This case concerns a 35.9 acre lot in Brimfield containing forest and mineral deposits, currently owned by defendant Brian Caron, classified and taxed as a forest lot under G.L. c. 61 (hereafter, the forest lot). Mr. Caron purchased the forest lot, together with an adjoining residential lot (the residential lot), from defendant Batista & Sons, Inc. in 2005. The Town brought this action to enforce its right of first refusal on the sale of the forest lot pursuant to G.L. c. 61, § 8, and, if it votes to acquire that lot, to compel its sale to the Town.
In connection with previous motions in the case, I ruled, inter alia, that [t]he conveyance of the [forest lot] to Mr. Caron constituted a s[ale] for, or conver[sion] to, residential, industrial or commercial use while so taxed under G.L. c. 61, § 8, and, as such, because Batista & Sons and Mr. Caron failed to comply with the notice provisions of that section, the towns right of first refusal endures. Mem. & Order at 24 (Jan. 12, 2010). [Note 1] Full relief could not be granted at that time, however, because a genuine issue of material fact existed on the appropriate purchase price [Note 2], whether that purchase price was subject to adjustments due to Mr. Carons conduct after acquiring the forest lot, and, if so, what those adjustments should be. See id.
The Town contends that the purchase price of the forest lot should be reduced to compensate the Town for minerals that Mr. Caron admittedly excavated (for resale and his own use) after acquiring the forest parcel, arguing that this not only deprived the Town of a valuable commodity that it would have used upon exercising its right to purchase the forest lot, but also that this removal significantly decreased the propertys value. Mr. Caron contends in response that only a small amount of minerals was actually removed from the forest lot, and that such removal should not impact the purchase price.
A trial was held before me on these remaining issues, jury-waived. Based on the evidence admitted and my assessment of the credibility, weight, and inferences to be drawn from that evidence, I find and rule that the Town has the right to purchase the forest lot for $186,500.00, which reflects an adjustment to account for Mr. Carons removal of valuable minerals. [Note 3]
These are the facts as I find them after trial. Undisputed additional facts are contained in my January 12, 2010 Memorandum and Order. See generally Mem. & Order at 2-10 (Jan. 12, 2010).
The forest lot is a 35.9-acre parcel with frontage on Palmer Road in Brimfield. It is heavily forested and contains wetlands (i.e., a stream), which affect its potential residential development. Its chief value lies in its extensive glacial deposits of valuable minerals -- an estimated 125,000 cubic yards of usable gravel, sand, and other aggregate material. [Note 4] The residential lot is a 1.667-acre parcel that abuts the forest lot to the west.
Mr. Caron is in the business of extracting and selling gravel and other minerals, and his intention in purchasing the forest lot was to obtain (for resale) the extractable minerals found there. By purchase-and-sale agreement (P&S) dated January 21, 2005, Mr. Caron agreed to purchase the forest lot and the residential lot from Batista & Sons for a total purchase price of $275,000.00. The amount was not apportioned between the parcels. The deeds (each dated May 9, 2005) conveying the two lots state that the consideration paid for each lot was $137,500.00. [Note 5] Prior to these conveyances, neither Batista & Sons nor Mr. Caron provided the Town with notice of the proposed sale or its proposed terms and conditions. [Note 6] On May 17, 2005, Mr. Caron granted defendant Michael Sosik, Jr. a $250,000.00 purchase money mortgage on the two lots. [Note 7] Mr. Batista testified that he loaned Mr. Caron $25,000.00 for the remainder of the purchase price, foregoing immediate receipt of payment in exchange for a promise to pay. [Note 8]
At some point in late 2006, Mr. Caron began excavating material from the excavation area on the forest lot. Mr. Caron testified that this began in October of 2006. It involved removing the topsoil covering the Woodbridge deposits (which Mr. Caron piled to the side of the excavation area), excavating fill from the excavation area, and then processing most of the excavated fill (with a portable, motorized screening plant that he had installed) into separate on-site stockpiles. Mr. Caron admits that he removed some of this stockpiled material from the forest lot at or around this time, and sold it at a profit. Mr. Caron also made use of the excavated materials in connection with certain contour alterations on the forest lot (as well as to the residential lot) [Note 9] in order, he claimed, to make the lot more accessible to vehicular traffic. Most notably, he reinforced and widened the access road from Palmer Road to the excavation area, and he built paved parking and turnaround areas for his vehicles. The parties dispute how much material was excavated, and how much was used for these improvements. They also dispute whether a number of these improvements (the parking and turnaround areas, for example) added value to the property or reduced it. [Note 10]
Mr. Caron testified that he removed only about 918 cubic yards of material from the site -- just below the amount (1,000 cubic yards) for which he would have been required to obtain a special permit. [Note 11] He testified that he did so only between October of 2006 and February of 2007. Mr. Caron further testified that, in addition to the materials he transported offsite, he used about 10,000 cubic yards of sand and gravel to create a parking lot on the forest lot (for storage and parking for his various business operations) and around 1,778 [Note 12] cubic yards to expand and improve the access road leading to the excavation area.
