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Penn-America Insurance Co. v. Bay State Gas Company

Appeals Court of Massachusetts, Plymouth

December 20, 2019

PENN-AMERICA INSURANCE COMPANY[1]
v.
BAY STATE GAS COMPANY.[2]

          Heard: October 10, 2019.

          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.

          Present: Wolohojian, Blake, & Englander, JJ.

          BLAKE, J.

         Following a natural gas fire that caused extensive damage to a building that Penn-America Insurance 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 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 [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 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 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 ...


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