Coca-Cola Bottling Co. of Cape Cod v. Weston & Sampson Engineers, Inc.

• Decision Date: 23 June 1998
• Docket Number: COCA-COLA,No. 95-P-1602,95-P-1602
• Citation: 45 Mass.App.Ct. 120,695 N.E.2d 688
• Parties: BOTTLING COMPANY OF CAPE COD v. WESTON & SAMPSON ENGINEERS, INC.
• Court: Appeals Court of Massachusetts

Page 688

695 N.E.2d 688

45 Mass.App.Ct. 120

COCA-COLA BOTTLING COMPANY OF CAPE COD v. WESTON & SAMPSON ENGINEERS, INC.

No. 95-P-1602.

Appeals Court of Massachusetts Barnstable.

Argued April 14, 1998.

Decided June 23, 1998.

Warren D. Hutchison, Boston, for defendant.

Kirk Y. Griffin, Boston, for plaintiff.

Before WARNER, C.J., and GILLERMAN and LAURENCE, JJ.

GILLERMAN, Justice.

Coca-Cola Bottling Company of Cape Cod (Coca-Cola) brought an action against Weston & Sampson Engineers, Inc., on August 5, 1991, for breach of contract regarding the design and operation of Coca-Cola's wastewater treatment facility in Sandwich. The defendant moved for summary judgment on the ground that Coca-Cola's claim was time-barred. While the motion for summary judgment was pending, Coca-Cola moved to amend its complaint in order to add additional counts for breach of implied and express warranties. On September 16, 1992, the defendant's motion for summary judgment was denied; the next day the motion to amend was allowed, and the case proceeded to trial on the amended complaint.

On May 17, 1994, a Barnstable County Superior Court jury returned a verdict for Coca-Cola in the amount of $293,000. The trial judge denied the defendant's motions for a directed verdict and for a judgment notwithstanding the verdict, and the defendant appealed.

1. Facts. There is no material disagreement as to what happened in this case (although why some of those events occurred often was left unexplained). In 1982, Coca-Cola moved its operations from Sagamore to a parcel of undeveloped land in Sandwich. Sandwich did not have a municipal sewerage system, and Coca-Cola was required to build its own wastewater treatment facility in conjunction with its new plant.

Coca-Cola began negotiations with the defendant in late 1982 for the design of the required facility in Sandwich. The parties subsequently signed four separate agreements regarding the consulting services that the defendant would provide to Coca-Cola. ¹

The defendant presented Coca-Cola with several designs for a wastewater treatment facility. Coca-Cola chose an aerated lagoon system which required lower initial costs but higher long-term operating costs. The wastewater treatment facility consisted of two lagoons, each ninety feet by 120 feet and twelve to fourteen feet deep, with heavy plastic liners and two infiltration areas. The waste that went into the system consisted of syrup, soapy/chlorinated water, product that fell below specifications, and oil and grease used to maintain machinery. Bacteria in the lagoons altered the composition of the waste so that the water could be safely released back into the ground.

Coca-Cola received the necessary groundwater discharge permit (permit) on February 8, 1984, and the facility began operating on May 16, 1984. The permit contained various discharge limitations. By the fall of 1984, it became evident that the system was not functioning within those limitations. The system failed to keep the levels of "Biochemical Oxygen Demand" (BOD), ² suspended solids, settleable solids, waste oils, phosphorous, and coliform within the limits specified in the permit. Although there were periods of time when some of the levels were within the permit limits, there was never a time when all of the levels met the permit requirements.

On March 6, 1985, the Department of Environmental Protection (DEP) ³ informed Coca-Cola that a review of Coca-Cola's monthly self-monitoring reports for the period of September, 1984, through January, 1985, showed "serious violations" of permitted discharge levels with respect to BOD's and suspended solids at the wastewater treatment facility. The DEP report also showed "violations" in total coliform levels for three months of the reporting period. On June 21, 1985, the DEP filed a civil enforcement proceeding against Coca-Cola for its permit violations and for an illegal discharge of wastewater onto an adjoining parcel of land.

The defendant implemented a number of modifications between 1985 and 1989 in an attempt to make the system operate properly. "Surface aerators" were added to augment the submersed air system that had originally been installed. ⁴ A "baffle" was added to the second lagoon in an attempt to address a continuing suspended solids problem. Supplemental air lines were also added to each lagoon. A spill plan was added, and a bacterial augmentation program was implemented. A biological reactor was set up on site. Nutrient levels and "pH" requirements were also frequently adjusted over the years.

