SCHOEMBS v. SCHENA (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The plaintiffs, Robert and Kimberly Schoembs (the Schoembses), appeal from an order of a judge of the Superior Court allowing defendant Sandra Gardner's motion for summary judgment and from the denial of their motions for reconsideration and to amend the complaint. We affirm.

Background. In January 2007, Robert and Christine Schena (the Schenas) hired Sandra Gardner to list their home for sale for $449,900. After initial efforts to sell the home were unsuccessful, the Schenas hired David Brosnan, a structural engineer, to evaluate the property. Brosnan's report ⁴ noted that the home had slanted floors and had settled, and made some recommendations. The Schenas completed three of the minor repairs recommended by Brosnan. They also reduced the listing price by $20,000.

During this same time frame, the Schoembses, who lived out of State, hired Patrick Gallagher, a real estate broker, to help them find a home in Massachusetts. They reviewed many properties, including the Schena property, on the Multiple Listing Service (MLS).⁵ The Schena listing stated, among other things, that the home was built in 1926 and had approximately 2242 square feet of living area. In the disclosure section of the listing, “Settlement” was noted.⁶

In May 2007, the Schoembses visited properties in Massachusetts, including the Schena property. Although the Schoembses noticed the “slanted,” “unlevel,” and uneven floors ⁷ in the home, they made an offer to purchase the property that day that was accepted.

The Schoembses hired Jeff Pederson of Tiger Home Inspection, Inc. (Tiger), to conduct a home inspection. They chose not to attend the inspection. Pederson produced a report (Tiger report) that outlined a number of issues with the property. In addition to areas of concern, including the roof, chimney, gutters, and electrical systems, the report stated in relevant part:

“This home experienced major settlement of its foundation long ago. The entire place, including the basement floor has settled and created sloping toward the front and r[igh]t front. Steps were taken to reinforce the area adjacent to the chimney. There was visible cracking in the foundation seen in the crawl space. There was no cracking seen in the remaining basement. If you can be comfortable with the sloping floors, I do not believe this is going to worsen. Contact a structural engineer if you wish to evaluate this issue further” (emphasis added).

Nonetheless, the Schoembses purchased the property and closed on July 16, 2007.

After they moved in, the Schoembses noticed new cracks develop throughout the home. Robert testified that he first saw new cracks no later than July 2008. Kimberly saw cracks in the door frame beginning in July 2007, as well as larger cracks in the fall of 2009. In August 2010, the Schoembses hired a structural engineer, who found significant defects in the home's foundation.

Procedural history. The Schoembses filed a complaint in the Superior Court on June 27, 2013, which was amended on September 19, 2013. As relevant here, the amended complaint asserted claims against Gardner for misrepresentation, fraud, deceit, and violation of G. L. c. 93A (93A claim).

On December 5, 2014, Gardner filed a motion for summary judgment pursuant to Mass. R. Civ. P. 56, 365 Mass. 824 (1974), contending that the misrepresentation ⁸ and 93A claims were barred by the respective statutes of limitations and that the Schoembses had failed to establish reliance on the sellers' statement to their detriment. Shortly thereafter, the Schoembses sought leave of court to file a further amended complaint to add an additional 93A claim against Gardner based on newly discovered evidence. In January 2015, a judge of the Superior Court allowed Gardner's motion for summary judgment, concluding that the claims were barred by the applicable statutes of limitations. The Schoembses' motion for reconsideration of that ruling was denied.

In January 2017 the motion to amend the complaint was denied by a second judge after a hearing. This appeal followed.

Discussion. 1. Statute of limitations. We review a grant of summary judgment de novo to determine “whether viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Karatihy v. Commonwealth Flats Dev. Corp., 84 Mass. App. Ct. 253, 255 (2013), quoting Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991). “Where summary judgment is sought on the basis of a statute of limitations, once the defendant establishes that the time period between the plaintiff's injury and the plaintiff's complaint exceeds the limitations period set forth in the applicable statute, the plaintiff bears the burden of alleging facts which would take [the] claim outside the statute.” McGuinness v. Cotter, 412 Mass. 617, 620 (1992).

Here, the Schoembses' claims against Gardner are based on theories of either intentional or negligent material misrepresentations regarding the condition of the property and violation of G. L. c. 93A, § 9. The claims for misrepresentation sound in tort and are subject to a three-year statute of limitations. G. L. c. 260, § 2A. “[A] cause of action for deceit in the sale of real estate accrues when a buyer learns of the misrepresentation or when the buyer reasonably should have learned of the misrepresentation.” Friedman v. Jablonski, 371 Mass. 482, 485-486 (1976). The 93A claim is subject to a four-year statute of limitations. G. L. c. 260, § 5A. “The accrual dates of ․ 93A claims are established by the same principles as govern the determination of the underlying actions.” Hanson Hous. Auth. v. Dryvit Sys., Inc., 29 Mass. App. Ct. 440, 448 (1990). Therefore, all claims accrued when the Schoembses learned or reasonably should have learned of the misrepresentation. See Friedman, supra at 486.

