Court Opinion

ID: 3159261
Source: CourtListenerOpinion
Date Created: 2015-12-02 15:06:23.00953+00
Date Added: 2024-06-11T12:01:45.157802
License: Public Domain

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14-P-1719                                          Appeals Court

    LAURI UNION & another1     vs. SAMUEL BLOOMBERG & others,2
                              trustees.3

                           No. 14-P-1719.

        Norfolk.     October 19, 2015. - December 2, 2015.

               Present:   Berry, Green, & Blake, JJ.

Contract, Settlement agreement. Condominiums, Common area,
     Management of trust. Real Property, Condominium. Damages,
     Attorney's fees. Practice, Civil, Attorney's fees, Trustee
     of condominium management trust.

     Civil action commenced in the Superior Court Department on
July 7, 2009.

     The case was heard by Patrick F. Brady, J., on a motion for
summary judgment, and a motion for attorney's fees and costs was
heard by him.

    Thomas O. Moriarty for the defendants.
    Arthur P. Kreiger for the plaintiffs.

    1
        Stanley Rosenzweig.
    2
        Barbara Davis, William Karlyn, and Wayne Saker.
    3
        Of the Longyear at Fisher Hill Condominium Trust.
                                                                   2

     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

     4
       Also signatories to the settlement agreement were Longyear
Properties, LLC; Cortland Properties, LLC; and Hayden Street,
LLC. Those entities, their two principals, Robert S. Roth and
John J. Sullivan, as well as the additional entity, CCCT, Inc.,
either were defaulted or are bankrupt.
                                                                    3

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

     5
       Roth and Sullivan were officers and directors of CCCT, and
signed the settlement agreement on behalf of the trust. See
note 4, supra. Roth and Sullivan also controlled Longyear,
Cortland, and Hayden.
                                                                   4

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

     6
       The landscaping is difficult to quantify from the plans
attached to the settlement agreement, but according to the
trust's brief, it consisted of fifty-one Norway spruce trees and
eight arborvitae to be planted and maintained in the common
areas between buildings C and D and the plaintiffs' property.
                                                                    5

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

     7
       In addition to CCCT, the new trustees were Samuel
Bloomberg, Barbara Davis, William Karlyn, and Wayne Saker.
                                                                     6

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,

     8
       Section 10(j), inserted by St. 1963, c. 493, § 1,
provides: "The declarant shall not use any funds of the
organization to fund expenses relating to the initial
construction, development, and marketing of the project, to pay
the declarant's share of common expenses, or to pay for any
costs that are not directly related to the operation of the
condominium."
                                                                   7

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 (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

     9
       The declarant is the person or entity who records a master
deed that submits the property to the provisions of c. 183A.
G. L. c. 183A, §§ 1 & 2.
                                                                    8

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 (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

     10
       The trust suggests that the public policy that favors
settlement of litigation should not trump the legislative intent
implicit in the statutory prohibition against the declarant's
use of trust funds to pay for its own initial costs. Compare
Scully v. Tillery, 456 Mass. 758, 771 (2010). Because we read
the plain language of § 10(j) as permitting the trust to expend
funds to settle a claim concerning the common areas, we see no
conflict in that regard.
                                                                      9

    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 in managing the

common areas.    Section 10(b)(4) gives the trust the right to

settle claims concerning the common areas, and nothing therein

limits that right to the period after the unit owners are

appointed as trustees.     Indeed, the Supreme Judicial Court has

observed that developer-controlled trusts are commonplace in the

development and the marketing stages of condominiums and do not

contravene public policy.     See, e.g., Barclay v. DeVeau, 384
                                                                   10
Mass. 676, 682-684 (1981) (declaration of condominium trust that

permitted developer to appoint majority of members to board of

trustees comported with public policy if limited to a reasonable

time).    It has been recognized as a matter of practical

necessity that the developer may retain control of the

condominium trust during the building and the marketing phases.

See id. at 683 ("The developer and its mortgagee risk a great

deal undertaking a condominium and, to protect their large

investment, may need to maintain control of the project for a

specific period of time").

