Invariably, actions for property damage and reimbursement of response costs under G.L. c. 21E, §§4 and 5 also include claims for negligence, nuisance and trespass. Prior to the July 1, 1992 amendments to G.L. c. 21E, particularly the addition of the statute of limitations provisions in §11A, many of those claims were challenged on statute of limitations grounds. While there are numerous Superior Court decisions and several Federal District Court and State Appellate Court opinions on this issue for cases initiated prior to the 1992 amendments, there are only a few decisions addressing the scope of the 1992 statutory limitations period. Consequently, what follows below is a discussion of the statute of limitations for negligence, nuisance and trespass claims arising out of environmental contamination, and the statute of limitations for property damage and cost-recovery actions under M.G.L. c. 21E, §11A.
NEGLIGENCE, NUISANCE AND TRESPASS
The three-year statute of limitations set forth in G.L. c. 260,§2A applies to negligence claims for environmental contamination: "actions of tort ... shall be commenced only within three years next after the cause of action accrues." Because of the hidden nature of subsurface soil and groundwater contamination, disputes between parties frequently arise over when a plaintiff's cause of action "accrues" for the purposes of G.L. c. 260, §2A.
In a 1993 Superior Court Memorandum of Decision, Justice Botsford described the standard for determining when the statute of limitations commences: It is well settled in tort cases that the statute of limitations begins to run when the plaintiff is injured or where the plaintiff should have reasonably discovered the injury and its likely cause. Kelly v. Texaco, Inc., No. 91-6917B (Super. Ct., Suffolk Cty., Nov. 5, 1993 Memorandum of Decisions on Plaintiffs' Motion and Defendants' Cross Motion for Summary Judgment) citing Bowen v. Eli Lilly & Co., 408 Mass. 204, 208 (1990). Because plaintiffs rarely know the precise date of injury caused by the contamination, analysis tends to focus on the second part of the test: when the plaintiff should have reasonably discovered the injury and its likely cause.
Courts have held that an "injury under the standard is any cognizable injury, even if the injury later becomes more serious or permanent." Olsen v. Bell Telephone Labs, Inc., 388 Mass. 171, 175 (1983) (emphasis added); Town of Mansfield v. GAF Corp., 5 Mass. App. Ct. 551, 555 (1977). In cases involving soil or groundwater contamination, the time when the plaintiff is on notice of the injury is when he or she is aware of the presence of oil or hazardous materials on the property. Cummings Properties Management, Inc. v. W.R. Grace & Co. - Conn., No. 91-2641 (Super. Ct., Middlesex Cty., Jan. 19, 1994 Memorandum of Decision and Order on Cross-Motions for Summary Judgment). However, the cause of action does not "accrue" until its source is "reasonably discoverable." Id.
In the Cummings case above, Justice Freemont-Smith held that "once a plaintiff is aware that he has suffered an injury from a likely source, he is obligated to conduct further scientific inquiry as to the actual source of the harm." Id., citing Fidler v. Eastman Kodak Co., 714 F.2d 192, 199 (1st Cir. 1983). Consequently, once contamination is discovered, a potential claimant may not "sit" on his rights until some later time if a "likely source" has been identified. Since the standard is a "reasonableness" one, the subjective beliefs of the plaintiff are not determinative. The court will look at the totality of the circumstances, including the availability of public documents from DEP, press reports, and the existence of presence of remediation equipment on the abutting property.
The practical implications of this analysis may be problematic for several reasons. First, "scientific inquiry" into the source of environmental contamination is an expensive undertaking, particularly for an owner of residential property. Second, property owners, especially industrial/commercial property owners, are reluctant to install monitoring wells on their own properties for fear of discovering reportable concentrations of materials that may or may not be due to activities on abutting properties. In some instances, it may be more prudent to simply file a compliant against the suspected wrongdoer, assuming the good faith provision of Mass. R. Civ. P. 11 is satisfied, and pursue the causation issue through discovery. If other potential defendants are subsequently identified, the complaint may be amended and, in most cases, the amendment will "relate back" to the date of the original filing. See Wadsworth v. Boston Gas Company, 352 Mass. 86, 88-89 (1967); and Mass. R. Civ. P. 15(c).
