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Wildlands Trust of Southeastern Massachusetts, Inc., et al. v. Cedar Hill Retreat Center, Inc., et al. (Lawyers Weekly No. 09-046-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2016-01432-BLS2
WILDLANDS TRUST OF SOUTHEASTERN MASSACHUSETTS, INC. &
JOHN AND CYNTHIA REED FOUNDATION,
Plaintiffs
vs.
CEDAR HILL RETREAT CENTER, INC. &
BALLOU CHANNING DISTRICT UNITARIAN UNIVERSALIST ASSOCIATION, INC.,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANTS’ MOTIONS TO DISMISS
PLAINTIFFS’ AMENDED COMPLAINT
This is an action seeking to enforce a Conservation Restriction imposed on real property located in Duxbury, Massachusetts (the Property). Plaintiffs are the Wildlands Trust of Southeastern Massachusetts, Inc. (Wildlands Trust) and the John and Cynthia Reed Foundation (the Foundation). Plaintiffs allege that the current owner of the Property, the defendant Cedar Hill Retreat Center, Inc. (Cedar Hill), is engaging in commercial activities in violation of the Conservation Restriction. Also named as a defendant is the Ballou Channing District Unitarian Universalist Association, Inc. (Ballou Channing), the original owner of the Property and the Grantor of the Conservation Restriction. Plaintiffs allege that the Ballou Channing induced the Foundation into making a $ 3 million gift in return for Ballou Channing’s promise to create the Conservation Restriction and to use the Foundation’s donation to preserve the Premises in conformity with that restriction (the “Gift Agreement”).
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This lawsuit was instituted on May 4, 2016. In their original Complaint, plaintiffs asserted the following counts against both defendants: breach of the Gift Agreement (Count I); breach of the Conservation Restriction (Count II); promissory estoppel (Count III); unjust enrichment (Count IV); and violation of Chapter 93A (Count V). The defendants filed motions to dismiss. On December 30, 2016, this Court allowed those motions in part. See Memorandum of Decision and Order dated December 30, 2016 (the 2016 Decision). As to Ballou Channing, this Court dismissed Count II because it no longer owned the Property that was subject to the Conservation Restriction. As to Cedar Hill, this Court dismissed Counts I, III and IV – those counts based on the Gift Agreement –because Cedar Hill was not a party to the Gift Agreement. Count V alleging a violation of Chapter 93A was dismissed as to both defendants.
Six months later, plaintiffs amended their complaint to assert new claims against both defendants and to add back some claims that this Court had previously dismissed. Specifically, the Amended Complaint contains a new claim against both defendants based on the same allegations that were the basis of Counts I, III and IV of the original Complaint, but with a wrinkle: this new claim asserts a breach of what is described as a “Letter Agreement” between the defendants Ballou Channing and Cedar Hill. Plaintiffs say that they only learned of this Letter Agreement as a result of discovery in the case but now claim they are third party beneficiaries entitled to enforce it. As a consequence of this new count for breach of contract (the Letter Agreement), the Amended Complaint added Cedar Hill back to the previously dismissed claims against it of unjust enrichment and promissory estoppel. The Amended Complaint also added Ballou Channing back as a defendant on the claim alleging a breach of the Conservation Restriction, even though this Court in its 2016 Decision had dismissed Ballou Channing as a defendant on that claim. Finally, the Amended Complaint accuses Ballou
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Channing of intentional misrepresentation, an entirely new claim. See Count VI of Amended Complaint.
Defendants now bring a second set of motions to dismiss, targeting these new counts and claims, but also asking this Court to dismiss those counts that I had previously concluded would remain in this case. This Court admits to some frustration in dealing with this latest round of motions which, like the earlier ones, are brought pursuant to Rule 12(b) (6), Mass.R.Civ.P. On one hand, plaintiffs seem intent on circumventing this Court’s earlier decision with new (and ultimately unsupported) theories which needlessly complicate what would seem to be a fairly straightforward case. On the other hand, in moving to dismiss all counts (including those that this Court already declined to dismiss earlier), the defendants make essentially the same arguments they made in connection with their first set of motions. To the extent that they rely on materials beyond the four corners of the Complaint, this Court does not understand why it is important (much less appropriate) to litigate these issues under the standard applicable to Rule 12(b) (6) motions.
Ultimately, this Court concludes that the new claims must be dismissed and the old claims must remain – at least until discovery is complete. The Motions are therefore Allowed in part and Denied in part. Thus, after much expenditure of time and resources, this case is back to where it stood in December 2016: the case survives but only as to those claims that remained in the case after this Court’s 2016 Decision.
BACKGROUND
Because many of the allegations made in the Amended Complaint are the same as those alleged in the original one and are fairly summarized in the 2016 Decision, this Court will not
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rehash all of them here, except to summarize those allegations (including any new ones) that are necessary to place the issues in context.
The Reeds are abutters to the Property, which consists of about twelve acres of land. When Ballou Channing acquired the Property, it had certain restrictions on its use. In 2007 when the Reeds learned that these restrictions were soon to expire, they entered into discussions with Ballou Channing about extending and strengthening the restrictions. Ballou Channing represented that it would take about $ 150,000 a year to preserve and maintain the Property without the need to engage in commercial revenue-generating activity. The Reeds, through the Foundation, agreed to make a $ 3 million gift to Ballou Channing to cover these expenses. On October 17, 2008, a Conservation Restriction was recorded with the Plymouth Registry of Deeds that named Ballou Channing as Grantor and plaintiff Wildands Trust as Grantee.
