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14-P-653                                                  Appeals Court

                 KARL NURSE    vs.   OMEGA US INSURANCE, INC.


                                 No. 14-P-653.

             Suffolk.     January 13, 2015. - October 5, 2015.

                  Present:    Trainor, Vuono, & Hanlon, JJ.

Insurance, Coverage, Water damage. Contract, Insurance.
     Limitations, Statute of. Practice, Civil, Summary
     judgment, Declaratory proceeding, Statute of limitations,
     Commencement of action.


     Civil action commenced in the Superior Court Department on
December 28, 2011.

     The case was heard by Edward P. Leibensperger, J., on a
motion for summary judgment.


       James M. Dunn for the plaintiff.
       Thomas M. Prokop for the defendant.


       VUONO, J.     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.
                                                                     2


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,
§ 1.
     3
       See Pinti v. Emigrant Mort. Co., 472 Mass. 226, 231
(2015).
                                                                   3


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 twenty-

six 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
damage occurs."
     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
bearing here.
                                                                    4


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
contractor.
                                                                    5


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
practices.
     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.
                                                                        6


     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.
                                                                    7


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

"accrues."

    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.
                                                                     8


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,
is distinguishable.
                                                                   9


     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
                                                               10


    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
loss").

     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).
                                                                 11


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

accrual.16


     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"
(emphasis supplied).
     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
                                                                     12


      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.
                                                                   13


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.

                                   Judgment affirmed.




     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
102.
