Tilcon Gammino, Inc. v. Commercial Associates

• Citation: 570 A.2d 1102
• Decision Date: 26 February 1990
• Docket Number: No. 88-490-A,88-490-A
• Parties: TILCON GAMMINO, INC. v. COMMERCIAL ASSOCIATES et al. ppeal.
• Court: United States State Supreme Court of Rhode Island

Page 1102

570 A.2d 1102

TILCON GAMMINO, INC. v. COMMERCIAL ASSOCIATES et al.

No. 88-490-Appeal.

Supreme Court of Rhode Island.

Feb. 26, 1990.

John R. Fornaciari, Washington, D.C., Louis V. Jackvony, Jr., Providence, for plaintiff.

Gerard R. Visconti, David M. Campbell, Visconti & Petrocelli, Providence, for defendants.

OPINION

MURRAY, Justice.

This case comes before us on the respondents' appeal from a Superior Court judgment entered after a seven-day bench trial pursuant to a petition to enforce a mechanics' lien. The respondents raise several issues on appeal. The respondents allege that the trial justice erred in computing the amount due to the petitioner. The respondents assert that in computing the amount due to the petitioner, the trial justice was incorrect in determining the types of contracts in effect. In addition the respondents allege that the petitioner was liable for the reimbursement to subcontractors for rock excavation. The respondents further challenge the court's computations by asserting that the justice allowed petitioner's claims that were not within the mechanics' lien period.

The respondents raise other issues on appeal which challenge several of the trial justice's rulings on pretrial motions. They assert that the trial justice erroneously denied respondents' motion to dismiss petitioner's lien petition for failure to particularize. They also claim that the trial justice erred in finding that respondents were not entitled to a jury trial. In addition respondents claim that the trial justice abused his discretion in denying respondents' motion to file a counterclaim.

The trial justice made his findings after observing eight witnesses. On appeal this court reviewed the four-volume record of testimony, several supplemental and reply briefs, the trial justice's twenty-eight-page opinion, his eight-page supplemental decision, and exhaustive oral arguments. After considering all the evidence, we have come to the firm conclusion that the trial justice in this case was absolutely correct in all his rulings and in awarding petitioner $1,329,207.

The court found the following facts. On February 5, 1985, Tilcon Gammino, Inc. (Tilcon), a contracting company that performs construction work, commenced site clearing of an area designated to be the Bald Hill Plaza Shopping Center in Warwick, Rhode Island. Work commenced on the shopping center at the direction of respondent Commercial Associates (Commercial). At this time there were no plans or specifications for the design of the shopping center or its utility lines. All that existed was a general "overview" of the proposed construction site.

On February 8, 1985, Thomas D. Gammino, a Tilcon vice president, entered into a written contract with three general partners of Commercial, including one Anthony J. DelVicario. Although the contract gave control over the site work to Tilcon, DelVicario assumed authority to speak for Commercial at the Bald Hill site. DelVicario managed and directed the site work daily.

In general, work progressed without regard to the terms of the contract. The contract was continually amended by oral agreements between Gammino of Tilcon and DelVicario of Commercial. DelVicario requested overtime work, extra equipment, extra materials, and the shifting of work crews from one part of the site to another. He would order different equipment for the job when he was unsatisfied. Tilcon honored these requests because DelVicario had promised that Commercial would pay for all the work he directed to be performed.

Another change implemented by DelVicario was the substitution of the subcontractor Western Mass Blasting (Western) for the Delfino Corporation (Delfino). Originally Tilcon had hired Western to do the drilling and blasting of ledge on the project for $4.75 per cubic yard of mass ledge and $13 per cubic yard for trench ledge. When the parties realized that there was substantially more ledge to be drilled and blasted than originally believed, DelVicario wanted to hire a subcontractor to perform the work for less money. DelVicario then fired Western and negotiated an oral contract with Delfino for $4.10 per cubic yard for all ledge. DelVicario supervised and directed all Delfino's drilling and blasting work. Commercial then began paying Delfino directly.

DelVicario's additional requests were motivated to a large extent by an agreement formed between Commercial and Lechmere, Inc. (Lechmere). Lechmere had agreed to be the primary anchor store for the Bald Hill Plaza Shopping Center. According to Lechmere's agreement with Commercial the building pad had to be completed by March 15, 1985, so that the shopping plaza could be completed by October 1985. This agreement created a time problem because as of December 1984 the site was still high ledge and dense forestland.