One of the Towns expert witnesses, civil engineer Steven Bressette, painted a somewhat different picture. Specifically, he testified that he performed a topographical comparative analysis of the excavation area as it existed in 2005 (before Mr. Caron performed any mineral extraction) and in 2010, 2012, and 2013 (after the period during which Mr. Caron admitted to having removed materials from the forest lot). [Note 13] Then, using digital, three-dimensional models of the 2005 and 2010 surveys of the excavation area, Mr. Bressette attempted to measure the amount of material extracted based upon changes in elevation. [Note 14] On the basis of this analysis, Mr. Bressette concluded that approximately 16,100 cubic yards of material had been excavated from the excavation area between 2005 and 2013. [Note 15]
The Town brought this action in November of 2006 to enforce its right of first refusal, and, subsequently, moved for a preliminary injunction preventing Mr. Caron from continuing to excavate, pending the outcome of the case. The injunction was entered on February 28, 2007, prohibiting Mr. Caron from conducting any activities to alter the forest lot (including land clearing, excavation, and/or removal of soil or gravel) until further order of the court.
Further facts are set forth in the Discussion section below.
As noted above, I have previously ruled that the forest lot is subject to G.L. c. 61, § 8, that Batista & Sons and Mr. Caron failed to comply with the notice provisions of that section, and that the Town retains its right to purchase the forest lot. See Mem. & Order at 24 (Jan. 12, 2010). The only remaining issues are thus (a) the purchase price the Town must pay in order to exercise its right to purchase the forest parcel, (b) whether that price should be adjusted to compensate the Town for the materials Mr. Caron excavated, and (c) if so, what that adjustment should be.
A. The Purchase Price of the Forest Lot
G.L. c. 61, § 8 -- both in its current form, and in the version in effect as of 2005 -- provides that, in the case of sale of forest land, the Town has the option to meet a bona fide offer to purchase the land. [Note 16] Determining the appropriate amount that the Town would be required to pay to purchase the forest lot is complicated by the fact that the P&S for the forest lot also included the residential lot in the same transaction, for a total consideration of $275,000.00, without apportioning that amount between the two properties. As previously noted, the two deeds conveying the lots simply split this total down the middle, reciting consideration for each lot of $137,500.00. By all accounts, however, the value of the forest lot (which is many times larger and contains the highly valuable mineral deposits previously referenced) was and is much greater than the value of the residential lot.
The Town argues that the pre-adjustment purchase price for the forest lot should be $137,500.00 -- the amount recited in the deed to Mr. Caron for the forest lot. I disagree. Whatever Mr. Carons reasons for placing these figures in the two deeds, that allocation is not dispositive. As the evidence showed, the value of the residential lot was $50,000.00. [Note 17] The remainder of the purchase price ($225,000.00) is thus allocable to the forest lot.
The Town disputes this $225,000.00 allocation, based on the testimony of its expert witness, Richard McCowan, that the forest lot was only worth $135,000.00 at the time. In his opinion, therefore, Mr. Caron overpaid for the properties by about $90,000.00, and the Town should not be required to pay more than the pre-adjusted figure of $135,000.00 for the forest lot. For the following reasons, I disagree.
I accept Mr. McCowans assessment of the value of the residential lot ($50,000.00). [Note 18] That valuation is not complicated by the presence of mineral resources nor of any potential use other than residential development, and is thus relatively straightforward and well within his competence and expertise. His calculation of the value of the forest lot, however, is not persuasive. It was based upon the estimated amount of valuable material present on the forest lot (based on the estimate of the Towns geologist) multiplied by his estimate of the value of such material, which he then compared to the value of three allegedly similar properties. However, not only did Mr. McCowan acknowledge that he had no expertise in assessing the value of mineral resources, his property comparisons did not take into consideration numerous variables, all of which undermines the comparability of the forest lot with his alleged comparables. [Note 19] Moreover, despite testifying that the forest lot could potentially be sold for conversion to residential use after removing the valuable minerals, Mr. McCowan acknowledged that he did not take this possibility into account in his $135,000.00 valuation. These deficiencies undercut Mr. McCowans estimate of the 2005 fair market value of the forest lot.