The following year, Ballou Channing created Cedar Hill, a 501(c)(3) organization, to own and operate the Property. Ballou Channing also filed a Petition with the Supreme Judicial Court seeking approval of a transfer of the Property to Cedar Hill, as required by G.L.c. 214 § 1. Exhibit C to Amended Complaint.1 The Petition alluded to the $ 3 million gift from the Foundation and stated that it was to compensate Ballou Channing “for (i) its loss of development rights; (ii) the expense associated with creating the Conservation Restrictions and operating and maintaining the Property in accordance with such restrictions over the years; (iii) the beneficial impact the Conservation Restrictions have upon the surrounding community; and (iv) the fact that the Conservation Restrictions will encumber the Property in perpetuity.” ¶ 15 of Exhibit C to Amended Complaint. The Petition added, however, that neither Ballou Channing nor the
1 The Amended Complaint states that the Petition was filed “without notice” to the plaintiffs. It does not state that the plaintiffs were unaware of its contents, however.
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Foundation had restricted Ballou Channing’s use of the $ 3 million gift “nor envisioned the fund would be used exclusively for the management of the Property.” Id. The Petition further stated that Ballou Channing and Cedar Hill had entered into a Letter Agreement (attached to the Petition) to ensure that Cedar Hill continued to use the Property in accordance with the terms of the Conservation Restriction. To accomplish those ends, Cedar Hill would receive $ 1.4 million from Ballou Channing. That Petition was subsequently approved and the Property was transferred to Cedar Hill by Quitclaim Deed in October 2009. See Exhibit D to Amended Complaint.
The Letter Agreement referenced in the Petition forms the basis of one of the new claims at issue and is attached to the Amended Complaint as Exhibit A. The parties to it are Ballou Channing and Cedar Hill. The Letter Agreement contains certain “Recitals” which acknowledge, among other things, the Conservation Restriction with Wildlands Trust. The Letter Agreement states that $ 1.4 million is being transferred to Cedar Hill to be used “for the purpose of maintaining, operating and improving the Property in accordance with the Conservation Restriction and this Agreement.” It gives member congregations of Ballou Channing permission to use the Property so long as they comply with the Conservation Restriction. Under a section entitled “Dispute Resolution,” the Letter Agreement sets forth a procedure that Ballou Channing must follow in the event that it “becomes aware of or reasonably suspects” that Cedar Hill is not operating the Property in compliance with the Conservation Restriction. If mediation fails, the parties to the Letter Agreement may bring their dispute to Land Court.
The Amended Complaint alleges that since this transfer, Cedar Hill has engaged in commercial revenue-generating activities on the Property which are in violation of the
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Conservation Restriction. It alleges that Cedar Hill has not used the funds to preserve the Property but that it has rather used some portion of them to promote this commercial activity. Ballou Channing is aware of Cedar Hill’s violations and has refused to take steps to end them. Finally, the Amended Complaint accuses Ballou Channing of intentional misrepresentation, relying on essentially the same allegations that form the basis for plaintiffs’ claim that Ballou Channing breached the Gift Agreement.
DISCUSSION
As a result of the 2016 Decision, this case consisted of essentially two claims. One claim (that involved three separate counts) named Ballou Channing as the sole defendant and was based on allegations relating to its receipt of the $ 3 million gift. The second claim was against Cedar Hill as the sole defendant and alleged breach of the Conservation Restriction, with Wildlands Trust as the sole plaintiff. The Amended Complaint now seeks to reinsert Cedar Hill as a defendant on the first set of claims on the theory that both plaintiffs are third party beneficiaries to the Letter Agreement, and are entitled to enforce its terms against both defendants. The Amended Complaint also seeks to add Ballou Channing back as a defendant on the claim based on a violation of Conservation Restriction and to include the Foundation once again as a plaintiff. This Court concludes that these amendments fail to state a claim on which relief may be granted, for some of the same reasons set forth in its earlier opinion.
A. The Letter Agreement
Count III of the Amended Complaint alleges a breach of the Letter Agreement. Count IV and Count V alleging unjust enrichment and promissory estoppel are based in part on the
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same allegations. 2 This Court concludes neither plaintiff has a legal basis for asserting any rights under the Letter Agreement so that Count III must be dismissed, and Counts IV and Count V surviving only as to Ballou Channing as the recipient of the $ 3 million gift. See fn. 3, supra.
The parties to the Letter Agreement are the defendants Cedar Hill and Ballou Channing. Plaintiffs are not parties to the Letter Agreement nor are they identified as having any rights under it. Plaintiffs claim that they nevertheless have standing to enforce its terms because they are third party beneficiaries to it. This Court disagrees.
The Restatement (Second) Contracts § 304 defines the circumstances under which a nonparty to a contract can claim a right to enforce it as a third party beneficiary: “[a] promise in a contract creates a duty in the promisor to any intended beneficiary to perform the promise, and the intended beneficiary may enforce the duty.” (Emphasis added). Intended beneficiaries are different from “incidental beneficiaries,” who have no right under the contract, even though they may benefit from it. Restatement (Second) Contracts § 315. Section 302 of the Restatement defines the difference between them: one is an intended beneficiary if “(a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.” As explained in comment (e) of Section 304 of the Restatement, one qualifies as an intended beneficiary “where the promisee clearly manifests an intention to confer on the beneficiary a legal right to enforce the contract.”
In accordance with these principles, this Court must look to the language of the Letter Agreement and the circumstances surrounding it to determine whether either plaintiff here is an
2 They are also based on allegations relating to the Gift Agreement, a claim that remains in this case even after today’s decision. Because of that, Count IV and V will not be dismissed but may be asserted against Ballou Channing only.
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intended third party beneficiary. Anderson v. Fox Hill Village Homeowners Corp, 424 Mass. 365, 366 (1997). If the terms of the contract are clear and unambiguous, then its interpretation – including whether it confers rights on a third party – is a question of law. Although there is no requirement that the intended beneficiary be identified by name in the contract, the intent of the contracting parties to create in that third person a right to enforce the contract must be “clear and definite.” James Family Charitable foundation v. State Street Bank and Trust Co., 80 Mass.App.Ct. 720, 724 (2011), quoting Lakew v. MBTA, 65 Mass.App.Ct. 794, 798 (2006). Thus, even if the contract is ambiguous, there must be some circumstances surrounding the making of the contract that demonstrate in a clear and definitive manner that the parties to the contract intended to create rights in a nonparty to enforce its terms.
