By: James G. Grillo, Esq. and Adam J. Reese, Esq.
Davagian Grillo & Semple LLP
In G4S Technology LLC v. Massachusetts Technology Park Corporation, the Supreme Judicial Court decided a case involving the construction of a high speed fiber-optic network. The owner, Massachusetts Technology Park Corporation (or “MTPC”), contracted with the general contractor, G4S Technology LLC (or “G4S”), for the construction of a network spanning western and central Massachusetts. After various change orders, the dates of substantial and final completion were extended. The project was completed seven months after the adjusted date of substantial completion, and the general contractor subsequently submitted several requests for equitable adjustments to the owner, seeking additional compensation and extensions of time for the dates of substantial and final completion. The owner denied these, and the matter ended up in court.
However, the court stated a new rule under which the “complete and strict performance” standard applies only to the actual design and construction work itself. The court stated that a lesser, “material breach,” standard was to be applied to other contract provisions. Under this new material breach standard, the general contractor would only be barred from recovering on its breach of contract claim if it breached an “essential and inducing feature of the contract.” The court went on to hold that because the contract’s terms governing the payment of subcontractors were an essential and inducing feature of the contract, and because the general contractor had breached those terms by submitting inaccurate payment releases concerning payments to subcontractors, the general contractor had materially breached the contract and was therefore barred from recovering on its breach of contract claim.
The court then went on to also state a new rule for quantum meruit claims. Under the old rule, recovery under quntum meruit would be barred by a contractor’s departure from the exact terms of the contract. This approach to quantum meruit dates to old English law and obviously can create a very harsh result which has been criticized over the years. Acknowledging this, the court overruled a long line of cases applying this simplistic approach and adopted a new rule under which the contract, performance, and breaches by both parties are to be weighed and evaluated to determine whether it would be fair and just to preclude quantum meruit recovery. Applying this new rule, the court suggested that if the general contractor’s misrepresentations in payment releases did not cause damage to the owner, and if the general contractor was not responsible for the delays, the general contractor should not be precluded from recovering against the owner under quantum meruit. Ultimately, the court did not decide whether the general contractor’s quantum meruit claim would be barred or not, remanding the case to a lower court for resolution of factual disputes. We look forward to the result when this one gets decided by the lower court.
James G. Grillo, Esq. is a partner at Davagian Grillo & Semple and has over fifteen years experience representing contractors in the Commonwealth. Adam J. Resse, Esq. is an associate with the firm. ABC members should feel free to contact Davagian Grillo & Semple with any questions or comments regarding the above article.