Instead, I accept the valuation produced by subtracting the $50,000.00 value of the residential lot from the overall $275,000.00 purchase price paid, resulting in a forest lot valuation of $225,000.00.There is no evidence that the P&S was anything other than a bona fide offer made in the course of an arms-length transaction. The evidence indicates no connection or affiliation of any kind -- personal, corporate, or otherwise -- between Batista & Sons and Mr. Caron that would tend to suggest that the transaction was anything other than a straightforward business transaction. Therefore, the intended price for the forest lot in the P&S ($275,000.00 minus $50,000.00, i.e., $225,000.00) is the purchase price the Town must meet, subject to the adjustments set forth below, to exercise its right of first refusal.
This valuation is corroborated by the arms-length purchase-money financing that Mr. Caron obtained for the full $275,000.00 purchase price of both lots from Mr. Sosik (who granted a $250,000.00 mortgage secured by both properties) and Mr. Batista (who lent him the other $25,000.00). Both were independent third parties with no prior relationship with Mr. Caron. It is further substantiated by the testimony of Mr. Sosiks son, Matthew Sosik, a bank executive, who confirmed Mr. McCowans valuation of the residential lot ($50,000.00), and testified that, at the time of the sale, he and his father viewed the remainder of the mortgage ($200,000.00) as having been secured by the forest land and the gravel operation Mr. Caron intended to conduct there. Mr. Flynn, Mr. Carons business partner, also corroborated this valuation in his testimony, as did the partnership agreement between Mr. Flynns development company and Mr. Caron, which specifically valued the residential lot at $50,000.00 and the forest lot at $225,000.00. See Trial Ex. 38, p. 1.
In view of the foregoing, I find that, pursuant to G.L. c. 61, § 8, the Town had a right to purchase the forest lot at the same purchase price paid by Mr. Caron. While the P&S itself does not identify the specific purchase price for the forest lot, the evidence establishes that it was $225,000.00. Thus, had Batista & Sons complied with G.L. c. 61, § 8 and properly communicated Mr. Carons bona fide offer to purchase the forest lot prior to consummating that sale, the price to the Town would have been $225,000.00. [Note 20]
B. Adjusting the Value of the Forest Lot
Batista & Sons, however, did not comply with G.L. c. 61, § 8. Rather, it proceeded with the sale of the forest lot to Mr. Caron, and the Town only learned of that sale after the fact. Moreover, after acquiring record title, Mr. Caron made subsequent alterations to the property -- most notably, the excavation of a significant amount of the valuable minerals found there.
Since the primary value of the forest lot is as a source of easily extractable mineral deposits, Mr. Carons extraction and/or removal of such materials clearly affected the value of that lot. Because Mr. Caron extracted and/or removed the material after the forest lot should have been made available to the Town to purchase pursuant to G.L. c. 61, § 8, I find that the purchase price that the Town must now pay for the forest lot should be adjusted to reflect the diminution in value of the forest lot, measured by the value of the material extracted and thus no longer available to the Town. [Note 21] See, e.g., Trinity Church in the City of Bos. v. John Hancock Mut. Life Ins. Co., 399 Mass. 43 , 48 (1987); Commonwealth v. Mass. Turnpike Auth., 352 Mass. 143 , 147-148 (1967).
The parties dispute both the exact quantity of material that Mr. Caron extracted and/or removed from the forest lot, and how that material should be valued. I thus turn to a discussion of those questions.
1. The Amount of Material Removed by Mr. Caron
At trial, the parties provided widely disparate calculations of the extent of Mr. Carons excavation and/or removal of material from the forest lot. As noted above, while Mr. Caron claims to have removed only about 918 cubic yards of sand and gravel from the site (his log states the total as 915 cubic yards), the Town, through the testimony of its expert, Mr. Bressette, estimated that approximately 16,100 cubic yards of material had been removed. These differing calculations are not apples to apples -- Mr. Carons is of material he transported off-site, while the Towns is of total material excavated, including that used elsewhere on the property -- and each is problematic.
