Title: Nemirovsky v. Daikin North America, LLC

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

NOTICE:  All slip opinions and orders are subject to formal 
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error or other formal error, please notify the Reporter of 
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SJC-13108 
 
OFER NEMIROVSKY  vs.  DAIKIN NORTH AMERICA, LLC, & others.1 
 
 
 
Suffolk.     October 6, 2021. - December 16, 2021. 
 
Present:  Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, 
& Georges, JJ. 
 
 
Contract, Warranty, Performance and breach, Misrepresentation.  
Negligence, Defective product.  Intentional Conduct.  
Consumer Protection Act, Attorney's fees.  Limitations, 
Statute of.  Practice, Civil, Judgment notwithstanding 
verdict. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
June 27, 2016. 
 
 
The case was tried before Jackie A. Cowin, J., and motions 
for judgment notwithstanding the verdict and for a new trial or 
remittitur were considered by her. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review. 
 
 
 
Mark C. Fleming (Felicia H. Ellsworth also present) for the 
defendants. 
 
James L. Messenger (John W. Moran also present) for the 
plaintiff. 
 
 
1 Daikin Applied Americas Inc., formerly known as AAF-McQuay 
Inc.; DACA Delaware Dissolution Trust, as successor-in-interest 
to Daikin AC (Americas), Inc.; and Stebbins Duffy, Inc. 
2 
 
 
The following submitted briefs for amici curiae: 
 
Jennifer B. Dickey, of the District of Columbia, & Patrick 
Strawbridge for Chamber of Commerce of the United States of 
America. 
 
James M. Campbell & Christopher Howe for Product Liability 
Advisory Council, Inc. 
 
Phil Goldberg & Cary Silverman, of the District of 
Columbia, & Brandon L. Arber for National Association of 
Manufacturers. 
 
 
 
WENDLANDT, J.  We have long held that the manufacturer of a 
nondefective component placed in an integrated product generally 
is not liable for damage caused by a defect in the integrated 
product.2  This so-called "component parts doctrine" is grounded 
in the unremarkable proposition that the component manufacturer, 
unlike the integrated product manufacturer, usually is not well 
positioned to oversee the design or manufacture of the 
integrated product and thus should not be liable for damage 
caused by defects in the integrated product. 
In the present case, a Superior Court judge declined to 
apply the doctrine to the nondefective component distributed by 
defendant Daikin North America, LLC (Daikin NA), because the 
component was not itself a "standalone" product and because the 
component was designed specifically for use in the integrated 
product, a heating, ventilation, and air conditioning (HVAC) 
 
2 The same is true for the distributor or seller of the 
component.  Except as otherwise noted, we will use 
"manufacturer" to refer both to the manufacturer and the 
distributor or seller. 
3 
 
system, manufactured and sold by entities other than Daikin NA.  
Neither reason supplies an exception to the doctrine in view of 
the rationale that undergirds it. 
Because the additional contention of the plaintiff, Ofer 
Nemirovsky, that the doctrine applies only to tort claims (as 
opposed to the warranty claims at issue here) is also 
unsupportable, we vacate the judgment entered against Daikin NA 
and remand for reconsideration of damages, if any, that stem 
from Nemirovsky's reasonable reliance on Daikin NA's intentional 
misrepresentations to him in connection with efforts to 
determine the causes of the HVAC system's failures.  Further 
concluding that evidence at trial showed only economic injury to 
the HVAC system itself, we affirm the judge's directed verdict 
for the defendants on Nemirovsky's claims for breach of the 
implied warranty of merchantability against the original sellers 
of the HVAC system as time barred under G. L. c. 106, § 2-725.3 
1.  Background.  We recite the evidence presented at trial 
in the light most favorable to the jury verdict, reserving some 
facts for discussion later in the opinion.  O'Brien v. Pearson, 
449 Mass. 377, 383 (2007). 
 
3 We acknowledge the amicus briefs submitted by the Chamber 
of Commerce of the United States of America, the Product 
Liability Advisory Council, Inc., and the National Association 
of Manufacturers.  
4 
 
In 2008, as part of a remodel of his 22,000 square foot 
single family home in Boston, Nemirovsky purchased an HVAC 
system designed and manufactured by Daikin Industries, Ltd. 
(Daikin Industries), a Japanese corporation.  The system 
included "fan coil units," which comprised a fan, an evaporator 
coil, and a Styrofoam drain pan.  In operation, the coil is 
filled with a refrigerant and the fan blows air across the coil, 
cooling the air, before the air is blown into a room.  The 
Styrofoam drain pan sits below the coil, collecting and removing 
water that condenses and drips from the coil. 
Nemirovsky's HVAC contractor, Climate Engineering, LLC, 
purchased the HVAC system from defendant Stebbins Duffy, Inc. 
(Stebbins Duffy), a manufacturer's representative of Daikin 
Industries' products.  Stebbins Duffy in turn acquired the 
system from its North American distributor at the time, Daikin 
AC (Americas), Inc.; the successor-in-interest to this entity is 
defendant DACA Delaware Dissolution Trust (DACA Trust). 
In 2012, an evaporator coil within Nemirovsky's HVAC system 
began to leak, resulting in the loss of air conditioning.  
Properly installed, cleaned, and inspected evaporator coils were 
expected to last from ten to fifteen years before needing to be 
replaced.  Nemirovsky had the first coil replaced, believing the 
failure to be a "hiccup." 
5 
 
