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SJC-12397

              G4S TECHNOLOGY LLC vs. MASSACHUSETTS
                   TECHNOLOGY PARK CORPORATION.



            Suffolk.    March 5, 2018. - June 13, 2018.

      Present:    Gants, C.J., Gaziano, Lowy, Budd, Cypher,
                           & Kafker, JJ.


Contract, Public works, Construction contract, Performance and
     breach, Subcontractor, Damages. Public Works, Delay, Extra
     work. Damages, Breach of contract, Quantum meruit, Fraud.
     Practice, Civil, Summary judgment, Damages. Fraud.



     Civil action commenced in the Superior Court Department on
September 22, 2014.

     The case was heard by Janet L. Sanders, J., on motions for
summary judgment, and entry of separate and final judgment was
ordered by her.

     The Supreme Judicial Court granted an application for
direct appellate review.


     Christopher Weld, Jr. (Megan C. Deluhery & Joel Lewin also
present) for the plaintiff.
     Robert J. Kaler (Edwin L. Hall also present) for the
defendant.
     Carol Chandler, Brendan Carter, David E. Wilson, Shannon A.
Reilly, & Mark Keough Molloy, for Associated Builders and
Contractors, Massachusetts Chapter, & others, amici curiae,
submitted a brief.
                                                                   2


     Maura Healey, Attorney General, & James A. Sweeney &
Cassandra H. Arriaza, Assistant Attorneys General, for the
Attorney General, amicus curiae, submitted a brief.


    KAFKER, J.   At issue is a construction contract dispute

between G4S Technology LLC (G4S) and Massachusetts Technology

Park Corporation (MTPC) arising out of a State- and federally

funded project to design and build a fiber optic network in

western and north central Massachusetts.   On summary judgment, a

judge in the Superior Court concluded that G4S was barred from

seeking recovery on the contract or under quantum meruit because

it intentionally filed false certifications of timely payments

to subcontractors.   The judge also concluded that MTPC could not

maintain a fraud action against G4S, in which it sought damages

in addition to the $4 million payment MTPC already had withheld

from G4S, because any recovery would be duplicative.

    On appeal, G4S argues that MTPC was not damaged by the

false certifications, and that the Commonwealth should replace

the common-law rule that "in relation to building contracts,

. . . a contractor cannot recover on the contract itself without

showing complete and strict performance of all its terms," Andre

v. Maguire, 305 Mass. 515, 516 (1940), with a materiality rule

as provided in the Restatement (Second) of Contracts §§ 237, 241

(1981).   Alternatively, G4S contends that, even if recovery on

the contract is disallowed, it should be able to pursue an
                                                                   3


equitable recovery under the doctrine of quantum meruit.     G4S

argues that MTPC, and not G4S, was responsible for the delays in

construction and the $10 million in increased costs G4S assumed.

MTPC cross-appealed from the dismissal of its claim of fraud

against G4S.

    We conclude that complete and strict performance is still

required for all construction contract terms relating to the

design and construction itself.   We also conclude, however, that

ordinary contract principles, including the traditional

Massachusetts materiality rule, apply for breaches of other

provisions, such as the one at issue governing payment

certifications.   We hold that G4S's numerous false

certifications and intentional subcontractor payment delays

constitute a material breach of the contract and, standing

alone, preclude recovery for breach of contract.

    Summary judgment was not, however, properly granted on

G4S's quantum meruit theory of recovery.   A party seeking to

recover under quantum meruit must prove both substantial

performance and good faith.   Substantial performance is not at

issue here, as the project was completed as specified, albeit

delayed.   The issue is whether a party that has intentionally

committed a breach of a provision in the contract can still have

acted in good faith for quantum meruit purposes and whether

there has been a windfall for the other party.   Overruling an
                                                                   4


older line of cases, we now hold that good faith applies to the

contract as a whole, and that the intentional commission of

breaches of individual contract provisions must be considered in

the over-all context, including the value of the uncompensated

work, the damage caused by the breach, the total performance of

both parties, and the balancing of equities to accomplish a just

result.     Here, there are material disputed facts regarding which

party caused the delays, whether G4S performed $10 million of

uncompensated work, and whether there is any causal connection

between the intentional misrepresentations regarding payments to

subcontractors and the damages assessed against G4S.    We thus

reverse the award of summary judgment on the quantum meruit

claim for further fact finding.

    We further conclude that the dismissal of MTPC's fraud

claim against G4S was error.    The undisputed facts establish

fraudulent certifications.     The motion judge dismissed the count

as duplicative, concluding that the fraudulent certifications

provided the basis for damages under all the different claims

presented and recovery under the fraud claim would be far less

than the amount MTPC was allowed to retain for breach of

contract.    Where separate recoveries are based on the same act

and injury, duplicative recovery is precluded.    Here, however,

further fact finding is required to discern whether there could

be factually separable and distinguishable acts resulting in
                                                                   5


separable quantifiable injuries.    We therefore reverse the

allowance of summary judgment on the fraud claim.1

     1.   Background.   MTPC is a State development agency created

and organized under G. L. c. 40J.   In 2010, MTPC received

funding from both the Commonwealth and the Federal government to

build a 1,200-mile fiber optic network connecting 123

communities in western and north central Massachusetts to high-

speed Internet (project).   An approximately $89.7 million

construction project, it connects "[o]ver 1,100+ public safety

entities, schools, libraries, medical facilities, and town

halls[,] . . . serve[s] as a backbone for over 400,000

households and businesses over a geographic area covering over

one-third of Massachusetts, with more than one million

residents[,] . . . [and] [p]rovides necessary broadband

infrastructure to foster economic growth, improve health care

and education, and strengthen public safety."   Of the $89.7

million project, $45.4 million was funded by the American

Recovery and Reinvestment Act of 2009, 111th Cong., Pub. L. No.

