Penn-America Insurance Co. v. Bay State Gas Co. ( 2019 )

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us
19-P-86 Appeals Court
PENN-AMERICA INSURANCE COMPANY1 vs. BAY STATE GAS COMPANY.2
No. 19-P-86.
Plymouth. October 10, 2019. - December 20, 2019.
Present: Wolohojian, Blake, & Englander, JJ.
Negligence, Adequacy of warning, Causation, Public utilities,
Statute of repose. Repose, Statute of. Practice, Civil,
Claim barred by statute of repose. Gas Company.
Civil action commenced in the Superior Court Department on
July 11, 2016.
The case was heard by Gregg J. Pasquale, J., on a motion
for summary judgment.
William E. Gericke, of Pennsylvania (Patrick J. Loftus,
III, also present) for the plaintiff.
Michael R. Byrne for the defendant.
BLAKE, J. Following a natural gas fire that caused
extensive damage to a building that Penn-America Insurance
1 As subrogee of King Street Realty Trust.
2 Doing business as Columbia Gas of Massachusetts.
2
Company (Penn-America) insured, Penn-America brought this
action, as subrogee for its insured (King Street Realty Trust),
against the building's natural gas supplier, Bay State Gas
Company, doing business as Columbia Gas of Massachusetts
(Columbia Gas). The primary issue before us is whether the
statute of repose bars Penn-America's claim that Columbia Gas
failed to maintain its more than fifteen year old equipment and
thereby caused the fire. On Columbia Gas's motion for summary
judgment, a judge of the Superior Court ordered judgment in
favor of Columbia Gas after concluding that Penn-America's claim
was time barred. Because we disagree, we vacate the judgment.
Background. We summarize the facts contained in the
summary judgment record in the light most favorable to Penn-
America. See Barrasso v. New Century Mtge. Corp., 91 Mass. App.
Ct. 42, 43 (2017). The history of this case dates back to 1996,
when Columbia Gas installed a natural gas service line for a
building located at 59 Lone Street in Marshfield (the building).
That installation included a riser pipe that came out of the
ground near the building and a gas meter fit that was attached
to the riser pipe through a high-pressure valve. The riser pipe
was not secured to the building or otherwise supported.
Columbia Gas continued to own this equipment even after it was
installed. Over the next two decades, Columbia Gas sometimes
had occasion to inspect, repair, or replace its equipment
3
located at the building, including once in 1998 when it repaired
or replaced the natural gas service line, and another time on
September 5, 2014, when Columbia Gas responded to a report of a
gas leak.
Then, a natural gas fire caused extensive damage to the
building on February 16, 2015, amidst record-setting snowstorms.
While the cause of the fire remains in dispute, there is
evidence that the weight of snow caused the gas meter fit to
break above the high-pressure valve, from which gas leaked and
then ignited. Penn-America brought this negligence action
alleging that, prior to the fire, Columbia Gas had occasion to
see how its equipment had been installed and had "fail[ed] to
detect and/or correct" problems associated with that
installation. In opposing Columbia Gas's motion for summary
judgment, Penn-America clarified that this portion of its claim
was based on Columbia Gas's continuing duty to maintain its
equipment in compliance with State and Federal regulations,
which required Columbia Gas to install supports for the riser
pipe no later than September 5, 2014. Penn-America further
alleged that Columbia Gas failed to warn of the dangers posed by
its incorrectly installed equipment and, in particular, that the
weight of snow and ice could cause its equipment to break.
Discussion. 1. Failure to maintain. Statutes of repose
are less forgiving than statutes of limitation and "strictly
4
[bar] actions that are not commenced within a defined period
after the occurrence of a key event, without attention to when
any injury was discovered, or when any cause of action accrued."
Barkan v. Zoning Bd. of Appeals of Truro, 95 Mass. App. Ct. 378,
388 (2019). While recognizing the hardship that this may impose
on plaintiffs, we nonetheless "enforce[] statutes of repose
according to their plain terms." Bridgwood v. A.J. Wood
Constr., Inc., 480 Mass. 349, 353 (2018). The statute of repose
at issue here, G. L. c. 260, § 2B, provides that "in no event
shall" an "[a]ction 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 . . .
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."
