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.

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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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