A Massachusetts statute bars tort lawsuits arising from defective or negligent design, planning, construction or general administration of buildings and improvements, unless filed within six years after construction completion.
This statute is known in the construction industry as the “statute of repose.” Statutes of repose operate much like statutes of limitations. Both protect potential defendants from having to respond to lawsuits filed many years after the alleged wrongdoing, but there are significant differences. Statutes of limitations can be suspended for various reasons, such as when plaintiffs cannot discover their injuries, or cannot determine responsible parties. This gives flexibility to the end point of the limitations periods in statutes of limitations.
In contrast, statutes of repose cannot be suspended for any reason. They impose absolute time limits on when plaintiffs can sue potential defendants. Statutes of repose bar plaintiffs’ claims after the statutory period expires, even when plaintiffs’ injuries or damages occur later or are not discoverable within the limited timeframe.
However, last month in Trustees of Boston University v. Clough, Harbour & Associates LLP, the Massachusetts Supreme Judicial Court ruled, in effect, that the statute of repose limiting suits for design defects can be contractually negated.
Boston University engaged an architectural firm in 2012 to design a synthetic turf athletic field above a parking structure designed by the same firm. The contract provided for about $970,000 in payments to the architects for professional services. It also required the architects, “to the fullest extent permitted by law,” to indemnify the university from all expenses, including attorney’s fees, caused by the architects’ negligence.
A $25K Defect
After the athletic field went into service in 2013, it became apparent that the field had design defects that rendered it unsafe. The defects arose from the architects’ failure to account for seasonal expansion of joists in the underlying parking structure.
The university spent $25,000 to remedy the defect, and demanded indemnification from the architects, who refused to pay for the remediation. In 2020, more than six years after the athletic field was first used, the university sued the architects in Superior Court for breach of the indemnification.
The architects moved for summary judgment, seeking dismissal of the university’s suit under the statute of repose.
The Superior Court judge agreed, and ruled in 2024 that the statute of repose barred the university’s contractual indemnification claim. The Supreme Judicial Court granted an application for direct appellate review.
The SJC noted at the outset of its decision that the statute of repose bars negligence claims for design and construction defects, unless the claim is brought within six years after completion.
The SJC also noted that a negligence claim is an “action in tort,” but the university’s suit included a claim against the architects for breach of the indemnification agreement, which is an “action in contract.”
Lawsuit Created an Unusual Situation
The SJC recognized that the university’s lawsuit created an unusual situation under the statute of repose, because the university was seeking compensation under a contractual indemnification clause for a loss that resulted from the architects’ negligence.
Therefore, according to the SJC, it was necessary to look beyond whether the university’s suit arose in tort on in contract, and to instead examine the “gist of the action.”
The SJC next compared the differences between actions in tort and actions in contract. Actions in tort arise where defendants fail to meet standards imposed by law, while actions in contract arise where defendants fail to meet standards set by the defendants’ promises made in their agreements with plaintiffs.
The SJC determined that the gist of the university’s claim against the architects was essentially “the enforcement of a contract for indemnification,” observing that the architects explicitly promised to indemnify the university from costs incurred as a result of the architects’ negligence.
Time Limits Can Be Negotiated
Therefore, the university’s claim was contractual in nature, and the statute of repose did not bar it.
The SJC reversed the Superior Court’s dismissal of the university’s contract claim, while stating that in order for the university to prevail, it must prove the existence of an enforceable indemnification agreement, the occurrence of an event triggering the architects’ indemnification obligation, the giving of adequate notice to the architects, and the architects’ breach of the indemnification agreement.
The statute of repose remains in effect for tort claims in building design and construction defect cases, but the SJC’s decision shows that project developers can avoid the strict six-year limit, by including properly drafted indemnification clauses in their contracts with design professionals and contractors.
Download the article as seen in Banker & Tradesman on April 28, 2025. Learn more about Christopher R. Vaccaro.