SPINA, J.
This case raises the question whether a subcontractor providing labor or materials to a public construction project for which a payment bond has been obtained by the general contractor pursuant to G. L. c. 149, § 29, may by private agreement forgo its right to pursue payment under the bond. In 2004 and early 2005, the plaintiff, John J. Costa, doing business as Costa & Son Construction (Costa or subcontractor), performed site work for the defendant Brait Builders Corporation (Brait or general contractor) on such a project in the town of Bridgewater (town). The relationship was not a happy one, and on January 28, 2005, Brait terminated Costa. Costa brought this suit alleging, inter alia, breach of contract and violations of G. L. c. 93A. Costa sought to recover damages under a payment bond obtained by Brait from the defendant Arch Insurance Company (Arch). See G. L. c. 149, § 29. Brait asserted similar counterclaims against Costa. Arch, for its part, defended by arguing that Costa had relinquished his right to claim against the bond pursuant to a provision of his subcontract with Brait. The matter went to trial. At the close of the plaintiff's case, a judge in the Superior Court, answering the question posed above in the affirmative, granted Brait and Arch's motion for a directed verdict and entered judgment with respect to Costa's claims seeking relief under the bond.
1. Background. We begin by reciting the basic facts of the case; we reserve other facts for our discussion of particular issues. Brait placed a successful bid with the town to build an addition to an elementary school. On June 3, 2004, Brait entered into a general contract with the town for $18,689,000 to build the addition (general contract). In accordance with G. L. c. 149, § 29, Brait obtained from Arch two bonds
On June 25, 2004, Brait entered into a subcontract to pay Costa $900,000 to perform site work on the project (subcontract). Site work refers to excavation and other preparation of the project site, such as digging tunnels for the placement of underground utilities and diverting surface water.
Costa began work on the project in mid-2004. Beginning in early 2005, the relationship between the parties began to unravel. On January 3, 2005, Brait sent Costa a letter alleging "under-manning and missed days" and stating it would "vigorously pursue[] all legal means available." Costa replied with a letter of his own claiming that as early as June, 2004, various scheduling and logistical mishaps by Brait — delayed building demolition,
On January 28, 2005, Costa sent Brait a letter announcing that he was "discontinuing all site work ... due to ... extreme weather conditions," and stating that he would return when the ground thawed. On the same day, Brait announced in a letter that it was terminating Costa due to "[u]nacceptable performance," and that Costa was barred from further accessing the project site without Brait's written consent.
On May 3, 2005, Costa initiated the present action. In his complaint, Costa alleged that Brait had committed a breach of the subcontract by obstructing Costa's performance, failing to pay him the balance under the subcontract owed, and barring him from the project site. Costa further claimed that he was owed money under a quantum meruit theory and that Brait had violated G. L. c. 93A, § 11, the section of our consumer protection law protecting persons engaged in business from unfair or deceptive acts or practices. The complaint sought relief under the bond issued by Arch, and Arch was named as a defendant. Arch and Brait answered, denying the allegations, and Brait alleged similar counterclaims against Costa.
After some five years of litigation, the matter went to trial in August, 2010. On August 16, at the close of the plaintiff's case, Brait and Arch sought and were granted a directed verdict on the bond claims. Arch was thereby dismissed as a party, see note 2, supra, and the case proceeded against Brait.
On August 19, the jury rendered a verdict in favor of Costa, awarding general damages (breach of contract and quantum meruit) in the amount of $199,228.14, consequential and incidental damages in the amount of $133,648, and damages for unfair or deceptive acts or practices under G. L. c. 93A in the amount of $167,123.86 — a total award of $500,000. Costa
2. Relinquishment of bond claims. We first consider Costa's appeal of the directed verdict in favor of Brait and Arch, which foreclosed Costa's ability to seek payment from the bond. Article 7 of the subcontract (article 7) provided in relevant part:
Brait subsequently asked Costa to provide performance and payment bonds each in the full amount of the subcontract, $900,000. Costa, however, was unable to do so.