111-5, 123 Stat. 115 (2009) (Recovery Act).   In the wake of the

"Great Recession," the funds were to be used "in a manner that


     1 We acknowledge the amicus briefs submitted by Associated
Builders and Contractors, Massachusetts Chapter; Associated
General Contractors of Massachusetts; Associated Subcontractors
of Massachusetts, Inc.; Construction Industries of
Massachusetts, Inc.; and Utility Contractors' Association of New
England, Inc.; and by the Attorney General.
                                                                   6


maximize[d] job creation and economic benefit" and was intended

to "provide a one-time injection of funds for the purpose of

stimulating the American economy."

     Time was of the essence with respect to the dates for

substantial completion and final completion of the project.2

According to the initial procurement documents, the Recovery Act

award placed "significant time constraints on the construction

of the Project."    The design-builder thus was contractually


     2   The contract provided that "substantial completion" was

     "the date on which either (a) the Work required by the
     Contract Documents has been completed except for Work
     having a Contract Price of less than one per cent (1%) of
     the then adjusted total Contract Price, or (b) the Network,
     or an agreed upon segment of the Network, is sufficiently
     complete and connected to the Internet that Owner can use
     it for its intended purposes except for minor incomplete or
     unsatisfactory Work items that do not materially impair the
     usefulness of the Work required by the Contract Documents.
     To meet these conditions, all fiber optic cable and all
     equipment must have been installed and tested successfully
     and passed pre- and post-construction testing and ready to
     begin the conditional Network acceptance testing period,
     and all operating manuals, warranties, and as-built
     documents pertaining to that portion of the Work have been
     delivered to the Owner."

"Final Completion" was

     "the date on which the Network, and all equipment and fiber
     supplied by or made available to the Design-Builder for
     installation in the Network, all Work is successfully
     completed, has been handed over to and accepted by Owner,
     no Work items required by the Contract Documents remain
     incomplete or unsatisfactory, and Owner has received and
     accepted all documentation and Project close-out
     deliverables required under the Contract Documents."
                                                                      7


obligated to meet mandatory milestones:   complete fifty-five per

cent of the value of the work by June 30, 2012; achieve

substantial completion by April 15, 2013; and achieve final

completion by June 30, 2013.

     MTPC put the project out to public bid, and a design-build

contract with G4S was executed on June 30, 2011.   After

adjustments, the total contract value was $45.5 million.     G4S

agreed to the mandatory milestones and acknowledged that if "any

Date for a Mandatory Milestone, after adjustment for any

extensions of time . . . is not attained as a result of any

failure of [G4S] to perform, then [G4S] shall pay [MTPC], as

part of compensatory delay damages . . . for each Day . . . that

achievement of the Mandatory Milestone" is not met as damages

are "difficult to determine and specify accurately."3

     Damages for failure to attain substantial completion by

April 15, 2013, was $7,500 per day and escalated to $9,500 per

day after June 30, 2013.   Failure to attain final completion by

June 30, 2013, was $3,000 per day; daily rates additive for any

periods of overlap.   The contract, however, also contemplated a

remedy should there be excused delays to the project.      Articles

8.2.1 and 8.2.2 provided that, "[i]f [G4S] is delayed in the




     3 The contract provided that "[t]he compensatory delay
damages . . . shall be [MTPC's] sole remedy for any failure of
[G4S] to meet the above dates."
                                                                    8


performance of the Work due to acts, omissions, conditions,

events, or circumstances beyond its control and due to no fault

of its own, . . . the Contract Time(s) for performance shall be

reasonably extended by Change Order . . . [and G4S] shall also

be entitled to an appropriate adjustment of the Contract Price."

    MTPC's contract with G4S set forth additional provisions,

at issue here.   They included (1) procedures for obtaining a

change order to adjust the contract price and time in the event

of delay to the work; (2) MTPC's right to stop and suspend the

work and terminate G4S for cause should G4S, among other

reasons, fail to "timely pay, without cause . . .

subcontractors"; (3) MTPC's obligation to facilitate timely and

efficient performance of the work, submit conduit and pole

attachment applications for licenses and leases, and perform any

"Make-Ready work" necessary to permit G4S to perform its

construction and installation work; and (4) G4S's right to,

within ten working days of awareness of excused work delay,

request an equitable adjustment to the contract price or an

equitable extension of time for the reasonable costs of excused

delays or differing site conditions.

    Following the June 30, 2011, execution of the design-build

contract and the subsequent notice to proceed, G4S commenced the

work.   On September 21, 2012, MTPC notified G4S of nonconforming
                                                                     9


work and requested corrective action.4    On December 10, 2012,

MTPC notified G4S a second time of nonconforming work and gave

notice that G4S had failed to cure the prior nonconforming work.5

At various times, change orders were executed throughout the

performance of the work.   The dates to achieve substantial and

final completion of the project were adjusted to July 31, 2013,

and October 31, 2013, respectively.     The parties reserved their

respective rights, stating that "[n]othing in . . . Change

Order[s] shall be taken as a waiver of any rights or defense of

[MTPC] and [G4S] with respect to any other request for change,

equitable adjustment or other claim."

