BELO, LLC v. 175 OLDE CANAL DRIVE, LLC, GOOD BELLAS, LLC, STEPHEN BAKER as TRUSTEE OF B&D REALTY TRUST, ROBERT MULREY as TRUSTEE OF B&D REALTY TRUST, and RICHARD GAROFANO as TRUSTEE OF R.G.C. REALTY TRUST

This action concerns the parties’ dispute over the validity and ownership of certain development rights described in the recorded master deed for a two-unit commercial condominium at 175-185 Olde Canal Drive in Lowell, Massachusetts, known as the “Olde Canal Drive Condominium” (the “Condominium”). Plaintiff Belo, LLC (“Belo”) is the owner of Unit B in the Condominium. Defendant Richard Garofano, Trustee of R.G.C. Realty Trust (“RGC”), is the owner of Unit A in the Condominium. Named as the Defendant Trustees of B&D Realty Trust (“B&D”) are B&D’s initial trustees, Stephen Baker (“Baker”) and Robert Mulrey (“Mulrey”), who were the original declarants of the Condominium. [Note 1] Also named as Defendants in this case are 175 Olde Canal Drive, LLC (“175 Olde Canal”) and Good Bellas, LLC (“Good Bellas”), the predecessor owners, respectively, of Units B and A. The several parties’ numerous claims, cross claims, counterclaims, and defenses can be summarized as follows.

Belo and RGC both seek declarations that the rights to develop and add a second phase to the Condominium (Phase II), as reserved by B&D in the Condominium Master Deed, were void ab initio because the Master Deed did not specify a deadline for the exercise of the reserved rights. They also seek declarations concerning the rights and obligations of the parties under certain agreements they entered into with Defendants 175 Olde Canal and Good Bellas in connection with their respective purchases of Condominium Units B and A, alleging that the agreements were based on misinformation and an unlawful severance of the Condominium common land. Finally, Belo seeks a declaration that certain language in its deed from 175 Olde Canal constitutes an illegal severance of the Condominium common land, and further seeks both reformation of the Unit B Deed to strike said language, and an order that Belo holds its title in Unit B free from the attempted severance.

B&D seeks a declaration that the Phase II rights reserved in the Master Deed are valid and enforceable rights owned by B&D, and that Belo and RGC are equitably estopped from denying the validity of said development rights. 175 Olde Canal and Good Bellas also seek judgments that the Phase II rights are valid and enforceable, [Note 2] and that Belo and RGC are equitably estopped from claiming otherwise. Additionally, Good Bellas has cross-claimed against RGC, seeking damages for alleged breaches of the agreement made in connection with the RGC’s purchase of Unit A.

Belo filed its motion for summary judgment on May 15, 2009. RGC also filed its motion for summary judgment on May 15, 2009, essentially adopting and relying upon Belo’s arguments. [Note 3] The remaining Defendants opposed Belo’s and RGC’s motions for summary judgment, and jointly cross-moved for summary judgment on June 23, 2009. The summary judgment hearing was held on August 11, 2009. On the same date, a hearing was held on Belo’s motion to dismiss the two successor B&D Trustees as Defendants due to B&D’s June 23, 2009 termination, and request for further instructions from the court as to whether the purported beneficiaries of B&D are now necessary and indispensable parties to the action. [Note 4]

On August 25, 2009, the B&D Trustees filed a motion to substitute the B&D beneficiaries as Defendants due to B&D’s automatic termination under the Trust. The Trustees, however, did not provide evidence that the Trust property (including any reserved development rights) had been conveyed to the beneficiaries as required by the Trust. Therefore, by order dated October 15, 2009, the Motion to Substitute was denied without prejudice to the Trustees providing supplementary documentation to establish the beneficiaries’ rights in the Trust res. On December 3, 2009, B&D submitted documentation evidencing that B&D’s Trustees had assigned B&D’s reserved development rights for Phase II to the B&D beneficiaries, by instrument dated November 19, 2009.

Substitution of the B&D beneficiaries as defendants is not necessary at this point in the proceedings because the Master Deed expressly provides that the phasing and development rights for Phase II of the Condominium are reserved to B&D, “its successors and assigns.” Therefore, the adjudications contained herein as to the ownership and validity of the reserved phasing and development rights necessarily apply to B&D’s assigns in those rights.

A Decision has been issued this date on the parties’ various motions and cross-motions for summary judgment. In accordance with that Decision it is:

ORDERED and ADJUDGED that the Development Rights reserved in the Olde Canal Drive Condominium Master Deed, which include the right to unilaterally amend the Master Deed to incorporate the constructed Phase II into the Condominium, as well as the easements to construct Phase II of the Condominium and sell the Phase II units, were validly created and vested in the Condominium Declarant upon the recording of the Master Deed.

ORDERED and ADJUDGED that said Development Rights have not lapsed.

ORDERED and ADJUDGED that ownership of said Development Rights was in the B&D Trustees at the time B&D terminated on June 23, 2009 and, as such, the B&D Trustees were required to convey such Rights to the B&D beneficiaries, pursuant to the terms of the Trust.

ORDERED and ADJUDGED that the language in the Unit B deed to Belo, which purports to exclude from the conveyance the grantor’s (175 Olde Canal’s) interest in a portion of the land shown on the Site Plan as Phase II, violates G. L. c. 183A § 5(c). The following language in that Deed is therefore void and of no effect:

Specifically excluded from this sale is grantor’s right, title, and interest which is retained by grantor in .70 acres (30,722 sq. ft., more or less) of building and parking impervious land identified as Phase II on a certain As Built Site Plan entitled “Olde Canal Drive Condominium prepared by Robert P. Morris, R.P.L.S., 21 Carter Street, Tewksbury, MA” dated November 22, 1989 and recorded on December 21, 1989 in the Middlesex North District Registry of Deeds at Plan Book 171, Plan 125.

ORDERED and ADJUDGED that the “Reconveyance and Cooperation Agreement” executed by Good Bellas and RGC, and recorded in the Middlesex North District Registry of Deeds at Book 20485, Page 48 (the “Unit A Agreement”), is void and unenforceable, and that both Good Bellas’ claim against RGC for breach of contract, and RGC’s request for attorney’s fees and costs, are accordingly dismissed.

ORDERED and ADJUDGED that the option agreement between Belo, 175 Olde Canal, and Good Bellas, entered into on August 30, 2006 (the “Unit B Agreement”), is void and unenforceable.

All other claims, cross claims and counterclaims are hereby DISMISSED.

SO ORDERED.

By the court (Cutler, J.)