its contested detention; and that the undifferentiated December 4 notice lacked the degree of specificity necessary under the statute.

Independently, BBC argues that the December 4 notice was untimely because the “idle” presence of the front-end loader on the project site did not constitute the requisite “furnishing” of equipment within the meaning of the statute. The last “furnishing” (active use) allegedly occurred on September 27. BBC received the notice on December 7. In BBC's view, the proposed interval of seventy-one days would place the notice beyond the sixty-five day limitation. ⁷ For several reasons both proposed applications of the statute are unpersuasive.

a. Substantial accuracy. The statute does not impose a duty upon a claimant subcontractor to separate the elements of its labor, materials, equipment, or other contributions to a project into discrete units, and then to transmit corresponding multiple notices. As always, we begin with the language of the act itself. Hoffman v. Howmedica, Inc., 373 Mass. 32, 37, 364 N.E.2d 1215 (1977). It requires a statement of the “amount claimed” and the name of the party for whom the subcontractor “furnished” the elements of value. Here the City Rentals December 4 notice communicated both an amount (“no less than $30,857.50”) and the recipient (“Kevt[ ]on Corp., a subcontractor to BBC Co., Inc.”). That information satisfied the statute. In addition, City Rentals identified the project by title and address. It sent identical notices to both BBC and Centennial by certified mail. It complied abundantly with the statutory purpose of meaningful notice.

The mode of interpretation for the act is liberal. “The fundamental purpose of § 29 is to afford security to subcontractors and materialmen in public works because they do not have the benefit of a mechanic's or materialman's lien, as would be the case in private construction work.” Floors, Inc. v. B.G. Danis of New England, Inc., 7 Mass.App.Ct. 356, 358, 387 N.E.2d 1166 (1979), S.C., 380 Mass. 91, 401 N.E.2d 839 (1980). Section 29 is “a remedial statute, to be construed broadly to effect its purpose of affording security to subcontractors and materialmen on public works.”...