Author Archives: Strang Scott

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Strang Scott is a dynamic business and litigation firm, dedicated to serving the needs of businesses of all sizes.

Christopher Strang’s Article Published on the Cover of Under Construction

By on March 26, 2018

Strang Scott partner, Chris Strang, co-authored and article with Brendan Carter from the Associated General Contractors of Massachusetts that was published recently on the cover of the American Bar Association’s “Under Construction” quarterly newsletter.  The article details a case where Strang Scott prevailed against the Commonwealth of Massachusetts, successfully arguing that the awarding authority has a duty to ensure the validity of payment bonds provided by general contractors on public construction projects in Massachusetts.  The case was a matter of first impression in Massachusetts courts.  

Forfeiture Rule in Construction Disputes Under Review by the Massachusetts Supreme Judicial Court

By on March 6, 2018

Since the early 1900’s, Massachusetts courts have held that a contractor cannot recover on the contract itself without showing complete and strict performance of all terms or, in the event the contract cannot be completed fully, that the contractor substantially performed and attempted, in good faith, to perform fully. Under this rule, if the court finds that the contractor intentionally departed from the specifications of the contract, the contractor is prohibited from recovering under the contract, forfeiting its right to contract damages. 

The Massachusetts Supreme Judicial Court (SJC) will hear arguments this week requesting the forfeiture rule in construction cases to be overturned. The appellant in G4S Technology LLC v. Mass. Tech. Park Corp., SJC-12397, appeals a prior summary judgment ruling, wherein the trial court denied the contractor’s claims for approximately $10 million in delay-and-impact damages on the basis of the forfeiture rule. Despite ultimately completing the project, it was determined that the contractor paid some of its subcontractors late and submitted false certifications. Those actions were in breach the contract, and the trial court determined that those actions were sufficient to deny the contractor’s claims.

The SJC will consider whether Massachusetts should adopt an alternative standard that considers whether a breach was an uncured, material breach that alleviates the non-breaching party’s obligation to pay and weigh a breaching party’s lack of good faith or willfulness, among other factors to be considered by the court. This multi-factor analysis is applied currently by Massachusetts courts in other contract disputes, but not in connection with construction disputes.

Should the forfeiture rule be overturned, it would have wide-reaching consequences and create greater flexibility in arguing an entitlement to damages on breach of contract claims. Contractors would be wise to keep track of this case as it proceeds. If you have questions concerning your rights in connection with a construction dispute, consult an experienced Massachusetts construction attorney.

Understanding the Limitations of Chapter 93A: Pre-Litigation Attorneys’ Fees Not Recoverable

By on January 30, 2018

The Regulation of Business Practices for Consumer Protection Act, commonly referred to by its statutory chapter number, “Chapter 93A,” is a frequently utilized statute that provides individual consumers and businesses with a right to bring legal action and recover damages if they are harmed by an unfair business practice.  Under the statute, “unfair or deceptive acts or practices” or “unfair methods of competition” committed while conducting business in Massachusetts permit the harmed party to recover their actual damages, or a statutory minimum of $25 per offense (whichever is greater), and up to three times such damages for knowing and willful violations of the statute, plus an award for reasonable attorneys’ fees and the costs of the lawsuit.  Chapter 93A creates harsh penalties, with a wide-reaching scope, to deter unfair business acts, however, it does have limitations.

Previously, we explained the prohibition on Chapter 93A recovery with regard to a party’s decision to litigate a dispute, rather than settle with the opposing party.

A second limitation on recovery under Chapter 93A relates to the timing of when a party’s legal fees are incurred. Recently, the Suffolk County Superior Court considered the issue of whether pre-litigation attorneys’ fees are recoverable under Chapter 93A in Beninati, et al. v. Borghi, et al. The court awarded double damages to one of the plaintiffs under Chapter 93A. The defendants who were found liable under Chapter 93A then moved the court to reduce the attorneys’ fees award by $170,000 for fees incurred prior to the filing of the lawsuit, relating to “extensive settlement discussions.” The court agreed that pre-litigation fees are not recoverable under Chapter 93A, stating that it “is aware of no authority that permits the award of fees incurred before the litigation began and that do not bear directly on its preparation.”  Accordingly, the court excluded the pre-litigation attorneys’ fees from the award.