In the instant case, there is nothing in the language of the Letter Agreement or in the circumstances surrounding it (as described in the Amended Complaint) which suggest that either Wildlands Trust or the Foundation has the right to enforce its terms. As described in the Petition to the SJC, its purpose was to ensure that, in exchange for Ballou Channing’s transfer of the Property together with certain funds, Cedar Hill would maintain and operate the Property in compliance with the Conservation Restriction. If it did not, then the Letter Agreement spelled out exactly what rights Ballou Channing (not the plaintiffs) had against Cedar Hill. Although the plaintiffs may stand to benefit from the Letter Agreement, they are at best incidental beneficiaries, with no legal basis to pursue either Ballou Channing or Cedar Hill for a breach, assuming that one occurred. Indeed, plaintiffs conceded at a hearing on this Motion that neither plaintiff even knew of the Letter Agreement until discovery in this case.
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B. The Conservation Restriction
Count II alleges a breach of the Conservation Restriction. In its 2016 decision, this Court dismissed this claim to the extent that it was asserted against defendant Ballou Channing, since it no longer owned the Property. It also concluded that only plaintiff Wildlands Trust, not the Foundation, could enforce it. In an apparent effort to circumvent that ruling, plaintiffs have added back both of these parties, ostensibly on the grounds that Cedar Hill is merely an “instrumentality” of Ballou Channing, which still “controls” the Property. The allegations in the Amended Complaint, even construed in the light most favorable to plaintiffs, do not support that.
Cedar Hill is a separate entity which, according the Petition approved by the SJC, is a nonprofit corporation duly registered with the Attorney General. The Amended Complaint alleges no facts to dispute that. According to the Petition and to the Letter Agreement, Cedar Hill was created to take over from Ballou Channing the responsibilities of maintaining the Property, which was conveyed to Cedar Hill after the SJC approved the Petition. The Amended Complaint does not dispute that either. That Cedar Hill had certain contractual obligations to Ballou Channing under the Letter Agreement– or that the Letter Agreement gave Ballou Channing certain rights in the event Cedar Hill did not comply — does not change the fact that these are separate corporate entities. The Amended Complaint does not allege any facts to support the notion that Ballou Channing and Cedar Hill are alter egos, such that these corporate formalities should be ignored. In short, Ballou Channing is not a proper defendant on this claim, for the same reasons that this Court articulated in its 2016 Decision. Nor is the Foundation a proper plaintiff for the reasons set forth in that same decision.
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C. Intentional Misrepresentation
To state a claim for fraudulent misrepresentation, the complaint must allege facts showing that: “(1) the defendant made a misrepresentation of fact; (2) it was made with the intention to induce another to act upon it; (3) it was made with the knowledge of its untruth; (4) it was intended that it be acted upon, and that it was in fact acted upon; and (5) damage directly resulted therefrom.” Equipment & Systems For Industry, Inc. v. Northmeadows Construction Co., Inc. 59 Mass.App.Ct. 931 (2003), quoting Graphic Arts Finishers, Inc. v. Boston Redev. Authority, 357 Mass. 40, 44 (1970). Rule 9(b), Mass.R.Civ.P. requires that a claim of fraud must be alleged with particularity. The Amended Complaint fails to satisfy this heightened pleading standard or allege facts sufficient to support each of the requisite elements. Specifically, it fails to identify a misstatement of existing fact, or to allege that it was made by the defendant with knowledge as to its falsity at the time that it was made.
The misrepresentation claim (Count VI) makes only two allegations that could be at all construed as relating to these two elements. First, it states that Ballou Channing “failed to disclose its plans for the Foundation’s $ 3 million Gift, which plans were wholly inconsistent with the Foundation’s expressed donative intent and the basis on which Wildlands Trust entered into the Conservation Restriction.” ¶ 89 of Amended Complaint. This is vague at best. Moreover, a failure to disclose can form the basis for liability only if one has a duty to disclose, and the Amended Complaint shows no such duty to disclose anything. Whatever obligation the Foundation had to use the money in a certain way is embodied in the Gift Agreement, but breach of a contractual obligation does not amount to fraud. Second, this count states that Ballou Channing affirmatively misrepresented to the Foundation how much it would cost to maintain and preserve the Premises. This is apparently based the following allegation:
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In 2007 and into 2008, in meetings between the Reeds on behalf of the Foundation, and members of the Cedar Hill Committee of Ballou Channing, including several meetings that occurred in the living room of the Retreat Center, Ballou Channing represented to the Foundation that approximately $ 150,000 per year would be required to preserve and maintain the Premises.
Amended Complaint, ¶ 20. It is questionable whether this yearly estimate as to future expenses is a fact at all as opposed to a nonactionable statement of opinion or prediction as to future events. Moreover, the Amended Complaint fails to allege who made this prediction (except in the most general way) or that the speaker knew that it was false when made. These are allegations critical to support a claim as serious as fraud. In sum, this count fails to meet the standard of either Rule 9(b) or of Iannachino v. Ford Motor Co., 451 Mass. 623, 636 (2008).
D. Remaining Claims
In addition to asking this Court to dismiss those claims which are new to the case, the defendants seek dismissal of those claims that the 2016 Decision left in the case. Specifically, Ballou Channing seeks to dismiss that count alleging a breach of the Gift Agreement on the grounds that there is no writing that satisfies the Statute of Frauds. It makes additional arguments as to the claims for unjust enrichment and promissory estoppel, but these arguments are all fact-based and thus not properly decided on a Rule 12(b) (6) motion. As to the Statute of Frauds, this Court already addressed this issue in its 2016 Decision: although it concluded that the plaintiffs could not rely on the Conservation Restriction to satisfy the Statue of Frauds,3 it was persuaded by plaintiffs that, because discovery might very well turn up writings sufficient to comply with the Statute of Frauds, this issue was best resolved by way of a motion for summary judgment. This Court continues to be of that view.
