Venus Drywall, Inc. v. Kullman Industries, Inc.

5 Mass. L. Rptr. 70
CourtMassachusetts Superior Court
DecidedMarch 15, 1996
DocketNo. 932616E
StatusPublished

This text of 5 Mass. L. Rptr. 70 (Venus Drywall, Inc. v. Kullman Industries, Inc.) 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
Venus Drywall, Inc. v. Kullman Industries, Inc., 5 Mass. L. Rptr. 70 (Mass. Ct. App. 1996).

Opinion

Garsi-i, J.

INTRODUCTION

Plaintiff, Venus Drywall, Inc. (“Venus”), commenced this action to recover the amount of the balance due on a contract between Venus, a sub-subcontractor, and Quality Service System (“Quality”), a subcontractor. In Count I of the Complaint, Venus seeks to recover under a public works payment bond provided, as required by law, by defendants, Kullman Industries, Inc. (“Kullman”), the general contractor, and National Union Fire Insurance Company of Pittsburgh Company of Pittsburgh, PA (“National Union”), the surety. Count II of the complaint seeks recovery under the payment bond on a quantum meruit theory. The defendants allege that Venus has waived its rights to collect under the bond, or, in the alternative, that it is estopped from doing so.2 For the reasons set forth below, Venus is entitled to judgment on Count I.

FINDINGS OF FACT

Based upon all of the credible evidence and all reasonable inferences drawn from that evidence, the court finds the following facts:

CC/Kullman Industries, Inc., a Joint Venture (the “Joint Venture”) entered into a prime contract with the Commonwealth of Massachusetts through the Division of Capital Planning and Operations (“DCPO”) for the construction of Middlesex Community College, State Project EJ90-1, Contract No. 1 in Bedford (the “Project”). Kullman was a joint venture partner with Sciaba Construction Corporation in the Joint Venture. SCC/Kullman Industries, Inc., as principal, and the defendant, National Union, as surety, executed a payment bond unto the Commonwealth of Massachusetts in the amount of $23,545,494.00 with respect to the Project. The payment bond provides that it shall remain in full force unless the principal has paid for all labor performed or furnished and for all materials used or employed in the Project. The word “lien” is not used in the payment bond, which expressly references G.L.c. 30, §39A and c. 149, §29.

Quality entered into a subcontract with Kullman to perform the drywall work on the Project required under the prime contract with DCPO. Venus entered into a sub-subcontract, dated January 3, 1992, with Quality to perform the drywall taping for the Project required by Quality’s subcontract with Kullman. The Venus sub-subcontract price, including extra work, totaled $84,335.

Venus completed the sub-subcontract work and extra work. There is a contract balance due and owing from Quality to Venus in the amount of $44,335. Quality has not paid this contract balance. By June 5, 1992, all work ofVenus was substantially complete; no more than $500 worth of work on the $84,335 Venus subcontract remained. In March of 1992, Venus received a check from Quality in the amount of $ 15,000 for work it had performed. Venus was not asked to execute, and it did not execute, a waiver of lien in connection with that payment. In April of 1992, Venus received a check from Quality in the amount of $10,000. Venus was not asked to execute, and it did not execute, a waiver of lien in connection with that payment. The April check was [71]*71returned to Venus unpaid as a result of insufficient funds in Quality’s account. Venus complained to Kullman’s project manager on the site, Dewey Stevens (“Stevens”), who told him that it was “not his problem.” Early in June, Quality replaced the check that had been returned with a treasurer’s check in the same amount. Venus was not asked to, and it did not, execute a waiver of lien in connection with the replacement check.

Kullman was aware that Quality was having trouble paying its subcontractors. Kullman decided that it would, therefore, require Quality to supply waivers of liens from its sub-subcontractors before making further payments to Quality. On June 1, 1992 Kullman and Quality orally agreed that Kullman would pay Quality $74,133.10, but that the funds would not be spent by Quality without authorization from Kullman. Venus was not a party to and was not made aware of this agreement. Quality obtained a check from Kull-man in the amount of $74,133.10 on June 2, 1995. Kullman relied on no action or statement by Venus when it released that check to Quality.

Kullman authorized Quality to use funds from the $74,133.10 check to pay its hourly employees. The condition relating to release of the remainder of the funds remained in place. Kullman relied on no action or statement by Venus when it authorized Quality to use some of the $74,000 to meet Quality’s payroll.

On June 5, 1992, Quality gave Venus a check in the amount of $15,000 which was post-dated to June 15, 1992. As a condition to receipt of that check, Quality required Venus to execute a document captioned “waiver of lien to date.” Jerline Johnson (“Johnson”), President of Quality, delivered such a waiver form to Marcel Trepanier (“Trepanier”), President of Venus, telling Trepanier that Kullman would not release funds to Quality for payment to Venus unless Venus executed that waiver. Trepanier signed it (the “Waiver”).

Trepanier did not know that Kullman would rely on the Waiver for any other purpose. Trepanier is a very credible, forthright witness, in marked contrast to Stevens, Marc Mahoney, Kullman’s Director of Project Management, and Johnson. Trepanier’s testimony has the ring of truth.

The wavier of lien form Venus executed had been provided to Quality by Kullman. Johnson presented it to Trepanier at a job site in New Hampshire. He signed it there in Johnson’s presence. Despite the writing under the signature representing that it was “subscribed & sworn before” Linda T. Morin, a notary, in Middlesex County, Massachusetts, the presence of what appears to be a genuine notarial seal, and the apparent signature of one Linda T. Morin, the Waiver was not signed before a notary.3 The Waiver was not signed as a sealed instrument. The blank spaces referencing the seal were not completed, and the parties did not intend it to be executed as a sealed instrument. Trepanier understands English.

The Waiver provided, in material part, as follows:

Whereas, the undersigned has a contract with (A) Kullman Industries to furnish labor and materials for (B) school grounds work for the improvement on premises described as (C) Middlesex Community College.
Now, therefore, the undersigned, for and in consideration of (D) Fifteen Thousand ($15,000) Dollars paid by Kullman Industries and other good consideration, the receipt of whereof is hereby acknowledged, hereby waives and releases any and all lien of claim or right of lien under laws of the state wherein the above premises are located, relating to mechanics, materialmen’s or similar liens on the above premise and improved whereon and on the monies or other considerations due to become due from Kullman Industries on account of labor or material, fixtures, or apparatus heretofore furnished by the undersigned for the above described premises . . .

The Waiver contains no reference to a payment bond. It does not contain standard release language, such as having Venus release Kullman “from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, . . . contracts, controversies, agreements, promises . . . claims, and demands whatsoever in law ... or equity,” which, against Kullman, Venus ever had, now has or hereafter can, shall or may have “by reason of any matter cause or thing whatsoever from the beginning of the world to the day of the date of this Release.” In August of 1992, Kullman forwarded to Quality a release containing just such language to be executed by Venus.

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5 Mass. L. Rptr. 70, Counsel Stack Legal Research, https://law.counselstack.com/opinion/venus-drywall-inc-v-kullman-industries-inc-masssuperct-1996.