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

• Court: Massachusetts Appeals Court
• Decided: December 20, 2019
• Docket: AC 19-P-86
• Status: Published

Opinion

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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

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.