Assuming a plaintiff can satisfy the requirements of the "discovery rule," he or she must also demonstrate that negligent conduct on the part of the defendant occurred in the three years prior to filing the complaint:
In a negligence cause of action there must be some negligent conduct by the defendants, not just continuing damage, extending into the three year period immediately preceding the filing of the Complaint. Town of Hopkinton v. C.K. Smith and Company, Inc., No. 90-7835-C (Super. Ct., Middlesex Cty., Aug. 21, 1992 Memorandum of Decision and Order on Motions for Summary Judgment), citing Flotech, Inc. v. V.G.I. DuPont de Nemours Co., 627 F. Supp. 338, 363 (D. Mass. 1985). See also McBarron v. Arena, No. 95-01515 (Super. Ct., Bristol Cty., March 25, 1996 Memorandum of Decision and Order on Defendants' Motion for Summary Judgment). The failure to remove leaking underground storage tanks after the owner was, or reasonably should have been, on notice of the release has been found to be evidence of negligence. Id. In Carpenter v. Texaco, Inc., the Supreme Judicial Court held that the removal of the leaking UST terminated the tortious conduct. 419 Mass. 581, 582 (1995).
It should be noted that a defendant's potential liability under a negligence theory of recovery is limited to damages suffered during three years prior to the filing of the complaint forward. Town of Hopkinton, supra. In that case, Justice Hely based this holding on "the statute of limitations defense and the tort discovery rule." Id. This probably refers to the same principle that has been applied to continuing nuisance and trespass claims where the nuisance or trespass has existed for a period longer than the statute of limitations, and a plaintiff has been precluded from recovering damages sustained prior to the applicable limitations period. Harrison v. Textron, Inc., 367 Mass. 540, 552 (1975). Defense counsel needs to be vigilant in raising the statute of limitations defense in the answer. Otherwise, it is waived and the door is open for the plaintiff to recover damages sustained long ago. Id.
B. Nuisance and Trespass
No other common law theories of recovery in environmental contamination cases have been litigated more in terms of the statute of limitations than those of continuing nuisance and continuing trespass.
The essence of a private nuisance action is some interference with the use and enjoyment of property . ... A private nuisance is actionable when a property owner creates, permits, or maintains a condition or activity on his property that causes a substantial and unreasonable interference with the use and enjoyment of the property of another. Asiala v. City of Fitchburg, 24 Mass. App. Ct. 13, 16-17 (1987). A trespass requires the unprivileged, intentional intrusion on land in the possession of another, and a continuing trespass "may be committed by the continued presence on the land of a structure, chattel, or other thing which the actor has tortiously placed there." One Wheeler Road Assoc. v. The Foxboro Company, 843 F. Supp. 792 (D. Mass. 1994). In both instances, the three year statute of limitations contained in G.L. c. 260, §2A applies.
In 1995, the Supreme Judicial Court shed some light on the interplay of these theories of recovery and the statute of limitations in Carpenter v. Texaco, Inc., 419 Mass. 581 (1995). Carpenter involved the migration of gasoline contamination from a leaking UST on the defendant's property to the plaintiff's property. Id. at 582. Texaco sold the property in 1980, the offending UST was removed in 1981, and after 1984 there "was no continuing release of gasoline from the gasoline station property, nor seepage of gasoline onto the plaintiff's property." Id. However, gasoline contamination remained on the plaintiff's property. The plaintiff brought suit in 1991 and 1992 alleging negligence, nuisance, and trespass and G.L. c. 21E. Id.
The Court affirmed Justice Botsford's allowance of Texaco's Motion for Summary Judgment, which was based upon the statute of limitations. The Court held that a continuing trespass or nuisance must be based on recurring tortious or unlawful conduct and is not established by the continuation of harm caused by previous but terminated tortious or unlawful conduct. Id. at 583, citing Sixty Eight Devonshire, Inc. v. Shapiro, 348 Mass. 177, 183-184, 202 N.E. 2d 811 (1964) and Wishnewsky v. Saugus, 325 Mass. 191, 194, 89 N.E. 2d 783 (1950).
There was no continuing trespass or nuisance because "[t]he gasoline on the plaintiffs' property is the consequence of tortious conduct and of seepage that occurred before 1985." Id. However, the door was left open by the Court for recovery under those theories in certain instances:
This case does not involve the seepage of gasoline onto the plaintiffs' properties within three years of the commencement of these actions, a circumstance that would present a different case. The plaintiffs' brief points to no record facts that support such a contention. Id. at 584, n.5. As chronicled in a subsequent Superior Court decision, a plaintiff walked through that open door and survived a statute of limitations challenge by the defendant.
In Durand v. Exxon Corp., 95-2415 (Super. Ct., Middlesex Cty., July 23, 1996 Clerk's Notice on Defendant's Motion to Dismiss or Alternatively for Summary Judgment), Exxon moved to dismiss the complaint or, in the alternative, for summary judgment on all the plaintiff's property damage claims, alleging the plaintiff had knowledge of contamination on his property, and that Exxon was the purported source, more than three years prior to filing the compliant on April 25, 1995. The plaintiff conceded in his opposition that he was aware of the contamination, and the likely source, more than four years prior to filing the complaint. However, the plaintiff, relying on Carpenter, presented evidence through an affidavit from an LSP interpreting groundwater monitoring well data that contamination continued to migrate onto the plaintiffs' property after April 25, 1992. On July 23, 1996, Justice Borenstein denied Exxon's Motion in its entirety without comment.
