LAWRENCE R. GLYNN, receiver, vs. CITY OF GLOUCESTER.

GREANEY, J. The city of Gloucester appeals from orders denying its motions (predicated on objections) challenging subsidiary and general findings in a master's report and adopting the report and from a judgment awarding the plaintiff, as receiver of R. & J. Salvucci Corporation (Salvucci),

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$243,007.05 in damages (and $95,711.47 in interest) for several alleged breaches by the city of its road construction contract with Salvucci. [Note 1] We reverse the judgment, holding that the report in its present form should not have been adopted but rather should have been recommitted for additional findings, summaries of the evidence, and production of certain exhibits.

The procedural background follows. Salvucci contracted to construct a road in and through the Cape Ann Industrial Park in Gloucester. Work commenced around July 1, 1972, and was completed on October 31, 1973. In July, 1976, Salvucci's receiver filed suit against the city. The amended complaint claimed that the contractor had incurred $528,753.76 in damages stemming from certain activities by the city in violation of the contract, among them a refusal to provide a disposal area for inorganic debris removed from the job, a failure seasonably to designate areas where suitable off-site borrow could be obtained, and a refusal to grant reasonable relief when the contractor encountered subsurface soil conditions at variance with those to be anticipated from the plans and test borings. The master, acting under a non-jury order of reference with evidence to be left unreported, found that the city had breached the contract: (1) by misrepresenting the subsurface soil conditions on the plans and thereafter refusing to allow Salvucci to deal with the actual conditions in a reasonable and economical fashion; (2) by seeking to impose a charge for use of the city dump in violation of a contract provision that promised a free disposal site for inorganic debris; (3) by ordering Salvucci to rebuild the road's embankments after rocks buried in their sides at the engineers' directions had caused concave slopes; and (4) by failing, as required by the agreement,

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to designate a suitable area for the excavation of usable gravel borrow and fill for the road's subgrade. The master also found that a memorandum signed by Salvucci's president just prior to the job's completion, which stated that the contractor had no present or anticipated claims under the agreement against the city, did not constitute a waiver or release of the contractor's rights, and that, if the memorandum was held sufficient to waive or release Salvucci's claims, it was signed under duress. Finally, the master found that, although Salvucci had failed to comply with the contract procedure for claiming payment for extras, the city was "aware that the corporation was incurring . . . extra costs and intended to make a claim in connection therewith."

Following the filing of the report, the city, punctiliously adhering to the requirements of Mass.R.Civ.P. 53, as amended, 367 Mass. 917 (1975), and Rule 49(7) of the Superior Court, as amended (1976), as explained by the cases (see post-1976, Miller v. Winshall, ante 312, 315-317 [1980]), filed fifteen specific and detailed objections which challenged the legal sufficiency of specific parts of the report. Wherever the objections questioned the adequacy of the underlying evidence to support the master's subsidiary findings, fair summaries of the evidence were requested, and annexed to each such objection, as required by the rule, were references to the portions of the approved transcript (by volume, page and line) where the material and relevant testimony necessary for each summary could be found. Wherever the objection depended on a documentary exhibit, the exhibit or specific portion thereof that was needed was identified with particularity. Each objection, wherever pertinent, reasonably synopsized the city's view of the contents of the evidence it relied upon for support. Together with the objections, the city filed motions to strike the master's ultimate findings or to recommit for summaries of the evidence. Bills v. Nunno, 4 Mass. App. Ct. 279, 282-283 (1976).

1. The central task confronting the court based on the report's findings was one of contract interpretation. Daley

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v. J.F. White Contr. Co., 347 Mass. 285, 288 (1964). GilBern Constr. Corp. v. Medford, 357 Mass. 620, 623 (1970). As discussed more fully in part 2 of this opinion, the judge needed to determine whether Salvucci's claims arose in connection with its performance of the contract. If so, recovery for extras would hinge on the contractor's showing that it had complied with the notice, claim and cost adjustment clauses in the agreement (paragraphs 17, 21, and 22 of the General Conditions), and with applicable provisions of the "Standard Specifications for Highways, Bridges and Waterways" adopted by the Commonwealth's Department of Public Works (the Blue Book), or in the alternative, that the city had waived or excused compliance with the necessary formalities. Certain statutes governing claims of this sort, as will be noted, also might apply to Salvucci's right to recover.

