Opinion
1584CV00452BLS2
01-29-2019
NSTAR ELECTRIC COMPANY dba Eversource Energy v. VEOLIA ENERGY NORTH AMERICA HOLDINGS, INC.
File Date: January 30, 2019
MEMORANDUM AND ORDER DENYING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Kenneth W. Salinger, Justice of the Superior Court
NSTAR Electric Company, now doing business as Eversource Energy, owns and operates an electrical distribution system in Boston, Massachusetts, that includes many underground cables. Veolia Energy North America Holdings, Inc., owns and operates an underground steam distribution system in Boston. In many locations Eversource’s electric cables are located near Veolia’s steam pipes.
Eversource alleges that its facilities have been damaged by steam or heat leaks from Veolia’s system. Eversource asserts claims for negligence (on the theory that Veolia did not exercise due care in operating and maintaining its system), trespass to chattels (based on allegedly wrongful releases or leaks of steam), and breach of contract (asserting that Veolia breached a December 2013 agreement to cooperate with Eversource in identifying and mitigating steam leaks and to reimburse Eversource for future and certain past costs caused by Veolia steam leaks).
Veolia has moved for partial summary judgment. It seeks to bar any claim for damages incurred before this action was filed on the ground that Eversource allegedly spoliated evidence. Veolia also contends that it is entitled to summary judgment in its favor on other grounds on the claims for negligence, trespass, and breach of the implied covenant of good faith and fair dealing.
The Court will allow the summary judgment motion in part and deny it in part. It will deny Veolia’s request to dismiss some of Eversource’s claims as a sanction for alleged spoliation of evidence, but will order that at trial Veolia may present evidence of the alleged spoliation and receive a jury instruction permitting an adverse inference if spoliation is found. As to the statute of limitations issue, the Court finds that Eversource’s tort claims are time-barred only to the extent they seek compensation for damage occurring more than three years before this action was filed, but that the statute does not bar Eversource’s claims based on damage that occurred later on. The Court will also grant summary judgment in Veolia’s favor on the claim for breach of the implied covenant of good faith and fair dealing, which adds nothing to Eversource’s claim for breach of the express terms of the 2013 contract. The Court will deny the request for summary judgment on the trespass to chattels claim and on the portion of the negligence claim based on alleged leaks of heat because Veolia is not entitled to judgment in its favor as a matter of law on those claims.
1. Alleged Spoliation of Evidence
Veolia has established that by the end of 2009 Eversource suspected that its facilities were being damaged by steam or heat leaks from Veolia’s system, Eversource nonetheless did not preserve any electric cable that failed before this lawsuit was filed in early 2015, and as a result Veolia cannot inspect those cables in an attempt to ascertain why they failed.
Veolia argues that this constitutes spoliation of evidence and seeks dismissal of all claims for damages incurred before the filing of this action as a sanction for that alleged spoliation.
Sometimes a request for spoliation sanctions is the predicate for a motion for summary judgment, because a party seeks to exclude certain evidence as a discretionary sanction for spoliation and may be entitled to summary judgment in its favor if that request is granted. See, e.g., Wiedmann v. The Bradford Group, Inc., 444 Mass. 698, 707-08 (2005). But that is not what is at issue here. Veolia is seeking partial dismissal of claims as a direct sanction for alleged spoliation. The Court will treat this part of Veolia’s motion as a request for spoliation sanctions rather than as a request for partial summary judgment. Trial judges have broad discretion to determine what sanction, if any, is appropriate if spoliation of evidence is established. See Keene v. Brigham & Women’s Hosp., Inc., 439 Mass. 223, 235 (2003). In contrast, summary judgment is only available if the material facts are not in dispute and the moving party is entitled to judgment in their favor as a matter of law. E.g., Monell v. Boston Pads, LLC, 471 Mass. 566, 569 (2015). Since the imposition of spoliation sanctions is discretionary, and no party is entitled to such sanctions as a matter of law, whether and how to remedy alleged spoliation is not properly raised by a summary judgment motion but instead should be raised in a pretrial motion in limine or motion for spoliation sanctions.
