TRUSTEES OF THE THOMAS GRAVES LANDING CONDOMINIUM TRUST and SCOTT SCHLISSEL v. PAUL GARGANO and SHEILA GARGANO.

Introduction

This case concerns the Thomas Graves Landing Condominium, a 167 unit condominium located at 4-6 Canal Park in Cambridge, near the Galleria Mall. 166 of the units are residential and one unit, designated Unit C-1 and currently owned by defendants Paul and Sheila Gargano, is commercial. [Note 1] The special permit issued to build the condominium contemplated that the commercial unit would be used as retail or restaurant space. After the condominium was built, the developer encountered financial difficulty and several of the residential units and Unit C-1 eventually came to be owned by the Federal Deposit Insurance Corporation (FDIC), which put them into an REO (“real estate owned”) division called Barnside Realty Corp. In 1993, in an effort to make Unit C-1 more attractive to a potential buyer, the plaintiffs, the Trustees of the Thomas Graves Landing Condominium Trust (the Trustees), granted Barnside an exclusive parking easement over a cul-de-sac located in front of Unit C-1. Barnside then obtained an amendment to the condominium’s special permit to allow Unit C-1 to be marketed as office space. Shortly after the special permit was amended, the FDIC sold Unit C-1 to the Garganos in 1994, and Mr. Gargano used the space for his law office.

From 1994 to 2006, Mr. Gargano, his employees, and clients parked their cars in the parking easement during business hours and on nights and weekends allowed condominium unit owners and their guests to park in the easement. But this arrangement eventually deteriorated. The Trustees accused Mr. Gargano of using the condominium association’s gas to heat his law office without paying for it and filed a lawsuit against him. The Garganos subsequently terminated the parking arrangement after complaining that unit owners and their guests interfered with the operation of Mr. Gargano’s law practice by leaving their cars in the easement during business hours. The Trustees then filed this lawsuit to declare the easement they executed void, contending that they improperly granted it to the Garganos’ predecessor, the FDIC, in 1993.

The case was tried before me, jury-waived. Based on the testimony and exhibits admitted into evidence at trial, and my assessment of the credibility, weight and inferences to be drawn from that evidence, I find for the Trustees and declare their grant of an exclusive parking easement appurtenant to Unit C-1 VOID.

Facts

These are the facts as I find them after trial.

In 1981, the Cambridge Planning Board granted a special permit to Unihab/Cambridge Inc. (the developer) to develop a residential condominium project with one unit designated for retail/restaurant use. As part of the development plan submitted to the Planning Board, the developer agreed to convey a portion of the property to the city of Cambridge for use as a public park. In its special permit decision, the Board expressed a strong preference for including retail space as part of the development, believing that such a retail use would create more activity near the public park. But the Board also acknowledged the “financial and marketing constraints” connected with finding a retail or restaurant business for the space and recognized that “some flexibility may be necessary.” Notice of Decision at 5, Nov. 10, 1981 (Trial Ex. 14). The Board found that the development plan generally conformed to the requirements of the Business A/PUD-4 zoning district, the proposed uses were allowed by the zoning ordinance and residential development coupled with a retail/restaurant component was “both appropriate and desirable.” Notice of Decision at 5. The Decision provided that any change of the retail space to additional housing or office use would require the written approval of the Board. Notice of Decision at 11.

By Master Deed, the developer, operating under the Graves Landing Limited Partnership, submitted the land comprising 4 and 6 Canal Park and the buildings thereon to provisions of G.L. c. 183A, thereby creating the Thomas Graves Landing Condominium. The Master Deed provides a description of the land, which is also shown on a plan referenced in and recorded along with the Master Deed. Thomas Graves Landing Condominium Master Deed (Jan. 20, 1988), Section 2 and Site Plan recorded at Book 18829, Page 424 (Trial Ex. 1). Under the section of the Master Deed entitled “Common Elements”, the developer (referred to as the Declarant) provided:

Parking Spaces: The Declarant reserves with respect to each of the parking spaces located both in the first level garage and outside and shown on the Plans the right to convey exclusive easements to Unit Owners (either in the Unit Deeds from the Declarant or by separate instruments) or to the Condominium Trust.

