Commercial Wharf East Condominium Ass'n v. Department of Environmental Protection

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19-P-1025 Appeals Court
COMMERCIAL WHARF EAST CONDOMINIUM ASSOCIATION & others1 vs.
DEPARTMENT OF ENVIRONMENTAL PROTECTION.
No. 19-P-1025.
Suffolk. May 13, 2020. - July 31, 2020.
Present: Green, C.J., Maldonado, & Blake, JJ.
Department of Environmental Protection. License. Notice.
Administrative Law, Intervention, Official notice,
Regulations. Real Property, Condominium, Restrictions,
Littoral property. Trust, Public trust.
Civil action commenced in the Superior Court Department on
July 22, 2016.
Motions for judgment on the pleadings were heard by Michael
D. Ricciuti, J., and a motion to alter the judgment and for
reconsideration was considered by him.
Seth Schofield, Assistant Attorney General, for the
defendant.
John M. Allen for Commercial Wharf East Condominium
Association.
1 PT By the Sea, LLC, intervener; Madeleine Bickert,
intervener; Elias Pettengill, intervener; John Cadigan,
intervener; Laurie Cadigan, intervener; Ted Sykes, intervener;
Karen Sykes, intervener; and John Shea and Julia Shea, as
cotrustees of the John B. Shea 2014 Revocable Trust and the
Julia P. Shea 2014 Revocable Trust, interveners.
2
Sarah A. Turano-Flores for Madeleine Bickert & others.
GREEN, C.J. After the Department of Environmental
Protection (department) issued a decision concluding that
changes from commercial to residential use of units in the
Commercial Wharf East condominium required the condominium to
obtain a new license under G. L. c. 91, plaintiff Commercial
Wharf East Condominium Association (CWECA) sought review in the
Superior Court pursuant to G. L. c. 30A, § 14. Once there, the
owners of certain units in the condominium moved to intervene
and were allowed to do so, but only on a limited basis. Among
the arguments CWECA advanced in the Superior Court action was
its contention that the administrative proceeding was flawed
from inception, because unit owners in the condominium, though
given notice, were not joined as parties. A Superior Court
judge, acting on the parties' cross motions for judgment on the
pleadings, agreed with CWECA, vacated the administrative
decision, and remanded the matter to the department for further
proceedings. The department appealed,2 and we affirm.
2 The parties have raised no question concerning appellate
jurisdiction. Though an order of remand ordinarily is
interlocutory and ineligible for appeal, an order remanding a
matter to an administrative agency may be appealed where, as
here, it is final as to the agency. See, e.g., Commercial Wharf
E. Condominium Ass'n v. Department of Envtl. Protection, 93
Mass. App. Ct. 425, 430-431 (2018).
3
Background. Commercial Wharf dates back to Boston's
earliest colonial days and has been the subject of the
historical wharfing statutes. See, e.g., St. 1832, c. 51; St.
1900, c. 96. In 1964, as part of an urban renewal plan for the
downtown waterfront area and Faneuil Hall, the "Waterfront North
Area," including Commercial Wharf, was approved for
"[r]esidential development on the wharves . . . of a very unique
character, intimately related to the water and to the old brick
and granite buildings which should be retained and rehabilitated
for residential use."
On July 2, 1964, the Legislature enacted Chapter 663 of the
Acts of 1964, entitled "An Act Authorizing the Department of
Public Works[3] and the Boston Redevelopment Authority to
Exercise Certain Powers in Regard to Certain Tidelands Along the
Atlantic Avenue and Commercial Street Waterfront in the City of
Boston." Under Chapter 663, the Commonwealth conveyed "all
right, title and interest of the [C]ommonwealth in and to the
tidelands" specified therein to the Boston Redevelopment
Authority, including the tidelands underlying Commercial Wharf,
for the purpose of achieving the Urban Renewal Plan. St. 1964,
c. 663, § 2.4
3 The Department of Public Works was then the State agency
charged with tidelands licensing under G. L. c. 91.