     Section 10(b)(4) places no express restraints on the

authority of the initial trustee to settle claims involving the

common areas, and we reject the trust's argument that the

initial trustee, when controlled by the same individuals as the

declarant, should not be permitted to bind subsequent trustees

in settling those disputes.11   We are mindful that the "statute

     11
       Individuals wearing different corporate hats in the
context of related entities is commonplace in business
transactions, and the courts, barring unusual circumstances,
generally accept the so-called "corporate fiction" of their
separate legal existence. See, e.g., Gordon Chem. Co. v. Aetna
Cas. & Sur. Co., 358 Mass. 632, 638 (1971) (ownership of all
stock in several corporations by one person does not create
single unit; "[d]ifferent corporations usually are distinct
entities in law"), quoting from New England Theatres, Inc. v.
Olympia Theatres, Inc., 287 Mass. 485, 493 (1934); Beaupre v.
Cliff Smith & Assocs., 50 Mass. App. Ct. 480, 494 n.22 (2000)
(discussing notion of corporate fiction and longstanding
principle that corporation is "a single and separate legal
                                                                 11

sets forth certain minimum requirements for the establishment of

condominiums, but 'those matters that are not specifically

addressed in the statute are to be worked out by the involved

parties.'"     Scully v. Tillery, 456 Mass. 758, 769 (2010),

quoting from Queler v. Skowron, 438 Mass. 304, 312-313 (2002).

See Barclay v. DeVeau, supra at 682 (c. 183A is enabling

statute, and matters that are not "expressly prohibited by clear

legislative mandate," may be worked out by unit owners and

developers).    Barring an express statutory limitation on the

trustees' authority to settle claims involving the common areas,

we will not invalidate the settlement agreement provisions

binding the trust on the ground that the same individuals who

controlled the declarant also controlled the trust at the time.12

     We agree with the plaintiffs that the trust's remedy for

any alleged breach of fiduciary duty on the part of the former

trustees regarding the obligations it undertook in the

settlement agreement is an action against the former trustees.

being"), quoting from Gardiner v. Treasurer & Recr. Gen., 225
Mass. 355, 370 (1916).
     12
       We refer as well to the principle that a "statute is not
to be interpreted as effecting a material change in or a repeal
of the common law unless the intent to do so is clearly
expressed." Queler v. Skowron, supra at 312, quoting from Pineo
v. White, 320 Mass. 487, 491 (1946). Unless expressly
prohibited, we will not interpret c. 183A as representing a
departure from the authority CCCT would otherwise possess to
bind the successor trustees to the settlement agreement
obligations.
                                                                  12

As to the plaintiffs, however, we see no basis to rule that the

disputed provision of the settlement agreement is invalid due to

CCCT's involvement at the time it was signed.

    2.   Unit owner consent for improvements.   The trust

additionally argues that the trust's power to bind the unit

owners to funding common area improvements is constrained by the

requirements of c. 183A, § 18.   Section 18, inserted by

St. 1963, c. 493, § 1, provides, to begin, that "[i]f fifty per

cent or more but less than seventy-five per cent of the unit

owners agree to make an improvement to the common areas and

facilities, the cost of such improvement shall be borne solely

by the owners so agreeing."   The section goes on to provide,

among other things, that seventy-five percent or more of unit

owners may agree to make improvements to the common areas and

assess the costs to all as a common expense, though for certain

costly improvements, a unit owner can petition the Superior

Court for an order directing a condominium trust to purchase his

or her unit.

    The trust maintains that unit owner consent is thus

required, under the statute, in order to fund common area

improvements such as the landscaping called for in the

settlement agreement, whether the improvements are undertaken in
                                                                    13

the ordinary course or in settling potential litigation.13    In

the absence of such consent, the argument continues, the trust

was without authority to bind the unit owners to fund the

landscaping, rendering that provision of the settlement

agreement ultra vires.    See, e.g., Golub v. Milpro, Inc., 402
Mass. at 401-402 (portion of settlement agreement pertaining to

individual condominium unit invalid because trustees lacked

authority to settle litigation that did not involve common areas

and facilities).

     As previously explained, the authority to settle claims

regarding the common areas of the condominium rests with the

trust.    "Only the trustees have the right to conduct litigation

concerning 'common areas and facilities.'"    Strauss v. Oyster

River Condominium Trust, 417 Mass. 442, 445 (1994) (citation

omitted).    See also Sea Pines Condominium III Assn. v. Steffens,

61 Mass. App. Ct. 838, 842 (2004) ("authority to litigate

matters concerning the condominium common areas in fact resides

exclusively in the condominium unit owners organization").