Master Deed, Section 5(f) (Trial Ex. 1). Exhibit B attached to the Master Deed identifies 113 underground parking spaces, designated P1-P113 and 12 outdoor, surface parking spaces, designated at S1-S12. A plan recorded with the Master Deed shows the location of the 113 underground parking spaces, but there is no plan showing the location of the 12 surface parking spaces.

The First Restated Master Deed, executed by the developer in 1989 for the development of Phase II of the condominium project, likewise reserves to the developer “with respect to each of the parking spaces shown on the Plans the right to convey exclusive easements for the use of such spaces to Unit Owners (either in the Unit Deeds from the Declarant or by separate instruments) or to the Condominium Trust.” First Restated Master Deed at 3 (Jul. 26, 1989) (Trial Ex. 1). Exhibit B to the Restated Master Deed identifies 86 additional underground parking spaces labeled P114-P199 and 9 additional surface parking spaces designated S13-S21.

After the sale of some of the residential units, the remaining units, including Unit C-1, became owned by the Bank of New England. [Note 2] When the Bank of New England failed, these units became owned by the FDIC, which put them into a REO (real estate owned) division called Barnside Realty Corp.

On June 16, 1993, the Trustees granted Barnside an exclusive easement appurtenant to Unit C-1 for parking in what the easement instrument labels as “Area B”. Transfer of Exclusive Easement for Parking Spaces, recorded in the Middlesex (South) Registry of Deeds at Book 23706, Page 540 (Sept. 29, 1993) (Trial Ex. 2). As part of the negotiations, the Trustees also bought Unit 107 at 6 Canal Park from the FDIC to use as a residence for the live-in building manager. [Note 3] Deposition of Robert Brown at 20-21 (Trial Ex. 7). Area B is shown on a plan recorded with the easement instrument as a 3,412 square foot cul-de-sac located directly in front of the entrance to Unit C-1. [Note 4] Easement Plan of Land, recorded in Middlesex (South) Registry of Deeds at Book 23706, Page 539 as Plan No. 756 (Sept. 29, 1993) (Trial Ex. 9) and Photographs (Trial Exs. 20, 22). The easement instrument states that it is “granted…in accordance with, and subject to all of the terms and conditions set forth in (i) Section 5 of said Master Deed, (ii) The Declaration of Trust, (iii) M.G.L. c. 183A and (iv) any ordinances and regulations of the City of Cambridge.” Transfer of Exclusive Easement for Parking Spaces, Trustees to Barnside Realty (Trial Ex. 2). At trial, the parties stipulated that the Trustees never brought this easement to the attention of the condominium unit owners and never received their assent before granting the easement to Barnside. (Trial Transcript at 8).

In June 1994, Barnside petitioned the Cambridge Planning Board for an amendment to the condominium’s special permit to allow Unit C-1 to be used as a professional office in addition to a potential retail or restaurant use. See Special Permit Amendment Decision (Jul. 26, 1994) (Trial Ex. 15). Barnside described to the Board the difficulty it had over four years in trying, unsuccessfully, to market Unit C-1 as a restaurant space. It noted that other nearby restaurants had failed, and this particular space lacked good sight lines from the street and the nearby park to draw in potential customers. Robert Brown, then chairman of the Trustees, along with two other condominium residents spoke in favor of the amendment. No one spoke in opposition, and the amendment was granted.

The Amended Special Permit Decision does not mention Area B or any outdoor parking spaces appurtenant to Unit C-1. The Decision did not condition Unit C-1’s change of use into office space on the provision of additional outdoor spaces. The Amended Decision only states that Barnside noted “the difficulty of using the condominium’s allocated parking spaces in the garage” during the public hearing before the Board. [Note 5] Amended Special Permit Decision at 2 (Jul. 26, 1994) (Trial Ex. 15).

