No. 98-6220Commonwealth of Massachusetts Superior Court CIVIL ACTION. MIDDLESEX, SS.
April 26, 2001
MEMORANDUM OF DECISION AND ORDER ON MOTION BY THE COMMONWEALTH OFMASSACHUSETTS FOR SUMMARY JUDGMENT AND PLAINTIFF’S CROSS-MOTION FORSUMMARY JUDGMENT AS TO LIABILITY
JUDITH FABRICANT, J.
INTRODUCTION
This eminent domain case is before the Court on defendant’s motion for summary judgment, based on its contention that the undisputed facts establish the plaintiff’s inability to prove that the 1998 taking caused any diminution in the value of its leasehold. The plaintiff has cross-moved for partial summary judgment on liability only. After a series of hearings,[1] and review of all materials submitted, the Court concludes that the defendant’s motion must be allowed, and the plaintiff’s motion must be denied.
BACKGROUND
The stipulated exhibits, deposition testimony, and affidavits offered in connection with the present cross-motions provide the following facts.[2] The plaintiff is the lessee of a parcel of land located on the eastbound side of Route 9 in Framingham.[3] The plaintiff operates a restaurant on the site, with seating for 69 customers. The adjacent parcel, along Route 9 to the east, is under common ownership with the site, and is also leased; that lessee operates a motel.
On August 11, 1980,[4] a registered engineer submitted to the Framingham Planning Board a single site plan for the two parcels (stipulated exhibit 19). The site plan provided dimensions of both buildings, layout of all parking spaces serving both businesses, information regarding the number of motel rooms, restaurant seats, and employees of both businesses, and a calculation, based on those numbers, of the number and dimensions of parking spaces required under the zoning by-law as in effect at that time.[5] The calculations appearing on the site plan indicate that 153 parking spaces were required, 133 for the motel and 20 for the restaurant, and that the layout provided 155 spaces.[6] By means of a stamped and signed notation appearing on the exhibit, the clerk of the Planning Board certified that “On 8/19/80 the Framingham Planning Board Voted that, in it’s (sic) opinion, this parking layout complies with the parking by-law.”
Between the 1980 site plan approval and the time immediately before the 1998 taking that is the subject of this action, two changes occurred with respect to parking at the site. The Town changed the provisions of the zoning by-law, so as to increase both the number of parking spaces required and the set back requirements.[7] In addition, in 1994, the Commonwealth’s Department of Highways took a strip of land along Route 9 in front of the restaurant and motel, moving the boundary line of the leased properties toward the buildings by some five feet.
These changes required no action on the part of the plaintiff, and did not render unlawful the plaintiff’s continued operation of its business, because of the so-called “grandfather” provision in the by-law.[8] They did, however, render the existing use of the two parcels non-conforming under the zoning by-law. By the Commonwealth’s calculations, the non-conformance amounted to some 42 parking spaces; the zoning changes increased the number of parking spaces required for the two parcels to a total of 168, while the new set-back requirements, combined with the 1994 taking, reduced the number of available spaces to 126. Although the Commonwealth offers no affidavit to support these calculations, they appear to be consistent with the provisions of the 1997 by-law, considered in relation to the dimensions shown on the site plan.