"The doctrine of spoliation ‘is based on the premise that a party who has negligently or intentionally lost or destroyed evidence known to be relevant for an upcoming legal proceeding should be held accountable for any unfair prejudice that results.’" Westover v. Leiserv, Inc., 64 Mass.App.Ct. 109, 112-13 (2005), quoting Keene v. Brigham and Women’s Hosp., Inc., 439 Mass. 223, 234 (2003). "As a general rule, a judge should impose the least severe sanction necessary to remedy the prejudice to the nonspoliating party." Keene, supra, at 235.
The failure by Eversource after 2009 to preserve cables that it now claims were damaged by heat or steam leaking from Veolia’s system constitutes spoliation of evidence. By the end of 2009 Eversource knew or should have realized that it could be involved in a lawsuit with Veolia regarding electric cable failures and that any failed cables would likely be relevant evidence in such a proceeding. Eversource’s negligent failure to preserve that evidence is spoliation.
The argument by Eversource that there was no spoliation because it never instructed its workers to collect and preserve all failed electric cables is without merit. Once Eversource realized it had potential claims against Veolia for allegedly damaging electric cables, it had a duty to preserve that evidence. Its failure to do so is negligent spoliation.
The further argument by Eversource that it no longer had any duty to preserve evidence of failed cables once it entered into its December 2013 agreement with Veolia is also unavailing. In that contract, Veolia agreed to enter into a further mitigation agreement under which Veolia would reimburse Eversource all costs of repairs or restorations, over the prior two years or at any time in the future, that were caused by Veolia steam leaks. Eversource should have realized that it would have to preserve failed cables because they could be important in determining whether particular repair or restoration costs were made necessary by leaks from the Veolia steam distribution system. The contract made it even more important that Eversource preserve this evidence, because the parties may need to examine damaged cables to determine whether Veolia complied with the 2013 agreement or the anticipated future mitigation agreement.
It is not clear, however, whether or to what extent Veolia has suffered any unfair prejudice as a result of Eversource’s failure to retain damages electric cables. Eversource notes that not all of its claims are for damage to electric cables. For example, Eversource claims that a Veolia steam leak caused a duct bank to collapse under School Street in Boston. In addition, Eversource has presented expert opinions, by a polymer scientist and by an electrical engineer, that when an electric cable short circuits any evidence of what caused that event is often destroyed by the cable failure. Veolia has presented expert testimony to the contrary.
The Court concludes, in the exercise of its discretion, that the jury should decide at trial what to make of this conflicting evidence as to whether Veolia suffered any material prejudice from Eversource’s failure to preserve failed electric cables. The Court will not dismiss any part of Eversource’s claims as a sanction for losing or destroying evidence. But it will allow both sides to present evidence regarding the alleged spoliation of evidence and regarding whether Veolia suffered any unfair prejudice as a result. The Court will then instruct the jury that, if they find that that there was spoliation of evidence-meaning they find that Eversource negligently or intentionally lost or destroyed evidence that it knew or should have known would be relevant if Eversource were to sue Veolia, and also that Veolia was unfairly prejudiced as a result-then the jury may, but is not required to, infer that the missing cables would have provided evidence unfavorable to Eversource. See Gath v. M/A-Com, Inc., 440 Mass. 482, 491 (2003); Keene, 439 Mass. at 234.
2. Statute of Limitations
Veolia argues that the claims by Eversource for negligence and trespass to chattels are barred in whole or in part by the statute of limitations. Eversource filed this action on February 18, 2015. Its tort claims for negligence and trespass are governed by a three-year statute of limitations. See G.L.c. 260, § 2A. As a result, those claims are time-barred to the extent they accrued before February 18, 2012.
Though Veolia asserts and Eversource does not dispute that the action was filed on March 27, 2015, that is incorrect. The docket shows that the complaint was docketed on February 19, 2015, and the time stamp on the complaint shows that it was actually received by the clerk’s office on February 18, 2015, at 4:11 p.m.