Assuming without deciding that actionable misrepresentations are attributable to Gardner, the Schoembses argue that their claims are not barred by the statute of limitations because of the so-called discovery rule. This doctrine tolls a cause of action until the plaintiffs learned or reasonably should have learned of the alleged misrepresentation. McEneaney v. Chestnut Hill Realty Corp., 38 Mass. App. Ct. 573, 577 (1995). Put another way, the discovery rule “[m]ay arise in three circumstances: where a misrepresentation concerns a fact that was ‘inherently unknowable’ to the injured party, where a wrongdoer breached some duty of disclosure, or where a wrongdoer concealed the existence of a cause of action through some affirmative act done with the intent to deceive” (citations omitted). Albrecht v. Clifford, 436 Mass. 706, 714 (2002). The Schoembses contend that they could not have known about the defects until August 2010 because they were inherently unknowable.

On this record, we agree with the judge's conclusion that the Schoembses should have reasonably known of the defects at the time of the sale or shortly thereafter. See Albrecht, 436 Mass. at 714, citing Williams v. Ely, 423 Mass. 467, 473 n.7 (1996) (“ ‘inherently unknowable’ standard is no different from and may be used interchangeably with ‘knew or should have known’ standard”). “Inherent unknowability is not a fact, but rather a conclusion to be drawn from the facts.” Melrose Hous. Auth. v. New Hampshire Ins. Co., 402 Mass. 27, 31 n.4 (1988). The Schoembses failed to demonstrate that “they did not know of the defect within the statute of limitation and that ‘in the exercise of reasonable diligence, they should not have known.’ ” Albrecht, supra at 715, quoting Friedman, 371 Mass. at 487.

Here, the MLS listing noted settlement, the Schoembses saw the slanting floors before they purchased the home, and the Tiger report detailed significant issues with the property and importantly expressly recommended consulting a structural engineer. Moreover, shortly after moving in and for many months thereafter, both Schoembses noticed new cracks in the home. Accordingly, the Schoembses did not meet their burden of demonstrating that “in the exercise of reasonable diligence, they should not have known” about the defects prior to 2010. See Albrecht, 436 Mass. at 714-716. See also Friedman, 371 Mass. at 486.

2. Equitable tolling. For the first time on appeal, the Schoembses argue that, under the doctrine of equitable tolling, their fraudulent concealment claims are not barred by the statutes of limitations. However, “[a]n issue not raised or argued below may not be argued for the first time on appeal.” Century Fire & Marine Ins. Corp. v. Bank of New England-Bristol County, N.A., 405 Mass. 420, 421 n.2 (1989). See Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006) (issue not argued in opposition to summary judgment motion may not be raised for first time on appeal, as “plaintiffs never put the judge on notice that they opposed summary judgment on this theory”). As such, this argument is waived.

3. Motion for reconsideration. The Schoembses sought reconsideration of the summary judgment decision on the basis of newly discovered evidence, and also alleged that a jury should decide the statute of limitations issue. We review the denial of a motion for reconsideration for an abuse of discretion. See Littles v. Commissioner of Correction, 444 Mass. 871, 879 (2005); Piedra v. Mercy Hosp., Inc., 39 Mass. App. Ct. 184, 188 (1995). A motion for reconsideration is “designed to correct judgments which are erroneous because they lack legal or factual justification.” Pentucket Manor Chronic Hosp., Inc. v. Rate Setting Comm'n, 394 Mass. 233, 237 (1985). Here, the statute of limitations argument was essentially a regurgitation of the summary judgment argument and without more, the motion was properly denied. As to the newly discovered evidence claim, this is based on an allegation that certain parties knew one another and therefore Gardner should have known of the Schenas' alleged concealment of the defects in the home. However, as the judge concluded, any purported familial relationship has no bearing on whether the Schoembses knew or should have known of the alleged defects before expiration of the statutes of limitations. The motion was properly denied.

4. Motion to amend complaint. We review the denial of a motion to amend a complaint for abuse of discretion. See Murphy v. I.S.K.Con. of New England, Inc., 409 Mass. 842, 864 (1991). While leave to amend should be “freely given when justice so requires,” Mass. R. Civ. P. 15 (a), 365 Mass. 761 (1974), such leave may be denied where there is undue delay, undue prejudice to the opposing party, or futility in the amendment. Mathis v. Massachusetts Elec. Co., 409 Mass. 256, 264 (1991). Where, as here, an amendment is futile such that it could not withstand a motion to dismiss, leave to file an amended complaint is properly denied. See Adorno v. Crowley Towing & Transp. Co., 443 F.3d 122, 126 (1st Cir. 2006). The Schoembses' effort to add an additional 93A claim was likewise barred by the statute of limitations. Therefore, we discern no abuse of discretion.

Conclusion. We affirm the orders allowing Gardner's motion for summary judgment and denying the motions for reconsideration and to amend the complaint.

So ordered.

Affirmed.

FOOTNOTES

4.   The Schoembses alleged that Gardner failed to provide the Brosnan report to them.

5.   The MLS is a database of residential properties used by real estate brokers to list properties.

6.   The “seller's statement of property conditions” warned that the buyer should independently verify all information contained therein before purchase.

7.   Kimberly attributed the slanted and uneven floors in the property to settlement. She specifically stated: “I noticed that [the floors] were slightly slanted. Unlevel I would say.” She further stated at her deposition that “[she] expected settling at [the] property.”

8.   In their reply brief and at oral argument, the Schoembses abandoned their claim as to the alleged misrepresentation regarding the square footage of the home and we therefore need not address it.