On April 2, 1998, the Commonwealth’s Department of Highways again took a strip of land along the site, this time 2,155 square feet, moving the boundary in front of the restaurant and motel toward the buildings by distances ranging from eleven to eighteen feet. As before, the change required no action on the part of the plaintiff, and did not render unlawful the plaintiff’s continued operation of its business, because of the so-called “grandfather” provision in the by-law. It did, however, further reduce the area of the leased site available for parking, thereby increasing the pre-existing non-conformance.[9]
At some time in 1998 or before, the plaintiff put its leasehold on the market through real estate broker Michael Seadia.[10] According to Seadia’s affidavit, “[a]fter making an offer, at least one prospective buyer became concerned about the parking non-conformance, and withdrew its offer to purchase. That uncertainty caused the Plaintiff to conclude that sale of the leasehold to any party would be financially impossible.” The plaintiff withdrew the business from the market, and brought this action seeking compensation for damage to the value of its leasehold.[11]
In support of its claim the plaintiff offers the testimony of four proposed expert witnesses, set forth in their affidavits, as follows. Real estate broker Saedia states that he has been a licensed broker active in the commercial market in the Framingham area for twelve years, and that he is familiar with the premises and with “the requirements of buyers and their lenders.” Saedia assumes, based on the accompanying affidavit of William Kearney, that “the 1994 Taking may have had a de minimus effect on the compliance of the Premises with the Town of Framingham Zoning Code.” Based on that assumption, he concludes that “this configuration would not affect the saleability or financeability of the Premises, and my opinion of the fair market value of the leasehold after the 1994 Taking was $250,000.” Seadia offers no explanation of the basis for that opinion; he makes no reference to comparable sales, income analysis, or any other method or standard of valuation. Seadia goes on to state that, in his experience, “if a piece of real estate is not in conformance with local zoning regulations, either buyer’s or lender’s lawyers will not issue a `clean’ zoning opinion,” and that “without a `clean’ zoning opinion, no matter how attractive a location, the property is unsaleable and unfinancable” (sic).
Seadia acknowledges the zoning changes, but asserts that “[t]o the extent that the leasehold Premises was in compliance with the 1980 Site Plan and the underlying 1978 Zoning Ordinance,” subsequent changes “would not have affected the value of the leasehold, since its use and occupation was `grandfathered.'” Seadia then expresses his understanding that the 1998 taking “had a material effect on the compliance of the Premises” with the zoning by-law, and on that basis asserts his opinion that “the very uncertainty caused by this material variance would have made the leasehold impossible to finance.” He therefore concludes, again without reference to any comparable properties or other standard or method of valuation, that “the fair market value of the leasehold after the 1998 Taking was a nominal sum, not more than $75,000.”
Seadia goes on to point out the necessity for any prospective new owner to obtain approval for transfer of liquor and common victualer licenses, and notes references to compliance with zoning ordinances in application forms for such licenses. He suggests, without expressly so stating, and without any apparent effort to reconcile his earlier statement regarding the effect of the grandfather provision, that any new owner would have to obtain approval of a site plan in order to obtain the necessary license transfers. On this basis, he asserts, “I would not risk listing or showing the Premises without a disclaimer that it does not now conform with the 1980 Approved Site Plan.” He goes on to opine that “if an exhaustive site plan review were to be carried out, with traffic studies, layouts, public hearings and appeals, the professional costs could easily exceed $100,000. In my opinion, the risks and timing of such a modification are so great as to make the Premises unsaleable to the normal buyer for such a leasehold.”[12]
Plaintiff’s second expert witness is real estate broker John M. Carroll. He offers lengthy experience both as a broker and as a bank lending officer in the area. He expresses opinions virtually identical with those of Seadia,[13] except that he values the leasehold at $200,000 before the 1998 taking, and $50,000 after. Like Seadia, he does not explain how he arrives at those figures, and makes no reference to any comparable properties, income analysis, or other method or standard.
The affidavit of William Kearney indicates that he is a “civil designer and draftsman” with some twenty-three years experience. He describes his work over those years as “surveying and laying out developments which `max out’ the respective development sites in the MetroWest area.” He defines “maxing out” as “maximizing the development potential of a site, based on many factors,” including zoning and other regulatory requirements, as well as “tricks of the trade.” Based on his experience, Kearney asserts familiarity with the practices of Framingham regulatory boards, such that he has “developed a feel for what I can and cannot submit and expect to have a plan approved.”
