What’s the Gist? Massachusetts Court Looks Past the Labels to the Gist of the Plaintiff’s Allegations to Find Claims Barred by the Statute of Repose

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In Lennar Northeast Props. v. Barton Partners Architects Planners, Inc, C.A. No. 16-cv-12330-ADB, 2021 U.S. Dist. LEXIS 11800, the United States District Court for the District of Massachusetts considered whether a property owner’s construction defect claims against a contractor were barred by the six-year statute of repose for improvements to real property. Massachusetts’ statute of repose, Mass. Gen. Laws ch. 260, § 2B, bars tort actions against those involved in the design, planning, construction or general administration of an improvement to real property more than six years after the earlier of the dates of (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of possession or occupancy by the owner. Finding that, despite the fact that the plaintiff’s actions were labeled as contract, breach of warranty and consumer protection act claims, the complaint alleged actions sounding in tort. Thus, the court applied the statute of repose to these claims.

The Lennar case arose from alleged construction defects to the plaintiff’s condominium buildings located in Hingham, Massachusetts. Some of the buildings within the condominium complex were constructed in 2012, including Buildings 3 and 20. As part of the construction project, the plaintiff, Lennar Northeastern Properties (Lennar), contracted with defendant F.M. Home Improvement, Inc. (F.M. Home) to perform work, including the installation of siding, trim and sheathing around the exterior of the buildings. The contract between Lennar and F.M. Home included an indemnification provision in which F.M. Home agreed to indemnify Lennar for damages arising from their work. The Occupancy Certificates for Buildings 3 and 20 were issued on November 1, 2012.

After Buildings 3 and 20 were completed, Lennar discovered deficiencies in the installation of the siding, trim and sheathing around the exterior of the buildings, which resulted in water intrusion into the buildings. In 2016, the plaintiff filed its action against the architect and engineer for the aforementioned defects within the condominium buildings. On April 29, 2019, Lennar amended its complaint to add F.M. Home as a defendant. Lennar asserted counts for negligence, breach of contract, breach of warranty and violation of Massachusetts General Laws Chapter 93A, Massachusetts’ consumer protection act.

All counts alleged, in similar fashion, that F.M. Home deviated from the standards of care applicable to reasonably prudent members of the construction profession. For instance, the plaintiff’s breach of contract claim – without citing a contract provision requiring indemnification – essentially asserted that the defendant breached its duty to perform with reasonably expected skill. Similarly, the plaintiff’s warranty count alleged that the defendant failed to perform its work in a workmanlike manner and to use reasonable and appropriate care and skill. With respect to the plaintiff’s 93A claim, the plaintiff alleged that F.M. Home failed to properly install siding and trim, which was akin to a negligence violation. F.M. Home filed a motion for summary judgement on grounds that all of Lennar’s claims related to Buildings 3 and 20 were essentially tort claims and thus, were barred by the six-year statute of repose.

The Lennar court acknowledged that the statute of repose does not preclude an action for contractual indemnification, nor does it preclude other non-tort claims. However, the court also noted that when determining whether the statute of repose applies to a particular claim, a court is directed to “read the complaint by its gist, rather than its label.” In other words, a court must look at the specific allegations of each count to determine if they sound in tort.

The court reviewed the breach of contract, breach of warranty and 93A counts and found that each of them essentially mirrored tort claims because they alleged that F.M. Home failed to perform its contract under the standards of care for their industry. None of these counts relied on any specific standards set forth by the contract between Lennar and F.M. Home, but rather relied on duties imposed by law. The court granted partial summary judgment to F.M. Home, dismissing all counts as they relate to Buildings 3 and 20, which were substantially completed more than six years prior to the filing of the amended complaint.

While the Lennar court acknowledged that there was an indemnification clause in the contract, the court’s analysis as to the applicability of the statute of repose to the contract and warranty claims was limited solely to the allegations in the pleadings. The Lennar case establishes that in Massachusetts, a non-tort claim must be pled with sufficient and precise detail to avoid appearing tort-like and falling under the purview of the statute of repose. This case reminds us of the importance of precisely setting forth the standards that support the claims being asserted.

This entry was posted in Construction Defects, Litigation, Massachusetts, Statute of Limitations-Repose, Subrogation and tagged , , , , , .