White v. Peabody Const. Co., Inc.
| Decision Date | 05 May 1982 |
| Citation | 434 N.E.2d 1015,386 Mass. 121 |
| Parties | , 33 UCC Rep.Serv. 1222 Bernadette WHITE et al. 1 v. PEABODY CONSTRUCTION CO., INC. et al. 2 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Harry A. Pierce, East Boston, for plaintiffs.
Cornelius J. Moynihan, Jr., Boston, for Peabody Const. Co., Inc.
Brian M. McMahon, Charlestown, for Lidapell Corp., Inc.
Before WILKINS, ABRAMS, LYNCH and O'CONNOR, JJ.
This is an action brought by tenants of the Heritage Elderly Housing Project (Heritage), located in East Boston, against the developer and the general contractor for the project. The named plaintiffs seek, on behalf of themselves and all other tenants of Heritage, 3 to recover damages resulting from widespread window and roof leaks allegedly caused by the defendants' improper design and construction of the project.
The plaintiffs' complaint, filed September 30, 1980, is in five counts. In two of the counts the plaintiffs contend that the defendant Lidapell Corporation (Lidapell) (1) negligently breached a duty it owed to the plaintiffs to design a watertight building, and (2) breached express and implied warranties that the building, as designed, would be free of substantial defects. In the three remaining counts, the plaintiffs allege that the defendant Peabody Construction Co., Inc. (Peabody), (1) negligently breached a duty it owed to the plaintiffs to construct a watertight building, (2) made subsequent repairs to the building in a negligent manner, and (3) breached express and implied warranties that the completed building would be free of substantial defects. The plaintiffs also alleged that Lidapell had intentionally concealed the existence of latent design and construction defects and that Peabody had either concealed construction defects or, in the alternative, had made efforts at repairing the leaks which had the legal effect of postponing accrual of the cause of action in negligence.
The relevant factual allegations of the complaint can be summarized as follows. Heritage is a 301-unit housing complex for elderly persons and is currently owned and operated by the Boston Housing Authority (BHA). The plaintiffs White and Ferrara have lived in Heritage apartments since September 1, 1975, and October 1, 1975, respectively. Heritage was developed and originally owned by the defendant Lidapell and was sold to the BHA in October, 1975, as part of the federally subsidized "turnkey" program. 4 The defendant Peabody was the general contractor for the project. As a result of numerous design and construction defects at Heritage, serious, widespread, and continuing water leaks have occurred in the apartments occupied by the plaintiffs. The design defects stem from the defendants' failure to take account of prevailing weather conditions in designing the project and selecting construction materials. Water leakage into the common areas of the project and into the plaintiffs' apartments has caused the plaintiffs to suffer property damage and emotional distress and has impaired their use and enjoyment of their apartments. Damages are sought from Peabody in the amount of $30,000,000 and from Lidapell in the amount of $20,000,000 "to correct the defects and compensate the tenants for their property losses and injuries."
Lidapell and Peabody both moved to dismiss the complaint for failure to state a claim upon which relief can be granted. Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974). In relevant part these motions raised the statute of limitations (G.L. c. 260, § 2B) as a bar to the negligence counts and lack of privity as a bar to the warranty counts. Peabody attached to its motion a copy of one of the contracts executed by Peabody and Lidapell, as well as the affidavit of Peabody's president attesting to the genuineness of the copy. Both defendants filed supporting briefs, as required by Rule 9 of the Superior Court, as amended (1980). The plaintiffs filed a memorandum in opposition to the motions to dismiss, arguing, in part, that the parties had presented no facts with respect to the timeliness of the action; that facts relevant to accrual dates were disputed, rendering summary dismissal inappropriate; and that the allegations of the complaint with respect to various tolling doctrines should be taken as true or as raising factual issues for decision.
