Thank you for your reply.
Unfortunately, just because the town inspected it, MA has statutory immunity for the inspectors and the fact that it was stamped by the inspector does not make them grossly negligent to overcome that statutory immunity.
Furthermore, the statute of limitations is the same as suing the contractor, just because you are including the city in the claim does not give you a different statute of limitations and if the statute of limitations of 3 years for property damage in MA (since you had no contract
with the city for them to breach) has expired then I am afraid you cannot sue even if you could prove somehow the inspector was grossly negligent.
MA Rule 19 on compulsory joinder also applies here, since you did not join the inspector's office at the time of the suit and it is based on the same set of facts and circumstances, even if the SOL had not expired, you could not sue them again now. MA Rule 19 says, "(a) Persons to Be Joined if Feasible. A person who is subject to service of process shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant."
Proving a conspiracy means you need witnesses to prove the negligent contractor acted together with the city/town and its inspector, without such witnesses, you would not be able to make a case based only on the circumstantial evidence
you mentioned above I am afraid.