3 Inexplicably, the plaintiffs continue to argue that the Conservation Restriction is sufficient. Reasserting arguments that have already been rejected by this Court, however, is not only improper but does nothing to advance the case and is a waste of judicial and litigation resources.
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Cedar Hill — the sole defendant on the claim alleging a breach of the Conservation Restriction — separately argues that this Court should narrow that claim to the single violation alleged to have occurred on September 8, 2012. This same issue came up on July 13, 2017 in connection with plaintiffs’ Motion to Compel Discovery and defendants’ Motion for a Protective Order. This Court initially agreed with the defendants, but then reconsidered following oral arguments on the instant motions. As explained in a Memorandum of Decision dated October 17, 2017, this Court is now of the view that Count II is not limited to the September 8, 2012 event but also encompasses activities on the Property following that date.
CONCLUSION AND ORDER
For the foregoing reasons, Ballou Channing’s Motion to Dismiss is ALLOWED as to Count II (breach of Conservation Restriction), Count III (breach of Letter Agreement) and Count VI (intentional misrepresentation). It is DENIED as to Count I (breach of the Gift Agreement) and as to Counts III and IV to the extent that these counts are based on the Gift Agreement. As to Cedar Hill’s Motion to Dismiss, it is ALLOWED as to Counts III through V, so that
Only Count II remains as to Cedar Hill and then only to the extent that Count II is asserted by Wildlands Trust.
_________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: November 10, 2017
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Posted by Stephen Sandberg - December 7, 2017 at 9:30 pm

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Wildlands Trust of Southeastern Massachusetts, Inc., et al. v. Cedar Hill Retreat Center, Inc., et al. (Lawyers Weekly No. 09-034-17)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2016-01432-BLS2
WILDLANDS TRUST OF SOUTHEASTERN MASSACHUSETTS, INC. &
JOHN AND CYNTHIA REED FOUNDATION,
Plaintiffs
vs.
CEDAR HILL RETREAT CENTER, INC. &
BALLOU CHANNING DISTRICT UNITARIAN UNIVERSALIST ASSOCIATION, INC.,
Defendants
MEMORANDUM OF DECISION ON PLAINTIFFS’ MOTION
FOR RECONSIDERATION OR CLARIFICATION
On July 13, 2017, the parties were before this Court on the Plaintiffs’ Motion to Compel Discovery and the Defendants’ Motion for a Protective Order. Defendants argued that the discovery sought was beyond the scope of what was at issue in this lawsuit and that the plaintiffs’ requests were unduly burdensome and amounted to harassment. This Court denied the motion from the bench, with only a brief explanation of its reasons by way of a margin note. Plaintiffs now move to reconsider and/or clarify this Court’s earlier ruling.
Although initially skeptical of this request, this Court is now convinced that clarification is indeed required. Although plaintiffs are not entitled to the broad discovery they had originally sought (which was unnecessary and unduly burdensome), this Court was wrong to deny any discovery sought by their Motion to Compel. It is also apparent that the parties may have interpreted that earlier order almost as if it were a dispositive motion and that the discovery ruling meant that certain parts of plaintiffs’ Complaint were not properly before this Court. This Court did not anticipate or intend that and now wishes to correct that misimpression. The
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Motion to Reconsider is therefore ALLOWED, with the following offered by way of explanation.
This is an action seeking to enforce a Conservation Restriction (CR) imposed on real property located in Duxbury, Massachusetts (the Premises). The parties to the CR are the plaintiffs Wildlands Trust of Southeastern Massachusetts, Inc. (Wildlands Trust) and the defendant Cedar Hill Retreat Center Inc., (Cedar Hill). In its Amended Complaint, 1 Wildlands Trust alleges that Cedar Hill is engaging in “commercial revenue generating activities…as well as other activities that are violative of the Conservation Restriction.” ¶ 7 of Amended Complaint; see also ¶48-50. In its Motion for a Protective Order (and again in opposing the Motion to Reconsider), Cedar Hill took the position that Wildlands Trust’s ability to complain of Cedar Hill’s activities on the Premises is far narrower – that is, that it is limited to a single event in September 8, 2012 when there was a wedding reception on the Premises. This did not involve a complaint that the Premises were being used to generate revenue.
In denying the plaintiffs’ Motion to Compel, this Court was of the view that a single violation was enough to entitle the plaintiffs to the equitable relief they sought, so that discovery that went beyond the September 8, 2012 incident was unnecessary. Because that violation was more narrowly drawn, however, the relief would not extend to revenue generating activities even if plaintiffs could prove that such activity violated the CR. Thus, to proceed simply on the basis of the September 2012 violation would not settle the dispute among the parties.
Cedar Hill argues that there is a legal impediment to Wildlands Trust seeking broader relief. It relies on Section IVA and IVF of the CR. Those provisions require that Wildlands Trust give notice to Cedar Hill of any claimed violation and that before resorting to court to seek
1 Although there is currently pending a motion to dismiss some counts in this Amended Complaint, the claim alleging breach of the Conservation Restriction is not the target.
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equitable relief, the parties must mediate the dispute. Following the September 8, 2012 incident, Wildland notified Cedar Hill of the alleged violation, and (as required by the CR) mediation of the dispute began and continued over the next couple of years. During that time period, additional notices were sent by plaintiffs’ counsel that did raise complaints about the Premises being used for revenue generating activities, thus going beyond that which was at issue in the September 2012 event. Throughout this time period, a mediator was available to the parties, but his efforts were unsuccessful. On February 26, 2016, Wildlands Trust counsel sent a letter to counsel for Cedar Hill that cited the failed mediation and outlined the various violations that it alleges had taken place on the Property. See Exhibit F to Amended Complaint. Cedar Hill takes the position that only the September 8, 2012 is properly before the Court, since the other alleged violations have not been subject to mediation. This Court disagrees.
