STEPHEN J. RUSSO, DIANA L. RUSSO, JAMES V. RUSSO and LORRAINE P. RUSSO vs. EDWARD H. BLANCHARD, JOHN K. PRENTISS, SCOTT M. JANSSENS, WILLIAM C. FERNEKEES, WILLIAM J. HOMANS and ANDREW R. BAUM, as they are members of the TOWN OF HUBBARDSTON ZONING BOARD OF APPEALS

Plaintiffs Stephen J. Russo and Diana L. Russo (the “Stephen Russos”) and James V. Russo and Lorraine P. Russo (the “James Russos”) (together, “Plaintiffs”) filed their unverified complaint on June 10, 2009, appealing, pursuant to the provisions of G. L. c. 40A, § 17, a decision of Defendant Town of Hubbardston Zoning Board of Appeals (the “ZBA”) which upheld a decision of the Hubbardston Building Inspector (the “Building Inspector”) that Lot 562 and Lot 564, both located on Chicopee Drive (“Locus”) were not grandfathered, buildable lots. A case management conference was held on August 11, 2009. Plaintiffs filed their Motion for Summary Judgment on February 1, 2010, together with supporting memorandum, Statement of Undisputed Material Facts, and Affidavits of Stephen Russo and James Russo. On March 1, 2010, the ZBA filed its Cross-Motion for Summary Judgment and Opposition to Plaintiffs’ motion, together with supporting memorandum. Plaintiffs filed their Opposition on March 9, 2010. A hearing was held on both motions on Wednesday, July 28, 2010, and both motions were taken under advisement.

I find the following material facts are not in dispute:

1. In 1968, American Central Company (“ACC”) owned Locus. On December 15, 1968, ACC, as Seller, and Vincent Russo and Evelyn Russo (the “Vincent Russos”), as Buyer, executed a contract of sale (“Contract 1”) for Lot 564, an unimproved residential lot, as shown on plan titled “Wachusett Shores Section 3 Hubbardston Mass. for American Central Company Wellesley Mass.” dated September 1964, revised April 1965, by Landmark Engineering & Surveying, Inc. (the “Plan”), which plan was recorded with the Worcester County Registry of Deeds (the “Registry”) on November 30, 1965, in Plan Book 295 as Plan 83. Contract 1 provided for sixty equal monthly payments, and provided that

Contract 1 provided that the Vincent Russos pay all real estate taxes and insurance during the term of the contract. Contract 1 also provided that the Vincent Russos could not assign the contract but that ACC could convey legal title and mortgage the property subject to the contract, and that the contract was voided if the Vincent Russos defaulted. Lot 564 has 163.71 feet of frontage on Chicopee Drive, and contains 18,870 square feet of area. The deed for Lot 564 from ACC to the Vincent Russos, dated July 19, 1974, was recorded with the Registry on September 30, 1974, at Book 5593, Page 124.

2. On December 15, 1968, ACC and the James Russos executed an identical contract of sale (“Contract 2”) of Lot 562, an unimproved residential lot as shown on the Plan. Lot 562 has 75 feet of frontage on Chicopee Drive, and contains 11,250 square feet of area. The deed from ACC to the James Russos, dated July 19, 1974, was recorded with the Registry on September 30, 1974, at Book 5593, Page 120.

3. On March 3, 1969, the Town of Hubbardston first enacted its Zoning By-law (the “By-law”), which required a minimum area of 40,000 square feet and 150 feet frontage for a residential lot. The current By-law requires 80,000 square feet of area and 200 feet of frontage for each residential lot.

4. The Vincent Russos conveyed Lot 564 to the Stephen Russos by deed dated March 6, 1992, and recorded with the Registry at Book 14594, Page 226.

5. By letter dated January 22, 2009 (the “Building Inspector Decision”), the Building Inspector determined that Lots 562 and 564 were not grandfathered and as a result were unbuildable lots because of dimensional violations.

6. Plaintiffs appealed the Building Inspector Decision to the ZBA on February 17, 2009. By decision dated May 26, 2009, the ZBA unanimously upheld the Building Inspector Decision “on grounds that control was with the party holding the deed as of March 3, 1969 and control and the deed was at [sic] of that date was with American Central Company.”

