Appeals Court Awards Attorneys' Fees To Developer Harassed By "10 Citizens" Group

Posted by Daniel Bailey on February 09, 2011

The Appeals Court recently awarded nearly $20,000 in attorneys’ fees – the full amount sought – to a developer whose project was delayed for several years by the serial appeals of a so-called “10 Citizens” group opposed to the project.  (Disclosure:  I am real estate counsel to the developer, and my colleagues Don Pinto and Erica Mastrangelo handled the litigation, including protesters.jpgthe successful motion for attorneys’ fees).

The project is a mixed-use development on formerly contaminated land in Rockport, Massachusetts.  In February, 2007, the project received an approval known as an Order of Conditions (OOC) from the Rockport Conservation Commission.  The plaintiff “10 Citizens” group – not even one member of which actually lives in Rockport – twice attempted to appeal the OOC to the Massachusetts Department of Environmental Protection (DEP), using DEP’s administrative appeal process.  (Followers of development on the North Shore will no doubt recognize the name of the lead appellant, Stevan Goldin, who has filed appeals in many waterfront projects using this device).  DEP dismissed the group's administrative appeals, and in October, 2007, the group appealed those dismissals to Superior Court.  In October, 2008, the Superior Court granted our motion to dismiss the court appeal based on the group’s “unreasonable delay” in prosecuting the case.  The group then appealed that ruling to the Appeals Court, where we sought not only dismissal of this further appeal, but also an award of our client’s appellate attorneys’ fees on the ground that the appeal was frivolous and had been filed solely to further delay the project.  In a March, 2010 decision, the Appeals Court dismissed this further appeal and invited us to file a separate motion to recover our client’s attorneys’ fees.  We did so promptly, and last week the Appeals Court finally allowed that motion and awarded our client 100% of its fees – $19,689.20. 

It’s important to note that, while the statute that empowers all courts to impose sanctions for the filing of frivolous claims – M.G.L. c. 231, § 6F – creates a high, often insurmountable bar (the defendant must prove that the claim has no factual or legal support whatsoever and that it was brought in bad faith), there is a separate rule that gives the Appeals Court and the Supreme Judicial Court more leeway with respect to appeals.  Rule 25 of the Massachusetts Rules of Appellate Procedure, entitled “Damages for Delay,” simply says that if an appellate court decides that an appeal is frivolous, “it may award just damages and single or double costs to the appellee, and such interest on the amount of the judgment as may be allowed by law.”  It was this rule under which the Appeals Court awarded our client its appellate attorneys’ fees in the case at hand.

As far as we know, this is the first time a Massachusetts court has awarded attorneys’ fees to a developer as a sanction against a “10 Citizens” group for filing a frivolous appeal.  This will be a salutary development if it emboldens trial courts to more carefully scrutinize claims made by such groups (at least where it appears the group may be asserting groundless claims solely to hold up or kill a project), and if it deters citizens from blithely joining such groups (which often are organized by one or two highly motivated ringleaders like Mr. Goldin) without first satisfying themselves that the group’s claims have some factual and legal basis.  

SJC on Regulatory Takings: That Word Does Not Mean What You Think It Means

Posted by Robert Foster on October 17, 2010

It is a truth universally acknowledged that property owners don't like restrictions on how they may use their land.  It is a truth equally acknowledged, however, that state and local governments can enact laws and regulations — zoning bylaws, environmental rules, nuisance statutes — that limit what landowners can do with their land.  Just when a law intended to protect the public goes too far, and limits the private use of land too much, so that it becomes a "regulatory taking" requiring compensation under the U.S. and Massachusetts constitutions, is a question that has long bedeviled both the U.S. Supreme Court and our own Supreme Judicial Court (SJC).

