FOX GATE LLC v. THE TOWN OF MILLBURY, THE TOWN OF MILLBURY PLANNING BOARD, THE TOWN OF MILLBURY ZONING BOARD OF APEALLS

Introduction

This case asks whether the purchaser of a subdivision [Note 1] at a mortgage foreclosure sale can be required to provide its own security to assure completion of the subdivision improvements, or whether that purchaser may rely on and seek enforcement of a bond provided by a previous developer.

The plaintiff, Fox Gate, LLC (Fox Gate/ plaintiff), filed two actions which now stand consolidated. In the first action, brought pursuant to G.L. 40A, § 17, [Note 2] the Plaintiff appeals from a decision of the Town of Millbury Zoning Board of Appeals (Zoning Board) upholding a determination by the local Building Inspector (Inspector). The second action in the nature of mandamus under G.L. c. 249 § 5, seeks an order requiring the Town of Millbury Planning Board “to enforce [a] Subdivision Bond.”

According to the Plaintiff, it became the “owner of the lots and ways [Note 3] in an approved and bonded subdivision having purchased the property at public auction.” [Note 4] The Summary Judgment record discloses, however, that Fox Hill Builders, Inc., rather than Fox Gate, LLC, became the owner of an essentially unimproved Subdivision, [Note 5] at public auction for a high bid of $1,850,000.00. [Note 6] Thereafter, pursuant to G.L. c. 41, § 81Y, the Inspector denied the building permit requested by the plaintiff on grounds that Fox Gate had failed to provide the requisite security for the construction of Subdivision improvements as set forth in G.L. c. 41, § 81U.

The plaintiff contends on Summary Judgment that the Town of Millbury Planning Board (Planning Board) “must enforce the bond against the Surety…” to the extent that the bond will suffice to cover the cost of the requisite subdivision improvements. The plaintiff argues further, that even if the Town of Millbury will not enforce the said Bond, it must issue building permits for the lots in the Subdivision, “because the subdivision is approved, bonded and the covenant has been …released….” [Note 7] For its part, the Town argues that (a) it cannot be compelled by a successor developer to enforce the bond by means of a lawsuit against the surety company, (b) that the obligation to construct the subdivision way and municipal services runs with land, and therefore, lies with the plaintiff, not the previous owner and its surety, (c) the plaintiff may not rely on a bond to which it was not a party and which “is solely for the benefit of the public at large,” and (d) the Planning Board properly exercised its discretion in determining that the prior bond did not constitute sufficient security for plaintiff’s obligations to construct improvements. [Note 8]

For the reasons provided herein, this court is of the opinion that plaintiff’s Motion for Summary Judgment ought to be Denied, while that of the defendants should be Allowed.

Background

On March 28, 2005 the Planning Board voted to approve a Definitive Subdivision Plan entitled “Autumn Gate Estates Definitive Subdivision Plan of Land in The Town of Millbury, Massachusetts,” dated May 18, 2004, [Note 9] as submitted by Taylor Armstrong Realty Trust of 16 East Main Street, Milford, Massachusetts “concerning the property located off Grafton Street, Millbury, Massachusetts.” On the same day, the Planning Board issued its “Certificate of Approval of Definitive Plan” with twenty-seven conditions. [Note 10] The property at issue (Subdivision / Locus) is a parcel of land located in the Town of Millbury appearing on that Definitive Subdivision Plan recorded with the Worcester Registry of Deeds (Registry) in Plan Book 826, Plan 101. It is a revised version of this Plan which was approved with Conditions by the Millbury Planning Board (Planning Board) on March 28, 2005.

Condition 1 thereof provides that “[t]he subdivision shall be built in accordance with the Subdivision Rules and Regulations of the Town of Millbury… except as otherwise stated in this Certificate of Approval.” Among other relevant Conditions, is the following:

Condition 18:

Before endorsement of the Definitive Plan, the Applicant shall either file a performance bond or surety in an amount determined by the Board to be sufficient to cover the cost of all improvements shown on the approved Definitive Plan and specified as conditions of approval…or the Applicant shall execute and record a covenant running with the land. Such covenant shall provide in part that no lot may be built nor sold until all the improvements required by the approved Definitive Plan and specified as conditions of approval have been completed and approved by the Planning Board. The Planning Board will not reduce the Town’s interest in a bond or surety to an amount less than twenty percent (20%) of the original amount, or $20,000, whichever is greater, or release the last lot in the case of approval with covenant, until the Applicant submits and obtains Planning Board approval for an ‘as-built’ plan in conformance with Section 6.11 of the Rules and Regulations. [Note 11]

