i
EXECUTIVE
OFFICEOF TRANSPORTATION
'5
re-
COMMONWEALTH
OF MASSACHUSETTS
THE
rc3iVR
MITTROMNEY
GivknrvoP
KERRY HEALEY
L ; E ~ E N A NGov~nrron
T
JOHN
COGLIANO
SECRETARY
To:
Secretary John
Through:
Commissioner
From:
Stephen H. Clark, Administrative Law Judg
Date:
August 25,2005
Re:
Report and Recommendation
I am pleased to submit for your consideration and approval the attached report
and recommendation.
Derbes Brothers, Inc. (Derbes), general contractor on MHD
contract #98204 (Contract) for roadway reconstruction and
related work in Quincy, appeals from the determination on the
Engineer's final estimate that Derbes was overpaid (and thus
now owes the Department) $3,054.54.
Derbes deliberately failed to appear a t a scheduled August 9,
2005 hearing and failed to prosecute its appeal. At the hearing
the Department presented substantial evidence to demonstrate
that Derbes was in fact overpaid by $3,054.54.
Because Derbes defaulted and because the Department showed
its final estimate to be correct, I recommend that Derbes
appeal be dismissed and that the final estimate stand
undisturbed.
TELEPHONE:
(617) 973-7000
TENPARKPLAZA,
BOSTON,MA 02116-3969
TELEFAX:
(617) 523-6454 TDD: (617) 973-7306
0
- I .
W.MASS.GOV/EOT
Derbes Brothers, Inc. (Derbes), the general contractor on Department contract
#98204 (Contract) for road reconstruction in Quincy at the bid price $487,155.00, appeals
from the Department’s final estimate issued November 14, 2002. The Department’s final
estimate determined that Derbes owes the Department $3,054.54. Derbes appealed,
claiming it owes nothing. The Department maintains that its final estimate was correct.
I recommend that the Derbes appeal be dismissed with prejudice, for two reasons.
First, Derbes, with actual knowledge that a hearing would be held on August 9, 2005,
deliberately failed to appear and prosecute its appeal. Second, the Department presented
substantial evidence at the hearing that its final estimates was correct and that Derbes in
fact owes the Department $3,054.54.
BACKGROUND
Subsection 9.05 of the Standard Specifications for Highways and Bridges (1988
ed.) provides
All prior partial estimates and payments shall be subject to correction in
the final estimate and payment. If within six months from the date the
final estimate is forwarded to the Contractor, the Contractor has not filed a
valid (as determined by the Engineer) written reasons(s) for not accepting
the final estimate, the final estimate will be considered acceptable to the
Contractor and payment of the final estimate made.
At the conclusion of the Contract, the Department duly prepared its final estimate
after making adjustments it deemed necessary. The Department sent the final estimate to
Derbes on or about November 14, 2002. Derbes apparently filed a notice of appeal to
this office within the time permitted by the Contract and filed a statement of claim on
October 24, 2003. The statement of claim asserted that no money was due because the
Department had overpaid one of Derbes’s subcontractors by $12,135.52 in a direct
payment made pursuant to G.L. c.30, s.39F and had erroneously subtracted the
overpayment from the general contract.
A pre-hearing conference was held on June 7, 2004 following a postponement
sought by Derbes. At the pre-hearing conference Derbes, with the agreement of the
Department, sought to amend its statement of claim to set forth an entirely new basis of
its appeal, namely that the resident engineer’s original estimated quantities correctly set
forth the actual quantities of materials used in the work. With the agreement of the
Department Derbes filed an amended statement of claim setting forth its new theory. A
hearing was scheduled for August 9, 2005, a date chosen after consultation with the
parties. Notice of the hearing date was sent to Derbes.
On August 4, 2005 Derbes wrote a letter to the Department’s counsel in the
appeal, Mr. Christian Gonsalves, stating that, “after reviewing all the documentation and
speaking to the Resident Engineer on that project, we will not be at the []hearing” on
August 9, 2005. On August 5, 2005 Mr. Gonsalves notified Derbes that it intended to
“go forward” at the hearing and “recommend that the … [appeal] be dismissed on the
grounds of your failure to prosecute this claim.”
The hearing was held as scheduled. Derbes did not appear.
The Department introduced the correspondence referenced above in evidence.
The Department’s counsel represented that he had spoken by telephone with the office of
Frank Derbes, the principal of Derbes, to be certain that Derbes knew the Department
intended to appear and go forward on August 9, 2005.
At the hearing the Department offered the testimony of the project’s resident
engineer and his written calculation sheet as evidence that, after the Department made
2
final adjustments to the quantities included in the work, the final estimate correctly
showed that Derbes owed the Department $3,054.54.
DISCUSSION
Subsection 9.05 of the Contract provides that the Department has the right to
correct “all prior partial estimates and payments” made during performance. Here, the
Department made the corrections it deemed necessary and then notified Derbes that it had
been overpaid by $3,054.54 through the preliminary estimates. These acts were
expressly authorized and permitted by the Contract.
With respect to the procedural matters raised in this appeal due to the conduct of
Derbes, I note first that the Department and this office afforded Derbes ample opportunity
to contest the final estimate and the adjustments made. Derbes filed its statement of
claim and amended the same; Derbes sought and was granted continuances. Despite
agreeing to an August 9, 2005 date to hear its appeal, and despite actual notice that the
Department intended to go forward on that date, Derbes deliberately failed to appear. I
conclude that Derbes knowingly defaulted and abandoned its appeal.
With respect to the merits, Derbes could have no expectation that the preliminary
final estimate quantities submitted in concert with the resident engineer would not be
adjusted when the final estimate was prepared. To the contrary, Subsection 9.05
expressly contemplated that the Contract’s preliminary estimates would be adjusted on
the final estimate. Hence, Derbes had no contractual basis to rely on the preliminary
estimate figures it had agreed to with the resident engineer. The Contract required
Derbes to present “written reasons(s) for not accepting the final estimate” in order to
challenge the final estimate. Derbes’s failure to present any such reasons—other than its
3
assertion that it agreed with the preliminary estimates—means that it failed to follow the
remedy provided it in the Contract. Cf. J. F. White Contracting Company v.
Massachusetts Bay Transportation Authority, 40 Mass. App. Ct. 937, 938-939 (1996)
(rescript) (the terms of the contract precluded contractor from relying on Department
furnished estimates).
Derbes, as the party appealing from the factual determinations the Contract
permits the Department to make, carried the burden of persuasion. See Subsection 9.05;
General Electric Co. v. Board of Assessors of Lynn, 393 Mass. 591, 598 (1984) (burden
of persuasion is from the outset on one party; presumption of validity of government’s
administrative action means challenging party has burden of proving the contrary). By
failing to appear at the hearing and by failing to present any evidence that the
Department’s adjustments were incorrect, Derbes failed to meet that burden.
Accordingly, Derbes’s appeal fails and the Department’s final estimate must stand.
CONCLUSION
Derbes’s appeal should be dismissed. The final estimate that shows Derbes owes
the Department $3,054.54 stands undisturbed. I recommend that it be approved as final.
Respectfully submitted,
Stephen H. Clark
Administrative Law Judge
Dated: August 25, 2005
4