Tuesday, September 25, 2018

SJC Rules on Statute of Repose Relating to Construction Defects


By Hugh J. Gorman III

Contractors can breathe a sigh of relief following the recent SJC decision clarifying the statute of repose
and its applicability to claims asserted under M.G.L. c.93A relating to building code violations and construction defects.

The Bridgewood v. A.J. Wood Construction decision (Bridgewood v. A.J. Wood Constr., Inc., No. SJC-12352, 2018 WL 4100644, at *2 (Mass. Aug. 29, 2018)) impacts the rights of consumers to bring an M.G.L. c.93A action against builders and protects builders from eternal liability for past projects.  The Bridgewood case came about after a customer’s home sustained serious damages as a result of an electrical fire.  The homeowner, Bridgewood, sued the construction company which, fifteen years prior, had allegedly performed faulty electrical work on her house, resulting in the fire.  Even though the homeowner subsequently discovered that the contractor had failed to obtain proper permits and had violated state and federal building codes in performing its work, the Court found that the six-year statute of repose barred any claims for unfair or deceptive business practices under M.G.L. c. 93A.

While the homeowner’s claims logically support a 93A cause of action (as a per se violation of 93A due to building code violations), the Court determined that the statute of repose rendered the claim invalid, ruling that the statute of repose provides a “substantive right to be free from liability after a given period of time has elapsed from a defined event.” This stands in contrast to the more familiar statute of limitations, which is a procedural limitation on the amount of time permitted to lapse before a cause of action can be commenced. Under the statute of repose, if a claim for damages is not asserted within six years of either the “opening of the improvement for use” or “substantial completion of the improvement and possession by the owner,” then the cause of action is extinguished.  In Bridgewood, the SJC held that a construction liability claim that would otherwise meet the requirements of 93A never legally arises if it occurs outside of the six-year window established by the statute of repose.

This decision has significant implications for contractors and their customers.  Even where there is clear negligence or deceptive business practices on the part of the contractor, customers are barred by the statute of repose where the injury is discovered and the claims are asserted beyond the six-year period of repose.

Chair of Prince Lobel Tye LLP’s construction law group, Hugh Gorman focuses his practice on construction law, creditors’ rights, and general business litigation.  Hugh can be contacted by email at hgorman@princelobel.com.  Thanks and appreciation to law clerk Lauren Koslowsky (Northeastern School of Law, 2019), for her assistance with this article.

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