Union v. Bloomberg

88 Mass.App.Ct. 671

41 N.E.3d 1093

Lauri UNION & another¹

v.Samuel BLOOMBERG & others² trustees.³

No. 14–P–1719.

Appeals Court of Massachusetts, Norfolk.

Argued Oct. 19, 2015.

Decided Dec. 2, 2015.

Thomas O. Moriarty, Braintree, for the defendants.

Arthur P. Kreiger, Cambridge, for the plaintiffs.

Present: BERRY, GREEN, & BLAKE, JJ.

Opinion

BERRY, J.

This action concerns a settlement agreement between a condominium trust, among others, and the owners of property that abuts the condominium. The defendants, trustees of the Longyear at Fisher Hill Condominium Trust (collectively, the trust), appeal from summary judgment entered in favor of the plaintiffs, Lauri Union and Stanley Rosenzweig, whereby a Superior Court judge ruled that the settlement agreement obligated the trust to plant and to maintain a number of trees between the condominium buildings and the plaintiffs' property.⁴ On appeal, the trust claims that the settlement agreement is invalid because it violates certain provisions of the condominium statute, see G.L. c. 183A, §§ 1 –23, and that the attorney's fees awarded by the judge pursuant to the settlement agreement are excessive. We affirm.

Background. The undisputed facts relevant to this appeal are taken from the parties' joint statement of material facts, which we supplement somewhat, from the record. In 1999, Longyear Properties, LLC (Longyear), the condominium declarant and developer, began construction of four condominium buildings on an eight-acre parcel in Brookline (town), pursuant to a special permit issued by the town board of appeals (the board). CCCT, Inc. (CCCT), was established by Longyear as the initial condominium trustee, pursuant to a June 28, 1999, declaration of trust, recorded in the Norfolk County registry of deeds. Robert S. Roth and John J. Sullivan controlled both Longyear and CCCT. The plaintiffs own property across the street from two of the condominium buildings, referred to as buildings C and D.

After completion of the first two buildings in the development, Longyear began construction on building C. The plaintiffs claimed that the location of building C was closer to their property than allowed under the special permit, and they filed a request for zoning enforcement with the town's building commissioner. When their request was denied, the plaintiffs appealed

to the board.

On April 22, 2004, the plaintiffs entered into a settlement agreement with Longyear and two Longyear affiliates, Cortland Properties, LLC (Cortland), and Hayden Street, LLC (Hayden), along with CCCT, as sole trustee of the trust.⁵ The plaintiffs agreed to dismiss their zoning appeal, and Longyear agreed to certain restrictions affecting buildings C and D. Longyear also agreed to plant and to maintain a number of trees on the condominium property, as well as on property owned by the town and by the plaintiffs, in order “to mitigate the visual impact of Buildings C and D upon the [plaintiffs'] property.”⁶ The trust joined in the settlement agreement and agreed to be bound by all of its provisions, including the landscaping obligations. In particular, paragraph 27 of the settlement agreement provided as follows:

“To the extent that the consent of [the trust] is needed to ensure that Longyear has the authority to perform all of the legal obligations set forth herein, [the trust] hereby provides such consent, and agrees to promptly execute such documents as may be necessary to effectuate such consent. Without limiting the generality of the foregoing, [the trust], agrees that it is bound by all provisions of this Agreement as the successor of Longyear, including but not limited to the restrictions on the location and height of Building D as set forth in paragraphs 1–2, the limitations on the use of Hayden Road to access Building C as set forth in paragraph 3, and the ongoing landscaping obligations set forth in paragraphs 7–16.”

Paragraph 28 further states, in relevant part: “This agreement is binding upon all parties signing this agreement below and their respective heirs, successors and assigns for a period of fifty years.” A memorandum of agreement, which provided notice of the settlement agreement and stated that a copy was available for inspection at the office of the trust, was recorded at the Norfolk County registry of deeds.

The trust notified the board of the parties' settlement and petitioned for the requisite modifications to the special permit in order to implement the terms of the settlement agreement. The plaintiffs thereafter dismissed their zoning appeal. Longyear proceeded to plant trees in front of building C, but failed to complete the landscaping called for in the settlement agreement and eventually filed for bankruptcy.

