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Layes v. RHP Properties, Inc.

Appeals Court of Massachusetts, Middlesex

August 28, 2019

ROSA LAYES[1] & another[2]
RHP PROPERTIES, INC., & another.[3]

          Heard: November 14, 2018

         Civil action commenced in the Superior Court Department on April 22, 2015. Motions for summary judgment were heard by Kenneth J. Fishman, J.; a motion for class certification was heard by S. Jane Haggerty, J.; and the entry of judgment was ordered by Fishman, J.

          Ethan R. Horowitz for the plaintiffs.

          Trevor J. Keenan for the defendants.

          Maura Healey, Attorney General, & Daniel A. Less, Assistant Attorney General, for the Attorney General, amicus curiae, submitted a brief.

          Present: Hanlon, Massing, & Ditkoff, JJ.

          HANLON, J.

         RHP Properties, Inc. (RHP Properties), a large owner and operator of manufactured housing communities, has a nationwide policy requiring its residents to pay for the maintenance, repair, and replacement of their privately-owned, individually-metered fuel tanks. The main question posed in this appeal is whether that policy passes muster under the provisions of the Manufactured Housing Act, G. L. c. 140, §§ 32A-32S (act), and the Attorney General's regulations promulgated thereunder, 940 Code Mass. Regs. §§ 10.00 (1996) (Attorney General's regulations).[4]'[5] A judge of the Superior Court decided that it did not, and entered judgment for the individual plaintiffs, Rosa and Francis Layes. We agree with that decision, but conclude that the denial of Rosa's[6] motion for class certification by another judge (motion judge) constituted an abuse of discretion. Accordingly, we affirm in part and reverse in part.


         None of the operative facts is in dispute. Rosa and Frank Layes live at Chelmsford Commons, a manufactured housing community with approximately 250 home sites (Chelmsford Commons or CC park), [7]'[8] The Layeses, like some eighty percent of the CC park residents, heat their manufactured home primarily with oil, which is stored in an above-ground tank situated on a cement pad adjacent to their home. The oil tank serves only their home.[9] Pursuant to their lease agreement, the Layeses and all CC park residents are responsible for purchasing their own fuel oil.

         In 2006, the Layeses purchased a new tank. The CC park rules at the time tied utility maintenance duties to the location of the systems; the park's operators were responsible for everything on the exterior of the homes, while residents were responsible for everything in the interior.[10] However, par. 9.h of the rules specifically required the residents to maintain their own oil tanks.[11]

         In April, 2011, RHP Properties purchased the CC park through the Chelmsford Group, LLC (Chelmsford Group) (collectively, defendants).[12] Thereafter, a document titled "Chelmsford Commons Rules and Regulations," dated April 22, 2011, was circulated to the park residents showing that par. 9.h had been deleted. (Paragraph 9 otherwise remained unchanged.) The Attorney General later approved the March, 2013, version of these rules, which contained the same allocation of maintenance duties as the 2011 rules and regulations.[13]

         Notwithstanding these "official" CC park rules, the defendants implemented a policy placing all burdens and costs associated with the home heating oil systems on the residents.[14]The defendants required new and renewing residents to sign standard lease agreements that made the residents responsible for "the maintenance and replacement of any above ground oil or fuel storage tanks." The policy was described in an "addendum" to the park rules and was posted in the park management office.

         The defendants admit that at no time have they maintained, repaired, or replaced any exterior components of the residents' home heating oil systems in the CC park. They have required the residents to do the following with respect to the exterior components: (1) the sanding and painting of rusted oil tanks; (2) the connection of the tanks to the homes and the removal of unused tanks; and (3) the installation of either protective sleeves on the fuel lines connecting the tanks to the homes or oil safety valves.[15] Many residents who failed to perform this work at their own cost were threatened with legal action or were sued by the defendants.

         On May 21, 2014, the Layeses smelled oil on their home site. Francis discovered oil leaking from the bottom of the tank. The Layeses immediately placed a container under the tank to catch the oil, and notified CC park maintenance employee Ronald Hennessey and their oil supplier, Gagnon Brothers Oil Company (Gagnon). A Gagnon employee responded and pumped the remaining oil in the tank into a temporary transfer tank. The compromised tank was removed from the site and destroyed. Thereafter, Hennessey and an RHP Properties manager informed Rosa that it was the Layeses' duty to replace the tank. The Layeses, who had two small children, could not afford the cost of a new tank. In September, 2014, the defendants rented a temporary tank for the Layeses and had it connected to their home.