Clearly, the defendants were put on notice of the other activities that Wildlands Trust regards as a violation, including those activities that generated revenues. This Court understands that, strictly speaking, each and every event did not generate a notice and a separate and distinct mediation. However, activities that post-dated the original notice in 2012 occurred at a time when mediation was ongoing and was the subject of correspondence between the parties and their lawyers. The purpose of the mediation was to encourage the parties to try first to resolve their differences among themselves before they resorted to litigation. That purpose has been fulfilled.
Returning then to the discovery dispute, this Court now agrees with Wildlands Trust that it is entitled to find out more about what happened on the Premises, but also concludes that such discovery should be strictly circumscribed. Events occurring before September 8, 2012 would not seem to be particularly relevant nor could they be the basis for equitable relief, since the
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mediation triggered by the September 2012 event had not yet begun. Apparently there have been over 300 events on the premises since 2012. The cost of third party discovery, including depositions of those involved in those events, would be quite expensive, harassing and in this Court’s view, entirely unnecessary, since there are other more efficient ways of determining the type of activity that occurred. Moreover, plaintiffs will be entitled to equitable relief provided that they show that the activity violates the terms of the CR; that there were a dozen violations of a similar nature or a hundred of them would seem to be largely irrelevant.
At the end of the hearing on the Motion to Reconsider, plaintiffs’ counsel made a proposal that in this Court’s view makes sense and that it now adopts: Cedar Hill shall produce for deposition a 30(b)(6) witness who has most familiarity with activities at the Premises since September 2012. This Court imposes an eight hour time limit on this deposition. In addition, Cedar Hill should be required to produce the spreadsheet of activities that it has maintained in the ordinary course of its business; although a partial spreadsheet has been produced, it was apparently incomplete and not a business record.
This Court does not envision any discovery beyond that. In particular, Wildlands Trust may not use contact information related to users of the Premises to notice any individual’s deposition without leave of court. This Court also does not see the need at this point for any third party discovery. As already stated, the number of violations is far less important than the nature of the activity conducted at the Premises. Plaintiffs should proceed with discovery with that in mind.
_______________________________ Janet L. Sanders
Justice of the Superior Court
Dated: October 16, 2017
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Wildlands Trust of Southeastern Massachusetts, Inc., et al. v. Cedar Hill Retreat Center, Inc., et al. (Lawyers Weekly No. 12-174-16)

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COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2016-01432-BLS2
WILDLANDS TRUST OF SOUTHEASTERN MASSACHUSETTS, INC. &
JOHN AND CYNTHIA REED FOUNDATION,
Plaintiffs
vs.
CEDAR HILL RETREAT CENTER, INC. &
BALLOU CHANNING DISTRICT UNITARIAN UNIVERSALIST ASSOCIATION, INC.,
Defendants
MEMORANDUM OF DECISION AND ORDER
ON DEFENDANTS’ MOTIONS TO DISMISS
This is an action seeking to enforce a Conservation Restriction imposed on real property located in Duxbury, Massachusetts (the Premises). Plaintiffs are the Wildlands Trust of Southeastern Massachusetts, Inc. (Wildlands Trust) and the John and Cynthia Reed Foundation (the Foundation). Plaintiffs allege that the current owner of the land, defendant Cedar Hill Retreat Center, Inc. (Cedar Hill), is engaging in commercial activities in violation of the Conservation Restriction. Also named as a defendant is the Ballou Channing District Unitarian Universalist Association, Inc. (Ballou Channing), the original owner of the land and the Grantor of the Conservation Restriction. Plaintiffs allege that the Foundation made a $ 3 million gift to Ballou Channing in exchange for Ballou Channing’s agreement to create the Conservation Restriction and to use the Foundation’s donation to preserve the Premises in conformity with that restriction (the “Gift Agreement”).
The case is now before this Court on the defendants’ motions to dismiss pursuant to Mass. R. Civ. P. 12(b) (1) and Mass. R. Civ. P. 12(b)(6). Ballou Channing moves to dismiss all
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counts asserted against it; Cedar Hill moves to dismiss some but not all of the counts against it. The motions raise difficult questions, some of which would benefit from discovery and cannot be decided at this early stages in the case. Still, there are certain claims that are not supported by the facts alleged in the Complaint or the applicable law, and which must therefore be dismissed, for reasons set forth below.
BACKGROUND
The Complaint contains the following allegations which, for purposes of these motions, are assumed to be true. The Foundation is a private charitable foundation created by John and Cynthia Reed. The Reeds are abutters to the Premises, which consists of 12.23 acres of land. Ballou Channing is a nonprofit religious corporation organized pursuant to Chapter 180 of the General Laws. Ballou Channing acquired the Premises in 1980 through a Deed of Gift that imposed certain restrictions on its use. Located on the Premises are a building and improvements that have historically been known as the Cedar Hill Retreat Center. Ballou Channing would periodically permit the center to be used by its member congregations.
In 2007, the Reeds learned that the restrictions imposed on the Premises through the Deed of Gift were to expire within the next couple of years. Thee Reeds wished to preserve the Premises in conformity with those original restrictions; negotiations with Ballou Channing ensued. Ultimately, the Foundation and Ballou Channing entered into what the Complaint calls the “Gift Agreement,” whereby the Foundation would make a contribution of $ 3million in return for the creation of a Conservation Restriction. It was understood between the parties that the $ 3 million donation would alleviate the need to engage in any commercial activities on the Premises and cover what was anticipated to be Ballou Channing’s “annual operating expenses” in maintaining it. Ballou Channing had represented to the Foundation that those expenses were
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about $ 100,000 to $ 150,000 per year. There is no allegation in the Complaint that the Gift Agreement was reduced to writing.
