Under that line of decisions — the most recent example is Bowen v. Eli Lilly & Co., 408 Mass. 204 (1990) — which considers when an action accrues for purposes of applying a statute of limitations, discovery of the wrong and, in negligence cases, the concurrence of some harm trigger
Judgment was entered on the basis of the allowance of a motion for summary judgment. The material facts, as is necessary if a case is to be considered on a motion for summary judgment, are not in dispute. See Mass.R.Civ.P. 56, 365 Mass. 824 (1974); Federal Deposit Ins. Corp. v. Csongor, 391 Mass. 737, 740 (1984). We summarize those facts.
International Mobiles Corp. ("Mobiles"), the plaintiff, leases ice cream vans to street vendors. From 1973 to 1979, Mobiles engaged the defendant Corroon & Black/Fairfield & Ellis, Inc. ("Corroon"), an insurance broker, to advise it about insurance needs and to purchase necessary coverage. Among a number of liability policies placed by Corroon for Mobiles in 1976 and 1977 was an excess coverage fleet policy with Northeastern Fire Insurance Company of Pennsylvania ("NFI"), covering ice cream vans operated by lessees — so Mobiles thought — in Maryland, Pennsylvania, Rhode Island, and Virginia. Mobiles paid an $8,500 insurance premium for NFI's 1977 coverage.
On June 16, 1977, a five year old girl was badly hurt in Portsmouth, Rhode Island, while buying ice cream from a van leased from Mobiles. She was struck by an oncoming
NFI responded on March 2, 1981, that the van involved in the Rhode Island accident was not included among those insured and that, indeed, only vehicles in Pennsylvania and Virginia were covered. Accordingly, NFI disclaimed coverage.
NFI's abstention from the field did not immediately alter the shape of the battle in Rhode Island. Mobiles' primary liability insurer, Wausau Insurance Company, assumed the defense for Mobiles. In June, 1986, after several days of trial, the case against Mobiles was settled for $380,000. Wausau paid the first $10,000. Mobiles had looked to NFI for the first level of excess coverage, between $10,000 and $100,000, and to First State
1. The negligence claim. Negligence in the abstract does not support a cause of action. A negligence claim cannot be maintained and, therefore, does not accrue, without a showing of some harm resulting from the negligence. Cannon v. Sears, Roebuck & Co., 374 Mass. 739, 742 (1978). Dinsky v. Framingham, 386 Mass. 801, 803 (1982). That some degree of harm came to the plaintiff as a result of the defendant's negligence is all that is required; the extent of the injury
In the general run of cases, negligence actions accrue when the accident happens and a person is injured. Cannon v. Sears, Roebuck & Co., 374 Mass. at 741. The ladder collapses and the woman on it suffers a broken leg. Suspected negligence and harm are apparent, and the statute of limitations begins to run. See White v. Peabody Constr. Co., 386 Mass. 121, 129 (1982); Frank Cooke, Inc. v. Hurwitz, 10 Mass.App.Ct. 99, 109 (1980). When negligence and harm are inherently unknowable, as in the case of an undiagnosed and asymptomatic disease, the running of the three-year limitations period begins "on the happening of an event likely to put the plaintiff on notice." Hendrickson v. Sears, 365 Mass. 83, 89-90 (1974). White v. Peabody Constr. Co., 386 Mass. at 129. Joseph A. Fortin Constr., Inc. v. Massachusetts Hous. Fin. Agency, 392 Mass. 440, 443 (1984). Bowen v. Eli Lilly & Co., 408 Mass. at 205-207. Notice here refers not to discovery of every fact necessary to prevail on the claim, but rather to discovery of the plaintiff's injury as causally connected to the defendant's negligence. White v. Peabody Constr. Co., 386 Mass. at 130. Salin v. Shalgian, 18 Mass.App.Ct. 467, 470 (1984). The plaintiff receives notice, and the statutory period begins to run, when the plaintiff knows or reasonably should have known that it sustained appreciable harm as a result of the defendant's negligence. Massachusetts Elec. Co. v. Fletcher, Tilton & Whipple, P.C., 394 Mass. at 268. Cantu v. St. Paul Cos., 401 Mass. at 57.