In 2013, four additional coils in Nemirovsky's system 
failed.  Nemirovsky began to believe that there was a systemic 
problem; he communicated his concerns to defendant Daikin 
Applied Americas Inc. (Daikin Applied), which serviced his 
system from 2013 to 2015.  Meanwhile in 2013, the defendant 
Daikin NA was established, becoming the North American 
distributor for the evaporator coils used in the type of HVAC 
system Nemirovsky had purchased.  In late 2014, Daikin Applied 
replaced Nemirovsky's four leaking coils with coils acquired 
from Daikin NA. 
Evaporator coils in Nemirovsky's system continued to fail 
over the next few years; all told, seventeen of the twenty-eight 
coils in the house failed.  Of the seventeen failed coils, three 
were supplied by Daikin NA as replacement parts; the remaining 
coils supplied by Daikin NA did not fail. 
Nemirovsky commenced an action in 2016 against DACA Trust, 
Stebbins Duffy, Daikin Applied, and Daikin NA.  As against each, 
he alleged breach of express warranty, breach of the implied 
warranty of merchantability, breach of the implied warranty of 
fitness for a particular purpose, intentional and negligent 
misrepresentation, and violations of G. L. c. 93A.  The judge 
allowed summary judgment in favor of all defendants on the 
claims of breach of express warranty and breach of the implied 
warranty of fitness for a particular purpose, as well as summary 
6 
 
judgment in favor of Stebbins Duffy and Daikin Applied on the 
G. L. c. 93A claims.4 
A jury trial was held on the remaining claims -– namely, 
breach of the implied warranty of merchantability and 
intentional and negligent misrepresentation as against all 
defendants, as well as the G. L. c. 93A claims against DACA 
Trust and Daikin NA.  Following the close of the evidence, the 
judge directed a verdict in favor of DACA Trust and Stebbins 
Duffy, the sellers of the original system, on the implied 
warranty of merchantability claim, because the four-year statute 
of limitations had run on claims related to the 2008 sale of the 
original HVAC system to Nemirovsky.  As to the various 
misrepresentation claims, the judge determined that only the 
negligent misrepresentation claims against DACA Trust and 
Stebbins Duffy could proceed to the jury based on those 
defendants' conduct leading to the sale of the original HVAC 
system, and that only the intentional misrepresentation claims 
could proceed against Daikin NA and Daikin Applied based on 
their conduct after the sale of the original system.  The judge 
denied Daikin NA and Daikin Applied's motions for a directed 
verdict, allowing the jury to decide Nemirovsky's claims against 
those two defendants for breach of the implied warranty of 
 
4 The summary judgment decision is not part of this appeal. 
7 
 
merchantability and intentional misrepresentations.  The judge 
also allowed the jury to provide an advisory opinion on whether 
Daikin NA and DACA Trust violated G. L. c. 93A. 
The jury found Daikin Applied liable for a breach of the 
implied warranty of merchantability and awarded $8,934 in 
damages for the cost of the replacement coils, but they found 
that defendant not liable for intentional misrepresentation.5  
The jury found Daikin NA, which sold the replacement coils to 
Daikin Applied, liable for intentional misrepresentation and 
breach of the implied warranty of merchantability, awarding 
$3,387,473.73 in damages, along with an advisory verdict that 
Daikin NA had violated G. L. c. 93A, warranting doubled damages.  
The jury returned an advisory verdict that DACA Trust was not 
liable for any violation of G. L. c. 93A and found DACA Trust 
and Stebbins Duffy not liable for negligent misrepresentation 
with respect to the original sale.6  The judge adopted the jury's 
G. L. c. 93A advisory verdict against Daikin NA, added 
prejudgment interest and attorney's fees, and awarded a total of 
$10,644,720.25 in damages. 
Daikin NA filed a motion for judgment notwithstanding the 
verdict, contending that the component parts doctrine precluded 
 
5 Daikin Applied did not appeal. 
 
6 Nemirovsky does not appeal from the jury verdicts as to 
DACA Trust and Stebbins Duffy. 
8 
 
liability because there was no evidence that the coils 
themselves were defective, and that there was no evidence of 
reasonable reliance on Daikin NA's alleged misrepresentations.  
Daikin NA also filed a motion for a new trial or remittitur, 
arguing, among other things, that the verdict was against the 
weight of the evidence, that the award of damages was contrary 
to law, and that the verdict form's failure to ask specifically 
about reasonable reliance required a new trial on the 
intentional misrepresentation claim.  Both motions were denied.  
Daikin NA timely appealed.  Nemirovsky filed a cross appeal, 
contending that the judge improperly allowed the directed 
verdict motion of DACA Trust and Stebbins Duffy on Nemirovsky's 
breach of implied warranty of merchantability claims.  We 
granted Daikin NA's application for direct appellate review. 
2.  Discussion.  When reviewing the denial of a motion for 
judgment notwithstanding the verdict, we "construe the evidence 
in the light most favorable to the nonmoving party" to determine 
"whether the evidence, construed against the moving party, 
justif[ies] a verdict against him" (quotation and citations 
omitted).  O'Brien, 449 Mass. at 383.  The verdict will stand if 
"anywhere in the evidence . . . any combination of circumstances 
could be found from which a reasonable inference could be made 
in favor of the [nonmovant]" (citation omitted).  Id. 
9 
 
 
a.  Component parts doctrine.7  It is a well-settled 
principle of products liability law that, as a general matter, a 
commercial manufacturer of a defective product is liable for 
harm to persons or property caused by the defect.8  Restatement 
(Third) of Torts:  Products Liability § 1 (1998).  See Evans v. 
Lorillard Tobacco Co., 465 Mass. 411, 424 (2013); Back v. Wickes 
Corp., 375 Mass. 633, 640-641 (1978).  This long-standing 
concept of products liability draws on both warranty law and 
 
