On April 16, 2025, the Massachusetts Supreme Judicial Court (the “SJC”) issued a decision concluding that a claim based on a negotiated contract providing for indemnification of damages caused by an architect’s negligence cannot be time barred under the statute of repose. The decision may noticeably impact negotiation and litigation of construction agreements going forward; parties in the construction industry need to pay careful attention to such provisions in their contracts. In the case, Trustees of Boston University v. Clough, Harbour & Associates LLP[1], the defendant architect agreed to design a new athletic field for Boston University. As part of the agreement, the sophisticated parties negotiated an express indemnification provision pursuant to which the architect promised to indemnify the university for “any and all” expenses incurred by the university as a result of the architect’s “negligen[t]” design. The SJC noted that this provision is not part of the American Institute of Architects (AIA) Standard Form of Agreement Between Owner and Architect, AIA Document B101-2007 used by the parties. When the university began to experience problems with the field after it first opened in 2013, it demanded, pursuant to the indemnification provision, that the architect indemnify it for the expenses. More than six years after the field opened, the university sued. The architect moved for summary judgment, relying on the statute of repose, and the Superior Court allowed the motion. Boston University appealed, and the SJC, recognizing the importance of the issue, took the case on direct appellate review, bypassing the Appeals Court. The SJC noted that the statute of repose[2] provides an automatic, nearly inviolable bar to actions of tort for damages arising out of “any deficiency or neglect in the design, planning, construction or general administration of an improvement to real property” if brought more than six (6) years after the earlier of (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of the possession for occupancy by the owner. The statute of repose does not, however, apply to contract actions; it is a limitation expressly applicable to actions of tort. The SJC therefore analyzed whether the action, although styled a contract claim, was really one of tort. In its analysis, the court noted that it would look beyond labels to examine the “gist of the action” to determine whether the tort statute of repose bars the claim.  The court wrote that determining where the gist of a claim falls depends largely on where the standard of performance is derived from. In contracts, the standard of performance is set by the defendant’s promises, whereas in tort, it is set by law. For example, the court observed that it has previously determined that the tort statute of repose applies to a claim for breach of an implied warranty, since the duty is imposed by law, and that the elements for breach of implied warranty and for negligence claims are the same. In contrast, it cited Gomes v. Pan Am. Associates[3] as an example of a contractual indemnification clause upheld in spite of a negligence claim brought more than six years after the property opened for use, where the parties freely and intelligently entered into a comprehensive contract of indemnification. Because in the Boston University case, the architect’s duty to indemnify the university was not one imposed by law, but rather, a promise to which the architect freely and intelligently chose to be bound, the SJC held that the gist of the action sounded in contract.[4] As a contract claim, the statute of repose could not apply, and the prior grant of summary judgment was reversed and remanded for further proceedings. Importance of the Decision As specifically noted in the SJC’s decision, the type of indemnification provision at issue, which included an indemnity for negligence, is not found in the standard AIA form most often used in construction contracting. That may change moving forward, but unless and until it does, the weight of negotiating such a clause into that type of contract has taken on additional importance. The statute of repose has long been a powerful shield for those in the construction industry to fend off lawsuits arising many years after completion of a project. There are very few ways to sue around a construction claim that arises more than six years after the project is complete. This decision now adds a meaningful sword to the arsenal of property owners for use in combating those protections. Relevant here, while the statute of repose is a strict six year limitation from completion of the project, the six year breach of contract limitation period only begins to run from the time of breach; in this case, that occurred when the architect refused to indemnify the university. Having that statute of limitations tolled pending a breach gives significant life to contract claims arising long after the project is completed. Parties on both sides of such construction contracts will need to consider how to approach negotiating indemnification provision moving forward. If they are not careful, construction professionals could find themselves liable for damages occurring decades after a construction project is completed. The Legislature’s response to the decision will be another intriguing area to watch. Caselaw is full of decisions noting the legislative intent in providing certainty and ironclad protections for construction professionals after six years, when they might otherwise forever be on the hook for latent defects in their work. Whether the Legislature takes action in response to this ruling remains to be seen; it may find that the SJC continued to honor its intent by only providing a carve out for those sophisticated parties willing to enter into a heavily negotiated indemnification provision, or it may feel that the loophole goes too far in adding pressure on construction professionals who may be forced to agree to provisions they would otherwise choose to reject. The Legislature’s response will be closely watched by the field. *** Sullivan’s Real Estate and Litigation teams are paying careful attention to these developments and stand ready to assist with the negotiation and litigation of such contracts and disputes. Please feel free to contact our attorneys with any questions on this significant development in construction law.    [1] 495 Mass. 682 (2025). [2] G.L. c. 260, § 2B, first par. [3] 406 Mass. 647, 648 (1990). [4] It further noted that, while not dispositive, because the complaint alleged breach of contract, the elements that the university would have to prove at trial differed from those in negligence, and supported the reading that the claim truly did sound in contract.

