6 Mass. App. Ct. 1 | Mass. App. Ct. | 1978
The plaintiff, a subcontractor, brought this action against the defendant, the general contractor on a State construction contract,
The plaintiff appeals from a judgment entered by a Superior Court judge that payment of the remaining re-tainage "is contingent upon receipt by the general contractor of final payment from the Commonwealth of Massachusetts.” The defendant, on its own appeal, disputes a provision of the judgment that it is not entitled to withhold from the price adjustment due the plaintiff any money for added costs, overhead or profit under either St. 1974, c. 554, or the contract between the parties.
1. The plaintiff is correct in its contention that the phrase "upon receipt of final payment by the owner” should be interpreted as setting a time for payment which is sufficient to give the general contractor an opportunity to obtain funds from the owner, and not as creating a condition precedent to payment where there is a dispute between the owner and the general contractor not involving the subcontractor. See A.J. Wolfe Co. v.
2. Moreover, if the defendant’s contention that release of retainage is contingent upon final payment from the Commonwealth were correct, the retainage provision would be contrary to G. L. c. 30, § 39F, and therefore void. Section 39F(l)(b) (as appearing in St. 1972, c. 774, § 2) which is "binding between the general contractor and each subcontractor,” requires that sixty-five days after the subcontractor has completed its work, the entire balance (less the cost of completing incomplete and unsatisfactory items of work) is due to the subcontractor. The defendant’s argument that that section applies only to the amount defined as due by the contract is incorrect, as the statute makes the entire balance (less the cost of incomplete and unsatisfactory items) due. It is thus clear that the entire balance of the retainage was due the plaintiff, as more than sixty-five days have passed since substantial completion and there is no dispute as to the quality of the work. Moreover, as the Commonwealth (owner and awarding authority) has paid the defendant the entire amount owed for work performed by this subcontractor, the defendant is required under § 39F(l)(b) to pay "forthwith to the subcontractor ... the full amount
3. The Superior Court judge was correct in ruling that St. 1974, c. 554, which authorized the Department of Public Works to make price adjustments for increases in the price of liquid asphalt, did not entitle the defendant to withhold money to compensate itself for increased costs claimed to be attributable to the price adjustment. Statute 1974, c. 554, is clear and quite specific. It provides in absolute and unambiguous language that there shall be "no allowance for overhead or profit.”
The judgment is reversed, and a new judgment is to be entered for the plaintiff for the full amount of the ten percent retainage, as well as the amount withheld contrary to St. 1974, c. 554, and the other sums found due the plaintiff by the judge. The plaintiff is to be paid interest at twelve percent on the amount withheld contrary to St. 1974, c. 554.
So ordered.
The general contractor’s surety and the Commonwealth were also named as defendants, but neither of them has appealed.