Chase Precast Corp. v. John J. Paonessa Co.

The Massachusetts Department of Public Works (the department) entered into two contracts with general contractor John J. Paonessa Company (Paonessa) (defendant) for highway projects. These projects included replacing the existing grass median strips with new concrete median barriers. Both contracts contained a standard provision that allowed the department to delete items or work during the project. Subcontractor Chase Precast Corporation (Chase) (plaintiff) had supplied barriers for department projects in the past. Chase was also familiar with the industry custom of paying a supplier for only the supplies accepted. Paonessa and Chase entered into contracts for Chase to supply the barriers for the two highway projects. These supply contracts did not state which party was bearing the risk of the department eliminating the barriers from the projects. Shortly after Paonessa began the projects, citizens sued the department to stop it from replacing the grass strips with concrete barriers. Paonessa asked Chase to stop supplying concrete barriers, and Chase did. By that point, Chase had already made half the contracted barriers. The department then officially deleted the median barriers from the highway projects, as allowed by its contracts with Paonessa. Paonessa paid Chase for the barriers that Chase had already made. However, Chase had not yet made the other half of the contracted barriers, and Paonessa did not pay Chase for those. Chase sued Paonessa for breaching the supply contracts and sought its lost profits for the unperformed portion of the contracts. Paonessa raised an impossibility-of-performance defense. The trial court ruled for Paonessa. Chase appealed. The appellate court affirmed. The Massachusetts Supreme Judicial Court agreed to review the case.