-: SJC-13316, Terrence Marengi and others
v. 6 Forest Road, LLC.
Dennis: Good morning, Your Honors.
May it please the court,
I'm Dennis Murphy on behalf of the appellants.
First, I'd like to appreciate that we're here
on an interlocutory basis,
which, if it weren't for that,
we'd have to suffer dismissal of a time barred claim
in order to challenge it, the bond order.
This appeal presents a straightforward issue
of statutory construction.
Under Chapter 4OA, Section 17,
zoning decisions are subject to judicial review.
Any person aggrieved by a zoning decision
can file an appeal in court to get that review.
And for direct abutters, like most of my clients,
the law presumes aggrievement as a matter of law.
In this case, the bond should be reversed
because the amendment that was enacted last year
doesn't expressly apply to comprehensive permits.
That's supported by the plain text,
the context, and the structure of the statutory provision
at issue, 40A 17.
Now, before the bond amendment was enacted,
Chapter 40A 17 already had a bond.
The bond was for subdivisions,
it was mandatory, and between two and $15,000.
That's paragraph seven of Section 17.
It also already provided for an award of costs
upon a finding of bad faith or malice.
When the legislature amended Section 17 last year,
it expanded the categories of zoning decision
that are subject to the bond.
It specifically added three:
special permits, variances, and site plan review.
Subdivisions under sections, paragraph.
-: About site plans, doesn't every 40B have a site plan?
-: No, Your Honor.
-: Almost every?
-: No, I would say some.
Some projects are subdivisions,
and they create lots with a subdivision plan.
Judge: How about this one?
This had a site plan, right?
-: This I believe was a condominium,
but the issue there is that the site plan review provision
of the Salisbury Bylaw was waived by the board
at the developer's request.
That's in the record.
The way to square the amendment last year
with the preexisting text of Section 17
is to read it in context.
So when the legislature added
three new types of zoning decisions
that are subject to a bond,
it enumerated very specifically
special permits, variances, site plans.
Subdivisions were already subject to a bond.
And so now you have four types of zoning-
-: You have the one that the legislature
feels the most strongly about,
that it's put the most oomph behind is 40B development
because it's addressing our housing crisis,
it's addressing communities that are trying to keep
low income people out of their communities,
it's critically important.
So we're gonna have this bond requirement
for fights about neighbors' variances
and fights about neighbors' special permits,
but not for the one that the legislature
seems to care the most about?
Isn't that odd?
Dennis: Yes, Your Honor.
It is a little odd.
There is this quirk in that Chapter 40B, Section 21
does make comprehensive permit decisions appealable to court
by any aggrieved person.
That's in accordance with the procedures
of Chapter 40A, Section 17, the zoning statute.
The best analogy to me is the other statute
that is for the purpose of developing affordable housing.
That's chapter 40R, Smart Growth.
And when the legislature put a bond in Chapter 40R,
it did it very explicitly.
It said that the bond is for two times
the annual carrying costs plus attorney's fees
minus any net income from the property
during the period of delay of construction
due to the appeal.
Now, the developer in this case is asking you
to read all of those words into the bond amendment
under 40A 17 that has one word, just costs.
Justice Kafker: I think the cost is-
Go ahead.
Sorry.
-: All right, it seems like you're not really addressing
Justice Kafker's question.
You are moving on to how much,
and I thought the question was about
whether it makes sense to have the bond requirement
under this new amendment not apply in the situation
that the legislature cared most about,
which was making a streamline process
for the ability to develop low income housing.
-: Yes, Your Honor, and I think that there are many avenues
that the legislature could have taken.
It could have made comprehensive permits
not subject to judicial review.
It could have put a provision-
-: [Justice Wendlandt] Well, let's not deal with
what other things the legislature could have done,
but instead deal with what they did do.
Dennis: So.
-: Does it make sense to you?
I mean, normally we construe statutes
to avoid absurd results,
and I think Justice Kafker's question
really puts a fine point on whether or not
the construction you propose is actually absurd,
where Section 40B is supposed to streamline the process
to get low income housing approved.
And you're saying in connection with that quick process,
you don't have the bond requirement,
but in connection with all other kind of
non low income housing,
you do have the bond requirement,
and does that make sense to you?
Dennis: It does, Your Honor.
-: Makes sense.