2.1. Accrual of the Tort Claims
"[L]imitations periods in Massachusetts run from the time a plaintiff discovers, or reasonably should have discovered, the underlying harm ... for which relief is sought," and has reason to believe that the harm was caused by the defendant. Crocker v. Townsend Oil Co., 464 Mass. 1, 8 (2012); accord Harrington v. Costello, 467 Mass. 720, 725-26 (2014) (cause of action accrues once plaintiff knows or should have known that particular conduct caused plaintiff harm and that defendant was responsible for that conduct). A plaintiff does not need to be certain "that the defendant was actually responsible for the injury"; instead, a cause of action accrues as soon as the plaintiff realizes that the defendant "may have caused the injury." Lindsay v. Romano, 427 Mass. 771, 774 (1998).
Eversource’s Rule 30(b)(6) witness admitted that by the end of 2009 Eversource believed that Veolia’s steam distribution system was causing damage to Eversource cables by giving off excessive heat or steam leaks.
These undisputed facts establish that, to the extent Eversource seeks compensation for damage that it incurred before February 18, 2012, those claims accrued before that date and are barred by the statute of limitations. Cf. Vinci v. Byers, 65 Mass.App.Ct. 135, 139 (2005) (where facts regarding discovery of harm and accrual of cause of action are undisputed, applicability of statute of limitations "may be decided as [a] matter of law" on motion for summary judgment).
Once Eversource realized that the steam distribution system might be damaging its electric cables, the limitations period started to run and Eversource "had a duty to investigate" within the next three years "the precise mechanism" through which its electric cables were being damaged. See Doucette v. Handy & Harmon, 35 Mass.App.Ct. 724, 726 (1994); accord, e.g., Bowen v. Eli Lilly & Co., 408 Mass. 204, 210 (1990) ("Reasonable notice that a particular product or a particular act of another person may have been a cause of harm to a plaintiff creates a duty of inquiry and starts the running of the statute of limitations"). The argument by Eversource that no cause of action accrued until it was sure that Veolia’s system had damaged its electric cables is without merit.
Eversource may nonetheless seek compensation for any further damage caused after February 18, 2012, by additional or continuing negligence or trespass. Veolia’s assertion that the accrual of some claims before 2012 bars tort claims for property damage that did not occur until later on is incorrect. Since Eversource has viable claims that ongoing negligence or trespasses by Veolia caused new damage or injury after February 2012, that part of its tort claims is not time-barred.
Where a party continues to breach of a duty of care or commits a continuing trespass over a period of time, a new cause of action accrues each time the continuing negligence or trespass causes new or additional damage, and thus the statute of limitations period "begins to run anew" with respect to each additional injury. Ahern v. Warner, 16 Mass.App.Ct. 223, 225-26 (1983) (breach of continuing duty to provide lateral support for abutting land gives rise to new claims for each substantial subsidence in the supported land); accord, e.g., Taygeta Corp. v. Varian Associates, Inc., 436 Mass. 217, 230-32 (2002) (continuing migration of volatile organic compounds onto plaintiff’s property); Sixty-Eight Devonshire, Inc. v. Shapiro, 348 Mass. 177, 183-84 (1964) (recurring discharge of water from defective gutter causing additional damage to plaintiff’s building); Doherty v. Admiral’s Flagship Condominium Trust, 80 Mass.App.Ct. 104, 110-11 (2011) (recurring roof leaks causing additional damage to plaintiff’s condominium unit).
2.2. Fraudulent Concealment
Eversource insists that Veolia should not be able to invoke the statute of limitations because Veolia fraudulently concealed the basis for the tort claims against it. That argument is unavailing.
If a defendant fraudulently conceals its wrongdoing, the statute of limitations is tolled until the plaintiff discovers it may have a claim. See generally Salvas v. Wal-Mart Stores, Inc., 452 Mass. 337, 375 (2008); G.L.c. 260, § 12. "Absent a fiduciary or other special duty," which Eversource does not assert here, "active fraud is ordinarily required to prove fraudulent concealment." Salvas, supra, at 375-76. In other words, "[i]n the absence of a fiduciary relationship, ... mere silence is not a fraudulent concealment. There must be something in the nature of positive acts of concealment with an intent to deceive." Burbridge v. Board of Assessors of Lexington, 11 Mass.App.Ct. 546, 549 (1981).
