Royal School Laboratories, Inc. v. Town of Watertown
| Citation | 236 F. Supp. 950 |
| Decision Date | 05 January 1965 |
| Docket Number | Civ. No. 10225. |
| Court | U.S. District Court — District of Connecticut |
| Parties | ROYAL SCHOOL LABORATORIES, INC., Plaintiff, v. TOWN OF WATERTOWN and Classen P. Perkins, Defendants. |
Arnold Bai, Goldstein & Peck, Bridgeport, Conn., for plaintiff.
Donald N. Vitale, Vitale & Mahaney, Waterbury, Conn., for defendants.
In this diversity action, Twombly Associates, Inc., a Massachusetts corporation, entered into a contract with the defendant Town of Watertown and its agent, defendant Perkins, chairman of the Watertown School Building Committee, for the furnishing and installation of certain science laboratory furniture and equipment in the Watertown High School. Plaintiff, a Virginia corporation, supplied and delivered equipment and furniture to the defendants pursuant to its obligations as a subcontractor and materialman under the contract.
Being unpaid and finding Twombly now in bankruptcy, plaintiff sues the defendants in contract and in tort. Counts 1 and 3 of the complaint seek recovery on theories of quasi-contract and quantum meruit respectively; count 2 sounds in tort and is based on the failure of the defendants to obtain a payment bond from Twombly for the protection of subcontractors and materialmen, as required by Section 49-41 of the Connecticut General Statutes.
There is no dispute that the defendants received and are presently using the plaintiff's equipment and that the amount owed the plaintiff is $43,307.00. Moreover, defendants admit they have retained $59,628.62 which is due and owing for materials and services rendered under the contract with Twombly. However, they refused to pay a portion of it to plaintiff because of an alleged conflicting claim by the New England Merchants National Bank of Boston. In a separate suit also pending in this Court, Civil No. 10,650, the bank seeks recovery from the Town of Watertown in the amount of $59,628.62, based upon an assignment from Twombly to it of all proceeds due Twombly for work performed in the Watertown High School.
Plaintiff in the instant case has filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Defendants have filed a motion to dismiss for failure of the complaint to state a cause of action and a motion to interplead the bank, with related motions to consolidate this action with the bank's action, for leave to deposit money into court, and an order discharging the defendants from any further liability. The bank has filed no motion to intervene.
Initially it might appear appropriate to grant the interpleader, allow the defendants to deposit the money into court, discharge the defendants from further liability, and thereafter resolve the conflicting claims between the plaintiff and the bank. Sound public policy dictates where possible a municipality should be exempt from exposure of double liability in the interest of protecting taxpayers' money. On the other hand, justice demands safeguarding the rights of persons who render valuable services to a municipality, particularly when they do so with the expectation they are protected by statute from financial loss.
Weighing the competing interests of all the parties, and after careful review of the relevant authorities as well as the historical purpose of the applicable statutes, it is decided that the contentions between the plaintiff and the defendant in the instant case present independent and distinct claims from those of the bank in Civil No. 10,650 and therefore should be determined separately.
As indicated, in counts 1 and 3 of the complaint there are set forth causes of action in quasi-contract based on unjust enrichment and in quantum meruit. The plaintiff's claims for relief proceed on the ground that the contract purportedly entered into between the defendants and Twombly is void because of their failure to obtain a payment bond in the amount of the contract price as required by Section 49-41 of the Connecticut General Statutes (1958). In view of the invalidity of the contract plaintiff alleges that as a materialman it is entitled to recover the reasonable value of the supplies on quasi-contract theories.
Defendants concede their failure to obtain the statutory payment bond renders the contract void as a matter of law, City of Norwalk v. Daniele, 143 Conn. 85, 119 A.2d 732 (1955), but argue that no action can be maintained against the municipality on an "illegal contract" and, therefore, plaintiff should be denied recovery.
Defendants misconceive the legal difference between an illegal contract, that is, one ultra vires, and a contract authorized by law but void due to an irregularity or omission in form or execution. If a contract is unlawful, against public policy, or beyond the corporate powers conferred upon a municipality, there can be no recovery against the public corporation. But a municipality may be held liable for retaining the benefits under an imperfectly executed contract which was within its power to make. By application of the doctrines of quasi-contract, implied contract, ratification, unjust enrichment or estoppel, the Connecticut courts have protected persons who, innocently and in good faith, render services or supply goods to another and are refused payment on technical contract defenses.
