CITY OF BOSTON vs. JADWIGA ROCHALSKA & another. [Note 1]

DUFFLY, J. The city of Boston (city) petitioned the Housing Court for appointment of a receiver, pursuant to G. L. c. 111, § 127I, to bring a vacant property owned by Jadwiga Rochalska into compliance with State sanitary and building codes. After the receiver had been appointed, his role was limited to "tak[ing] all necessary steps to enable the Boston Fire Department to enter the premises in the event of a fire." Having completed that task, the receiver was discharged, and following a hearing to establish the reasonableness of his claimed expenses, he was awarded $124,353.49.

The intervener, Marian Sklodowski, filed this appeal [Note 2] from various orders and judgments of the Housing Court, primarily claiming that G. L. c. 111, § 127I, does not apply to vacant buildings and it was thus error to deny his motion to vacate the appointment of a receiver. He also appeals from the denial of Rochalska's motion to dismiss the city's petition to appoint a receiver (based on a claim of insufficiency of service of process); the denial of his own motion to amend findings of fact and rulings of law (asserting, inter alia, that the receiver committed a fraud on the court); and the award of $124,353.49 to the receiver, claiming that findings regarding certain allowed expenses of the receiver were not supported by the evidence. [Note 3] We affirm in part and reverse in part.

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1. Background and proceedings. Some years prior to the commencement of the within proceeding, the city through its inspectional services department condemned the property located at 199-201 Athens Street in Boston (property) as unfit for habitation due to various sanitary and building code violations, and issued a vacate order. [Note 4] On January 16, 2002, the city filed its petition in the Housing Court for the appointment of a receiver for the property, alleging that the abandoned property had been condemned as unfit for human habitation in that, among other things, the porches were in a badly deteriorated state and conditions at the property presented a public safety hazard and a danger of vandalism, trespass, fire, and illegal activities occurring there.

As also set forth in the complaint, Rochalska had not applied for permits to remedy these conditions after the condemnation of the property entered, and there was a risk that the building would be destroyed beyond repair absent the appointment of a receiver who would be obligated to secure the property, repair it, and bring it into conformity with applicable sanitary and building codes. Following several unsuccessful attempts to personally serve Rochalska with the petition, the city's motion for service by publication was allowed, and on March 19, 2002, Jonathan Kaye was appointed receiver.

Some two weeks later, Rochalska, through an attorney, filed a motion supported by affidavits to stay the receivership claiming that she was never served with notice of the proceedings and was

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prepared to "immediately commence the rehabilitation of the entire subject property." The motion to stay was allowed by an order dated May 14, 2002, on the ground that "it is in the interests of justice to afford the respondent [Rochalska] an opportunity [within twenty-one days] to show that she is capable of rehabilitating the premises." The order did not fully divest the receiver of authority, however, but, rather, authorized Kaye "to take all necessary steps to enable the Boston Fire Department to enter the premises in the event of a fire." [Note 5]

Two motions to dismiss the petition for appointment of a receiver were thereafter filed on Rochalska's behalf by another attorney (not apparently associated with the attorney who filed the motion to stay). The first sought to dismiss the petition without prejudice on the basis that Rochalska "has conveyed the property to Mari[a]n Sklodowski, an experienced contractor . . . [who] is now prepared to renovate the property and bring it into compliance with the applicable codes." [Note 6] The second motion was brought pursuant to Mass.R.Civ.P. 12(b)(5), 365 Mass. 755 (1974), and alleged insufficient service of process. [Note 7] Both motions to dismiss were eventually denied. [Note 8] Sklodowski's motion to intervene as a

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party defendant was allowed. [Note 9]

In December, 2002, Sklodowski, as intervener, filed a motion seeking to "vacate and/or dissolve" the receivership, contending that the property was unoccupied and thus not subject to the appointment of a receiver under G. L. c. 111, § 127I. Two weeks later, the motion to vacate the receivership was denied but the motion to dissolve it was allowed, and Sklodowski was ordered "hereafter responsible for the rehabilitation of the property in question and bringing it into compliance, under continued court supervision, and subject to the right of [the city] to move for the appointment of a receiver for the property should the rehabilitation work fail to progress."

