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Central Ceilings, Inc. v. Suffolk Construction Co. Inc.

Appeals Court of Massachusetts, Suffolk

March 29, 2017

CENTRAL CEILINGS, INC.
v.
SUFFOLK CONSTRUCTION COMPANY, INC. & others.

          Heard Date October 7, 2016.

         The case was heard by S. Jane Haggerty, J.; an award of attorney's fees was entered by her; and a motion for reconsideration was considered by Judith Fabricant, J.

          Joel Lewin (John P. Connelly also present) for the defendants.

          Paul R. Mordarski (Thomas J. Fullam also present) for the plaintiff.

          Present: Agnes, Maldonado, & Desmond, JJ.

          DESMOND, J.

         After a jury-waived trial, a Superior Court judge entered judgment awarding the plaintiff, Central Ceilings, Inc. (Central), $321, 315 on its breach of contract claim for damages for loss of productivity incurred while acting as a subcontractor for defendant Suffolk Construction Company, Inc. (Suffolk), on a large construction project. This case is before us on cross appeals.

         Suffolk challenges the judgment, [2] claiming, inter alia, that Central's claim was barred by the "no-damages-for-delay" clause in the subcontract between the parties, and that the judge erred in ruling that Central had established its claim for damages by the "total cost" method. Suffolk further challenges the judge's award of $471, 682 in attorney's fees to Central, claiming that it was wrongfully denied discovery and a hearing prior to the entry of that award.

         On its cross appeal, Central challenges the judge's holding that the "pay-if-paid" clause in the subcontract barred it from recovering $82, 538 from Suffolk for unpaid change order requests (CORs). For the reasons set forth herein, the judgment on the merits entered on December 20, 2013, and the amended judgment for attorney's fees entered on September 9, 2014, are affirmed.

         1. Background.

         First, we set forth the basic material facts, drawing extensively from the trial judge's thoughtful and thorough findings of fact, rulings of law, and decision. The Massachusetts State College Building Authority (MSCBA) hired Suffolk to serve as general contractor on the construction of three interconnected dormitories at what is now known as Westfield State University (the project). As the dormitories were to be ready for occupancy by students arriving for the fall semester in 2005, the contract between the MSCBA and Suffolk (the general contract) provided for a substantial completion date of July 1, 2005. As an incentive for Suffolk to finish on time, the general contract further provided that Suffolk could either earn a $200, 000 bonus for completing the project on time or pay significant liquidated damages if it was not.[3]

         Central submitted a bid to serve as the subcontractor for installing, among other things, the exterior heavy metal gauge framing and sheathing, interior light gauge framing, drywall, and hollow metal door frames. Critical to Central's estimate and ability to timely complete its work was the "flow" of the project, with each aspect of its work following in sequence, floor by floor, exterior to interior, building by building. Suffolk accepted Central's bid, and the parties entered into a subcontract in the original amount of $3, 606, 476.

         From the outset, however, the project was plagued by problems as Suffolk failed to carry out many of its obligations, including: failing to coordinate the work of other "trades, " such as the steel erector and window installer, whose work necessarily had to be completed before Central could complete its own; failing to establish proper elevation, column, and control lines, from which Central worked to construct the building in accordance with the plans; failing to provide for the timely and properly coordinated delivery of the hollow metal door frames to be installed by Central; and failing to ensure that the buildings were weather-tight and properly heated, both of which were essential to Central's ability to, among other things, carry out the temperature-sensitive tasks related to the installation of the gypsum wall board.[4]

         As Central encountered each obstacle and awaited resolution, its workers, who had taken their tools and the necessary supplies and mobilized in a specific area to carry out a specific task, were repeatedly forced to break down and remobilize to a different area to carry out a different task. Then, once the obstacle had been overcome, Central's workers would have to do a "go back, " remobilizing and completing the original task. Meanwhile, Central's project manager and other supervisory personnel were forced to spend an inordinate amount of time coordinating all of the changes and filling out related paperwork. The problems also resulted in Central's workers being forced to work in the same space and at the same time as other subcontractors, an inefficient situation commonly referred to in the industry as the "stacking of trades."

         Given the substantial completion date, and the financial incentives and disincentives related thereto, Suffolk advised Central that no time extensions would be granted on the project. As a result, while the start dates for various aspects of Central's subcontract work were consistently pushed back due to the myriad of issues caused by Suffolk's breaches, the completion dates remained the same and the time within which Central had to perform was constantly "compressed." When Central complained, Suffolk told it to simply assign additional manpower to keep the project on track, which is what Central was forced to do. As such, even though the project was substantially completed on time, to the financial benefit of Suffolk, the "flow" and productivity that Central had reasonably counted on when calculating its bid for the project suffered significantly.

         Central brought this suit for breach of contract and quantum meruit claiming that Suffolk had not adequately managed and coordinated the project, and that these deficiencies resulted in damages for loss of productivity in the amount of $321, 315 and $82, 538 in unpaid CORs.[5] The judge specifically found that Suffolk had breached the contract "(1) by failing to coordinate erection of the steel; (2) by incorrectly establishing the elevation, column, and control lines of Building 2; (3) by failing to order the [hollow metal door frames] and to coordinate delivery of the window and curtain walls in a timely manner; (4) by failing to provide the necessary climate for the interior work on the Project; and (5) by making errors in design that affected the plumbing, the heights and dimensions throughout the Project, the fan coil units in each room, the shaft walls, the curtain walls, and the pour stops."

         At trial, Central sought to establish its damages due to this loss of productivity through the expert testimony of Richard Broglino, an individual with substantial experience in the construction industry. Broglino opined that Central's loss was best quantified through the impact it had on "manpower." To that end, he first reviewed Central's original estimate for labor costs of $1, 657, 000 and determined that it was reasonably accurate. He then subtracted that figure, as well as amounts that Central had already recovered for labor through change orders, from the $2, 310, 526 in actual labor costs Central incurred on the project, resulting in a net loss of $321, 315 in labor productivity. The judge determined Broglino's testimony was credible and awarded that amount to Central on its claims for breach of contract.[6]

         2. Standard of review.

         On appeal from a jury-waived trial, we review the trial judge's findings of fact for clear error and review de novo her rulings on questions of law. Trace Constr., Inc. v. ...


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