TLC 73315

March 4, 1988

Berkshire, ss.



On July 8, 1987, the plaintiff filed this petition under G.L. c. 60, §69A to vacate a final decree issued on August 27, 1986 foreclosing the plaintiff's right of redemption of a tax foreclosure of property located at 30 Union Street in Pittsfield Berkshire County, Massachusetts.

A trial was held on October 2, 1987 at which a stenographer was sworn to record and transcribe the testimony. Five witnesses testified and sixteen exhibits were introduced into evidence, which exhibits are incorporated herein for the purpose of any appeal.

Based on the above, I find as follows:

1. On March 15, 1972, the City of Pittsfield ("City") took the locus at 30 Union Street for delinquent real estate taxes.

2. The plaintiff, Berkshire Public Theatre, Inc. ("BPT"), is a nonprofit corporation formed in 1976 of which Iris Bessell is the managing director and Frank Bessell is the artistic director. BPT moved to Pittsfield in 1980 and was allowed by the City to locate rent free in a vacant elementary school building.

3. On February 18, 1983, BPT purchased from Winthrop Amusement, Inc. the equity of redemption in the locus for $15,000. The $15,000 used as the purchase price included a $5,000 payment consisting of contributions from 30 businesses and a $10,000 mortgage. The City gave BPT a $40,000 community development block grant to begin renovations.

4. The locus at 30 Union Street originally opened as a vaudeville theatre, known as the Union Square Theatre, and later became a movie house. Prior to its purchase by BPT, the locus had been unoccupied for several years and had physically deteriorated.

5. BPT, Mayor Charles Smith and members of local trade unions volunteered time and made extensive renovations to the locus including replacing hardwood floors, the boiler and heating system, restoring walls, exits and entrances, repairing the roof, replacing electric wiring, installing new chairs, rebuilding the rake, renovating the lobby and providing new bathrooms. The Mayor of Pittsfield, a former construction worker for 25 years, estimated the labor of the renovations at approximately $500,000. The seats were donated by Berkshire Life Insurance Company and the lumber and hardwood floors by Kelly Lumber.

6. The BPT opened for its first performance in the summer of 1983.

7. Prior to and after the purchase of the locus by the plaintiff, numerous discussions were held between the plaintiff, Mayor Smith, City Solicitor Edward Reilly and the Pittsfield Office for Community and Economic Development ("OCED") concerning back taxes owed on the locus. The result of these discussions was an agreement to search for alternative ways to deal with the back taxes as it was understood that BPT did not have the funds to pay these outstanding taxes. Among the alternatives discussed were abatement, waiver and foreclosure.

8. The BPT has tax exempt status and no new taxes have been levied on the locus since 1983.

9. The City of Pittsfield applied to the Massachusetts Department of Revenue for a waiver of the back taxes, but the application was dismissed by the Department.

10. On September 27, 1984, the City filed a Petition to Foreclose Equity of Redemption in the locus.

11. On August 27, 1986, a Final Decree issued foreclosing the plaintiff's right of redemption. At this time, the locus was subject to a tax lien of $78,357.

12. On September 24, 1986, Lawrence A. Grizey, Jr., City Treasurer and Director of Administration and Finance for the City of Pittsfield, was appointed custodian of the locus by Mayor Smith.

13. On October 3, 7 and 10, 1986, a public auction of the locus to be held on October 20, 1986 was advertised in the Berkshire Eagle. The October 3, 1986 advertisement listed the locus as "land of low value." The sale terms included a minimum bid of $120,000, a nonrefundable cash deposit of $100 and full payment within two (2) business days. Iris Bessell received notice of the auction.

14. On October 20, 1986, the public auction was held. Prior to the bidding, City Solicitor Reilly announced that the City had the right to reject any and all bids. He also announced that purchasers would have ten days to tender full payment of the bid. The defendant Bernard Barriere, the only bidder, bid $120,000 for the locus and gave City Treasurer Grizey a deposit of $100.

15. On October 21, 1986, BPT was informed by City Solicitor Reilly that they had ten days, until October 31, 1986, to pay the back taxes on the 30 Union Street property in order to void the sale prior to the closing and if payment were made, the City would petition to vacate the foreclosure and the property would be returned to BPT.

16. On October 30, 1986, Mr. Barriere tendered four checks to custodian Grizey totaling $119,000.

17. On October 31, 1986, BPT tendered to Mayor Smith a bank check for $78,357. Mayor Smith accepted the check and promptly delivered it to City Treasurer Grizey. City Treasurer Grizey returned the four checks to Mr. Barriere through his attorney with a letter rejecting his bid due to the fact that the outstanding taxes on the locus had been paid in full.

18. On July 7, 1987, BPT filed a petition under G.L. c. 60, §69A to Vacate the Foreclosure of the Right of Redemption.

G.L. c. 60, §69A provides:

No petition to vacate a decree of foreclosure entered under section sixty-nine and no proceeding at law or in equity for reversing or modifying such a decree shall be commenced by any person other than the petitioner except within one year after the final entry of the decree....