7 Nemirovsky's contention that Daikin NA waived the 
component parts doctrine argument is unavailing.  In its motion 
for a directed verdict, Daikin NA argued that the "[p]laintiff 
presented no evidence that the replacement coils are themselves 
defective.  Rather, his expert testified that the design defect 
at issue was the design of the drain pan in the [integrated] 
system, not of the coils themselves."  Cf. Abramian v. President 
& Fellows of Harvard College, 432 Mass. 107, 115 (2000) ("Where 
the defendants first raised this defense in their motion for 
judgment n.o.v. and not in their motion for directed verdict, we 
agree with the trial judge that the defense is now waived"); 
Bonofiglio v. Commercial Union Ins. Co., 411 Mass. 31, 34 (1991) 
(reiterating that "no grounds for the motion for judgment 
notwithstanding the verdict may be raised which were not 
asserted in the directed verdict motion").  Daikin NA reiterated 
the same argument at the hearing on the directed verdict motion, 
asserting that "there is no evidence of defect with the 
replacement coils themselves. . . .  The pans are not part of 
the replacement coils."  Indeed, the judge expressly ruled on 
the argument.  See Fidelity Co-op. Bank v. Nova Cas. Co., 726 
F.3d 31, 39 (1st Cir. 2013) ("Since the district court addressed 
and passed on the issue directly, [appellant] is free to address 
the issue so raised in this appeal"). 
 
8 Of course, liability standards differ depending on whether 
the defect is a manufacturing defect, a design defect, or a 
defect based on inadequate instructions or warnings.  See 
Restatement (Third) of Torts:  Product Liability § 1 reporters' 
note to comment a (discussing "abundant authority" recognizing 
this division of liability depending on product defect type). 
10 
 
tort law.  Restatement (Third) of Torts:  Products Liability § 1 
comment a ("The liability established in this Section draws on 
both warranty law and tort law").  See Prosser, The Assault Upon 
the Citadel (Strict Liability to the Consumer), 69 Yale L. Rev. 
1099, 1126 (1960) (describing interrelated nature of products 
liability, warranty, and tort law); Titus, Restatement (Second) 
of Torts Section 402A and the Uniform Commercial Code, 22 Stan. 
L. Rev. 713, 781-782 (1970) (summarizing various States' 
approaches to products liability, some through warranty and 
others through tort liability). 
Products liability is grounded in the judgment that, as 
between the commercial manufacturer of a defective product and 
the consumer, the cost of injury should be borne by the former, 
which can treat the expense as a cost of production, can obtain 
insurance for the liability, and can more readily pass along the 
costs to the consuming public in the form of higher prices of 
its goods.  Restatement (Third) of Torts:  Products Liability 
§ 2 comment a (1998) ("An often-cited rationale for holding 
wholesalers and retailers strictly liable for harm caused by 
manufacturing defects is that, as between them and innocent 
victims who suffer harm because of defective products, the 
product sellers as business entities are in a better position 
than are individual users and consumers to insure against such 
losses"). 
11 
 
Many commercial products, however, comprise multiple 
components made by different entities not involved in the design 
of the integrated product.  In such circumstances, a component 
manufacturer may be liable if the component itself was defective 
and the component's defect caused the harm.  See Cipollone v. 
Yale Indus. Prods. Inc., 202 F.3d 376, 379 (1st Cir. 2000); 
Restatement (Third) of Torts:  Products Liability § 5 & 
comment b (1998).  Additionally, a component manufacturer may be 
liable, even if the component itself is not defective, if the 
component manufacturer is "substantially involved" in the 
integration of the component into the design of the integrated 
product, the integration of the component causes the integrated 
product to be defective, and the defect in the integrated 
product causes the harm.  Restatement (Third) of Torts:  
Products Liability § 5 & comment e (1998).  See Freitas v. 
Emhart Corp., 715 F. Supp. 1149, 1152 (D. Mass. 1989).  
Otherwise, the manufacturer of a nondefective component is not 
liable for harms caused by the integrated product.  See Mitchell 
v. Sky Climber, Inc., 396 Mass. 629, 631 (1986); Restatement 
(Third) of Torts:  Products Liability § 5 comment a ("As a 
general rule, component sellers should not be liable when the 
component itself is not defective . . ."). 
The rationale for the component parts doctrine is that 
"[i]f the component is not itself defective, it would be unjust 
12 
 
and inefficient to impose liability solely on the ground that 
the manufacturer of the integrated product utilizes the 
component in a manner that renders the integrated product 
defective."  Restatement (Third) of Torts:  Products Liability 
§ 5 comment a (1998).  Imposing liability on the nondefective 
component seller "would require the component seller to 
scrutinize another's product which the component seller has no 
role in developing.  This would require the component seller to 
develop sufficient sophistication to review the decisions of the 
business entity that is already charged with responsibility for 
the integrated product."  Id.  See Crossfield v. Quality Control 
Equip. Co., 1 F.3d 701, 704 (8th Cir. 1993) ("To impose 
responsibility on the supplier of the [component] in the context 
of the larger defectively designed machine system would simply 
extend liability too far.  This would mean that suppliers would 
be required to . . . scrutinize machine systems that the 
supplier had no role in developing").  Indeed, as the highest 
court in one of our sister jurisdictions observed, "every court 
presented with the issue has adopted the component parts 
doctrine."  Davis v. Komatsu Am. Indus. Corp., 42 S.W.3d 34, 38-
39 (Tenn. 2001) (collecting cases). 
i.  Standalone components.  The judge rejected Daikin NA's 
argument that it, as a distributor of defect-free evaporator 
coils, was not liable under the component parts doctrine, 
13 
 
