Plaintiff filed its Verified Complaint for Declaratory Judgment and Injunctive Relief on May 10, 2006, seeking to enforce its rights under G. L. c. 61B (Chapter 61B) relative to a 126.5 acre parcel of land located on Pleasant and Leicester Streets in Oxford, MA (Locus). On the same day Plaintiff filed its Motion for a Preliminary Injunction. This court allowed, in part, Plaintiffs Motion for Preliminary Injunction on May 26, 2006 (the Order), finding that the 120-day option period under G. L. c. 61B, § 9 had not yet begun to run because of a defective notice, and ordering that Defendant EAV Realty, LLC (EAV) be enjoined from conveying Locus to Defendant Pulte Homes of New England, LLC (Pulte) or any other party except Plaintiff until final adjudication of the merits of this case. [Note 1] Pulte filed its Answer on June 9, 2006, and EAV filed its Answer on June 28, 2006. A case management conference was held on July 18, 2006.
EAV filed its Motion for Judgment on the Pleadings and/or Summary Judgment on August 17, 2006, together with supporting memorandum, Concise Statement of Material Facts, and Appendix, and a hearing was scheduled for February 9, 2007. At a status conference on December 7, 2006, the parties acknowledged that they were in settlement discussions and the summary judgment hearing was put on hold. At a status conference on May 21, 2007, the parties announced that settlement talks had fallen through, and this court scheduled a second hearing for EAVs summary judgment motion to take place on December 17, 2007. On August 30, 2007, Plaintiff filed its Opposition and Cross-Motion for Summary Judgment, together with supporting memorandum, Reply to Concise Statement of Material Facts, and Affidavit of Shirin Everett, Esq. On December 17, 2007, the parties again requested a postponement of the summary judgment hearing because of continued negotiations, yet at a status conference on March 6, 2008, the parties once more indicated negotiations had fallen through and requested a new hearing date. [Note 2] On September 16, 2008, EAV filed its Supplemental Memorandum, and this court held a hearing on both motions on September 17, 2008, at which time the matter was taken under advisement. [Note 3]
Summary judgment is appropriate where there are no genuine issues of material fact and where the summary judgment record entitles the moving party to judgment as a matter of law. See Cassesso v. Commr of Corr., 390 Mass. 419 , 422 (1983); Cmty. Nat'l Bank v. Dawes, 369 Mass. 550 , 553 (1976); Mass. R. Civ. P. 56(c).
The following material facts are not in dispute:
1. EAV is the record owner of Locus, which consists of approximately 126.5 acres of property located in Oxford, MA. 126 of these acres are classified as recreational land pursuant to G. L. c. 61B, and EAV has received tax benefits based on such classification. The remaining 0.5 acre is not so classified.
2. On September 22, 2005, EAV executed an Agreement for Sale with Pulte for Locus (the Agreement). The Agreements purchase price (the Purchase Price) is stated as:
The Purchase Price for the Premises shall be calculated with reference to the number of market rate units (MRUs) and limited price units (LPUs) that Buyer obtains final approval for. The Purchase Price shall be calculated at $37,500 for each MRU and an amount as set forth on Exhibit B for each LPU for which Buyer receives Final Approval. . . . [Note 4]
Through a footnote in its definition of Purchase Price, the Agreement notes that the term Final Approval shall mean that all permits or approvals required prior to the issuance of an unconditional building permit have been issued with conditions reasonably acceptable to the Buyer with no appeal taken or if an appeal is taken it has been resolved on terms reasonably satisfactory to the Buyer.
The Closing Date of the Agreement states:
Unless this Agreement is terminated earlier, or been extended as provided in this Agreement, the Closing shall occur between the 31st and 60th day (at Buyers election) from the later of: (i) the date that Buyer has received the Final Approvals (as previously defined) of all permits and approvals set forth in Section 6 and the Preconditions to Closing set forth in this section have been satisfied and (ii) the date the Seller records the waiver of the Towns rights pursuant to Chapter 61B.
The Agreement also confers a discretionary right of termination in the buyer
if at any time the Buyer determines in its sole opinion that it is unlikely to obtain approvals for a minimum of 175 market rate units or if such approval will contain conditions which the Buyer finds unacceptable, the Buyer shall have the option to terminate the Agreement and upon such termination, all Deposits paid shall be returned to the Buyer . . . .