Condition 18, reflects the dictates of G. L. c. 41, § 81U which, in turn, provides in relevant part as follows:

Before endorsement of its approval of a plan, a planning board shall require that the construction of ways and the installation of municipal services be secured by one … of the methods described in the following clauses... and which methods may be selected and from time to time varied by the applicant:

(1) By a proper bond, sufficient in the opinion of the planning board to secure performance of the construction of ways and the installation of municipal services required for lots in the subdivision shown on the plan, and the planning board may require that the applicant specify the time within such construction shall be completed…. (emphasis added)

(3) By a covenant, executed and duly recorded by the owner of record, running with the land, whereby such ways and services shall be provided to serve any lot before such lot may be built upon or conveyed…..

Pursuant to the aforementioned Planning Board Condition 18, the original applicant, Taylor Armstrong Realty Trust, submitted a covenant (Covenant) recorded with the Registry at Book 36509, Page 302. Prior to any construction, the entire Subdivision changed hands until conveyed to Autumn Gate Estates, LLC (Autumn Gate) on or about July 8, 2005. [Note 12]

On September 27, 2005, Autumn Gate secured a mortgage loan in the amount of $4,500,000.00 from Bank of America, N.A. in order to commence construction on the approved subdivision. [Note 13] On or about February 1, 2006 Autumn Gate delivered a bond [Note 14] (Bond) to the Town of Millbury from Bond Safeguard Insurance Company (Bond Safeguard) naming the Town as sole obligee in order to secure construction of the required ways and municipal services. [Note 15] Thereafter, on February 13, 2006 [Note 16] Autumn Gate obtained a release of the Subdivision lots “from the restrictions in the Covenant as to sale and building. The release expressly stated that [it] was in consideration of the execution and delivery of the bond…” [Note 17] It is the plaintiff’s position that the Bond remains in full force and effect. [Note 18]

In furtherance of the approved Subdivision Plan, construction commenced on the ways and services, but was never completed. [Note 19] Critically, “[t]he Subdivision ways serve as the only access roads for all of Fox Gate LLC’s lots.” [Note 20] None of the Subdivision lots had been improved, nor had any building permit been issued to Autumn Gate. [Note 21] Subsequently, Autumn Gate defaulted on its mortgage obligation, whereupon Bank of America, N.A. foreclosed upon the property, exercised its Power of Sale, and conveyed the property to Fox Hill Builders, Inc. on October 8, 2008. [Note 22] The property was presumably conveyed thereafter to the Plaintiff, [Note 23] a related entity. “In October 2008, after Fox Gate LLC purchased the property, the Millbury Town Planner contacted one Steven Gallo [Note 24] and asked him to post a new bond for the subdivision. Refusing to do so, he replied that the Town “already had a bond and that it should enforce the bond to complete the ways.” [Note 25]

Prior to purchasing the Subdivision, the Plaintiff claims to have conducted a title search which revealed that the Covenant had been released. Further, Steven Gallo asserts in an Affidavit on behalf of the Plaintiff that he was advised by the Millbury Town Planner, Laurie Connors “that there was a Bond in place, posted as security under M.G.L. c. 41, sec. 81U. I was specifically told that the bond amount was $474,500.00.” [Note 26]

In her uncontroverted Affidavit, the Millbury Town Planner, Laurie A. Connors, states as follows:

In or about August, 2008, I learned that the mortgagee for the Subdivision, Bank of America, N.A. had foreclosed on its mortgage, and had scheduled an auction to sell the Subdivision…. Sometime thereafter, I was contacted by Steven A. Gallo, who told me that he had purchased the Subdivision in accordance with the Certificate of Approval…. Mr. Gallo further informed me at that time that he did not intend to finance the completion of the Subdivision roadways and services, and expected the Planning Board to rely on the Bond for that work. [Note 27]