In our view, the master's findings, both subsidiary and general, are insufficient to permit a judge to address adequately the dispositive legal questions. The report does not (as it should) disclose on its face all the subsidiary findings which the master had in mind and upon which he based his general findings. Bills v. Nunno, supra at 282, and cases cited. The subsidiary findings on several of the vital issues are vague and non-specific and leave the general findings ultimately predicated thereon lacking in sufficient foundation. See Lattuca v. Cusolito, 343 Mass. 747, 752-753 (1962), and cases cited. By way of examples, the report fails to indicate what action Salvucci took to clarify an obvious deviation from the terms of the contract when the city sought to charge Salvucci for the use of its dump for disposal of inorganic as well as organic materials [Note 2] (see John F. Miller Co. v. George Fichera Constr. Corp., 7 Mass. App. Ct. 494, 499 [1979]); it fails to indicate precisely what the preliminary test-borings indicated; [Note 3] it fails to find

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whether the extras had written or express approval by the project engineer, implying that one claim may not have (screening plant) and that another might have (slope reconfigured at engineers' "direction"); it leaves the damages only loosely accounted for with much emphasis on reasonableness. The report is replete with rulings of law which were not expressly addressed by the judge. Some of the other defects in the report are noted in the margin. [Note 4] The master also failed to incorporate all relevant portions of the contract and such of the documents integrally related to it (plans, specifications, Blue Book and borings) that are needed for analysis of the legal questions. Only a few provisions of the contract are set out in the report, and as to one of those provisions, the city has made it appear that the provision quoted contains a serious omission which might affect and fatally impair certain general findings. [Note 5] The Blue Book's provisions concerning scope and control of the work, and materials specifications should be made a part of the report. The judge should have exercised his right to call for the contract documents but did not, [Note 6] and it will not help things for us to

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do so because resolution of the issues first requires additional findings of fact and completion of the summaries of evidence. A reading of the leading case of State Line Contractors, Inc. v. Commonwealth, 356 Mass. 306 (1969), which deals with claims analogous to the ones in issue here, aptly illustrates that this type of controversy cannot be determined without a study of all the pertinent contract documents based upon complete and detailed findings by the trier. All the areas where further findings or summaries are needed are pinpointed by the objections.

We conclude that the city has demonstrated probable error on the face of the report (Minot v. Minot, 319 Mass. 253, 258 [1946]; contrast H. Piken & Co. v. Planet Constr. Corp., 3 Mass. App. Ct. 246, 248-249 [1975]), and that a sufficient foundation has been laid by the objections to necessitate the making of additional subsidiary findings or to make the absence of evidentiary support for the findings apparent. Bills v. Nunno, 4 Mass. App. Ct. at 282-283 n.3. We also conclude that the judge could not have settled the legal questions raised by the report without examination of the pertinent exhibits specified by the objections, particularly the contract, and the various reports, documents, plans and specifications incorporated therein. Under these circumstances, the judge abused his discretion in denying the city's motions designed to put the report in a posture where it could be intelligently studied. S. D. Shaw & Sons v. Joseph Rugo, Inc., 343 Mass. 635, 639-640 (1962). Contrast Tzitzon Realty Co. v. Mustonen, 352 Mass. 648, 651 (1967); H. Piken & Co. v. Planet Constr. Corp., 3 Mass. App. Ct. at 248.

2. To speed disposition of the case, we briefly comment on the legal principles that are to be applied to the facts once the report is put in good order.

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On a public construction contract, if actions or requirements of the public agency necessitate changes in the work as it progress, thereby causing the contractor to perform extra work or incur added expense, or if the contractor encounters materially different conditions from those predicted by the plans, specifications, preliminary borings and estimates, the contractor must follow the procedures spelled out in the contract and in the Blue Book, if incorporated in the contract, to adjust the price before unilaterally accruing expenses to be pursued later on breach of contract or quantum meruit theories. See United States v. Utah Constr. & Mining Co., 384 U.S. 394, 404 n.6 (1966); Morrison-Knudsen Co. v. United States, 345 F.2d 833, 837 (Ct. Cl. 1965), S.C. 397 F.2d 826 (Ct. Cl. 1968); Kelly, Government Contractors' Remedies: A Regulatory Reform, 18 Admin. L. Rev. 145, 145-146 (Fall 1965). See also M. DeMatteo Constr. Co. v. Commonwealth, 338 Mass. 568, 587-593 (1959); Marinucci Bros. v. Commonwealth, 354 Mass. 141, 145 (1968); State Line Contractors, Inc. v. Commonwealth, 356 Mass. 306, 318-319 (1969). See as well G. L. c. 30, Section 39I, inserted by St. 1960, c. 771, Section 1A; [Note 7] G. L. c. 30, Section 39N, inserted by St. 1972, c. 774, Section 4. [Note 8] The public authority is expected to address the contractor's legitimate problems in good faith in an effort to formulate an adjustment of the price which will equitably compensate the contractor