On March 11, 2025, the Massachusetts Supreme Judicial Court (the “SJC”) issued a decision concluding that once a losing party satisfies a judgment in full, postjudgment interest stops running even if the losing party then appeals. The decision stands to have a potentially significant impact for Massachusetts litigants’ strategic appellate decisions going forward. In the case, H1Lincoln, Inc. v. S. Washington St., LLC[1], the defendants, having lost at trial, paid the entire amount of the more than $20 million judgment against them, in full, and proceeded to appeal. They argued that their payment meant that the judgment should therefore have been considered fully satisfied regardless of their appellate rights, and so postjudgment interest should stop running. The Superior Court motion judge disagreed and ruled to allow postjudgment interest to continue to accrue pending appeal. In taking up the case, the SJC dealt with the issue in the context of a 2021 SJC decision (“Governo”)[2] which had held that conditional payments do not constitute full satisfaction of a judgment. In Governo, the defendants sought to deposit funds with the court (effectively in escrow) pending appeal. The defendant offered to release the deposited funds immediately if the plaintiff did not appeal, but to keep the deposit if an appeal proceeded. The SJC noted that such a conditional payment of a judgment cannot stop the accrual of postjudgment interest, as it prevents the plaintiff from having use of the funds unless it agreed to forfeit its right to appeal.   In H1 Lincoln, the evolved question therefore became: “whether a payment in full by a judgment debtor who intends to appeal is only a ‘conditional payment.’” The SJC concluded that “full payment of a judgment fully satisfies the [postjudgment interest] statutory requirement and terminates the accrual of interest, even if the judgment debtor pursues an appeal.” The SJC supported its rationale by reiterating the established premise that postjudgment interest is not punitive, but rather compensatory. It found support in the postjudgment interest statute’s history, noting that “the purpose of postjudgment interest is to compensate the prevailing party for the loss of the use of money” when a judgment is not immediately paid. The statutory purpose thereby puts “the judgment creditor and the judgment debtor in the same position they would have enjoyed had the debtor paid the judgment promptly.”  Where the plaintiff in such circumstances is made whole by virtue of a fully satisfied judgment, the Court reasoned, there can be no further compensatory need to run the interest clock any further. The Court further noted that it would be contrary to the Legislature’s intent in a statute designed to encourage prompt payment to read the law in a way that would discourage judgment debtors who exercise their right to appeal from paying the entire judgment up front.   Importance of the Decision As Massachusetts litigators are well aware (but others may not be), statutory postjudgment interest in Massachusetts accrues at an incredible rate of 12% per annum. Such an unusually high interest rate can be a debilitating stumbling block to a party considering an appeal; after all, appeals can take upwards of a year (or more), during which time interest is steadily accruing. The skyrocketing cost of a potential loss plus 12% interest certainly complicates the decision on whether to pursue a meritorious appeal.  This new decision gives would-be appellants more strategic breathing room. If they so choose, such parties can now pay the judgment in full and then prosecute an appeal, knowing they will not be on the hook for endlessly accruing 12% interest. Of course, this strategy is only of interest to parties capable of paying the underlying judgment in the first place. Nonetheless, it adds a layer of flexibility for litigants who might have otherwise written off their appeal rights as prohibitively expensive.  The Natural Next Question – What if the Appeal Succeeds? The plaintiff in H1 Lincoln argued, unsuccessfully, that it should continue to accrue interest as it did not truly have full use and enjoyment of the judgment as-paid, “because the payment remains subject to risk and uncertainties of appeal.” The SJC was more persuaded by the defendants’ response: that defendants assumed a significant financial risk in paying the judgment because the plaintiff might dissipate all of the funds before the defendants had an opportunity to prevail on appeal.  In contemplating this point, the decision proceeded to mention, but not answer, the question of what does happen if the appeal is successful.  Clearly, a successful appeal is pointless if the previously paid judgment proves unrecoverable. Fortunately, courts have the inherent authority to order restitution, as recognized by the Restatement of Restitution § 74, and at least one unreported Massachusetts decision.[3] What remains murky is how such restitution would be handled and executed in practice. The refund process during a successful appeal therefore remains an important consideration for parties involved in both paying judgments and appealing them. * * * Ultimately, while the H1 Lincoln decision clarifies postjudgment interest considerations surrounding appellate rights, the issue of restitution in the event of a successful appeal remains a significant consideration for successful and unsuccessful litigants’ strategies in similar cases.            [1] SJC-13651, 2025 WL 757719 (Mass. Mar. 11, 2025). [2] Governo Law Firm LLC v. Bergeron, 487 Mass. 188 (2021). [3] Dombrowski v. Cronin, 2001 Mass. App. Div. 194, 2001 WL 1021054, at *2 (Mass. App. Div. Aug. 28, 2001).