Not long after the special permit was amended, the Garganos purchased Unit C-1 from the FDIC. Deed, FDIC to Paul and Sheila Gargano (Sept. 15, 1994) (Trial Ex. 4). The deed includes an exclusive easement to 18 numbered parking spaces located in the underground garage, but contains no mention of the parking easement over Area B, directly in front of Unit C-1. Deed, FDIC to the Garganos (Trial Ex. 4). Despite this omission, Mr. Gargano testified that the exclusive easement for parking over Area B was one of the main reasons why he decided to purchase the unit since it would provide convenient parking for his employees and clients visiting his law firm. (Trial Transcript at 87). As part of his due diligence prior to closing, Mr. Gargano had a title examination performed, reviewed Planning Board documents, and minutes from the Trustees’ meeting, and based on these materials he testified that he was satisfied that Unit C-1 had exclusive parking rights to Area B, though again, there is no mention of such rights in the Garganos’ unit deed. (Trial Transcript at 108-112)

Five years later, in 1999, the FDIC executed an instrument entitled “Transfer of Exclusive Easement for Parking Spaces” in favor of the Garganos. This instrument specifically granted the Garganos an exclusive parking easement to Area B, and provided that the grant was made “WITHOUT WARRANTY, REPRESENTATION, OR RECOURSE.” Transfer of Exclusive Easement, FDIC to Paul and Sheila Gargano, (Feb. 1, 1999) (Trial Ex. 6). Mr. Gargano testified that he had “no idea” why the FDIC sent him this instrument five years after he purchased Unit C-1. (Trial Transcript at 148, 169). He testified that he assumed those rights were included in his unit deed (even though the unit deed makes no mention of such rights) and he, his employees and clients used Area B for parking since moving his law practice to Unit C-1 in 1994.

Scott Schlissel has owned a unit in the condominium since 1988, and served on the condominium’s Board of Trustees from 2000 until 2006. (Trial Transcript at 16-17). Mr. Schlissel testified that from 1994 to 2006, the practice at the condominium was that Mr. Gargano, his employees and clients would park in the parking easement during business hours and then in the evening and on weekends, those spaces would be available to unit owners and their guests. (Trial Transcript at 17-18). The Trustees placed signs in the parking easement that stated “Gargano and Associates Parking Only 9:00 to 5:00 Violators will be towed.” [Note 6] (Trial Transcript at 19). Robert Brown, former chairman of the condominium Trustees, also testified to this “informal agreement” between the Garganos and the other unit owners. Deposition of Robert Brown at p. 41 (Trial Ex. 7).

This informal agreement fell apart in 2006 when Mr. Gargano became frustrated that unit owners kept their cars in the easement during business hours. Mr. Gargano testified that when he arrived at work, the cars were parked in front of his office door. (Trial Transcript at 123-25). Mr. Gargano notified the building manager on a few different occasions about these issues, but the situation apparently did not improve. In August 2006, an attorney with Mr. Gargano’s firm sent a letter on behalf of the Garganos to the condominium’s management company notifying it that unit owners and their guests no longer had permission to park in the easement during off- hours, and any violators would be towed at their expense. [Note 7] Letter, Gargano and Associates to Niles Company, Inc. (Trial Ex. 10).

The Trustees then filed their verified complaint in this court seeking a declaration that the exclusive parking easement they granted to the FDIC was void under G.L. c. 183A § 5(b) as written in 1993, and case law interpreting the statute as it then existed before it was amended in 1998.

Additional facts are set forth in the Analysis below.

Analysis

G.L. c. 183A, § 5(b), as it existed in 1993, provided “[t]he percentage of the undivided interest of each unit owner in the common areas and facilities as expressed in the master deed shall not be altered without the consent of all unit owners whose percentage of the undivided interest is affected, expressed in an amended master deed duly recorded.” The Trustees now contend that under the statute, the exclusive parking easement they granted to the FDIC was invalid, and for support they cite to Kaplan v. Boudreaux, 410 Mass. 435 (1991) and Strauss v. Oyster River Condominium Trust, 417 Mass. 442 (1994), which interpret c. 183A, § 5(b) as it existed at the time of the easement grant.

Kaplan concerned a grant of an exclusive parking easement by a condominium’s trustees. Such a grant, the court held, altered the unit owners’ respective percentage interests in the condominium common areas (“the grant of exclusive use to one unit owner of a common area is sufficient to change the relative interest of the unit owners in that common area,” 410 Mass. at 443). Under the then-existing provisions of G.L. c. 183A §5 (the version also in effect at the time of the grant of this easement), it thus could not be effective without the consent of all the unit owners. [Note 8]

Strauss followed Kaplan, again holding that exclusive easements to condominium common areas could not validly be granted without the consent of all unit owners. But it did so with a caveat. Kaplan and Strauss concerned grants to common areas. As Strauss made plain, however, “a developer may retain a property interest by excluding it from the interest subjected to the condominium statute.” 417 Mass. at 446.

