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Controlled Affiliates Under the Massachusetts Tort Claims Act: New Case Law

Does a property owner who is a “controlled affiliate” of a public housing authority also qualify as a public entity by its affiliation? More importantly for purposes of personal injury law, is an injured tenant limited in recovery against the controlled affiliate under the Massachusetts Tort Claims Act? These questions were addressed by the Appeals Court in the Massachusetts case of Acevedo v. Musterfield Place.

In the case, the plaintiff slipped and fell while he was walking down the stairs in his apartment in a public housing authority in Framingham. He suffered serious injuries and sued the housing authority, the property owner, and the managing agent in order to recover for his damages. The property owner and manager filed a motion for summary judgment, asking that they be regarded as public employers under the Massachusetts Tort Claims Act. The effect of that would be to limit their liability to $100,000 in damages, which is the limit for public entities prescribed by the act.

The property owner in this case was classified as a “controlled affiliate”—it is more than a private contractor, as it purchased the property from the public housing authority in order to assist with its rehabilitation and maintenance. Under the Code of Massachusetts Regulations, the controlled affiliate is required to maintain the property in the same manner and to the same effect as if it were a public housing authority.

The trial judge denied the defendants’ motion, noting that the act clearly defines public employers, and that “controlled affiliates” of public entities, such as the defendants, are not considered public employers. The judge then reported the case to the Appeals Court, recognizing that this was a case of first impression in Massachusetts.

The Appeals Court concluded that neither a controlled affiliate nor the manager of a controlled affiliate is a "public employer" as defined in the Massachusetts Tort Claims Act, noting that the language of the act does not include controlled affiliates, and in fact, specifically excludes private contractors.

The Court compared the situation to private contractors. “[I]f a housing authority that owned a housing development were to retain a private contractor to manage the development (including delegating to that private contractor the responsibility for maintenance and repairs in the housing development), a suit brought by a tenant of the housing development against the private contractor for injuries arising from the negligent failure to maintain or repair the premises could not be brought under the act and, accordingly, would not be subject to the limitations on liability in the act,” the Court stated. Simply having a contract that required the contractor to perform the same duties of maintenance and repair that a housing authority would have does not transform the contractor into a public housing authority or public employer, the Court noted.

“Accordingly, if a private contractor that manages property owned by a housing authority is not a public employer (even if it were contractually obligated to manage the property as if it were a housing authority), then a controlled affiliate that purchased the property from the housing authority, but is required by regulation to manage the property "in the same manner and to the same effect as if it were" a housing authority…is also not a public employer,” the Court said. “It would be strange indeed if the sale of the public property by the housing authority to a private entity could enable that private entity to become a public employer.” The Appeals Court affirmed the trial judge’s decision to deny the defendants’ motion.

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