The Conservation Restriction was reduced to writing and is attached to the Complaint as Exhibit A. It is dated October 17, 2008 and was recorded with the Plymouth County Registry of Deeds. Ballou Channing is named as the Grantor in the Conservation Restriction; the Grantee was the plaintiff Wildlands Trust, a non-profit organization dedicated to conservation and preservation of land in Southeastern Massachusetts. The stated purpose of the Conservation Restriction is to preserve the Premises “in its predominately natural, scenic wooded and open space condition” and to prohibit any use of the Premises not in conformity with that purpose. Section III of the Conservation Restriction sets forth what uses are prohibited and what are permitted. Section VIII (entitled “Assignability”) makes it clear that the burden the Conservation Restriction imposes “shall run with the Premises in perpetuity” and “shall be enforceable against Grantor and the successors, licensees and assigns of the Grantor holding any interest in the Premises.” In January 2009, Ballou Channing created Cedar Hill, a 501(c) (3) organization, to own and operate the Premises. Ballou Channing transferred the Premises to Cedar Hill by a Quit Claim Deed which specifically references the Conservation Restriction. The Quit Claim Deed also states that the Premises are subject to an easement that granted each congregation that is a member of Ballou Channing the right to use the Premises so long as that use does not violate any term of the Conservation Restriction. The Quit Claim Deed is attached to the Complaint as Exhibit B. It was recorded with the Plymouth County Registry of Deeds on December 31, 2009.
Neither the Quit Claim Deed nor the Conservation Restriction mention the Foundation’s $ 3 million gift. The plaintiffs contend, however, that the parties intended that the money would
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be transferred over to any subsequent owner of the premises so as to maintain the land in conformity with the limitations on its use. Ballou Channing knew this, but when it conveyed the Premises to Cedar Hill, Ballou Channing kept $ 1.6 million of the $ 3 million gift for itself and only conveyed $ 1.4 million to Cedar Hill.
Cedar Hill used a portion of the $ 1.4 million to renovate a structure on the Premises and proceeded to use the building as a rental property, advertising its availability to the public for overnight stays at a fee. In collecting fees for this use and permitting activities on the Premises such as food preparation, alcohol consumption, weekend family reunions, and other social uses, Cedar Hill has (according to the Complaint) violated the terms of the Conservation Restriction. The Complaint alleges that Ballou Channing is aware of Cedar Hill’s violations and has refused to take steps to end them. The Complaint does not allege that Ballou Channing has through the use of its easement itself violated the Conservation Restriction.
DISCUSSION
The standard that this Court applies to the instant motions is well established. This Court is required to accept as true the allegations contained in the Complaint, drawing all inferences in favor of the plaintiff. This deference to the nonmoving party, however, is not unbounded. To withstand a motion to dismiss under Mass. R. Civ. P. 12(b) (6), the Complaint must contain “allegations plausibly suggesting (not merely consistent with) an entitlement to relief . . . .” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-557 (2007). Although a Complaint need not set forth detailed factual allegations, a plaintiff is required to present more than labels and conclusions and must raise a right to relief “above the speculative level.” Id.
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The Complaint in the instant case alleges the following counts, each of them brought by both plaintiffs and asserted against both defendants: breach of the Gift Agreement (Count I); breach of the Conservation Restriction (Count II); promissory estoppel (Count III); unjust enrichment (Count IV); breach of Chapter 93A (Count V). Ballou Channing’s Motion targets all five counts, whereas Cedar Hill seeks to dismiss all counts except for Count II. Because there is substantial overlap in the arguments that each defendant makes, this Court’s discussion will focus on each count rather than divide the discussion up between the two motions.
A. Breach of the Gift Agreement (Count I)
According to the Complaint (as read in the light most favorable to the plaintiffs), the Foundation entered into an agreement with Ballou Channing whereby Ballou Channing would create the Conservation Restriction and would use a $ 3 million donation by the Foundation to maintain the land so as “to preserve the ecological and aesthetic condition of the Premises in perpetuity.” Although Ballou Channing did indeed create the Conservation Restriction, it did not use the $ 3 million donation as promised, instead creating a separate entity (Cedar Hill) to hold title to the land and keeping at least $ 1.6 million of the donated funds to use for its own purposes unrelated to conserving the Premises. This Court concludes that, notwithstanding Ballou Channing’s numerous arguments to the contrary, this does state a claim against Balllou Channing. It does not state a claim as to Cedar Hill, however, who is not alleged to be a party to the Gift Agreement and cannot be sued on the theory that it was a third party beneficiary. By way of explanation, this Court addresses each of the arguments made by the defendants as to why this claim should be dismissed.
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1. Standing
Both defendants contend that the plaintiffs do not have standing to bring this claim which arises from the allegations that Ballou Channing failed to use the Foundation’s $ 3 million donation as promised. In support, plaintiffs rely on G.L.c. 12 §8, which states that the Attorney General “shall enforce the due application of funds given or appropriated to public charities within the commonwealth and prevent the breaches of trust in the administration thereof.” That statute has been interpreted to bar individual plaintiffs from challenging the manner in which a charitable institution has managed or used its money. See e.g. Garland v. Beverly Hospital Corp., 48 Mass.App.Ct. 914 (1999) (plaintiff who had donated funds to defendant hospital had no standing to claim that defendant misused funds); Weaver v. Wood, 425 Mass. 279 (1997) (individual members of Christian Science church had no standing to contest decision of the defendant to expand its publishing activities into electronic media and use church funds in connection therewith); Dillaway v. Bulton, 256 Mass. 568 (1926) (trustees under a will that bequeathed money to defendant had no standing to bring claim that money was being used contrary to the purposes set forth in the will itself); Judkins v. Hyannis Public Library Association, 302 Mass. 425 (1939) (same). In each of those cases, the appellate courts held that only the Attorney General can bring an action alleging the misuse of charitable assets. The courts reasoned that G.L.c. 12 §8 conferred exclusive power on the Attorney General to represent those who assert a beneficial interest in a charity. “It has not left it to individuals to assume this duty, or even to the court to select a person for its performance.” Weaver v. Wood, 425 Mass. at xx.