-: It does because when the legis-
So there are several different types of zoning decisions
that are subject to judicial review
under Chapter 40A, Section 17.
In addition to the ones that provide for a bond,
subdivisions, site plans, variances, and special permits,
there are also, in addition to comprehensive permits,
there are zoning enforcement appeals under Section 15.
Those are subject to judicial review,
but there's no bond provision.
If the legislature intended to make
everything subject to a bond,
it wouldn't have enumerated for specific types.
On the policy issue of affordable housing,
my answer is that if there was a bond
as there is in 40R adopted to 40B,
it would accomplish that purpose.
I will say that the act that in 2021,
the Omnibus Act enabling partnerships for growth,
that did not amend Chapter 40B.
It only amended chapter 40A.
And so it's consistent to think that the bond amendment
as part of that would apply to the 40A zoning decisions
and not to 40B.
-: Even though 40B incorporates 40A?
-: 40B is appealable under the procedures of Chapter 40A,
Section 17, yes.
-: So can I switch you to the cost?
'Cause there I think I find more your literal reading there
raises more complications to me.
So it says $50,000 to secure the payment of costs.
I mean, I've never heard of a case that had $50,000
in sort of traditional costs before,
so how do we interpret that?
Dennis: Nor have I, Your Honor.
And in fact, the the case law is really thin on this
because frankly, as a practicing attorney,
I almost never submit a bill of costs.
It's not worth my time.
And so the way to interpret it is
the meaning of costs in paragraph three
where they're subject to bond
and in paragraph six where they can be awarded,
they've got to be consistent.
We've got to construe that term the same way
in the same section of the same statute.
So absent statutory authorization-
Justice Kafker: Okay, but then I get confused,
and I'm honestly, I'm totally confused
on the second part of this.
So the cost they're providing for $50,000
to secure the payment of costs.
The costs that you described
that require malice and bad faith
are the kind you don't even file for, right,
because they're not worth your time and energy, right?
Dennis: Generally, you're right, Your Honor, yes.
-: So we're gonna allow 50 thou-
And this applies, again, into every little zoning case,
every little...
You know, a lot of towns,
everything is done through special permits.
So we're gonna have as much of $50,000 bonds
for these type of cases?
I'm just trying to make sense of this thing.
You know, your view is you don't file for these things,
but the legislature is provided for $50,000.
Doesn't that suggest that they're really not talking about
those type of technical costs,
and they're not talking about bad faith and malice?
-: Your Honor, the $50,000 amount alone,
particularly when you compare it to subdivision plans,
when the bond for subdivisions was adopted,
I think in the seventies, it's between two and 15,000.
That's mandatory.
The other is discretionary.
I think it's meant to be an outside limit.
I also believe that the strict interpretation
of the word cost is really confined by the rules
and the ordinary taxable costs for litigation items.
When the legislature has a bond,
and it applies for extraordinary costs
like carrying costs or interest or attorney's fees,
it says it, and I've cited a few.
I mentioned Chapter 40R.
The Boston zoning code, that has an express provision
that says the bond is to indemnify for damages.
It says it very clearly.
The word indemnify, the word damages.
You shouldn't read the word costs in 40A 17
to mean indemnify for damages
just because they happen to increase the amount
from 15,000 in 1975 for subdivisions
to now up to 50,000 in 2021 for other types of relief.
-: So why should we add cost tax, you know, taxable costs?
You're saying we shouldn't read these other things
into the statute,
but you're asking us to read in taxable
into the costs that are allowable under this $50,000 bond,
which I'll agree with you is outsized for taxable cost
but must mean something else given that it's not taxable.
-: I don't think you have to read in the term taxable
in order to have costs have their plain meaning.
They are defined under Rule 54,
and there is a case cited in my brief, Styller,
that actually says costs are to be interpreted.
-: [Justice Wendlandt] But in that Styller case,
which the author of which you may know,
that was about taxed cost.
It was not just about cost.
It was a specific insurance provision
that required the insurer to cover taxed cost,
which is why I asked the question here.
The statute did not see fit to say taxable cost.
Instead it said a number,
which suggests it's not limited to taxable costs.
-: Your Honor, the cost provision of 40A 17
was not amended by the bond amendment.
That paragraph six of that section
is the same as it's been for almost 50 years.
