Trinity Church in City of Boston v. John Hancock Mut. Life Ins. Co.

• Decision Date: 15 January 1987
• Citation: 502 N.E.2d 532,399 Mass. 43
• Parties: TRINITY CHURCH IN the CITY OF BOSTON v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 532

502 N.E.2d 532

399 Mass. 43

TRINITY CHURCH IN the CITY OF BOSTON v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY et al.¹

Supreme Judicial Court of Massachusetts Suffolk.

Argued Sept. 9, 1986.

Decided Jan. 15, 1987.

Anthony E. Battelle (James D. Smeallie and Robert M. Ruzzo, Boston, with him), for plaintiff.

Robert M. Hacking (Calum B. Anderson and Leonard F. Zandrow, Jr., Boston, with him), for John Hancock Mut. Life Ins. Co. & others.

Richard W. Renehan (Jane S. Schacter, Boston, with him), for I.M. Pei and Partners.

Raymond J. Kenney, Jr., Boston, for Mueser, Rutledge, Wentworth & Johnston, was present but did not argue.

Before WILKINS, LIACOS, ABRAMS, LYNCH and O'CONNOR, JJ.

LYNCH, Justice.

This case arises out of property damage sustained by the plaintiff, Trinity Church in the City of Boston, during construction of the John Hancock Tower Building in Copley Square. On January 29, 1975, the plaintiff filed a complaint against John Hancock Mutual Life Insurance Company and seventeen other defendants involved in the construction of the Hancock tower. At the defendants' request the claims against the eight defendants to the present action for excavation-related damages were tried separately from the fallen object claims. ² This appeal concerns only the counts related to the defendants' excavation activities.

At the close of Trinity's evidence, the trial judge denied Hancock's motion for a directed verdict but allowed the motions for directed verdicts raised by the seven other defendants. Following jury verdicts for the plaintiff on three counts in the sum of $4,170,300, Hancock appealed. ³ Trinity subsequently appealed from the judgment dismissing the claims against the seven other defendants. The appeals have been consolidated and we granted direct appellate review. We affirm.

There was evidence from which the jury could have found the following facts. Trinity Church was designed by Henry Hobson Richardson in 1872 and completed in 1876. It is considered by scholars to be one of Richardson's greatest works. Today, Trinity Church is a national historic landmark as well as a functioning church.

Trinity Church is constructed almost entirely of stone masonry. Stone masonry is heavy and very brittle compared to other construction materials; when placed under stress it does not deform, but it cracks. When stone masonry cracks, it characteristically breaks throughout its entire thickness, and its strength diminishes significantly. Ordinarily it cannot be repaired except by disassembly, resetting, and reconstruction. The foundation of the church rests atop more than 4,500 pilings and four massive granite pyramids which support the church's main tower.

Since its completion, the church experienced settlement or movement as the layers of subsurface soil upon which it rests have shifted and compressed. Trinity began taking periodic surveys to measure this settlement in 1918. Between 1918 and 1968, six measured areas of the church had experienced settlement of between three and four inches. ⁴

During construction of the Hancock tower, the foundation of the church was undermined by a failure of the excavation system at the Hancock site. As work was being performed on the excavation system, the ground immediately surrounding the construction site moved inward toward the excavation. ⁵ This caused the foundation of the church to settle unevenly, most dramatically on the south side closest to the tower site, and to migrate horizontally toward the Hancock tower excavation. This settlement produced a spray of cracks up through the masonry walls of the church which affected the structural integrity of the church. ⁶

Although some evidence suggested that minor damage to the church may have occurred in April or May of 1969, there was no evidence introduced to indicate that these damages were causally related to the tower construction. In a letter dated September 22, 1969, one of Hancock's engineers after analyzing current survey data denied that there was any evidence of lateral movement of the church. By December 22, 1969, however, it was clear some settlement of the church related to the Hancock construction project had occurred and Hancock so informed the church's engineer two days later. Several meetings between representatives of Trinity, Hancock, and CNA Insurance, Hancock's insurer, and the seven other defendants followed.