The Towns estimate has several issues that undermine its reliability. First, there is the question of the fidelity of Mr. Bressettes model (see nn. 13 & 14, supra) -- that is, how closely the model tracks actual conditions on the ground. As discussed in the Facts section above, the actual surface of the excavation area is highly complex and varied, yet Mr. Bressettes survey measured and compared elevations at points located at a distance of twenty-five feet from each other. This, at best, represents only a rough depiction of actual conditions on the ground. [Note 22] Had Mr. Bressette plotted more data points, his results would have been more reliable. And while the court understands that greater fidelity (i.e., more data points) no doubt entails more work, here it appears that a greater effort to ensure fidelity was called for. In other words, due to the relatively low fidelity of Mr. Bressettes survey, significant topological variation could have been missed entirely -- for instance, piles of topsoil, gravel, and other aggregate that are small in length and width, yet great in height. [Note 23]
Next, despite the fact that his measurement of volume (based on the above- discussed grid method) represents, at best, an approximation, Mr. Bressette did not specify the margin of error associated with his estimate. See, e.g., Commonwealth v. Trainor, 374 Mass. 796 , 804 (1978) (discussing the margin of error on a public opinion survey); Commonwealth v. Rumery, 78 Mass. App. Ct. 685 , 689 (2011) (identifying the margin of error for breathalyzer machines). Likewise, he made no effort to acknowledge the possibility of measurement error inherent in his methodology. Rather, Mr. Bressette presented his analysis as definitive. Indeed, the closest that Mr. Bressette came to addressing potential errors in his analysis was when he explained that he had (very roughly) confirmed his results with a non-computer geometric calculation -- a method he acknowledged was more imprecise than the computerized model he had used. [Note 24] By presenting his analysis in this way, Mr. Bressette not only raised questions regarding his testimony (by failing to acknowledge the obvious possibility of error), he provided no way for the court to assess for itself the reliability of his analysis (by providing no margin of error for the court to consider). [Note 25]
Furthermore, because Mr. Bressette only surveyed the areas that had previously been surveyed and mapped on the 2005 Frydryk plan, he cannot state with certainty that the amount of material he estimated had been excavated from the excavation area was actually removed from the forest lot. Clearly, Mr. Bressette considered the areas of the forest lot where excavation and filling was most likely -- i.e., the excavation area, the access road [Note 26], and the parking lot. [Note 27] However, the vast majority of the forest lot was not surveyed, nor is there any indication that Mr. Bressette investigated other areas of the forest lot to determine if any activity had taken place there. [Note 28]
Finally, even setting aside the shortcomings of Mr. Bressettes survey, it is highly unlikely that Mr. Caron could have removed more than 16,000 cubic yards of material from the forest lot over the course of only five months (October of 2006 to February of 2007). Mr. Carons gravel business is a small-scale operation that involves only Mr. Caron himself, his business partner, and a small number of third parties with whom Mr. Caron contracts. [Note 29] The Town presented no evidence that such a massive amount of material was being transported offsite, nor that the Town suspected so. Surely that number of trucks would have attracted attention on such a main road in a small town.
Thus, the Towns estimate has problems. But so does Mr. Carons. While Mr. Carons estimate (~918 cubic yards) is backed by what appears to be a contemporaneous record documenting the removal of 915 cubic yards of material from the forest lot, it accounts only for materials that were physically removed from the forest lot entirely, mostly for resale. His estimate does not take into account materials that were excavated and put to use on the forest lot and/or residential lot, even though he acknowledged that he used a substantial amount of material to expand and reinforce the access road through the forest lot and to construct a parking area near the entrance to the forest lot off Palmer Road. [Note 30]
When pressed, Mr. Caron estimated that -- in addition to the 915 cubic yards of materials that he removed from the forest lot entirely -- he used about 10,000 cubic yards of sand and gravel to create the parking lot and around 1,778 [Note 31] cubic yards to expand and improve the access road. In total, then, on Mr. Carons account, approximately 12,700 cubic yards of material were extracted from the excavation area, which were then either removed from the forest lot entirely (for resale) or were used by Mr. Caron on the forest lot and/or residential lot.
Mr. Carons account of the total amount of material extracted (irrespective of its ultimate destination) is plausible for several reasons. First, it explains why the parties estimates initially seemed vastly different: the Town was considering all material extracted, and Mr. Caron was only considering materials removed from the lot. It would also explain why the Town was not alerted to Mr. Carons transportation of materials offsite, which would have created hundreds of vehicle trips to and from the site.
However, while Mr. Caron strives to draw a distinction between materials removed from the forest lot and materials extracted from the excavation area but not removed from the forest lot, there is no reason to make such a distinction for purposes of assessing the loss in value to the Town. It is true that much of this material has not been taken offsite. Yet, because it has been used to construct improvements on the forest and residential lots, the effect is the same as it would have been had the material been removed entirely. In either case, it is of no use to the Town as extractable mineral. [Note 32]
Nonetheless, because Mr. Carons testimony that the access road was reasonably necessary to enable extraction of materials from the excavation area, it stands to reason that the Town would also been required to perform the same (or substantially similar) work in order to obtain access to the valuable materials. The same is not true for the parking lot, which Mr. Caron testified was used for other purposes personal to him and his business, and which would not have been of any use to the Town. Moreover, there is no evidence that the parking lot has increased the forest lots value to the Town.
