CENTRAL CEILINGS, INC. V. NATIONAL AMUSEMENTS, INC.
873 N.E.2d 754 (2007)
NATURE OF THE CASE: This was a motion for a judgment notwithstanding the verdict or new
trial.
FACTS: National (D) is the owner of a cinema complex. D entered into a contract with Old
Colony, the general contractor, with an anticipated completion date of June 28, 2000.
Central (P) submitted a bid to Old Colony that was accepted. P was to do the drywall,
acoustical, carpentry, and hardware installation work at the Project. It was discovered in
late April that the groundwater table at the construction site was higher than originally
thought. D was required to redesign structural and other aspects of the construction.
Revised plans were in place by mid-June, and by early July, work on the Project was poised
to move forward. D extended the completion date for the Project to September 3, 2000. D
wanted to have the theater complex open for the Labor Day week-end. Old Colony was
experiencing severe cash flow problems. It failed to timely bill D for work performed on the
Project as well as on earlier projects. Old Colony owed substantial sums to P, over one
million dollars for its work on prior projects, and checks were being returned for
insufficient funds. After the groundwater problem many subcontractors were refusing to
return to the Project. P informed Old Colony's it would not go forward with its work unless
it obtained 'assurances' of payment from D. D's representative at a meeting guaranteed
future payments. This promise to P was not made conditional upon Old Colony's prior default
in paying for the work. It was agreed that P would continue to work under the direction of
Old Colony and that D would pay half the amount due P on the Monday after Labor Day and the
balance ten days thereafter. P went back to work. P discovered that D's representative had
collaborated with the president of Old Colony in a scheme to defraud D on a number of
construction projects, by inflating Old Colony's contract price above what was necessary to
accomplish the work and then splitting the overage. The president of D learned that Old
Colony's subcontractors were not being paid for their work on the Project. Dl decided to
issue checks to Old Colony and the subcontractors jointly to ensure that the subcontractors
received payment for their work. In March, 2001, P brought this action alleging breach of
contract against Old Colony and seeking to establish a lien on D's property. A default
judgment was entered against Old Colony in the amount of $593,237.25. P amended its
complaint to add claims against D for breach of its agreement to pay P for its work at the
Project. P obtained a judgment against D. Post-trial motions were filed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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