AEROSTATIC ENGINEERING CORP. vs. CHESTER SZCZAWINSKI, trustee.

AEROSTATIC ENGINEERING CORP. vs. CHESTER SZCZAWINSKI, trustee.

1 Mass. App. Ct. 141

December 18, 1972 - March 2, 1973

Middlesex County

Present: ROSE, GOODMAN, & ARMSTRONG, JJ.

In an action for breach by the defendant of the payment provisions of a written construction contract with the plaintiff, there was no merit in contentions of error in the allowance of the plaintiff's motion for summary judgment under G. L. c. 231, Section 59, in that a genuine issue of material fact existed by reason of a differing prior oral agreement between the parties with respect to the terms of payment, where the unmistakable and unequivocal terms of the contract represented their complete agreement on that subject [142-143]; or in that the issue of fraud, raised by the defendant for the first time in his brief, created a genuine issue [143]; or in that genuine issues were raised by the defendant in the affirmative defences pleaded, where such issues were omitted from his counter affidavit, and in a deposition he unequivocally admitted liability [143-144].

The provision of G. L. c. 231, Section 59, permitting the filing of a motion for summary judgment "after the completion of the pleadings" does not preclude the filing of such a motion prior to the expiration of the time within which "interrogatories" may be filed under Rule 36 of the Superior Court (1954). [144]

In an action for breach by the defendant of the payment provisions of a written construction contract substantially performed by the plaintiff before terminating it, there was no merit in a contention of error in the allowance of the plaintiff's motion for summary judgment under G. L. c. 231, Section 59, in that such termination raised an issue of breach of contract by the plaintiff, where the defendant in a deposition admitted his indebtedness; his substantial breach by failure to pay the large sum due justified termination by the plaintiff and dismissal of the defendant's declaration in set-off seeking reimbursement for the cost of completion. [144-145]

The damages of a builder for breach of the payment provisions of an uncompleted construction contract justifiably terminated by him is

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the contract price less the cost of completion which he would have incurred had he completed the work, or in the alternative, the fair value not in excess of the total contract price of the work done and the materials furnished prior to termination. [145]

CONTRACT. Writ in the Superior Court dated September 24, 1971.

A motion for summary judgment was allowed by Tomasello, J.

Bruce N. Sachar for the defendant.

John D. O'Reilly, III, for the plaintiff.

ROSE, J. The plaintiff, pursuant to a written agreement with the defendant, performed a substantial part of a $60,000 contract before terminating it because of the defendant's asserted refusal to make payments as they became due under the contract. The plaintiff seeks in one count to recover $54,000 allegedly due under the contract and in a separate count to recover the same amount on an account annexed for labor and material furnished to the defendant. The plaintiff filed a motion for judgment on undisputed facts under G. L. c. 231, Section 59, as amended through St. 1965, c. 491, Section 1, which makes summary judgment available when there is no genuine issue of material fact to be determined but only questions of law. The defendant, besides filing a counter affidavit, had filed a declaration in set-off seeking to recover certain monies because of the plaintiff's termination of the contract. A deposition of the defendant taken by the plaintiff was also before the court at the time of the hearing on the motion. After a hearing, the court below allowed the plaintiff's motion.

In his bill of exceptions the defendant argues that his counter affidavit, affirmative defences and declaration in set-off raised four issues of material fact and that therefore the plaintiff's motion for judgment on undisputed facts should not have been granted. We disagree.

1. The defendant first argues that there was a prior oral agreement between the parties with respect to the terms of payment, differing from those unambiguously spelled out in the written contract. He suggests that this understanding

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raises a disputed fact and therefore defeats the statutory requirement that there be no genuine issue of material fact. The ninth clause of the contract provides in unmistakable and unequivocal terms the amount due to the plaintiff under the contract and the terms of payment. It is clear to us, from reading the document, that this represented the complete agreement between the parties with respect to the terms of payment. It could not be more clear that this is a case where the parol evidence rule precludes evidence of prior or contemporaneous oral agreements that vary or modify the terms of a subsequent unambiguous written contract. Trahant v. Perry, 253 Mass. 486 , 487-488. Schuster v. Baskin, 354 Mass. 137 , 141.

2. The defendant next argues that the issue of fraud which he raised in his brief for the first time creates a genuine issue. It cannot now be considered. It is basic that the failure to allege fraud affirmatively in the pleadings precludes one from relying on it later. Barron v. International Trust Co. 184 Mass. 440 , 443. Kerrigan v. Fortunato, 304 Mass. 617 , 620. Gedart v. Ejdrygiewicz, 305 Mass. 224 , 228. Furthermore, this court cannot now decide an issue that was not before the trial court. Serabian v. Tatian, 229 Mass. 191 , 192; Taxi Service Co. v. Gulf Refining Co. 252 Mass. 314 , 319. 3. The defendant raises other issues in his pleadings by way of affirmative defences but they are omitted from his counter affidavit. It was implicit in the trial judge's ruling that they no longer were genuine issues. This was proper. Doral Country Club, Inc. v. O'Connor, 355 Mass. 27 , 30. In any event the defendant made certain admissions of liability in the deposition which clearly eliminate these issues.