In sum, as previously noted, the Town had the right to purchase the forest lot at the bona fide offer price of $225,000.00 in 2005. Mr. Caron excavated roughly 12,700 cubic yards of sand and gravel. Of that amount, approximately 11,000 cubic yards (i.e., 915 cubic yards extracted and removed plus 10,000 cubic yards extracted and used on the forest lot) represent materials that were either removed from the lot entirely or put to uses of no value to the Town. The Town is thus entitled to an adjustment in its purchase price for the forest lot to offset that amount of extracted materials.
2. The Valuation of the Mineral Deposits Removed by Mr. Caron
At trial, the Towns expert geologist, Mr. Geagan, testified that, in 2005-2007, the wholesale price of the onsite Woodbridge material was $3.25 to $3.50 per cubic yard. [Note 33] This estimate was roughly corroborated by Mr. Carons testimony. Mr. Geagan also testified as to a significantly higher value (estimated at between $7.00 and $9.00 per cubic yard) for processed, delivered materials, which also was corroborated by Mr. Caron. The Town argues that it is entitled to be compensated for extracted materials at the full price of extracted, delivered materials. This argument fails for several reasons.
First, in order to obtain the full price cited by Mr. Geagan for processed, delivered materials, Mr. Caron undertook a significant amount of work and incurred the attendant expenses of doing so, including: extracting the material, screening it into its various sizes and contents, storing the various sizes and contents of materials, marketing said materials, and eventually delivering said materials -- which Mr. Geagan and Mr. Caron both testified, is the most significant expense. Only after incurring these expenses is the full price for final products available. However, had the Town purchased the forest lot, it would not have obtained final product; it would have obtained wholesale material, in the ground. As Mr. Caron testified, that material is immediately saleable, without need even for delivery, at a 2005 market value of $3.25 to $3.50 per cubic yard.
Second, the testimony at trial established that the actual value of the materials in the ground varies based on the nature of the yield (i.e., on the actual contents of the fill), which cannot be determined until after it is extracted and processed. One excavation may yield more valuable gravel than another. Another excavation may yield more sand, silt, and clay, yielding a lower value. There is simply no way of knowing. Far more reliable would be to avoid speculation as to yield, and simply value the materials based on its price as immediately saleable fill -- again, $3.25 to $3.50 per cubic yard. Given that Mr. Caron removed the material without right to do so, I will accept the high end of this estimated range, setting the value of the materials at $3.50 per cubic yard.
In sum, I find that the 2005 wholesale value of the mineral deposits removed by Mr. Caron from the forest lot ($3.50 per cubic yard) most closely approximates the value that the Town would have received from that material had Mr. Caron not removed it. That price, multiplied by the 11,000 cubic yards of material for which an adjustment is needed, comes out to $38,500.00. Thus, if the Town chooses to exercise its right to purchase the forest lot, it must pay Mr. Caron $186,500.00 -- i.e., the $225,000.00 offer price reflected in the P&S ($275,000.00 minus the $50,000.00 value of the residential lot), less $38,500.00 for materials extracted by Mr. Caron. [Note 34]
For the foregoing reasons, I find and ORDER that the Town has the right to purchase the forest lot from Mr. Caron at a price of $186,500.00, plus the amount of the rollback taxes and release fees paid by Mr. Caron (if not already returned). The Town shall have 120 days [Note 35] from the date of entry of such judgment to exercise its right to purchase the forest lot in accordance with G.L. c. 61, § 8. In the event that the Town exercises its right to purchase the forest lot, upon such sale, the forest lot will no longer be subject to the mortgage lien held by Mr. Sosik. See n. 20, supra. [Note 36]
Judgment shall enter accordingly.
[Note 1] I also found that, because Mr. Caron [had] pa[id] the roll-back taxes [for the forest parcel] . . . , should the town exercise its right of first refusal and purchase the [forest lot], it must reimburse Mr. Caron for the amount he paid, plus interest. Id.
[Note 2] The price was not a simple matter of matching the price paid by Mr. Caron. This was because he paid a single price for the two lots -- the forest lot (subject to G.L. c. 61) and the adjoining residential lot (which was not) -- and the Town wanted only the forest lot.
[Note 3] If the Town has not already returned the rollback taxes and release fee to Mr. Caron, it must credit him that amount towards the purchase price.
