In a recent “unpublished” decision in Cohen v. City of Somerville (pdf), an Appeals Court panel confirmed that M.G.L. c. 240, § 14A – which allows a landowner to obtain a judicial declaration of the extent to which a zoning regulation applies to a proposed use of land – remains available even after the landowner has “engaged the administrative process” by applying for and being denied a building permit. The defendant city acknowledged the 1983 case of Banquer Realty Co. v. Acting Building Commissioner of Boston (pdf), in which the Supreme Judicial Court (SJC) stated this principle, but argued that Banquer Realty Co. had been narrowed by the SJC’s later decision in Whitinsville Retirement Society, Inc. v. Northbridge (pdf). The panel disagreed, noting that Whitinsville denied relief under the statute because the plaintiff there was seeking a declaration of the extent to which a special permit – not a zoning bylaw or ordinance – applied to the plaintiff’s land. Stating, “we continue to follow Banquer Realty Co. as clarified by Whitinsville Retirement Soc., Inc.,” the panel reversed the trial court’s dismissal of the plaintiffs’ M.G.L. c. 240, § 14A claim. The remaining appellate claim concerned the trial court’s grant of summary judgment to the city on the issue of whether the plaintiffs’ proposed use of their land as the site of an Ocean State Job Lot store amounted to a “change in use” from the previous supermarket use. On this claim, too, the panel reversed, finding that the plaintiffs’ evidence – while thin – was enough to create a disputed issue of material fact, thereby precluding summary judgment.
In its recent decision (pdf) in Abate v. Fremont Investment & Loan, the Supreme Judicial Court (SJC) affirmed a Land Court judgment dismissing a foreclosed borrower’s “try title” action. “Try title” is a nineteenth century cause of action that allows an owner of land to force someone with an adverse claim to the land to either bring an action and prove his “better title” or forever hold his peace. The statute is M.G.L. c. 240, §§ 1-5. Since the onset of the current foreclosure crisis, mortgagees facing foreclosure have been using the try title mechanism to challenge the mortgage holder’s right to foreclose, often by contesting the validity of one or more assignments of the mortgage as it moved through the secondary market.
To bring a try title action, a plaintiff must allege that (1) he holds record title to the land, (2) he is in possession of the land, and (3) there is an actual or possible adverse claim. In Abate, the plaintiff’s mortgage had already been foreclosed. Nevertheless, Abate filed a try title action claiming that the original mortgagee’s assignment of the mortgage was “fraudulent, invalid, void and/or legally inoperative,” therefore the foreclosure itself was invalid and he was still the owner of the property.
The defendants, who were the foreclosing mortgagee and prior holders of Abate’s mortgage, moved to dismiss the case on the ground that his allegations were insufficient to show that the last assignment in the chain was invalid. Abate opposed the motion, arguing that under the two-step procedure typically used in try title actions, the question of who has “better title” must await the second step of the proceeding, in which the defendant becomes the plaintiff and, in a case such as this, must prove that his foreclosure was valid.
The Land Court allowed the defendants’ motion to dismiss, ruling that, in the first step of the procedure, the plaintiff must demonstrate at least the first two elements of the claim: record title and possession. This is necessary because, if either of those elements is in doubt, the court may not have jurisdiction to entertain the case in the first place. The Land Court held a hearing and, considering all the evidence, rejected Abate’s substantive claims and found that the last assignment – and therefore the foreclosure – was valid. Since Abate could not prove he had record title to the property, the court had no jurisdiction and the try title action was dismissed.
On appeal the SJC affirmed the Land Court’s judgment in all respects. The court agreed that the first two elements of the plaintiff’s case – record title and possession – must, if challenged by the defendants, be determined at the outset of the case, to establish the court’s jurisdiction. As to the third element – the existence of an adverse claim – the SJC held that, even if challenged, the plaintiff’s allegations should be presumed to be true, with resolution of that issue reserved to the second step of the procedure. In this way, the court noted, “we harmonize the two-step try title procedure with the traditional use of the rules of civil procedure as a device for raising jurisdictional issues before the court.”
Though in Abate the foreclosure had already occurred, the SJC went on to say:
Nonetheless, because the issue may arise in future try title actions between a mortgagor and mortgagee, we take this opportunity to resolve the conflict in the Land Court try title decisions on the adverse claim element of subject matter jurisdiction. We conclude that where a mortgagor challenges the right of the mortgagee to foreclose, the “adverse claim” element of a try title action is sufficiently alleged only if the foreclosure has already occurred.