4
A condominium master deed establishing the Commercial Wharf
East condominium was executed and recorded with the Suffolk
County registry of deeds on or about August 8, 1978. By its
terms, condominium units on either the first or second floor
(and two units on the third floor) were authorized for use
interchangeably for either residential or commercial purposes.
On September 22, 2003, the department initiated two
enforcement actions, by means of unilateral administrative
orders, against two owners of a combined thirty-six units in the
condominium.5 The orders alleged that the owners had converted
the units from commercial to residential use. Thereafter, on
July 14, 2004, the department issued a minor modification to the
two owners, pursuant to 310 Code Mass. Regs. § 9.22, expressly
authorizing the change of eleven specified units from commercial
to residential use, with one first-floor unit to remain a
facility of public accommodation. Shortly following the
department's issuance of the minor modification, the eleven
4 In 1972, the Legislature, through Chapter 310 of the Acts
of 1972, extended the procedure for redevelopment and
rehabilitation of tideland areas along the waterfront for any
urban renewal development project after January 1, 1971.
5 According to the orders, Commercial Wharf East Property
LLC owned twenty-six units and Wharf Condominium Units LLC owned
ten units. Both entities were developers who held the units for
sale.
5
units were sold to individuals under unit deeds that restricted
their use to residential.
On September 16, 2011, Boston Boat Basin, LLC (Boston
Boat), the owner and operator of a marina abutting the
condominium at the water's end of Commercial Wharf, filed a
request for determination of applicability under 310 Code Mass.
Regs. § 9.06 (RDA).6 The RDA alleged a change in use of
condominium units within the condominium, but did not identify
the units it contended had changed in use; instead, it asserted
that Boston assessor's and inspectional services records
suggested that thirty-six units were in commercial use in 1984,
while only one unit remained in commercial use in 2010.7 The RDA
named CWECA as the owner of the property at issue, but did not
name, or give notice to, the owners of any units within the
condominium.
On June 5, 2013, the department issued its determination of
applicability that concluded:
6 Boston Boat retained Fort Point Associates, Inc., the same
consultant that had represented the unit owners in the 2004
enforcement action that resulted in the 2004 minor modification.
7 The RDA acknowleded that the 2004 minor modification
authorized a change from twelve commercial units to eleven
residential units and one facility of public accommodation, but
that the remaining twenty-four units were changed from
commercial to residential use without authorization. Because a
change in use of twenty-four units affects more than ten percent
of the condominium, the RDA asserted that the entire condominium
building must obtain a new license.
6
"Relying upon the information as submitted by [Boston Boat]
. . . pursuant to 310 CMR 9.05(1)(b), the changes in use of
thirty-six (36) units from commercial to residential
subsequent to January 1, 1984 described in the [RDA]
require authorization."
On June 25, 2013, CWECA filed an administrative appeal of
the determination, pursuant to 310 Code Mass. Regs. § 9.17. In
its appeal, CWECA observed that it "neither owns nor controls
any of the condominium units located within the [condominium]."8
In an early scheduling order, issued on October 18, 2013, the
presiding officer observed:
"Although unit owners in CWECA's building may be affected
by this proceeding, none has intervened. CWECA should
clarify whether it has provided or intends to provide
notice of this proceeding to potentially affected unit
owners by filing a brief statement with the Case
Administrator as soon as practicable. The Department
should clarify its practice for appeals where a
Determination of Applicability for a condominium may
determine the rights of unit owners, more specifically
where the use of certain units potentially may be
affected."
In response, the department advised the presiding officer
by e-mail that "on information and belief, while there may not
be a practice specifically relating to Determinations of
Applicability, it has not historically been the practice of the
Department to notify individual unit owners when notice is
legally required by 310 CMR 9.00 to a property containing
condominiums, but has instead been to notify the condominium
8 But see footnote 15, infra.
7
association." Continuing, the department advised that "a letter
was sent to unit owners in this case after the Determination had
been issued and the appeal had been filed." Thereafter, the
presiding officer sent two notices to all unit owners, on
November 14, 2014, (regarding a prehearing conference) and on
December 22, 2014 (advising of CWECA's appeal and advising that
interested persons may intervene). Between the dates of the
first and second notices, CWECA filed a motion requesting that
the department identify the units it claimed had changed in use.