A hearing was conducted before a judge of the Housing Court to determine the amount of reasonable costs and expenses incurred by the receiver for work undertaken from the date of his appointment, March 19, 2002, to December 5, 2002. In his order dated September 30, 2003, the judge determined that $124,353.49 in costs and expenses had reasonably been incurred and that, $50,000 having been paid, the balance due to the receiver was $74,353.49, plus $7,597.19 in interest. The judge denied without

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hearing Sklodowski's motions for new trial and to amend findings of fact and rulings of law pursuant to Mass.R.Civ.P. 52(b), as amended, 423 Mass. 1402 (1996). Final judgment entered on March 24, 2005. [Note 10]

2. Summary of findings. "We give a summary account of this protracted case embodied in a very extensive record. In doing so we apply the rule that findings of fact made by the judge below are to be accepted by us unless clearly erroneous, Mass. R. Civ. P. 52 (a), . . . and we also take the view that more general appraisals by the judge . . . are entitled to respect although they are not binding on us." Perez v. Boston Hous. Authy., 379 Mass. 703, 705 (1980). Additional findings and evidence to support them will be included in our discussion of the issues.

The property, which consists of two three-story buildings each containing three dwelling units, was vacant when the petition to appoint a receiver was filed. Rochalska was the owner of the property and had allowed it to become vacant when she received numerous notices of health and building code violations at the property; she attended hearings held by the city's inspectional services department that, in August, 2000, resulted in the issuance of an order of condemnation and an order to vacate the building. The property was in a dilapidated condition with rear porches in danger of imminent collapse. As a result of homeless people frequenting the building, several fires occurred there; the building was without essential utilities or smoke alarms, and debris and furniture blocked ingress and egress, rendering the property impassable. The Boston fire department had declared that the building was unsafe and dangerous, posting a red "X"

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on the door. Despite having been given time to obtain permits and make repairs after the building was condemned, Rochalska did not undertake any substantial repairs, and a receiver was then appointed.

Kaye, as receiver with authority to undertake the repairs necessary "to enable the Boston Fire Department to enter the premises in the event of a fire," cleared the debris, discarded furniture that blocked ingress and egress to the property, and reconstructed the rear porches.

3. Discussion. a. Service of process. The claim that Rochalska was not properly served with process and that the judge thus erred in denying Rochalska's motion to dismiss pursuant to Mass.R.Civ.P. 12(b)(5), was waived.

Passing the question (not raised by the parties) of the intervener's standing to appeal from the denial of Rochalska's motion, cf. Box Pond Assn. v. Energy Facilities Siting Bd., 435 Mass. 408, 415 (2001), we note that when Rochalska requested the Housing Court to stay the receivership so that she could "commence the rehabilitation of the entire subject property," she was asking that the court exercise its jurisdiction over the parties; as such she "waive [d] all questions in regard to service [of process] and submit[ted her]self to the jurisdiction of the court." Hull v. Adams, 286 Mass. 329, 333 (1934), quoting from Gahm v. Wallace, 206 Mass. 39, 44-45 (1910). See Bateman v. Wood, 297 Mass. 483, 486 (1937) ("party may lose the right to object to lack of proper service of process by . . . pleading to the merits").

b. Scope of G. L. c. 111, § 127I. We disagree with Sklodowski's argument that his motion to vacate the receivership was wrongfully denied [Note 11] because G. L. c. 111, § 127I, does not apply to unoccupied buildings. [Note 12] He argues that the statutory

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language permits a court to appoint a receiver only when such appointment is "in the best interest of the occupants residing in the property" and is thus inapplicable to an unoccupied property. This misreads the language of the statute, particularly when viewed in the light of legislative intent as reflected in the statutory scheme.

"We must ascertain the intent of a statute from all of its parts, from the subject matter to which it relates, and we must construe it so as to render the legislation effective, consonant with reason and common sense." Bay Colony Mktg. Co. v. Fruit Salad, Inc., 41 Mass. App. Ct. 662, 664-665 (1996), and cases cited. We read § 127I as setting forth circumstances that permit a court to appoint a receiver (i.e., when it "may" do so) as well as those circumstances when appointment of a receiver is mandated (i.e., when it "shall" do so). This case involves facts warranting the court's permissive appointment of a receiver.

In its opening paragraph, § 127I provides that when "affected occupants" or a "public agency" (such as the city's inspectional services department) files a petition to enforce provisions of the sanitary code, the court has the discretion to choose among three options: the court may (1) issue an injunction; (2) order that affected tenants make use and occupancy payments to the clerk of the court; or (3) appoint a receiver. See Brittle v. Boston, 439 Mass. 580, 594 (2003) ("may" is permissive, not mandatory). Nothing in the language of this portion of § 127I limits to occupied buildings the court's exercise of discretion to enforce the sanitary code through appointment of a receiver.