By requiring mortgagors to wait until after foreclosure to file a try title action, and by allowing (if not requiring) defendants to challenge the mortgagor’s claims concerning the validity of the foreclosure at the outset of the case, the SJC has taken the try title mechanism off the table as a way to prevent a foreclosure, and has reduced its attractiveness as a means of delaying the mortgagee’s disposition of the foreclosed property. Both of these are salutary developments that should help accelerate the real estate market’s ongoing recovery from the foreclosure crisis.
Last week the Supreme Judicial Court (SJC) issued its much-anticipated decision in Palitz v. Zoning Board of Appeals of Tisbury. The fact that the high court took this appeal directly from the Land Court (bypassing the Appeals Court) caused some to wonder whether a dramatic change in the law on the relationship between zoning and subdivision control – especially with regard to pre-existing buildings – was in the works. In the end, the court largely stuck to the path marked by prior decisions. My colleague Jesse Abair and I filed an amicus brief on behalf of the Massachusetts Association of Regional Planning Agencies, the Massachusetts Association of Planning Directors, Inc., the Massachusetts Chapter of the American Planning Association, and the Martha’s Vineyard Commission.
Palitz concerned land in Tisbury (on Martha’s Vineyard) shown on a plan that the town’s planning board in 1994 endorsed “Approval Not Required” (ANR). The basis for the ANR endorsement was a provision in the Subdivision Control Law which exempts from that law a division of land on which there are two or more pre-existing buildings (i.e., buildings in existence before the town adopted the Subdivision Control Law) so that, after the division, there is one building on each new lot. This is known as the “existing building” exemption. In connection with this ANR endorsement the owner also obtained a variance because the resulting lots violated setback and lot size requirements of the zoning bylaw.
In 2012 Palitz, who owned one of the lots, sought to rebuild her 200-year-old house. The new house would retain the same footprint as the old one but would be almost 10 feet higher and would include a basement. The building inspector refused to issue a building permit until Palitz obtained a new or amended variance. When Palitz applied for such a variance she was denied. She appealed that denial to the Land Court, arguing that she didn’t need a variance because her house was a lawful pre-existing, nonconforming structure that was grandfathered under the state Zoning Act, M.G.L. c. 40A, § 6 (Section 6). The Land Court disagreed and upheld the local decision.
The SJC affirmed the Land Court, holding that the prior variance “cannot serve as a launching pad for the expansion of zoning nonconformities” through use of the grandfathering protections in Section 6. Thus, Palitz’s project did require a new or amended variance. However, the SJC found no reason to disturb the Land Court’s conclusion that her variance application was properly denied.
The cases on pre-existing uses and structures are a dense thicket, and Palitz is no exception. Had Palitz’s predecessor not used the “existing building” exemption to obtain an ANR endorsement placing her house on its own lot, it’s possible Palitz would have been able to rebuild the house using the protections afforded by Section 6 – a much easier task than meeting the notoriously difficult variance standard. Indeed, that was Palitz’s principal argument. But those protections were lost when her predecessor created a new lot through the “existing building” exemption of the Subdivision Control Law, and then obtained a variance to excuse the resulting zoning violations. This is so even though Palitz’s 200-year-old house itself didn’t change. Palitz confirms that zoning and subdivision control are two different animals that must be addressed on their own terms.
The Appeals Court’s recent decision in 1148 Daviol Street LLC v. Mechanic’s Mill One LLC will be of interest to adverse possession buffs.
The issue on appeal was whether the plaintiff’s adverse possession claim started running during a 14-year period when the defendant’s property was owned by the City of Fall River. The defendant argued that the claim could not have commenced during that period because of M.G.L. 260, § 31, which codifies the ancient common law principle that “time does not run against the sovereign” (“nullum tempus occurrit regi” for you Classics majors). In 1987 the Legislature revised the statute to expand the categories of public property that can be recovered at any time (i.e. without regard to claims of adverse possession or prescriptive use) to include land held for various recreational and environmental uses as well as for “other public purpose[s].” The defendant reasoned that, since its land had been held by Fall River for a public purpose, and no adverse possession claim could have been asserted against the city, those 14 years of municipal ownership should be excluded from the 20-year period required to prove adverse possession.