However, that request remained pending at the time of the
presiding officer's second notice.
Boston Boat filed its motion for summary decision on
February 23, 2015. The motion was not accompanied by any
affidavits or other evidentiary material; instead, it summarized
the evidence submitted with the RDA it previously had filed with
the department. CWECA requested, and obtained, an extension of
time to respond to Boston Boat's motion and filed requests for
discovery from the department and Boston Boat. CWECA also
filed, on January 22, 2015, a motion to disqualify the presiding
officer, based on her previous role as counsel to the
department's commissioner from 2000 to 2006, which included the
period in which the department issued the 2003 administrative
enforcement orders and the 2004 minor modification that resolved
those orders and approved the change of use of certain units.
8
On June 30, 2015, the presiding officer issued three orders
denying CWECA's discovery requests, its motion to disqualify
her, and its motion requesting the department to identify the
affected units.9 On July 2, 2015, Boston Boat filed a request
that the presiding officer establish a date by which responses
to its motion for summary decision would be due. By e-mail to
the parties later that day, the department's general counsel
advised that the presiding officer previously assigned to the
case had retired, effective as of June 30, 2015.
CWECA filed its opposition to Boston Boat's motion for
summary decision on November 6, 2015, accompanied by affidavits
and other supporting materials.10 On January 14, 2016, the
successor presiding officer issued a recommended final decision
recommending that Boston Boat's motion for summary decision be
9 A subsequent attempt by CWECA to obtain information from
the department identifying the affected units also was
unsuccessful.
10Among other things, CWECA's affidavits contended that
Boston Boat's assertion that thirty-six units had changed from
commercial to residential use could not be true, because (i) all
units on the third floor of the condominium or above have been
used only for residential purposes at all time since the
condominium was established; (ii) there were only thirty-six
units in total on the first and second floors of the
condominium; (iii) DEP approved eleven units for change from
commercial to residential use in the 2004 modification; and (iv)
at least seven other units among those on the first and second
floors remained in commercial use.
9
allowed.11 The commissioner adopted the recommended decision in
a final decision issued on May 3, 2016.12
On July 22, 2016, CWECA filed an appeal from the final
decision in the Superior Court, pursuant to G. L. c. 30A, § 14.
On September 21, 2017, certain of the then owners of units that
were the subject of the 2004 minor modification moved to
intervene in the Superior Court action. At a hearing on their
motion held on December 4, 2017, the motion judge expressed her
view that, because the unit owners who intervened had previously
been given notice and did not intervene "in a timely fashion,"
they should be allowed to intervene only on a limited basis and
would not be allowed to "expand the matter in any respect." She
suggested that they attempt to reach agreement with the
department on the scope of their involvement, including such
matters as filing consolidated briefs and prohibiting any
expansion of the administrative record, and present her with a
proposed order. Thereafter, a different motion judge adopted
the proposed order the interveners and the department jointly
11Under department practice, the presiding officer conducts
the adjudicatory hearing and issues a recommended decision, and
the commissioner thereafter issues a final decision, typically
adopting the recommended decision.
12The presiding officer thereafter issued a recommended
final decision, recommmending that CWECA's motion for
reconsideration be denied, and the commissioner adopted his
recommendation.
10
submitted on February 1, 2018. On July 16, 2018, the
interveners, CWECA, and the department all filed motions for
judgment on the pleadings. After a hearing, a third motion
judge issued an order denying the motions for judgment on the
pleadings, but vacating the commissioner's decision and
remanding the matter to the department, based on his conclusion
that the department "erred as a matter of law by proceeding
without the unit owners affected by the RDA." A "judgment"
entered,13 and (after its motion to alter the judgment and for
reconsideration was denied) the department appealed.