The Supreme Judicial Court has recognized an exception to this rule, however, where the individual plaintiff asserts a special interest distinct from the more general public interest
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protected by the Attorney General. That exception was most clearly defined by the Supreme Judicial Court in Maffei v. Roman Catholic Archbishop of Boston, 449 Mass. 235 (2007), which arose from the defendant’s decision to close a church in Wellesley. The plaintiffs there were members of a family that had provided land on which the church was built. The land had been given to the defendant on the specific condition that it be used as the site of a church. Joining in the case as a co-plaintiff was a parishioner who had given money to the defendant based on its representation that it would use the money for that same purpose. Although the SJC ultimately agreed with the lower court that the case had to be dismissed because it challenged decisions protected by the First Amendment, it nevertheless concluded that all of the plaintiffs did have standing. It reasoned that the plaintiffs’ claims were “readily distinguishable from those of the general class of parishioner-beneficiaries” in that each of the plaintiffs had made contributions to the defendant – land in one case and money in another – which they would not have made had they known that the defendant would close the church. “These claims are personal, specific and exist apart from any broader community interest in keeping [the church] open.” 449 Mass. at 245.
In the instant case the Complaint (read generously) alleges that the Foundation made the $ 3 million donation for the specific purpose of maintaining the Premises in a certain way. Ballou Channing breached that agreement by failing to use the donation as promised. Had the Foundation known that Ballou Channing would keep a large portion of that money for itself to use for purposes unrelated to conserving the land, that donation would not have been made. The Foundation thus has a specific interest that is unique to it and distinct from the interests of the public or of Ballou Channing’s congregation members. That is enough in this Court’s view to confer the Foundation with standing. If the funds were intended for Wildland Trust, then it can
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join with the Foundation as a plaintiff in asserting a claim against Ballou Channing for breach of the Gift Agreement, provided that sufficient facts surface in the course of discovery to show that it was the intended (as opposed to incidental) third party beneficiary of the Gift Agreement.1
This Court does not reach the same conclusion on Count I insofar as it is asserted against defendant Cedar Hill, however. Cedar Hill was not a party to the Gift Agreement. It therefore made no promises that could be breached. That it is bound by the Conservation Restriction as a result of purchasing the land does not mean that it was obligated to spend money it received from Ballou Channing in any particular way. Although plaintiffs contend that Cedar Hill is properly named as a party because it was a third party beneficiary of the Gift Agreement, they rely on case law that permits a person who is the intended beneficiary of a contract entered into by others to maintain an action where he or she has been deprived of that benefit. See James Family Charitable Foundation v. State Bank and Trust Co., 80 Mass.App.Ct. 720, 724-725 (2011) (discussing intended beneficiary theory as set forth in Restatement (Second) Contracts 302-315.) Here, the plaintiffs attempt to use that doctrine to bring Cedar Hill in as a defendant. This Court sees no legal basis for such a claim and accordingly orders that Count I be dismissed as to Cedar Hill.
2. Statute of Frauds
Even if the plaintiffs have standing, the Foundation contends Count I must be dismissed because the Complaint contains no allegation that the Gift Agreement was in writing so that it does not comply with the Statute of Frauds. G.L.c. 259 1. That statute requires a writing, signed by the party to be charged, if the contract cannot be performed in one year. Here, the
1 This issue should be revisited by way of a motion for summary judgment when more details about the Gift Agreement have been revealed. In contrast to an intended beneficiary, an incidental beneficiary obtains no right to enforce a contract. Restatement (Second) contracts 315.To determine whether a beneficiary is intended, rather than merely incidental, the court must look to the intent of the parties, taking into account the language of the contract and the circumstances surrounding its formation. See James Family Charitable Foundation v. State Street bank and Trust co., 80 Mass.App.Ct. 720 (2011) and cases cited therein.
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Complaint alleges that the $ 3 million donation was to be used to preserve the land in “perpetuity;” the Gift Agreement could not be performed within one year so that the Statute of Frauds does indeed apply. The question is whether it is appropriate at this early stage in the case to dismiss Count I on this basis. This Court concludes that it is not.
In so concluding, however, this Court is not persuaded that the writing necessary to satisfy the Statute of Frauds is the Conservation Restriction, as plaintiffs seem to suggest. Ballou Channing, in compliance with its promise to the Foundation, did create the Conservation Restriction; the breach of the Gift Agreement consisted of the manner in which Ballou Channing used the $ 3 million donation. The Conservation Restriction makes no mention of that donation much less that any amount of money was earmarked for use in connection with it. In opposing Cedar Hill’s Motion, the plaintiffs maintain that discovery will indeed turned up documents sufficient to satisfy the Statute of Frauds and that they should at least be given an opportunity to conduct that discovery, particularly since the Gift Agreement as described in the Complaint was “extensively negotiated” over a period of months. Whether they will be successful or not can be tested by way of a motion for summary judgment.
Chapter 93A
Cedar Hill argues that the Chapter 93A claim in Count V should be dismissed because the plaintiffs have not alleged that Cedar Hill was a party to any transaction with either plaintiff and because Cedar Hill was not involved in trade or commerce with the plaintiffs. In their Complaint, the plaintiffs allege that, in contravention of its 501(c) (3) tax exempt status, Cedar Hill has and continues to operate a commercial, revenue-generating enterprise on the Premises
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and that its conduct in knowingly using a portion of the Foundation’s $ 3 million gift for unintended uses in conjunction with its refusal to comply with the Conservation Restriction is conduct that comes within the purview of Chapter 93A. This Court disagrees.
Under G.L. c. 93A, “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” G.L. c. 93A, § 2(a). Consumer plaintiffs may bring a 93A claim provided they first make a pursuit demand on the defendant. No demand letter is necessary under G.L. c. 93A, § 11 but then that section applies only to those plaintiffs who are themselves engaged in trade or commerce. Because there is nothing to indicate that plaintiffs made any pre-suit demand as required by G.L.c. 93A 9, this Court must assume that the plaintiffs are bringing their Chapter 93A claim under Section 11.2 There are no facts in the Complaint, however, to suggest that Wildlands Trust or the Foundation were engaged in the conduct of any trade or commerce.