This case is just one example of the importance of understanding the process of litigating claims and the implications of dealing with an adverse party.  Depending on the circumstances of a dispute, it can be wise to initiate litigation sooner to ensure large portions of incurred attorneys’ fees are ultimately recoverable from the party causing the harm. To learn more about scope and application of Chapter 93A, contact an experienced Massachusetts litigation attorney.

Christopher Strang Selected as 2017 Super Lawyer

By on December 12, 2017

Strang Scott is honored to announce the selection of Christopher Strang as a 2017 Super Lawyer by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the ninth consecutive year, first as a Rising Star and then as a Super Lawyer. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

Know Your Rights – Limitations on Retainage for Private Construction Projects

By on November 20, 2017

The Massachusetts Retainage Act limits the amount of retainage allowed for private construction projects, and imposes mandatory processes for reaching the date of substantial completion, submitting punchlists and completing punchlist items, and submitting applications for payment and obtaining payment of retainage.

The Act applies to all construction contracts signed after November 4, 2014, for privately owned projects where the original contract price with the owner is at least three million dollars and the general contractor, subcontractors, or design professionals would have mechanic’s lien rights , but exempts residential housing projects of one to four units.

Limit on Retainage

Under the Act, no more than five percent retainage may be withheld from any progress payment. Among other things, this prohibits frontloading retainage amounts for a portion of the project, with less held at the end.

Substantial Completion

The Act defines substantial completion as the stage in the project when the work required under the general contractor’s contract with the owner is “is sufficiently complete … so that the project owner may occupy or utilize the work for its intended use.” Substantial completion may apply to the entire project or to a phase of the project, but only where the project owner has expressly allowed substantial completion for defined phases.

In order to reach substantial completion, the general contractor must submit a form for notice of substantial completion, as contained in the Act, to the owner within fourteen days of reaching the stage when the general contractor believes the project is substantially complete. Then the owner has fourteen days to accept or reject the general contractor’s notice. Should the owner fail to timely respond to the notice, the owner is deemed accept to general contractor’s work as substantially complete.  If the owner accepts the notice, the date of substantial completion is set and is binding upon all related aspects of the contract. If the owner rejects the notice, it must notify the general contractor in writing of the rejection and include the factual and contractual basis for the rejection and a certification that the rejection is made in good faith. The Act permits an expedited process for the general contractor to dispute the rejection under the contract’s dispute resolution procedures. Alternatively, the general contractor can resubmit a form for notice of substantial completion to the owner for new approval.

Submission of Punchlists and Completion of Punchlist Items

Within fourteen days after acceptance (whether express or deemed accepted) of the notice of substantial completion, or the final and binding resolution of a dispute, the owner must submit a written punchlist “describing all incomplete or defective work items and deliverables” to the general contractor. The owner’s punchlist must be certified as made in good faith.

The general contractor has an additional week after the owner’s deadline expires, or twenty-one total days after acceptance, to submit a punchlist to each subcontractor from whom the general contractor is holding retainage “describing all incomplete or defective work items and deliverables required,” which may include items in addition to the owner’s punchlist. The general contractor’s punchlist to its subcontractors and suppliers must be certified as made in good faith. General contractors, subcontractors and suppliers are permitted to dispute punchlist items directed to them.

Submitting Applications for Payment and Obtaining Payment of Retainage

The general contractor, subcontractors and suppliers from whom retainage is held may submit written applications for payment of retainage no sooner than 60 days following the date of substantial completion.  Each contractor shall use the form required by their contract to apply for payment of retainage. Alternatively, the project owner and general contractor may allow for earlier submission dates. An application for payment of retainage must include the punchlist, along with a written list identifying which items have been completed, repaired or delivered, and a certification that the application is submitted in good faith.

