In D’Allesandro v. Lennar Hingham Holdings, LLC, C.A. No. 17-cv-12567-IT, 2019 U.S. Dist. LEXIS 185874, the United States District Court for the District of Massachusetts heard a case against a general contractor and its related entities involved in the construction of a multi-phase project. The court held that in this context, completion of the “improvement” triggering the six-year statute of repose for the plaintiffs’ negligence and breach of implied warranty claims was the whole project, rather than each individual phase.
The action arose out of the construction, marketing, sale, and management of the Hewitts Landing Condominium (the Condominium) project. Ultimately the project was constructed over 24 separate phases.
On June 25, 2010, the Master Deed of the Condominium was recorded with the Plymouth County Registry of Deeds and the Condominium Trustee established the Condominium Trust. In December 2015, the Condominium unit owners took control of the Condominium Trust. On November 3, 2017, the Trustees of the Condominium Trust brought their action, alleging a number of deficiencies and code violations in the design and/or construction of the common areas of the buildings.
The defendants moved for partial summary judgment, arguing that with respect to six of the buildings, the plaintiffs’ claims were barred by Massachusetts’ statute of repose. The statute bars tort claims arising out of any deficiency or neglect in the design, planning, or construction of an improvement to real property commenced more than six years after 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. For the six buildings at issue, the architect signed affidavits of substantial completion more than six years before the plaintiffs filed their action. For five of these buildings, the Town of Hingham issued certificates of occupancy for the buildings and all of their units more than six years before the plaintiffs filed their action.
The court found that the “improvement” was the project as a whole. The court reasoned that the units in the different buildings were thought of as part of entire project from the onset, that the same general contractor and architect were used throughout, and that the project was legally defined as a single condominium with a single Trust maintaining exclusive control over the common and limited common elements of the entire condominium. Therefore, the repose period began to run upon completion of the entire improvement, not when the architect or township signed off on the individual buildings.
The question before the court was not whether construction of an individual building or improvement could trigger the statute of repose, but whether the construction of a portion of a project constituted completion of an improvement, thereby triggering the repose period while the overall project remained underway. Here, the same contractor and architect oversaw the project from start to finish and the project had been completed 2½ years before the suit was filed. Therefore, the court found that the concerns addressed by the statute of repose–that the contractor would be subject to unforeseen liability for an extended period, the possibility that documents/witnesses would no longer be available, and that memory of witnesses would have faded–were not applicable.
Based on D’Allessandro, when faced with phased construction in multi-phase projects in Massachusetts, subrogation professionals should always be mindful of the specific circumstances of their claim.
Editor’s Note: On January 16, 2020, the District Court certified the question of when the statute of repose started to run for actions related to the common elements to the Massachusetts Supreme Judicial Court.
This article was originally published on SubrogationStrategist.com (a blog hosted by White and Williams, LLP) on January 7, 2020. It was reprinted, in abbreviated form, with permission. The full article in its original form can be found here.
Kyle Rice (LAW ’19) is an Associate at White and Williams, LLP, where he represents major property insurers focusing on complex property damage cases caused by construction and/or product defects.