Posts tagged "Mechanical"

Suffolk Construction Company, Inc. v. Benchmark Mechanical Systems, Inc., et al. (Lawyers Weekly No. 12-045-17)

COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT.
1384CV01463-BLS2
____________________
SUFFOLK CONSTRUCTION COMPANY, INC.
v.
BENCHMARK MECHANICAL SYSTEMS, INC. and READING CO-OPERATIVE BANK
____________________
MEMORANDUM AND ORDER ALLOWING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
This case arises from Suffolk Construction Company’s mistaken payment of monies to Benchmark Mechanical Systems rather than to Benchmark’s lender, Reading Co-Operative Bank. Suffolk had hired Benchmark as a subcontractor on a large construction project. Benchmark secured a line of credit by assigning to the Bank all money that Benchmark stood to collect from Suffolk under its subcontract. Suffolk mistakenly made payments totaling $ 3,822,500.49 to Benchmark instead of to the Bank. Benchmark held and spent those monies, rather than forward them to the Bank. After Benchmark went out of business, the Bank sued Suffolk. The Supreme Judicial Court ordered Suffolk to pay the Bank the full amount it should have paid under Benchmark’s assignment. See Reading Co-Operative Bank v. Suffolk Constr. Co., 464 Mass. 543, 557 (2013). With statutory interest included, Suffolk paid the Bank a judgment totaling $ 7,640,907.45.
Suffolk brought this action seeking to recover the surplus held by the Bank that was left after the Bank deducted its reasonable costs of collection and the principal and interest owed by Benchmark from the amount paid by Suffolk. In addition, Suffolk asserted common law claims against Benchmark seeking to recover the $ 3,822,500.49 in subcontract payments that Suffolk was compelled to pay a second time to the Bank. The Supreme Judicial Court recently held that Suffolk had stated viable claims against the Bank, but that its claims against Benchmark are barred by the applicable statute of limitations. See Suffolk Constr. Co. v. Benchmark Mechanical Systems, Inc., 475 Mass. 150 (2016).
Suffolk now moves for summary judgment as to its right to collect the surplus of roughly $ 1.35 million being held by the Bank. The Court will ALLOW this motion.
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This resolves all remaining claims. Suffolk and the Bank report that they have settled Suffolk’s claim that the Bank’s costs of collection were unreasonable, and that this settlement will take effect if the Court were to rule (as it does) that Suffolk is entitled to receive the full surplus amount that the Bank owes to Benchmark.
The SJC has held that under the circumstances of this case Suffolk is entitled to equitable subrogation as against Benchmark, meaning that it may “stand in Benchmark’s shoes as to the surplus” held by the Bank. Suffolk Constr., 475 Mass. at 156. This holding is the law of the case, is binding on all parties, and may not be reconsidered now that the case has been remanded to the Superior Court. See City Coal Co. of Springfield, Inc. v. Noonan, 434 Mass. 709, 712 (2001).1 It necessarily follows that Suffolk is therefore the “debtor” for purposes of G.L. c. 106, § 9-608(a)(4), and thus by law is entitled the full amount of the surplus held by the Bank. See Suffolk Constr., 475 Mass. at 155-156. Suffolk’s alternative theories as to why it is entitled to recover the surplus are therefore moot.
Benchmark’s claim that Suffolk owes it $ 964,642.51 for change orders that Benchmark carried out on the project, and that Benchmark should be able to recoup this amount from the surplus held by the Bank, is without merit. The summary judgment record demonstrates that the Bank, as Benchmark’s assignee, settled and resolved these claims against Suffolk. In exchange for a $ 35,000 payment by Suffolk, the Bank (acting as Benchmark’s assignee) executed a settlement agreement providing that this payment “constitutes full and final satisfaction, discharge and payment for any monies owed to Benchmark by Suffolk. The settlement agreement also expressly released “any rights Benchmark may have against Suffolk” arising out of or with respect to any work by Benchmark for Suffolk on this project. This release and settlement agreement did more than merely extinguish any right by Benchmark
1 The Court recognizes that an issue decided on appeal may be reopened by a trial judge after remand “if the evidence on a subsequent trial was substantially different, controlling authority has since made a contrary decision of the law applicable to such issues, or the decision was clearly erroneous and would work a manifest injustice.” Kitras v. Town of Aquinnah, 474 Mass. 132, 146 (2016), quoting King v. Driscoll, 424 Mass. 1, 8 (1996), quoting in turn United States v. Rivera-Martinez, 931 F.2d 148, 151 (1st Cir.), cert. denied, 502 U.S. 862 (1991). None of these circumstances is present here, however.
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to assert a claim directly against Suffolk for further payment; it also extinguished any debt owed to Benchmark by Suffolk.
ORDER
Plaintiff’s motion for summary judgment on the remaining claims is ALLOWED. Final judgment shall enter: (1) in favor of Suffolk Construction Company, Inc., on Counts VII and XI of its amended complaint by (a) Declaring that Suffolk is the equitable subrogee of Benchmark Mechanical Systems, Inc., with respect to the surplus remaining after Reading Co-Operative Bank applied Suffolk’s judgment payment to Benchmark’s outstanding debt to the bank, Suffolk is therefore the “debtor” for purposes of G.L. c. 106, § 9-608(a)(4), and Suffolk is entitled to recover the full amount of that surplus held by the Bank, and (b) Ordering Reading Co-Operative Bank to pay the full amount of that surplus to Suffolk Construction Company, Inc., forthwith; and (2) Dismissing all other remaining claims, counterclaims, and cross-claims with prejudice.
25 April 2017
___________________________
Kenneth W. Salinger
Justice of the Superior Court read more

Posted by Stephen Sandberg - April 26, 2017 at 7:04 pm

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Suffolk Construction Company, Inc. v. Benchmark Mechanical Systems, Inc., et al. (Lawyers Weekly No. 10-125-16)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

SJC-12020

SUFFOLK CONSTRUCTION COMPANY, INC.  vs.  BENCHMARK MECHANICAL SYSTEMS, INC., & another.[1]

Suffolk.     May 2, 2016. – August 12, 2016.

Present:  Gants, C.J., Spina, Botsford, Duffly, Lenk, & Hines, JJ.[2]

Uniform Commercial Code, Secured creditor.  Practice, Civil, Motion to dismiss, Summary judgment, Statute of limitations.  Subrogation.  Indemnity.  Unjust Enrichment.  Restitution.  Limitations, Statute of.

Civil action commenced in the Superior Court Department on April 22, 2013. read more

Posted by Stephen Sandberg - August 13, 2016 at 2:08 am

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