Case Style: Nurse v. Omega US Insurance, Inc.
Case Number: 14-P-653
Judge: Ariane D. Vuono
Court: Massachusetts Supreme Court
Plaintiff's Attorney: James M. Dunn
Defendant's Attorney: Thomas M. Proko
Description: This case arises from the denial of coverage by
the defendant, Omega US Insurance, Inc. (Omega1), for water
damage to a multi-unit residence owned by the plaintiff, Karl
Nurse. The damage is alleged to have been caused by a burst
1 Omega's successor-in-interest is Canopius US Insurance,
Inc. We use the name Omega as did the judge and the parties.
pipe which resulted from frigid weather. A judge of the
Superior Court granted summary judgment in favor of Omega on the
ground that Nurse's action for declaratory relief and breach of
contract was barred by the two-year statute of limitations set
forth in G. L. c. 175, § 99, Twelfth (the statute or § 99), and
incorporated as a provision of the policy.2 While there is no
dispute that Nurse did not commence this action within two years
of the date the loss occurred, he contends that his complaint
was nevertheless timely because the so-called "discovery rule"
applies to toll the statute of limitations period. We conclude
that the discovery rule does not apply in these circumstances
and, therefore, summary judgment was proper.
Background. The material facts, in the light most
favorable to Nurse, the nonmoving party, are as follows.3 Nurse
owns a three-unit residence (property or building) located at
294 Shawmut Avenue in Boston. The property was insured under a
dwelling policy issued by Omega for the period from April 27,
2 The statute provides, in relevant part:
"No suit or action against this company for the recovery of
any claim by virtue of this policy shall be sustained in
any court of law or equity in this Commonwealth unless
commenced within two years from the time the loss occurred
. . . ."
G. L. c. 175, § 99, Twelfth, as appearing in St. 1951, c. 478,
3 See Pinti v. Emigrant Mort. Co., 472 Mass. 226, 231
2009, to April 27, 2010. The policy was subject to the
requirements of G. L. c. 175, § 99, Twelfth, which sets forth
standard terms applicable to all fire insurance policies in the
Commonwealth including a two-year statute of limitations for any
claims covered by such policies.4
In December, 2009, the property was vacant except for
ongoing construction work in the third-floor unit, which
required that the plumbing supplying water to that unit remain
active.5 Both December 17 and December 18 were extremely cold
days with high temperatures reported at Logan Airport of twentysix
and twenty-eight degrees Fahrenheit, respectively. On
December 19, 2009, which was also a cold day with a high
temperature of thirty-two degrees, records from the Boston Water
and Sewer Commission (commission) show that the rate of water
usage at the property dramatically increased from fifteen cubic
feet of water every six hours for the period between December 1
4 The pertinent policy language states, "No action can be
brought unless the policy provisions have been complied with and
the action is started within two years after the date loss or
5 To operate the plumbing while the building was vacant,
Nurse was obligated under the policy to ensure that the heating
system was set to at least fifty-five degrees. Records of
electricity use during the period in question established that
the heating system was not operating. Nurse maintains, however,
that he left an electric space heater in the front hallway of
the building to maintain a minimum level of heating. These
facts, while relevant to other defenses raised by Omega, have no
and December 18, to approximately 260 cubic feet of water every
six hours. This rate of water usage continued from December 19
to December 28, 2009, and in excess of 8,000 cubic feet of water
was released during that period. The damage for which Nurse
seeks coverage occurred on December 19, 2009, the day on which
the water usage first spiked.6 On December 28, 2009, the
commission notified Nurse of the increased water usage; he went
to the property that day, where he discovered substantial water
damage to the building. He traced the damage to a leak under
the sink in the third-floor unit, and he immediately shut off
the water supply.7
Nurse subsequently filed a claim for coverage under the
policy, which Omega denied on January 14, 2011, following a year
of investigation. On December 28, 2011, Nurse brought this
action, seeking a declaration that Omega provide coverage for
6 Nurse claims to have entered the property on December 21,
2009, and to have seen no water damage, but he only entered the
front hallway and did not observe the third-floor unit where the
leak occurred. In any event it is undisputed that the leak --
and damage -- occurred on December 19, 2009.
7 A subsequent investigation revealed that a soldered joint
of a copper pipe supplying water to the kitchen sink in the
third-floor unit had failed. There was no indication of rust,
corrosion, or any other structural defect in the pipe or the
joint. Nurse asserts that he found a sliding door on the deck
open and speculated that it had been left open by the
the damage to the property.8 Omega filed a motion for summary
judgment asserting, among other defenses, that Nurse's complaint
was barred by application of the statute of limitations, as the
loss occurred on December 19, 2009, and Nurse waited until
December 28, 2011, more than two years later, to file suit.9 The
judge agreed with Omega and concluded that Nurse's suit was time
barred. In reaching his conclusion, the judge explicitly
rejected Nurse's argument that the discovery rule should apply
to toll the statute of limitations in § 99.