The Appeals Court brushed the defendant’s argument aside with “little difficulty.” The court stated, “[n]othing in the statutory language immunizes [public lands] from having an adverse possession claim begin to accrue during the period of public ownership.” The court noted that, while the 1987 amendments broadened the protections afforded to public lands, “nothing in the statute evinces an intent that such protections also benefit a subsequent private owner.” The court further noted that M.G.L. 260, § 21, the statute of limitations governing private actions to recover land, was not changed in 1987, and includes no exception for land formerly held by the Commonwealth or its political subdivisions. The coup de grâce for the defendant’s position was the court’s observation that the public policy considerations underlying the 1987 amendments to G.L. c. 260, § 31 “no longer come into play once the land in question is transferred to a private party.”
Though it’s almost 300 years old (in America), the adverse possession doctrine continues to develop before our eyes.
In its decision earlier this year in U.S. Bank Natl. Assn. v. Schumacher (pdf), the Supreme Judicial Court addressed the impact of a failure to comply with requirements for providing notice of the mortgagor’s right to cure a default pursuant to M.G.L. c. 244, § 35A (our post on Schumacher is here). The recent Appeals Court case of Haskins v. Deutsche Bank National Trust Co. (pdf) provides additional guidance with respect to Section 35A notices.
Haskins granted a residential mortgage to the entity known commonly as “MERS.” Although MERS was the legal mortgage holder, the loan was beneficially held by Deutsche Bank as Trustee of a mortgage securitization trust.
Neither MERS nor Deutsche Bank serviced the loan. Rather, IndyMac Mortgage Services was responsible for the billing and accounting, and it also apparently was responsible for foreclosure decisions.
Section 35A requires the notice to inform the mortgagor of “the name and address of the mortgagee, or anyone holding thereunder.” Haskins defaulted and IndyMac sent him two notices of default and of his right to cure, pursuant to Section 35A. However, the notices identified IndyMac as the mortgage holder.
Haskins never cured his default, but instead sought to prevent the foreclosure, claiming the Section 35A notice was ineffective because IndyMac was not the mortgage holder.
The Appeals Court rejected both the borrower’s call for strict compliance with Section 35A and also the Bank’s suggestion that the proper standard for reviewing a Section 35A letter is whether it was fundamentally unfair. Instead, the court looked to the realities of the business world and the intent of Section 35A. Schumacher had recognized that the purpose of the notice requirement is to give the mortgagor a fair opportunity to cure a default before the loan is accelerated and the foreclosure process begins. In order to accomplish that purpose, “the statutory notice is designed to provide the mortgagor with the information necessary to contact the party who holds all relevant information about the loan . . . and who holds authority to . . . allow the mortgagor to cure any default” or to discuss modifying the loan.
The Appeals Court then observed that neither MERS nor the Bank had responsibility for modifying the loan or making foreclosure decisions. Those responsibilities rested with the servicer, IndyMac. Therefore, considering the statutory objective, the court concluded that the term “mortgagee” in Section 35A includes the servicer.
Although he did not dispute that he had received the notices, Haskins also argued that Section 35A requires that they be sent by certified mail. The Appeals Court shot down this claim.
Haskins and Schumacher make clear that the courts are not granting borrowers who have defaulted on their mortgage loans an easy out based on claims of technical noncompliance with the requirements of Section 35A.
In its recent rescript opinion in Pelullo v. Croft, the Appeals Court affirmed a Land Court decision that overturned a building inspector’s interpretation of an undefined term in the Natick Zoning Bylaw. The Appeals Court found that the building inspector’s interpretation was unreasonable and therefore not entitled to deference.
At issue was the meaning of the undefined term “lot depth.” The Natick Bylaw provides that undefined terms “shall have their ordinarily accepted meanings or such as the context may imply.” Based on that language, the building inspector issued a building permit for construction of a single-family residence, deciding that, for lots that he considered “oddly-shaped,” lot depth should be calculated based on a diagonal line. Neither the building inspector nor the Board of Appeals (which upheld the building inspector’s decision) offered any reasoned basis for this approach.
In affirming the Land Court’s decision, the Appeals Court noted that the Bylaw provision on undefined terms is not a license to give such terms a meaning that suits the personal views of those charged with enforcement of the Bylaw. While acknowledging the deference usually given to a zoning board’s interpretation of a local bylaw, the court emphasized that unreasonable interpretations are not entitled to such deference.