In fact, the Millbury Town Counsel informed the surety company, Bond Safeguard, that the Town intended to rely on the Bond in order to complete the necessary improvements. [Note 28] Bond Safeguard, however, disclaimed responsibility, arguing, inter alia, that “when Bank of America, N.A. became the owner of the subject property… it also became responsible for any obligations in connection with the property, including the improvements covered by the subject bond…. The subject Bond is non-assignable and does not cover the obligations of the new parties…. The posting of new bonds by the new developer will ensure that the entity benefiting from the improvements will bear the cost thereof….” [Note 29] (emphasis added) The defendants contend, therefore, that the Bond no longer constitutes valid security. [Note 30]

Given Bond Safeguard’s determination, the Planning Board voted to request that all building permits be denied on the Subdivision “[d]ue to the lack of a performance guarantee.” The Planning Board’s decision was noted in the first sentence of a letter of December 10, 2008 from the Town Planner to Robert Blackman, the Inspector of Buildings for the Town of Millbury. That letter continued as follows :

This request to deny permits is based upon G.L. Chapter 41, Section 81Y, which states that the Building Inspector shall not issue a building permit for a lot shown on an approved subdivision plan, until he is satisfied that any applicable condition endorsed on the plan limiting the right to erect buildings on that lot, has been satisfied. G.L. Chapter 41, Section 81U requires a developer to put certain security in place (as reviewed and approved by the Planning Board) for the construction of the ways and municipal services, before the Planning Board endorses a subdivision plan. Since the condition requiring security is endorsed directly on the Autumn Gate Estates Subdivision Plan, the release of lots is conditioned upon sufficient security being maintained…..

Predicated upon the Town Planner’s missive, and for essentially the reasons set out in Ms. Connors’ letter, the Building Inspector, by letter of December 12, 2008, denied the application of November 20, 2008 which sought a building permit in conjunction with Subdivision Lot 15, designated 1 Autumn Circle. The Building Inspector concluded his letter to the applicant with the observation that “[w]hen the security is in place your building permit will be issued.”

The plaintiff appealed the Building Inspector’s decision to the Town of Millbury Zoning Board of Appeals (Zoning Board) pursuant to G. L. c. 40A, which rendered its Decision on March 1, 2009. The Zoning Board denied plaintiff’s request for a building permit, thereby upholding the Building Inspector’s determination.

The action at bar consists of two consolidated cases. The first, 09 MISC 395474, was brought by Fox Gate in order to appeal the decision of the Zoning Board upholding the Inspector’s building permit denial. The second action, 09 MISC 402987, was brought by Fox Gate seeking by means of mandamus, to order the Millbury Planning Board (Planning Board) to enforce the surety bond posted by Autumn Gate. The two actions were consolidated on October 20, 2009. The plaintiff filed a Motion for Summary Judgment on January 4, 2010 and the defendants, Town of Millbury Zoning Board of Appeals and Millbury Planning Board, filed an Opposition to Plaintiff’s Motion for Summary Judgment and Defendants’ Cross-Motion for Summary Judgment on March 1, 2010.

Summary Judgment

Summary judgment is to be granted when "pleadings, depositions, answers to interrogatories, and responses to requests for admission...together with affidavits...show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." See Mass. R. Civ. P. 56(c). The moving party bears the burden of proving the absence of controversy over material facts and that he or she deserves a judgment as a matter of law. See Highlands Ins. Co. v. Aerovox Inc., 424 Mass. 226 , 232 (1997). The substantive law which controls the outcome of the issue determines which facts are material for purposes of summary judgment. Houghton v. Johnson, 2006 WL 2304036 (Mass. Land Ct.) (citing Hogan v. Riemer, 35 Mass. App. Ct. 360 , 364 (1993)).

Although the court may not pass on the credibility of witnesses or weigh the evidence, Atty. Gen. v. Brown, 400 Mass. 826 , 832 (1987), Mass. R. Civ. P. 56 (c) does permit it to dispose of controversies, if in essence there is no real dispute as to the salient facts, or resolution of the matter depends solely upon judicial determination of a question of law. On the present record, the court is satisfied that the relevant facts are not in dispute. Consequently, this matter is ripe for summary judgment.

Discussion

This court notes at the outset, that much of the ensuing discussion focuses upon the Bond given by Autumn Gate, and its enforceability. The existence of that Bond, however, does not in the view of this court, derogate from the fact that it is the developer, its assigns [Note 31] and successors, who bear primary responsibility for the completion of the Subdivision improvements.

