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September 5, 2018

Legal Update
Dylan Sanders

SJC extends the protection of the statute of repose to violations of the home improvement contractor law asserted under Chapter 93A

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The Massachusetts Supreme Judicial Court has ruled that claims for unfair and deceptive acts against contractors under the state’s consumer protection act–Chapter 93A–where they are premised on a breach of the home improvement contractor law–Chapter 142A–must be brought within six years of completion of the project. This six year window is absolute, even where a consumer has no reason to suspect any wrongdoing, or where the defects have been intentionally concealed. The rare split decision, Bridgwood v. A.J. Wood Construction, Inc., is a significant win for the construction industry. And it is the first time that the SJC has held that the six year “statute of repose” that limits common law construction defect claims for negligence and breach of the implied warranty of habitability also limits claims under Chapter 93A alleging violations of the home improvement contractor law.

The decision, authored by Justice Cypher, was not unanimous. A dissent, by Chief Justice Gants, joined by Justices Lenk and Budd, argued that the Court was in effect creating a statute of repose for Chapter 93A claims premised on Chapter 142A violations which the Legislature had implicitly chosen not to do when it enacted either statute.

The Electrical Work and Fire

In 2001, the defendant contractors performed electrical work during renovations of the plaintiff’s Newburyport home. The electrical work allegedly was closed (i.e., covered by the finished construction) without first being examined as required by the local building inspector as required. The contract that governed the contractors’ work required that it be done in compliance with applicable national, state and local building codes. In addition, a section of the state’s home improvement contractor law, Chapter 142A, § 17, prohibits contractors and subcontractors from violating state and local building codes. Chapter 142A, § 17 further provides that a violation of Chapter 142A, including a failure to comply with building codes, constitutes an unfair and deceptive act under Chapter 93A, the state consumer protection act.

In January 2012, more than 10 years after the renovations to the house were completed, a fire damaged plaintiff’s home. Plaintiff brought suit against the contractor and its electrical subcontractor, alleging that defects in the 2001 electrical work were the cause of the fire, that the electrical work violated the applicable building codes, and for these and other reasons the contractors had violated Chapter 142A and were therefore liable to the plaintiff for unfair and deceptive acts under Chapter 93A.

Statutes of Repose v. Statutes of Limitation

The right to bring a lawsuit may be limited in time in two different ways:  A statute of limitation governs when an action must be commenced based on when a cause of action accrues; when an action accrues often depends on when a plaintiff knew or should have known that they were injured or had a claim. A statute of repose, on the other hand, bars a claim after a statutorily specified period of time, regardless of when the plaintiff was injured or when the plaintiff should have known that they had a claim, and regardless of whether it leaves a plaintiff with absolutely no remedy. Not every claim is subject to a statute of repose.

In 1968, the Massachusetts Legislature enacted both a statute of limitations and a statute of repose for construction defect claims sounding in tort. Chapter 260, § 2B provides that:

Actions of tort for damages arising out of any deficiency or neglect in the design, planning, construction or general administration of an improvement to real property . . .  shall be commenced only within three years next after the cause of action accrues; provided, however, that in no event shall such actions be commenced 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 for occupancy by the owner.

(Emphasis supplied.) In sum, common law tort claims such as negligence or breach of the implied warranty of habitability must be brought within three years of when the cause of action accrues (the statute of limitations), but in any event no later than six years of the opening of the improvement to use or its substantial completion (the statute of repose).

In 1991, the Legislature enacted Chapter 142A, the home improvement contractor statute.  As noted, among other things Chapter 142A provides that a violation of Chapter 142A, § 17, including a failure to comply with building codes, constitutes an unfair and deceptive act under Chapter 93A, the state consumer protection act.  Claims under Chapter 93A are subject to a four year statute of limitations found in Chapter 260, § 5A, meaning that a plaintiff must file a lawsuit within four years of the date that they knew, or should have known, that they had been injured or otherwise had a consumer protection claim. Chapter 260, § 5A, however, does not include a statute of repose for consumer protection claims under Chapter 93A, an aspect that created the issue addressed in Bridgewood.