The parties' arguments with respect to G. L. c. 260, § 2B,
pertain solely to whether Penn-America's claim "aris[es] out of
any deficiency or neglect in the design, planning, construction
or general administration" of the installation of the natural
gas service line at the building.3 Columbia Gas contends that
3The parties do not dispute that Columbia Gas's equipment
constitutes an improvement to real property, that more than six
years have passed since "the opening of the improvement to use,"
5
its failure to correct any problems associated with the
installation of the natural gas service line was part of the
general administration of that installation and that, moreover,
this case is about an original design or construction defect
regardless of how Penn-America phrases its claim. Penn-America
responds that Columbia Gas had a continuing duty to maintain its
own equipment and that Penn-America's claim arises out of
Columbia Gas's breach of that duty versus any duties related to
the design or the construction of the natural gas service line.
We agree with Penn-America.
"[T]he Legislature's primary objective in enacting § 2B was
to limit the liability of architects, engineers, contractors,
and others involved in the design, planning, construction, or
general administration of an improvement to real property in the
wake of case law abolishing the long-standing rule that once an
architect or builder had completed his work and it had been
accepted by the owner . . . liability was cut off as a matter of
law." Stearns v. Metropolitan Life Ins. Co., 481 Mass. 529,
533-534 (2019). See Klein v. Catalano, 386 Mass. 701, 708
(1982). These cases greatly increased the liability of those
involved in the construction industry, as injuries frequently do
not occur until many years after a construction project is
or the "substantial completion of the improvement and the taking
of possession for occupancy by the owner." G. L. c. 260, § 2B.
6
completed. Id. In this respect, § 2B serves a "well recognized
public purpose." Id. at 709. It prevents architects,
engineers, contractors, and others involved in the construction
industry from being "subject to possible liability throughout
their professional lives and into retirement," when, perhaps,
"evidence has been lost, memories have faded, and witnesses have
disappeared" (quotation and citation omitted). Id. at 708-709.
General Laws, c. 260, § 2B, thus applies to any "tort for
damages arising out of any deficiency or neglect in the design,
planning, construction or general administration of an
improvement to real property." This language "contemplates the
occurrence of three phases to any improvement to real property:
the design phase, the construction phase, and the administration
phase following the completion of construction." Coca-Cola
Bottling Co. of Cape Cod v. Weston & Sampson Eng'rs, Inc., 45
Mass. App. Ct. 120, 126 (1998). All three phases, including the
general administration phase, are part of the same continuous
construction project.4 See id. at 127 (noting that "general
administration" does not include "plumber who negligently
repairs a plugged soil line long after the last punch list was
satisfied and all professionals paid and released"). Viewed in
4 We note that the Legislature's objective in enacting § 2B
would not be served by including within general administration
acts that occur years later.
7
this context, "[t]he purpose of the [general administration]
phase is to remedy design or construction problems which may,
and frequently do, emerge following construction." Id. at 126.
In our view, Penn-America's claim is not barred here
because the gravamen of its claim is not the design, planning,
construction, or general administration of the natural gas
service line. Rather, the gravamen of Penn-America's claim is
the failure of Columbia Gas to properly maintain the service
line -- its own property -- to appropriate safety standards.
More specifically, Penn-America does not allege that
Columbia Gas should have installed supports for the riser pipe
back in 1996 or 1998 when the natural gas service line was first
installed and then repaired or replaced. Nor does Penn-
America's claim turn on whether the lack of supports would have
been considered a design or construction defect back then.
Rather, Penn-America claims that Columbia Gas should have
installed supports for its own riser pipe years later, after
pertinent State and Federal regulations, as well as Columbia
Gas's own internal standards, may have changed.5 By that point
5 As noted in Columbia Gas's brief, it does not dispute for
summary judgment purposes that the "State and Federal
regulations cited by Penn-America support the imposition of such
a 'continuing duty.'" To the extent that Penn-America's claim
turns on issues regarding those regulations and Columbia Gas's
own internal standards, such as when they went into effect and
what they required on any particular date, those issues are not
before us at this time and we do not address them.
8
in time, even the general administration phase of the
installation had concluded.