The responsibility to complete the mandated improvements, including municipal services, while initially vested in Autumn Gate Estates, LLC, passed seriatum through its successors to Autumn Gate, where it vests presently in Fox Gate, LLC. This court rejects the notion that while the plaintiff acquired the Subdivision together with the rights to develop same, it managed to shed the concomitant obligation to complete the Subdivision improvements.

The plaintiff makes three general arguments in support of its Motion for Summary Judgment. The first is that the Bond is fully enforceable by the Planning Board against Bond Safeguard because Autumn Gate defaulted on the construction of ways and services. The second argument is that while the plaintiff is itself as a matter of law, unable to enforce the Bond, the Town must construct the ways and services to the extent of the amount of the Bond. In this regard, the plaintiff asserts that the Town is not obliged to fully construct the ways and services and cannot be forced to expend any money itself, but that the Town must enforce the Bond up to the amount thereof pursuant to G.L. c. 41, § 81Y. The plaintiff’s third argument is that regardless whether the Town does enforce the Bond, building permits must be issued to the plaintiff because all requirements for the permits are met. The plaintiff contends that the finding of the Building Inspector that adequate security was not in place is erroneous because the Bond is still valid. Since the Bond is still valid, there are no restrictions on the Subdivision’s title owing to the release of the Covenant and the proposed use of the lots is allowed by right under the Millbury Zoning Bylaw. Consequently, argues the plaintiff, the denial of the building permits was without authority.

As noted supra, G.L. c. 41, § 81U sets out four acceptable modes of security. They include a “proper bond,” deposit of money or negotiable securities, a covenant restricting sale or construction upon any lot within the subdivision, and agreement of the applicant and first mortgagee for the retention of funds adequate to “secure construction of ways and the installation of municipal services.” [Note 32] Upon completion of the ways, provision of services and inspection by the Planning Board, the security is to be released by the town. In the event the developer defaults on its obligations, the statute provides as follows:

Any such bond may be enforced and any such deposit may be applied by the planning board for the benefit of such city or town, as provided in section eighty-one Y, upon failure of the performance for which any such bond or deposit was given to the extent of the reasonable cost to such city or town of completing such construction and installation. (emphasis added)

The plaintiff argues, inter alia, that the Planning Board should be compelled, by virtue of the action in the nature of mandamus, to enforce the Bond by filing suit against the surety company pursuant to the provisions of § 81Y. As the plaintiff itself readily acknowledges, it is well established that a private party cannot itself seek to enforce a subdivision bond. [Note 33] See in this regard, Gordon v. Robinson Homes, Inc., 342 Mass. 529 (1961).

In Gordon, the defendant developer Robinson Homes, Inc., executed a surety bond pursuant to § 81U as a performance guarantee in the event it failed to construct various subdivision improvements. Apart from listing the city as obligee, the bond also provided that it was “made for the use and benefit of all persons…who may hereafter purchase lots upon any of said plans, and they and each of them are hereby made obligees hereunder,… and they and / or each of them may proceed or sue herein…. In reliance on the bond, the plaintiff purchased several lots in the subdivision. Robinson [the developer] did not faithfully perform all of the terms and conditions imposed by the planning board. Thus the obligations of the bond were not fulfilled and the plaintiff…sustained substantial damage.” Id at 530.

In its decision, the Gordon Court analyzed § 81U, as well as the purpose underlying the enactment of the subdivision control law, as set forth in § 81M. The Court went on to describe § 81U as “designed primarily to benefit the inhabitants of cities and towns generally and those who purchase lots in developments only secondarily.” Id. To bolster its interpretation, the Court pointed to the broad powers of the planning board enumerated in § 81U including the ability to approve, modify or disapprove plans, require the creation of ways and services, set completion times, and the duty to certify completed performance. The Court concluded that these factors pointed to a “legislative intent that the planning boards were to have the primary responsibility for administering the subdivision control law and thus safeguard the declared paramount interests of the community as a whole.” (emphasis added) Id. at 531-532. The Court concluded that “enforcement of the bond by one in the position of the plaintiff [Note 34] [i.e. Gordon] is inconsistent with the general purpose of the law as well as with the powers given the planning board.” Id at 531. Taking into account the legislative history and intent underlying § 81U, the Court concluded “that matters relating to the bond (its enforcement and the release of the town’s interest in it) were to be centralized in the hands of the city or town. Id. at 532 (citing Stoneham v. Savelo, 341 Mass. 456 (1960).