[Note 4] The Towns geological expert, Thomas Geagan, testified that these glacial deposits are Woodbridge material -- a well-draining soil that can be used for numerous different applications. In one particular area towards the rear of the forest lot (referred to hereafter as the excavation area), deposits of Woodbridge soil are located very near to the grounds surface and can be easily accessed for excavation. Material excavated from the excavation area is called fill, and can be sold on its own, as-is, for certain uses. This fill can also be further processed, or screened, to separate out the different sizes of sand and stone, and to extract smaller particulate matter (including silt and clay) to add value to the material. After screening, it can be sold for various purposes based upon the size and/or nature of the material.
[Note 5] Mr. Caron took title to the residential lot in his capacity as trustee of C&F Realty Trust, and to the forest lot in his individual name.
[Note 6] On May 23, 2005, after the sale, counsel for Batista & Sons sent the Town Board of Selectmen a letter requesting that the Town sign a release of the Towns right of first refusal. The letter disclosed the total purchase price, but did not enclose the actual P&S or detail its terms. On the same date, the same attorney (purporting to act on behalf of Mr. Caron) requested a calculation of the roll-back taxes needed to remove the forest lot from the provisions of G.L. c. 61. On August 27, 2005, Town counsel responded to the letter, objecting to the sale of the forest lot (as well as the post-purchase removal of materials), and reserving the Towns right to purchase the forest lot -- which, counsel argued, could not be waived until the Town was properly notified of a bona fide offer to purchase, in accordance with the requirements of G.L. c. 61, § 8. The following day, Mr. Caron paid the roll-back taxes and release fee for the forest lot.
[Note 7] Mr. Caron, as trustee of C&F Realty Trust, and Daniel Flynn (Mr. Carons business partner) were also mortgagors under this mortgage.
[Note 8] Other than this testimony, the record does not contain any evidence that such a loan was granted, nor of any lien against either of the properties at issue securing said loan.
[Note 9] Mr. Caron testified that most of this work was done on the forest lot, but that he did not differentiate between the two lots when doing it, so that some occurred on the residential lot as well.
[Note 10] Not everyone would develop the property the same way, and Mr. Carons improvements were installed in connection with his particular business needs.
[Note 11] Mr. Carons estimate is corroborated by a document in the evidentiary record entitled Weekly Gravel Report, which lists the daily amount of mineral (i.e., fill, gravel, and/or sand) that Mr. Caron and others removed from the forest lot between October 9, 2006 and February 23, 2007 -- in total, 915 cubic yards. See Trial Ex. 42. Mr. Caron testified that he did not remove any minerals from the forest lot at any time not covered by this report, and that the report documented all of the material that he removed (or allowed to be removed) from the site.
[Note 12] Mr. Caron estimated that he used about 2,500 cubic yards of sand and gravel on the access road. However, his numbers add up to only about 1,778 cubic yards: 2,000 feet of roadway, multiplied by the average width of the road (twelve feet), and multiplied again by an average depth of two feet.
[Note 13] Mr. Bressettes analysis started with an August 5, 2005 survey (known as the Frydryk Plan) of the excavation area, which had been commissioned by Mr. Caron. See Trial Ex. 2. Mr. Bressette then performed a new topographical survey of the same area in 2010 with measurements taken every twenty- five feet across the two-dimensional area of the excavation area. See Trial Ex. 29. Mr. Bressette performed two subsequent surveys in January of 2012 and September of 2013, both of which were commissioned by the Town to determine if Mr. Caron was continuing to extract and/or remove materials, in violation of this courts directives. Mr. Bressette testified that no additional material had been removed from the site as of his 2012 survey, but that his 2013 survey indicated that an additional 200 cubic yards of gravel from an existing storage pile were missing.
[Note 14] Mr. Bressette testified that he used computer software called Land Desktop to digitize the Frydryk Plan and his 2010 plan, and to create three-dimensional models of the surface of the excavation area as it existed in 2005 and 2010. He then used Land Desktop to create a plan of the excavation area superimposing the 2010 elevations upon the 2005 elevations to illustrate changes in elevation and to calculate the approximate volumetric change in materials that such elevation changes entailed. Land Desktop did so by connecting the 2010 measured grid points, forming boxes between the points, and calculating the volume of each box. Thus, where materials had been excavated (or cut), the 2010 survey showed a lower elevation; and, where materials had been piled (such as for storage) (i.e., fill), the 2010 survey showed a higher elevation.
As noted above, the grid points measured by Mr. Bressette were located every twenty-five feet across the two-dimensional area of the excavation area. The detail of these measurements is limited by the fact that the actual surface of the excavation area is more or less infinitely complex, Mr. Bressette did not explain his reasons for selecting twenty-five feet as the distance between grid points, but it appears that this determination represents his attempt to balance the need for specificity and exactitude with logistical concerns that would have been associated with plotting more points. In other words, while plotting points, say, every five feet would have produced a more faithful representation of the actual elevation of the excavation area, doing so would have entailed approximately five times the amount of work.
