Wrong Procedure Costs City $1 Million Dollar Judgment Against Developer it Fined for Building Without Permits
In a striking blow, stripping a city of a judgment of nearly $1 million, the Massachusetts Appeals Court recently reversed a superior court summary judgment awarding fines to the City of Haverhill for a developer’s violations of zoning laws. The city assessed the fines against the developer under the state building code and the local zoning bylaw for building without necessary permits. In Maroney v. Planning Board of Haverhill, the Appeals Court held that the city’s building inspector did not follow the required procedures to impose fines.
The developer, Maroney, had a special permit and subdivision plan approval for a 50‑lot residential subdivision, both of which required him to build a water pressure booster station to service certain lots in the subdivision. The developer built much of the subdivision, in conformance with the process outlined by the city, on lots that the water department considered serviceable. When Maroney attempted to go forward with development of lots that the water department considered to have insufficient water pressure, the department refused to sign off on the site plans until the water booster station was built. Maroney’s position was that the water booster station did not have to be completed before construction, but only before occupancy. In an effort to force Haverhill to issue permits, Maroney filed suit in superior court seeking mandamus, injunctive relief, and declaratory relief.
Maroney not only filed suit against the city, but also went forward with construction on some of the unpermitted lots. The city building inspector sent two letters ordering Maroney to cease and desist and warning him that if he continued work on the lots, “additional penalties in the form of monetary fines [would] be sought” against him. Maroney stopped working on the lots. More than one year later the building inspector sent another letter to Maroney, addressing the unauthorized use of a maintenance building, which was one of the unpermitted structures. This letter also warned Maroney that failure to comply with the order would result in the city “seeking additional action against [Maroney].” There was no allegation that use of the structure continued after the letter was sent.
After Maroney filed suit, the city building inspector counterclaimed for fines pursuant to both the state building code and Haverhill’s bylaws. The city sought fines for violations on days before the building inspector’s letters to Maroney. The court granted summary judgment to the city on the counterclaims and awarded the full amount of the fines sought.
On appeal Maroney did not contest that he violated both the state building code and the city bylaws by building on the lots without the required permits; rather, he challenged the procedure by which the fines were imposed and calculated. Because the procedures differed between the local bylaws and the state building code, the Appeals Court addressed each separately. The Appeals Court concluded that the procedures employed by the building inspector under each were improper.
The zoning act, M.G.L. c. 40A, § 7, authorizes a municipality to impose penalties for violation of its zoning bylaws but does not spell out the method for doing so. In its 1991 decision in Burlington Sand & Gravel, Inc. v. Harvard, the Appeals Court held that M.G.L. c. 40A, § 7 does not provide a mechanism to seek civil fines for violations of a zoning bylaw in superior court. A city or town seeking a fine for a zoning bylaw violation must proceed by a complaint in a district court or by an indictment in the superior court under M.G.L. c. 40, § 21. If the city or town has a relevant ordinance or bylaw providing for noncriminal dispositions, it may use the procedures outlined in M.G.L. c. 40, § 21D. Under Burlington Sand & Gravel, Haverhill could not initiate the imposition of fines for violations of the zoning bylaws by counterclaim in superior court.
The city also failed to follow proper procedures to impose penalties under the state building code. Penalties are authorized by M.G.L. c. 148A, § 2, which requires a building inspector to “give to the offender a written notice of a code violation” containing “the specific offense charged and the time and place of the violation.” The alleged violator shall either “(1) pay in full the scheduled assessment; or (2) request a hearing before the municipal hearing officer.” The letters sent to Maroney did not comport with the statute. The Appeals Court noted that the letters did not advise Maroney of the amount he was being fined – or that he was then being fined at all. Rather, “the most reasonable reading of the letters is that Maroney would not be fined unless he ‘ignored [the] order and continued work on [the] lots.’”
Because Burlington Sand & Gravel established that a counterclaim in a civil action is not the proper route for imposing civil penalties allowed under a local zoning bylaw, the Appeals Court’s decision in the Maroney case is not surprising. The Appeals Court did more than rely on its precedent, however, noting the importance of the statutory notice provisions at issue. “The statutory procedures in question serve more than a salutary notice function; they are designed to provide not only appropriate notice, but an opportunity to be heard with administrative efficiency.” The Appeals Court concluded that the notice provisions at issue in Maroney are prerequisites to Haverhill pursuing civil penalties for state building code or local bylaw violations, and the city’s failures were substantive. Accordingly, the judgment in the city’s favor could not stand.