reasoning that the doctrine applied only to "standalone" 
components –- by which the judge apparently referred to 
components that function separate and apart from the system into 
which they are integrated.9  However, as discussed supra, the 
doctrine is not based on the component's functionality as a 
standalone product, but rather on the assessment that liability 
generally should not flow to one engaged in providing a defect-
free component that is integrated into another product that 
itself is defective.  See Restatement (Third) of Torts:  
Products § 5 comment a (1998) (explaining that for purpose of 
doctrine, components include those that "have no functional 
capabilities unless integrated into other products").  Indeed, 
Nemirovsky cites to no case law, and we are aware of none, that 
would limit the doctrine in such a manner.  To the contrary, the 
doctrine has been applied to nonstandalone products.  See 
Pantazis v. Mack Trucks, Inc., 92 Mass. App. Ct. 477, 483 (2017) 
(applying doctrine to "power take-off" part of system used to 
tilt body of dump truck, which was not standalone); Childress v. 
 
9 In so concluding, the judge apparently relied on language 
from the Federal court's decision in Cipollone, 202 F.3d at 379, 
which applied the doctrine to preclude extending liability to a 
manufacturer of a dock lift that "function[ed] on [its] own" 
when it was integrated into a defective scaffolding structure.  
The language reflected the court's conclusion that the lift 
itself did not have a defect, id.; the court did not create an 
additional element -- namely, that the component must be a 
standalone product -- for applicability of the doctrine. 
14 
 
Gresen Mfg. Co., 888 F.2d 45, 47 (6th Cir. 1989) (applying 
doctrine to nonstandalone hydraulic valve within log splitter). 
ii.  Specialized component parts.  The judge alternatively 
concluded that the component parts doctrine was unavailable to 
Daikin NA because the coils were produced "specifically for the 
[HVAC] system and distributed exclusively for use in that 
system."  The doctrine applies equally, however, to specialized 
components designed only for use in an integrated product.  See 
Restatement (Third) of Torts:  Products Liability § 5 comment e 
("A component seller who simply designs a component to its 
buyer's specifications, and does not substantially participate 
in the integration of the component into the design of the 
product, is not liable" for defects in integrated product).  
See, e.g., Cipollone, 202 F.3d at 379 (seller of dock lift 
"designed to [the integrator's] specifications" and "later 
integrated into a larger . . . system" was not liable for 
defects in integrated system under component parts doctrine 
because there was "no evidence" that lift itself was defective 
upon delivery to integrator); Childress, 888 F.2d at 48-49 
(holding manufacturers of component specifically designed for a 
given purpose liable when part is "misapplied [by the 
integrator] rather than defectively designed" "would be contrary 
to public policy, as it would encourage ignorance on the part of 
component part manufacturers or alternatively require them to 
15 
 
retain an expert in the client's field of business to determine 
whether the client intends to develop a safe product" [quotation 
and citation omitted]); Davis, 42 S.W.3d at 40 ("no public 
policy can be served by imposing a civil penalty on a 
manufacturer of specialized parts of the highly technical 
machine according to the specifications supplied by one who is 
expert at assembling these technical machines, who does so 
without questioning the plans or warning of the ultimate user" 
[citation omitted]).10  Compare DeSantis v. Parker Feeders, Inc., 
547 F.2d 357, 361-362 (7th Cir. 1976) (holding seller of parts 
for cattle feeder liable because "every part" that was purchased 
to construct feeder was manufactured by seller and "was 
dependent on every other part to accomplish any useful purpose," 
and thus it was reasonable for jury to find seller liable for 
design defect in whole unit). 
 
10 The cases cited by Nemirovsky in support of the judge's 
reasoning involve components that were themselves defective.  
See Fleck v. KDI Sylvan Pools, Inc., 981 F.2d 107, 118 (3d Cir. 
1992), cert. denied sub nom. Doughboy Recreational, Inc. v. 
Fleck, 507 U.S. 1005 (1993) (finding manufacturer of replacement 
pool liners, which had "but one purpose," liable for failure to 
warn, because liners' lack of depth markers made them defective 
when integrated into pool); Maake v. Ross Operating Valve Co., 
149 Ariz. 244, 247 (1985) (suggesting that liability for failure 
to warn would depend on whether component valves were defective, 
despite that they were made for integrated product); Heco vs. 
Midstate Dodge LLC, Vt. Sup. Ct., No. S0869-2010 (Mar. 14, 2013) 
(suggesting liability would turn on whether component seat, 
designed specifically for particular car, was defective). 
16 
 
iii.  Tort and contract claims.  Nemirovsky contends that 
the doctrine is inapplicable to his breach of implied warranty 
of merchantability claim against Daikin NA, maintaining that the 
doctrine applies only to tort claims.  See, e.g., Rafferty v. 
Merck & Co., 479 Mass. 141, 148 (2018) (applying component part 
doctrine to negligent failure to warn); Barbosa v. Hopper Feeds, 
Inc., 404 Mass. 610, 616 (1989), S.C., 411 Mass. 273 (1991) 
(applying component part doctrine to personal injury); Pantazis, 
92 Mass. App. Ct. at 482 (applying component part doctrine to 
wrongful death).  But the doctrine arises in the context of 
products liability, which, as discussed supra, involves the 
intersection of warranty law and tort law.  Restatement (Third) 
of Torts:  Product Liability §§ 2 comment n, 5 (1998).  
Moreover, with the 1971 elimination of the requirement of 
privity to bring a claim for breach of warranty of 
merchantability, see Swartz v. General Motors Corp., 375 Mass. 
628, 630 (1978), those contract-based claims became "congruent 
in nearly all respects" with traditional tort-based liability 
claims, Commonwealth v. Johnson Insulation, 425 Mass. 650, 653-
654 (1997), quoting Back, 375 Mass. at 640.  See One Beacon Ins. 
Co. v. Electrolux, 436 F. Supp. 2d 291, 296 (D. Mass. 2006), 
quoting Hayes v. Douglas Dynamics, Inc., 8 F.3d 88, 89 n.1 (1st 
Cir. 1993), cert. denied, 511 U.S. 1126 (1994) (breach of 
17 
 