Discussion. General Laws c. 91, known generally as the
Waterways Act, "governs, among other things, water- and
nonwater-dependent development in tidelands and the public's
right to use those lands. Chapter 91 finds its history in the
public trust doctrine, 'an age-old concept with ancient roots
. . . expressed as the government's obligation to protect the
public's interest in . . . the Commonwealth's waterways.'" Moot
v. Department of Envtl. Protection, 448 Mass. 340, 342 (2007),
quoting Trio Algarvio, Inc. v. Commissioner of the Dep't of
Envtl. Protection, 440 Mass. 94, 97 (2003). After the Supreme
Judicial Court held, in Boston Waterfront Dev. Corp. v.
Commonwealth, 378 Mass. 629, 648-649 (1979), that tidelands may
13 See note 2, supra.
11
be used only for a purpose approved by the Legislature as a
public use, and that changes in use over time required
legislative approval, the Legislature amended G. L. c. 91, § 18,
to require a new license for changes in use of structures or
fill licensed under the Waterways Act. See St. 1983, c. 589,
§ 26. In addition, "[a]s part of its mandate to 'preserve and
protect' the public's rights in tidelands, G. L. c. 91, § 2, the
department, under G. L. c. 91, § 14, may not license uses or
structures in tidelands, except as authorized by G. L. c. 91,
§ 18, unless such structures 'are necessary to accommodate a
water dependent use.'" Moot, supra at 343.14
The department has promulgated regulations to administer
its tidelands licensing authority. Under 310 Code Mass. Regs.
§ 9.05(1) (2014), the holder of a tidelands license must file an
application with the department for (among other things):
"(d) any change in use of fill or structures from that
expressly authorized in a valid grant or license or, if no
such use statement was included, from that reasonably
determined by the Department to be implicit therein,
whether such authorization was obtained prior to or after
January 1, 1984."
In addition, under 310 Code Mass. Regs. § 9.06(1) (2014),
"[a]ny person who desires a determination whether 310 CMR 9.00
14By regulation, the department protected otherwise
unauthorized structures and uses lawfully commenced prior to
1984, provided no unauthorized structural alteration or change
in use occurs after January 1, 1984. See 310 Code Mass. Regs.
§ 9.05(3)(b) (2014).
12
presently apply to any area of land or water, or any activity
thereon, may submit to the Department a request for a
determination of applicability," together with certain specified
information concerning the location at issue. When seeking a
determination of applicability, the applicant is required by 310
Code Mass. Regs. § 9.13(1)(a) (2014) to send notice to (among
others) "all landowners and easement holders of the project site
and abutters thereto." The decision of the department to grant
or deny a license or permit, or on a request for a determination
of applicability, is subject to review in an adjudicatory
appeal, upon request of "an applicant who has demonstrated
property rights in the lands in question, or which is a public
agency," 310 Code Mass. Regs. § 9.17(1)(a) (2017), or "any
person aggrieved by the decision of the Department to grant a
license or permit who has submitted written comments within the
public comment period" (emphasis added). 310 Code Mass. Regs.
§ 9.17(1)(b) (2014).
In the present case, the owners of units in the condominium
were entitled to notice of Boston Boat's RDA, under 310 Code
Mass. Regs. § 9.13(1)(a), by virtue of their status as
landowners of the project site. "Ownership of a condominium
unit is a hybrid form of ownership in real estate, entitling the
owner to both 'exclusive ownership and possession of his unit,
G. L. c. 183A, § 4, and . . . an undivided interest [as tenant
13
in common together with all the other unit owners] in the common
areas . . . .'" Noble v. Murphy, 34 Mass. App. Ct. 452, 455-456
(1993), quoting Kaplan v. Boudreaux, 410 Mass. 435, 438 (1991).