The defendant argues, citing McMahon v. M & D Builders, Inc. 360 Mass. 54 , that the admissions in the deposition cannot be conclusive because during a trial on the merits these admissions might be controverted by additional testimony from the defendant himself or other witnesses. The court in the McMahon case was faced with a different situation, however. Before it was a summary of

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material facts which included answers to written interrogatories without the questions. The court said, ". . . since the interrogatories are not in the record, we do not know the scope of inquiry which produced their answers. Since the answers must be responsive, they are limited by the language of the interrogatories. We cannot assume or conclude that the plaintiffs, at a trial on the merits, would be unable . . . to present evidence in addition . . . ." McMahon v. M & D Builders, Inc. supra, at 61.

The record before us is much more conclusive. Here, the defendant in his deposition unequivocally admits his liability. Not only is the evidence clear and compelling, but it is difficult to imagine what additional or contradictory testimony might be forthcoming from a trial on the merits which the defendant could not have set forth in a counter affidavit filed in opposition to the allowance of the motion.

4. The defendant argues that this motion for judgment has been filed prematurely because G. L. c. 231, Section 59, as amended through St. 1965, c. 491, Section 1, provides that the motion may only be filed "after the completion of the pleadings" and that this motion was filed prior to the expiration of the time for filing interrogatories. There is no basis for the contention that Section 59 requires a party to wait one year, the period within which interrogatories may be filed under Rule 36 of the Superior Court (1954) before filing such a motion. We reject the defendant's contention as unsound and unwarranted. Moreover, interrogatories and the answers thereto are not considered part of the pleadings. This distinction is clear from Section 59 itself which refers to "pleadings" and "interrogatories" as separate sources for "admissions" under this section.

5. The defendant finally asserts that an issue arises as to whether or not the plaintiff, by terminating performance, breached its contractual obligation, thereby causing damage to the defendant. In an affidavit the president of the plaintiff corporation stated that the plaintiff completed at least ninety percent of the contract before terminating because of the defendant's refusal to pay. It is further asserted in the affidavit that in discussions with the

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defendant, he acknowledged the indebtedness in the amount of $54,000 but that he was unable to make payment of this amount. Nowhere does the defendant dispute this. In fact, in a deposition of the defendant he again admits his obligation to the plaintiff and his inability to pay due to lack of financing. This refusal of the defendant "to pay so large a part of the total sum payable and due" was a substantial breach going to the root of the contract thus entitling the plaintiff to terminate. Hughes v. Rendle Corp. 271 Mass. 208 , 212. Bucholz v. Green Bros. Co. 272 Mass. 49 , 52-53. Petrangelo v. Pollard, 356 Mass. 696 , 701.

Implicit in the trial judge's allowance of the plaintiff's motion for judgment was the dismissal of the defendant's declaration in set-off. Dooley v. Murphy, 229 Mass. 72 , 74.

This disposition of the defendant's claim in set-off was correct since the defendant's claim in set-off was correct since the defendant's substantial breach precludes his recovery for any reimbursement for completing the work.

6. While the plaintiff is entitled to recover, the correct amount of damages has not been ascertained. The statement in the plaintiff's affidavit that $54,000 is due appears to be based on a computation inconsistent with the normal rule of damages. This amount appears to be predicated on the plaintiff's assertion that it performed ninety percent of the contract and thus is entitled to ninety percent of the contract price. The rule of damages for breach of a construction contract by one who has promised to pay for construction and which is applicable in this case is that the builder may sue on the contract for the entire contract price less the cost of completion that he would have incurred had he completed the work, or in the alternative, he may recover the fair value not in excess of the total contract price of the work done and the materials furnished prior to his justified termination of the work. Restatement: Contracts, Section 346. See also Fox v. Harding, 7 Cush. 516 , 522-523; Brown v. Woodbury, 183 Mass. 279 , 282; Gaffey v. United Shoe Machinery Co. 202 Mass. 48 , 53; Bullard v. Eames, 219 Mass. 49 , 53; Dalton v. American Ammonia Co. 236 Mass. 105 , 108.

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It is not clear from the record that this rule of damages was followed in allowing the motion for judgment. Therefore, the case must be remanded to the Superior Court solely for the proper determination of damages.

There being no issue of material fact other than the issue of damages, the defendant's exceptions are overruled and the case is remanded to the Superior Court for further proceedings consistent with this opinion.

So ordered.