warranty of merchantability claim "is basically the same as" 
liability in tort). 
Indeed, Federal courts and courts in other States have 
applied the doctrine to breach of warranty claims.  See 
Cipollone, 202 F.3d at 379 (breach of warranty of 
merchantability claim against dock lift manufacturer barred by 
component parts doctrine); Hininger v. Case Corp., 23 F.3d 124, 
129 (5th Cir. 1994), cert. denied, 513 U.S. 1079 (1995) 
(component manufacturer not liable for breach of warranty where 
injuries were caused by combine into which wheel had been 
integrated); In re Gen. Motors Corp. Anti-Lock Brake Prods. 
Liab. Litig., 966 F. Supp. 1525, 1533-1534 (E.D. Mo. 1997) 
(anti-lock brake system manufacturer not liable for loss of 
value in car because "implied warranty liability does not extend 
to remote manufacturers of component parts"); Goldberg v. 
Kollsman Instrument Corp., 12 N.Y.2d 432, 437 (1963) (altimeter 
manufacturer not liable after airplane crash because "[a]dequate 
protection is provided" by availability of suing integrator 
airplane manufacturer). 
iv.  Defect-free coil distributor not liable.  Thus, under 
the component parts doctrine, unless the evidence marshalled11 in 
 
11 The burden is on the plaintiff to prove a defect to 
support a breach of warranty claim.  Enrich v. Windmere Corp., 
416 Mass. 83, 89 (1993); Fernandes v. Union Bookbinding Co., 400 
Mass. 27, 37 (1987). 
18 
 
this case provided a basis to find that the replacement coils 
supplied by Daikin NA were defective themselves, Daikin NA is 
not liable for harm caused by the HVAC system.12  See Evans, 465 
Mass. at 422, quoting G. L. c. 106, § 2–314 (2) (c) ("defect" in 
context of warranty of merchantability claim involves being 
unfit "for the ordinary purposes for which such goods are 
used").  Viewed in the light most favorable to the jury verdict, 
the evidence supported the finding that the coils corroded 
prematurely not because they were themselves defective, but 
because the drain pan in the HVAC system was made from Styrofoam 
rather than metal.  Nemirovsky's expert explained that when the 
two metals that form the coils interact with water, an electric 
 
12 Nemirovsky does not contend that Daikin NA was 
"substantially involved" in the design of the integrated product 
as would be necessary to exempt it from the component parts 
doctrine.  See Freitas, 715 F. Supp. at 1152; Restatement 
(Third) of Torts:  Products Liability § 5 & comment e (1998).  
It is undisputed that Daikin NA, which was not established until 
2013, had no involvement in the design of the HVAC system 
Nemirovsky purchased in 2008. 
 
Moreover, it makes no difference that the various "Daikin" 
entities apparently are related.  Nemirovsky argues on appeal 
that the integrator here was not a "third party," because only 
coils distributed by Daikin NA could be used in a Daikin 
Industries HVAC system.  However, Daikin NA (as distributor of 
the component part) is a distinct corporate entity from Daikin 
Industries (as manufacturer/designer of the integrated HVAC 
system), and Nemirovsky does not argue that he has shown the 
elements required to pierce the corporate veil.  See Kraft Power 
Corp. v. Merrill, 464 Mass. 145, 148-149 (2013).  Indeed, the 
judge rejected this argument at summary judgment, and Nemirovsky 
has waived it explicitly. 
19 
 
current is generated; the current must be "grounded" to escape 
the system.  In the absence of a different path to "ground," 
Nemirovsky's expert explained, the resulting electric current 
used the coils as the path to ground, causing these coils to 
undergo galvanic corrosion and to leak.  The expert opined that 
"the cause of the failure was the [Styrofoam] drain pan [which] 
didn't provide an exit path for the galvanic electric current."  
Using Styrofoam rather than metal in the design of the drain 
pan, the expert explained, meant "[y]ou can't drain virtually 
any of [the galvanic electric current] through [it]."  Instead, 
the current has "got to find a way out . . .  up through the fan 
coil."  By contrast, the expert testified, with a metallic drain 
pain, which he was able to test, "you don't get the stray 
current corrosion."  The corrosion of the coils was "accelerated 
by the inability of the electrons to get out through the ground 
on the bottom" because the pan was made of nonconductive 
Styrofoam rather than of a conductive material. 
There was no evidence that the coils themselves, their 
design, or their manufacture were other than as specified by the 
integrated part manufacturer.  To the contrary, Nemirovsky's 
expert testified that the coils comprised an industry standard 
bimetal composition,13 and would not have prematurely corroded in 
 
13 The evidence was that the coils at issue in the case were 
substantially similar, in both material and design, to other 
20 
 
a properly designed system that allowed electrons to escape 
through the drain pan.14 
Given the absence of evidence of any defect in the coils 
themselves, the component parts doctrine precludes extending 
liability to Daikin NA.15  See Cipollone, 202 F.3d at 379 
(component parts doctrine precluded liability where component 
was designed in accordance with integrator's specifications); In 
re Temporomandibular Joint Implants (TMJ) Prods. Liab. Litig., 
97 F.3d 1050, 1056 (8th Cir. 1996) (where failure is because 
part was "unsuited for the particular use that the finished 
product manufacturer chose to make of it," integrator, not 
component part manufacturer, is liable).  Daikin NA's motion for 
 
major companies' coils:  over 150 million coils have been made 
since 1972 with a copper coil, aluminum fins, and zinc-coated 
endplates. 
 
