METRO INSULATION CORP. vs. ROBERT LEVENTHAL & others.

GRANT, J. This proceeding under G. L. c. 149, Section 29 (as amended through St. 1964, c. 609, Sections 4 and 5), was originally brought by Metro Insulation Corp. (Metro), a sub subcontractor, against persons doing business as Beacon Construction Company [Note 1] (Beacon), the general contractor,

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and the surety on Beacon's bond [Note 2] to recover for two extras of insulation work performed by Metro [Note 3] in connection with the construction of a federally assisted housing project for the elderly owned by the Boston Housing Authority (Authority). The Authority was brought into the proceeding on Beacon's counterclaim alleging, in effect, that the Authority should be responsible to Beacon for any liability for extras which Metro might succeed in establishing. Frank Sullivan Co. (Sullivan), the plumbing subcontractor and the concern with which Metro had its direct contractual relationships, was not joined as a party.

Metro, following Beacon's responses to Metro's notices to admit facts, moved with supporting affidavit for the entry of a decree in its favor (G. L. c. 149, Section 29; G. L. c. 231, Section 59). Beacon filed an affidavit in opposition to Metro's motion and (together with the surety) moved, with supporting affidavit, for dismissal of Metro's original bill or, in the alternative, for a decree against the Authority. The Authority filed an affidavit in opposition to so much of Beacon's motion as was directed to it, but no affidavit directly responsive to the matters set out in Metro's affidavit. After hearing the Superior Court allowed Metro's motion, denied Beacon's motion, and entered a final decree ordering Beacon and its surety to pay Metro the total of both extras (see fn. 3, supra). Beacon and the surety have appealed from the interlocutory decree denying their motion and from the final decree.

We shall confine our consideration of the case to the specific issues which have been argued in the briefs of the parties. Rule 1:13 of the Supreme Judicial Court, 351 Mass. 738 . Rule 1:13 of the Appeals Court. Beacon does not seriously dispute Metro's right to recover for either of the claimed extras, contending instead that the ultimate responsibility should lie with the Authority to pay for all work

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not required under the basic contract between itself and the Authority. The Authority's main reliance is on the asserted failure of Metro and Beacon to comply with procedural requirements found in the basic contract. As the two claims for extras are unrelated we discuss them separately. The facts recited are taken from Beacon's responses to Metro's notices to admit and from the various affidavits. None of them is disputed.

1. The first claim for extra payment is with respect to Metro's insulation of certain hot water piping in the seventh floor ceiling and of certain cold water piping in the pump and boiler rooms of the building.

At some point in time prior to June 13, 1967, the engineer employed by the Authority's architect inquired of Metro as to the type of insulation it proposed to employ in the upper floors of the building. By its letter of that date to the engineer Metro replied that the specifications of the basic contract did not call for the insulation of such piping [Note 4] and that it had not carried anything for such insulation in the bid which it had submitted to Sullivan, the plumbing subcontractor. By letter of June 30 Sullivan requested Metro to submit a price "for the hot water piping not covered by the specifications." By letter of July 17 Metro submitted separate prices to Sullivan for insulation of hot water piping in the seventh floor ceiling and cold water piping in the pump and boiler rooms. Acting on a request from the Authority, Sullivan instructed Metro to send a breakdown of its quotations "priced in accordance with the contract specifications." Metro did so, and Sullivan in turn sent the revised quotations to Beacon on August 21. On August 22 Beacon wrote Sullivan that the architect had "verbally authorized that this insulation was to be installed and that it was subject to a change order" and concluded by saying that "[i]n the meantime, it appears

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that we are authorized to proceed with this change." Sullivan, by a letter of August 24, sent a copy of Beacon's letter to Metro.