Though the association of unit owners is the sole entity
authorized to litigate matters concerning the common areas, see,
e.g., Strauss v. Oyster River Condominium Trust, 417 Mass. 442,
445 (1994); Cigal v. Leader Dev. Corp., 408 Mass. 212, 217-218
(1990), the association itself holds no ownership interest in
the common areas, which are held by each of the unit owners in
proportionate interest.15 See G. L. c. 183A, § 5. Passing any
question whether Boston Boat's notice to CWECA would have been
adequate if its RDA affected only the common areas of the
condominium,16 the subject matter of Boston Boat's request
plainly implicated the units themselves, as it was principally
based on its assertion that a number of units had changed from
commercial to residential use after 1984. The RDA, and the
department's review of it, was fundamentally procedurally flawed
from its inception.
15In the present case, CWECA incidentally does hold a
partial interest in the common areas, by virtue of its ownership
of one of the commercial units in the condominium.
16We express no view on the question whether the unit
owners would have been entitled to notice as "abutters" to the
project site under 310 Code Mass. Regs. § 9.13(1)(a).
14
The department suggests that, even if Boston Boat's failure
to give notice of its RDA to unit owners within the condominium
was deficient, CWECA and the unit owners have failed to
demonstrate any prejudice to their substantial rights entitling
them to relief. See G. L. c. 30A, § 14 (7); Chiuccariello v.
Building Comm'r of Boston, 29 Mass. App. Ct. 482, 486 (1990).
Pointing to the fact that the first presiding officer in the
adjudicatory appeal directed that notice be given to the unit
owners in that proceeding, that a number of unit owners elected
to intervene, and that sixty-five of the unit owners submitted
affidavits as part of the appeal, the department suggests that
the unit owners suffered no prejudice by virtue of Boston Boat's
failure to give them notice in its RDA. However, the presiding
officer denied CWECA's request to require that the department
identify units alleged to have changed in use. Accordingly,
individual unit owners were unable to determine whether their
particular rights in their unit would be affected by the
proceeding. Moreover, in her order denying CWECA's request, the
presiding officer cited her view that CWECA was the owner of the
building, rather than the unit owners, and observed that the
proceeding was not an enforcement action against individual unit
owners.17 As to the first point, we have explained above why
17The presiding officer also observed that the burden of
proof in the adjudicatory appeal rested on CWECA rather than the
15
that view is incorrect as a matter of law. As to the
distinction between this determination of applicability and an
enforcement proceeding, unless the department is taking the
position (which it does not appear to be doing) that the
determination has no preclusive effect against the unit owners,
or unless the department otherwise is taking the position (which
it does not appear to be doing) that the determination binds
CWECA but not the unit owners, then the unit owners whose uses
will be directly affected by the determination need to be
identified in time for them to participate meaningfully in the
proceedings and to attempt to protect their respective property
interests.
We are unpersuaded by the department's suggestion that
requiring notice to unit owners within condominiums established
on filled tidelands will pose insurmountable practical
challenges in its administration of the Waterways Act. In fact,
review and evaluation of applications for a c. 91 license when a
condominium is first established will not, as the department
department. But that illustrates rather than negates the
significance of Boston Boat's failure to name the unit owners in
its RDA. In the RDA review, antecedent to the adjudicatory
appeal, the burden of proof rested on Boston Boat, and the unit
owners presumably could, at that earlier stage, have insisted
that Boston Boat identify which units were alleged to have
changed in use, so that the owners of those units would have an
opportunity to meet that assertion with evidence to the
contrary.
16
contends, impose impossible burdens on the department's staff
because of the multiplicity of parties; when a condominium is
first established, it is the unitary owner of the project who
submits the land and buildings to the provisions of the
condominium statute. See G. L. c. 183A, § 2. Only when an
attempt to review or modify a previously issued license arises
after the condominium is established, and units sold to third
parties, will multiple parties become involved. But for the
reasons we have explained, in such instances the unit owners
have substantial property interests entitling them to
participate meaningfully in the proceeding.
Judgment affirmed.
Order entered March 15, 2019,
denying motion to alter
judgment and for
reconsideration affirmed.