MISC 123162

October 8, 1992



By complaint filed April 17, 1987, Plaintiffs seek a declaration that they have a valid easement (the Claimed Easement) along a former railroad right of way in the Town of North Attleborough (the Town) by a 1970 Order of Taking (Order of Taking). Defendants built 34 condominium units on the Claimed Easement and on adjacent land. Plaintiffs seek a declaration of their rights in the Claimed Easement, a preliminary injunction enjoining sale of condominium units, a permanent injunction requiring Defendants to remove the condominiums, and damages.

Plaintiffs moved on December 18, 1991 for partial summary judgment "as to liability" on all counts of the Complaint. Counsel for Plaintiffs and Defendants argued the motion on May 20, 1992. Plaintiffs submitted Affidavits of Philip L. Sussler, Esq. (Plaintiffs' Counsel); and Margaret A. Robbins, Esq. (Plaintiffs' Co-Counsel). Defendants submitted Affidavits of Stephen D. Clapp, Esq. (Counsel for Defendant Bos-Park Realty Corp.) (two Affidavits); and Francis X. Cannata (one of the joint venture partners in the real estate development of Defendants).

I find and rule that there are no materials facts in dispute as to the issues raised in this Decision and I rule for Plaintiffs, as follows:

1. The Town, through the Plaintiff Department, owns and operates a municipal light plant, established pursuant to G. L. c. 164, providing electrical service to customers within the Town. The Defendant's status as a separate party plaintiff has not been raised.

2. on June 21, 1970, the Penn Central Company (Penn Central) entered into bankruptcy. See In Re Penn Central Securities Litigation, 335 F. Supp. 1026 (1971). As part of the bankruptcy proceedings, the Reorganization Court entered an order (the Stay Order) pursuant to 11 U.S.C. §205 (a) and (j) restraining and enjoining all entities from, inter alia, seizing, converting or appropriating Penn Central's property.

3. The then current Bankruptcy Act, 11 U.S.C. §205 (a) provided that a reorganization court "shall, during the pendency of the proceedings under this section and for purposes thereof, have exclusive jurisdiction of the debtor and its property wherever located. . . ." Section 205 (j) authorized the reorganization court to enjoin all judicial proceedings against the debtor.

4. The Order of Taking is dated August 4, 1970, and recorded in the Bristol County Northern District Registry of Deeds (all recording references here are to that registry) at Book 1562, Page 580 (Exhibit B). By the Order of Taking the Town purports to take (the Taking) in fee and by easement various areas "for electric power line purposes." The easements taken include easements over Parcels SW-5 through SW-12 (by reference to the plan recorded with the Order of Taking) (the Easement Area), which are stated as being owned by Penn Central. The Town did not seek permission from the Reorganization Court to make the Taking.

5. The Town awarded damages to Penn Central for the Taking, which were held in escrow by the Town Treasurer, until payment by check to Penn Central dated April 12, 1984.

6. Some time after the Taking, Penn Central resumed business (under the name The Penn Central Corporation). By deed dated July 21, 1982 and recorded at Book 2260, Page 120, reciting consideration of $125,000, Penn Central conveyed to defendant Bos­Park Realty Corp. (Bos-Park) all Penn Central's right, title and interest in a portion of Penn Central's right of way, including the Easement Area. In its deed to Bos-Park, Penn Central reserved its "right to collect any and all outstanding awards due as a result of any easements previously condemned by the Town of North Attleboro." The deed excepted from the grant all "conveyances previously made by deeds of record." The deed also imposed on Bos­Park the covenant that no part of the premises conveyed "shall be used as, or made a part of, a transportation, communication, electrical or other corridor or right-of-way."

7. On March 8, 1983, Bos-Park filed a petition in this Court to confirm its title to the area which includes the Easement Area, and specifically requested that this Court declare the Claimed Easement invalid throughout the entire Penn Central right­of-way. However, while the Land Court Examiner's opinion, filed May 25, 1984, confirmed title in Bos-Park, it expressly found title subject to the Taking. Following submission of the Examiner's report, Bos-Park moved to amend its petition in July, 1984 to claim that the Town's easement was invalid because of an allegedly defective taking. The case has been continued generally on various occasions since then.

8. By deed dated November 25, 1985, recorded at Book 2863, Page 83, Bos-Park transferred its interest in the right-of­way, including the Easement Area, to Defendant, Old Colony Town Houses, Inc. (Old Colony).

9. In 1985, Bos-Park and Old Colony constructed part of a single condominium unit directly on the Easement Area on parcel SW-8. In addition, sometime during 1986, Defendants constructed an additional 33 condominium units on parcel SW-8.

10. Plaintiffs argue that Defendants lack standing to challenge the validity of the Taking, arguing that the right to challenge does not run with land.