Counsel for all parties argued the motions before a Superior Court judge at a hearing held on January 13, 1981. During the oral argument, counsel for the plaintiffs conceded that the water leaks had begun "immediately," i.e., as soon as the named plaintiffs moved into Heritage on September 1 and October 1, 1975. On February 6, 1981, the judge issued a decision ordering the complaint dismissed as untimely under the three-year limitations period of G.L. c. 260, § 2B. The judge stated in his decision that he had treated the motion as one for summary judgment because he had considered the statement of the plaintiffs' counsel at oral argument, a matter outside the complaint, in reaching his decision. See Mass.R.Civ.P. 12(b), 365 Mass. 754 (1974). The judge noted the plaintiffs' allegations of fraudulent concealment and justified late discovery of the claim but found these theories "inapposite" in light of the admission that the leaks began in 1975. He concluded that the plaintiffs' cause of action accrued at that time, making 1978 the last year in which a complaint could seasonably have been filed. Final judgment was entered in favor of the defendants on February 10, 1981.
On February 20, 1981, the plaintiffs filed a motion pursuant to Mass.R.Civ.P. 59(e), 365 Mass. 827 (1974), to alter or amend the judgment, so as to reinstate the warranty counts of the complaint or to clarify the reasons for dismissal of these counts. The plaintiffs gave as grounds for the motion that the defendants' motion to dismiss had raised the statute of limitations only with respect to the negligence counts. On February 27, 1981, the plaintiffs filed a "motion for relief from judgment or order," see Mass.R.Civ.P. 60(b)(1), (4), & (6), 365 Mass. 828 (1974), on the ground of surprise, citing as reasons therefor that neither party had moved for summary judgment, that the judge's disposition violated the notice requirements of Mass.R.Civ.P. 12(b) and Mass.R.Civ.P. 56(c), 365 Mass. 824 (1974), and that the plaintiffs had been denied the opportunity to produce documents supporting a claim of fraudulent concealment. The motion represented that counsel for the plaintiffs had requested such an opportunity at the hearing on the motions to dismiss "if the motion was to be treated as one for summary judgment." In support of this motion the plaintiffs filed the affidavit of their counsel and numerous documents obtained from the BHA, all of which purported to provide "a factual basis for plaintiffs' allegations of fraudulent concealment and justified late discovery." Finally, the plaintiffs filed a motion for leave to file affidavits under Mass.R.Civ.P. 56(f), 365 Mass. 824 (1974). They alleged that further discovery would be necessary for them to justify opposition to summary judgment and they requested a continuance to engage in such discovery. The rule 56(f) affidavit of the plaintiffs' counsel, which was attached to this motion, described in detail the fraudulent concealment and late discovery theories the plaintiffs hoped to prove and the discovery devices which would be employed to obtain the facts to support these theories.
All three of the plaintiffs' postjudgment motions were denied on March 4, 1981, by the same judge who had earlier dismissed the complaint. The judge found the warranty counts barred by the statute of limitations and reiterated his previous ruling that the claim of fraudulent concealment was irrelevant on the facts of the case. The plaintiffs appealed from the judgment of dismissal and from the order denying the postjudgment motions, and we granted their application for direct appellate review. We affirm the judgment of dismissal. 5
1. Treatment of rule 12(b)(6) motion as motion for summary judgment. Rule 12(b) of the Massachusetts Rules of Civil Procedure provides that "(i)f, on any motion ... to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56." The plaintiffs contend that it was reversible error for the judge to convert the defendants' rule 12(b)(6) motions into rule 56 motions for summary judgment without first giving them notice and an opportunity to respond. We conclude that, in the circumstances of this case, any error in this regard was harmless.
The judge handled the defendants' motions as motions for summary judgment because, in reaching his decision, he considered the statement of the plaintiffs' counsel at oral argument that the leaks began "immediately." We assume, as the judge apparently did, that this admission was a matter "outside the pleading ... presented to ... the court" within the meaning of rule 12(b), 6 thus triggering the conversion provision of rule 12(b). Admissions may properly be considered by a judge deciding a summary judgment motion under Mass.R.Civ.P. 56(c), and an admission may be established by a statement of counsel at oral argument. 6 Moore's Federal Practice par. 56.11(6), at 287 (2d ed. 1982). 5 C.A. Wright & A.R. Miller, Federal Practice and Procedure § 1364, at 669, 672 (1969). See Reporter's Notes to Mass.R.Civ.P. 12, Mass.Ann.Laws, Rules of Civil and Appellate Procedure, at 154 (Michie/Law. Co-op. 1974) ("uncontroverted allegations by counsel"). The plaintiffs do not argue that the fact admitted is not true. On the contrary, their reliance in...
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