3. By certified letter dated January 20, 2006, addressed to the Planning Board of the Town of Oxford (the Notice of Intent), EAV notified Plaintiff of its intent to sell Locus to Pulte. [Note 5] The Notice of Intent was not sent by certified mail to the Town of Oxford (the Town) Board of Selectmen (the Board of Selectmen), the Town Board of Assessors (the Board of Assessors) or the Town Conservation Commission (the Conservation Commission). The Notice of Intent did not include a copy of the Agreement. The Notice of Intent stated a purchase price of not less than Six Million Five Hundred Sixty-Two Thousand Five Hundred and 00/100 Dollars . . . . and stated that [t]he Property is valued, assessed and taxed on the basis of its recreational use under the terms and conditions of M.G.L. c 61B and Pulte intends to convert the Property to residential use if it completes the transaction described in the Agreement of Sale. 4. EAV delivered a copy of the Agreement to the Town Manager, at the Town Managers request, on February 6, 2006. The Agreement was not delivered to the Board of Selectmen, the Board of Assessors, or the Conservation Commission.
5. On December 6, 2007, Pulte sent EAV a notice of termination of the Agreement. [Note 6]
Both Plaintiff and EAV argue that the Notice of Intent is defective; however, that is the extent of the parties agreement. EAV argues that the Notice of Intent was intended as notice to sell Locus, and, as a result of it being defective, the 120-day period during which the Town could exercise their first right of refusal was never triggered. [Note 7] While Plaintiff agrees that the Notice of Intent was defective, it reaches a far different conclusion. Plaintiff contends that the defective notice to sell results in valid notice to convert, conferring to Plaintiff the right to purchase Locus once the fair market value of Locus is obtained from an impartial appraiser.
G. L. c. 61B, § 9, as in effect when this matter was filed, [Note 8] states in part:
Land which is valued, assessed and taxed on the basis of its recreational use under an application filed and approved pursuant to this chapter shall not be sold for or converted to residential, industrial or commercial use while so valued, assessed and taxed unless the city or town in which such land is located has been notified of intent to sell for or convert to such other use . . . . For a period one hundred and twenty days subsequent to such notification, said city or town shall have, in the case of intended sale, a first refusal option to meet a bona fide offer to purchase said land, or, in the case of intended conversion not involving sale, an option to purchase said land at full and fair market value to be determined by impartial appraisal. . . . Such notice of intent shall be sent by the landowner via certified mail to the mayor and city council of a city, or to the board of selectmen of a town, to its board of assessors and to its planning board and conservation commission, if any, and said option period shall run from the day following the latest date of deposit of any such notices in the United States mails. . . .
Both parties agree that the Notice of Intent was not sent as required by the statute, and the record so indicates. The Notice of Intent was not sent to the proper parties and it was only sent by certified mail to the planning board; moreover, the Agreement was not included with the Notice of Intent. In addition, the Notice of Intent also covered both 61B land and non-61B land. Both parties cite Town of Billerica v. Card, 11 LCR 195 (2003) (Misc. Case No. 272985) (Sands, J.), affd 66 Mass. App. Ct. 664 (2006), where the Appeals Court stated that
[t]he statutory requirement that notice be sent by certified mail ensures that all parties will receive a notice of intent reflecting a readily ascertainable date of mailing, which sets the option period running. To construe the statute otherwise would permit a degree of imprecision as to the start of the 120-day option period, which the Legislature deemed undesirable.
Card, 66 Mass. App. Ct. at 668. Plaintiff also relies upon Plante v. Grafton, 56 Mass. App. Ct. 213 , 217 (2002), for the proposition that a seller may not defeat a right of first refusal by confronting the optionee with terms that include acquisition of land in addition to that covered by the right. In this respect, this court agrees with the parties. [Note 9] As a result of the foregoing, I find that the Notice of Intent was defective and was not valid notice of an offer to sell Locus to Plaintiff.
The parties, however, disagree as to the consequences of the invalidity of the Notice of Intent. EAV argues that since the Notice of Intent was defective, it did not give proper notice to Plaintiff and, therefore, the parties should return to the respective positions that they held prior to when the Notice of Intent was mailed. Plaintiff agrees that the Notice of Intent was defective and that the Agreement was not a bona fide offer to sell, but argues that this court should construe it as a valid notice to convert. Plaintiff maintains that the Notice of Intent started a chain of events which now provides Plaintiff with the right to retain an appraisal to determine the fair market value of Locus, which thus triggers a 120-day period during which Plaintiff could determine whether it wishes to purchase Locus.