Eversource asserts that, after the parties entered into their December 2013 agreement to search for and remediate steam leaks near Eversource facilities, Veolia found a number of steam leaks in its system and then lied to Eversource about its findings, falsely claiming that it had not found any steam leaks in the areas at issue.
But Eversource points to no evidence to support that assertion. The Court may not consider factual assertions made by Eversource in opposing summary judgment that are not supported by evidence. "Bare assertions made in the nonmoving party’s opposition will not defeat a motion for summary judgment." Barron Chiropractic & Rehab., P.C. v. Norfolk & Dedham Grp., 469 Mass. 800, 804 (2014).
The actual summary judgment record, construed in the light most favorable to Eversource, shows something quite different. It shows that starting in 2014 Veolia looked for and found a number of steam leaks, that Veolia did not disclose that information to Eversource, and that Veolia continued to deny that steam leaks from its system were damaging Eversource electric cables. But Eversource has produced no evidence that Veolia expressly and falsely denied that there were any steam leaks.
This evidence does not establish that Veolia engaged in fraudulent concealment that would toll the running of the statutory limitations period. Although Eversource has shown that Veolia discovered steam leaks that it did not disclose to Eversource, such a failure to disclose facts that may support a cause of action "does not amount to fraudulent concealment," and thus does not toll the limitations period, where the defendant had no fiduciary duty to disclose potential claims against it. Szymanski v. Boston Mut. Life Ins. Co., 56 Mass.App.Ct. 367, 381 (2002). And Veolia’s continued denials that it has any liability to Eversource even after discovering some steam leaks, perhaps because it did not believe that the leaks caused any damage to Eversource electric cables, does not constitute fraudulent concealment either. See White v. Peabody Const. Co., Inc., 386 Mass. 121, 134 (1982).
3. Tort Claims Based on Heat Leaks
Veolia argues that since it did not design or install the steam system it cannot be held liable for damage allegedly caused by heat radiating from steam pipes, as distinguished from damage allegedly caused by steam leaking from pipes. The Court is not convinced.
The steam distribution system at issue in this case was originally designed and installed by Eversource, back when it was known as Boston Edison Company. Eversource says it "lacks sufficient information to admit or deny" Veolia’s evidence that Boston Edison designed, constructed, and installed the steam system. The Court nonetheless deems those facts to be undisputed for the purpose of evaluating the cross motions for summary judgment. Cf. Dziamba v. Warner & Stackpole, 56 Mass.App.Ct. 397, 401 (2002). A properly supported statement of material facts served under Superior Court Rule 9A(b)(5) is an offer of proof, not merely a request for admissions. The responding party cannot create a disputed issue merely saying it is unable to admit the matter. "[M]ere assertions of the existence of disputed facts without evidentiary support cannot defeat [a] summary judgment motion." Bergendahl v. Massachusetts Elec. Co., 45 Mass.App.Ct. 715, 718-19, rev. denied, 428 Mass. 1111 (1998), cert. denied, 528 U.S. 929 (1999).
It is also undisputed that Edison sold the steam system to Boston Thermal Corporation in 1986, and that Veolia became the owner of this steam system in 2007 as the result of a series of corporate sales and acquisitions.
The summary judgment record appears to establish the following. When Boston Thermal bought the steam system from Boston Edison in 1986, it was a wholly-owned subsidiary of Catalyst Energy Corporation. In 1994, Catalyst was acquired by Trigen Energy Corporation; Boston Thermal therefore became a wholly-owned subsidiary of Trigen, and its name was changed to Trigen-Boston Energy Corporation. At some point thereafter, Trigen-Boston and other Trigen subsidiaries were acquired by Thermal North America, Inc. Finally, all of the stock of those subsidiaries, including Trigen-Boston, were transferred to a holding company called TNAI Holdings, LLC that Veolia acquired in 2007.
The Court agrees that Veolia could not be sued on the theory that a design defect in the steam system or some negligence how it was originally installed has caused damage to Eversource’s electrical infrastructure. Since Veolia did not design or install the steam system it could not be liable for damage caused by a design or installation defect. See Enrich v. Windmere Corp., 416 Mass. 83, 85-86 (1993) (no liability for defective fan absent evidence that defendant designed or manufactured the fan); Standard Tire & Rubber Co. v. A.L. Richardson & Bro., 231 Mass. 374 (1918) (tenant not liable for leak from sprinkler system installed by landlord). But that is not what Eversource is claiming.
