968 F. Supp. 2d 435
D. Mass.2013Background
- Power Control filed suit against Orchid alleging breach of contract and related claims arising from a contract to design and build four amplifier prototypes for motor control.
- The contract commenced around June 11, 2004; Orchid delivered prototypes January–March 2005, which failed to meet specifications.
- Power Control tested each prototype and concluded they did not meet written specifications; the parties held multiple testing-related discussions in Feb–Apr 2005.
- March 16, 2005 Orchid delivered a completed-design package; Power Control received final prototypes and paid the final invoice on April 4, 2005.
- Power Control emailed and discussed testing discrepancies on April 4 and April 14, 2005; Orchid produced a Control Discussion and Review report on April 29, 2005.
- Power Control filed suit on April 25, 2011; the court addressed whether six-year statutes of limitations barred the remaining claims and when accrual occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did the contract accrual occur? | Power Control argues accrual occurred April 29, 2005 upon Orchid’s report or, if earlier, upon final delivery/payment. | Orchid argues accrual occurred no later than April 4, 2005 and that discovery rule does not apply. | Accrual occurred before April 25, 2005; June 16, 2005 analysis rejected discovery toll |
| Does the discovery rule toll the statute here? | Discovery rule tolls if the factual basis was inherently unknowable prior to April 29, 2005. | Power Control had knowledge of the defects earlier; discovery rule not applicable. | Discovery rule not applicable; facts were knowable; tolling denied |
| Was Power Control on notice prior to April 25, 2005? | Plaintiff asserts lack of notice until April 29, 2005 report; discovery rule could apply. | Plaintiff had notice by April 14, 2005 that prototypes failed to meet specifications. | Plaintiff was on notice before April 25, 2005; accrual occurred earlier |
| Do ongoing discussions or contract ambiguity toll accrual? | Ongoing discussions after March 16, 2005 prevent accrual until issues resolved. | Ongoing discussions do not toll accrual; contract completion occurred on March 16, 2005. | Ongoing discussions and alleged ambiguities do not toll accrual; no tolling justified |
| Is the contract a service contract with a six-year statute of limitations? | Six-year period applies to contract, implied duty, and unjust enrichment claims. | Court previously held six-year period applies; issue remains whether claims are timely. | Six-year statute applies; claims barred for accrual prior to April 25, 2005 |
Key Cases Cited
- Foisy v. Royal Maccabees Life Ins. Co., 356 F.3d 141 (1st Cir.2004) (accrual rules and discovery rule framework for contract actions)
- Saenger Org., Inc. v. Nationwide Ins. Licensing Associates, Inc., 119 F.3d 55 (1st Cir.1997) (general accrual timing for contract claims)
- Cambridge Plating Co., Inc. v. Napco, Inc., 991 F.2d 21 (1st Cir.1993) (notice-based accrual; discovery rule limitations)
- Donahue v. United States, 634 F.3d 615 (1st Cir.2011) (on the timing of accrual and discovery considerations)
- White v. Peabody Const. Co., Inc., 386 Mass. 121 (Mass. 1982) (notice accrual principle in Massachusetts law)
- RTR Technologies, Inc. v. Helming, 707 F.3d 84 (1st Cir.2013) (discovery rule applicability where inherently unknowable facts are involved)
- Gonzalez v. U.S., 284 F.3d 281 (1st Cir.2002) (definition of inherently unknowable factual basis for discovery rule)
- Hanson Hous. Auth. v. Dryvit Sys., Inc., 29 Mass.App.Ct. 440 (Mass. App. Ct. 1990) (limitations and discovery rule in Massachusetts contract cases)
- Edward v. Cambridge Plating Co. (implied from text), — (—) (noted in context as authority for notice-based accrual)