     On March 7, 2014, over seven months past the contractual

substantial completion date, substantial completion of the


     4 Among other things, the notice of nonconforming work that
Massachusetts Technology Park Corporation (MTPC) sent to G4S
Technology LLC (G4S) alleged that G4S had been performing work
with insufficiently skilled labor, resulting in poor
workmanship; that G4S failed to follow industry standards with
the installation of certain project parts; and that G4S's work
generally suffered from a lack of planning, poor leadership, and
poor quality. The notice acknowledges that G4S had made
improvements over time, but it stated that more corrective
action on behalf of G4S was needed. The notice requested a
conference between G4S and MTPC as well as a plan of action to
resolve the issues.

     5 MTPC sent G4S a second notice. This notice alleged that
G4S failed to take corrective action in accordance with the plan
laid out by the parties following the first notice. The notice
also restated several of the issues MTPC had with G4S, including
a general lack of planning, poor performance, and poor
leadership.
                                                                   10


network was achieved.   On March 21, 2014, G4S submitted a

request for equitable adjustment (REA) seeking additional

compensation and an extension of time for the dates of

substantial completion and final completion.   On April 1, 2014,

MTPC responded to G4S's REA and asserted that G4S was not

entitled to additional time or money and that G4S was the reason

for the delay.6   On August 15, 2014, MTPC issued a "Notice of

Withholding" to G4S claiming damages in the amount of

approximately $4 million resulting from the delays and failure

to perform required tasks.7

     On September 10, 2014, G4S submitted an amended REA to MTPC

for approximately $10 million.   G4S asserted that, because of

MTPC's "failure to timely complete the necessary predecessor

Make-Ready work," G4S incurred substantial additional time and




     6 Neither G4S's March 21, 2014, request for equitable
adjustment nor MTPC's April 1, 2014, letter was in the submitted
record.

     7 In accordance with the August 15, 2014, notice of
withholding, MTPC withheld approximately $2 million, based on
the liquidated damage rate of $9,500 per day for 219 days, on
account of G4S's failure to achieve substantial completion of
the project by July 31, 2013, the date established for
substantial completion. Additionally, MTPC withheld $864,000,
based on the liquidated damages rate of $3,000 per day for 288
days, on account of G4S's failure to achieve final completion by
October 31, 2013, the date established for final completion.
Lastly, MTPC withheld the additional sum of approximately $1.3
million for reimbursements due and extra cost and expenses
incurred on account of G4S's failure to perform or complete
required tasks.
                                                                   11


costs in completing the project.   It explained, "The failure of

[MTPC] to timely complete the predecessor activities to G4S

installation work resulted in the work often being performed

with different crew configurations, out-of-sequence, in smaller

non-contiguous distances, utilizing premium time/extended work

days, and often in different climatic conditions than what was

contemplated under the baseline schedule."   The amended REA

referenced provisions in the contract that permitted G4S to

recover increased costs due to circumstances that were no fault

of the design-builder.   G4S also stated that it had filed the

necessary change orders required by article 8.2.1 and that the

parties had reserved their rights regarding those change orders.8

Contending that MTPC's failure was thus the "root cause of

delays and impacts to the Project," G4S also requested another

adjustment to the dates to achieve substantial and final

completion of the project.   The response, if any, to the REA, is

not in the submitted record.

     On January 20, 2015, MTPC issued a Certificate of Final

Completion of the Work, over one year after the contractual

final completion date.   On February 11, 2015, MTPC issued a

recalculated and updated "Notice of Withholding" of

approximately $4 million, to account for subsequent delays,


     7 The change orders referenced in G4S's amended REA were not
in the submitted record.
                                                                  12


costs, and expenses.

     G4S brought an action in the Superior Court against MTPC

for breach of contract, breach of warranty, and quantum meruit.

G4S asserted that MTPC's withholding of $4 million was improper

and contended that MTPC wrongfully denied its $10 million REA.

MTPC, in turn, brought counterclaims against G4S alleging fraud

and violations of G. L. c. 93A.   By the start of litigation,

MTPC had paid G4S approximately $41 million of the original $45

million total contract value.

     During discovery, evidence revealed that, unbeknownst to

MTPC, G4S engaged in a pattern of submitting inaccurate

"progress payment releases" (certifications) when sending its

applications for payment.9   As previously explained, the contract

expressly stated that subcontractors were to be paid on time and

that a failure to do so, without cause, was grounds for

terminating the contract with G4S.   G4S certified to MTPC that

it had timely paid its subcontractors, but this was not true.


     9 Through the "progress payment releases" (certifications),
G4S represented and warranted that

     "all subcontractors, suppliers and equipment providers of
     the undersigned have been paid in full all amounts due to
     them up to the date of this Certification, and that the
     sums received in payment for the Amount Requested shall be
     used to forthwith pay in full all amounts due to such
     subcontractors, suppliers and equipment providers up to the
     date hereof."
                                                                  13


Spanning more than one year, G4S, a publicly traded company,

repeatedly and continuously delayed payments to its

subcontractors until after its fiscal quarters closed, so it

could show a more favorable cash flow in its quarterly reports.10

     In sum, G4S received $38.6 million in progress payments

through sixty false certifications.   The work had been

performed, but the subcontractors had not been paid prior to the

certifications.