In March, 1996, Justice Hely, relying on Carpenter, allowed the defendants Motion for Summary Judgment based on the statute of limitations. McBarron v. Arena, 94-01515 (Super. Ct. Bristol Cty, March 25, 1996, Memorandum of Decision and Order on Defendants' Motion for Summary Judgment). The case involved the migration of gasoline from the defendants' property to the plaintiffs' property. An extensive set of facts revealed the plaintiffs were aware of the existence of contamination beginning in late 1986, which was nearly eight years prior to the filing of the Complaint in September, 1994. Justice Hely held "[t]here is an absence of evidence of tortious or unlawful conduct by the defendants, or of a release from their property occurring or continuing after September 22, 1991." The court, therefore, disposed of not only the nuisance and trespass claims, but also the negligence claims as it found no tortious or unlawful conduct after September, 1991.
It is important to note that, in instances where the continuing nuisance or trespass has existed for longer than the three year statute of limitations, the plaintiff is barred from recovering damages sustained more than three years prior to the filing of the actions. Harrison v. Textron, 367 Mass. 540, 552 (1975). Again, it is vital that the statute of limitations be raised as a defense, or else a plaintiff's ability to recover under these theories into the past is greatly expanded. Id.
C. Successive Ownership
The above illustrations primarily involve the migration of contaminants from one property to another. In instances where a contaminated property has been purchased, and the subsequent owner brings an action against the prior owner, courts have held that the theories of continuing nuisance and trespass are not applicable. One Wheeler Road Assoc. v. The Foxboro Company, 843 F.Supp. 792 (D. Mass. 1994) ("[c]ontaminating one's own property ... is not, and cannot be, a continuing trespass. The analogy to nuisance and continuing trespass simply will not work as to Mass. Gen. L. c. 21E, §5"); Wellesley Hills Realty Trust v. Mobil Oil Corp., 747 F.Supp. 93 (D. Mass. 1990).
II. M.G.L. c. 21E
A. Section 4 Claims
M.G.L. 21E, §4 provides a mechanism for persons who have conducted response actions at a property to seek reimbursement from other responsible parties:
"[a]ny person who undertakes a necessary and appropriate response action regarding the release or threat of release of oil or hazardous material shall be entitled to reimbursement from any other person liable for such release or threat of release for the reasonable costs of such response action."
Prior to the 1992 Amendments, G.L. c. 21E did not contain a statute of limitations under §4. With the addition of §11A(2), the legislature provided a generous time period to bring such claims:
Actions brought by persons other than the Commonwealth pursuant to sections four or four A to recover reimbursement, contribution or equitable share shall be commenced within three years after the date the person seeking such recovery discovers or reasonably should have discovered that the person against whom the action is being brought is a person liable pursuant to the provisions of this chapter for the release or threat of release for which such costs or liability were incurred, or within three years of the time when the person bringing the action first learns of a material violation of an agreement entered into pursuant to section four A, or within three years after the person bringing the action incurs all response costs, or within three years after payment by the person seeking contribution, reimbursement, or an equitable share for liability pursuant to the provisions of this chapter, or within three years after sending notice pursuant to the first paragraph of section four A, whichever is later.
This provision contains a statutory version of the "discovery rule" described earlier, as well as generous extensions to the limitations period based upon incurring or paying response costs, or providing notice to the potential defendants under G.L. c. 21E, 4A. Because the intent of the statute generally is to encourage private party clean-ups of contaminated sites, the limitation period for recovering those costs is based upon when they were paid or incurred, or when notice to another responsible party is given. It appears the legislature has provided every opportunity to ensure that persons who undertake response actions have a clear and available avenue of recovery. However, it should be noted in instances where the claimant is seeking reimbursement for costs paid, the Supreme Judicial Court has intimated that there may be more than one "accrual date" under §11A(2), each starting from the date of payment. Oliveira v. Pereira, 414 Mass. 66, 73-74, n. 11 (1992). Recently, the Appeals Court expanded Pereira and more severely restricted the time period available to recover response costs in Buss v. McElhiney, No. 96-P-310 (August 15, 1997, Memorandum and Order Pursuant to Rule 1:28).
In Buss, the Court broadly stated "[a]n action under §4 must be brought within three years of when cleanup costs were paid" (emphasis added). The Court cites Oliviera, supra, as well as G.L. c. 21E, §11A. Even though Buss was a pre-1992 Amendment case, the Court specifically states in footnote 8 that the enactment of §11A would "not change [its] analysis." The Court only considered recoverable those costs that were paid within three years of the filing of the claim. This appears to directly contradict the language in §11A(2) which states an action must be brought "within three years after the person bringing the action incurs all response costs ... or within three years after sending notice pursuant to the first paragraph of section four A, whichever is later." §11A(2).