Applications for retainage must be paid within thirty days of receipt, minus any withholdings described below. For each tier of contract below the prime contact with the owner, the time period for paying retainage is extended by seven days.

Should the owner or contractor seek to withhold payment of retainage, they are limited to (1) the value of incomplete, incorrect or missing deliverables as either agreed upon by the parties or, if no agreement is reached, no more than two and a half percent of the total adjusted contract price; (2) one hundred and fifty percent of the reasonable cost to complete or correct incomplete or defective work items; and (3) the reasonable value of claims and any costs, expenses, or attorneys’ fees incurred as a result of the claims (but only when permitted by the terms of the contract).

Retainage, or any portion thereof, cannot be withheld unless the party seeking payment receives, before the date payment is due, a written explanation “of the incomplete or defective work items and incomplete, incorrect or missing deliverables, the factual and contractual basis for the claims and the value attributable to each incomplete or defective work item, deliverable and claim.” The explanation of withholding must also be certified as made in good faith.

Moreover, the Act prohibits the owner from holding any portion of retainage due to subcontractors or suppliers that are not the subject of the owner’s claim against the general contractor, unless the owner has declared the general contractor in default under its contract.

As the foregoing makes plain, the Act requires all parties to a project to adhere to strict guidelines in connection with withholding, and later releasing retainage.  In order to gain a full understanding of how the Act and other statutes govern Massachusetts construction projects, and how to preserve your rights under those statutes, contractors would be wise to consult with a Massachusetts construction attorney regarding their specific contract and situation.

Chris Strang Reelected Treasurer of the Boston Bar Foundation

By on October 18, 2017

The Boston Bar Foundation (BBF) Board of Trustees elected Strang Scott partner Chris Strang to the office of Treasurer for a second term.   Chris’ service to the BBF as Treasurer continues his long-term committment to the organization, where Chris has served in many capacities, including as a member of the Executive Committee, the Board of Trustees, the Society of Fellows, the Young Lawyers Advisory Council and many ad hoc, fundraising or event planning committees.

The BBF is the charitable arm of the Boston Bar Association. It raises money to provide grants for many community organizations that further the mission of the BBF. These include providing legal services and access to justice to those in need, as well as a variety of public service activities.  To learn more, please visit the BBF: http://bostonbarfoundation.org/

Home Improvement Contractor Denied Damages for “Reasonable Value” of Completed Work

By on October 18, 2017

Damages for work performed under a construction contract may be awarded under a variety of legal theories. One such theory is the principle of quantum meruit, which, when established, allows for an award of the reasonable value of goods or services as compensation for the value of “enrichment” those goods or services provide. Generally, one must demonstrate both good faith and substantial performance in order to recover on the theory of quantum meruit.

Recently, the Massachusetts Appeals Court reversed an award of damages on a quantum meruit claim after homeowners terminated their contract prior to completion of work.

In Pinecone Construction, Inc. v. Sridhar, the trial court awarded quantum meruit damages to a contractor, reasoning that while the contractor’s work intentionally departed from the contract specifications, the work was “structurally sound” and was used in completing the project.  As a result, the court concluded that “equity demands” that the contractor recover the value of its labor and materials provided prior to termination. On appeal, the Appeals Court reversed, determining the trial court’s reasoning to be circular, and held that as a matter of law a contractor cannot recover quantum meruit damages without showing both good faith and substantial performance, without regard to any benefit or enrichment conveyed to the homeowners.  Because the trial court found the contractor’s intentional departure from contract specifications tantamount to bad faith, the damages award was overturned and the homeowners were separately awarded damages for the cost of completion and under the Massachusetts Home Improvement Contractor Act and Mass. Gen. Laws Chapter 93A.