Section 127I goes on to describe circumstances where the court's discretion is limited, providing that the court "shall appoint

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a receiver" if a petitioner shows that sanitary code violations "will not be promptly remedied unless a receiver is appointed and the court determines that such appointment is in the best interest of occupants residing in the property" (emphasis added). G. L. c. 111, § 127I, third par. See Hashimi v. Kalil, 388 Mass. 607, 609 (1983) ("shall" is interpreted as imposing a mandatory obligation); Commonwealth v. Gagnon, 439 Mass. 826, 832 (2003) ( "When 'shall' and 'may' are used within the same section of a statute, there is a presumption that the Legislature realized the difference and was aware of their meanings").

Section 127I may thus be seen as requiring the appointment of a receiver to undertake remedial action when there are ongoing sanitary code violations in an occupied building "and the court determines that such appointment is in the best interest of occupants residing in the property," but making the appointment discretionary when the building is unoccupied or, if occupied, when the best interests of occupants do not require appointment.

A review of the broader context in which the statute was enacted supports this reading of § 127I as applicable to vacant as well as to occupied buildings. See Boston Police Patrolmen's Assn. v. Police Dept. of Boston, 446 Mass. 46, 50 (2006) ("in determining the legislative intent, an appellate court should construe the statute as a whole, to ensure that the statute serves its intended purpose").

"General Laws c. 111, §§ 127A-127N, reflect a comprehensive legislative attempt to effectuate compliance with minimum health and safety standards for residential premises." Negron v. Gordon, 373 Mass. 199, 202 (1977). [Note 13] These sections of c. 111 address the need to protect the health and safety of occupants of buildings as well as that of the general public where vacant buildings pose a threat of harm.

Section 127A of G. L. c. 111, as appearing in St. 1983, c. 84, § 1, provides for the adoption of public health regulations, to be known as the "state sanitary code," which

"shall deal with matters affecting the health and well-

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being of the public . . . [and] may provide for the demolition, removal, repair or cleaning by local boards of health and, in the cit[y] of Boston, . . . by the commissioner of housing inspection, of any structure which so fails to comply with the standards of fitness for human habitation . . . as to endanger or materially impair the health or well-being of the public" (emphasis added).

Nothing in this language limits the scope of § 127A to occupied buildings. [Note 14]

Other provisions in G. L. c. 111 further demonstrate a legislative intent to protect the health and safety of both the occupants of a building and members of the general public, and to do so through the appointment of a receiver when necessary. Section 127B provides that upon determining that a building "is or may become a nuisance . . . or may be a cause of sickness or home accident to the occupants or to the public" (emphasis added), a board of health may issue an order to vacate a building or to bring it into compliance with the sanitary code. In the event of failure to comply with the board of health's requirements, the court may appoint a receiver to enforce the board's orders. [Note 15], [Note 16]

We note further that nothing in the General Laws defines a

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nuisance as being limited to occupied buildings. A common nuisance is defined, inter alia, as "a burnt, dilapidated or dangerous building or other structure." G. L. c. 139, § 1, as amended through St. 1970, c. 649, § 2. A local board of health is empowered by G. L. c. 111, § 131, when "necessary for preservation of life or health to enter any land, building or premises . . . within its town, to examine into and destroy, remove or prevent a nuisance . . . ." See G. L. c. 111, § 129 (permitting court to order nuisance to be removed or destroyed); G. L. c. 111, § 130 (permitting court to enjoin the maintenance of a nuisance).

We conclude that G. L. c. 111, § 127I, is applicable both to vacant and occupied buildings. [Note 17] Such an interpretation comports

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with the plain meaning of the statute and serves the intended purpose of the statute to promote and ensure compliance with minimum health and safety standards through appointment of a receiver, when a failure to do so poses a risk of harm to the health or well-being of occupants of such buildings or to members of the public who come in contact with or live near vacant buildings that are not in compliance with applicable codes.

Here, the city complied with the requirements of G. L. c. 111, § 127I, when, after some sixteen months of inaction by Rochalska, it sought the appointment of a receiver to remedy the sanitary code violations that remained after the property had been condemned and any occupants ordered to vacate the property.

c. Fraud on the court. Sklodowski argues that, had the judge amended his findings as requested, those additional findings would have established that Kaye as receiver committed fraud upon the court by purporting to make payments to Daniel Buckley of Hearthstone Development Group, LLC ($47,000 on April 13, 2002, and $44,525 on August 12, 2002), that in fact were returned to Kaye (by two checks to Kaye on May 3, 2002, and August 19, 2002), and by misrepresenting the amounts billed and payments made in connection with the removal and repair of the rear porches.