Despite the foregoing, Fox Gate argues that Gordon leaves open the question whether a private party may require a municipality to enforce its own rights under a bond.

In this regard, the plaintiff points to the concluding sentence in Gordon wherein the Court notes that “[t]he possible rights of lot owners to require the enforcement of this bond are not in issue.” Id. at 533. The plaintiff relies upon this sentence to argue that the Millbury Planning Board should be compelled to bring suit on the Bond. [Note 35] However, the quoted language must be properly contextualized. That sentence appears in conjunction with the Gordon’s argument, that the bond “was not exclusively a statutory bond and can be enforced as a common law obligation.” [Note 36]

The paragraph in which the above quoted language appears reads as follows:

Assuming that the provisions [in the bond] for the enforcement by the purchasers of the lots met the requirements of a common law obligation we think that it ought not to be treated as such. If the nonstatutory provisions permitting actions by the individual purchasers were enforced[,] the statutory objectives, discussed above, would be thwarted. The possible rights of lot owners to require the enforcement of this bond are not in issue. (emphasis added)

It seems clear that the Court was speaking in context not only of common law obligations but of the particular bond at issue in Gordon. As noted supra, that bond provided that it was “made for the use and benefit of all persons…who may hereafter purchase lots upon any of said plans, and they and each of them are hereby made obligees hereunder,…and they and/or each of them may proceed or sue herein…” Notwithstanding this explicit language, the Gordon Court discounted any individual enforcement rights conferred on lot owners under the terms of a bond naming them as obligees. It did so, as it found that such rights undercut the statutory authority vested in the planning board. The Court concluded with the observation that the rights of those obligees, expressly named in the bond, to “require enforcement of this bond are not at issue.” (emphasis added)

However, in the case at bar, no such expansive language is to be found in the Bond in question. Rather, the Bond naming Autumn Gate Estates, LLC as principal, identifies the “Town of Millbury, acting by and through its Planning Board,” as the sole obligee. Contrary to the Gordon bond, the Autumn Gate Bond contains no language which purports to allow a private action by individual lot owners, much less enforce such action indirectly, by means of an case in the nature of mandamus.

Moreover, Fox Gate, LLC is not, in the view of this court, akin to the “lot owners” referenced in Gordon. A clear distinction is to be drawn between one who acquires an individual subdivision lot or lots, the Gordon scenario, and one who succeeds to the rights of a developer upon foreclosure, the case at hand. In the latter instance, the successor or assignee of the rights of Autumn Gate, LLC intends to develop the subdivision as a whole, conveying out individual lots as part of that effort.

Even were it otherwise, the power of a court to force action by a government official by means of mandamus is designed as “a call to a government official to perform a clear cut duty.” Montefuscol v. Commonwealth, 452 Mass. 1015 , 1015 (2008) (emphasis added). If the plaintiff is to prevail in a mandamus action then, it must demonstrate a “clear cut duty” on the part of the Planning Board to enforce [Note 37] the bond at issue. This, the plaintiff has failed to do.

The case of Marlboro Savings Bank v. City of Marlboro, 45 Mass. App. Ct. 250 (1998) is also instructive. In Marlboro, after foreclosing on a mortgage given by a subdivision developer, the bank took possession of the property. By way of security, the original developer had signed a covenant [Note 38] and then, in its place, a guaranteed set-aside of mortgage funds by that developer’s mortgagee [Note 39] as security for the improvements required under § 81U. In the course of the construction, the City determined that the developer had improperly installed a water line whereupon the municipality utilized the available reserve funds in an effort to remediate the problem. Id. at 251. Upon foreclosure, the plaintiff bank argued that the City should be compelled to complete the ways and services even though the reserve amount had run out because it was the City who set the amount. In rejecting the bank’s argument, the Court observed as follows:

Nothing in G. L. c. 41, s. 81U makes a municipality the guarantor of the public improvements that an approved subdivision plan calls for…. Moreover, the purpose of the security provision of s. 81U is the protection of the public interest, and those provisions do not confer private benefits.” Id. at 252-253 (citing Gordon, 342 Mass. at 532-533. (emphasis added)