[Note 15] Specifically, based on Mr. Bressettes above-described analytical method, he estimated that the net total amount of minerals removed between 2005 and 2010 (i.e., the amount cut, less the amount of new fill) was between 15,915 and 15,982 cubic yards. Based upon his subsequent survey in 2013, Mr. Bressette increased this total to approximately 16,100 cubic yards.
[Note 16] G.L. c. 61, § 8 was amended in 2006, after Mr. Carons purchase of the forest lot, to, inter alia, specifically define the term bona fide offer to purchase: a good faith offer, not dependent upon potential changes to current zoning or conditions or contingencies relating to the potential for, or the potential extent of, subdivision of the property for residential use or the potential for, or the potential extent of development of the property for industrial or commercial use, made by a party unaffiliated with the landowner for a fixed consideration payable upon delivery of the deed. See Mass. Gen. Laws Ann. c. 61, § 8 (2006). The version of this section that was in effect as of the 2005 sale did not specifically define bona fide offer to purchase, but is consistent with the current version of the statute in all ways relevant to this dispute. Compare G.L. c. 61, § 8 with An Act Providing for the Classification & Taxation of Forest Lands & Forest Products, c. 768, 1970 Mass. Acts 1270, 1276 (1981).
[Note 17] The Towns own expert witness, Richard McCowan, valued the residential lot at $50,000.00 as of 2005.
[Note 18] See n. 17, supra.
[Note 19] For instance, Mr. McCowan acknowledged that various features of the forest lot were not in fact the same on the comparison properties, including: lack of utilities; lack of an existing wetlands crossing; different zoning; more limited access in the form of more rural, two-lane roads; and potentially different soil material. Moreover, Mr. McCowan readily conceded that he was not an expert in soils, and that his analysis had not taken into consideration possible differences in the level or quality of minerals present at the forest lot and the comparison properties, nor the attendant difference in value thereof.
[Note 20] In the event that the Town exercises its right to purchase the forest lot at this price (subject to the adjustments discussed below), the lien granted to Mr. Sosik on the forest lot would be null and void, and secured only by the residential lot. See, e.g., Bongaards v. Millen, 440 Mass. 10 , 15 (2003) (grantor can only convey that to which it has title) (here, Mr. Carons title was subject to the Towns right of first refusal and he thus could not grant a mortgage with any right or interest superior to the Towns).
The same would be true for the alleged loan granted by Mr. Batista if, in fact, it was secured by the forest lot. The mortgagors, however, remain personally liable for the outstanding balance of both obligations, and, presumably, would use the money paid by the Town for the forest lot towards satisfying those obligations.
[Note 21] I use a restitution-type measure of damages because the evidence showed that the Town would have done exactly the same work as Mr. Caron -- removed the gravel for municipal or sale purposes -- and would have removed it in substantially the same way from substantially the same places. Also, there was no evidence that the excavation reduced the propertys residual value as a residential lot or lots.
[Note 22] To provide a point of reference, Autodesk, Inc., the company that developed the industry-standard AutoCAD© computer-aided design software, recommends as follows: [t]he Grid method for calculating volumes is an approximation controlled by the grid spacing. When you use grid-based volumes, make sure the grid spacing is not too large, which might result in an imprecise volume estimate. Autodesk, Inc. AutoCAD© Land Dev. Desktop Users Guide § 35 (2d Ed. 1999). Here, based upon the size of the excavation area (i.e., three acres) and the spacing of the grid points, Mr. Bressettes model provided only about 300 grid points (i.e., fifteen to twenty in either direction) with which to approximate the volume change of the entire excavation area, with all of its excavated depressions and piles of material.
[Note 23] To give an example, if four grid points were to have boxed in a pile of materials twenty-four feet in diameter, Mr. Bressettes model would nonetheless report the elevation of the surface within that box as level -- failing to take into account the fill material contained in that pile. The converse is equally true.
[Note 24] Specifically, Mr. Bressette testified that he confirmed his software-based analysis by performing a manual backup calculation, which indicated that about 20,000 cubic yards may have been removed. This would suggest a very wide margin of error of about +/- 4,000 cubic yards -- about twenty-five per cent.
[Note 25] In addition to the possibility of error inherent in the grid method, Mr. Bressettes testimony did not attempt to compensate for the expansion or compaction of the surface material during excavation efforts, which is accomplished through cut factors and fill factors. See Natl Res. Conservation Commn, Calculating Volumes Between Terrain Surfaces 3, in AutoCAD/Land Desktop 2005 Resources and Tips (2004), available at www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/nrcs142p2_032035.pdf. The Natural Resources Conservation Service (a program in the United States Department of Agriculture) recommends that such factors be taken into account when using software such as AutoCAD or Land Desktop.
