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Grand Manor Condominium Association & Others v. City of Lowell

Supreme Judicial Court of Massachusetts, Middlesex

January 19, 2018


          Heard: October 5, 2017.

         Civil action commenced in the Superior Court Department on October 10, 2012. The case was tried before Kathe M. Tuttman, J.

         The Supreme Judicial Court granted an application for direct appellate review.

          Alan B. Rubenstein (Stacie A. Kosinski also present) for the plaintiff.

          C. Michael Carlson, Assistant City Solicitor (Rachel M. Brown, Assistant City Solicitor, also present) for city of Lowell.

          Present: Gants, C.J., Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

          KAFKER, J.

         The owners of condominium units at Grand Manor and the Grand Manor Condominium Association (collectively, plaintiffs) filed suit against the city of Lowell (city) on October 10, 2012, for the release of hazardous materials at the Grand Manor condominium site. The plaintiffs brought claims for response costs under G. L. c. 21E, § 4A, and for damage to the plaintiffs' property under G. L. c. 21E, § 5 (a.) (iii) .[2] A jury found that the plaintiffs' claim under § 5 (a.) (iii) was barred by the applicable statute of limitations, G. L. c. 21E, § 11A (4). The plaintiffs appealed, and we granted their application for direct appellate review. On appeal, the plaintiffs argue that (1) the statute of limitations did not begin to run until the plaintiffs knew that the property damage was permanent; and (2) the trial judge erred in instructing the jury that the plaintiffs had the burden of persuasion to show that they filed suit within the statute of limitations. The city contends that the plaintiffs needed to know only that there was environmental damage and that the defendant was the source of the damage, not that the damage was permanent, for the limitations period to begin to run. The city also contends that the jury were properly instructed.

         We conclude that a plaintiff must be on notice that he or she has a claim under § 5 (a.) (iii) before that claim may be time barred, and that such notice is separate from a plaintiff's notice that environmental contamination has occurred. A plaintiff has notice of a claim under § 5 (a.) (iii) once the plaintiff learns whether or not remediation and response costs will fully compensate the plaintiff for the harm he or she has suffered, as well as the identity of the party who caused such harm. This will not ordinarily occur until the plaintiff learns that the damage to his or her property is not reasonably curable by the remediation process. As we conclude as a matter of law that the plaintiffs could not know that they had a claim under § 5 before June 6, 2012, when the city filed its Phase II/Phase III report pursuant to the Massachusetts Contingency Plan, the statute of limitations issues should not have been presented to the jury. We therefore vacate the judgment below and remand this case for further proceedings consistent with this opinion.

         1. Background.

         a. Overview of G. L. c. 21E.

         The Massachusetts Oil and Hazardous Material Release Prevention Act, G. L. c. 21E, was enacted both "to compel the prompt and efficient cleanup of hazardous material and to ensure that costs and damages are borne by the appropriate responsible parties." Taygeta Corp. v. Varian Assocs., Inc., 436 Mass. 217, 223 (2002). The Department of Environmental Protection (department) has promulgated a set of regulations known collectively as the Massachusetts Contingency Plan (MCP) that detail specific requirements for complying with the G. L. c. 21E remediation process. See id., citing G. L. c. 21E, § 3, and 310 Code Mass. Regs. §§ 40.0000 (1999).

         As we explained in Taygeta Corp., 436 Mass. at 224, once the department is notified of a release of hazardous materials, "a property owner or other responsible person is subject to a five-phase assessment and remediation process set forth in the MCP." That assessment and remediation process defines how much cleanup of the property will be required and who will be responsible for the cleanup. "Phase I consists of preliminary response actions and risk reduction measures, including a limited investigation and evaluation of the contaminated site and a remediation of sudden releases, imminent hazards, and other time-critical conditions. . . . Preliminary response actions may be sufficient for complete evaluation or remediation of localized or uncomplicated releases and threats of release at some sites. . . . Where that is not the case, the property owner or other responsible person must proceed with the subsequent phases of the assessment and remediation process described in the MCP." (Citations omitted.) Id.