The Garganos contend that Kaplan and Strauss do not apply because Area B was not condominium common area, and thus the consent of all of the unit owners was not required. Specifically, they argue “the Master Deed explicitly excludes the right to grant parking easements relative to Area B from the land transferred to the condominium [and thus] Area B never became part of the common areas.” Defendant Sheila Gargano’s Post-Trial Brief at 3. This argument fails for several reasons. The Master Deed makes no reference to Area B, which is a term first used in the Trustees grant of easement to the FDIC in 1993. See Easement, Trustees to Barnside Realty (Trial Ex. 2). A review of the Master Deed also makes clear that the land which comprises Area B, located at the far western edge of the development, was included in the property that the developer made subject to the condominium statute. The Master Deed provides that the land at 4 and 6 Canal Park and the buildings thereon constitute the “Premises” that was subject to the provisions of the condominium statute, c. 183A. Further in the Master Deed, under the section entitled “Common Elements”, it states in more detail

5. Common Elements: The “Common Area and Facilities” and also called herein “Common Elements” are hereby defined to consist of the Premises (emphasis added), including, without limitation, the following:

(a) The land and any recreational facilities on the Premises included in the Premises, lawns, gardens, walks, pathways, parking, and other improved areas not within the Units.

See Master Deed, Section 5(a) (Trial Ex. 1). The developer did, however, reserve a right to grant exclusive parking easements, but only to “the parking spaces located both in the first level garage and outside and shown on the Plans…” Master Deed, Section 5(f). The Master Deed identifies the outside parking spaces as S1-S12 and the Amended Master Deed identifies additional outside spaces as S13-S21. There is no evidence that these numbered outside parking spaces were located in what later came to be described as Area B. [Note 9] The photos submitted at trial show that Area B contains 10 parking spaces, none of which are numbered individually. Moreover, the Trustees’ easement grant specifically states that “Area ‘B’ is presently not appurtenant to any unit at the Condominium.” See Easement, Trustees to Barnside Realty (Trial Ex. 2). From these facts, I find and rule that Area B is common area under the terms of the Master Deed, and any alteration of the unit owners’ percentage interest in Area B required unanimous unit owner consent, which was never obtained.

The Garganos contend they meet an exception described in Strauss from unanimous unit owner approval for a “specific, minor accessory use of the abutting common area.” See Strauss, 417 Mass. at 447. In Strauss, the master deed at issue specifically allowed each condominium owner the right to install an outdoor shower with a privacy fence. The court distinguished a minor intrusion from a “roving authority to permit unspecified expansion of units into the common area.” Id. at 447-448. Here, the parking easement is hardly a minor intrusion into the condominium’s common area. It is a 3,412 square foot area with parking for 10 cars. This is not within a range that courts have considered to be a de minimis encroachment. See Tramonte v. Colarusso, 256 Mass. 299 , 301 (1926) (one eighth to one quarter inch bulge of a building was de minimis); See also, Feinzig v. Ficksman, 42 Mass. App. Ct. 113 , 118 (1997) (195 square foot encroachment of driveway and retaining wall not de minimis).

The Garganos next contend that the Trustees, having let twelve years pass before bringing this suit, should be barred from contesting the easement’s validity by the doctrine of laches. “Laches is an unjustified, unreasonable, and prejudicial delay in raising a claim. Laches is not mere delay, but delay that works disadvantage to another.” The Colony of Wellfleet, Inc. v. Harris, 71 Mass. App. Ct. 522 , 531 (2008) (internal citations omitted). But because the Trustees’ easement to the FDIC was null and void for failing to obtain the required unit owner consent, the FDIC could not grant the Garganos more than it had, and the Garganos cannot use laches to acquire rights they never possessed. See Sheriff’s Meadow Foundation, Inc. v. Bay- Courte Edgartown, Inc., 401 Mass. 267 , 270 (1987) (“laches cannot aid one who never had title”); Davenport v. Broadhurst, 10 Mass. App. Ct. 182 , 188 (1980) (laches “[does] not assist one…in acquiring an easement over another’s land.”); But see The Colony of Wellfleet, 71 Mass. App. Ct. at 531 (corporation barred by laches from contesting validity of initially defective deed that was later ratified). To allow the Garganos to acquire an exclusive easement based on a theory of laches and twelve years of unchallenged use would render the law of prescriptive easements (requiring twenty years of continuous, adverse use) meaningless.