The subject of the statute of limitations was first raised at a meeting on December 1, 1971, attended by Mr. F. Stanton Deland, Jr., an attorney representing Trinity, and Mr. John G. Burke, a claims attorney for CNA. Mr. Deland testified that Mr. Burke indicated at this meeting that "CNA defends all parties," although Mr. Burke recalled no statement to that effect. At this time Mr. Deland was aware of the approaching statute of limitations deadline. Mr. Burke agreed to waive assertion of the statute of limitations defense, and said that he would also seek a waiver directly from Hancock. No specific mention was made of a waiver by any party other than Hancock, and Mr. Deland sought a written waiver only from Hancock. On December 2, 1971, Mr. Deland wrote Mr. Burke to confirm the agreement reached the following day.

Several payments from CNA were received by Trinity during settlement negotiations. Mr. Deland also sought and received enlargements of Hancock's original waiver of the statute of limitations. The last waiver of the statute of limitations issued by Mr. Burke expired on February 1, 1975. Trinity filed suit on January 29, 1975, three days before the period of the final waiver expired.

I. Damages.

Trinity asserted three separate damage claims related to the Hancock tower construction. At trial, Trinity sought compensation for the cost of repairing the interior and the exterior areas of the church, as well as for the structural damages sustained. This appeal only involves the church's claim for structural damages.

Trinity based its structural damage claim on the changes which took place within the church during the time the Hancock tower was being constructed. Trinity quantified these changes in terms of a percentage of the church's ultimate "takedown" condition.

A. The "takedown" theory of damage assessment. The plaintiff introduced evidence to show that the level of structural damage within a masonry structure such as the church can be related directly to the amount of distortion in its foundations caused by differential settlement. The degree of differential settlement can be expressed in terms of "angles of distortion," which can be calculated directly from the settlement survey data. At a certain angle of distortion, the structural damage to a building reaches a point where disassembly and reconstruction become necessary. This ultimate level of damage is referred to as the "takedown" level of damage.

For the purpose of calculating its damage claim, angles of distortion were calculated for the years 1968 and 1972, for each section of the church for which sufficient data were available. These angles were converted into percentages of the angles which represented the "takedown" condition in the corresponding section of the church. The percentage difference before and after the tower construction was taken to represent the amount of damage caused to the building during the construction period. The final dollar value of the claim was established by applying the change in physical damage from 1968 to 1972, expressed as a percentage of the over-all takedown condition, to the estimated cost of takedown and reconstruction for each affected section.

The general rule for measuring property damage is diminution in market value. Hopkins v. American Pneumatic Serv. Co., 194 Mass. 582, 583, 80 N.E. 624 (1907). However, "market value does not in all cases afford a correct measure of indemnity, and is not therefore 'a universal test.' " Wall v. Platt, 169 Mass. 398, 405-406, 48 N.E. 270 (1897). For certain categories of property, termed "special purpose property" (such as the property of nonprofit, charitable, or religious organizations), there will not generally be an active market from which the diminution in market value may be determined. Commonwealth v. Massachusetts Turnpike Auth., 352 Mass. 143, 147, 224 N.E.2d 186 (1967). Newton Girl Scout Council, Inc. v. Massachusetts Turnpike Auth., 335 Mass. 189, 194-195, 138 N.E.2d 769 (1956). The parties agree that Trinity Church falls within the definition of special purpose property and that the damage to the church could not be measured on the basis of fair market value.

In such cases, this court has been cognizant of the need for greater flexibility in the presentation of evidence relating to damages and has provided "[s]pecial opportunities for proof of value ... where it is felt that there is no market value.... The courts in these cases ... may be doing no more than recognizing that more complex and resourceful methods of ascertaining value must be used where the property is unusual or specialized in character and where ordinary methods will produce a miscarriage of justice." Newton Girl Scout Council, Inc. v. Massachusetts Turnpike Auth., supra at 195, 138 N.E.2d 769.

In a number of situations involving special purpose property, the cost of reproduction less depreciation has been utilized as an appropriate measure of damages. See, e.g., Roman Catholic Archbishop of Boston v. Commonwealth, 364 Mass. 486, 306 N.E.2d 254 (1974) (eminent domain taking of a church); Commonwealth v. Massachusetts Turnpike Auth., supra, 352 Mass. at 148, 224 N.E.2d 186 (eminent domain taking of armory); Newton Girl Scout Council, Inc. v. Massachusetts Turnpike Auth., supra, 335 Mass. at 195, 138 N.E.2d 769 (eminent domain taking of Girl Scout camp). See also Foxboro Assocs. v. Assessors of Foxborough, 385 Mass. 679, 688, 433 N.E.2d 890 (1982) (reproduction cost less depreciation used to determine value of a harness raceway for real...