This case is very different from Coca-Cola Bottling Co. of
Cape Cod, 45 Mass. App. Ct. at 127, the only published decision
to have addressed the meaning of "general administration." In
that case, an engineering firm spent more than five years
immediately following construction of a wastewater treatment
plant trying to "remedy the unceasing difficulties that arose in
the operation of the plant virtually from the day it opened for
use." Id. Unlike in Coca-Cola Bottling Co. of Cape Cod, and
construing the summary judgment record in the light most
favorable to Penn-America, there is no basis for us to conclude
that Columbia Gas's failure to install supports for the riser
pipe no later than September 5, 2014, was part of the same
continuous construction project that began in 1996.
We are also unpersuaded by Columbia Gas's argument that
this case is about an original design or construction defect
regardless of how Penn-America phrases its claim. Section 2B
requires us to look at the act that serves as the basis for
liability. See Dighton v. Federal Pac. Elec. Co., 399 Mass.
687, 694, cert. denied, 484 U.S. 953 (1987) (§ 2B "extend[s]
protection to persons allegedly responsible for [specified]
acts"). Unlike many of those involved in the construction
industry who have no ties to an improvement once the general
9
administration phase has concluded, Columbia Gas continued to
own the equipment at issue here. As the owner of that
equipment, Columbia Gas had additional duties that a nonowner
would not have had and may "be liable for damages . . . on a
basis independent of a claim of negligence in the design or
construction." Sonin v. Massachusetts Turnpike Auth., 61 Mass.
App. Ct. 287, 290 (2004). One such basis for liability is
Columbia Gas's failure to maintain its equipment. See id.
(noting that in Milligan v. Tibbetts Eng'g Corp., 391 Mass. 364,
365 [1984], "plaintiff was allowed to proceed against a
defendant municipality on a claim of negligent maintenance of a
roadway even though its claims of negligent design against the
defendant engineering firm was barred by § 2B"). Thus, the act
that may serve as the basis for Columbia Gas's liability is its
failure to maintain its equipment to existing safety standards.6
By its own express terms, § 2B does not apply to such acts.
See, e.g., MBA Enters. v. Northern Ill. Gas Co., 307 Ill. App.
3d 285, 287-289 (1999) (similar statute did not apply to claim
that defendant failed to maintain gas piping system that had
defects dating back to its installation).
6 Columbia Gas further argues that there is no evidence that
it negligently maintained its equipment. This argument ignores
the main factual issues in this case: what supports Columbia
Gas should have installed for the riser pipe and when they
should have installed them.
10
2. Failure to warn.7 As to Penn-America's failure to warn
claim, Columbia Gas argues that it warned customers of the need
to keep their gas meters clear of snow and ice and that there is
no evidence to support Penn-America's theory of causation that
the weight of snow or ice caused the leak. The summary judgment
record, however, is replete with genuine issues of material
fact. See, e.g., Cargill v. Harvard Univ., 60 Mass. App. Ct.
585, 597-604 (2004). Whether the content and the manner of
distribution of Columbia Gas's warnings were sufficient are jury
questions. See Fiorentino v. A. E. Staley Mfg. Co., 11 Mass.
App. Ct. 428, 436 & n.8 (1981). Some of those warnings, at
least one of which indicates that "excessive snow weight can
result in damage," also support Penn-America's theory of
causation. This warning, combined with other evidence in the
summary judgment record, creates a genuine issue of material
fact as to causation. In particular, a note from the Columbia
Gas employee who responded to the fire states that "the pressure
[of snow] may have caused the [gas meter] fit to break on the
top of the [high-pressure valve]," and several photographs show
7 In the circumstances, § 2B does not bar this claim,
either. Cf. Sonin, 61 Mass. App. Ct. at 290 (where plaintiff
brought claims for negligent design and failure to warn against
property owner who participated in designing improvement, "trial
judge properly dismissed the plaintiffs' claims for negligent
design [due to the applicability of § 2B] and properly submitted
to the jury the plaintiffs' claims for failure to warn").
11
the amount of snow around Columbia Gas's equipment.8 Thus, the
judge improperly allowed summary judgment in favor of Columbia
Gas.
Judgment vacated.
The photographs, while taken after someone had cleared a
8
path to Columbia Gas's equipment following the fire, show the
amount of snow around that equipment. We also note that Penn-
America disclosed that it had a natural gas expert who was
prepared to testify as to causation. While Columbia Gas argues
that this expert's opinion should not be considered for summary
judgment purposes, we decline to address the argument as we
think there is sufficient evidence of causation to survive
summary judgment regardless.