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for bona fide extras. [Note 9] Generally, a failure by the contractor to invoke its remedies under the agreement and Blue Book will preclude all relief (Lewis v. Commonwealth, 332 Mass. 4, 5-6 [1954]; State Line Contractors, Inc. v. Commonwealth, 356 Mass. at 316-319), unless the contractor can demonstrate that the particular claim falls outside the contract, and because of the agency's conduct, constitutes a true breach. United States v. Utah Constr. Mining Co., 384 U.S. at 404-405, 412-413. If any claim arises from the contractor's wilful and substantial deviation from the plans and specifications, there can be no recovery without a showing of compliance with the requirements of G. L. c. 30, Section 39I (see note 7, supra). See Morse v. Boston, 253 Mass. 247, 252-253 (1925); Albre Marble & Tile Co. v. Goverman, 353 Mass. 546, 550 (1968); Rep. A.G., Pub. Doc. No. 12, at 126-128 (1964). This statute establishes a clear legislative policy that "those who engage in public contracts . . . [must] act in strict accord with their undertakings . . . ." Albre Marble & Tile Co. v. Goverman, 353 Mass. at 549. To the degree, however, that the claim does not arise from such a wilful and substantial deviation, the contractor may recover if he can show that the public agency has waived or excused compliance with the terms of the contract (see, for example, Costonis v. Medford Housing Authy., 343 Mass. 108, 113 [1961]; Powell's Gen. Contr. Co. v. Marshfield Housing Authy., 7 Mass. App. Ct. 763, 766-768 (1979) [waiver]; D. Federico Co. v. New Bedford Redev. Authy., ante 141, 143-144 [1980] [excuse]). If

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the claims are found to involve changes in or additions to the work under the contract, inquiry must also be made whether the appropriation requirements of G. L. c. 44, Section 31, have been complied with. See Dyer v. Boston, 272 Mass. 265, 274 (1930); Continental Constr. Co. v. Lawrence, 297 Mass. 513, 514-516 (1937); Duff v. Southbridge, 325 Mass. 224, 228 (1950); Rich & Son Constr. Co. v. Saugus, 355 Mass. 304, 306-307 (1969); Arthur R. Murphy, AIA, & Associates v. Brockton, 364 Mass. 377, 380 (1973). Cf. Lawrence v. Falzarano, 380 Mass. 18, 24-26 (1980), involving G. L. c. 44, Section 31C.

Moreover, if the contractor argues (as it does here) that the agency waived compliance with the contract's provisions, it is incumbent on it to show not only that G. L. c. 30, Section 39I, is inapplicable, but also that there was clear, decisive, and unequivocal conduct on the part of an authorized representative of the agency indicating that it would not insist on adherence to the agreement. [Note 10] Cashman v. Boston, 190 Mass. 215, 218-219 (1906). Millen v. Boston, 217 Mass. 471, 472-473 (1914). Lewis v. Commonwealth, 332 Mass. at 6, and cases cited. Savignano v. Gloucester Housing Authy., 344 Mass. 668, 671-672 (1962). These principles would apply in kind to consideration of the city's argument that Salvucci waived any enforceable contract claims that it possessed. Finally, the question of economic duress, if reached, is to be examined in light of the discussion of that subject in the recent decision of International Underwater Contractors, Inc. v. New England Tel. & Tel. Co., 8 Mass. App. Ct. 340 (1979).

3. This case, as have many others before it, illustrates that the experience with references to masters has not been a happy one. Stripped of excess baggage, this case involves questions of contract interpretation and construction which

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have always been better left to a judge than a master. See D. Federico Co. v. New Bedford Redev. Authy., supra at 143, and cases cited; Stock & Grove, Inc. v. United States, 493 F.2d 629, 645 (Ct. Cl. 1974). A trial before a judge would supply us with a record containing findings of fact on all the essential issues, and the underlying evidence including the important exhibits. With the Superior Court now fully staffed and with congestion in the civil dockets beginning to lessen, the primary reason for the use of masters to settle facts in civil cases has lost most of its force. See Reardon, Civil Docket Congestion -- A Massachusetts Answer, 39 B. U. Law Rev. 297, 308-310 (1959). Other arguments in support of the practice are outweighed by the delay, extra expense and frustration that inevitably results. [Note 11] The device of sending cases out to be heard by a busy lawyer has been the subject of steady criticism by the Supreme Judicial Court (see O'Brien v. Dwight, 363 Mass. 256, 279-280 [1973]; Jet Spray Cooler, Inc. v. Crampton, 377 Mass. 159, 161-163 [1979]) and divests the litigants of their right to have a trial by the court. Only special circumstances should justify a reference. Such references may include construction cases where an inordinate amount of court time will be spent sorting out tedious details. Apart from these cases, references should not be considered [Note 12] because (as in the case here) we think a judge armed with pretrial memoranda and a sharp pencil is in a far better position than a master to separate the lawsuit's wheat from its chaff and to bring the case to an orderly and fair conclusion.

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Paragraph one of the judgment is reversed. The orders adopting the master's report, overruling the city's objections, and denying its several motions are reversed. The action is to stand for further proceedings in the Superior Court consistent with this opinion.

So ordered.