Discussion. Summary judgment is appropriate where there
are no genuine issues of material fact, and the moving party is
entitled to judgment as a matter of law. See Mass.R.Civ.P.
56(c), as amended, 436 Mass. 1404 (2002); Kourouvacilis v.
General Motors Corp., 410 Mass. 706, 716 (1991). We review a
decision to grant summary judgment de novo. See Ritter v.
Massachusetts Cas. Ins. Co., 439 Mass. 214, 215 (2003).
8 The complaint also alleged that Nurse was entitled to
recover damages because Omega (1) breached its contract by
declining to pay damages and (2) engaged in unfair insurance
9 The judge considered Nurse's failure to file his suit
within the limitations period as dispositive, and therefore, the
judge did not reach Omega's additional arguments for summary
judgment. These were that Nurse had failed to comply with a
condition precedent (his obligation to use reasonable care to
maintain heat at the property) and the so-called "freeze-up"
exclusion contained in the policy. Given our conclusion, we
likewise do not reach these issues.
As we have noted, neither party disputes that the water
damage or "loss" occurred on December 19, 2009, that Nurse filed
his complaint on December 28, 2011, or that the two-year statute
of limitations applies.10 Instead, Nurse urges us to reject the
judge's rationale and apply a discovery rule to the commencement
of the two-year limitations period provided by § 99 and the
policy.11 This raises the question whether the discovery rule
applies in this context.
A brief review of the history of the discovery rule is
helpful to our discussion. As the judge explained in his order
granting summary judgment in favor of Omega, in Massachusetts
the discovery rule operates to toll certain statutes of
limitations for particular types of claims until the claimant
discovers, or reasonably should have discovered, the damage.
Felton v. Labor Relations Commn., 33 Mass. App. Ct. 926, 927
(1992). The discovery rule was first adopted by the Supreme
Judicial Court in Hendrickson v. Sears, 365 Mass. 83 (1974). In
10 While our review is de novo, we agree with the judge's
well-reasoned memorandum of decision.
11 In addition to urging us to apply the discovery rule,
Nurse also argues that the question whether he should have been
aware of the water damage before December 28, 2009, the date he
was notified by the commission of the increase in water usage,
is one of fact that should be decided by a fact finder. See
Silvestris v. Tantasqua Regional Sch. Dist., 446 Mass. 756, 766-
767 (2006). However, given our conclusion that the discovery
rule does not apply, the date on which Nurse reasonably should
have been aware of the damage is not relevant.
Hendrickson, the court applied the rule to a claim of legal
malpractice and "held that, if an attorney's negligent title
search overlooked an easement of record and the title defect
was, in the circumstances, inherently unknowable by his clients,
their cause of action against him did not accrue until they
discovered or should reasonably have discovered the attorney's
misrepresentation concerning the record title." Bowen v. Eli
Lilly & Co., 408 Mass. 204, 206 (1990) (summarizing the holding
in Hendrickson v. Sears, supra). The rule was later applied to
claims of fraudulent misrepresentation, see Friedman v.
Jablonski, 371 Mass. 482, 485 (1976), and to medical malpractice
actions, see Franklin v. Albert, 381 Mass. 611, 618-619 (1980).
See also Harrington v. Costello, 467 Mass. 720, 724 (2014)
(relying on Friedman v. Jablonksi, supra). In each instance,
the court was construing statutes that set forth limitations
periods that began when a cause of action "accrued." As the
court noted in Bowen, it developed "a discovery rule for the
purpose of determining when a cause of action accrues." Bowen
v. Eli Lilly & Co., 408 Mass. at 205. In this case we are not
construing language pertaining to when a cause of action
We see no basis for extending the discovery rule to
insurance cases governed by § 99. Unlike the situations where
the discovery rule was initially applied, such as Hendrickson v.
Sears, supra, the damage here was not "inherently unknowable."
Also, neither party has provided us with a case directly on
point, nor have we found one.12 However, J. & T. Enterprises,
Inc. v. Liberty Mut. Ins. Co., 384 Mass. 586 (1981), is
instructive. In that case, the Supreme Judicial Court held that
the two-year statute of limitations set forth in § 99 barred an
action on a fire insurance policy commenced more than two years
after a fire occurred at the insured property (a restaurant)
even though it was unclear when the plaintiff, a mortgagee of
the property, first learned of the fire. Of significance is the
court's strict application of § 99 in ruling that the action was
barred as untimely regardless of who had authority to bring
suit. Id. at 587-588, 590.
