SJC Ruling Favors Owners on Deadline to Sue for Property Damage by Contamination Featured

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Grand Manor Condominiums - Lowell, MA Grand Manor Condominiums - Lowell, MA

In the case of Grand Manor Condominium Association v. City of Lowell, the Supreme Judicial Court established with clarity an important rule as to when the statute of limitations begins to run for filing in court a claim for property damage under the Massachusetts Superfund statute, General .Laws, Chapter. 21E, Section 5(a)(iii). The SJC ruled that a claim for such damage due to contamination does not accrue until the plaintiff learns that the damage is not reasonably or feasibly curable.

Significantly, the SJC said that this relatively late date for the deadline to begin to run ordinarily is not until the environmental remediation process under Chapter 21E and the Massachusetts Contingency Plan (“MCP”) is well advanced. The SJC rejected arguments that this claim accrues at the relatively early date when the plaintiff first knew that there was contamination.

In Grand Manor, the City had acquired in 1906 the property upon which the condominium was later built. In the early part of the twentieth century it used the property as a quarry for mining rock and gravel. During the 1940s and 1950s, it used the site as a landfill. The landfill was eventually covered and in 1983 the City conveyed the land to a developer, who built the condominium.

A long history of industrial use of a property over a period of many decades or longer is a common feature of Chapter 21E cases.

In November 2008, the condominium hired a contractor to install a drainage system. The excavation quickly uncovered solid waste and hazardous material. A consultant was hired who began efforts to remediate it. In June 2011, a consultant’s report concluded that there were 1.5 million cubic feet of hazardous material extending down to bedrock. Restoring the site would cost approximately $11.7 million and was not feasible.

Plaintiffs filed suit on October 10, 2012 seeking recovery under Chapter 21E, Section 4A for reimbursement of their response costs and under Section 5(a)(iii) for the damage to their property. The statute of limitations for a claim under 
Section 5 is three years, as provided in Section 11A.

At trial, the Superior Court ruled that the plaintiffs had the burden of proving that their claim under Section 5 was timely and submitted the issue to the jury, together with a list of several potential dates that could have triggered the limitations period, including dates of preliminary work by the consultants and the date of a demand letter by the plaintiff.

The jury found that the plaintiff was entitled to reimbursement of response costs under Section 4A but had failed to bring their property damage claim under Section 5 within the limitations period, and that claim was dismissed. This result was appealed.

The SJC considered the statute of limitations in the context of the over-all statutory scheme and the regulations set forth in the Superfund law and MCP. The statutory and regulatory scheme sets out separate phases of assessment and remediation, which eventually leads to a decision about the appropriate level of cleanup, beyond which further cleanup would be cost-prohibitive.

The SJC said that full remediation of the contamination is desirable and, if that occurs, the plaintiff has no cause of action under Section 5. It also said, however, that the Superfund law and MCP do not require remediation of all contamination in all cases, since that may not be financially feasible. It held that Section 5 provides for the recovery of residual damage in that the property, even after undergoing the mandated cleanup, still may contain pollutants that may diminish the fair market value of the property. It said that the plaintiff also may have suffered temporary loss of use that cannot be cured or compensated by remediation and reimbursement of response costs.

The SJC held that a plaintiff has suffered damage within the meaning of Section 5 if he has suffered damage that is not reasonably curable through the clean-up process. The cause of action under section 5 is triggered when he has knowledge that it is not reasonably curable. “Such knowledge is generally not provided until the MCP process is sufficiently advanced.”

The SJC said it would make little sense to hold otherwise. If the plaintiff were required to file suit earlier, he might be required to file suit before he knows whether the contamination can be reasonably remedied, that is, before he knows whether he has a claim.

The SJC vacated the judgment and remanded the case to the Superior Court. This likely is for trial if the case is not settled.

Read 2548 times Last modified on Wednesday, 09 May 2018 12:07
Michael J. O'Neill, Esq.

MICHAEL J. O’NEILL, ESQ., is a Senior Associate of McGregor & Legere, P.C. He has more than thirty-five years of experience in a wide range of litigation in all courts and in real estate and commercial law, concentrating in environmental and land use law and litigation since 1992 and real estate and commercial law and litigation from 1983 to 1992.

Mr. O’Neill represents clients in all types and phases of environmental and land use law and litigation, including prosecution and defense of claims for or involving: clean-up, cost recovery, and property damage under the Massachusetts Superfund Law, G.L. c. 21E; deceit, misrepresentation, and unfair and deceptive acts under Massachusetts G.L. c. 93A arising out of the sale of real estate; ownership and use of real estate; nuisance, negligence, and trespass; citizen suits under the Clean Water Act; appeals to court from decisions of local boards and commissions on special permits, subdivisions, zoning enforcement, and permits under the Wetland Protection Act; Article 97 of the Massachusetts Constitution; condominiums; contracts; and injunctive relief. He regularly represents clients before local boards regarding land use permits and appeals to administrative agencies and court from decisions of local boards. He does opinions, lawsuits, and problem-solving concerning real estate titles, transactions involving contaminated land, easements, and leases.

Mr. O’Neill has extensive experience in the preparation, trial, and appeal of cases in all courts. He has successfully represented clients in all Massachusetts courts, including the Massachusetts Supreme Judicial Court, Appeals Court and all Divisions of the Trial Court. He has tried and argued cases before the United States Courts of Appeal for the First and Fourth Circuits, the United States District Courts for Massachusetts, New Hampshire, Rhode Island, and West Virginia; the United States Bankruptcy Courts for Massachusetts, New York, and Pennsylvania; the Vermont Supreme Court, the Pennsylvania Superior Court (an Appellate Court), and the Pennsylvania Court of Common Pleas. He is also experienced in arbitration and mediation.

Mr. O’Neill has taught workshops in environmental, land use, and real property law for the Citizen Planner Training Collaborative, the Massachusetts Association of Conservation Commissions, Massachusetts Continuing Legal Education, Inc., and National Business Institute, Inc.

Mr. O’Neill has received the Founders Award presented by Alternatives for Community and Environment, Inc. (ACE) and the Community Merit Award presented by Concerned Citizens of Freetown, Inc. for pro-bono work. Mr. O’Neill is rated “BV-Distinguished,” a “Very High” Rating, by Martindale-Hubbell, a legal directory.

Mr. O’Neill is a graduate of the College of the Holy Cross and a cum laude graduate of Suffolk University Law School, where he won the American Jurisprudence Award in Evidence.

Mr. O’Neill’s clients find him responsive, knowledgeable, sympathetic, and a strong advocate. His results before juries and justices have earned him the loyalty of many long term clients.

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