There are two basic problems with Plaintiffs analysis. First, the plain language of the Notice of Intent is unambiguous; it specifically states that it is a notice of sale. Second, G. L. c. 61B, § 9 provides a municipality with an option to purchase said land at full and fair market value to be determined by impartial appraisal only in the case of an intended conversion not involving sale. The facts presented in the case at bar do not involve any intent to convert Locus not involving a sale. More importantly, when Plaintiff argues that the Notice of Intent was defective as to notice of sale but not as to notice to convert, it ignores the substance of its own argument that the notice was defective in general. Whereas Plaintiffs argument that the absence of the Agreement in the notice package and the lack of specificity in the Agreement relate directly to the issue of sale, Chapter 61Bs requirements of a certified mailing and its application to exclusive recreational land go to the general issue of improper notice. This court does not read G. L. c. 61B, § 9 as creating a situation where notice must be either one of sale or one to convert. [Note 10] Rather, here is a situation where there was not a proper notice at all. In light of the above, I find that the defective Notice of Intent to sell Locus was not valid notice to convert Locus to a residential, industrial, or commercial use.
Plaintiffs observe, and this court agrees to a degree, that Chapter 61Bs right of first refusal shows a legislative intent to preserve and protect recreational land within the Commonwealth. In line with such intent, recreational land is protected in the case at bar for Plaintiff is not without recourse. Plaintiff is protected for EAV must comply with Chapter 61B if it desires to either sell or convert Locus. Plaintiff has not lost any of its rights of first refusal. [Note 11] This is not a situation of un-ringing the bell, as Plaintiff proclaims, for the bell was never rung in the first place.
Plaintiff acknowledges that its argument is one of an equitable remedy and cites Sudbury v. Scott, 439 Mass. 288 (2003), to argue that a municipality retains the right of first refusal when the owner does not inform the municipality of its right. However, Sudbury is distinguishable because in the case at bar the sale never took place; in Sudbury, the owner sold the property without notifying the municipality. Id. at 290. Similarly, Plaintiff cites Card to argue that a right of withdrawal of a right of first refusal cannot be read into the statute. Card, however, is distinguishable for it involved a valid notice of intent. See Card, 11 LCR at 198. Finally, EAV argues that since the Agreement has been terminated, this case is moot, and any new sale will require a new notice of intent. This further supports this courts ruling that the parties are back at square one and EAV must notify Plaintiff again in the event that it intends to sell or convert the use of Locus.
As a result of the foregoing, I ALLOW EAVs Motion for Summary Judgment and DENY Plaintiffs Cross-Motion for Summary Judgment.
Judgment to enter accordingly.
Alexander H. Sands, III
Dated: May 6, 2009
[Note 1] This court also allowed Plaintiffs Motion for Lis Pendens contingent upon Plaintiffs filing of an Amended Verified Complaint. Because Plaintiff failed to amend their Complaint accordingly, their Lis Pendens was never effective.
[Note 2] A date for the summary judgment motion to be heard was extended three additional times.
[Note 3] At the hearing, the parties agreed that this would be a summary judgment hearing, and that this court could rely on all documents submitted into the record as a part of the summary judgment/judgment on the pleading briefs.
[Note 4] Exhibit B includes a combinations of definitions and mathematic formulas.
[Note 5] The Notice of Intent states, This letter shall serve as notice of EAV Realtys intent to sell recreational land as required by [G.L. c. 61B § 9].
[Note 6] At the summary judgment hearing, the parties indicated that they would fill a Stipulation of Dismissal relative to Pulte. Such a stipulation was filed on April 23, 2009.
[Note 7] In the alternative, EAV argues that if the Notice of Intent was not defective, Plaintiffs 120-day period has since run and, thus, Plaintiffs have no remaining rights in Locus. Given this courts finding regarding the invalidity of the Notice of Intent, infra, I need not address this argument by EAV.
[Note 8] This section was amended in 2006, effective March 22, 2007, to indicate that a bona fide offer to purchase shall mean a good faith offer, not dependent upon potential changes to current zoning or conditions or contingencies relating to the potential for, or the potential extent of, subdivision of the property for residential use . . . made by a party unaffiliated with the landowner for a fixed consideration payable upon delivery of the deed.
[Note 9] Both parties distinguish Town of Franklin v. Wyllie, 443 Mass. 187 , 197 (2005), where the Supreme Judicial Court found a contingent purchase and sale agreement sufficient to satisfy the requirement for a bona fide offer. In that case, the subdivision plan was a conventional plan and the court determined that the town through its own officials and experts, [could determine] the ultimate number of permissible lots in the proposed subdivision.
[Note 10] This conclusion by the court is reinforced by the following language from G. L. c. 61B, § 9: If the notice of intent to sell or convert does not contain all of the material as described above, then the town or city, within 30 days after receipt, shall notify the landowner in writing that notice is insufficient and does not comply. Neither party addresses this issue.
[Note 11] Plaintiff raises the issue of what happens in the event that EAV removes Locus from Chapter 61B classification, and argues that it will be harmed by such action if it loses its right to purchase Locus. The statute, however, is clear that a right of first refusal is only required while the land is being given special tax classification. Plaintiff is entitled to no more protection than that allowed by statute.