14 The expert opined that the electric current did not 
always use the coils as a path to ground.  In some 
configurations, he explained, other metallic pieces or the water 
in the system itself provided a path to ground to avoid 
discharge of the electrons through the coils.  In fact, the 
evidence was that only three of the seventeen replacement coils 
supplied by Daikin NA failed. 
 
15 While not dispositive, this conclusion is bolstered by 
the fact that, in parallel cases brought in Federal court by 
different plaintiffs alleging substantially similar claims and 
facts against Daikin NA, the court found that because the 
problem was the Styrofoam drain pan and "not the coils 
themselves," Daikin NA could not be liable for breach of the 
implied warranty of merchantability.  See Evans vs. Daikin N. 
Am., LLC, U.S. Dist. Ct., No. 17-CV-10108 (D. Mass. Feb. 4, 
2019); Egan vs. Daikin N. Am., LLC, U.S. Dist. Ct., No. 17-CV-
11630 (D. Mass. Feb. 4, 2019). 
21 
 
judgment notwithstanding the verdict as to the breach of implied 
warranty of merchantability claim should have been allowed;16 
accordingly, we vacate the judgment insofar as it regards that 
claim. 
b.  Misrepresentation claim.  The jury also found Daikin NA 
liable for intentional misrepresentation.  To prevail on a claim 
for misrepresentation, Nemirovsky must show that (1) Daikin NA 
made a "false representation of a material fact with knowledge 
of its falsity for the purpose of inducing the plaintiff to act 
thereon," and that (2) he reasonably relied on Daikin NA's 
misrepresentation as true and acted upon it to his detriment.  
Masingill v. EMC Corp., 449 Mass. 532, 540 (2007); Kilroy v. 
Barron, 326 Mass. 464, 465 (1950).17  We recite the relevant 
 
16 Because we conclude that the component parts doctrine 
applies, we do not reach Daikin NA's appeal from the denial of 
the motion for remittitur. 
 
17 Contrary to Daikin NA's argument, the judge's denial of 
its request for a specific question regarding reasonable 
reliance was not error.  The verdict form asked whether Daikin 
NA had made any intentional misrepresentation, as well as 
whether the misrepresentation caused Nemirovsky harm.  Combined 
with the explanation that the judge provided in the jury 
instructions, there was no error here.  The instruction stated, 
"[T]he plaintiff must prove his reliance on the defendant's 
statement was reasonable and justifiable under the 
circumstances. . . .  [T]he plaintiff is not entitled to rely on 
a misrepresentation that he knows to be false or if its falsity 
is obvious to him."  "We presume that the jury followed [] 
instructions in rendering their verdict."  Reckis v. Johnson & 
Johnson, 471 Mass. 272, 304 n.49 (2015), cert. denied, 577 U.S. 
1113 (2016). 
22 
 
facts in the light most favorable to the jury verdict.  O'Brien, 
449 Mass. at 383.18 
In May or June 2014, after Nemirovsky complained to Daikin 
NA when four coils had failed, representatives of Daikin NA and 
Daikin Applied told Nemirovsky that "off-gassing" within his 
home was causing the coil corrosion, even though Daikin NA had 
not yet conducted any testing or specific investigation as to 
the cause.  The jury could have found that the posited cause of 
the coil failures was an intentional misrepresentation, not only 
because the statement was made without any apparent foundation, 
but also because it must be read in the context of Daikin NA's 
knowledge by January 2014 that Ken Vona, a contractor in the 
area, had been experiencing the same problems in multiple other 
homes.  See Restatement (Third) of Torts:  Liability for 
Economic Harm § 10 (2020) ("A misrepresentation may result in 
liability only if . . . [b] the maker of it knowingly states or 
implies a false level of confidence in its accuracy; or [c] the 
maker of it knowingly states or implies a basis for the 
representation that does not exist"); Briggs v. Carol Cars, 
Inc., 407 Mass. 391, 396 (1990) (finding representation was 
 
18 There is no evidence that Daikin NA's misrepresentations 
delayed Nemirovsky's decision to file suit.  The earliest 
evidence of Daikin NA's misrepresentation was in 2014, at which 
time the statute of limitations on the claims against the DACA 
Trust and Stebbins Duffy had already run.  See infra. 
23 
 
recklessly made because truth was "readily ascertainable by the 
defendant").  Relying on Daikin NA's representation as to the 
cause of the coil failures, Nemirovsky hired environmental 
engineering consultants and paid approximately $22,000 to 
conduct testing in his home. 
Daikin NA continued to blame environmental factors for the 
premature leaking.  In January 2015, one of Daikin NA's 
employees surveyed Nemirovsky's home and reported that there 
were "no environmental issues that could have led to the coil 
failures," directly contradicting what Daikin NA would continue 
to say to Nemirovsky.  Similarly, in March 2015, an internal e-
mail message between Daikin NA and Daikin Applied indicated that 
the Daikin NA knew the coil failures did "not appear to be 
related to adverse field conditions."  Yet, Daikin NA did not 
correct its previous statements about the asserted cause of the 
corrosion, nor did it share these reports with Nemirovsky.  
Meanwhile, Daikin NA had sent corroded coils collected from 
Nemirovsky's house to Matrix Analytical Laboratories, Inc. 
(Matrix), to conduct additional testing in February 2015.  In 
March 2015, Matrix produced reports finding that the coils 
evinced "Formicary-type Corrosion" due to certain compounds in 
the "indoor air" in the coils' environment.  The jury could have 
24 
 