Eversource claims that Veolia was negligent because it failed "to exercise due care in the operation, maintenance, and inspection of its Steam Distribution System." It asserts and has presented some evidence showing that Veolia’s negligence in operating, maintaining, and inspecting the steam system allowed steam leaks and the discharge of excess heat that allegedly damaged Eversource’s electrical system. (In contrast, Eversource’s claim for trespass to chattels is based only on the steam leaks, and not on alleged heat leaks.)
Like any property owner, Veolia has a duty "to exercise ordinary prudence and care in the maintenance and use" of its steam lines. See Gelinas v. New England Power Co., 359 Mass. 119, 124 (1971) (same as to electric utility). A property owner must maintain its property "in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the injury, and the burden of avoiding the risk." Bernier v. Smitty’s Sports Pub, Inc., 90 Mass.App.Ct. 472, 474 (2016), quoting Mounsey v. Ellard, 363 Mass. 693, 695-709 (1973). "If a property owner knows or reasonably should know of a dangerous condition on its property," it has a duty "to make reasonable efforts" to protect others against that danger. Papadopoulos v. Target Corp., 457 Mass. 368, 383 (2010).
Veolia may therefore be sued for negligence, even though it did not design or install the steam system, on the theory that Veolia knew or should have known there were dangerous conditions on its property and failed to make reasonable efforts to protect Eversource against those dangers. Whether Eversource can prove that claim must be decided by a jury.
In deciding whether Veolia exercised reasonable care, the jury will have to "determine what burdens of care are unreasonable in light of the relative expense and difficulty they impose ... as weighed against the probability and seriousness of the foreseeable harm to others." Mounsey, 363 Mass. at 709.
That is why, as is true in most cases, whether Veolia exercised reasonable care in view of all the circumstances is a jury question and not something that can be resolved on a motion for summary judgment. See generally, e.g., Jupin v. Kask, 447 Mass. 141, 146 (2006) ("whether a defendant exercised reasonable care" is within "the special province of the jury").
4. Trespass to Chattels Claim
Whether Veolia is liable in trespass turns on disputed issues of material fact, or at least on disputed inferences from admitted facts, and thus cannot be resolved on a motion for partial summary judgment. See Molly A. v. Commissioner of Dept. of Mental Retardation, 69 Mass.App.Ct. 267, 284 (2007) ("summary judgment cannot be granted if the evidence properly before the motion judge reveals a genuine issue of disputed material fact"); Flesner v. Technical Communications Corp., 410 Mass. 805, 811-12 (1991) ("Where a jury can draw opposite inferences from the evidence, summary judgment is improper").
Veolia contends that it did not intend for steam to leak from its system and damage electric cables belonging to Eversource.
If a jury were convinced that the steam leaks were entirely inadvertent, then Veolia could not be held liable for trespass damage to Eversource’s chattels. "[A]n unintended and inadvertent contact with the defendant’s personal property" is "not in itself a trespass upon that property." Marengo v. Roy, 318 Mass. 719, 721 (1945); accord Edgarton v. H.P. Welch Co., 321 Mass. 603, 612 (1947) (unintended intrusion upon land of another is not a trespass).
But Eversource has presented evidence that at some point in time Veolia became aware that steam was leaking from its system, continued to use the system without fixing it, and as a result steam leaks kept happening and causing damage.
If a jury were to find that Veolia knew its system was leaking, and continued to pump steam through it without locating and fixing the leaks, then the jury could reasonably find that Veolia is liable for trespass if the steam then leaked and damaged Eversource’s cables. See Sixty-Eight Devonshire, 348 Mass. at 183-84 (trespass where water continued to discharge onto neighboring building after property owner learned gutter was leaking). This follows from the principle that "a landowner who intentionally sets in motion a force which in the usual course of events will damage the land of another" is liable for trespass if the force does in fact damage someone else’s property. United Elec. Light Co. v. Deliso Const. Co., 315 Mass. 313, 319 (1943) (trespass where landowner deliberately injected grout underground that damaged neighbor’s conduits); accord Sheppard Envelope Co. v. Arcade Malleable Iron Co., 335 Mass. 180, 187 (1956) (trespass where landowner’s stack or cupola emitted cinders and gritty substances that continuously fell on neighbor’s property).