         When Rosa attempted to schedule an oil delivery in January, 2015, Gagnon refused to provide additional oil until the Layeses purchased a new permanent tank. Although Rosa contacted other oil suppliers, she was unable to find a supplier who would fill the temporary tank. For the rest of the 2015 heating season, the Layeses rationed their remaining oil supply. The temperature in their home routinely fell into the 50s (degrees, Fahrenheit) in the mornings. On August 24, 2015, the Layeses observed the Chelmsford Commons manager and a third party disconnect, drain, and remove the temporary tank from their home site.

         Legal proceedings.

         On April 22, 2015, the Layeses filed a complaint, alleging that the defendants' failure to maintain, repair, and replace the exterior components of their home heating system (and those of the other residents of the CC park) violated the act, the Attorney General's regulations, and G. L. cc. 93A and 186. The defendants asserted counterclaims against the Layeses, alleging negligence and liability under G. L. c. 21E for the cleanup costs arising from the release of oil on the Layeses' home site. On November 2, 2015, with winter approaching, a judge of the Superior Court issued a preliminary injunction requiring the defendants to provide the Layeses with a new fuel tank and to connect it to their home.[16]

         Ruling on cross motions for summary judgment, a judge allowed the Layeses' renewed motion for partial summary judgment on their individual c. 93A claims and on the defendants' amended counterclaim. Another judge subsequently denied Rosa's motion for class certification. Final judgment in favor of the Layeses entered on their two substantive claims (under c. 93A and c. 186, § 14), [17] and the judge awarded them three months' rent in damages as well as attorneys' fees.[18] See G. L. c. 186, § 14. The judge also dismissed the defendants' counterclaims and permanently enjoined the defendants "from implementing or engaging in any policies or practices that contravene or violate 940 Code Mass. Regs. §§ 10.03(2) (n) and 10.05(4) (d) ." These timely cross appeals followed.[19]

         As the defendants point out, were we to conclude that the judge erred in entering judgment for the Layeses on their individual claims, there would be no need to reach the merits of the certification ruling. We start our analysis there.


         A. Individual claims.

         1. Standard of review.

         We review the allowance of a motion for summary judgment de novo, assessing whether, viewing the facts in the light most favorable to the nonmoving party (here, the defendants), the moving party (the Layeses) was entitled to judgment as matter of law. See Homeowner's Rehab, Inc. v. Related Corporate V SLP, L.P., 479 Mass. 741, 750 (2018). Courts construe regulations in the same way as statutes, applying traditional canons of interpretation. See Armata v. Target Corp., 480 Mass. 14, 19 (2018). The words of a regulation are given their usual and ordinary meaning. Id. If the meaning of a term is clear, courts give effect to that language; but if the language is ambiguous enough to support more than one rational interpretation, courts will give effect to the interpretation that furthers the purpose of the framers. See Peterborough Oil Co., LLC v. Department of Envtl. Protection, 474 Mass. 443, 448 (2016) . The interpretation of a regulation is a question of law that is reviewed de novo. See Morgan v. Massachusetts Homeland Ins. Co., 91 Mass.App.Ct. 1, 8 (2017) .

         2. Statutory scheme.

         "Both the Legislature and the courts of the Commonwealth have recognized that manufactured housing communities provide a viable, affordable housing option to many elderly persons and families of low and moderate income, who are often lacking in resources and deserving of legal protection."[20]Greenfield Country Estates Tenants Ass'n v. Deep, 423 Mass. 81, 83 (1996). The act was first enacted in 1939, in order to protect the rights of residents of mobile home parks. See G. L. c. 140, §§ 32A-32S; Quinn v. Rent Control Bd. of Peabody, 45 Mass.App.Ct. 357, 359 (1998). The law "provide[s] comprehensive and substantial rights to owners of manufactured homes who place such structures upon land rented by them." Danusis v. Longo, 48 Mass.App.Ct. 254, 255 (1999).