None of the implemented modifications succeeded in making the system operate within permit limits. Coca-Cola closed the wastewater treatment facility in November, 1989, ⁵ and the defendant's relationship with Coca-Cola was also terminated. Coca-Cola ceased production, purchased product elsewhere, and became a distributor. Coca-Cola later settled the DEP suit related to its various permit violations. A consent judgment entered in 1990, and Coca-Cola paid a $200,000 fine. Coca-Cola resumed production in June, 1991, and chose a new wastewater management system developed by another company. Coca-Cola now has its wastewater taken by a tank truck to an outside facility so that the water can be properly treated.

Count I of Coca-Cola's amended complaint alleges that the defendant failed to design, construct, and operate a functional and complete wastewater treatment facility as required by its contract. The judge did not instruct on this count, and Coca-Cola makes no claim under it. Count II alleges the breach of an implied warranty for a particular purpose, see G.L. c. 106, § 2-315. Count III alleges a breach of the express warranty, G.L. c. 106, § 2-313, that the wastewater treatment facility would treat wastewater within permit requirements. ⁶

The standard of review for the defendant's motions for a directed verdict and for judgment notwithstanding the verdict is the same: "Does the evidence, construed against the moving party, justify a verdict against him?" D'Annolfo v. Stoneham Hous. Authy., 375 Mass. 650, 657, 378 N.E.2d 971 (1978). See McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 706 n. 3, 563 N.E.2d 188 (1990). There were also extensive objections by the defendant to the judge's charge: both as to the instructions given and as to what was omitted from the instructions. As to these claims, we determine if there was error, and, if so, whether the error affected the substantial rights of the defendant. Mass.R.Civ.P. 61, 365 Mass. 828 (1974).

2. Coca-Cola's implied warranty claim: the application of G.L. c. 260, § 2B. The defendant argues that Coca-Cola's implied warranty claim was barred by the statute of repose, see G.L. c. 260, § 2B, as appearing in St.1984, c. 484, § 53, which provides in pertinent part:

"Action 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, ... shall be commenced only within three years next after the cause of action accrues; provided, however, that in no event shall such actions 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." (Emphases added.)

Coca-Cola responds that the statute of repose does not apply here because its claim against the defendant is essentially a contract action, not a tort action. We disagree.

Coca-Cola's implied warranty claim is, in substance, a claim of professional malpractice--a negligence claim. Note 6, supra. See Klein v. Catalano, 386 Mass. 701, 719, 437 N.E.2d 514 (1982). To treat a claim for professional malpractice as a contract action because of the warranty label would defeat the repose provision which strikes "a balance between the public's right to a remedy and the need to place an outer limit on the tort liability of those involved in construction." McDonough v. Marr Scaffolding Co., 412 Mass. 636, 643, 591 N.E.2d 1079 (1992). Because Coca-Cola's implied warranty claim is based in tort rather than in contract, ⁷ it is subject to the provisions of the statute of repose. See Anthony's Pier Four, Inc. v. Crandall Dry Dock Engrs., Inc., 396 Mass. 818, 823, 489 N.E.2d 172 (1986) (in determining whether the statute of repose applies to a claim, the court must look to the "gist of the action").

Coca-Cola also argues that the statute of repose does not bar its professional malpractice claim because it did not discover that the defendant could not make the system work properly until it terminated its relationship with the engineering firm in 1989. There is no merit to the argument. A statute of repose such as G.L. c. 260, § 2B, sets the outer time limit for bringing an action. "Simply put, after six years, the statute completely eliminates a cause of action against certain persons in the construction industry." Klein v. Catalano, 386 Mass. at 702, 437 N.E.2d 514.

Thus, "[s]ection 2B, in its statute of repose aspect, forbids [courts] from considering the fact that a plaintiff did not discover or reasonably could not have discovered the harm before the six-year period of the statute of repose expired." Sullivan v. Iantosca, 409 Mass. 796, 798, 569 N.E.2d 822 (1991). The statute also bars courts from "considering circumstances that might have tolled the running of a statute of limitations." Ibid. See Tindol v. Boston Hous. Authy., 396 Mass. 515, 517-518, 487 N.E.2d 488 (1986).

Coca-Cola argues that, even if the statute of repose is applicable to its professional malpractice claim, the claim is not time-barred because the statute did not begin to run on May 16, 1984, as the defendant claims. This is so, Coca-Cola argues, because the wastewater treatment facility was not "substantially completed" when the facility "started up" on May 16, 1984, and was never substantially...