11. Plaintiffs further contend that even if Defendants have standing, Defendants' claim is barred by a two-year statute of limitations (G. L. c. 79, §16 and §18).

12. Defendants claim they have standing and claim that inasmuch as they are not seeking damages but rather are attacking the Taking because of Plaintiffs' violation of a court order based on a federal bankruptcy statute, the applicable statute of limitations is G. L. c. 260, §21, (20 years), for which they cite Akasu v. Power, 325 Mass. 497 (1950). Defendants further claim that, under §21, the cause of action does not accrue until the party claiming title has been seised of the property. (As stated above, Bos-Park acquired the property in 1982.)

13. Defendants contend that the Taking was invalid because the Town failed to seek the Bankruptcy court's approval after the Reorganization Order (mentioned in Paragraph 2) pursuant to the Bankruptcy Act, 11 U.S.C. §205 (a) and (j).

14. Plaintiffs counter that the Town's eminent domain taking power is superior to, and may be exercised notwithstanding, the Stay Order, according to Commonwealth of Mass.v. Bartlett, 384 F. 2d. 819 (1st Cir. 1967). Defendants argue that Bartlett is not binding on this Court and that it is a minority, and less meritorious, view.

15. Defendants also contend that the Taking is void because the Town did not comply with G. L. c. 40 §14 ("§14"). §14 provides that a town may take any land or easement "not already appropriated to public use." Defendants argue that Penn Central's previous use of the railroad bed was "public use" within the meaning of §14.

16. Defendants further contend that there is a genuine issue of material fact as to whether the Town reached the requisite two-thirds majority to appropriate the money for the Taking pursuant to §14.

17. As to the standing issue, Plaintiffs argue that the Stay Order benefitted only Penn Central and that Defendants "should not be able to use the restraining order as a platform from which to challenge the validity of the easement more than twenty years later," citing Trustees of Property of Penn Cent. v. U. S. Ry. Association, 463 F. Supp. 1321 (Special Court, Regional Rail Reorganization Act, 1979).

18. I concur that Defendants do not have standing as to the Stay Order. I base my finding on the case just cited and also cases cited by Plaintiffs under the current Bankruptcy Act, In Re Globe Investment and Loan Co., 867 F2d 556 (9th Cir. 1989), In Re Brooks, 79 B. R. 479 (Bankr. 9th Cir 1987) and In Re Fuel Supply and Terminaling Inc., 30 B. R. 360 (Bankr. N. D. Texas, 1983). These cases say that where the debtor's trustee does not object to a stay violation, and where the objector is not even a creditor, there is no standing. "Whatever argument may be made for extending the protection of section 362 (the current stay provision, PWK) to creditors, it clearly does not confer any rights on outside parties." Globe, at page 560.

19. Penn Central 's Trustee did not object to the Taking; indeed, specific recognition of it was made in the deed to Bos­Park.

20. I am not persuaded by Defendants' attempts to argue away Penn Central (above). The other cases cited by Defendants say that creditors may avail themselves of §362 (and it should be noted, they do so in then current bankruptcy proceedings). None support giving standing to subsequent assignees such as Defendants.

21. Defendants' other line of attack about standing is to cite Akasu v. Power, 325 Mass. 497 (1950), in which a servient owner established that an easement conditioned on an annual payment had terminated because the payments had ceased. In reaching its result the Supreme Judicial Court stated: "(T)he owner of the servient estate whose land has been subjected to an easement by a predecessor in title has the right to challenge the validity, extent or existence of the easement" (p .501). Defendants also cite a string of cases in which servient owners complained about alleged overburdening of the easements in question; these cases are cited to show that the right to complain was not questioned.

22. Akasu and the other cases do not help Defendants as far as the stay Order is concerned. Problems arising because of the stay Order do not go to the general validity of the Taking. The Stay Order was meant to protect the debtor, and apparently also creditors, but not the world.

23. But what of Defendants' invalidity claims under state law - that the Town could not take property already appropriated to public use and that there was no showing of the requisite two-thirds vote? I conclude that Defendants have standing to raise the two-thirds vote question but not the appropriation question. Assuming (but not deciding) that Penn Central's land was appropriated to a public use, the prohibition in G.L. c.40 §14 apparently is for the protection of the existing public use (that is, it protects against a taking absent explicit legislative authorization, lacking here). Although I find no case law on this point, I conclude that the purpose of §14 does not suggest extending its protection to persons, such as Defendants, using the property for a non-public use. Akasu does not reach the public use appropriation issue, nor do the easement overburdening cases also cited by Defendants.

24. There is another threshold question - are Defendants barred by the statutes of limitations in G.L. c. 79, §16 and §18? I conclude they are. Defendants correctly assert that neither §16 nor §18 is an express bar to validity claims. Section 16 on its face merely bars damage actions not brought within three years (two, in our case, under the earlier version of the statute).