It is largely discretionary with the Court as to whether a petition to vacate a final decree in a tax lien foreclosure proceeding should be allowed. While it is well settled that the policy of the Commonwealth is to favor redemption in the tax foreclosure proceedings, West v. Board of Selectmen of Yarmouth, 345 Mass. 547 (1966), "the Legislature appears to have determined that the public interest in marketable titles for tax takings outweigh considerations of individual hardship after one year." Sharon v. Kafka, 18 Mass. App. Ct. 541 , 543 (1984) citing Hardisty v. Kay, 268 Md 202, 208 (1973).

In the present scenario, the plaintiff has filed the petition to vacate within the one year limitation provision of §69A established by the legislature. The Supreme Judicial Court has previously held that a petition to vacate is "extraordinary in nature and ought to be granted only after careful consideration and in instances where ... it is required to accomplish justice." Sharon v. Kafka, 18 Mass. App. Ct. 541 , 542 (1984) citing Lynch v. Boston, 313 Mass. 478 , 480 (1943).

The defendant Barriere argues that he is an innocent purchaser for value and thus the petition should be denied. He relies on G.L. c. 60, §69 which states that the petitioner of the Land Court may request upon a petition filed at any time that such decree be vacated in the discretion of the Court provided "no innocent purchaser for value has acquired an interest." Although I conclude that the defendant Barriere is not an innocent purchaser for value due to the City Solicitor's announcement prior to the start of the auction that the City had the right to reject all bids, which the City did prior to closing, and in light of legislative statutes which allow the filing of a petition to vacate within a one year period, this question is irrelevant because the plaintiff's petition was filed under the provisions of G.L. c. 60, §69A which contrary to c. 60, §69, contains no impediment barring the vacating of a decree where an innocent purchaser has acquired an interest.

G.L. c. 60, §69 provides a mechanism by which the petitioner (in most instances the city or town), being the title owner to the property upon the decree of foreclosure having entered, may request the Land Court that such decree be vacated. It is vital to understanding the "innocent purchaser" exception of §69 to recognize that it is this same petitioner who would have sold the property to this "innocent purchaser" who would be requesting the vacation under §69. The Legislature's support of public interest in marketable titles prevents this petitioner (the city or town) from selling to an innocent purchaser and subsequently entering a petition in the Land Court to vacate the decree of foreclosure. In contrast, §69A provides a mechanism whereby any person, not necessarily the title owner after the foreclosure decree, can institute a petition to vacate a decree of foreclosure or a proceeding in law or in equity for reversing or modifying such a decree if filed within a one year time span of the date such decree was entered. An "innocent purchaser" exception is not included in §69A. Hence, BPT, the plaintiff under this §69A petition, is not subject to the "innocent purchaser" exception and the allowance of this petition lies within the exercise of this Court's discretion.

In the instant proceeding, the City still has title to the premises under the foreclosure decree as no sale has been made to a bona fide purchaser. In addition, the City has filed with this Court a Brief in Support of Petition to Vacate Foreclosure (G.L. c. 60, §69A). The City has urged that such petition be allowed in the best interests of its inhabitants and in the interests of justice. The City urges and this Court finds the following equitable consideration: the uses, present and future, intended by BPT; the use of public funds and volunteer efforts, private individuals' money and materials utilized in rehabilitation; the cultural and economic value of BPT's presence to the City's growth and inhabitants; and the actual payment of the taxes by BPT on October 31, 1986 as requested by and accepted by City officials, all of which support the allowance of the petition to vacate.

While there is conflicting testimony as to whether an announcement was made that the premises were being conveyed subject to the property owners' right of redemption, there exists no doubt that the City was attempting in every conceivable way to find a home for BPT and numerous discussions occurred from 1980 to the present. Although BPT did not respond to foreclosure proceedings, it is obvious that such default was based on representations from City officials that the tax problems would be worked out favorably to BPT.

In a final analysis, the City on October 31, 1986 accepted the plaintiff's tender of a bank check in the amount of $78,357 and promptly returned to defendant Barriere through his counsel, Attorney Fuster, the four checks tendered on October 30, 1986 with a letter rejecting his bid. The City presently has title to 30 Union Street and has requested the plaintiff's petition to vacate be allowed. There is no evidence of any harm suffered by the defendant Barriere other than that of a lost opportunity. By this decision, the Court does not impose judgment on public policy decisions involving land dispositions in the City of Pittsfield. Rather, this is a tax foreclosure proceeding and given the history of the plaintiff BPT's relationship with the City and the City's attempts and efforts to make a home for the plaintiff, I find that substantial justice will be served by allowing the plaintiff's petition to vacate.

The plaintiff and the defendants have submitted requests for findings of fact and rulings of law. I have not attempted to rule on each of said requests as I have made my own findings on the questions of fact which I deem material and on the law which I believe is applicable.

Accordingly, it is ordered that the petition to vacate the tax foreclosure decree entered be and hereby is allowed, and that BPT be allowed to redeem the premises at 30 Union Street.

Judgment accordingly.