     The delayed payments did not go unnoticed by the

subcontractors.   At various times, subcontractors strongly

objected and threatened to shut down work or remove crews from

the project if G4S continued to withhold payments, even as G4S

was getting paid by MTPC.11   Despite such protests, there was no


     10G4S's contract manager, who was responsible for paying
subcontractors, acknowledged in contemporaneous electronic mail
(e-mail) messages as well as in her later deposition that there
remained past due invoices for significant sums that were
outstanding at the time the certifications were executed. The
certifications were nevertheless submitted to MTPC. One
internal e-mail message from a G4S project manager criticized
this practice stating, "How can we tell sub[contractors] that
they aren't getting paid so our books look better? There's
something wrong with that."

     11For example, in an e-mail message to G4S, one
subcontractor wrote, "I think it is extremely unfair that you
are not honoring our contract. . . . The issue that bothers me
the most is that you are not making payment [in order] to better
your books but don't care about the books of the companies that
support you." Another subcontractor wrote to G4S that they were
owed $358,275, which presented a "significant problem" for the
subcontractor as it sought to pay its work crews.
                                                                   14


indication from the submitted record that any of the

subcontractors demanded direct payment of balances due from

MTPC, as was the subcontractors' statutory right under G. L.

c. 30, § 39F,12 nor did they shut down work or remove crews.

     MTPC moved for summary judgment, and in March, 2016, the

judge granted summary judgment to MTPC as to G4S's complaint.

The judge concluded that G4S intentionally committed a breach of

the contract and thus, without complete and strict performance

of all of the contract's terms, could not recover on the

contract.   The judge, relying on an older line of cases that we

overrule today, also concluded that G4S could not recover under

a theory of quantum meruit because an intentional violation of a

contract provision was inconsistent with a finding of good faith

and barred all such recovery unless the violation was deemed "so

trifling as to fall within the rule de minimis."     See Andre, 305

Mass. at 516.   G4S's payment delays and false certifications

were inconsistent with the good faith requirement.    In January,

2017, in a subsequent decision, the judge dismissed MTPC's

counterclaims of fraud and G. L. c. 93A.   The judge reasoned




     12General Laws c. 30, § 39F (d), provides: "If, within
seventy days after the subcontractor has substantially completed
the subcontract work, the subcontractor has not received from
the general contractor the balance due under the subcontract
. . . , the subcontractor may demand direct payment of that
balance from the awarding authority."
                                                                     15


that permitting additional compensation to MTPC under a theory

of fraud would be improperly duplicative because the underlying

conduct forming the basis of MTPC's fraud claim was the same as

the contract claim.     The judge also noted that MTPC, as a public

entity acting pursuant to a legislative mandate, was not acting

in a business context and therefore was not engaged in trade or

commerce for the purposes of G. L. c. 93A.     G4S appealed from

the Superior Court decision, and we granted its application for

direct appellate review.

    2.    Discussion.    "Our review of a motion judge's decision

on summary judgment is de novo, because we examine the same

record and decide the same questions of law."     Kiribati Seafood

Co. v. Dechert LLP, 478 Mass. 111, 116 (2017).     "The standard of

review of a grant of summary judgment is whether, viewing the

evidence in the light most favorable to the nonmoving party, all

material facts have been established and the moving party is

entitled to judgment as a matter of law" (citation omitted).

Casseus v. Eastern Bus Co., 478 Mass. 786, 792 (2018).     Here, we

affirm the decision to grant summary judgment on the contract

claim, but conclude that there are material disputed facts

precluding summary judgment on the quantum meruit and fraud

claims.

    a.    Complete and strict performance of all construction

contract terms.   "The law has long been settled in this
                                                                   16


Commonwealth, in relation to building contracts, that a

contractor cannot recover on the contract itself without showing

complete and strict performance of all its terms . . . ."

Andre, 305 Mass. at 516.   See Peabody N.E., Inc. v. Marshfield,

426 Mass. 436, 441 (1998); United States Steel v. M. DeMatteo

Constr. Co., 315 F.3d 43, 50 (1st Cir. 2002).   G4S claims that

the complete and strict performance requirement is outdated and

asks us to adopt instead the "materiality rule" set forth in

Restatement (Second) of Contracts, supra at §§ 237, 241.13    We


     13Restatement (Second) of Contracts § 237 (1981) provides:
"[I]t is a condition of each party's remaining duties to render
performances to be exchanged under an exchange of promises that
there be no uncured material failure by the other party to
render any such performance due at an earlier time."

     Section 241 presents five factors to consider whether a
failure is material:

     "In determining whether a failure to render or to offer
     performance is material, the following circumstances are
     significant:

          "(a) the extent to which the injured party will be
     deprived of the benefit which he reasonably expected;

          "(b) the extent to which the injured party can be
     adequately compensated for the part of that benefit of
     which he will be deprived;

          "(c) the extent to which the party failing to perform
     or to offer to perform will suffer forfeiture;

          "(d) the likelihood that the party failing to perform
     or to offer to perform will cure his failure, taking
     account of all the circumstances including any reasonable
     assurances;
                                                                  17


decline this invitation.   We do, however, interpret the complete

and strict performance requirements in construction contracts as

being limited to the design and construction itself, as

explained infra.   All of our previous holdings imposing complete

and strict performance have concerned breaches of the actual

design and construction of the project.