found that the Matrix reports were also misrepresentations.19  
Finally, in May 2015, another Daikin NA employee sent a letter 
restating that Nemirovsky's HVAC system had been "impacted 
negatively" by "environmental factors." 
On appeal, Nemirovsky contends that he incurred over 
$200,000 in expenses for coil testing, system repairs, and 
replacement coils over the years.  While the testimony and 
exhibits support these expenses, it is not clear from the record 
on appeal whether Nemirovsky relied on Daikin NA's continued 
misrepresentations in choosing to incur these expenses. 
For example, Nemirovsky testified that "if [he] had known 
that this was a common thing that happens to people who have 
Daikin systems," he might not have spent money to get ball 
valves installed (to isolate each coil so that when one failed 
the entire system would not) but might instead have looked for a 
"longer-term solution."  However, the decision to install ball 
valves was made in January 2016, well after he had become aware, 
in June 2015, of Ken Vona's similar experiences with coils 
failures.  Thus, the cost of installing the ball valves was not 
incurred in reliance upon Daikin NA's misrepresentations.  As 
 
19 The evidence at trial suggested that Matrix was not an 
"independent" laboratory, because it had a favorable deal on 
rent through its association with Daikin NA.  The evidence also 
showed that Matrix revised its reports, first stating it could 
not conduct analysis of corrosive ions but then conducting that 
analysis. 
25 
 
another example, Nemirovsky explicitly testified that he did not 
do anything in response to the May 2015 letter asserting that 
the cause of the coil failures was "environmental."  He rejected 
Daikin NA's offer in that letter to replace the remaining 
twenty-two coils for free, hoping instead for less of a "Band-
Aid solution."  Indeed, it appears that many of the replacement 
coils were purchased by Nemirovsky after he commenced the 
present action, presumably at a time when he was no longer 
reasonably relying on Daikin NA's misrepresentations.  Because 
the record on appeal is unclear, we must remand for a 
determination of the reliance damages flowing from Daikin NA's 
intentional misrepresentations. 
c.  Chapter 93A claim.  The jury provided an advisory 
opinion, which the judge adopted, that Daikin NA violated G. L. 
c. 93A based on the breach of warranty and intentional 
misrepresentation claims.  Our review is for clear error.  
Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 476 
(1991).  Because the breach of warranty claim fails under the 
component parts doctrine, that claim cannot support a G. L. 
c. 93A violation.  However, intentional misrepresentations can 
constitute a violation of G. L. c. 93A.  McEvoy Travel Bur., 
Inc. v. Norton Co., 408 Mass. 704, 714 (1990); VMark Software, 
Inc. v. EMC Corp., 37 Mass. App. Ct. 610, 620-621 (1994); 
26 
 
Grossman v. Waltham Chem. Co., 14 Mass. App. Ct. 932, 933 
(1982). 
In this case, the judge found that Daikin NA's 
misrepresentations were "willful and knowing," warranting 
doubled damages under G. L. c. 93A.  The judge also awarded 
attorney's fees pursuant to G. L. c. 93A, § 9 (4).  On remand, 
the judge should determine whether the G. L. c. 93A damages 
based on the amount of reliance damages for Daikin NA's 
intentional misrepresentations, see supra, should be enhanced, 
and whether, and to what extent, to award attorney's fees.  See 
Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 185-186 
(2013) ("substantial reduction in the amount of damages the 
plaintiffs may recover on remand" may warrant reconsideration of 
attorney's fees awarded under c. 93A). 
d.  Statute of limitations under G. L. c. 106, § 2-725.  As 
set forth supra, following the close of the evidence at trial, 
the judge directed a verdict in favor of DACA Trust and Stebbins 
Duffy, the sellers of the original HVAC system, on the implied 
warranty of merchantability claim, because by 2014 the statute 
of limitations had run on claims related to the 2008 sale of the 
original system.  The judge relied on the four-year statute of 
limitations in G. L. c. 106, § 2-725, part of the Massachusetts 
Uniform Commercial Code (UCC), which provides: 
27 
 
"(1) An action for breach of any contract for sale must be 
commenced within four years after the cause of action has 
accrued. . . . 
 
"(2) A cause of action accrues when the breach occurs, 
regardless of the aggrieved party's lack of knowledge of 
the breach.  A breach of warranty occurs when tender of 
delivery is made, except that where a warranty explicitly 
extends to future performance of the goods and discovery of 
the breach must await the time of such performance the 
cause of action accrues when the breach is or should have 
been discovered. 
 
". . . 
 
"(4) This section does not alter the law on tolling of the 
statute of limitations nor does it apply to causes of 
action which have accrued before this chapter becomes 
effective." 
 
