Opinion
No. 12–P–279.
2013-04-12
FOX GATE, LLC, v. MILLBURY ZONING BOARD OF APPEALS (and a companion case ).
By the Court (KAFKER, COHEN & TRAINOR, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Fox Gate, LLC, appeals from summary judgment entered for the defendants, Millbury zoning board of appeals (zoning board) and Millbury planning board (planning board) (collectively, the defendants), in two consolidated Land Court cases stemming from the planning board's requirement that the plaintiff post security pursuant to G.L. c. 41, § 81U, before developing lots in an approved subdivision. The plaintiff purchased the subdivision at auction and now argues that a bond posted by the subdivision's previous owner satisfies the planning board's requirement of security for provision of ways and municipal services. The Land Court judge ruled that the planning board had authority to require that the plaintiff furnish a new bond, and that the planning board could not be compelled by an action in the nature of mandamus to enforce the bond filed by the plaintiff's predecessor. We affirm. We summarize the undisputed facts from the judge's December 2, 2011, order on the parties' cross motions for summary judgment. On March 28, 2005, the planning board approved with conditions a subdivision owned at the time by Taylor Armstrong Realty Trust. Condition 1 provided that the subdivision be built in accordance with the Millbury subdivision rules and regulations. Condition 18 provided, in relevant part, “Before endorsement of the Definitive Plan, the Applicant shall either file a performance bond or surety in an amount determined by the [planning board] to be sufficient to cover the cost of all improvements shown on the approved Definitive Plan and specified as conditions of approval ... or the Applicant shall execute and record a covenant running with the land.”
The covenant was to provide that no lot may be built or sold until all the required improvements were completed and approved by the planning board. The original owner executed and recorded a covenant on May 9, 2005.
Condition 18 was consistent with the requirements of G.L. c. 41, § 81U, as amended by St.1981, c. 421, § 1, which provides, in relevant part: “Before endorsement of its approval of a plan, a planning board shall require that the construction of ways and the installation of municipal services be secured by one, or in part by one and in part by another, of the methods described in the following clauses (1), (2), (3) and (4) which method or combination of methods may be selected and from time to time varied by the applicant.” The available methods included a proper bond, a deposit of money or negotiable securities, a covenant running with the land, or a first mortgage.
In July, 2005, the subdivision was acquired by Autumn Gates Estates, LLC (Autumn Gates). Shortly thereafter, Autumn Gates obtained a mortgage loan from Bank of America, N.A., in the amount of $4.5 million, to finance construction. In February, 2006, Autumn Gates delivered to the town a bond, issued by Bond Safeguard Insurance Company (Bond Safeguard), naming the town as sole obligee, to secure the construction of ways and installation of municipal services for the subdivision. The town, in turn, released the subdivision lots from the restrictions to their building and sale imposed by the covenant.
Work began on the subdivision ways and services but was not completed, and the lots remained undeveloped. In 2008, Bank of America, N.A., foreclosed on the mortgage, and the entire subdivision was sold at auction to Fox Hill Builders, Inc., and thereafter transferred to the plaintiff. According to the plaintiff, a title search prior to its acquisition revealed that the covenant providing for the construction of ways and services had been released, and a telephone call to the town indicated there was a bond in place securing that construction. According to the defendants, sometime after the purchase, a representative of the plaintiff informed the town that the plaintiff did not intend to pay for the construction of the subdivision ways and services and that the town should rely on the existing bond for that purpose.
The town, in turn, informed Bond Safeguard by letter that the town would rely on the bond executed by Autumn Gates to complete the subdivision ways and services. Bond Safeguard rejected the town's overture, asserting that the bond was nonassignable and did not secure the obligations of the new owner. On the town's subsequent formal demand, Bond Safeguard's response remained the same.
In view of Bond Safeguard's position, the planning board notified the Millbury building inspector that building permits for the subdivision lots should be denied for lack of security required under G.L. c. 41, § 81U. On December 12, 2008, the building inspector denied the plaintiff's application for a building permit for subdivision lot number fifteen, in accordance with the planning board's notice. The denial was upheld by the zoning board.
The plaintiff brought this action in Land Court to appeal the decision of the zoning board. A second action was brought in the nature of mandamus, to order the planning board to enforce Autumn Gate's bond. The cases were consolidated. On cross motions for summary judgment, the judge ruled in the defendants' favor, and the plaintiff filed this appeal.
1. Denial of the building permit. The plaintiff appeals from the zoning board's decision upholding the denial of the plaintiff's application for a building permit. Under G.L. c. 41, § 81Y, the building inspector was prohibited from issuing a building permit for a lot in the subdivision until the conditions endorsed on the subdivision plan, limiting the right to build on that lot, had been satisfied. See, e.g., Ellen M. Gifford Sheltering Home Corp. v. Board of Appeals of Wayland, 349 Mass. 292, 294 (1965). The plaintiff argues that the planning board's release of the covenant, in exchange for the posting of a bond by the previous owner, satisfied the security requirement of c. 41, § 81U, and that no restrictions to building on the lots remained. According to the plaintiff, the planning board lacked authority to require additional security from the new owner, and the building permit was improperly denied on that basis.
