General Contractor Prevails: Subcontractor’s Demand for Payment Dismissed

The Massachusetts Appeals Court affirmed summary judgment in favor of a general contractor in the matter Acme Abatement Contractor, Inc. v. S&R Corporation.  The general contractor, S&R Corporation, hired an asbestos abatement subcontractor, Acme, to demolish and remove materials from a water treatment plant and ball field.  The linchpin issue was whether the subcontract required the paint removed from a section of the bleachers at the ball field.

The subcontractor claimed that there was no asbestos in the paint therefore removing the paint was outside the scope of its contract.  It refused to do that work.  As a result, the general contractor was forced to hire another contractor.  When the subcontractor demanded payment for the work it had completed, the general contractor refused and did not pay the subcontractor anything.  The subcontractor sued.

The general contractor proceeded to summary judgment on two bases.  First, it argued that the subcontract had assumed that all paint contained asbestos and therefore the subcontract’s scope necessarily included removing the subject paint. Then the general contractor argued if there were disputes about scope, per the contract terms, the subcontractor was required to do the work and then litigate the scope later: 

"In the event of any dispute, controversy or claim between the Contractor and the Subcontractor, the Subcontractor agrees to proceed with the Work or extra work without delay and without regard to such dispute, controversy, claim or the tendency [sic] of any proceeding in relation to the same. The failure of the Subcontractor to comply with the provisions of this paragraph shall constitute a material breach of this agreement. . . ."

Because the subcontractor refused to perform the disputed work, general contractor asserted that the refusal was a material breach and it was justified in not paying the subcontractor for any work.  The appellate court agreed with this second argument.

The subcontractor attempted to counter that even if it breached by not doing the subject work, under a theory of quantum meruit, it still was entitled to payment for the work it did perform.  The appellate court disagreed holding that because the subcontractor "intentional[ly] depart[ed] from the contract in a material matter without justification or excuse," its claim for recovery under quantum meruit was precluded.

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The author, Katharine Kohm, is a committee member for The Dispute Resolver. Katharine practices construction law and commercial litigation in Rhode Island and Massachusetts.  She is an associate at Pierce Atwood, LLP in Providence, Rhode Island.  She may be contacted at 401-490-3407 or kkohm@PierceAtwood.com.