G. L. c. 106, § 2-725. 
 
Nemirovsky maintains that the judge improperly directed a 
verdict, because the jury should have been allowed to decide 
whether the statute of limitations had been tolled pursuant to 
the "discovery rule."20  However, § 2-725 provides that "[a] 
breach of warranty occurs when tender of delivery is made" and 
that the "cause of action accrues when the breach occurs, 
regardless of the aggrieved party's lack of knowledge of the 
 
20 The discovery rule provides that "a cause of action 
accrues when the plaintiff discovers or with reasonable 
diligence should have discovered that (1) he [or she] has 
suffered harm; (2) his [or her] harm was caused by the conduct 
of another; and (3) the defendant is the person who caused that 
harm."  Harrington v. Costello, 467 Mass. 720, 727 (2014). 
 
28 
 
breach."  G. L. c. 106, § 2-725 (2) (emphasis added).21  Allowing 
the discovery rule to apply would "circumvent the very purpose 
of § 2-725, which . . . is to provide a finite period in time 
when the seller knows that he [or she] is relieved from 
liability for a possible breach of contract for sale or breach 
of warranty."  New England Power Co. v. Riley Stoker Corp., 20 
Mass. App. Ct. 25, 29 (1985), quoting Ontario Hydro v. Zallea 
Sys., Inc., 569 F. Supp. 1261, 1267 (D. Del. 1983).22  Accord 
Cambridge Plating Co. v. Napco, Inc., 991 F.2d 21, 25 (1st Cir. 
1993), citing G. L. c. 106, § 2-725 (2) ("Not all contractual 
causes of action in Massachusetts are governed by the judicially 
crafted accrual rules.  Claims alleging breach of a contract for 
the sale of goods instead are subject to the detailed provisions 
of the UCC"). 
 
21 General Laws c. 106, § 2-725 (4), states that the section 
"does not alter the law on tolling of the statute of 
limitations"; however, none of the statutory grounds for tolling 
the statute of limitations applies here.  See G. L. c. 260, 
§§ 7-12. 
 
22 Other jurisdictions have similarly declined to extend the 
discovery rule to breach of implied warranty claims.  See, e.g., 
Sudenga Indus., Inc. v. Fulton Performance Prods., Inc., 894 F. 
Supp. 1235, 1238 (N.D. Iowa 1995); Armour v. Alaska Power Auth., 
765 P.2d 1372, 1375 (Alaska 1988); Baker v. DEC Int'l, 458 Mich. 
247, 255 n.17 (1998) ("We agree that the plain language of the 
statute renders a buyer's actual knowledge [or lack thereof] of 
defects totally irrelevant for the purposes of the accrual of 
the cause of action"). 
29 
 
In the alternative, Nemirovsky argues that the correct 
statute of limitations for his claims is set forth in G. L. 
c. 106, § 2-318,23 because the HVAC system was purchased as a 
consumer good rather than as part of a commercial transaction.24  
However, G. L. c. 106, § 2-318, applies to consumer transactions 
where there was harm to persons or property.  Bay State-Spray & 
Provincetown S.S., Inc. v. Caterpillar Tractor Co., 404 Mass. 
103, 104 (1989) (Bay State).  By contrast, G. L. c. 106, 
§ 2-725, applies when (as here) only economic loss is incurred.  
Bay State, supra at 109, quoting East River S.S. Corp. v. 
Transamerica Delaval, 476 U.S. 858, 871 (1986) ("When a product 
injures only itself the reasons for imposing a tort duty are 
 
23 General Laws c. 106, § 2-318, provides, in relevant part: 
 
"Lack of privity between plaintiff and defendant shall be 
no defense in any action brought against the . . . seller, 
. . . of goods to recover damages for breach of warranty, 
express or implied, or for negligence, although the 
plaintiff did not purchase the goods from the defendant if 
the plaintiff was a person whom the . . . seller . . . 
might reasonably have expected to use, consume or be 
affected by the goods.  The . . . seller . . . may not 
exclude or limit the operation of this section.  Failure to 
give notice shall not bar recovery under this section 
unless the defendant proves that he [or she] was prejudiced 
thereby.  All actions under this section shall be commenced 
within three years next after the date the injury and 
damage occurs." 
 
24 Nemirovsky did not waive this argument, as Daikin NA 
suggests, because he argued for and referred to the "tort-based" 
statute of limitations in his opposition to the motion for 
directed verdict. 
30 
 
weak and those for leaving the party to its contractual remedies 
are strong").  See Jacobs v. Yamaha Motor Corp., U.S.A., 420 
Mass. 323, 330 n.5 (1995) (reaffirming this "appropriate 
distinction" between G. L. c. 106, § 2-318, being used for 
personal or property injury and G. L. c. 106, § 2-725, for 
economic harms).  Therefore, the judge applied the correct four-
year limitations period under G. L. c. 106, § 2-725. 
The statute thus began to run on the date that the HVAC 
system was purchased in 2008.  The complaint against DACA Trust 
and Stebbins Duffy was not filed until 2016, well after the 
four-year statute of limitations in G. L. c. 106, § 2-725, had 
expired.  Thus, the claims against Stebbins Duffy and DACA Trust 
were properly dismissed. 
3.  Conclusion.  The judgment on the directed verdict in 
favor of DACA Trust and Stebbins Duffy on Nemirovsky's claims 
for breach of the implied warranty of merchantability is 
affirmed.  The judgment entered against Daikin NA is vacated, 
and we remand for reconsideration of damages, if any, that stem 
from Nemirovsky's reasonable reliance on Daikin NA's intentional 
misrepresentations to him in connection with efforts to 
determine the causes of the HVAC system's failures.  On remand, 
the judge should also determine whether the G. L. c. 93A damages 
based on the amount of reliance damages for Daikin NA's 
31 
 
intentional misrepresentations should be enhanced, and whether, 
and to what extent, to award attorney's fees. 
So ordered.