And so I'm a zoning attorney for quite some time.
I'm not aware of any case where there were costs awarded.
I did cite the Sheehan case,
which was the anomaly of some abutters in an appeal,
who, like my clients, are direct abutters
presumed aggrieved,
and the court found below that there was bad faith,
and the appeals court said that's inconsistent.
How can somebody be presumed to be aggrieved
with a right to judicial review
yet somehow that seeking that judicial review
is in bad faith,
and I think that a similar result should obtain here.
-: Isn't it possible to resolve the seeming inconsistency
by setting requiring the judge to set the bond amount
by considering the good or bad faith of the litigant?
Dennis: Yes, Your Honor,
and I was gonna touch for a moment on that balancing test.
In this case, there was no hearing,
there's no written memorandum,
we have no findings in the record.
So we're left to try to guess what the balancing might be.
The court has to consider the merits,
the relative financial means,
and then decide whether the burden on the plaintiffs
to post a bond is outweighed by the burden on the developer
from the delay.
In this case, the $50,000 was reduced to $35,000.
We don't know why.
I think this is a civil matter.
I believe that, in the criminal context,
the judge may have thought he was doing us a favor
by reducing it.
In fact, whether it's 50,000 or 35, the result is the same.
It it becomes an insurmountable hurdle
without refinancing mortgages,
and that's too steep a price to pay.
-: I'd just like to understand that a little better.
So to get a bond of $50,000,
I don't know the criminal context, it's $5,000, right?
What is it in the civil context,
you don't put up the whole amount, do you?
Dennis: You do, Your Honor.
We looked into this.
It's not in the record,
but we looked into this initially,
and you've got to have $50,000,
or in this case, $35,000 in order to make that surety
with the court.
-: Meaning you have to secure it with $50,000,
but you don't have to put up $50,000, right?
Dennis: That's correct, Your Honor.
But you have to have designated funds.
It's not a 10% or 20% ratio.
It's 100%.
-: And the funds have to be an escrow,
or they don't have to be an escrow?
And none of this is in the record,
so I guess this is not helpful.
Dennis: It's a brand new statute,
and you're asking a civil attorney
who is not used to posting bonds,
so my apologies, I actually don't know the mechanism,
and I hope never to find out.
-: Thank you very much.
-: Yes, thank you.
-: Okay, Attorney Silverstein.
-: Good morning, and may please the court,
Jonathan Silverstein for the private defendant
6 Forest Road LLC.
Your Honors, this bond applies to comprehensive permits
because comprehensive permits are umbrella vehicles
that encompass all manner of zoning relief.
They encompass variances,
they encompass special permits,
and they most certainly encompass site plans.
In fact, Chapter 40B, Section 21
requires or specifically references site plans.
It says conditions may be imposed
via the comprehensive permit on the site plans.
The comprehensive permit itself in this case
specifically lists the site plans
that are included among the quote unquote final plans
that are approved by the comprehensive permit.
And the comprehensive permit says this,
"This comprehensive permit shall be a master permit,
which shall subsume,
subsume all local permits and approvals
normally issued by local boards."
Now, this court has previously addressed in 135 Wells
what those local approvals are,
and it acknowledges that it's all local approvals,
everything from building permits
to every other local approval issued by a local board.
And local board is defined in 760 CMR 56.02
to include planning boards.
And under the Salisbury Zoning Bylaw,
planning boards are the site plan approval authority.
Now-
Justice Kafker: I'm gonna,
unless my colleagues have questions on this part,
I'd like to move to what I find the most confusing part,
which is costs.
Jonathan: Go ahead, Your honor.
-: I mean, this thing is like a giant exploding bomb.
I'm just trying to make sure I understand it
'cause it's gonna apply to everything,
variances, special permits.
If you challenge any of these things under,
and the way you interpret it,
which is without malice or bad faith,
every time someone challenges something,
they're gonna have to get as much as a $50,000 bond.
Jonathan: No, Your Honor.
-: Okay, well, why not?
Isn't that what it says?
-: Because this is a discretionary bond.
Unlike the subdivision bond, this is discretionary.
Justice Kafker: But a judge,
someone can impose this, right?
-: Can, yes, Your Honor.