The plaintiff distinguishes Marlboro by pointing out that the security is not exhausted in the case at bar, as it was in Marlboro. Plaintiff contends that the Town of Millbury should be responsible to the extent of the Bond’s penal sum. [Note 40] In this regard, it argues as follows:

From the beginning, Fox Gate recognizes that the town of Millbury did not guaranty the construction of the ways and services in the subdivision. It admits that the town has no obligation to spend one cent to build out the subdivision roads. Fox Gate recognizes that the Millbury Planning Board did not undertake a financial obligation to spend moneys over and above the bond amount. If the Planning Board had exhausted the bond moneys, the town would have no further obligations to construction [sic]. However, Fox Gate argues that Millbury must complete the ways, but only to the extent of the outstanding bond. [Note 41]

In referring to Marlboro, Plaintiff asserts that “the case stands for the proposition that, although the town is not liable to spend moneys in excess of the bond, a town is responsible for the subdivision work up to the bond limit.” [Note 42] This is a more expansive reading of Marlboro than can reasonably be justified. The fact that the City of Marlboro chose, in that case, to enforce the reserve, does not compel the conclusion that a municipality must complete subdivision improvements to the extent of the bond limits. This is especially so, in light of the Court’s statement that “the purpose of the security provisions of s. 81U is the protection of the public interest, and those provisions do not confer private benefits.” (emphasis added). If as this court believes, Fox Gate bears primary responsibility for the completion of the Subdivision improvements, then the utilization of the Bond moneys at issue [Note 43] for completion of those improvements, would plainly confer a significant private benefit upon Fox Gate.

Section 81U provides in part that “Any such bond may be enforced and any such deposit may be applied by the planning board for the benefit of such city or town…” (emphasis added). The use of the term “may” highlights the level of discretion which resides in a municipality under the Subdivision Control Law.

It seems clear that the Legislature intentionally left the enforcement of security in the hands and discretion of the obligee municipality. As correctly noted by the defendants, mandamus will not lie against an official in the performance of a discretionary act. See Urban Transport, Inc. v. Mayor of Boston, 373 Mass. 693 , 698 (1977). (It is well settled that the relief provided in the nature of mandamus does not lie to compel the municipal officer to exercise his or her judgment or discretion in a particular way.)

This conclusion finds support in the case of McGowan v. Sears, 3 LCR 24 , 25 (Misc. Case. No. 178398) (Scheier, J.) (citing Gordon v. Robinson Homes, Inc., 342 Mass. 529 , 531 (1961)). In McGowan, the court reached the following succinct conclusion:

The Subdivision Control Law, G.L. c. 41, Sections 81K-81GG, gives planning boards the authority to impose conditions on the construction of subdivisions, including the requirement that a bond be posted to insure that all other conditions are met. See G. L. c. 41, s.81U. The statute does not require that the town enforce such conditions, however. (emphasis added)

This court is satisfied that a determination by a public entity to initiate legal action against a surety company, of the sort here at issue, is an inherently discretionary function contingent upon an array of factors including, but not limited to, the perceived soundness of one’s legal position as well the availability of funding. This court concludes therefore, that an action in the nature of mandamus will not lie to require enforcement of the Autumn Gate Bond by the Town of Millbury.

Building Permit

Fox Gate argues that whether or not the Town can be compelled to enforce the Bond, the plaintiff is entitled nonetheless, to the requested building permit(s).

G.L. c. 41, § 81Y provides in relevant part, as follows:

In any city or town in which the subdivision control law is in effect, the board or officer…having the power and duty to issue permits for the erection buildings shall not issue a permit for the erection of a building until first satisfied that the lot on which the building is to be erected is not within a subdivision, or that a way furnishing the access to such lot is as required by the subdivision control law is shown on a plan…, and that any condition endorsed thereon limiting the right to erect or maintain buildings on such lot has been satisfied, or waived by the planning board…

As we have seen, the condition requiring security was endorsed on the Autumn Gate Estates Subdivision Plan. [Note 44]

The plaintiff asserts that Condition 18 of the Subdivision Approval requiring security was a condition subsequent to endorsement. [Note 45] As such plaintiff argues that Condition was satisfied by the recording of the Covenant and did not continue as an obligation after it was initially satisfied. Once the Covenant was released and title was clear, according to the plaintiff, it had every right to rely on the fact that there were no restrictions on the title that prevented building, especially since it had been informed that the original Bond was still active. Therefore, the Building Inspector cannot take Condition 18 into account when determining if the conditions for a right to build are met.