On appeal, Costa argues that article 7 violates the public policy of the Commonwealth and cannot be enforced. See generally, e.g., Beacon Hill Civic Ass'n v. Ristorante Toscano, Inc., 422 Mass. 318 (1996). He argues that the requirement under G. L. c. 149, § 29 (§ 29), of a bond on certain public construction projects reflects a strong public policy of encouraging competitive bidding for, and swift completion of, such projects, see Peters v. Hartford Acc. & Indem. Co., 377 Mass. 863, 872 (1979); Manganaro Drywall, Inc. v. White Constr. Co., 372 Mass. 661,
Arch responds by arguing that the bond requirement serves primarily a private purpose: to place laborers and materialmen who work on public construction projects — for which mechanic's liens are disallowed, Lessard v. Revere, 171 Mass. 294, 294-295 (1898) — on the same footing as those who work on private construction projects, for which mechanic's liens are allowed under G. L. c. 254. Stated otherwise, § 29 provides a direct benefit to laborers and materialmen — security against nonpayment — not to the public. Any benefit the statute may provide to the public is only incidental, Arch argues, and not sufficient to override freedom of contract and mutual risk-taking.
Because Costa raises this public policy argument for the first time on appeal, we would generally consider it waived. See Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006). Because the question has been "fully briefed," is of public importance, and may arise again, however, we think it an appropriate exercise of our discretion to address it.
We begin, as always, with the statutory text. Adams v. Boston, 461 Mass. 602, 609 (2012). The version of § 29 in effect at the
The statutory text says nothing of waiver. The parties draw opposing inferences from this silence. Noting that § 29 is based on the mechanic's lien statute, G. L. c. 254, under which waiver is explicitly prohibited, see G. L. c. 254, § 32, Arch infers from the statutory silence in § 29 that waivers are permitted. Costa replies by arguing that the strength of the public policy behind the bond requirement obviates the need for an explicit waiver prohibition and that G. L. c. 254, § 32, only includes such a prohibition because it also lists exceptions to that general rule. We need not enter this briar patch — for our purposes, it suffices to say that the text of § 29 "does not answer clearly the question posed." Adams v. Boston, supra at 611.
Having found no answer in the statute's text, we next turn to its legislative history. See id. We examine "the cause of [the statute's] enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated." Id., quoting Industrial Fin. Corp. v. State Tax Comm'n, 367 Mass. 360, 364 (1975). But this signpost, too, points in different directions. Arch is correct that, as the court has stated on several occasions, § 29 was passed to benefit laborers and materialmen who work on public construction projects, given the impossibility of obtaining a mechanic's lien on such projects. See, e.g., Massachusetts Gas & Elec. Light Supply Co. v. Rugo Constr. Co., 321 Mass. 20, 23 (1947), quoting Burr v. Massachusetts Sch. for the Feeble-Minded, 197 Mass. 357, 360 (1908) ("The object of [§ 29] is to give those furnishing labor and materials `security equivalent to the lien which the law creates upon the property of other owners in like cases'"). See also Manganaro Drywall, Inc. v. White Constr. Co., 372 Mass. 661, 663-664 (1977) ("The
Our study of the statutory scheme for public construction, and the mechanic's lien statute, G. L. c. 254, leads us to conclude that the strong public policy behind the § 29 bond requirement renders unenforceable a provision purporting to waive claims against such a bond. We have long held that § 29 should be construed liberally to achieve the remedial purpose of providing security to subcontractors and others who supply labor or materials for public construction projects. See LaBonte v. White Constr. Co., supra; Lawrence Plate & Window Glass Co. v. Varrasso Bros., supra at 633, and cases cited. It is undisputed that § 29 is an outgrowth of the mechanic's lien statute, Massachusetts Gas & Elec. Light Supply Co. v. Rugo Constr. Co., supra, under which waivers are explicitly proscribed as "against public policy," G. L. c. 254, § 32. Given our broad interpretation of § 29 and its remedial purpose, it would be anomalous to ascribe to the Legislature an intent to forbid waivers under G. L. c. 254,
3. Duplicative damages. Brait argues that the portion of the amended judgment awarding damages under G. L. c. 93A (c. 93A) must be vacated as duplicative of the general damages awarded for breach of contract. In our cases discussing jury verdicts that award damages under both a common-law theory, such as breach of contract, and c. 93A, we have stated that the awards must be based on acts that are "factually separable and distinguishable." Calimlim v. Foreign Car Ctr., Inc., 392 Mass. 228, 236 (1984). This is because our consumer protection law was not intended to authorize duplicative recoveries for the same wrong. McGrath v. Mishara, 386 Mass. 74, 85 (1982). Thus, where a judge or jury discernibly award separate recoveries under c. 93A and a common-law claim based on the same act, one recovery is precluded, with preference given to retaining the c. 93A award. Calimlim v. Foreign Car Ctr., Inc., supra at 235-236 (separate recovery for breach of warranty disallowed where based on facts found to be violative of c. 93A). Here, we conclude that because the jury were instructed properly on the law of duplicative damages and c. 93A, and the plaintiff argued facts plausibly giving rise to a violation of c. 93A, the award need not be disturbed.