Kearney reports that he reviewed data from the 1998 taking overlayed on the 1980 site plan, which, according to his description, “indicates 59 parking spaces.” This number, as Kearney clarified in his deposition testimony, reflects only spaces on the plaintiff’s parcel, without reference to the motel parcel, even though the 1980 site plan, as approved by the planning board, combines both. Kearney limited his consideration to the restaurant parcel because, as he testified, “That’s what I was asked to do.” Kearney then “attempted to `max out’ the parking spaces after the 1998 Taking, using 1978 zoning criteria.” This effort, he reports, “yielded approximately 49 conforming parking spaces . . . I could find no room for additional non-conforming spaces.” In his opinion, this layout “would not be accepted by the Framingham Planning Board.” The same analysis of the site after the 1994 taking but before the 1998 taking “yielded 59 conforming parking spaces.”[14] In his opinion, “this Post-1994 Taking layout of spaces would be accepted by the Framingham Planning Board.” At his deposition, Kearney opined that the Town “probably” would permit a new owner to operate the restaurant as is, without any change in use or in size, regardless of both the 1994 and 1998 takings.
The plaintiff’s final proposed expert witness is Robert Gemma, a professional engineer and president of the firm that employed Kearney at the time of his work on this case.[15] Gemma asserts his familiarity with the site, with the Framingham zoning by-law, and with practices of the Town regarding zoning enforcement. He expresses opinions regarding an attached plan, labeled “scheme #4,” which he refers to as “the 1994 Plan.” That plan presents a layout for the combined site, including both the restaurant and the motel, reflecting the 1994 taking. The layout shown on scheme #4 for the restaurant parcel follows Kearney’s drawing, and shows 59 spaces, while the layout for the motel parcel shows 96 spaces. One additional space lies on the boundary between the parcels, making a total of 156 spaces on the combined site.[16]
Gemma opines that “the Building Commissioner would have approved the 1994 Plan as being in substantial compliance with the Approved Site Plan,” because it is “functionally equivalent . . . since it provides the same number of parking spaces in substantially the same locations,” and the differences “are minor and within the broad discretionary power of the Zoning Enforcement Officer.” He continues, “since the 1994 Plan is substantially in compliance with the Approved Site Plan, the setbacks for parking areas subsequently enacted are inapplicable pursuant to M. G. L. c. 40A, § 6.” Finally, Gemma opines that “after the 1998 Taking . . . the Site cannot be construed in any way as to be in compliance with the Approved Site Plan.”
DISCUSSION
This Court grants summary judgment where no genuine issues of material fact exist and the summary judgment record entitles the moving party to judgment as a matter of law. Hakim v. Massachusetts Insurers’ Insolvency Fund, 424 Mass. 275, 281 (1997); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community Nat’l Bank v. Dawes, 369 Mass. 550, 553 (1976); Mass.R.Civ.P. 56(c). The moving party bears the burden of affirmatively demonstrating that there is no genuine dispute of material fact on every relevant issue. Pederson v. Time, Inc., 404 Mass. 14, 16-17
(1989). A party moving for summary judgment who does not bear the burden of proof at trial may demonstrate the absence of a triable issue either by submitting affirmative evidence negating an essential element of the nonmoving party’s case or by showing that the nonmoving party has no reasonable expectation of proving an essential element of the claim at trial. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). Once the moving party establishes the absence of a triable issue, the party opposing the motion must respond and allege specific facts establishing the existence of a genuine issue of material fact. Pederson, 404 Mass. at 17. “To avoid summary judgment, an opposing party may not rely upon his pleadings or bald conclusions but must set forth specific facts showing that there is a genuine issue for trial.” United States Trust Co. of New York v. Herriott, 10 Mass. App. Ct. 313, 318
(1980); see also Trustees of Tufts College v. Parlane Sportswear Co., Inc., 4 Mass. App. Ct. 783, 784 (1976).
As the plaintiff properly conceded at the hearings on these motions, to prove its claim for damages based on the 1998 taking, it must show that the taking caused a diminution in the value of its leasehold. Se Rite-Media, inc. v. Secretary of Massachusetts Highway Department, 429 Mass. 814, 815 (1999), citing John Hancock Mutual Life Ins. Co. v. United States, 155 F.2d 977, 978 (1st Cir. 1946). The plaintiff’s theory, in that regard, is that the taking made the site inadequate to meet parking requirements under the zoning by-law, so that potential buyers would have to consider the necessity of obtaining discretionary relief from the Town. The prospect of entering into such a process, with its attendant costs and uncertain outcome, would scare off buyers and their lenders, reducing the market for, and thus the market value of, the leasehold.