On July 7, 2009, the plaintiffs filed suit for breach of contract against Longyear, Cortland, Hayden, CCCT, and the trust. On September 9, 2009, control of the trust was turned over to trustees elected by the unit owners.⁷ CCCT was removed as trustee soon after, and the plaintiffs amended their complaint to include the new trustees. Roth and Sullivan were added as third-party defendants. As the litigation proceeded, various parties filed for bankruptcy or were defaulted, see note 4, supra, leaving the trust to defend the action.

On April 18, 2013, the trust moved for summary judgment, challenging the enforceability of the settlement agreement under c. 183A. The judge denied the motion and entered summary judgment for the plaintiffs. Following dismissal of the remaining cross claims and counterclaims, final judgment entered, declaring that the trust was obligated to perform the landscaping obligations set out in the settlement agreement. Attorney's fees and costs, as provided in paragraph 24 of the settlement agreement, were awarded to the plaintiffs in the amount of $132,140.96. The trust filed this appeal.

Discussion. 1. Limits on declarant's use of trust funds. The trust maintains that requiring the trust to complete Longyear's landscaping obligation is a violation of c. 183A, § 10(j ), which prohibits a declarant from using trust funds toward the initial construction, development, and marketing of the condominium.⁸ It is the trust's position that the landscaping is related to the initial construction of the condominium development, and § 10(j ) prohibits the use of trust funds for that purpose.

We will assume, without deciding, that funding the landscaping required under the settlement agreement is related, in a broad sense,

to the project's initial construction by virtue of the fact that by agreeing to install the landscaping, Longyear was able to proceed unfettered with construction of buildings C and D. Even so, the plain language of c. 183A, § 10(j ), does not prohibit the trust's use of trust funds to comply with its own obligations, as the statute prohibits only the declarant, here Longyear, from using those funds.⁹ “The statutory language, when clear and unambiguous, must be given its ordinary meaning.” Beaconsfield Towne House Condominium Trust v. Zussman, 401 Mass. 480, 483, 517 N.E.2d 816 (1988).

The plaintiffs' appeal to the board, following the building commissioner's denial of their request for zoning enforcement, involved a dispute concerning the condominium's common areas and facilities and therefore implicated the trust's rights under c. 183A, § 10(b )(4). Moreover, the trust had an obvious interest in the potential adverse effect the plaintiffs' request for zoning enforcement (if successful) could have on portions of the common areas, particularly those included as a part of building C. Section 10(b )(4), inserted by St. 1963, c. 493, § 1, provides the trust with the right and the power to “conduct litigation and to be subject to suit as to any course of action involving the common areas and facilities or arising out of the enforcement of the by-laws, administrative rules or restrictions in the master deed.” Pursuant to the grant of authority under § 10(b )(4), it was well within the trust's power to join in the settlement of the plaintiffs' zoning appeal involving the condominium's common areas. “The power of trustees ‘[t]o conduct litigation ... involving the common areas and facilities' includes the power to settle claims prior to or in the course of litigation.” Golub v. Milpo, Inc., 402 Mass. 397, 401, 522 N.E.2d 954 (1988), quoting from c. 183A, § 10(b )(4).

Accordingly, on our reading, § 10(j ) serves to preclude the declarant's use of trust funds for its own purposes in the initial phases of the project, as specified therein. Contrary to the trust's view, we are not enforcing an obligation under a settlement agreement that is otherwise forbidden by statute. The settlement agreement here specifically acknowledged the trust's role in managing the affairs and the common areas of the condominium, and § 10(j ) does not prohibit the trust from settling a claim and committing trust funds to carry out its own distinct obligations

under the settlement agreement.¹⁰

The trust complains that the owners of Longyear, i.e., Roth and Sullivan, also controlled CCCT, the trustee at the time of the settlement agreement's execution, as the settlement agreement was signed before the unit owners replaced CCCT as trustees. According to the trust, the individuals in control of the corporate declarant should not be permitted to take advantage of their simultaneous control of the corporate trustee to shift the burden of funding construction-related expenses to the trust, in contravention of § 10(j ). Such an arrangement, in the trust's view, would lead to all manner of abuse.

We discern no danger that enforcement of the settlement agreement would encourage a declarant's misuse of trust funds, under the guise of dual roles as developer and trustee, by applying them towards initial construction in the ordinary course. The events here occurred in the context of a zoning appeal, and the trust, as a separate entity, took part in the settlement of that dispute pursuant to its role...