    Our construction law cases have emphasized the importance

and need for strict compliance with construction law contracts

to ensure that the construction itself is done safely and

correctly according to design specifications.   See, e.g., Russo

v. Charles I. Hosmer, Inc., 312 Mass. 231, 233-234 (1942)

(failure to follow design requirements in guard rails posed

public safety problems).   This is particularly true as defects

are difficult to identify and expensive to fix in a finished

project.   See id. at 233 (deviation from number of steel rods

cast in concrete to provide support for highway guard rail

unknown to owner); Bowen v. Kimbell, 203 Mass. 364, 368 (1909)

(cost to cure deviation from building specification after

building's construction disproportionately high).   Thus, we have

not tolerated any breaches that relate to whether the




         "(e) the extent to which the behavior of the party
    failing to perform or to offer to perform comports with
    standards of good faith and fair dealing."
                                                                 18


construction was completed according to design specifications.

See Peabody N.E., Inc., 426 Mass. at 437, 441 (failure to

substantially complete construction of septage and grease waste

facility by terms of agreement not complete and strict

performance); J.A. Sullivan Corp. v. Commonwealth, 397 Mass.

789, 790 (1986) (failure to complete itemized list of finish

work, corrections, repairs, and services for construction of

public college building not complete and strict performance);

Albre Marble & Tile Co. v. Governman, 353 Mass. 546, 549-550

(1968) (failure to ensure satisfactory surfaces before tile

installation not complete and strict performance); Russo, supra

(failure to install highway guard rail in accordance with terms

specifying number of steel rods not complete and strict

performance); Andre, 305 Mass. at 516-517 (failure to comply

with plans and specifications of house construction not complete

and strict performance); Bowen, supra (failure to use correct

ratio as provided in specifications for making plaster not

complete and strict performance); Hayward v. Leonard, 7 Pick.

181, 185 (1828) (failure to build house to specifications not

complete and strict performance).

    In the instant case, design and construction provisions

that would require strict and complete performance would

include, for example, the following:

    "The fiber optic cable and infrastructure system shall be
                                                                  19


     designed and installed for a minimum life expectancy of 30
     years[.]"

     "All fiber strands and buffer tubes shall be color coded
     with highly distinguishable, vibrant colors[.]"

     "The fiber cable shall have a circular cross section so
     that aerial installation can be done with standard sheaves
     and tensioning equipment[.]"

     "The . . .Fiber Optic Network will consist of a core fiber
     backbone with extensions to two (2) major . . . regional
     network centers located at One Summer Street in Boston, MA
     and One Federal Street in Springfield, MA."

     We recognize, however, that construction contracts can be

thousands of pages long, containing all types of different

provisions.14   We have not considered in our cases the

consequences of breaches of construction contract provisions

that are subsidiary to or supportive of the design and

construction, but do not directly involve the design and

construction itself.   We clarify today that the complete and


     14Here, the 1,400-page contract between MTPC and G4S
provided many provisions unrelated to the actual construction
work. Examples of such provisions include (1) G4S was to submit
printed copies of required manuals in "heavy-duty, commercial-
quality, durable, 3-ring, vinyl covered, loose-leaf binders, in
thickness necessary to accommodate contents, sized to receive 8-
1/2" by 11" paper. The binder spine shall provide a clear
plastic sleeve to hold labels identifying the contents"; (2) G4S
was to ensure that the Recovery and Reinvestment Act of 2009
logo emblem was at least six inches or larger in diameter and
ensure clear space surrounding the logo equal to one-half of the
logo's radius; and (3) G4S was required to provide, for MTPC
field inspectors, offices with a "minimum of 200 square feet of
usable space with . . . a [d]esk, desk chair, visitor chair and
plan table[,] . . . [p]ortable radio with contractor frequencies
and charger[,] . . . [and] [w]eekly office cleaning services."
                                                                   20


strict performance requirements in construction contracts apply

only to the design and construction work itself.   Other

provisions should be analyzed pursuant to ordinary contract

principles, including the materiality standard applied under

Massachusetts contract law.    See EventMonitor, Inc. v. Leness,

473 Mass. 540, 546 (2016), quoting Anthony's Pier Four, Inc. v.

HBC Assocs., 411 Mass. 451, 470 (1991); Buchholz v. Green Bros.,

272 Mass. 49, 52 (1930), S.C., 290 Mass. 350 (1935).15

     The question then becomes what is the legal status of the

contractual violations here.   The construction contract at issue

was to "design, furnish, build and equip a complete fiber optic

network system . . . for a fully implemented, functional and

tested system" in accordance with the project construction

schedule.   The "Work" was defined broadly as comprising

     "all Design-Builder's design, construction and other
     services required by the Contract Documents, including
     procuring and furnishing all materials, equipment, services
     and labor specified by or reasonably inferable from the
     Contract Documents, to develop, install, and test the
     Network, and including the submission and delivery of all
     documents and other things as required or reasonably
     inferable from the Contract Documents."

The contractual violations at issue did not concern the actual


     15We decline to adopt the materiality standard of the
Restatement (Second) as argued by G4S. We recognize, however,
that many of the different elements of the Restatement
materiality standard are considered in either our contract or
our quantum meruit analysis.
                                                                   21


design and construction of the project.   Instead, they were

about the timing of payments to subcontractors and the

documentation concerning those payments.16   G4S delayed payments

and filed false certifications to allow it, a public company, to

report inflated revenues for its quarterly reports.    We thus

analyze these violations under a materiality standard, not

complete and strict performance.