The most recent response came in the SJC's August 26, 2010 decision in Blair v. Dept. of Conservation and Recreation (pdf).  The Blair case concerned the Watershed Management Act, which prohibits alterations to land within 200 feet of the banks of waters within the watershed system that supplies drinking water.  The Blairs own a 2.87-acre parcel on Demond Pond in Rutland that contains a small cottage and a 60-foot sand beach on the pond.  They were barred from expanding the beach and constructing a retaining wall because that portion of their property is in the buffer zone.  The Blairs asserted that this restriction on their use of their property was a regulatory taking.

The SJC disagreed.  Relying on existing U.S. Supreme Court and SJC precedent, the court found that the statute on its face was not a taking, and did not constitute a physical taking of the property since it didn't create an easement — it simply restricted use.

The main issue was whether the statute effected a regulatory taking.  This hinged on whether the regulation as applied to the Blairs' property deprived them of all economically viable use of their parcel of land.  This question further hinges on how you define the "parcel."  The U.S. Supreme Court has said that under the 5th Amendment, the relevant parcel is the entire parcel, not just the portion affected by the regulation.

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Lyon v. Duffy

Posted by Donald Pinto on October 08, 2010

Plaintiffs bought a single-family residence and learned after closing that the property was subject to a recorded Order of Conditions (OOC) that required a substantial amount of work on an ocean-facing coastal bank.  The prior owners had not completed the required work.  The plaintiffs sued their lender's attorney, who had certified that they were receiving good title to the property.  The Appeals Court held that the unfulfilled OOC did not constitute a defect in title, saying in relevant part, "[i]t is well established that building or zoning laws are not encumbrances or defects affecting title to property . . ." and "[a]n individual can hold clear title to a parcel of land, although the same parcel is valueless or considered economically unmarketable bnecause of some restriction or regulation on its use."  

Lyon v. Duffy (pdf), Appeals Court decision dated September 29, 2010.

Missed Deadline Deprives Conservation Commission of Jurisdiction, Even if Project Plans Change

Posted by Daniel Bailey on September 27, 2010

DJB wetlands blog photoOn August 26, 2010 in Regan v. Conservation Commission of Falmouth (pdf), a divided Appeals Court panel held that the Falmouth Conservation Commission didn't have authority to review revised development plans where the Commission had earlier failed to act within the 21 days required under the local wetlands by-law.  The permitting process in Regan was not unusual.  The landowners applied for permission to construct a pier, ramp and floating dock.  The Commission denied the request,  but unfortunately (for the Commission) mailed the denial on the 22nd day after the close of the public hearing.  The landowner filed a request for a superseding order of conditions and appealed the local by-law denial to Superior Court.

The landowner then redesigned its plan during the course of the superseding order proceedings.  DEP issued a superseding order approving the revised plan.  The landowners asked the Commission to reconsider its earlier denial.  The Commission held a public hearing but decided to reject the revised plans.  This time, however, the Commission acted within 21 days following the close of the hearing.

The Superior Court found for the Commission, on the basis that the landowner had waived any procedural issue related to the first decision by going back to the Commission for approval of the revised plans.  The Appeals Court reversed, however, based on the Supreme Judicial Court's 2007 decision in Oyster Creek Preservation v. Conservation Commission of Harwich (pdf).  The Appeals Court read Oyster Creek to mean that anytime a conservation commission fails to act within 21 days after the public hearing, it loses jurisdiction entirely – even over any changes to the development plan – and the superseding order of conditions controls.

Regan seems to be a very favorable decision for the landowner.  Read literally, it means that once a conservation commission loses jurisdiction, the superseding order of conditions controls, even if the landowner makes material changes to the development plans.  In this case the commission lost jurisdiction because it failed to timely act.  What happens, however, if the commission loses jurisdiction because a Superior Court finds that the local by-law is no broader than the Wetlands Protection Act?  Does Regan mean that in such a case the local commission has entirely lost jurisdiction over any changes to the project that occur during the superseding order proceedings?  Counsel for landowners will certainly argue that the commission has lost jurisdiction.