In determining whether a party is engaged in trade or commerce, this Court may consider the character of the party, the nature of a transaction, the activities engaged in by the party, and also whether the transaction was motivated by business or personal reasons. Begelfer v. Najarian, 381 Mass. 177, 191 (1980). ). As described in the Complaint, the Foundation is a private charitable foundation and that Wildlands Trust is a non-profit organization dedicated to conserving land and preserving the natural heritage of Southeastern Massachusetts. There are no facts in the Complaint to suggest that the Foundation or Wildlands Trust have conducted any trade or commerce. Accordingly, the 93A claim must be dismissed.
2 Nothing in the Complaint, including Exhibit C, a letter from the plaintiffs to the defendants dated February 26, 2016 (entitled “Cedar Hill Conservation Restriction” and authored by sophisticated legal counsel), suggests that the plaintiffs sent the defendants a Chapter 93A demand letter. See G.L. c. 93A, § 9(3) (“At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent”). Notably, the plaintiffs never referenced Chapter 93A or described specific “unfair or deceptive” acts or practices in the February 26, 2016 letter.
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Ballou Channing’s Motion to Dismiss
Ballou Channing separately moves to dismiss Counts I through V of the plaintiffs’ Complaint pursuant to Mass. R. Civ. P. 12(b)(6). Ballou Channing’s arguments in support of its motion are similar to some of the arguments Cedar Hill raised, and are resolved in line with the court’s reasoning as explained above, with the following offered by way of brief explanation.
First, Ballou Channing claims that both plaintiffs, Wildlands Trust and the Foundation, have no standing to bring Counts I (breach of contract related to the gift agreement), III (promissory estoppel), and IV (unjust enrichment) and that those claims must be dismissed.3 Like Cedar Hill, Ballou Channing , argues that the Attorney General has the exclusive authority to enforce the proper application of funds by a public charity and that the plaintiffs’ claims in this action do not fall under certain limited exceptions to this general rule. See Ballou Channing’s Memorandum at 5-6. As discussed above, this Court concludes that, taking the allegations in the the Compalint as true, the plaintiffs have a personal and specific interest in this dispute against both defendants so as to have standing to pursue their claims, at least at this juncture. Indeed, Ballou Channing appears to concde as much in fottnote 3 of it memorandum; whether the personal nature of that interest and the use fot eFoudnation fundt to prtect that interest violates the INternanl Revuenue Code is (ate least for the purposes of standing) irrelevant.
Second, Ballou Channing argues that Counts I (breach of contract related to the Gift Agreement), III (promissory estoppel), and IV (unjust enrichment), should be dismissed because the claims are barred by the Statute of Frauds. Ballou Channing argues that the Conservation Restriction does not address Ballou Channing’s use of the $ 3 million donation and that no
3 Cedar Hill argues that only the Foundation lacks standing to bring its claims in this action.
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writing memorializes the purported Gift Agreement, which Ballou Channing states was never documented by a writing. AS explained above, discovery is necessary to determine wheehr that is indeed true,, howeve.r
Third, Ballou Channing moves to dismiss Count II (breach of contract related to the Conservation Restriction) on the grounds that it cannot be compelled to comply with the Conservation Restriction because it no longer owns the land, having transferred the Premises to Cedar Hill. The Compalint alleges, hwoever, that Ballou Channing is bound by the terms of the Conservation Restriction and remains obligated to ensure that it is complied with. Palintiffs also ntoed that Ballou Channing maintains an easement interest in the Premises, reinforcing this ongoing obligation of compliance. They contend that Ballou Channing’s failure to enforce the terms of the Conservation Restriction and enter into mediation to potentially resolve the instant disputes are in breach of these obligations.
This Court declines to dismiss Count II against Ballou Channing at this time. Ballou Channing is the “Grantor” of the Conservation Restriction, which is attached to the Complaint as Exhibit A. The Conservation Restriction states that, “The burdens of this Conservation Restriction shall run with the Premises in perpetuity, and shall be enforceable against Grantor and the successors, licensees and assigns of Grantor holding any interest in the Premises.” Conservation Restriction at Section VII.A. The dispute resolution provision of the Conservation Restriction also specifically requires the parties (Grantor and Grantee) to “participate in at least three hours of mediation” if prior negotiations of any disputes are unsuccessful; Ballou Channing is the named Grantor of the Conservation Restriction. Whether Count II should be dismissed against Ballou Channing cannot be resolved without a more developed factual record regarding
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Ballou Channing’s actions or inactions thus far related to the instant dispute. Accordingly, Ballou Channing’s request to dismiss Count II is denied.
Finally, Ballou Channing moves to dismiss Count V, a claim under Chapter 93A, arguing that it was not acting in a business context or conducting any trade or commerce such that Chapter 93A should apply to it in this action. This Court agrees. As discussed above, this Court concludes that the plaintiffs’ Chapter 93A claim in Count V is based on G.L. c. 93A, § 11 because there are no factual allegations in the Complaint suggesting that the plaintiffs sent the defendants a Chapter 93A demand letter, which is required under G.L. c. 93A, § 9(3). Section 11 requires the plaintiffs to be engaged in the conduct of trade or commerce, and as discussed above, there are no facts in the Complaint to suggest that Wildlands Trust or the Foundation were engaged in the conduct of any trade or commerce. As a consequence, Count V must also be dismissed as to Ballou Channing.
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CONCLUSION AND ORDER
For all of the foregoing reasons, Defendant Cedar Hill Retreat Center, Inc.’s Motion to Dismiss is ALLOWED as to Count V (violation of Chapter 93A) and is otherwise DENIED, and Defendant Ballou Channing District Unitarian Universalist Association, Inc.’s Motion to Dismiss is ALLOWED as to Count V (violation of Chapter 93A) and is otherwise DENIED.
______________________________
Janet L. Sanders
Justice of the Superior Court
Dated: December 12, 2016 read more

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Posted by Stephen Sandberg - December 31, 2016 at 8:49 am

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