While Pinecone Construction is an unpublished opinion, it should stand as a cautionary tale to contractors – failure to perform work in good faith can bar even equitable recovery for work performed.  If you have questions regarding your ability to recover damages for your work on a home improvement contract or other construction work, you should contact an experienced construction lawyer to determine your rights and assess your potential remedies.

Strang Scott Enjoys “A Taste of The Fenway”

By on September 30, 2017

The Strang Scott team was out in force last week to support our friends and neighbors at “A Taste of The Fenway.”

The fun festival featured our best community chefs, restaurants and other local businesses with delicious food and drink samples, as well as live music and games. The Fenway Community Development Corporation partnered with Samuels & Associates to organize the event.

We all enjoyed meeting our community leaders, area residents and local business owners, as well as catching up with several old friends and colleagues. The turnout was outstanding and everyone left a bit heavier than when they arrived.

Special thanks to Basho Japanese Brasserie, Beerworks Brewing Company, The Fenway Craft Beer Cellar, Blackjack Pasta Bar, Blaze Pizza, By Chloe, Cask ‘n Flagon, Cheeky Monkey Brewing Company, El Pelon Taqueria, Fiouna’s Persian Fusion Cuisine, Hojoko Japanese Tavern, HoneygrowLookout Farm, Loretta’s Last Call, Neighborhoods Café, Pavement Coffeehouse, Saloniki Greek, Sweet Cheeks, Tapestry, Target, The Lansdowne Pub, Tiger Mama, Wahlburgers, and Yard House  for the amazing food and drinks.

We encourage everyone to join us next year!

Recent Ruling Emphasizes the “Sacred” Procedure of a Jury Demand

By on September 11, 2017

     Parties to a summary process (eviction) proceeding in Massachusetts are afforded the right to a trial by jury. Article 15 of the Constitution for the Commonwealth of Massachusetts declares that “parties have a right to a trial by jury; and this method of procedure shall be held sacred,” which applies to court rules and procedures for summary process governed by Massachusetts Rules of Civil Procedure, Rule 8 of the Uniform Summary Process Rules, and Section 21 of Massachusetts General Laws Chapter 185C.

     Recently, the Massachusetts Appeals Court overturned a ruling from the Housing Court and reemphasized the “sacred” right to a jury trial.  In Tchad Cort v. Alver Majors, a residential tenant appealed from judgment awarding possession and money damages to the landlord. The landlord filed a summary process action, to which the tenant responded with an answer, counterclaims, and a jury trial demand. At trial, the judge asked both parties if they were prepared for trial and the tenant acknowledged that he was prepared to proceed. After the landlord presented her case, the tenant provided testimony and stated that he would “like a jury.” The judge determined that trial was already underway and thus the tenant waived his right to trial. The tenant and the judge debated the tenant’s misunderstanding regarding waiver and the tenant presented his case. Thereafter, judgment entered against the tenant.

     On appeal, the Appeals Court reversed the judgment, holding that a passive waiver of a jury demand, by proceeding with trial without a jury after demanding a jury, is not sufficient to waive a prior plead jury demand. Instead, an effective waiver of a jury demand requires at least an oral stipulation waiving the demand. The Appeals Court emphasized the responsibility assigned to trial court judges to affirmatively investigate, prior to commencement of trial, whether to proceed with or without a jury, rather than starting trial and waiting for a party to object to the absence of a jury.

     Self-represented litigants in all courts are held to the same standards as attorneys. As a result, it’s crucial to understand and apply the rules of court and constitutional protections relevant to each action. More often than not, self-represented litigants are ill prepared to do so. In order to navigate litigation efficiently and effectively, engaging an experienced attorney to guide litigation prevents costly errors resulting from the failure to understand available rights and remedies. If you are involved in, or are considering filing a summary process claim, you’re well-advised to contact an experienced landlord-tenant attorney to achieve the best outcome.

