U.S. Leasing Corp. v. City of Chicopee

• Citation: 402 Mass. 228,521 N.E.2d 741
• Parties: , 45 Ed. Law Rep. 1242 UNITED STATES LEASING CORPORATION v. CITY OF CHICOPEE.
• Decision Date: 19 April 1988
• Court: United States State Supreme Judicial Court of Massachusetts

Page 741

521 N.E.2d 741

402 Mass. 228, 45 Ed. Law Rep. 1242

UNITED STATES LEASING CORPORATION v. CITY OF CHICOPEE.

Supreme Judicial Court of Massachusetts Hampden.

Argued Feb. 4, 1988.

Decided April 19, 1988.

L. Jed Berliner, Springfield for plaintiff.

Thomas J. Donoghue, Springfield for defendant.

Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and O'CONNOR, JJ.

HENNESSEY, Chief Justice.

In December, 1977, a lease agreement was executed whereby the plaintiff, United States Leasing Corporation, would purchase a National Cash Register Corp. (NCR) computer system and lease it to the defendant city of Chicopee (city) in return for five annual payments of approximately $24,000. The agreement was signed by the city's superintendent of schools and its purchasing agent, and the school committee passed a resolution in favor of entering into the agreement. In addition, the city solicitor signed a form provided by the plaintiff stating that the persons signing the lease had authority to do so and that the city could bind itself by signing the lease. The city tendered the first two annual payments. At this point, however, problems developed with the computer system and the city refused to make further payments.

On December 10, 1981, the plaintiff filed a complaint in Superior Court alleging breach of contract by the city. The plaintiff moved for summary judgment. The city responded in kind, arguing that the contract had not been approved by the mayor as required by the city's charter. Cf. G.L. c. 43, § 29 (1986 ed.). The city's motion was granted on April 21, 1982. The plaintiff was thereupon allowed to amend its complaint to allege a G.L. c. 93A violation. In May, 1984, a stay was ordered to allow the city to resolve its dissatisfaction with the computer system with NCR. The record does not indicate the result of these negotiations.

On October 24, 1985, the case was reactivated. The plaintiff moved to amend its complaint a second time. The plaintiff sought leave to: add the city solicitor and the school committee as defendants on the c. 93A claim; add a negligence claim against the city solicitor; add claims holding the city and the school committee vicariously liable for the solicitor's negligence and directly liable for the negligent training and supervision of him; seek reformation of the agreement; seek recovery on the theory of quantum meruit. The motion to amend was denied in its entirety and, following a bench trial, judgment was entered in favor of the city on the c. 93A claim. The plaintiff appealed to the Appeals Court, and we transferred the case on our own motion. We affirm.

1. The contract claim. ¹ The plaintiff argues that the historic power and independence of school committees, see, e.g., Leonard v. School Comm. of Springfield, 241 Mass. 325, 328-330, 135 N.E. 459 (1922), and the grant of authority to school committees to purchase equipment contained in G.L. c. 71, § 49A, allowed Chicopee's school committee to bind the city under the lease without mayoral approval despite the city charter's ² requirement of such approval. We have addressed the tension between the historic independence of school committees and statutory ³ and municipal charter fiscal management provisions in a number of decisions. See, e.g., School Comm. of Salem v. Gavin, 333 Mass. 632, 635, 132 N.E.2d 396 (1956) (school committee's employment contract with football coach valid despite lack of mayoral approval); School Comm. of Gloucester v. Gloucester, 324 Mass. 209, 218, 85 N.E.2d 429 (1949) (school committee must follow statutorily prescribed purchasing procedures); Eastern Mass. St. Ry. v. Mayor of Fall River, 308 Mass. 232, 238, 31 N.E.2d 543 (1941) (mayoral approval required for school transportation contract); Parkhurst v. Revere, 263 Mass. 364, 371, 161 N.E. 599 (1928) (mayoral approval of contracts to purchase textbooks required). See McLean v. Mayor of Holyoke, 216 Mass. 62, 64-65, 102 N.E. 929 (1913) (court refuses writ of mandamus to require mayor to approve school committee's recommended contract for purchase of furniture).

The rule to be distilled from the above decisions is that the school committee is subject to statutory and charter based fiscal management provisions except when it is acting in an area directly related to the "methods of education or the policy, conduct, regulation and discipline of schools. Ordinary commercial contracts have never hitherto been held to belong in the field in which by long established policy and tradition school committees have exercised exclusive and untrammeled control." Eastern Mass. St. Ry., supra 308 Mass. at 237, 31 N.E.2d 543. See School Comm. of Gloucester, supra 324 Mass. at 218, 85 N.E.2d 429. The agreement at issue here is an ordinary commercial contract which does not implicate the school committee's area of exclusive control. As such, mayoral approval of the lease agreement was required for it to become binding on the city.

The plaintiff makes two further arguments in connection with its contract claim. First, the plaintiff argues that by signing warrants authorizing payment of the first two annual installments, the mayor approved the contract. Second, the plaintiff contends that the city should be estopped from denying the contract. We find these arguments unpersuasive.

Statutory and charter provisions restricting the manner in which municipal funds may be expended serve the salutary functions of placing cities and towns on a sound financial basis and preventing waste, fraud, and abuse. See Leonard, supra 241 Mass. at 331, 135 N.E. 459; Lumarose Equip. Corp. v. Springfield, 15 Mass.App.Ct. 517, 520, 456 N.E.2d 1087 (1983). In order to advance these benign goals we have consistently and punctiliously held that "one dealing with a city or town cannot recover if statutory requirements such as are contained in the [city's] charter have not been observed." Richard D. Kimball Co. v. Medford, 340 Mass. 727, 729, 166 N.E.2d 708 (1960). See Sancta Maria Hosp. v. Cambridge, 369 Mass. 586, 595, 341 N.E.2d 674 (1976) (justification for this rule is that requirements are matter of public record). Consistent with this approach we have denied past entreaties to find implicit mayoral approval of a contract where the required explicit approval was lacking. Goodyear Park Co. v. Holyoke, 291 Mass. 11, 15-16, 195 N.E. 766 (1935) (mayor's signed recommendation to board of aldermen that bond should issue for purpose of the contract is insufficient as mayoral approval of the contract). Similarly, we have refused to estop governmental entities from denying the existence of a contract where the statutory requirements were lacking, for to do so would circumvent our insistence that those requirements be satisfied precisely. See, e.g., Phipps Prods. Corp. v. Massachusetts Bay Transp. Auth., 387 Mass. 687, 693-694, 443 N.E.2d 115 (1982). ⁴ Although we are not unsympathetic to the plaintiff's position, it has presented no argument compelling us to foresake our longstanding approach in this area. There was no error in granting the defendant's motion for...