Lawsuits to recover cleanup costs and property damages resulting from environmental contamination can be expensive and time-consuming. Plaintiffs should be sure their claims are timely before embarking on the litigation path.
M.G.L. c. 21E (Chapter 21E), the Massachusetts Oil and Hazardous Material Release Prevention and Response Act, contains a statute of limitations provision, Section 11A. Until now, the law was reasonably clear on when a property damage claim must be brought. In its recent decision in Grand Manor Condominium Association v. City of Lowell (pdf), the Massachusetts Supreme Judicial Court (SJC) elaborated on the meaning of “damage” under Chapter 21E and redefined what triggers the statute of limitations for a property damage claim. In Grand Manor the SJC ruled that the statute of limitations does not begin to run until the plaintiff learns that the damage to the property “is not reasonably curable by the remediation process.”
Section 11A(4) of Chapter 21E states that claims for property damage must be brought within three years of when a person suffers the damage, or discovers or reasonably should have discovered that the person against whom the action is being brought is a person liable under Chapter 21E. In its 2002 decision in Taygeta Corp. v. Varian Associates, Inc. (pdf), the SJC described the relevant date as the date when the plaintiff obtained the results of groundwater sampling on its property. For purposes of that case the court said “the key phase [of the Massachusetts Contingency Plan, or MCP, process] is Phase II, a comprehensive site assessment,” which describes, among other things, the nature and extent of the contamination.
In Grand Manor the SJC took the analysis a step further. For purposes of determining when a property damage claim is ripe, “the plaintiff must have knowledge that he or she suffered damage that is not curable by the MCP remediation process.” (emphasis added). Put another way, the plaintiff suffers “damage” within the meaning of Chapter 21E if and when the plaintiff learns there will be residual property damage – that is, remaining contamination – after the cleanup is finished. Under the MCP, remedy selection typically isn’t done until the Phase III Remedial Action Plan, so now the SJC is saying that in most cases the statute of limitations for property damage claims won’t begin to run until the Phase III report is completed.
Although the SJC undoubtedly intended to provide more clarity on the meaning of “damage” under Chapter 21E, and the question of when the statute of limitations for a property damage claim is triggered, the court may have created more complications. In many cases there is temporary damage even if the remediation will eventually clean up the site. For example, there may be odor or vapor issues that result in a temporary loss of use of the property, and perhaps a loss of rental income. Although the SJC acknowledged in Grand Manor that a plaintiff may suffer such temporary losses, the court did not address when such claims must be brought.
Depending on the nature of the contamination and the diligence of the party performing the assessment and cleanup, Grand Manor could mean that property damage claims won’t be brought for many years (potentially even decades) after the contamination is first discovered.