Following Metro's receipt of the last two letters a conference was had between and among Metro, Sullivan, Beacon, the architect, the engineer and the Authority at which Metro was "informed by all those present that a change order for the proposed extra insulation work in the amount of Metro's proposal was forthcoming and that Metro was to proceed with the work immediately so as not to hold up" the project. Metro thereafter went ahead and completed the work "in reliance on the oral and written authorization to proceed and the agreement to pay it additional money." [Note 5] The Authority, apparently acting under the provisions of art. 10 of the General Conditions of the basic contract, [Note 6] submitted a relevant change order to the Department of Housing and Urban Development (HUD) for its written approval. HUD, for reasons we need not assess, refused to approve the change order for the insulation work. Metro does not appear to have received notice of such disapproval until on or about November 14, 1967, by which time it had completed the work for which it now seeks to recover the price quoted by it. There then followed a flurry of correspondence whereby those concerned either did or did not succeed in complying with the requirements of art. 15 [Note 7] of

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the General Conditions of the basic contract. We need not decide any question in that regard.

No one contends that the insulation work which forms the basis of this claim was required by the specifications. Beacon suggests, and the Authority argues, that the claim should be barred by the failure of Metro and Sullivan to comply with the notice and other requirements of art. 15 of the General Conditions (fn. 7) following HUD's failure to approve the change order. [Note 8] We do not think there was a "dispute" within the meaning of art. 15; almost as soon as the problem was discovered, and even before HUD approval was sought, it was expressly agreed by the architect and all the parties to this litigation that the insulation requested by the architect was not required by the specifications and should be paid for as an extra. [Note 9] Cf. Chiappisi v. Granger Contracting Co. Inc. 352 Mass. 174, 176-178; Beacon Construction Co. of Massachusetts v. United States, 314 F. 2d 501, 504 (Ct. Cl.). If the Authority had requested us to consider the effect of the provisions of art. 10 of the General Conditions (fn. 6), we would have regarded them as waived by the Authority's actions, prior to seeking HUD approval of the change order, in directing the work to proceed and agreeing that it should be paid for. See Stuart v. Cambridge, 125 Mass. 102, 109-110; Farm-Rite Implement Co. v. Fenestra Inc. 340 Mass. 276, 286-287;

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M. L. Shalloo, Inc. v. Ricciardi & Sons Construction, Inc. 348 Mass. 682, 685-686; J. P. Smith Co. Inc. v. Wexler Construction Co. Inc. 353 Mass. 551, 554-555; Ferber Co. v. Ondrick, 310 F. 2d 462, 465 (1st Cir.); Wexler Construction Co. Inc. v. Housing Authority of Norwich, 144 Conn. 187, 192-193.

2. The second claim for extra payment is with respect to Metro's insulation of certain sprinkler piping in the first floor ceiling of the building. The Authority's objection to payment of this claim is that the work in question was already required under Division 28.21 o of the specifications (fn. 4) [Note 10] in the basic contract between itself and Beacon. The specifications, read by themselves, are silent on the point. Metro, apparently in anticipation of the Authority's objection, asserted (in the affidavit filed in support of its motion for a decree) that "[i]t is not the custom in the insulation trade to insulate sprinkler piping unless that insulation is clearly specified" (see Fred C. McClean Heating Supplies, Inc. v. Jefferson Construction Co. 339 Mass. 356, 369) and pointed in particular to a contract drawing which clearly distinguished between the water piping and the sprinkler piping to be installed in the first floor ceiling. A copy of Metro's affidavit was attached to Beacon's motion (in the alternative) for a decree against the Authority. Nothing in the Authority's affidavit took issue with the factual assertions in Metro's affidavit concerning a custom in the insulation trade. That being so, the Authority is in no position to urge before us, for the first time, that it was entitled to a trial on the merits in order to determine if any custom existed. Doral Country Club, Inc. v. O'Connor, 355 Mass. 27, 30. There was no error in summarily deciding that possible question.

3. The Authority is ultimately responsible for payment of both of Metro's claims for extras. The final decree (as already modified by stipulation) is to be further modified by including therein a provision to the effect that the

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Authority shall reimburse Beacon (or its surety) upon its payment of those claims to Metro and, as so modified, is affirmed. Metro and Beacon are to have costs of appeal against the Authority.

So ordered.