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Monday, September 10, 2018

SJC Imposes 6-Year Statute of Repose on Construction Claims Brought Under Chapter 93A

 
When the unit owners of a condominium take control of the condominium board of trustees, one of the first tasks that the new board should undertake is to
investigate whether any construction defects exist in the condominium common areas. Examples of such defects may include water infiltration around windows or balconies, storm water drainage issues, failure to meet building code requirements, and other construction problems that should be corrected. The board’s investigation typically involves hiring a licensed engineer to perform an inspection of the common area and make findings about the conditions, including whether any construction defects exist. When construction defects are found, the board will often make a claim against the condominium developer seeking to recover the costs to correct the defects. If the developer refuses to pay, the board will have to consider whether to file a lawsuit.

A potential trap for the unwary includes the time limits for construction defects claims that are imposed by the applicable Massachusetts statutes.

A potential trap for the unwary includes the time limits for construction defects claims that are imposed by the applicable Massachusetts statutes. Generally speaking, under G.L. c.260, such claims are limited to three years after the claim “accrues.” Under the “discovery rule,” the claim accrues when the plaintiff knows or reasonably should have known that the defect exists. If a condominium board learns of a defect in a common area but waits more than three years to file a complaint in court, the lawsuit will could be dismissed as time-barred under the statute of limitations. However, there is a cut-off point at which any construction defects claim, no matter when discovered, will be time-barred. Under what is called the “statute of repose” (G.L. c. 260, § 2B), no claim may be filed in court after six years have elapsed from the earlier of: “(1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of possession for occupancy by the owner.” A court may find that the statute of repose is triggered even during the period that the condominium developer is in control of the condominium trust. Therefore, when the unit owners take control of the condominium trust, the new board must act quickly to determine whether defects exist in any common area to avoid the potential pitfall of the statutes of limitation and repose.

A recent court decision by Massachusetts Supreme Judicial Court emphasizes the importance of acting with urgency in construction defects cases. In Bridgwood v. A.J. Wood Construction, Inc., issued last August, the Court considered a claim brought by a homeowner against a contractor for construction defects. The homeowner, Bridgwood, argued that his claim was not barred by the six-year statute of repose because it was not merely a claim for negligence—rather, it was a claim for violation of the Massachusetts Consumer Protection Act, G. L. c.93A (“Chapter 93A”).1 The Court disagreed and concluded that a claim under Chapter 93A for construction defects is in effect the same as a negligence claim and therefore subject to the statute of repose. Accordingly, the Court affirmed the trial court’s dismissal of Bridgwood’s lawsuit for being time-barred under the statute of repose because it was filed more than six years after the claim accrued. The Court explained that the purpose of the statute of repose is to “protect contractors from claims arising long after the completion of their work” and will be enforced “despite the hardship [it] may impose on plaintiffs.”

The Bridgwood decision is notable in that it is a split decision, with four justices voting in favor of affirming the dismissal of the plaintiff’s case, and three justices voting against it. In a thoughtful dissenting opinion written by Chief Justice Gants, the dissenters opined that no provision of Chapter 93A suggests that the Massachusetts Legislature intended claims under its provisions to be limited by the statute of repose. Judge Gants asked, “Why would the Legislature seek to protect those who engaged in such unfair and deceptive acts from [Chapter] 93A actions brought within the statute of limitations by granting them a statute of repose that could potentially shield such violations from any private cause of action by injured consumers?”

In a footnote to the Bridgwood decision, the majority opinion invites the Massachusetts Legislature to amend the statute of repose to exclude construction defects claims brought under Chapter 93A, if that is what the Legislature actually intended. It will be interesting to see if the Legislature reacts to the decision by amending the statute of repose. For now, the majority opinion in the Bridgwood decision is the law, and claims under Chapter 93A that involve construction defects are subject to the six-year statute of repose.

The above-referenced case is captioned Terry Bridgwood v. A.J. Wood Construction, Inc., et al., SJC-12352 (Mass. SJC, August 29, 2018).

Associated with the Braintree firm of Moriarty, Troyer & Malloy, Thom Aylesworth has over twenty years of practice experience in Massachusetts and New Hampshire. He represents condominiums, corporations, and individuals in a wide range of matters with a primary focus on complex real estate litigation. His specific areas of practice include construction defects, condominium enforcement, zoning and land use litigation, beach rights, and other property disputes.  His email address is taylesworth@lawmtm.com

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