In sum, the trespass claim cannot be resolved on summary judgment because "a reasonable jury could return a verdict" for either side. Dennis v. Kaskel, 79 Mass.App.Ct. 736, 741 (2011), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
5. Implied Covenant Claim
Veolia has two different claims for breach of contract. One claim asserts that Veolia breached the express terms of its December 1983 agreement with Eversource; Veolia does not seek summary judgment as to that claim. The other asserts that Veolia breached the implied covenant of good faith and fair dealing. The Court concludes that Veolia is entitled to summary judgment on its favor on the implied covenant claim.
Like all contracts in Massachusetts, the 2013 agreement between Eversource and Veolia includes an implied covenant of good faith and fair dealing. See, e.g., Weiler v. PortfolioScope, Inc., 469 Mass. 75, 82 (2014). This implied covenant provides "that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract ..." Id., quoting Druker v. Roland Wm. Jutras Assocs., Inc., 370 Mass. 383, 385, 348 N.E.2d 763 (1976). Eversource need not allege or prove that Veolia acted in bad faith; this claim is made out if one party to a contract failed to act in good faith and thereby deprived the other party of at least some of what it bargained for. See, e.g., A.L. Prime Energy Consultant, Inc. v. Massachusetts Bay Transp. Auth., 479 Mass. 419, 434 (2018).
However, the implied covenant "does not create rights or duties beyond those the parties agreed to when they entered into the contract." Boston Med. Ctr. Corp. v. Secretary of Executive Office of Health & Human Servs., 463 Mass. 447, 460 (2012) (affirming dismissal of claim), quoting Curtis v. Herb Chambers I-95, Inc., 458 Mass. 674, 680 (2011). Instead, the implied covenant only governs "the manner in which existing contractual duties are performed." Eigerman v. Putnam Investments, Inc., 450 Mass. 281, 289 (2007).
Under the circumstances of this case, the implied covenant claim adds nothing to the claim under the express terms of the contract. Eversource argues that Veolia breached the implied covenant by not performing adequate inspections of its system for steam leaks and by refusing to reimburse Eversource for costs caused by steam leaks. But those claims arise under express terms of the contract. If Veolia breached express obligations to search for steam leaks and to reimburse Eversource, then the implied covenant is irrelevant. And if Veolia’s investigatory efforts satisfied the express requirements of the contract, and it had no express obligation to reimburse Eversource because Eversource did not incur any costs that were caused by Veolia steam leaks, then Veolia could not have violated the implied covenant because that implied provision does not impose any additional substantive duties. See Boston Med. Ctr., supra, at 459-60 (where plaintiff hospitals contracted with Medicaid program to be paid at certain rates, "the Secretary cannot be found to have acted in bad faith or to have dealt unfairly by failing to provide reimbursement at higher rates"). Either way, Veolia is entitled to summary judgment on the implied covenant claim.
ORDER
Defendant’s motion for partial summary judgment is ALLOWED IN PART and DENIED IN PART. With respect to the Defendant’s claim of spoliation, at trial the parties may present evidence regarding Plaintiff’s alleged spoliation of evidence and Defendant shall be entitled to an instruction telling the jury that if they find there was spoliation of evidence then they may, but are not required to, infer that the missing evidence would have been unfavorable to Plaintiff. The statute of limitations bars Plaintiff from seeking any compensation for damages caused by Defendant’s alleged negligence or trespass to chattels before February 18, 2012. Veolia is entitled to summary judgment in its favor on the claim in Count IV for breach of the implied covenant of good faith and fair dealing, which is hereby dismissed with prejudice. The Court DENIES Defendant’s requests for more onerous spoliation sanctions and for summary judgment in its favor on the rest of Plaintiff’s claims for negligence and for trespass to chattels.