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The central issue in this case is whether Lot 562 and Lot 564 were grandfathered under the By-law as buildable lots. The ZBA argues that the two lots were under common legal ownership of record as of the date of the enactment of the By-law, which By-law made them nonconforming. Plaintiffs argue that the two lots were under the control of different entities at the time of the enactment of the By-law. G. L. c. 40A, § 6, states as follows:

Any increase in area, frontage, width, yard, or depth requirements of a zoning ordinance or by-law shall not apply to a lot for single and two-family residential use which at the time of recording or endorsement, whichever occurs sooner was not held in common ownership with any adjoining land, conformed to then existing requirements and had less than the proposed requirement but at least five thousand square feet of area and fifty feet of frontage.

The ZBA relies on the language in Adamowicz v. Town of Ipswich, 395 Mass. 757 (1985), which interprets G. L. c. 40A, § 6 to mean that the “statute looks to the most recent instrument of record prior to the effective date of the zoning change.” Id at 762. Since at the time of the zoning change, March 3, 1969, ACC held record title to both lots, the plain language of the statute indicates that Lot 562 and Lot 564 were held in “common ownership”. At that time both lots were under contracts of sale, but title had not passed, and did not pass for another five years. Both Contract 1 and Contract 2 specifically provided that title did not pass until all contract payments are made; both contracts also provided that Plaintiffs could not assign the contracts, that the contracts would be voided if Plaintiffs defaulted under the terms, and that ACC could convey and mortgage the property subject to the terms of the contracts.

Plaintiffs point out that the focus of the Supreme Judicial Court (the “SJC”) in its decision in Adamowicz can be distinguished from the case at bar. The issue in Adamowicz was whether to apply the statute to a recorded plan or a subsequently recorded deed. That decision clarified that the most recent document of record prior to the change in the bylaw, whether it be a plan or a deed, pertaining to the same parcel of land, is determinative of “common ownership”.

Plaintiffs rely on Planning Board of Norwell v. Serena, 27 Mass. App. Ct. 689 , 690 (1989), which states that the purpose of the grandfather provision is as follows:

The condition that the nonconforming lot ‘not [be] held in common ownership with any adjoining land’ represents a statutory codification of a principle of long-standing application in the zoning context: a landowner will not be permitted to create a dimensional nonconformity if he could have used his adjoining land to avoid or diminish the nonconformity.

In Serena, decided four years after Adamowicz, the Appeals Court found that grandfather status was not allowed, because the owners had attempted to place adjoining lots in different legal names (one in joint tenancy, the other in a trust where the joint tenants were the sole beneficiaries) but where the owners clearly still controlled both lots. Plaintiffs also rely on Sorenti v. Board of Appeals of Wellesley, 345 Mass. 348 (1963). In Sorenti, the SJC held that a landowner could not take advantage of a grandfather provision, similar to the provision in the case at bar, when that owner conveyed an adjoining lot to a straw the day before the town voted a dimensional (frontage) amendment to the Bylaw. Id at 353. The rationale behind the reasoning in both Serena and Sorenti is that it is proper to look beyond record ownership and determine whether the “the landowner ha[s] it ... within his legal control, to use the adjoining land so as to avoid or reduce the nonconformity.” Serena, 27 Mass. App. Ct. at 691. Applying this law to the case at bar, this court must determine whether ACC, the record owner of both Lot 562 and Lot 564 at the time of the enactment of the By-law, had legal control over such lots.

It is clear that Contract 1 and Contract 2 were not simply purchase and sale agreements. In fact, Contract 1 and Contract 2 are akin to installment contracts which are nearly, if not entirely, economically identical to a mortgage. “A contract for deed creates a mortgage.” Restatement (Third) of Property § 3.4(b). ACC and the Vincent Russos under Contract 1 and the James Russos under Contract 2 (together, the “Purchasers”) each had various rights and obligations under the respective contracts that are relative in determining whether ACC or the Purchasers controlled each lot.

The ZBA argues that at all times ACC had the right to convey its interest in both Lot 562 and 564; thus, if ACC wished to do so, it could have exercised its control over both lots by selling them to another buyer as one larger, combined parcel. This reasoning, however, is flawed because such sale would be subject to the Purchasers’ contracts. The Purchasers, provided that they timely made their installment payments, had the right to take legal title to the lot for which they contracted upon satisfaction of their contractual obligations. It was the Purchasers who had the control over the fate of each lot, not ACC.