         Phase II includes "a characterization of the sources, nature, and vertical and horizontal extent of contamination at the disposal site, and the identification and characterization of all potential human and environmental receptors that could be affected by hazardous material at or migrating from such site." Id. at 224-225. Phase III requires the "identification and selection of comprehensive remedial action alternatives." Id. at 225 n.12. Phase IV implements the selected remedial action alternative. Id. If needed, the property owner or other responsible person will proceed to Phase V for the continued "operation, maintenance, or monitoring of the disposal site." Id. See 310 Code Mass. Regs. § 40.0890 (2014) .

         A site does not need to be remediated to its precontamination state in order to complete the remediation process specified in the MCP. Rather, there are a number of means by which a party can finish the remediation process. See 310 Code Mass. Regs. § 40.1000 (2014). For example, a party may be able, or even required, to implement an Activity and Use Limitation (AUL) to reduce contaminants to levels that pose no significant risk to public health. See 310 Code Mass. Regs. § 40.1012 (2014). An AUL limits the permissible range of future activities and acceptable uses for the site, in order to prevent a member of the public from being exposed to contamination that remains on site that could not feasibly be remediated. See id. Thus, a site with an AUL is remediated to the point of no significant risk to public health, but may still contain hazardous materials. As is the case when a site utilizes an AUL, the remediation process under G. L. c. 21E and the MCP do not necessarily cure all property damage that resulted from the contamination.

         b. Facts.

         In 1906, the city acquired the land upon which the Grand Manor condominium was later built. In the early part of the Twentieth Century, the city operated the site as a quarry for mining rock and gravel. During the 1940s and 1950s, the city used the site as a landfill. Solid waste, such as tires, leather waste products, batteries, bottles, and containers of liquid were deposited in areas that had been excavated during the site's prior use as a quarry. The landfill was eventually covered and sat unused until 1983, when the city conveyed the property to a real estate developer. The developer constructed the Grand Manor condominium on the property, and recorded the master deed for it in 1985.[3]

         In November, 2008, the Grand Manor Condominium Association (association) hired a contractor to excavate part of the site to install a drainage system. During the excavation, the contractor discovered discolored soil, as well as debris including glass, bottles, metal, vehicle parts, and ash. Two soil samples were collected from separate stockpiles of excavated soil and submitted for testing. In a letter dated December 31, 2008, the contractor was informed that one of the two soil samples indicated that a release of hazardous materials had occurred. The letter stated that the owner of the site was required to notify the department of the release and hire a licensed site professional to comply with its duties under G. L. c. 21E.[4] See 310 Code Mass. Regs. §§ 40.0169, 40.0315. The association learned of the soil test results in early 2009. The site's prior use as a landfill was the source of the hazardous materials.[5]

         In January, 2009, the association hired Joseph Jammallo as its licensed site professional. In March, 2009, Jammallo attempted a limited removal action to remediate the contamination, which would allow the association to avoid the much lengthier five-phase cleanup process mandated by the MCP.[6]310 Code Mass. Regs. § 40.0318 (2014). Jammallo issued a report on April 24, 2009, informing the association that the limited removal action had failed. The association notified its residents and unit owners of the contamination in a letter dated the same day. Both the report and the letter indicated that members of the association had learned through personal research that the site was once operated as a landfill by the city. The report stated that the contamination "may likely be associated with the wastes that were deposited on the [s]ite over the years of the [c]ity's ownership [and operation of the dump], " but recommended further investigation to assess the "nature and approximate extent of the release." The letter similarly stated that "[t]he extent and nature of materials disposed of is not yet known."

         Four days later, the association notified the department of the release of hazardous materials, and requested that the department issue a notice of responsibility to the city.[7] In May 2009, the department sent a notice to both the city and the association informing them that they were potentially responsible parties under G. L. c. 21E, § 5, and ordering them to undertake all response actions necessary to achieve a level of no significant risk to public safety, in compliance with the MCP.

         On July 16, 2009, the city hired its own licensed site professional, Christopher McDermott, and Jammallo's work for the association ceased.[8] On October 13, 2009, the association sent a letter to the city demanding reimbursement for costs the association incurred responding to the contamination, pursuant to G. L. c. 21E, ยง 4. In April, 2010, McDermott filed a Phase I Initial Site Investigation report with the department. The Phase I report stated that the release of hazardous materials "is likely related to the former use of the [s]ite as a solid waste landfill." The ...

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