The Decision

The electrical work at issue in Bridgewood had been performed in 2001; the fire occurred in January 2012, and plaintiff filed suit against the contractors in January 2016. The claim was brought within the four year statute of limitations for a Chapter 93A claim, since the plaintiff had no notice prior to January 2012 that he might have a claim.

The question facing the SJC, therefore, was whether claims brought under Chapter 93A that were premised on a violation of Chapter 142A, § 17 were barred by the six year statute of repose in Chapter 260, § 2B, notwithstanding that Chapter 260, § 5A, the statute of limitations governing Chapter 93A claims, does not include a statute of repose. Plaintiff Bridgwood argued that Chapter 93A was “sui generis,” meaning that Chapter 93A claims stand on their own separate and apart from those common law causes of action against contractors – such as negligence or breach of the implied warranty of habitability – that are subject to the statute of repose in Chapter 260, § 2B.

The majority disagreed, and found that Chapter 260, § 2B applies to Chapter 93A claims that are premised on violations of Chapter 142A, § 17, the home improvement contractor statute, at least where, in the SJC’s description, the “gist” of such claims resembles common law tort claims. The court drew support from several appellate decisions (mostly Appeals Court decisions) that, at least in the majority’s view, established an analytical precedent for looking beyond the Chapter 93A label that a plaintiff gives a claim to see whether the claim actually was a claim that sounded in tort. Since, in the majority’s view, plaintiff’s Chapter 93A claim was no different than a claim for negligence or breach of the implied warranty of habitability, the court held that the Chapter 93A/142A claim was barred by the same statute of repose that would have barred plaintiff from bringing common law claims after six years.  In essence, the majority rejected plaintiff’s argument that a Chapter 93A/142A claim was sui generis, at least where the claim was no different than a negligent claim.

The Court also appears to have been persuaded, at least in part, to extend the statute of repose to Chapter 93A/142A claims by the argument that plaintiffs should not be able to escape the statute of repose simply by relabeling a common law claim as a Chapter 93A/142A claim. The Legislative intent behind enacting the statute of repose was to give contractors, architects and others involved in construction finality after a certain point in time that they would not face liability and litigation costs arising from past work, particularly when memories have faded and evidence lost. Otherwise, as the court has said elsewhere, those involved in construction could face liability from past projects “throughout their professional lives and into retirement.” Said the Court in Bridgewood, had the Legislature intended to remove the shield of the statute of repose “and expose contractors to indefinite liability for claims arising long after the completion of their work, it would have done so explicitly.”

The Dissent

Justice Gants’ dissenting opinion was built on four observations: First, Chapters 93A and 142A were, of course, statutes that provided independent statutory remedies to consumers separate and apart from common law remedies available in tort, a fact that the Legislature was well aware of when it enacted these independent statutory remedies.  Second, Chapters 93A and 142A were enacted after Chapter 260, § 2B, which established the statutes of limitation and repose for common law tort claims. Third, Chapter 260, § 5A, which governed the statute of limitations for Chapter 93A claims, was also enacted after § 2B, and did not include a statute of repose. Finally, the Court was bound to apply the four year statute of limitations found in Chapter 260, § 5A to Chapter 93A/142A claims, not the three year statute of limitations found in Chapter 260, § 2B. And, Gants wrote, “[i]t does not make sense to exempt c. 93A claims from the statute of limitations in § 2B and yet still subject such claims to the statute of repose in § 2B.”

These observations led Justice Gants and the other dissenters to a very different interpretation of legislative intent, namely, that the Legislature intended to exclude Chapter 93A/142A claims from Chapter 260, §2B’s statute of repose. In any event wrote Gants:

“Where the Legislature did not choose to include a statute of repose under G. L.c. 260, § 5A, to shield those who engaged in unfair and deceptive acts in violation of c. 93A from six-year old claims that are timely brought under the statute of limitations, it is not the appropriate role of this court to do it ourselves.”

Takeaway

The bottom line is that consumers employing home improvement contractors now have six years from the completion of the work to bring any claims arising from the work. Home improvement contractors, on the other hand, have additional security that they will not face liability and litigation expenses based on ancient work. In many cases, six years will be sufficient time for any alleged defects to manifest themselves.  Where it is not, consumers might well be advised to consider requiring express warranties for the work, since such express warranties would not be subject to the statute of repose.

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