So it is that a negligence action may be maintained against an insurance agent or broker who undertakes to procure an insurance policy and fails to do so, Rae v. Air-Speed, Inc., 386 Mass. 187, 192 (1982), but not unless there has been some appreciable harm to the potential insured. See
In the instant case, although Mobiles had reason to think that Corroon had bungled when NFI responded in 1981 that its policy did not cover vehicles in Rhode Island, Mobiles incurred no expense nor, on this record, suffered any discernible
There is some transitory attraction to the idea, once a party becomes aware that it has been exposed to another's negligence, although damage has not yet materialized, that within three years from that awareness the potentially injured person be required to give unmistakable notice of potential liability to the allegedly negligent party by filing a lawsuit. The target party can then look to its defenses. The countervailing and more powerful consideration, however, which underlies the principle that damage is a prerequisite to a negligence action, is that it is unsound judicial policy to encourage the initiation of litigation in anticipation that liability may materialize. See Gore v. Daniel O'Connell's Sons, Inc., 17 Mass. App. Ct. at 648; Young v. Clinchfield R.R. Co., 288 F.2d 499, 502 (4th Cir.1961). It is unwise to require persons to take out options on potential negligence actions.
As Mobiles filed its action in negligence against Corroon within three years of the settlement agreement to which Mobiles was bound to contribute, the action was not barred under G.L.c. 260, § 2A.
2. The G.L.c. 93A claim. For a cause of action under G.L.c. 93A, the relevant statutory period of limitations is
In making out a c. 93A claim, the plaintiff must show a loss connected with the unfair or deceptive act. International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 850 (1983). Shapiro v. Public Serv. Mut. Ins. Co., 19 Mass.App.Ct. 648, 657 (1985). The loss which the plaintiff must show in a c. 93A action is analogous, if not identical, to the appreciable harm the plaintiff sustains in a negligence action. Just as a cause of action in negligence accrues when the plaintiff knew or should have known of appreciable harm resulting from the defendant's negligence, the same standard is applicable to set the date of accrual in a c. 93A action. Paterson-Leitch Co. v. Massachusetts Mun. Wholesale Elec. Co., 840 F.2d at 994. The date of accrual for Mobiles' c. 93A action, therefore, is also the date of settlement in June, 1986. As the limitations period for the c. 93A action is a year longer, that count of the plaintiff's action is, obviously, not time barred.
3. The breach of contract claim. A cause of action for breach of contract accrues at the time of the breach. Boston Tow Boat Co. v. Medford Natl. Bank, 232 Mass. 38, 41 (1919). Campanella & Cardi Constr. Co. v. Commonwealth, 351 Mass. 184, 185 (1966). DiGregorio v. Commonwealth, 10 Mass.App.Ct. 861, 862 (1980). This rule applies even though a specific amount of damages is unascertainable at the time of the breach or even if damages may not be sustained until a later time. DiGregorio v. Commonwealth, 10 Mass. App. Ct. at 862. Cf. Restatement (Second) of Contracts § 236 comment a (1981) ("Even if the injured party sustains no pecuniary loss or is unable to show such loss with sufficient certainty, he has at least a claim for nominal damages").
The time at which Corroon committed a breach of its contract with Mobiles was when Corroon failed to procure an
There are, however, situations in which a cause of action for breach of contract is not capable of being discovered because it is based on an "inherently unknowable" wrong. In those cases, the "discovery rule" tolls the accrual date of the statutory period until the injured party knows or should know the facts giving rise to the cause of action. Frank Cooke, Inc. v. Hurwitz, 10 Mass. App. Ct. at 106 (1980). The discovery rule has been applied in breach of contract claims in those cases involving the rendering of professional services where a client would not be expected to retrace the professional's steps not be able necessarily to recognize the professional negligence should the client come across it. Anthony's Pier Four, Inc. v. Crandall Dry Dock Engrs., Inc., 396 Mass. 818, 825 (1986). See Frank Cooke, Inc. v. Hurwitz, 10 Mass. App. Ct. at 107. The inherently unknowable wrong must be incapable of detection by the wronged party through the exercise of reasonable diligence. Melrose Hous. Authy. v. New Hampshire Ins. Co., 24 Mass.App.Ct. 207, 212 (1987), S.C., 402 Mass. 27 (1988). Even if the discovery rule were to be applied to these facts, Mobiles surely discovered the facts giving rise to a cause of action in breach of
Our resolution of the contract count is in dissonance