The Garganos’ estoppel theory also fails. They contend that the familiar elements of estoppel have been met, specifically that the Trustees made representations to the Garganos’ predecessor, the FDIC, that induced a course of action by the FDIC (its sale to the Trustees of a condominium unit for a building manager) and the FDIC relied on the Trustees’ representation to its detriment. See Turnpike Motors, Inc. v. Newbury Group, Inc. 413 Mass. 119 , 123 (1992) (explaining elements of estoppel). But, with respect to easements, “we are aware of no case in Massachusetts recognizing the creation of an easement on broader principles of estoppel.” Blue View Construction, Inc. v. Town of Franklin, 70 Mass. App. Ct. 345 , 355 (2007) (internal citations omitted). Easements by estoppel arise in only two specific ways. “First, when a grantor conveys land bounded by a street or way, he, and those claiming under him, are estopped to deny the existence of the street or way, and his grantee acquires rights in the entire length of the street or way as then laid out or clearly prescribed. Second, when a grantor conveys land situated on a street in accordance with a recorded plan that shows the street, the grantor and those claiming under him, are estopped to deny the existence of the street for the distance as shown on the plan.” Id. (internal citations omitted). None of these estoppel theories is applicable to this set of facts.

The Garganos contend that the easement should be validated since they are bona fide purchasers for value who took title without notice of any defects. See Brief of Defendant Paul A. Gargano at 6. “Generally, the key question [in determining whether a bona fide purchaser is protected from adverse claims] is whether the transaction is void, in which case it is a nullity such that it never left possession of the original owner, or merely voidable, in which case a bona fide purchaser may take good title.” Bevilacqua v. Rodriguez, 460 Mass. 762 , 778 (2011). Here, the transaction is void because the Trustees could not alter the unit owners’ respective percentage interest in the condominium common area without their consent. “Where the bona fide purchaser is not protected against an adverse claim the purchaser must rely upon the covenants of his deed rather than dispossession of the true owner.” Id. (internal quotations omitted). The Garganos’ easement from the FDIC, however, was made “without warranty, representation, or recourse.” Transfer of Exclusive Easement, FDIC to the Garganos (Trial Ex. 6).

The Garganos are also charged with constructive knowledge of any defects that a search of the documents on record at the registry would reveal. Here, the defect was evident from the absence of documents that should have been on record at the time the Garganos purchased their unit. G.L. c. 183A, § 5(b) in effect at the time of the Garganos’ purchase provided that the unanimous consent of the unit owners to an alteration of their percentage interest in the common areas had to be “expressed in an amended master deed duly recorded.” No such amended master deed reflecting unit owner consent was on record when the Garganos purchased Unit C-1. The Garganos’ claim that they had no knowledge of any defect in the Trustees’ grant of easement is thus unpersuasive. [Note 10]

Finally, in the court’s summary judgment memorandum, taking all inferences in favor of the Garganos as required at that stage, I raised the possibility that the parking easement might have been required under zoning in order to make Unit C-1 commercially viable and thus preserve the condominium’s special permit, which was conditioned on a mix-use development. See Mem. & Order on the Parties’ Cross-Motions for Summary Judgment at 9. But no zoning ordinance in effect at the time of the easement grant was submitted into evidence at trial, and there is no basis for me to make a determination as to what zoning might have required. See Warren v. Bd. of Appeals of Amherst, 383 Mass. 1 , 8 (1981) (court cannot take judicial notice of zoning bylaw). Even if the relevant zoning ordinance was supplied, perhaps the outcome would be no different since there is no mention of additional outdoor parking spaces in the Planning Board’s Amended Special Permit Decision that allowed Unit C-1 to be marketed as office space.

Conclusion

For the foregoing reasons, the exclusive parking easement granted by the Trustees to the Barnside Realty Corp. is hereby declared NULL and VOID, and the Garganos are ENJOINED from excluding or otherwise prohibiting the use of Area B by other condominium unit owners and their guests.

Judgment shall enter accordingly.

SO ORDERED.