Property Owners and Landlords Beware: New Ruling Clarifies Restriction on Claims to Remove Holdover Owners and Tenants After Foreclosure

By on June 5, 2017

Every eviction action centers on one or both of the following issues: which party is entitled to possession and what amount of damages are appropriate. Recently, the Massachusetts Appeals Court faced a unique set of facts with regard to the right of possession in Fed. Nat. Mortgage Ass’n v. Heather Gordon, et al., 2015-P-0441, and reaffirmed the requirement for post-foreclosure owners to resort to summary process to remove holdover owners and tenants.

In Nat. Mortgage Ass’n, the occupants of a property in Roxbury appealed from a judgment in favor of Fannie Mae, the party obtaining title to the property after foreclosure, from the Boston Housing Court. The occupants argued Fannie Mae’s common-law trespass claim against them was barred by statute and that Fannie Mae failed to obtain actual possession of the property before filing its claim. The occupants previously entered into a 3-year residential lease with one of the former owners of the property who lost title at foreclosure. Interestingly, the lease was executed after the date of foreclosure and after Fannie Mae filed a summary process action against the former owner. The former owner moved out of the property several months after signing the lease and the occupants moved in. Once Fannie Mae learned the occupants had taken possession, it brought a separate action for common-law trespass against them. The Boston Housing Court entered judgment awarding possession to Fannie Mae.

The occupants argued on appeal that Section 18 of Massachusetts General Laws Chapter 186 prohibits property owners from bringing common-law trespass actions against holdover former owners or tenants and requires resort to summary process to lawfully regain possession. The Appeals Court agreed with the occupants, reaffirming the Supreme Judicial Court’s holding in A.G. v. Dime Sav. Bank of N.Y., 413 Mass. 284 (1992). The Appeals Court held that the former owner occupied the property at the time of foreclosure and that the occupants became holdover tenants. The Court went on to hold that the occupants’ status in relation to the property could not be treated as different or lesser than that of a holdover tenant without attributing actual or constructive knowledge that the occupants knew the former owner did not have title when signing the lease or when they moved into the property. The Court declined to create an expectation that residential tenants would need to take steps to make sure their landlord has title to a property before entering into a tenancy. Under the ruling set forth in Fed. Nat. Mortgage Ass’n, post-foreclosure owners may not bring a trespass action against holdover tenants who remain in possession, even where that holdover tenant’s leasehold rights arose after the date of foreclosure, but before final judgment for possession in favor of the foreclosure purchaser.

The Appeals Court also held in favor of the occupants’ argument that Fannie Mae never took actual possession of the property. Actual possession is one of the elements claimants must prove in order to succeed on a common-law trespass claim. In holding for the occupants, the Court reaffirmed the ruling in Dime Savings that actual or constructive possession by an owner asserting a trespass action cannot be maintained when the property is actually possessed by another. The Appeals Court clarified that “actual” possession does not terminate the minute the former owner vacates the property and that the facts presented in Nat. Mortgage Ass’n showed that the execution of the lease and surrender of possession to the occupants did not “indicate [the former owner]’s surrender of possession in relation to others [namely, Fannie Mae] who might claim title.” To the contrary, the facts suggest the opposite and that a gap in time between when the former owner vacated and the occupants took possession cannot signify surrender of actual possession by the former owner. The Court determined that surrender of possession is a factual dispute “to be determined by the intent as expressed by words and acts of all the parties in the light of the circumstances” and the facts presented suggested that the former owner intended to remain in possession after she moved out, regardless of the pending summary process action against her by Fannie Mae. 

The outcome of Fed. Nat. Mortgage Ass’n further emphasizes the strict conformity Massachusetts require in connection within regaining possession and the necessity for landlords and residential property owners to undertake summary process to protect and enforce those rights. Evicting holdover tenants and former owners can be a complicated and fact-specific process.  As such, you should contact an experienced attorney to ensure the proper timelines and steps are taken to evict a tenant.