The owner and manager of an apartment building attempted to extend the umbrella of immunity under the Tort Claims Act, G.L. c. 258 Sec. 2 to avoid liability for a serious injury Massachusetts slip and fall accident. A resident of a public housing development fell while descending the stairs in his apartment building. He filed suit against the city’s housing authority, the company that owned the property, and the company that managed the property. The owner and manager moved for partial summary judgment, asserting they were public employees. The motion was denied and the defendants appealed.
The Massachusetts Torts Claims Act arose out of a case law precedent known as “sovereign immunity”. This legal concept shielded the government from liability if someone was injured as a result of the negligence stemming from a governmental agent. The Massachusetts legislators created the Tort Claims Act to delineate when this privilege applied and when exceptions to this privilege occurred. While the Act increases the ability for an injured person to find legal relief, public employees are shielded from liability. The defendants in this suit argued they were public employees as “controlled affiliates” for a housing authority apartment complex. The controlled affiliate of a local housing authority is an entity with the power to own and manage residential real property which is within the legal control of the housing authority. The trial judge found controlled affiliates do not fit within the scope of the definition of “public employee” found within the Tort Claims Act.
The defendants came into their respective positions in 2009, when the housing authority realized the rehabilitation project costs exceeded the public funds available to them. The project was partially financed through five other sources, including an equity investment seeking to take advantage of the Federal Low Income Housing Tax Credit program. The tax credits are available to investors providing funds for qualified low income housing projects with rent restrictions and a minimum share of rental units for moderate and low income households. The housing authority cannot utilize these tax credits, so in order to keep outside investors on board, they “sell” the use of these credits and transfer the ownership of the housing project to a “controlled affiliate”. The apartment complex in this suit was transferred over to the owner, giving him 99.99 percent ownership interest and the manager, giving him .001 per cent ownership interest.
The owner and manager claimed on appeal that because the housing authority retains actual and legal control over the property and they are beholden to follow the federal regulations connected to their duties as controlled affiliates, they are public employees. The Supreme Court disagreed. The Tort Claims Act specifically excludes private companies contracting with public entities. The court noted if an injured party attempted to file suit against a private contractor for failing to maintain and repair the premises, the injured would not be able to file suit under the Tort Claims Act and the manager would be precluded from enjoying the immunity.
The court looked at the main purpose of the Torts Claim act which provides plaintiffs with valid causes of action to recover when government entities are negligent. The legislation holds the spirit of “sovereign immunity” by only allowing the claims against the government that are valid and with reasonable damages so government can continue to run with stability and effectively. The Supreme Court determined that because the owner and manager are not governmental entities, shielding them from liability would not protect public funds. The partial summary judgment against the defendants was affirmed, allowing the injured resident to pursue legal action against the manager and owner.
The Massachusetts premises liability attorneys of Karsner & Meehan can assist you with your personal injury claim. If you’ve been injured after slipping and falling, call our office today at 508-822-6600 for a free, confidential consultation today.
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