The special verdict slip given to the jury contained separate
Although not explicitly using the term "duplicative damages," these instructions adequately conveyed the law.
At trial, Costa sought to prove breach of contract primarily by showing that Brait had withheld an amount of "retainage" payments in excess of that agreed to in the subcontract. "Retainage" refers to a percentage of the contractor's periodic payments to the subcontractor that the contractor withholds "to ensure satisfactory completion of the work." J. Lewin & C.E. Schaub, Jr., Construction Law § 9:4, at 620 (2009-2010). Article 1 of the subcontract between Costa and Brait provided for five per cent retainage, but when Costa could not obtain the bond, Brait began to withhold twenty per cent retainage. Brait claimed the additional money was withheld pursuant to internal policy and an oral agreement with Costa; Costa denied any agreement. In all, Costa alleged that $125,511.33 in retainage had been improperly withheld.
As for unfair and deceptive acts or practices under c. 93A, Costa's principal allegation was that Brait was engaged in a
A reasonable jury could find that these facts, which are distinguishable from the facts regarding retainage, supported the existence of an unfair or deceptive act or practice under G. L. c. 93A, § 11.
Brait contends that Costa's $500,000 jury verdict was less than "amounts claimed" and that, accordingly, Costa is "responsible for [his] own attorney's fees." Costa responds that the attorney's fees clause of article 13 applies to arbitration and is wholly inapplicable to litigation.
We conclude that Costa has the better argument. Whether the provision applies when a dispute is settled by litigation, as opposed to arbitration, is at best ambiguous.
The first paragraph of the subcontract between Costa and Brait contained an "incorporat[ion] by reference" clause, expressly incorporating the terms of the general contract between Brait and the town into the subcontract. Further, article 2 of the subcontract stated, in relevant part:
In turn, article 4.3.10 of the general contract between Brait and the town stated:
Brait argues that these provisions worked in concert to preclude claims of consequential damages arising out of the project, and
The subcontract here unambiguously incorporates the general contract, article 4.3.10 of which unambiguously precludes recovery of consequential damages. We see no need to look further than this explicit language. So-called "flow down" clauses, pursuant to which the contractor's obligations "flow down" to the subcontractor, are an acceptable and common method for general contractors to limit risk. See J. Lewin & C.E. Schaub, Jr., Construction Law § 7:6, at 450-451 (2009-2010). See also Capricorn Power Co. v. Siemens Westinghouse Power Corp., 324 F.Supp.2d 731, 751 (W.D. Pa. 2004). Our Appeals Court has on two prior occasions approved the use of such clauses to pass a provision of the general contract along to a subcontractor. See Massachusetts Elec. Sys., Inc. v. R. W. Granger & Sons, Inc., 32 Mass.App.Ct. 982, 982 (1992) (arbitration provision); B.J. Harland Elec. Co. v. Granger Bros., 24 Mass.App.Ct. 506, 509-514 (1987) (provision precluding damages on account of delay). We see no special policy reason to fashion an exception for waivers of consequential damages, particularly as there may be good reason for the parties in construction contracts to exclude such damages.
For the reasons stated, even construing the evidence "most favorably to the plaintiff" as we must do, Poirier v. Plymouth, 374 Mass. 206, 212 (1978), Brait's motion for a directed verdict
6. Conclusion. The judgment on the directed verdict in favor of Brait and Arch is reversed, and the case is remanded for proceedings consistent with this opinion. On remand, the amended judgment shall be modified to strike the jury's award of consequential damages
So ordered.