More recently in Hawley v. Preferred Mut. Cas. Co., 88
Mass. App. Ct. 360, 364 (2015), we cited J. & T. Enterprises,
Inc., noting that "it is well settled that the statute of
limitations begins to run at the time the loss occurred."
Specifically at issue in Hawley was whether the provision of
§ 99 providing for the tolling of the statute of limitations
applied in the circumstances presented; this court determined
that it did not and that the limitations period was not tolled.
12 Nurse's reliance on Providence Builders, LLC v.
Philadelphia Indem. Ins. Co., 83 Mass. App. Ct. 1127 (2013), a
summary decision issued pursuant to our rule 1:28, does not help
him. The decision has no precedential value and, in any event,
In construing Massachusetts law in Nunheimer v. Continental
Ins. Co., 68 F. Supp. 2d 75, 78 n.5 (D. Mass. 1999), a Federal
District Court judge determined that the discovery rule does not
apply to the statute of limitations in § 99. There, the judge
concluded that the "loss" referenced by the statute is the
incident "causing the damage to the property" rather than the
denial of insurance benefits, reasoning that prior State court
decisions reflected this interpretation "unequivocally." See
id. at 78.13 Outside of Massachusetts, the application of the
discovery rule in this context varies across jurisdictions, and
we draw no clear guidance from the relevant decisions.14
13 In Mulhern v. Philadelphia Indem. Ins. Co., 802 F. Supp.
2d 317, 322 (D. Mass. 2011), the insurer moved for partial
summary judgment on statute of limitations grounds. A different
Federal District Court judge, construing Massachusetts law,
assumed that the discovery rule applied to a loss governed by
§ 99 in a situation where the damage occurred gradually and
there was a question of fact as to when it could reasonably have
been perceived. Consequently, the judge denied the insurer's
motion. (It is noteworthy that the decision does not contain
any analysis of the distinction between the Massachusetts cases
that adopt the discovery rule -- construing statutes with
"accrual" language -- and cases under § 99 using "loss occurred"
as the starting date for the running of the limitations period.)
14 Some jurisdictions have adopted a version of the
discovery rule in the insurance context. See, e.g., Prudential-
LMI Commercial Ins. v. Superior Ct., 51 Cal. 3d 674, 686 (1990)
(announcing "delayed discovery rule" for "accrual of a cause of
action" by which "inception of the loss" occurs when
"appreciable damage occurs and is or should be known to the
insured, such that a reasonable insured would be aware that his
notification duty under the policy has been triggered"); Jackson
v. State Farm Fire & Cas. Co., 108 Nev. 504, 509 (1992)
(limitations period triggered by "manifestation of loss" which
More fundamentally, we agree with the judge that the plain
language of the statute does not support the application of the
discovery rule. "[C]onsistent with our general practice of
occurs when "appreciable damage occurs and is or should be known
to the insured") (citations omitted). See also Elsey v.
Hastings Mut. Ins. Co., 161 Mich. App. 484, 488 (1987)
(implicitly applying discovery rule in concluding that
plaintiffs' claim was time barred because, "through the exercise
of reasonable diligence, they should have discovered their
However, in extending these principles several courts have
indicated that the discovery rule is only appropriate where a
claim is predicated on a "nonobvious injury or loss." See,
e.g., Parker v. Worcester Ins. Co., 247 F.3d 1, 4 & n.4 (1st
Cir. 2001) ("no one would expect an insured to be stripped of
coverage where a reasonable person would not have detected the
injury or loss"); Prudential-LMI Commercial Ins. v. Superior
Ct., 51 Cal. 3d at 681 ("delayed discovery rule" appropriate
where plaintiffs were "blamelessly ignorant" of objective facts
underlying claim); O'Reilly v. Allstate Ins. Co., 474 N.W.2d
221, 223 (Minn. Ct. App. 1991) (extending delayed discovery rule
in cases involving latent or progressive property damage).
Other courts have altogether declined to extend the
discovery rule to limitations periods in the insurance context,
reasoning that a loss occurs or "has its inception" when the
casualty insured against takes place irrespective of when the
damage is discovered. See, e.g., Sager Glove Corp. v. Aetna
Ins. Co., 317 F.2d 439, 441 (7th Cir.), cert. denied, 375 U.S.
921 (1963) ("[t]he loss occurs and has its 'inception' whether
or not the insured knows of it"); Harvey Fruit Mkt., Inc. v.
Hartford Ins. Co., 294 Ill. App. 3d 668, 669 (1998) ("date
utilized for determining the date of loss is the date on which
the actual physical loss of property occurred"); Moore v. Mutual
of Enumclaw Ins. Co., 317 Or. 235 (1993) (unlike statutes
referencing accrual of cause of action, statute referencing
inception of loss not amenable to discovery rule); Borgen v.