The general proposition that uncertainty about regulatory requirements affects market value is so intuitively obvious as to require no expert support. The problem here, however, is that the undisputed facts establish the existence of such uncertainty before the 1998 taking, due to the combined effects of the zoning changes and the 1994 taking. Given those facts, in order to establish the element of causation, the plaintiff must show more than the existence of uncertainty after the taking; it must show that the 1998 taking, as distinct from those other events, brought about a measurable change in the level of uncertainty, so as to affect market value.
The plaintiff attempts to make that showing by offering evidence that the non-conformance existing before the 1998 taking could have been cured with relative ease, merely by redrawing parking lot lines in a manner likely to be approved by the Town, but that the 1998 taking increased the non-conformance to a level that was not subject to any feasible cure. The theory is plausible on its face, but is not supported by the evidence offered. The purported cure for the pre-1998 situation, as offered by the plaintiff’s expert witnesses, does not stand up to close examination.
Under the plain terms of the zoning by-law, as well as the zoning enabling act and case law under it, if a buyer were to make any change in the use of the site, or any substantial alteration or improvement of the structure, the site would become subject to all requirements of the zoning by-law in effect at the time of the change. See G. L. c. 40A, § 6 Derby Refining Co. v. Chelsea, 407 Mass. 703, 708 (1990). Thus, from the point of view of nearly any potential buyer evaluating the site before the 1998 taking — that is, any potential buyer not willing to be locked in to continuing the same use, without altering or improving the building — the crucial question would be whether the site could be brought into compliance with the zoning code as in effect at that time, not as in effect in 1980. If it could not, such a buyer would have to face the prospect of seeking discretionary relief from the Town, with all of the attendant costs and uncertainties, just as would a potential buyer after the 1998 taking. The evidence offered by the plaintiff simply fails to address that question, while the undisputed facts strongly indicate that the site could not have been brought into compliance with the zoning code as in effect in 1997, either before or after the 1998 taking. The expert testimony offered, considered in the light most favorable to the plaintiff, shows only that before the 1998 taking, reconfiguration of parking spaces could have brought the site into compliance with the 1979 zoning code.[17] Such compliance would not have cured the problem then existing. The evidence thus fails to show any impact of the 1998 taking on the marketability of the leasehold to a typical buyer.
As the plaintiff’s witnesses acknowledge, a buyer could have avoided the necessity of compliance with current zoning requirements by continuing the same use, without altering or improving the building, pursuant to the grandfather provision. See G. L. c. 40A, § 6; Derby Refining Co. v. Chelsea, 407 Mass. at 708. For a buyer willing to be limited to such use, neither the 1994 taking nor the 1998 taking would present any obstacle, any more than those changes prevent the plaintiff from continuing the operation of its business exactly as before. Such a buyer could operate the business exactly as it presently exists, in full compliance with the zoning by-law pursuant to Section IVA, and could truthfully so certify in application for all necessary licenses. Thus, for such a buyer, the zoning non-conformance, whether arising from changes in the by-law or from one or both takings, would be of no significance, and should have no effect on value. As far as the evidence discloses, however, no such potential buyer exists.
The undisputed facts establish that the regulatory uncertainty cited by the plaintiff’s witnesses as impairing the market value of its leasehold existed prior to the 1998 taking. The plaintiff has failed to offer evidence from which a reasonable jury could find that the 1998 taking exacerbated that uncertainty so as to further impair its market value to any measurable degree. Accordingly, the defendant is entitled to judgment as a matter of law.[18]
CONCLUSION AND ORDER
For the reasons stated, the Motion by the Commonwealth of Massachusetts for Summary Judgment is ALLOWED, and the Plaintiff’s Cross-Motion for Summary Judgment as to Liability is DENIED.
_________________________________________ Judith Fabricant Justice of the Superior Court
April, 2001