     In the Commonwealth, a material breach of a contract occurs

when the breach concerns an "essential and inducing feature of

the contract."   See EventMonitor, Inc., 473 Mass. at 546,

quoting Anthony's Pier Four, Inc., 411 Mass. at 470.   Essential

and inducing features of a contract are provisions that are "so

serious and so intimately connected with the substance of the

contract[]" that a failure to uphold the provision would justify




     16Contract terms defining payment or reporting requirements
may have an impact on construction but they are not design and
construction contract terms analyzed pursuant to the complete
and strict performance requirement. Rather they are analyzed
according to the materiality standard. For example, payment
delays or disputes may cause subcontractors to stop or slow down
work by temporarily pulling crews or reducing the number of
workers. That would result in delays in the construction, but
even delays in the construction are different from the design
and construction itself. If, however a subcontractor, having
not received timely payments, installs an insufficient amount of
highway guard rails, uses plastering of inferior quality, or
does not complete the project, such breaches would be analyzed
under complete and strict performance. See Peabody N.E., Inc.
v. Marshfield, 426 Mass. 436, 441 (1998); Russo v. Charles I.
Hosmer, Inc., 312 Mass. 231, 233-234 (1942); Bowen v. Kimbell,
203 Mass. 364, 368 (1909).
                                                                   22


the other party walking away from the contract and no longer

being bound by it.   See Buchholz, 272 Mass. at 52 (failure to

make monthly payments as agreed to in contract material breach

because payments "essential and inducing feature").

    There can be little doubt that paying subcontractors on

time was an essential and inducing feature of the contract

between MTPC and G4S.   See Buchholz, 272 Mass. at 52 (in

contract to paint and maintain signs, payment of wage "essential

and inducing feature").   The "[p]rompt payment of subcontractors

on public works is a consistent legislative purpose."       Manganaro

Drywall, Inc. v. White Constr. Co., 372 Mass. 661, 664 (1977).

This is particularly true here, where a significant portion of

the project funding came from the Recovery Act, the purpose of

which was to "maximize[] job creation and economic benefit" and

"provide a one-time injection of funds for the purpose of

stimulating the American economy."

    The contract itself also stressed the importance of timely

payments to subcontractors.   As provided in article 10.2 of the

contract's general conditions, MTPC could walk away from the

contract and no longer be bound by its terms if G4S failed to

timely pay subcontractors.    G4S's repeated instances of

intentionally failing to timely pay subcontractors in accordance

with the agreed-upon contract was therefore a material breach of

the contract, barring G4S from recovering breach of contract
                                                                      23


damages.   See Buchholz, 272 Mass. at 55.17

     G4S not only delayed the payments but also falsely

certified that it had made the payments, thereby magnifying and

multiplying the number of material breaches.     The contract here

independently required proper certification of payments.       Those

provisions were intentionally violated.    Intentional

misrepresentations to the government for financial gain are

significant breaches of contract in and of themselves and can be

serious civil and criminal offenses.18    In the words of Justice

Holmes, contractors "must turn square corners when they deal

with the Government."   Rock Island, Ark. & Louisiana R.R. v.

United States, 254 U.S. 141, 143 (1920).      G4S did the opposite,

cutting those corners for improper purposes.     In sum, the

delayed payments and the false certifications here were material




     17G4S argues that the subcontractors were eventually paid
and thus the breach was cured. Given the importance of timely
payment, we do not consider the delayed payments a cure for the
contractual violation. They do, however, have an impact on the
equities and the quantum meruit analysis.

     18We note that persons or corporations who make a
fraudulent claim for payment to a State government entity are
subject to civil penalties under the Massachusetts False Claims
Act, G. L. c. 12, §§ 5A-5O. When any funding for a public
contract is provided by the Federal government, civil and
criminal sanctions may also be pursued under the civil or
criminal False Claims Act. See 31 U.S.C. §§ 3729-3733 (civil);
18 U.S.C. § 287 (1986) (criminal). Additionally, the Division
of Capital Asset Management and Maintenance may suspend or debar
persons who wilfully supply materially false information while
performing a public contract. G. L. c. 29, § 29F.
                                                                     24


breaches of the contract precluding recovery on G4S's contract

claim.

       b.   Recovery under quantum meruit.   G4S contends that even

if it is not entitled to pursue its contract claim, it should be

allowed to recover under a quantum meruit theory.     We conclude

that there are genuine issues of material fact in dispute on the

quantum meruit claim.     To recover under quantum meruit in a

construction case, a contractor must prove both substantial

performance of the contract and an endeavor in good faith to

perform the work fully.     J.A. Sullivan Corp., 397 Mass. at 796;

Albre Marble & Tile Co., 353 Mass. at 550; Andre, 305 Mass. at

516.   "The underlying basis for [recovery under quantum meruit]

is derived from principles of equity and fairness, to prevent

unjust enrichment of one party . . . at the expense of another

. . . ."    Malonis v. Harrington, 442 Mass. 692, 697 (2004).