[Note 26] The towns expert geologist, Mr. Geagan, testified that the access road had a non-natural gravel cap, although he did not know how deep it went.
[Note 27] Mr. Bressettes plan did not depict the topography of the frontage and parking lot area by Palmer Road, since, he stated, he found [n]o evidence of any significant grade changes in this area.
[Note 28] More specifically, Mr. Bressettes analysis failed to account for an embankment by the last curve of the access road before the excavation area, and did not address the possibility that unsuitable material was taken out of the pre-existing road and refilled with sand and gravel (as Mr. Caron argues). Presumably, Mr. Caron dumped this unsuitable material on the forest lot, likely on an area that was not surveyed.
[Note 29] On cross-examination, Mr. Caron testified that his operation could not have moved more than 10,000 cubic yards of material (from any/all of his worksites) even in a full year, since, during the relevant time period, he owned only one relatively small truck, which, he stated, held no more than sixteen cubic yards of material. He testified that he now owns a different truck, which actually holds less (fifteen cubic yards). Based on these limitations, he stated, moving 16,000 cubic yards offsite would have required around 1,000 truckloads. It seems highly unlikely (if not impossible, given the timeframe) that so many off-site trips occurred.
[Note 30] The Towns geologist, Thomas Geagan, suggested that the discrepancy between Mr. Carons figures and the Towns estimate of the material removed from the extraction area could not be accounted for by the construction of the access road and parking lot, since, he stated, if Mr. Caron had actually used the full amount of fill that was removed, the road and parking lot would have been at a higher grade. However, as noted above, he did not know how deep Mr. Caron excavated into the existing road surface.
Mr. Caron, however, offered what I take to be a plausible explanation for this discrepancy, stating that he removed muddy material from the areas now encompassing the road and parking lot (which, he stated, would have been unsuitable for driving on and parking his vehicles), and that he then filled in the areas where material had been removed with extracted minerals (mainly gravel and sand). He testified that, in some locations, he removed muddy soil (and subsequently replaced it with sand and gravel) to a depth of up to six feet. He also stated that, over the years, he has used material from a stockpile to sand the access road in the winter. Mr. Caron also testified that he took material from the forest lot to the residential lot to fill in voids and gaps, but could not recall exactly how much. Mr. Caron seems not to have kept a clear boundary between the residential lot and the forest lot, testifying that he conducted improvements on the frontage area of both properties simultaneously, without a clear picture of exactly how much material ended up on the forest lot or on the residential lot.
[Note 31] As noted above, Mr. Carons actual estimate of 2,500 cubic yards of material used on the access road appears to have been mistaken.
[Note 32] Nothing in the record indicates that the material used to build the road and/or parking lot on the forest lot could be recovered and repurposed. Even if it could be reused, that would presumably entail significant costs. Given how accessible the material originally was, even if reusing it were possible, ultimately, doing so may not be worth the effort.
[Note 33] Mr. Geagan testified that this wholesale value of the material was based upon a sieve analysis to confirm the quality of the material, but that the material would require processing (incurring costs) in order to become retail-ready. Additional costs would be associated with delivery. By contrast, Mr. McCowan suggested a lower price range of $1.07 - $1.09 per cubic yard for the material in bank -- i.e., the raw material in the ground before an analysis of its quality. He determined this price by dividing the purchase prices of his alleged comparables by the estimated amounts of valuable minerals found there.
I find Mr. Geagans analysis more persuasive. As noted above, Mr. McCowan admitted that he was not an expert in minerals valuation and that his analysis did not account for post-mining resale for residential purposes. Thus, I question not only the accuracy of his estimate of in bank value, but also whether he had any basis for suggesting such a value exists in the first place. Moreover, here, Mr. Geagans testimony included an analysis of the actual quality of the materials on the forest lot, so, even if Mr. McCowans estimate of in bank value were valid, there would be no reason to resort to the in bank value, which, presumably, is much lower based upon the risk of finding lower quality material.
[Note 34] As noted above, if the Town has not already returned the rollback taxes and release fee to Mr. Caron, it must add that amount to the purchase price.
[Note 35] I set 120 days as the time to exercise the right to purchase to give the Town adequate time to hold appropriate proceedings, including a Town meeting if necessary.
[Note 36] As noted above, there is no evidence in the record that Mr. Batista has a lien against the forest lot for the $25,000.00 loan that he claims to have granted Mr. Caron. If Mr. Batista does have such a lien, the forest lot would not be subject to it upon the sale of the forest lot to the Town.