A fraud on the court results from an "unconscionable scheme calculated to interfere with the judicial system's ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party's claim or defense." Wojcicki v. Caragher, 447 Mass. 200, 210 (2006), quoting from Paternity of Cheryl, 434 Mass. 23, 35 (2001). We need not decide whether this principle would have application to the facts as proposed by Sklodowski.

The judge, in denying Sklodowski's motion to amend the

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findings of fact, implicitly discredited the evidence that Sklodowski cites as supporting the proposed findings. [Note 18] "We recognize that the judge, who has a firsthand view of the presentation of evidence, is in the best position to judge the weight and credibility of the evidence. . . . Where there are two permissible views of the evidence, the fact finder's choice between them cannot be clearly erroneous." Lily Transp. Corp. v. Royal Inst. Servs., Inc., 64 Mass. App. Ct. 179, 181 (2005), quoting from Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 509-510 (1997).

The judge did not abuse his discretion in failing to make additional findings. See West Springfield v. Olympic Lounge, Inc., 45 Mass. App. Ct. 923, 924 (1998) (judge has discretion not to revisit findings when denying motion to amend findings of fact).

d. Sufficiency of the evidence. Sklodowski contends that the evidence does not support an award of $9,694.68 for lumber and $12,575.00 for labor to reconstruct the rear porches; $20,000 for supervisory services provided by Buckley; and $9,500.00 for the "Receiver's Fee."

As previously stated, we accept as true the judge's findings of fact unless they are clearly erroneous. See Henry v. Morris, 62 Mass. App. Ct. 714, 717 (2004). With this principle in mind, we discuss each of the claimed erroneous findings.

(i) Rear porches. There was sufficient evidence to support the award of $9,694.68 for lumber and $12,575.00 for the demolition and reconstruction of the rear porches. The evidence includes an invoice from Wachusett Lumber for $9,694.68, and check stubs reflecting payments made to Charles D. Joseph, totaling $12,575. Permit applications to remove the rear porches

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list Charles Derrick Joseph as the contractor, and Buckley testified that Joseph was licensed to work on the property.

(ii) Receiver's fee. The judge's determination that $9,500 was a reasonable fee for the receiver's services finds support in Kaye's testimony that he had received a fee of $7,500 for another receivership that was "much less complex and less time consuming," and that, because the project had tied up his working capital, it prevented him from taking on other work. The award was not clearly erroneous. See Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. at 510 ("[W]e do not review questions of fact found by the judge, where such findings are supported on any reasonable view of the evidence, including all rational inferences of which it was susceptible. So long as the judge's account is plausible in light of the entire record, an appellate court should decline to reverse it") (citations omitted).

(iii) Quantum meruit. The judge observed that "[t]he most troublesome part of the Receiver's claim involves Daniel Buckley of Hearthstone Development. . . . [T]he relationship between the Receiver and Daniel Buckley was not an arms length relationship since Buckley had worked for the Receiver as a job superintendent on a number of occasions." [Note 19] However, the judge found that "there is no doubt that Buckley performed general supervisory services for the Receiver on the subject property and is entitled to reasonable compensation for same." Concluding that "substantial work was accomplished on the project under supervision of Buckley," the judge awarded $20,000 "on a quantum mer[u]it basis" for services performed by Buckley.

No view of the evidence supports the amount of this award. Even crediting Buckley's testimony that he provided supervisory

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and security-related services for fourteen weeks, and on this basis awarding $400 per week, [Note 20] which is the amount actually paid to Buckley for his services for eleven of the claimed weeks, [Note 21] the total amount would be, at most, $5,600, not $20,000.

4. Conclusion. We affirm the orders denying (1) Rochalska's motion to dismiss the petition; (2) the intervener's motion to vacate the appointment of a receiver; and (3) the intervener's motion to amend findings of fact and rulings of law. As to the order and judgment awarding the receiver $124,353.49 for his reasonable expenses, we vacate the award of $20,000 for services provided to the receiver by Daniel Buckley of Hearthstone Development Group, LLC, and remand for such further proceedings as may be appropriate to determine a reasonable amount of reimbursement; we affirm the balance of the award.

So ordered.