Section 10(b)(4) does not contain language requiring unit owner

consent to the trust's various efforts in settling claims that

     13
       The parties dispute whether the landscaping called for in
the settlement agreement constituted an improvement to the
common areas or, instead, mere maintenance, for which unit owner
consent would not be needed. For purposes of this discussion,
we again will assume, without deciding, that the landscaping
here is an improvement.
                                                                   14

may result in committing trust funds to improving the common

areas.   Moreover, § 10(b)(6), inserted by St. 1963, c. 493, § 1,

states, at its conclusion, that the "expenses incurred in and

proceeds accruing from the exercise of the aforesaid rights and

powers shall be common expenses and common profits."    Reading

§ 18 alongside the framework of § 10(b), we are not persuaded

that the trust's obligations under the settlement agreement

should be invalidated because of a lack of unit owner consent to

fund a settlement reached by the trust in response to the

plaintiffs' zoning appeal.    See, e.g., Scully v. Tillery, 456
Mass. at 771 (setting aside settlement agreement between

condominium trust and developer would "subvert the well-

established public policy of respecting and enforcing litigation

settlement agreements").

    We conclude that the statutory provisions relied on by the

trust pose no obstacle to enforcing the settlement agreement in

this case.   In light of the foregoing, we also reject the

trust's argument that the plaintiffs were not entitled to

specific performance, as specific performance was expressly

authorized as a remedy pursuant to the settlement agreement.

    3.   Attorney's fees.    As a final matter, the trust

complains that the attorney's fees award was excessive.      The

settlement agreement provided that the prevailing party was

entitled to its costs and reasonable attorney's fees, including
                                                                   15

expert witness fees, in an action alleging breach of the

settlement agreement.   The judge awarded attorney's fees and

costs to the plaintiffs in the amount of $132,140.96.

    The trust argues that the judge abused his discretion by

according undue weight to the amount requested by the

plaintiffs.   See Berman v. Linnane, 434 Mass. 301, 303 (2001).

The trust maintains that the judge, instead, should have applied

the multifactor analysis set out in Linthicum v. Archambault,

379 Mass. 381, 388-389 (1979).   The judge's detailed memorandum

indicates that he carefully reviewed plaintiffs' counsels'

affidavits concerning their qualifications, rates, and itemized

invoices and properly "considered those factors on which

evidence was presented, as well as his experience from the

trial."   Berman v. Linnane, supra.   See Margolies v. Hopkins,

401 Mass. 88, 93 (1987) (Though helpful, "[w]e have never

required a judge to make a factor by factor analysis in findings

and rulings in an attorney's fee action").   "The judge making

the firsthand observation of the quality and necessary quantity

of the parties' preparation and performance is uniquely situated

to assess the reasonable value of those services."   City

Rentals, LLC v. BBC Co., 79 Mass. App. Ct. 559, 566-567 (2011).

We believe the judge properly took into account the appropriate
                                                                   16

factors in evaluating the plaintiffs' submissions and in

considering his own involvement with this lengthy litigation.14

     As to the trust's arguments concerning specific charges,

the judge's explanations for allowing them were well reasoned,

and his findings supported in the record.     The trust's principal

complaint is that the plaintiffs' attorneys "block billed"

certain items, thereby grouping several tasks under a single

time entry.   The trust relies on Haddad v. Wal-Mart Stores, Inc.

(No. 2), 455 Mass. 1024 (2010), in which block billing was

described as disfavored but permissible if the work was clearly

described.    Id. at 1026-1027.   Here, the judge referenced his

many years of experience as a practicing attorney and trial

judge, in addition to his firsthand experience with the case, in

finding that there was nothing unreasonable about grouping a

number of activities under one time entry.

     The trust additionally contends that the judge overlooked

several irregularities in the materials submitted, when in fact

     14
       The plaintiffs' attorney's and expert fees originally
totaled $361,078.96, but $225,000 was recovered as a result of
attachment of a unit owned by the developers, which later was
sold. The judge also reduced the amount requested by $2,300 for
the mediator's fee, which the parties had agreed would be
assessed per party, and by $1,638 for "unrelated tasks." As to
the amount of the award, our observation in City Rentals, LLC v.
BBC Co., supra at 568, seems apt: "While at first glance, the
fees tail may appear to be wagging the damages dog, both the
complexity of a case -- factual or legal -- and the intensity of
the defense may drive the claimant's legal fees well beyond the
level of its damages figure."
                                                                     17

the judge discussed each of those items and explained his

reasoning.   "What constitutes a reasonable fee is a question

that is committed to the sound discretion of the judge," Berman

v. Linnane, supra at 302-303, and it was for the judge to

determine the appropriate activities to be included in the fees

awarded, as well the reasonableness of time billed for who the

trust characterizes as inexperienced counsel, the judge

specifically finding that her time spent on the summary judgment

motion was warranted and her submissions excellent.      The judge

addressed each of the trust's objections in turn and adequately

explained his resolution, and we are satisfied that there was no

error.

                                    Judgment affirmed.

                                    Order allowing costs and
                                      attorney's fees of
                                      $132,140.96 affirmed.