And you have to look at the purpose
of this bond requirement,
which is laid out both in my brief and in the amicus briefs
that have been submitted to the court,
and particularly would point you to the REBA brief
and the abstract club, which lays out,
and also to the brief unprecedented in my experience
submitted by too many amicus to mention, including DHCD,
the implementing administrative body, Mass Housing.
And what these briefs show is that,
in 2015, a report was done by the Mass Housing Partnership
that identifies this terrible problem
of not frivolous, not bad faith,
but meritless land use appeals stopping housing projects.
Judge: I asked before-
Go ahead, I'm sorry.
-: But I agree that I could see why the legislature
would create this kind of powerful protection
for 40B projects, but they don't.
They may, but they apply the same powerful tool
to all these little projects.
So we have to read it,
and you're sort of the afterthought.
We have to do creative lawyering like you just did
to get to comprehensive permits in 40B.
But this bond provision as written
applies to every little dispute
that makes its way into the appeals court, the SJC,
and everything else, right?
It's just-
Jonathan: It can apply, Your Honor,
and, and I see your point.
-: Well, it's kind of scary
that if my neighbor's doing something I don't like,
and they're getting a variance or a special permit,
I have to come up with 50,000.
That's a kind of a-
Jonathan: But it-
-: That's kind of gonna shift the-
And it's discretionary, and I don't know what-
Jonathan: I take your point, but I do think you have-
It's discretionary, but it's not unbridled discretion.
The court has to apply this balancing test.
It has to look at the relative merit.
It has to look at the harm to the public interest.
I mean, it's very similar to the test
for a preliminary injunction.
It's not a slam dunk.
And I respectfully, like Mr. Murphy,
I've been doing land use law for 26 years.
You're not going to have abutters
arguing about dormers claiming the right to a $50,000 bond
because they're not gonna be able to meet
the financial component of the test,
and most likely they're not gonna be able to meet
the relative marriage component of the test.
Justice Kafker: Well, it goes if the court finds
that the harm to the defendant or to the public interest
resulting from the delays caused by the appeal
outweighs the financial burden of the surety.
Yeah, it's kind of open-ended, isn't it?
Jonathan: Well, but that, again,
that's, yes, that's that one component.
-: Makes some sense in a 40B context.
Jonathan: It sure does.
-: But again, it's also gonna be applied
to every little person's dispute with, you know,
and every variance in every special permit.
You know, it's like crazy.
-: Did the legislature paint it with two broad a brush?
Perhaps, but that's a question for another day
and another case that involves one of these,
as you say, little cases.
Justice Kafker: So what is your-
-: But I do think we have to look at-
Justice Kafker: What your definition of cost then?
So cost to you is what?
-: So cost to me would be what the balancing test refers to,
which is the harm to the public interest
or to the defendant.
And in this case, that harm was supported by affidavit.
And I do think we have to look
at the remedial nature of the statute.
And when I started to reference a moment ago,
the MHP report comes out
in the very next legislative session,
this exact provision finds its way
into a piece of legislation that passes in the House.
And it takes, as these things do,
a few years to finally get into this Omnibus budget,
but all along the way, a piece of legislation,
all along the way you see reasons proffered
both by supporters and by legislators themselves.
What is this about?
This is remedial.
This is to prevent situations
where relatively non meritorious appeals
pause, raise the costs,
and very frequently kill these projects.
-: But does it include a problem with the supply chain?
Does it include a change in interest rates
and things like that?
-: I would submit, and this goes to Mr. Murphy's,
I'm not asking you to read in the specific language of 40R
that's very specific.
This language just says harm.
It says harm,
and it doesn't say double the carrying cost,
so I'm not asking you to read anything, you know,
I'm not asking you to read that in.
It says harm.
What is the harm to the public interest
and to this specific developer?
-: Well, if the affordable housing is going to go
down the drain
because since the appeal interest rates went up 3%
and the supply chain's a problem because of the pandemic,
so does that fit or not fit into cost?
Jonathan: I submit it does fit,
and that's why the legislature had to put a cap on it
because that harm could be hundreds of thousands
or millions,
but instead it capped it
because there had to be some reasonable upper limit
on what this harm could amount to
and what these costs of this harm
could be imposed upon plaintiffs for.
-: [Justice Wendlandt] Is that harm limited
by the good or bad faith of the appellant?