If in 1968, at the time of the execution of Contract 1 and Contract 2, had the Purchasers wished to build residences on the individual lots, they would have been able to do so, so long as they continued to honor their financial obligations to ACC. The right to take possession, at the time of the execution of Contract 1 and Contract 2, vested “equitable title” to Lot 564 and 562 respectively, thus conferring control upon the Purchasers, so long as they did not default. See Restatement (Third) of Property § 3.4 cmt. a. “While the purchaser obtains equitable title upon execution of the contract, legal title is retained by the vendor until the final payment is made.” Id. At that time, the Vincent Russos, the equitable owners of Lot 564, could not have used Lot 562 for their own benefit without the permission of the James Russos, the “equitable owners” of Lot 562, even if the Vincent Russos purchased Lot 562 from ACC. Moreover, ACC could not unilaterally use both lots together because the Vincent Russos and the James Russos had vested rights in Lot 564 and Lot 562, respectively, so long as there was no default. This logic establishes that Lot 562 and Lot 564 could no longer be combined by either of the Purchasers, nor by ACC.

It is true that ACC was free to “convey its interest in the above described land,” and that ACC “may mortgage said premises”. The relevant provision in both Contract 1 and Contract 2, however, is as follows: Seller reserves the right to convey its interest in the above described land and its conveyance thereof shall not be a cause of recision. Purchaser expressly consents that Seller and its assigns may mortgage said premises ... provided however that no such mortgage shall be valid as against the purchaser until it shall contain a provision in whatever form, that the purchaser may obtain a release of the premises from said mortgage upon payment of a sum not in excess of the balance then remaining unpaid hereunder and any sums so paid to such a mortgagee shall be credited against the obligation of the sellers unpaid mortgage and shall be considered as payments pro tanto hereunder.

Under both Contract 1 and Contract 2 ACC could mortgage or conveys its rights, but those rights were no longer fee rights in each lot. After Contract 1 and Contract 2 were executed, ACC merely held a mortgage interest in both Lot 562 and Lot 564. In the event that ACC did mortgage its interest in either Lot 562 or Lot 564, any payments made by the “Purchasers” to said “mortgagee” would be considered as payments “pro tanto hereunder”, i.e. would be credited against Purchasers’ obligations under the contract to ACC. Moreover, the Purchasers would be released from any hypothetical mortgage, with ACC as the mortgagor, upon payment of Purchasers’ obligation under either Contract 1 or Contract 2. As such, this provision merely sorts out the rights of the Purchasers, ACC, and the any hypothetical third party assignee in the event ACC assigns its mortgage interest, i.e. its contract rights, in either Lot 562 or 564.

In sum, the fate of Lot 562 and Lot 564 was firmly in the hands of the Purchasers and not under the common control of ACC. Any conveyance by ACC was subject to the terms of Contract 1 and Contract 2 and any such conveyance was limited to ACC’s interests, or contract rights, in either lot.

The fact that the deeds to Lot 562 and Lot 564 were not recorded until five years after the enactment of the Bylaw is of little consequence. Adamowicz must be read for the proposition for which it stands. Adamowicz mandates that courts shall look to the most recent recorded instrument, amongst multiple instruments of record pertaining to the same lot, to determine common ownership. Serena, the most recent of the relevant cases, looks beyond the instrument of record, and applies the test of whether the landowner has control or the legal power to combine the adjoining lots. Since the Purchasers were each free to take possession of the lot for which they contracted, subject to the contract rights of ACC, the James Russos and the Vincent Russos were in control of Lot 562 and 564, respectively, and had no power to combine the two adjoining lots as one conforming parcel.

As a result of the foregoing, I find that Lot 562 and Lot 564 were not under common control at the time the Town of Hubbardston enacted the By-Law, and that the ZBA made an error of law in finding that Lot 562 and Lot 564 did not have grandfather status.

As a result, I ALLOW Plaintiffs’ Motion for Summary Judgment and DENY the ZBA’s Cross-Motion for Summary Judgment.

Judgment to enter accordingly.

Alexander H. Sands, III

Justice

Dated: February 8, 2011