This argument is based upon a narrow reading of the relevant statutory language. It comports neither with the broad, discretionary powers enumerated in the Subdivision Control Law, or with or the purpose underlying that Law. That purpose is recited in G.L. c. 41, s 81M, as follows:

The subdivision control law has been enacted for the purpose of protecting the safety, convenience and welfare of the inhabitants of cities and towns in which it is…put in effect by regulating the laying out and construction of ways in subdivisions providing access to the several lots therein…and ensuring sanitary conditions in subdivisions…. The powers of a planning board and of a board of appeal under the subdivision control law shall be exercised with due regard for the provision of adequate access to all the lots in a subdivision by ways that will be safe and convenient for travel...; for securing adequate provision for water, sewerage, drainage, underground utility services, fire, police, and other similar municipal equipment, and street lighting and other requirements where necessary in a subdivision.

In Stoner v. Planning Board of Agawam, 358 Mass. 709 (1971), the plaintiffs purchased an unimproved subdivision. The planning board voted to rescind the approval, and the plaintiffs appealed. However, the Court determined that the subdivision had actually been constructively approved inasmuch as the planning board had failed to act on the application in a timely fashion. There were no specific conditions of approval. Under these circumstances, the Court found that the approval could not be rescinded without the assent of the property owners. However, despite the absence of any conditions including performance guarantees, the Court concluded as follows:

The planning board still has authority under Section 81U to require the owners to furnish security by bond, deposit or covenant for the construction of ways and the installation of municipal services required for the subdivision shown on the plan. Matters relating to the required security are “in the centralized hands of the city or town.” Id. at 715

Regardless of the fact that the plaintiffs were successors to the original developers and that the subdivision had been approved, constructively so, without conditions, the Court concluded that the Planning Board was nonetheless authorized to require a performance guarantee, to assure construction of ways and services. Notably, at the time of the Stoner decision, § 81U had not yet been amended so as to require a performance guarantee. Rather, the language was, as originally enacted by St. 1953, c. 674, § 7, permissive rather than mandatory. Under such circumstances, “it was the custom of the board to require [a] bond or covenant only when the landowner was going to proceed with actual construction of buildings in the subdivision.”

In the case at bar, approval was clearly conditioned upon the provision of adequate security, a condition of which the plaintiff was well aware and to which it succeeded upon acquisition of the Autumn Gate Estates Subdivision. The Planning Board has determined that the Autumn Gate Bond was inadequate and / or unenforceable. In any event, this court is of the view that, having succeeded to Autumn Gate’s rights under the subdivision approval, it assumed, as well, the primary responsibility to undertake and complete the requisite improvements including ways and municipal services. The Planning Board, in turn, acted properly in looking to Fox Gate for adequate performance guarantees.

In view of the foregoing, this court is satisfied that the Zoning Board too, acted well within its authority in upholding the decision of the Building Inspector. [Note 46]

Given this court’s decision, it sees no need to reach the argument concerning the enforceability of the underlying Bond.

Conclusion

In light of the foregoing, this court is satisfied that an action in the nature of mandamus will not lie against the Town of Millbury. It is satisfied too, that the Plaintiff Fox Gate as successor to Autumn Gate Estate, LLC is no less obligated to complete the requisite ways and municipal services than was its predecessor. This court does not believe that the Town of Millbury may be required to complete the ways and other improvements, to the extent of the Bond, or otherwise. To so rule would be to effectively circumvent the prohibition on mandamus.

This court is of the view, moreover, that a building permit may be withheld in the event one or more of the Subdivision Conditions are not fulfilled. Given the plaintiff’s expressed intention not to complete the improvements or otherwise provide the necessary performance guarantees, it seems clear that a critical condition has not been met. Statutorily, the Building Inspector was obliged to deny the request for a Building Permit. The principles enunciated in cases discussed supra, as well as the rationale underlying the Subdivision Control Law serve merely to buttress these conclusions.

Accordingly, it is hereby

ORDERED that the plaintiff’s Motion for Summary Judgment be, and hereby is, DENIED. The defendants’ Cross-Motion for Summary Judgment is hereby ALLOWED as set forth herein.

Judgment to issue accordingly.

SO ORDERED

By the court (Grossman, J.)