-: No, Your Honor.
I mean-
-: You can award costs for delay such as supply chain,
et cetera, that Justice Lowy is referring to,
even though the party appealing
was acting entirely in good faith?
-: Well, I would submit that good faith and bad faith,
it's a continuum, right,
and the legislature tells the trial, the motion judge
to consider the relative merits of the appeal.
Here-
-: No, that's for setting the bond.
I'm going to when awarding costs.
-: Well, I would submit that setting the bond
makes no sense if the costs aren't gonna be awarded
at the end of the day.
-: [Justice Wendlandt] Right, but doesn't-
-: If this is gonna be remedial.
-: What do you do with the statute provision that says
cost shall not be allowed?
-: Right, that is a earlier past general cost provision
that does not apply to these costs
under this bond provision.
Clearly, the purpose,
because if you're gonna require bad faith,
which is, I don't know how many cases this court has seen
of bad faith costs being awarded.
In my 26 years, I've seen it once.
Now, if the purpose of the statute is remedial,
as it's clear from the legislative history,
if the purpose is to deter non meritorious,
not bad faith, non meritorious appeals,
then what's the purpose of only allowing those costs
to be imposed when there's a showing of bad faith?
It would be pointless.
There would be no point to the legislature
of having taken five or six years after this report
to impose this remedial provision
if they were going to keep in this general requirement
that you show bad faith to get those costs.
It doesn't make any sense.
-: [Justice Wendlandt] But the legislature
didn't excise that paragraph from 40A.
Jonathan: Well, they wouldn't because that paragraph
applies broadly to all types of appeals.
This paragraph, paragraph three,
applies only to appeals from the grant of zoning relief.
It doesn't apply to the appeals of denial of zoning relief.
That still is governed by paragraph seven.
It doesn't appeal to the grant or denial
of zoning enforcement.
That also would still require a showing of bad faith
to get costs.
Justice Kafker: Conditions, if there's an appeal related
to the conditions imposed, would that be covered?
So again, this may be a sort of an ignorant question,
but if I've got a neighbor who all in favor of 40B housing,
but they didn't deal with that the fire trucks
can't get in properly,
so I'm just appealing this because of the conditions,
would that be subject to the bond?
Jonathan: It could be, Your Honor,
because that would still be-
You can't just appeal a condition.
You have to appeal the grant of relief.
Justice Kafker: Right, so I've got some person
who is worried about fire on their block.
They're all in favor of the 40B project.
They just don't like the way they've designed the road.
So they're appealing,
and they've gotta now come up with $50,000
because this thing's gonna make money.
You got to satisfy those financial requirements, you know,
so it's gonna be easy for the developer
to show that they've got big dollars at stake here,
so that little neighbor is gonna have to come up
with 50 grand.
-: But you still have to convince the court
that the relative merits favor imposition of that bond,
and that's not an insignificant requirement.
That's why the legislature imposed that requirement
unlike in the subdivision bond requirement,
which is automatic.
Just briefly, Your Honors,
I want to point out that the trial court was not required
to hold a hearing on the bond requirement
and clearly did consider the merits.
And in my brief,
I go through each of the elements of the test,
including the relative merits of the appeal,
and respectfully, the trial court had every right
to rely on the fact that there were expert reports submitted
both by the developer and peer reviewed
by independent experts retained by the board,
and there was nothing but just conjecture
on the part of the plaintiffs,
and those relative merits are plain on the face.
The plaintiff's complain about the fact that
the board could have denied the comprehensive permit
under a safe harbor.
Clearly not required to do so.
And though some of the plaintiffs
do have presumptive standing,
we rebutted that presumption with these expert reports,
and nothing was proffered to meet the plaintiff's burden
of demonstrating that they do have standing.
And for all those reasons,
I think I submit that the trial court
properly weighed the relative merits of the case
in imposing the bond requirement.
-: Did you say standing?
Jonathan: Yes, Your Honor.
-: Abutters?
Jonathan: They are abutters,
which gives them a presumptive standing under the statute
and under the case law standard (indistinct)
and all the case law of this court,
that presumption of standing can be rebutted.
We rebutted it by submitting expert reports
from not just us but from the board itself,
and nothing but conjecture was submitted
by the plaintiffs in response.
-: [Justice Wendlandt] Thank you.