In Loomis v. Fifth School District, 109 Conn. 700, at page 704, 145 A. 571, at page 572 (1929), the Court stated that "* * * where a school district retains and uses school supplies and equipment purchased under invalid contracts, it is liable for their purchase price". Similarly, Vito v. Town of Simsbury, 87 Conn. 261, 265, 87 A. 722, 724 (1913), holds that, although a municipality is not liable on implied contracts which would be ultra vires if made in express terms, "* * * there is no reason, in the absence of statutory objection, why the general obligation to do justice should not bind a town so as to make it liable for the reasonable worth of a permanent improvement, constructed under an imperfectly executed contract, and retained by the town as part of a highway". See, also, Bartlett v. Raidart, 107 Conn. 691, 694, 142 A. 398 (1928); State v. Newman, 140 Conn. 214, 218, 99 A.2d 110 (1953); 154 A.L.R. 356 (1945).
In the instant case, the town has accepted and has retained the goods supplied by the plaintiff. No complaint is made of the quality of the equipment and the price is reasonable. Under the circumstances the defendants cannot now say "We shall not pay". Leverty & Hurley Co. v. City of Danbury, 7 Conn.Supp. 125 (1939). The plaintiff is entitled to judgment on counts 1 and 3 of the complaint.
Tort is the basis of recovery in count 2 of the complaint. Plaintiff contends that the defendants' failure to obtain the payment bond from Twombly was a tortious breach of a ministerial duty imposed upon them by statute for which they are liable in damages.
Section 49-41 of the Connecticut General Statutes provides in pertinent part:
"Before any contract exceeding one thousand dollars in amount for the construction, alteration or repair of any public building or public work of the state or of any subdivision thereof is awarded to any person, such person shall furnish to the state or such subdivision a bond in the amount of the contract which shall be binding upon the award of the contract to such person, with a surety or sureties satisfactory to the officer awarding the contract, for the protection of persons supplying labor or materials in the prosecution of the work provided for in such contract for the use of each such person."
Initially, the Court must determine whether the defendants owed a duty to the plaintiff to obtain the payment bond, and, if so, whether they are liable in tort for their failure to do so.
There is no Connecticut case directly in point, and an extensive review of the authorities in other jurisdictions reveals that the issue is far from settled.
A compilation of the leading cases, through the year 1929, is found in 64 A.L.R. 679. The majority of the cases hold that failure of a municipality and its public officials to obtain a payment bond from a contractor for public work, as required by statute to protect subcontractors and materialmen, does not render them liable in tort to the subcontractors and materialmen for work done or materials furnished to the contractor. See, for example, E. I. DuPont De Nemours & Co. v. City of Glenwood Springs, 10 Cir., 19 F.2d 225 (1927); Newt Olson Lumber Co. v. School District, 83 Colo. 272, 263 P. 723 (1928). On the other hand, a few states take the view that the public body or its officials are liable to...
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Royal School Laboratories, Inc. v. Town of Watertown
...granted Royal's motion for summary judgment, awarding a recovery of $43,307 in quasi-contract and tort against the Town and Perkins. 236 F.Supp. 950 (1965).2 Recognizing that "initially it might appear appropriate to grant the interpleader," the judge concluded that the contentions between ......
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O and G Industries, Inc. v. Town of New Milford
...unambiguous language and legislative history of § 49-41. The plaintiff relies primarily on Royal School Laboratories, Inc. v. Watertown, 236 F.Supp. 950 (D.Conn.1965) (Royal School I ), rev'd on other grounds, 358 F.2d 813 (2d Cir.1966) (Royal School II ), as authority for the proposition t......
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O and G Industries, Inc. v. Town of New Milford, 11048
...the trial court recognized that there are no Connecticut cases directly on point, and therefore relied on Royal School Laboratories, Inc. v. Watertown, 236 F.Supp. 950 (D.Conn.1965), rev'd on other grounds, 358 F.2d 813 (2d Cir.1966), a case also involving the failure of a general contracto......
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Elec. Contractors, Inc. v. Ins. Co. of Pa.
...Miller Act undeniably affects the public's interest in public works and municipal finance. See Royal School Laboratories, Inc. v. Town of Waterton, 236 F.Supp. 950, 955 (D.Conn. 1965), rev'd on other grounds, 358F.2d 813 (1966) ("The mandatory requirement of a payment bond, however, has as ......