In its recent decision in Rodman v. Commonwealth (pdf), the Massachusetts Appeals Court reversed a Superior Court judgment entered after a jury trial almost 10 years ago. That judgment had required the plaintiffs, who sought damages for an eminent domain taking of their land in Foxboro, to repay the Commonwealth about $165,000 – the amount by which the pro tanto award the plaintiffs received exceeded the damages the jury found were caused by the taking. [Disclosure: I was the Assistant Attorney General who represented the Commonwealth at trial.]
The case involved a taking of about 10% of the plaintiffs’ 57.7-acre parcel of land across from Gillette Stadium. Most of the land had never been developed, and most of the taking was from that undeveloped area. A small part of the taking was from a gravel parking lot at one end of the property.
At trial, the parties disputed the admissibility of engineering testimony and development plans offered by the plaintiffs. The plaintiffs claimed that their undeveloped land could have been developed (before the taking) for high-end commercial uses such as a hotel, manufacturing, or a warehouse – all of which would have required a special permit. The plaintiffs acknowledged that they had never taken any steps to get a special permit, and did not know of any instances where special permits had been granted in similar circumstances. The plaintiffs’ expert nevertheless sought to testify that special permits would have been issued because special permits are “generally granted where no waivers, or other zoning relief, are required.” The Commonwealth argued that this evidence should have been excluded because special permits were not legally available in the special zoning overlay district at issue, and because there was no evidence that such permits would have been granted.
The trial judge agreed with the Commonwealth’s position and excluded the plaintiffs’ evidence. As a result, the plaintiffs’ appraiser lowered his estimate of the pre-taking value of the property by almost $500,000, which reduced the plaintiffs’ claimed damages by a corresponding amount, to about $1.6 million. The Commonwealth’s appraiser testified that the plaintiffs’ damages were $600,800, a figure based largely on the taking of part of the gravel parking lot.
At the conclusion of the trial, the jury returned a verdict in the amount of $600,800 – the exact amount to which the Commonwealth’s appraiser testified. Because that amount was below the pro tanto award that the Commonwealth had made to the plaintiffs prior to trial, the court’s judgment required the plaintiffs to repay the difference – about $165,000 – to the Commonwealth.
On appeal, the main issue was how to value land subject to an eminent domain taking where the valuation testimony is based on a theoretical use of the property that differs – sometimes, as here, substantially – from its existing use. The Appeals Court ruled that the trial judge committed reversible error by excluding the plaintiffs’ evidence of the particular uses to which the land could have been put. The court noted, “[i]t is true that with the testimony of its own experts and in cross-examination of the plaintiffs’ experts, the Commonwealth presented evidence that the [undeveloped] property still had the same amount of frontage and could be developed in the same ways before and after the taking.” The court nevertheless opined (without citing any record support) that, “[w]ithout question, the excluded testimony impacted the credibility of the plaintiffs’ engineering and appraisal experts’ testimony.” The court concluded that “[t]he ultimate determination of value was a question of fact for the jury who were entitled to hear all relevant testimony as to how the property could be developed before making that determination.” Continue Reading
In a closely-watched case affecting hundreds of stores and other commercial establishments across Massachusetts, the Supreme Judicial Court (SJC) today ruled that Article 9 of the Massachusetts Declaration of Rights – which protects the right of equal access to ballots – trumps the right of private property owners to bar individuals from soliciting signatures in support of a candidate’s nomination to public office. Here is a full copy of the court’s decision in Glovsky v. Roche Bros. Supermarkets, Inc. In its 1983 decision in Batchelder v. Allied Stores Int’l, Inc., the SJC reached a similar conclusion with regard to a large, enclosed shopping mall, reasoning that malls had become the functional equivalent of municipal “downtowns.” Glovsky extends this principle to a single, stand-alone supermarket, though the court’s reasoning seems equally applicable to other commercial establishments that offer “assorted products” and “draw large numbers of people on a daily basis.” While ruling in the plaintiff’s favor on the access issue, the court rejected his claim that the store manager’s statement that the store “had adopted a policy against signature solicitation” constituted “threats, intimidation or coercion” within the meaning of the Massachusetts Civil Rights Act.