         Over the course of time, the Legislature has subjected park owners to progressively more extensive regulations. See Quinn, 45 Mass.App.Ct. at 359 n.4. In 1993, the Legislature further strengthened the protections of the act in two ways relevant to this litigation. First, the Legislature made any violation of the act's provisions a per se violation of G. L. c. 93A. See G. L. c. 140, § 32L (7), as amended by St. 1993, c. 145, § 12; Quinn, 45 Mass.App.Ct. at 364 n.10. At the same time, the Legislature authorized the Attorney General to promulgate regulations deemed necessary for the "interpretation, implementation, administration and enforcement" of the act. G. L. c. 140, § 32S. As the statute made clear, the authority given to the Attorney General supplements the Attorney General's preexisting authority to regulate manufactured housing communities pursuant to the Consumer Protection Act. See c. 140, § 32S; G. L. c. 93A, §§ 2, 9; 940 Code Mass. Regs. § 3.17 (1993) (regulating the landlord-tenant relationship). To fulfill the statutory directive, the Attorney General promulgated Title 940 Code Mass. Regs. §§ 10.00 (1996). In these regulations, the Attorney General established detailed requirements concerning the respective rights and duties of park residents and operators.[21]

         3. General Laws c. 93A, § 9, claims.

         a. Park operator's removal and replacement duties.

         The Attorney General's regulations directly address the factual situation presented by this case. If an oil tank leaks, as it did here, the cost of removing and replacing it belongs to the park operator unless the negligence of the resident caused "the environmental concerns or risks." 940 Code Mass. Regs. § 10.03(2) (n) (§ 10.03[2] [n]) .[22] No other exception to the park operator's liability is provided. As the Attorney General has explained, the regulation requires park operators to incur these costs initially because they are "usually better able to pay for or finance these costs upfront." Attorney General's Guide to Manufactured Housing Community Law § II.D.8.h (March 2009) (Attorney General's Guide).[23] Any operator who improperly transfers to the resident the financial responsibility for replacement costs commits an unfair or deceptive act or practice in violation of G. L. c. 93A, § 2 (a). See § 10.03(2)(n). This clear and unambiguous language controls our decision here.

         The defendants, relying on the regulations "read in their entirety" and the provisions governing fuel charges for individually metered heating fuel sources and operator maintenance duties, see 940 Code Mass. Regs. §§ 10.05(4) (b) (3) and 10.05(4)(d), urge this court to carve out another exception to liability for privately-owned, individually-metered tanks. We decline to do so. Clearly, it would be inappropriate to make a substantive change to the interpretation of a specific regulation by using language that the Attorney General did not see fit to include or even reference. See Thurdin v. SEI Boston, LLC, 452 Mass. 436, 444 (2008) ("where there is an express exception in a statute, it comprises the only limit on the operation of the statute and no others will be implied"). Moreover, we are not inclined to adopt a judicial gloss that not only conflicts with the Attorney General's Guide, but also contravenes the purpose of the act to allocate reasonably the burden of addressing relevant safety and environmental concerns, as well as to assist a vulnerable class "deserving of legal protection." Greenfield Country Estates Tenants Ass'n, 423 Mass. at 83.

         On the undisputed facts here, the Layeses were entitled to summary judgment on this aspect of their c. 93A claims. Following the failure of their tank, RHP Properties attempted to require them to fund the cost of a replacement tank until the defendants were ordered to provide one by the trial court.[24]This unfair or deceptive act did not stand alone. The defendants also had inserted in their standard lease agreement a provision placing an unconditional replacement duty on all of the residents, including the Layeses; in addition, the CC park rule to the same effect was posted only in the management office, far from scrutiny by the Attorney General. Moreover, both the lease provision and the CC park rule were inconsistent with § 10.03(2)(n) and the Attorney General's Guide. For these reasons, as a matter of law, the CC park rule placing the replacement burden on the residents in all cases was "unreasonable, unfair or unconscionable."[25] G. L. c. 140, § 32L (1). See § 32L (1) (prohibiting promulgation of such rules). The defendants' actions violated the act and the Attorney General's regulations, and constituted additional unfair and deceptive acts or practices within the meaning of c. 93A, § 2 (a).[26] See G. L. c. 140, § 32L (7); 940 Code Mass. Regs. § 10.02(2), (3); Clark v. Leisure Woods Estates, Inc., 89 Mass.App.Ct. 87, 94 (2016).

         b. Park operator's maintenance duties.

