The University filed a complaint against a HVAC contractor based on faulty workmanship. Deciding that the complaint was barred by the state statute of repose, the trial court granted summary judgment to the contractor. This was affirmed on appeal – with the court applying the statute not only to the negligence count of the complaint, but also to the claims for breach of contract and indemnification. The university filed its complaint about 4 months after the six-year time limit expired. On appeal the court dealt with whether the breach of contract and indemnification claims were properly dismissed. Finding there were no express warranties in the contract, the court concluded that the defendants did not promise “specific results”. Contract provisions merely required that the ventilation system operate and “did not require it “operate so as to deliver a specific result.” All the contract provisions “required nothing more than compliance with the implied duty for reasonable care.” With regard to the indemnity count the court concluded that the plaintiff was seeking on first-party indemnity damages and that no damage to other property of either the university or others was alleged. Concluding that the entirety of the complaint was based on negligent performance, the court applied the statute of repose to all counts. Commonwealth of Massachusetts v. Adams Plumbing & Heating, Inc., (Mass. 22-P-426, Memorandum and Order)
This is an interesting case in which the plaintiff attempted to avoid the consequences of the statute of repose by asserting distinct causes of action for breach of contract and indemnification.
After the dining hall opened for use in September 2024, the University discovered that the kitchen’s duct work had collapsed and had other deficiencies such as seam leaks, joint separations, duct panel damage, and irregularities with the control systems. It was not until December 2020 (six (6) years and three (3) months later that the University filed suit for negligence, breach of contract and indemnification.
Massachusetts has a statute of repose that places an absolute six-year time limit on filing suit. The statute eliminates a cause of action after six years regardless of whether an injury has occurred or a cause of action has accrued as to that date. The court explained that although the statute applies specifically to actions of tort (such as negligence) “a plaintiff may not escape the consequences of the statute by recasting a negligence claim in the form of another claim” – such as breach of contract or indemnity.
To determine whether the statute of repose must be applied, the court looks to the nature or “gist” of the claim. In this case, the court stated that there was no dispute that the statute barred the late negligence claim. The only issue on appeal was whether the trial judge properly applied that statute to bar the breach of contract and indemnity claims.
Breach of Contract. The University argued that the defendants breach express warranties, and that such warranties are contractual in nature and survived the statute of repose period. Warranty claims are indeed outside the scope of the statute but here the University failed to identify any express warranties in the contract. The court reviewed the contract and found no instance of where the defendants “guaranteed a heightened level of workmanship by promising a specific result.” Nor did the defendants agree “to comply with technical specifications in a written contract.” “The plaintiff may not rely on general contract provisions that impose the implied duty of reasonable care, as such provisions do not guarantee a heightened level of workmanship.”
The University argues that the defendants agreed to comply with technical specifications in their written contracts. But the University failed to identify “with specificity any problems involving violations of technical specifications versus problems that amounted to shoddy work in violation of implied duty of reasonable care.” For this reason, the court focused on whether any of the defendants “promised specific results.” The court considered case precedent where the court previously considered situations in other matters where parties made “an explicit promise that the system would operate so as to deliver a specific result, and those promises imposed a heightened standard of care.”
In this particular case, the University’s contract provisions set forth the nature of the work to be completed and required nothing more than compliance with the implied duty of reasonable care. “The provisions required that the ventilation system operate – a basic contract expectation – and did not require that the ventilation system operate so as to deliver a specific result.” “The provisions also required that the ductwork be assembled and installed in accordance with recognized industry practices, which on its face required nothing more than compliance with the implied reasonable care” – meaning that it must not be negligently performed. This did not create a warranty and the breach of contract claims were, therefore, held to be properly dismissed as barred by the statute of repose.
Indemnification. The University argued that its indemnity claims were contractual in nature and, therefore, survived the statute of repose. Again, because the court found the gist of the claim sounded in negligence, it enforced the statute of reposed to bar the indemnity claim. The court discussed the difference in first party indemnity and third party indemnity but concluded that was not relevant to its decision making process here.
There as no injury separate and distinct from the shoddy work. The issue was simply whether the defendants were negligent. “That is precisely the sort of claim that the statute or repose bars….”
Risk Management Comments. The contract in question didn’t contain language creating any contractual obligations or warranties, but instead required only that the work be performed “in accordance with recognized industry standards.” The court called that a duty of “implied reasonable care.” When reviewing contracts it may be wise to clearly define the standard of care that will be required and to further disclaim warranties and guarantees. For example, we often insert the following clause into design professional contracts:
“Consultant shall perform its services consistent with the professional skill and care ordinarily provided by firms practicing in the same or similar locality under the same or similar circumstances (hereinafter the “Standard of Care”) and expressly disclaims all express or implied warranties and guarantees with respect to the quality of performance of professional services.”
Contractors and design professionals need to be aware of any contractual obligations committing them to detailed compliance with performance criteria. The court in this case explains that had this contract contained such performance criteria the University may very well have been able to sue the defendants for breach of contract beyond the time allowed by the statute of repose for negligence actions.
NOTE: This is a summary decision by the Massachusetts Appeals Court and such decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. The decision may be cited for its persuasive value but not as binding precedent.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 25, No. 2 (February 2023).
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