Although "clean hands" are important in determining equitable

relief, we also have recognized that this is not an absolute

proposition, as the purpose of the doctrine is to allow courts

to produce a just result.    Walsh v. Atlantic Research Assocs.,

321 Mass. 57, 62 (1947).     The proper focus is on the value of

the benefit conferred.     In a construction contract, "[t]he

amount of recovery on a claim based in quantum meruit is the

fair and reasonable value of material and labor supplied to the

benefiting party."     J.A. Sullivan Corp., supra at 797.   "It is
                                                                    25


not the policy of our law to award damages which would put [the

nonbreaching party] in a better position than if the [breaching

party] had carried out [its] contract."     Ficara v. Belleau, 331

Mass. 80, 82 (1954).   The nonbreaching party is "entitled to be

made whole and no more."    Id.   See J.A. Sullivan Corp., supra at

794 (principle of equity and fairness cautions against

"produc[ing] a windfall").

    In the instant case there was, without dispute, substantial

performance by the contractor.    A critical and complex project

providing a fiber optic network for western and north central

Massachusetts has been completed according to its design.     The

project was, however, delayed.    The cause of those delays is

bitterly disputed in the record.    G4S has raised a genuine issue

of material fact that MTPC is responsible for those delays due

to its failure to complete the make-ready work on time.

    More complicated is the good faith requirement.     The motion

judge concluded that it was undisputed that G4S did not act in

good faith given its numerous delayed payments to contractors

and false certifications.    She held that intentional violation

of these contract provisions precluded a finding of good faith

fully to perform.   Support for this holding and the short-

circuiting of the rest of the equitable analysis certainly

exists, in a line of older cases that the judge properly cited.

For example, in J.A. Sullivan Corp., 397 Mass. at 797, quoting
                                                                  26


Andre, 305 Mass. at 516, we reiterated that "[g]enerally, '[i]n

the absence of special exculpating circumstances an intentional

departure from the precise requirements of the contract is not

consistent with good faith in the endeavor fully to perform it,

and unless such departure is so trifling as to fall within the

rule de minimis, it bars all recovery."   The simplicity and

severity of this approach, which dates back to Sipley v.

Stickney, 190 Mass. 43, 46 (1906), and Homer v. Shaw, 177 Mass.

1, 5 (1900), has, however, been criticized in leading treatises

on contract law.   See 8 C.M.A. McCauliff, Corbin on Contracts

§ 36.8, at 354 (J.M. Perillo ed., rev. ed. 1999); S. Williston,

Contracts § 842, at 2364 n.4 (rev. ed. 1936).   This rule also

has been questioned, and even distinguished by this court, but

this older line of cases has not been overruled.   See Walsh, 321

Mass. at 62 (describing Sipley doctrine as rigid rule of law

that has been criticized as "too severe").   We expressly

overrule this line of cases and rearticulate the doctrine of

quantum meruit today.

    We conclude that intentional breaches, even those involving

material breaches, alone are not dispositive of the right to

equitable relief, at least when such breaches do not relate to

the construction work itself.   Good faith is a requirement for

recovery under quantum meruit, but ruling in equity, this

requirement is not one that is "too rigid and unyielding for the
                                                                   27


practical accomplishment of justice."    J.A. Sullivan Corp., 397

Mass. at 797, quoting Morello v. Levakis, 293 Mass. 450, 453

(1936).    We have emphasized that "[t]he doctrine of clean hands

is not one of absolutes and should be so applied as to

accomplish its purpose of promoting public policy and the

integrity of the courts."    Walsh, 321 Mass. at 66 (allowing

recovery in quantum meruit even for plaintiff who intentionally

committed breach of employment contract provision).   There is no

simple formula to apply here, but rather numerous factors to

analyze.   We thus conclude that in evaluating the contractor's

good faith and right to recover under quantum meruit, we must

consider the contract performance as a whole, taking into

account both parties' actions, the different contractual

breaches and the damages they caused, and most importantly the

value of the project provided as compared to the amount paid for

that work.    We must, in the end, balance the equities and

produce a just result.    See id. (in quantum meruit case, court

declined to deprive plaintiff of all earnings during employment

despite bad faith material breach of employment contract).      See

also Meehan v. Shaughnessy, 404 Mass. 419, 438-439 (1989)

(departing law firm partner did not forfeit accrued profits

despite intentional breach of partnership contract and fiduciary

duties because there was no causal connection between law firm's

claimed losses and breaches).
                                                                    28


    Here, G4S completed the project as specified, albeit with

delays.   MTPC deducted $4 million, of which a significant sum

was damages for delay.   Whether one party or the other or both

were responsible for the delays remains disputed on this record.

Resolution of this issue has an impact on the over-all balancing

of the equities in the instant case.    If MTPC was responsible

for some or all of those delays and nevertheless withheld the

amount, MTPC's own contractual violations would need to be

considered in the equitable analysis.   If those violations were

intentional, that would also be a factor in the balancing of

equities.   Furthermore, G4S has introduced evidence to support

its claim that it has performed $10 million in uncompensated

work because of MTPC's failure to perform make-ready work.     If

G4S's $10 million REA has merit, this represents a significant

amount of value supplied to MTPC without cost and may constitute

a windfall.   See J.A. Sullivan Corp., 397 Mass. at 794; Ficara,

331 Mass. at 82.    It would thus "work great hardship to deprive"

G4S of compensation for extra work conferred over the three-year

project given that the design and construction of the network

was satisfactory.   See Walsh, 321 Mass. at 66.