         We turn to the legal question of more wide-reaching significance. The Layeses claim that the defendants violated the Attorney General's regulations and c. 93A by placing the burden of maintaining the exterior components of the oil systems on the Layeses and all the CC park residents. The defendants argue that, even if they can be held liable to the Layeses under c. 93A in the limited factual circumstances of this case, the defendants have no general duty under the Attorney General's regulations to "inspect, repair, service, and maintain" the residents' oil tanks. The judge read the regulations to place the maintenance burden on the defendants. We agree.

         The park operator's duties with respect to basic utilities are set forth in 940 Code Mass. Regs. § 10.05(4) (§ 10.05[4]). A park operator is required to make "basic utilities" available to each site.[27] See § 10.05(4)(a), (b). Basic utilities are defined in the regulations as the "utility services listed in ...[§] 10.05(4)." 940 Code Mass. Regs. § 10.01. Five essential utilities are listed therein: electrical service of appropriate amperage, a natural gas connection if "economically reasonable," a sufficient supply of potable water, a sanitary sewage disposal system, and "electricity, natural gas, or other heating fuel" (i.e., a source of heat). § 10.05(4)(b)(1)-(3). The regulations specify that the operator must not only "supply," but also "pay for" the water and the sewage disposal system. See §10.05(4)(b)(1), (2). The operator must also "supply and pay for" the resident's heat unless the energy supply is separately metered to the individual home and the resident agrees to pay for the heat in the occupancy agreement.[28] See §§ 10.05(4)(b)(3) and 10.05(4)(e) (permitting use charges for utilities determined by metering). The regulations permit the park operator to recover its expenses in providing these basic utility services through nondiscriminatory rent increases. See § 10.05(4)(c).

         The duty to maintain the park utilities is specifically governed by § 10.05(4) (d), [29] which requires operators to install all basic utilities "to the point of connection at each manufactured home and [to] maintain[ them] in good repair and operating condition . . . without charge to residents . . . ." Home heating fuel falls within the definition of basic utility.

         The defendants, reading §§ 10.05(4) (b) (3) and 10.05(4) (d) together, argue that where, as here, they properly transferred the duty "to supply and pay for" the heating oil to the Layeses, all the defendants' other regulatory duties with respect to the oil tanks -- including the duty to replace leaking tanks -- were eliminated. We are not persuaded. The text of § 10.05(4)(d) permits the park operator to pass on the cost of maintenance and repair if the resident, through negligence or willful misconduct, causes damage to the utility components. As in § 10.03(2)(n), no other exception is provided. If the Attorney General wanted to relieve operators from their other duties in this situation, she would have expressly included appropriate language in the regulations. See Thurdin, 452 Mass. at 444.

         The phrase "as applicable" in § 10.05(4) (d) does not support the defendants' argument that they have no duties at all with regard to individually-metered utilities. We read the phrase "as applicable," which modifies both § 10.05(4)(a) and (b) (i.e., all basic utilities), simply to limit the park operator's duties to the basic utilities actually in use in the park. If, for example, park residents heat with oil, no purpose would be served by requiring a park operator to install and to maintain gas lines and other unnecessary equipment.

         Nor can the plain meaning of the regulations be overcome by the defendants' policy arguments. Many retired and disabled park residents are not in a position, physically or financially, to inspect regularly and maintain their oil tanks (or to hire professionals to do so). For individuals struggling to pay for their basic living expenses, oil tank maintenance and replacement is beyond their means. In fact, an RHP Properties manager acknowledged that some park residents will "overlook" these duties, especially the seniors.

         In addition, as landowners, the defendants acknowledge that they are potentially responsible persons for any releases of hazardous materials at Chelmsford Commons. See G. L. c. 21E, § 5. Pollution to the environment caused by leaking oil tanks is not in anyone's interest, and remediation work, as the defendants have put it, can be "catastrophically expensive." In light of that potential "traumatic" liability, the wisdom of a corporate policy imposing oil tank maintenance (and ...

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