Tilcon prepared and submitted to DelVicario nine bills (pay estimates) to be approved by DelVicario, and submitted to Commercial for payment. Six of the pay estimates were submitted to DelVicario, approved by him, and paid by Commercial. Two other pay estimates (Nos. 7 and 8) were approved by DelVicario and not paid. One pay estimate (No. 9) was neither approved nor paid.

Commercial's refusal to pay the three pay estimates was based on the assertion that certain "extras" were actually within the scope of work to be performed. Commercial claimed that the February 8 agreement, as amended by a May 8, 1985 letter sent by Gammino to Commercial, established a "guaranteed maximum price" of $3,095,000 for all the contract work done by Tilcon on the project. Therefore, Commercial claimed, those "extras" for which Tilcon sought payment were actually items that were included within the scope of work to be performed defined in the February 8 contract.

On February 7, 1986, Tilcon filed a petition to enforce a mechanics' lien in the Superior Court for Kent County pursuant to the Rhode Island Mechanics' Lien Statute, G.L.1956 (1984 Reenactment) chapter 28 of title 34. Tilcon sought to recover for labor, equipment and materials furnished to the respondents Commercial and Lechmere for the construction of respondents' shopping center.

In considering respondents' appeal of the justice's determination of the amount due to petitioner, we must review the trial justice's findings of fact. We have consistently ruled that findings of fact made by the Superior Court "will not be disturbed on appeal unless it is shown that the trial justice misconceived or overlooked relevant evidence or was otherwise clearly wrong." E.g., In re Randy B., 486 A.2d 1071, 1073 (R.I.1985). No such finding can be made in this case. Instead, we affirm the findings of fact of the trial justice and commend his thorough evaluation of voluminous evidence in deriving them.

The trial justice found that up until May 8, 1985, Tilcon agreed to work on a cost-plus basis. In making this finding, the trial justice considered the testimony of Gammino that he and DelVicario agreed that Tilcon would do the work on a cost-plus basis. Gammino's testimony was corroborated by the behavior of the parties which was inconsistent with a guaranteed-maximum-price contract. As we stated in the facts above, DelVicario assumed total control over the project. His control over the project, to which Tilcon consented, obstructed Tilcon's ability to protect itself under a guaranteed-maximum-price contract. The trial justice found that Tilcon would not have consented to relinquishing control over the project if the parties had not agreed to a cost-plus contract.

The court also found it to be "inconceivable" that Tilcon would lock itself into a guaranteed-maximum-price figure in light of the fact that no sufficient site and construction plans and work specifications were available at that time. Tilcon had at best only a general idea of the type of work expected of it. Without construction plans, any price figure given could only have been a mere estimate.

In regard to that period after May 8, 1985, the trial court found that the $3,095,000 figure that appeared in correspondence constituted a guaranteed-maximum price only for the contract work done subsequent to May 8, 1985. Commercial's failure to act confirms this finding. Commercial Associates never informed Tilcon that it considered the $3,095,000 to be a guaranteed-maximum price for all the contract work performed, that Tilcon was exceeding the agreed maximum price, or that Commercial Associates was not going to pay more than $3,095,000. In addition the trial justice observed that it would have been irrational for Gammino to give a low figure for a guaranteed-maximum price on May 8, 1985, when Tilcon had already received the construction plans. As an expert at trial testified, the value of the work reflected on the April 17, 1985 plans exceeded $5 million. In light of this uncontroverted testimony, Gammino would have given a price exceeding the projected value of the work to be performed if this figure was intended to be a maximum price for all contract work to be performed.

In computing the amount due petitioner, the Superior Court found that Commercial and not Tilcon was responsible to pay for certain rock excavation work performed by Delfino. Commercial, therefore, had no right to attempt to back-charge Tilcon for payments Commercial made to Delfino. Tilcon had originally contracted with Western to perform the ledge drilling and blasting. Tilcon submitted pay estimates to Commercial for the charges by Western for the work. DelVicario soon realized, however, that there was more ledge to be drilled and blasted than originally believed. He then decided that the price charged by Western was too high. He therefore fired Western and hired Delfino to do the work for substantially less money.

Tilcon was not a party to Commercial's contract with Delfino. DelVicario directly supervised all of Delfino's drilling and blasting. Delfino contracted directly with Commercial via its...