    Finally, although there was not good faith and clean hands

in the context of prompt payments to subcontractors or truthful

certifications to MTPC, it is unclear from the submitted record

whether there is any causal connection between these contractual
                                                                  29


violations and any damages to MTPC.   It is undisputed that the

work had been done prior to the certifications.   It also appears

from this record that the subcontractors, not MTPC, suffered the

consequences of the delayed payments by continuing to work

despite the payment delays.   The record before us, as the motion

judge recognized, contains no evidence that the delayed payments

or false certifications had an impact on or affected the

construction, the delays in the completion of the project

resulting in the withholding of liquidated damages, or the $10

million of extra work alleged in the REA.19   See Meehan, 404

Mass. at 438-439 (no causal connection between breach and

damages claimed).

     We conclude that resolution of these disputed factual

questions is necessary to determine whether equitable relief is

appropriate in the instant case.   The responsibility for the

delay, the amount of extra uncompensated work, and the presence

or absence of any causal connection between the intentional

breaches and any damage to MTPC are all relevant to a just

resolution of the quantum meruit claim.   If the delays were

caused by MTPC, G4S has performed and paid for $10 million in




     19The lack of impact on the construction appears to be
because of the patience and accommodation of the subcontractors
that put up with, and even suffered from, G4S's misconduct,
without complaining to MTPC or demanding direct payment as was
their right.
                                                                 30


extra work to complete the project, and the payment delays to

subcontractors and false certifications had no impact on the

project's construction or completion date, it would be

inequitable for MTPC to withhold compensation from G4S for the

reasonable value of its labor and materials in excess of the

amounts already paid to G4S.   Meehan, 404 Mass. at 447.   See

Harness Tracks Sec., Inc., v. Bay State Raceway, Inc., 374 Mass.

362, 367-368 (1978).

    c.   Fraud.   MTPC contends that its counterclaim against G4S

for fraud was improperly dismissed.   The motion judge sua sponte

dismissed MTPC's fraud claim against G4S.   She relied on Szalla

v. Locke, 421 Mass. 448, 454 (1995), in which this court held:

"Where the same acts cause the same injury under more than one

theory, duplicative damage recoveries will not be permitted."

Applying Szalla, the motion judge reasoned that "the conduct

that forms the basis of MTPC's fraud claim is precisely the same

as that which caused this Court to conclude that G4S had

necessarily forfeited its affirmative claims against MTPC.     As a

consequence . . . , [MTPC] no longer had to justify the $4

million it retained of the Contract balance; the upshot was that

it was effectively provided with an award that more than covered

any loss that it suffered as a result of paying G4S

prematurely."

     We agree that summary judgment on the fraud claim may be
                                                                    31


appropriate only under a duplicative damages analysis.     However,

"where the acts complained of . . . are factually separable and

distinguishable . . . , there is no error in permitting separate

recoveries for separable injuries."   Calimlim v. Foreign Car

Ctr., Inc., 392 Mass. 228, 236 (1984).   "Permitting awards under

several counts where claims and injuries are factually

distinguishable, but disallowing such recovery where they are

not, will serve to avoid over or under compensation."     Id.

     Here, there may be separable and distinguishable acts

forming the basis of recovery under the breach of contract and

fraud claims.   A fact finder could determine that the delayed

completion of the project could be the basis for the breach of

contract claim and the false certifications that subcontractors

were timely paid could be the basis for the fraud claim.     MTPC

withheld $4 million as separable recovery for the breach of

contract because of the delay, using the liquidated damages

provision to calculate the amount of the withholding.20    MTPC

additionally claims that the false certifications caused it to




     20The fact that the fraudulent certifications and delayed
payments to subcontractors also provide a basis for breach of
contract is not dispositive. If G4S was responsible for the
delays, an issue that cannot be decided on summary judgment,
those delays provided a much more straightforward basis for
calculating damages for breach of contract than the false
certifications.
                                                                   32


pay G4S prematurely, resulting in the loss of $1.67 million,

which it asserts is another injury for which it thus is entitled

to separable recovery.21   Whether this claim has merit and

whether such calculations of damages are correct require further

fact finding, but some recovery, at least for the loss of the

time value of money, may be justified.

     Whether the monetary loss for MTPC due to fraud is less

than the monetary loss due to breach of contract also should be

determined.   This appears to depend on who was responsible for

the delays; G4S's recovery, if any, under quantum meruit; and

whether the losses due to fraud claimed by MTPC have been

grossly inflated.   Whether the damages, if any, caused by the

false certifications are duplicative thus cannot be determined

on this record.   We therefore reverse the allowance of summary

judgment on the fraud claim.

     3.   Conclusion.   For the reasons discussed, we affirm the

summary judgment decision on the breach of contract claim and

reverse the summary judgment decision on the quantum meruit and




     21MTPC and G4S also dispute the amount of loss, asserting
it to be $1.67 million and $1,757.48, respectively. MTPC
calculated $1.67 million based on lost interest accrued at the
prime rate of 3.25 per cent per annum interest from the date of
each payment until June, 2, 2014, the date of MTPC's last
payment to G4S. G4S, in turn, asserts that lost interest based
on alleged late subcontractor payments would result only in
$1,757.48 based on a thirty-day yield of 0.22 per cent interest
calculated for only the period that the payment was late.
                                                                 33


fraud claims.   We remand the matter to the Superior Court for

proceedings consistent with this opinion.

                                   So ordered.