The case of Stoner v. Planning Bd. of Agawam, 358 Mass. 709, 715 (1971), suggests otherwise. There, the Supreme Judicial Court determined that the planning board could not rescind its approval of a subdivision plan after the subdivision was acquired by a good faith purchaser, where the planning board had failed to file a timely certificate of its approval, and the subdivision was therefore deemed constructively approved prior to the purchase. Nevertheless, even though the board had approved the plan without requiring security for construction of ways and services prior to its acquisition by the current owners, the court specifically held that “the planning board still has authority under § 81U to require the owners to furnish security by bond, deposit or covenant for the construction of ways and the installation of municipal services required for the subdivision shown on the plan.” Ibid. Thus, prior approval of the subdivision plan did not operate to constrain the planning board's power to require security under § 81U, from a subsequent owner seeking to develop the lots. Id. at 715–716.
Applying the principle here, we believe that the planning board's authority to ensure that sufficient security was in place for the construction of ways and services did not terminate with its approval of the subdivision plan. In this case, where a change in ownership jeopardized the availability of the prior owner's bond, the planning board properly could revisit the § 81U security requirement when the new owner sought to develop the lots. The plaintiff's interpretation of “before endorsement,” in § 81U, as limiting the planning board to a one-time opportunity to impose the security requirement, does not comport with the town's statutory mandate to ensure the safe construction of ways and services before the lots are built on, sometimes several owners later. See generally Richard v. Planning Bd. of Acushnet, 10 Mass.App.Ct. 216, 219 (1980) (securing construction of ways and services is mandatory under the statute, and “[w]e are to interpret the subdivision control statutes so as to further that goal”). See, e.g., Berg v. Lexington, 68 Mass.App.Ct. 569, 581 (2007).
In Berg v. Lexington, supra, this court took a similarly broad view of the planning board's authority to ensure the proper provision for ways and services for a subdivision plan that predated the town's acceptance of the subdivision control law. Although the subdivision was exempt from the requirement of planning board approval, the town's interest in adequate access to the subdivision lots justified the planning board's imposition of its current subdivision rules and regulations regarding access. Id. at 579–581. See Toothaker v. Planning Bd. of Billerica, 346 Mass. 436, 439 (1963); LeBlanc v. Board of Appeals of Danvers, 32 Mass.App.Ct. 760, 764 (1992).
The plaintiff counters that Stoner v. Planning Bd. of Agawam, supra, only applies when there is no security in place, unlike here, where a bond already exists that, in the plaintiff's view, is sufficient to complete the subdivision. The sufficiency of the bond, however, is a matter of the planning board's opinion, as the statute expressly provides. Section 81U(1) states, in relevant part, that the planning board can require “a proper bond, sufficient in the opinion of the planning board to secure performance of the construction of ways and the installation of municipal services.” The word “sufficient” is defined as “marked by quantity, scope, power, or quality to meet with the demands, wants, or needs of a situation or of a proposed use or end.” Webster's Third New Internatl. Dictionary 2284 (1993). In these circumstances, given the change in subdivision ownership and Bond Safeguard's opposition to the town's attempt to enforce the bond, we think it was a matter appropriately within the planning board's opinion to deem the prior owner's bond unavailable and hence, insufficient, to ensure the construction of ways and services going forward.
The plaintiff complains that there was no record notice to indicate that the planning board's release of the covenant did not release a subsequent purchaser from responsibility for construction of ways and services, and that the town should be responsible for such construction to the extent of the prior owner's bond. We disagree. The security provisions of c. 41, § 81U, do not render the town the guarantor of the developer's obligation should the security prove inadequate. Marlborough Sav. Bank v. Marlborough, 45 Mass.App.Ct. 250, 252–253 (1998) (rejecting the bona fide purchaser argument to impose a financial obligation on the city to complete public improvements). Moreover, § 81U does provide for the town to issue a certificate of performance releasing the covenant when construction of the ways and services is completed, which may then be recorded. See Gordon v. Robinson Homes, Inc., 342 Mass. 529, 531–532 (1961). So long as that construction remained unfinished, we think the plaintiff assumed at its peril that the planning board's release of the covenant, in consideration of the prior owner's bond, meant that responsibility for completing the ways and services belonged to someone else.
Accordingly, the plaintiff's application for a building permit for one of the lots in the subdivision was properly denied until the plaintiff furnished security that, in the planning board's opinion, was sufficient to secure construction of ways and services.
2. Mandamus relief. The plaintiff appears to concede that, in light of the language of § 81U, which provides that “[a]ny such bond may be enforced ... upon failure of performance,” a decision by the planning board as to whether to bring an action against the surety to enforce the bond is discretionary. See generally Stoner v. Planning Bd. of Agawam, 358 Mass. at 715, quoting from Gordon v. Robinson Homes, Inc., 342 Mass. at 532 (“Matters relating to the required security are ‘in the centralized hands of the city or town’ ”). As such, “relief provided in the nature of mandamus does not lie to compel the municipal officer to exercise his or her judgment or discretion in a particular way.” Urban Transp., Inc. v. Mayor of Boston, 373 Mass. 693, 698 (1977). See Sturdy v. Planning Bd. of Hingham, 32 Mass.App.Ct. 72, 76 (1992).
We decline the plaintiff's invitation to create an exception, based on Southington v. Commercial Union Ins. Co., 254 Conn. 348, 358 (2000), which discussed the municipality's obligation to call a bond to complete improvements when subdivision lots had been conveyed. The analysis in that case accorded with express statutory language far different from our § 81U. Denial of mandamus relief was proper.
Judgment affirmed.