25. Section 18, on its face, merely gives an extra six months for a damages action to someone who has brought a suit contesting validity - but note that §18 states that the validity suit is one which "is brought within the time for filing a petition to the proper tribunal for an award or assessment of the damages caused by such improvement or taking" (or within six months after an earlier validity suit not terminated on the merits).

26. Defendants argue that these limitations do not apply to them, since they are not seeking damages. However, the Appeals court has read §16 and §18 together to the contrary. Whitehouse v. Sherborn, 11 Mass. App. Ct. 668 (1981) was a 1980 attempt by landowners to overturn a 1960 taking by the Town of Sherborn, allegedly defective because not recorded within thirty days. The Appeals Court, referring to the desirability of efficiently resolving disputes arising from takings, held that the suit was barred by §§16 and 18.

27. See also Commonwealth v. Quincy Memorial Company. Inc., 13 Mass. App. Ct. 901 (1982) in which one ground stated for refusing to hear a validity claim was that it had not been advanced within the (then one year) limitation in §16. In Boyce v. Greater Lowell Regional Vocational Technical School District, 7 Mass. App. Ct. 639 (1979) Plaintiffs originally sued for damages and also attacked the validity of the taking. At trial they abandoned their validity claim, rendering some of the following discussion dicta, but the Appeals Court stated (p. 645) "Thus a landowner whose property is taken under c. 79 for a public purpose and who receives notice of the taking has two years from the date the order of taking is recorded either to commence an action questioning the validity of the taking or to seek an assessment of damages." Finally, the Appeals Court, in Eldredge v. Board of Selectmen of Brewster, 18 Mass. App. Ct. 502 (1984) stated, also in dicta, "That statutory limitation period applies not only to controversies over the amount of damages (the usual petition for an assessment of damages), but as well to disputes over whether a taking has occurred or damages have been inflicted." (p. 504).

28. There is a suggestion in fn. 11, page 674 in Whitehouse that a post-limitations period validity suit might be maintained if the question involved were one of constitutional dimension. This action involves no such question and, indeed, the last sentence of the footnote suggests that even some or all constitutional attacks might be held barred under the present statutory scheme.

29. Defendants also attempt to meet §16 and §18 by pointing to the March 8, 1983 commencement of Confirmation Case 41283, referred to above at paragraph 7. They argue the two years of §16 should run from the date Penn Central conveyed to Bos-Park, July 21, 1982. I find to the contrary, that the two years started, at the latest, at the final decree in the reorganization proceedings, recorded November 16, 1978. I find that date from an abstract of the Consummation Order and Final Decree recorded at Book 1866, Page 1 in the abstract filed in Confirmation Case 41283.

30. The bar established by §16 and §18 applies to both Defendants' state law claims and also to its claim based on the Stay Order. Once Penn Central was out of reorganization (November 16, 1978) it became subject to §16 and §18, if it was not before.

31. In view of the foregoing resolutions of standing and statute of limitation questions, I need not reach the two other principal legal issues raised by the parties. The first of these is whether Reorganization Court permission was necessary, which in turn comes down to whether the First Circuit Bartlett case, cited at 14 above, is followed rather than cases from other Circuits cited by Defendants, which reach a contrary result. The second question is whether the Easement Area, which was acquired by Penn Central's predecessors by purchase and not by eminent domain, was "already appropriated to public use" within the meaning of G. L. c. 40, §14.

32. I conclude that at the 1968 annual town meeting the Town voted unanimously to appropriate the money necessary for the Taking.

33. Plaintiffs have suggested, as an alternative argument relating to the "prior appropriation to public use" question, that where a taking is for a purpose not inconsistent with the original public use, the taking is valid. Plaintiffs have not established the facts on that question and summary judgment would not be appropriate as to it. Its resolution is not necessary, however.

34. Plaintiffs moved "for summary judgment in plaintiff's favor as to liability on Counts One, Two and Three of the Complaint." In Count One, Plaintiffs seek equitable relief generally; in Count Two they seek a declaration of the rights of the parties and a restriction of the use of the servient tenement by Defendants; and in Count Three Plaintiffs seek damages and relief from continuing trespass. I take Plaintiffs' motion as seeking a determination that they have a valid easement, or, more precisely, that Defendants are not in a position to raise that issue. As stated above, I find and rule for Plaintiffs. I do not reach the questions whether Defendants have violated the Claimed Easement, whether Plaintiffs are entitled to a declaration restricting Defendants' use of the Easement Area and whether Defendants are liable for trespass. Plaintiffs have not established the lack of a material factual dispute on those issues, nor have the parties asked that I decide those issues.

Judgment accordingly.