Economy Preferred Ins. Co., 176 Wis. 2d 498, 505 (Ct. App. 1993)
("'inception of the loss' clearly and unambiguously means the
date on which the loss occurs . . . '[i]nception' means
'beginning; start; commencement'") (citations omitted).
statutory interpretation, we look first to the language of the
statute because it is 'the principal source of insight' into the
intent of the Legislature." Sisson v. Lhowe, 460 Mass. 705, 708
(2011), quoting from Bishop v. TES Realty Trust, 459 Mass. 9, 12
(2011). In instances where the discovery rule has been
extended, the governing statute of limitations required a
determination of when the cause of action accrued, as opposed to
when the "loss occurred."15 By contrast, § 99 does not reference
15 As discussed previously, the Massachusetts cases that
have both adopted and extended the discovery rule construe
language pertaining to the accrual of a cause of action.
Friedman v. Jablonksi, 371 Mass. at 484, involved G. L. c. 260,
§ 2A, as then in effect, which provided in pertinent part:
"Except as otherwise provided, actions of tort, actions of
contract to recover for personal injuries, and actions of
replevin, shall be commenced only within two years next after
the cause of action accrues" (emphasis supplied). Franklin v.
Albert, 381 Mass. at 612 n.3, involved G. L. c. 260, § 4, as
then in effect, which provided, in pertinent part: "Actions of
contract or tort for malpractice, error or mistake against
physicians, surgeons, . . . hospitals . . . shall be commenced
only within three years next after the cause of action accrues"
16 The judge further noted that even if a discovery rule
applied to Nurse's claim, it was likely the claim would
nevertheless be barred. The discovery rule starts the running
of the statute of limitations when a claimant reasonably should
know of his loss. The policy required Nurse to inspect the
vacant property on a weekly basis ("You, or a responsible adult
appointed by you, must inspect the dwelling on a weekly basis to
ensure that there are no visible signs of loss or damage to the
insured property . . ."). Nurse visited the premises on
December 21, 2009, but claims he did not see the damage. As
already noted (see note 6, supra), during that visit he did not
inspect the premises beyond the hallway. According to the
Moreover, the phrase "loss occurred" is unambiguous. It
clearly denotes the time at which the damage to the property
happens. As the court observed in J. & T. Enterprises v.
Liberty Mut. Ins. Co., 384 Mass. at 588, § 99 "states broadly
that no action for recovery of any claim by virtue of the policy
shall be sustained unless brought within two years from the time
the loss occurred." In Nunheimer v. Continental Ins. Co., 68 F.
Supp. 2d at 78, the court interpreted the word "loss" as the
incident or event that causes "damage to the property." Accord
Hawley v. Preferred Mut. Ins. Co., 88 Mass. App. Ct. at 364. It
is well settled that "statutory language should be given effect
consistent with its plain meaning and in light of the aim of the
Legislature." Herrick v. Essex Regional Retirement Bd., 77
Mass. App. Ct. 645, 649 (2010), S.C., 465 Mass. 801 (2013),
quoting from Sullivan v. Brookline, 435 Mass. 353, 360 (2001).
The language we must construe here ("from the time the loss
occurred") has not changed since the time the provision was
added in 1881,17 despite the application of the discovery rule in
other contexts. The phrase "loss occurred" simply does not rest
on a determination of when the loss was discovered. Put simply,
judge, "A jury would likely conclude that Nurse should have been
aware of the damage by no later than December 21, 2009."
17 See St. 1881, c. 166, § 1.
if the aim of the Legislature had been to incorporate the notion
of accrual into § 99, it would have done so.18
For the foregoing reasons, we conclude that the discovery
rule does not apply to claims governed by § 99. Because it was
beyond dispute the water damage for which Nurse seeks coverage
occurred on December 19, 2009, the statute of limitations began
to run on that date. Accordingly, this action is untimely, and
summary judgment was properly granted.
* * *
18 The Supreme Judicial Court's decision in Goldsmith v.
Reliance Ins. Co., 353 Mass. 99 (1967), provides additional,
albeit somewhat tangential, support for our conclusion. In that
case the court was faced with a conflict between G. L. c. 175,
§ 22, which provides that an insurance policy may not contain a
provision that limits the time within which a cause of action
accrues to less than two years, and § 99, which provides that
the action must be brought within two years of the time that the
loss occurred. The court determined that the conflict could be
resolved by confining the application of § 22 to "nonstatutory
limitations." The court observed that "§ 99, in limiting
actions to two years from the time the loss occurs, limits them
to less than two years from the time the cause accrues." Id. at
Outcome: Judgment affirmed.