B. Section 5 Claims
M.G.L. c. 21E, §5(a) provides that any person may bring an action "for damage to his real or personal property incurred or suffered as a result of such release or threat of release" against a liable party as described under §5(a). Prior to the 1992 Amendments, courts had applied the three year tort statute of limitations and "discovery rule" to such claims. Oliveira, 414 Mass. at 72-73. The 1992 Amendments contain a statutory hybrid of the "discovery rule" in §11A(4):
Actions by persons other than the Commonwealth to recover for damage to real or personal property shall be commenced within three years after the date that the person seeking recovery first suffers the damage or within three years after the date the person seeking recovery of such damage discovers or reasonably should have discovered that the person against whom the action is being brought is a person liable pursuant to this chapter for the release or threat of release that caused the damage, whichever is later. G.L. c. 21E, §11A(4).
As stated above, the statute of limitations begins running under the "discovery rule" when the plaintiff "should have reasonably discovered the injury and its likely cause." Kelley v. Texaco, Inc., No. 91-6917B (Super. Ct., Suffolk Cty., November 5, 1993, Memorandum of Decision on Plaintiffs' Motion and Defendants' Cross Motion for Summary Judgment) (emphasis added). Under §11A(4), the cause of action under §5(a) does not accrue until after the claimant "discovers or reasonably should have discovered" the potential defendant "is a person liable" under G.L. c. 21E (emphasis added). The difference between identifying a person who is the "likely source" of the contamination and establishing liability under G.L. c. 21E, §5 can be substantial in terms of time elapsed.
The Supreme Judicial Court has discussed the issue of whether an action can be brought under §§5 and 11A(4) based upon the theories of continuing trespass or continuing nuisance in instances where the complaint is filed more than three years after the latest accrual date described in§11A(4). In Carpenter, the Court noted:
We decline to recognize for the first time a continuing trespass or continuing nuisance concept in the circumstances such as exist in this case, in part, because, in adopting a three-year statute of limitations in 1992 for private actions under G.L. c. 21E, the Legislature stated a guiding public policy. See G.L. c. 21E, §11A, inserted by St.1992, c. 133, §309. There is no distinguishing reason to justify our granting relief under a label of continuing trespass or continuing nuisance in this case when the Legislature did not recognize a similar concept of a continuing wrong under G.L. c. 21E in its 1992 enactment of a statute of limitations for G.L. c. 21E. 419 Mass.
This statement comes after footnote 5, which left the door open for plaintiffs to advance common law continuing nuisance and trespass claims if he or she can demonstrate "seepage" onto the property within three years of filing the complaint. Although the court speaks broadly of the "public policy" behind the three year period, the language of this passage may be limited because the court confines its analysis in both sentences to "this case." Id.
Counsel should be aware that at least one Superior Court Justice has limited recovery under §5 for property damage to the three years prior to the filing of the Complaint. Mulcahy v. Massachusetts Turnpike Authority, No. 94-1200 (Super. Ct., Worcester Cty., November 3, 1994, Memorandum of Decision and Order on Defendants' Joint Motion to Dismiss or Alternatively for Summary Judgment). In Mulcahy, the plaintiffs were aware in 1990 of gasoline contamination on neighboring properties which allegedly originated from the Commonwealth's Service Area on the Massachusetts Turnpike. From 1990 to 1993, the Commonwealth sampled the plaintiffs' well, but never found gasoline contamination. Nevertheless, on May 25, 1994, the plaintiffs filed suit alleging strict liability, negligence, nuisance, trespass and G.L. c. 21E, §5. On August 3, 1995, after the filing of the complaint, contamination was found in the plaintiffs' well.
The Commonwealth moved for dismissal or for summary judgment on statute of limitations grounds. The Court denied the motion as it found the claims were based on "continuing torts," which would potentially allow recovery "for any damages sustained up to three years just prior to commencing suit (and thereafter)." The court made this finding although there was no evidence that the nuisance or trespass had continued past the limitations period. In specifically addressing the §5 claim, the Court held that "[i]n no event may the plaintiffs recover for any damages occurring prior to May 24, 1991," which was three years prior to filing the compliant. The lesson from this restriction is clear: when the damage and likely source have been identified, it is prudent to bring suit sooner rather than later to maximize the potential for damage recovery. On the other hand, defense counsel must raise the defense of the statute of limitations in order to contain the scope of recovery in continuing tort situations.
Recognizing that the litigation of G.L. c. 21E cases is a tremendously expensive and time-consuming process, the use of a Tolling Agreement allows counsel to attempt to negotiate a resolution of claims while preserving the right to go forward at a later time.