Milford Water Co. v. Ryan

21 Mass. L. Rptr. 439
CourtMassachusetts Superior Court
DecidedSeptember 20, 2006
DocketNo. 052191
StatusPublished
Cited by1 cases

This text of 21 Mass. L. Rptr. 439 (Milford Water Co. v. Ryan) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milford Water Co. v. Ryan, 21 Mass. L. Rptr. 439 (Mass. Ct. App. 2006).

Opinion

Billings, Thomas P., J.

For the reasons that follow, the defendants’ Motion to Dismiss Counts III-VI of the Complaint is ALLOWED.

FACTS

The allegations of the Complaint, taken as true for purposes of the present Motion, are as follows. The plaintiff water company is a private Massachusetts corporation. Defendants Ryan, Collins, and Arcudi are members of the Board of Selectmen, and defendants Morin, Tarca and Bird are members of the Water and Sewer Commission, of the Town of Hopedale.

Prior to 1948, the plaintiff owned Hopedale’s water supply system. In that year, however, by contract, the plaintiff granted that system to the Town. The contract provided that the plaintiff would supply the Town’s water until the Town was “water self-sufficient.”

The contract set a per-gallon price for water and a price for fire protection services. Since then, the plaintiff has petitioned for rate and fee increases, and has been granted them by the Department of Public Utilities, now known as the Department of Telecommunications and Energy.

In 2004, the Town stopped paying fire protection charges, and demanded payment for “unreasonable and baseless wheeling charges.” In December 2004, the Town disconnected its water system from the company for about two weeks, and was water self-sufficient during that period. On June 1, 2005, the Town began selling water to the Town of Mendon.

The Complaint pleads the following counts:

I. Breach of Contract.
II. Breach of Warranty (sic) of Good Faith and Fair Dealing.
III. Quantum Meruit.
IV. Promissoiy Estoppel.
V. Equitable Estoppel.
VI. M.G.L.c. 93A.
VII. Conversion.
VIII. Declaratory Relief.

Damages are sought in the amount of $87,834.54, as well as a declaration that by virtue of the Town’s breach of its contract, the plaintiff is no longer obligated to supply water to the Town, and an injunction prohibiting the Town from selling water to Mendon.

The defendants seek dismissal of Counts III, IV, V, and VI, and additionally dismissal of the Selectmen defendants as to all counts, on grounds described below.

DISCUSSION

A. Counts III - V

The defendants first seek dismissal of Counts III (Quantum Meruit), IV (Promissory Estoppel), and V (Equitable Estoppel), on the ground that these claims run afoul of the Uniform Procurement Act, G.L.c. 30B. Sections 17(a) and (b) of that Act provide:

(a) All contracts in the amount of five thousand dollars or more shall be in writing, and the governmental body shall make no payment for a supply or service rendered prior to the execution of such contract.
(b) Subject to the provisions of section three A of chapter forty [pertaining to recordable instruments of title in real estate, and not applicable here], a contract made in violation of this chapter shall not be valid, and the governmental body shall make no payment under such contract. Minor informalities shall not require invalidation of a contract.
The SJC has
held that a party cannot evade the statutory limitations on a municipality’s contracting power by rendering services and subsequently seeking recovery based on alternative theories. See United States Leasing Corp. v. Chicopee, 402 Mass. 228, 231-32 (1988), and cases cited (estoppel): Adalian Bros. v. Boston, 323 Mass. 629, 632 (1949) (implied contract); Lowell v. Massachusetts Bonding & Ins. Co., 313 Mass. 257, 272 (1943) (quantum meruit).

Park Drive Towing, Inc. v. Revere, 442 Mass. 80, 83 n.7 (2004) (decided under the similar written contract requirement, applicable to cities, in G.L.c. 43, §29). See also Majestic Radiator Enclosure Co., Inc. v. County Comm’rs of Middlesex, 397 Mass. 1002, 1003-04 (1986) (denying recovery under theories of quantum meruit and estoppel where provisions of Chapter 30B not complied with; “the public interest in adherence to statutory bidding procedures overrides any equitable considerations”).

Because Counts III, IV, and V “seek[ ] recovery on alternative theories” (i.e., other than on the terms of the written contract), and because no facts are pleaded which would constitute an emergency excusing com[440]*440pliance with Chapter 30B, those Counts must be dismissed.2

B. Count VI

Success for the plaintiff on Count VI, for violation of Chapter 93A, will depend on a showing that the Town was acting in “trade or commerce” in its dealings with the plaintiff. Thus far, the appellate courts have not passed on the question of whether a municipality may ever be found to have engaged in trade or commerce so as to bring it within the statute’s reach. Park Drive Towing, Inc. v. Revere, 442 Mass. 80, 86 (2004); Hurton v. Puorro, 2006 WL 540907 (Super.Ct. 2006; Burnes, J.).

It is at least clear from the cases that when a city or town negotiates, contracts, or otherwise deals with commercial actors in connection with the provision of municipal services, it has not itself engaged in “trade or commerce” as Chapter 93A uses the term. See, e.g., Park Drive Towing (procurement of snowplowing services); Boston Hous. Auth. v. Howard, 427 Mass. 537, 538-39 (1998) (housing authority’s rental of apartments); Peabody, Inc., N.E. v. Marshfield, 426 Mass. 436, 439-40 (1998) (construction of municipal waste facility); All Seasons Services, Inc. v. Commissioner of Health and Hospitals of Boston, 416 Mass. 269, 271-72 (1993) (procurement of food and vending services for city hospital); Clean Harbors of Braintree, Inc. v. Board of Health of Braintree, 409 Mass. 834, 841 (1991) (operation of hazardous waste facility); U.S. Leasing Corp. v. Chicopee, 402 Mass. 228, 232-33 (1988) (lease of computer system for school department).

As to most of what is alleged in the complaint, it is clear that the City was engaged in the traditional municipal function of providing potable water and fire protection to its inhabitants, and so was not engaged in trade or commerce. The only arguable exception is in paragraph 11, in which it is alleged that on June 1, 2005 the Town began selling water to the Town of Mendon.3 This is, however, expressly contemplated and permitted by the first paragraph of G.L.c. 40, §38, which provides as follows:

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Bluebook (online)
21 Mass. L. Rptr. 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milford-water-co-v-ryan-masssuperct-2006.