Reading Co-Operative Bank v. Suffolk Construction Company, Inc. (Lawyers Weekly No. 10-038-13)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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‑11159 READING CO-OPERATIVE BANK vs. SUFFOLK CONSTRUCTION COMPANY, INC. Suffolk. November 6, 2012. ‑ March 13, 2013. Present: Ireland, C.J., Spina, Botsford, Gants, Duffly, & Lenk, JJ. Uniform Commercial Code, Secured creditor, Damages. Damages, Mitigation. Estoppel. Civil action commenced in the Superior Court Department on May 25, 2006. The case was tried before Stephen E. Neel, J., and entry of judgment was ordered by him. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court. R. Robert Popeo (Paul J. Ricotta with him) for the defendant. Nelson G. Apjohn (Cynthia M. Guizzetti with him) for the plaintiff. LENK, J. This case requires us to determine, among other things, whether art. 9 of the Uniform Commercial Code displaces the common law on the question of the proper measure of a secured creditor’s recovery under G. L. c. 106, § 9-405. We conclude that it does. The defendant, Suffolk Construction Company, Inc. (Suffolk), contracted with Benchmark Mechanical Systems (subcontractor) for construction of elements of a heating, ventilation, and air conditioning (HVAC) system at a building project in Reading. As partial collateral for a revolving line of credit, the subcontractor assigned to the plaintiff, Reading Co-Operative Bank (bank), its right to receive payment under the contract with Suffolk. Suffolk received notification of the assignment and agreed to make payments directly to the bank. However, Suffolk instead made twelve payments to the subcontractor. The subcontractor subsequently ceased business operations, with an outstanding debt to the bank on its line of credit. Seeking recovery of the total value of the misdirected payments, the bank filed an action in the Superior Court for breach of contract and violation of the Uniform Commercial Code (UCC), pursuant to G. L. c. 106, § 9-405. A Superior Court jury found Suffolk liable on both counts for ten of the twelve checks that Suffolk had delivered to the subcontractor. The jury found that the bank was estopped from recovering with respect to the final two checks. The jury calculated the bank’s actual damages as $ 533,348.62, and the judge entered judgment on the contract claim in this amount. However, concluding that he was statutorily required to do so, the judge entered judgment on the statutory claim in the amount of $ 3,015,000.49, the full face value […]