In a strongly-worded dissent, Justice Robert Cordy asserts that the majority “significantly expands the scope of the right [under Article 9] at the expense of the rights of countless commercial property owners across the Commonwealth.” He notes that this outcome departs from “the overwhelming national consensus” in similar cases, “completely undoes the intended balance between the rights of property owners and the rights of those whom they invite to use their property,” and “creates serious consequences for property owners who miscalculate their obligations despite their best intentions.”
Particularly in this election season, owners of Massachusetts retail establishments of all kinds would be wise to study Glovsky, consult with their real estate counsel, and re-evaluate their policies on signature collection.
In a case of first impression, the Appeals Court recently ruled that a dimensionally conforming structure used for a nonconforming use can’t be considered a nonconforming structure under M.G. L. c. 40A, § 6 (Section 6), first paragraph. The case is Welch-Philippino v. Zoning Board of Appeals of Newburyport (pdf).
Under Section 6, the alteration or extension of a pre-existing nonconforming commercial structure triggers the need for a so-called Section 6 finding, which is a finding that the proposed structural changes will not be substantially more detrimental to the neighborhood than the existing structure.
Welch-Philippino involved the proposed renovation and modernization of a nursing home in Newburyport. As with the existing nursing home structure, the new structure would comply with all dimensional requirements of the Newburyport zoning bylaw. The nursing home use pre-dates zoning and is lawfully nonconforming.
An abutter appealed a special permit authorizing the project to proceed. The abutter argued that a fully conforming structure used for a nonconforming use should be treated as a nonconforming structure under Section 6, and therefore require a Section 6 finding. The Land Court rejected that argument, finding no support for it in the statute. Instead, the court ruled that the proposed new structure is – and thus should be treated as – a fully conforming structure. According to the Land Court, where a change or extension of a nonconforming use is proposed, the proper procedure is to apply the so-called Powers test, derived from the 1973 case Powers v. Building Inspector of Barnstable (pdf). Applying that test, the Land Court found that the project is allowed as of right because it does not amount to a change or substantial extension of the lawfully nonconforming commercial use. The Appeals Court agreed.
Welch-Philippino adds another smidgen of clarity to the law of nonconforming structures and uses in Massachusetts. However, this body of law will continue to be a source of confusion for landowners and abutters – and a source of fees for land use litigators – until the Legislature amends the “difficult and infelicitous” language of Section 6. For more on Section 6, see our prior posts here and here.
In a case of first impression, the Appeals Court ruled last week in Allen v. Allen that a recorded deed with an acknowledgement falsely stating that the grantor had personally appeared before the notary public was unenforceable against a family member with a competing, subsequently recorded deed.
Allen pitted the plaintiff sister, Deborah, against her defendant brother, Harold Jr. In July, 2001, the siblings’ mother, Ethel, signed a deed conveying her Lexington home to Harold Jr. That deed was recorded in August, 2001 with a facially valid acknowledgement. In November, 2001, Ethel created a realty trust and conveyed the same property to herself and Deborah as trustees, reserving a life estate for herself and providing that, upon her death, the property would be sold and the proceeds divided among several of her descendants, including Deborah but – wait for it – excluding Harold Jr. Fast forward to 2009: Ethel dies, Harold Jr. whips out his 2001 deed, and Deborah marches into Land Court.
The case went to trial on several issues. Regarding Harold Jr.’s deed, the Land Court found that, while Ethel’s signature on the deed was genuine, she did not – contrary to the acknowledgement – personally appear before the notary (an attorney who was friendly with Harold Jr.). Rather, the court found, Ethel signed the deed in front of Harold Jr., who then brought it to the notary to get his signature on the acknowledgment. Under M.G.L. c. 183, § 29, a deed may not be recorded without a proper acknowledgement. Because the one on Harold Jr.’s deed – though facially valid – was defective, the deed was not entitled to be recorded; therefore, the court reasoned, the deed did not provide constructive notice to third parties, including, in this case, Deborah.
The Appeals Court affirmed the Land Court’s decision in all respects, agreeing that “the latent defect in the certificate of acknowledgement of the July  deed prevented it from giving constructive notice to Deborah of the prior conveyance.” Because Deborah had no actual notice of that conveyance, Ethel’s November 2001 deed to herself and Deborah as trustees ostensibly passed good title to the Lexington property.
Deborah may have won this battle, but the war apparently isn’t over. In a footnote, the Appeals Court mentions that Harold Jr. has filed a separate Land Court case alleging that Ethel’s November 2001 deed was the product of undue influence. Stay tuned.