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Nantasket Beachfront Condominiums, LLC v. Hull Redevelopment Authority

Appeals Court of Massachusetts, Plymouth

June 5, 2015

Nantasket Beachfront Condominiums, LLC
v.
Hull Redevelopment Authority

Argued November 7, 2014

Page 456

Civil action commenced in the Superior Court Department on February 8, 2012.

The case was heard by Robert C. Cosgrove, J., on motions for summary judgment.

Brian K. Bowen for the plaintiff.

Denise A. Chicoine ( Edward S. Englander with her) for the defendant.

Present: Rapoza, C.J., Milkey, & Hanlon, JJ.

OPINION

Milkey, J.

In 2004, plaintiff Nantasket Beachfront Condominiums, LLC (Nantasket), and defendant Hull Redevelopment Authority (authority) entered into a contract for the purchase and development of certain land in Hull. Under that " Land Disposition Agreement" (LDA), Nantasket was to purchase the land, construct seventy-two units of housing, and develop a new public park. Subsequently, the proposed project encountered robust neighborhood opposition, and this in turn led to significant delays in the anticipated closing. Eventually, the authority terminated the LDA and notified Nantasket that it was retaining as liquidated damages $857,500 in deposits that Nantasket had made. This action ensued.

In a comprehensive and thoughtful decision, a Superior Court judge ruled in the authority's favor on summary judgment. He concluded that Nantasket indisputably stood in breach of the LDA, and that the authority was within its rights to terminate the agreement and to retain the deposits. On Nantasket's appeal, we affirm, albeit on somewhat different grounds.

Background[1]

The parties execute the LDA.

In order to spur the development of twelve acres of land that it owned, the authority

Page 457

in October of 2003 issued a detailed " Request for Proposals" (RFP). According to the RFP, the property " provides the transition between the [State-owned] ... Nantasket Beach Reservation and a major residential area of the Town of Hull along Nantasket Avenue." The RFP set forth a preferred development scenario in which approximately three-quarters of the land would be developed into " primarily passive public open space," with the rest (approximately three acres) developed as " residential dwelling units, or other uses, as may be acceptable to the [authority]." In a section entitled " Site Constraints and Issues," the RFP discussed the applicability of various environmental and land use requirements.

Only two developers submitted proposals. One was from Nantasket's parent company, which emphasized that, based on its thirty years of experience in developing residential and commercial projects, it was " well versed in overcoming a multitude of tough regulatory issues and environmental concerns." On July 9, 2004, Nantasket and the authority executed the LDA, which spelled out their respective rights and obligations in thirty-three single-spaced pages (not including voluminous attachments).

Under the LDA, Nantasket would purchase the land for three and one-half million dollars (subject to various potential adjustments). Nantasket would then build seventy-two units of housing, develop the open space, and eventually return the park land to public ownership and control. Nantasket's specific development plans were subject to its completing the authority's design review process and obtaining -- at its expense -- all necessary permits and other approvals (collectively termed " Approvals" ) from other State and local agencies. The closing date was set for thirty days after Nantasket obtained the Approvals, but not later than July 9, 2006 (termed the " Outside Closing Date" ). Thus, as originally executed, the LDA contemplated that all necessary permitting and the closing would be completed within two years.

Deposits

 Nantasket paid a $97,000 deposit to the authority at the execution of the LDA, in addition to a $25,500 deposit it had previously paid. An additional deposit of $122,500 was due on August 17, 2004, bringing the total deposit due by that point to $245,000. Until the closing actually took place, additional deposit payments of $122,500 each would be due at the six month

Page 458

anniversary of the date of the LDA and the one year anniversary, and then " Extension Deposits" of $122,500 each would be due every three months after that. The LDA stated that if Nantasket missed any deposit payment, this " shall constitute a default."

Termination rights

The LDA gave each party the right to terminate the agreement in certain situations. In the event that Nantasket defaulted on its obligations and did not achieve a cure of that default within thirty days of receiving written notice from the authority, the authority could terminate the LDA and retain all deposits paid.[2] For its part, Nantasket could terminate the LDA and secure a return of its deposits in three different types of scenarios. First, Nantasket was given until August 4, 2004, to inspect the property, and until August 16, 2004, to inspect the title. If such inspections revealed a defect in either, then it could terminate the LDA within those respective deadlines. Second, Nantasket could terminate the LDA in the event that a local permitting agency prevented the project from going forward as planned and adjustments to the project or purchase price could not be agreed upon to accommodate the potential loss in value (this scenario was termed a " Local Permit Problem" ). Third, if a third party challenged the issuance of one or more of the approvals that the project needed, Nantasket could terminate the LDA in lieu of defending the action.

Project delays

Almost immediately, the project sparked significant opposition from local residents. In 2004, Jacqueline Chase, a direct abutter, cofounded a group to try to stop it. At Chase's suggestion, the group called itself " No Way HRA!" The project opponents used every opportunity to attempt to derail the project. Chase herself attended seventy local board meetings on the topic. After the Hull zoning board of appeal (ZBA) issued a special permit for the project on March 30, 2006, six project opponents filed an action in Superior Court appealing the special permit pursuant to G. L. c. 40A, § 17. The lead plaintiffs in that action (zoning appeal) were Chase and Phyllis Aucoin, another leading member of No Way HRA!

First amendment to the LDA

Nantasket did not use the filing of the zoning appeal as an occasion to terminate the LDA but, instead, elected to defend it. However, with it becoming increasingly obvious ...


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