Kraus obtains Ruling of Superior Court Remanding Rent Control Decision Where Record Incomplete

Attorney Kraus argued before Bristol Superior Court that the Easton Rent Control Board failed to document appropriately its decision denying a claim for a capital improvement for replacing pipes in the Easton Mobile Home Park. The Board summarily denied the petition and the Superior Court, J. Cowin, agreed, remanding the matter back to the Board for further consideration. See attached decision.

Easton MHC, LLC v. Town of Easton Rent Control Board, et al.1

Bristol Superior Court No. 1773-CV-00310 MARC J SANTOS, ESQ.LERK/MAGISTRATE

Memorandum and Order on Cross-Motions for Judgment on the Pleadings (P#s 13, 13.1)The plaintiff, Easton MHC, LLC (“MHC”), owner and operator of the Easton Mobile Home Park manufactured housing community (“Park”), applied to the defendant Town of Easton
Rent Control Board (“Board”) to allow an increase in rent charged to residents of the Park. MHC sought the rent increase to pay the approximately $1.644 million cost of replacing pipes
contained within the Park’s sewer collection system. After a hearing, the Board voted to deny
the application, on the basis that MHC did not provide information requested by the Board inconnection with the application. MHC appealed the Board’s decision to this Court pursuant to
G.L. c. 30A.2 The Court is aware that MHC’s tenure at the Park has been fraught with controversy,punctuated by local enforcement orders, two Administrative Consent Orders from DEP, a significant reduction in the rent charged to residents due to substandard conditions in the Park,
and a number of court actions (all of which have resolved against MHC). The Court is further aware that another Justice of this Court has found that MHC failed to comply with the Court’sown Order, issued July 3, 2019, that MHC submit a plan for remediating substandard conditions
in the Park relating to maintenance of the wastewater collection, stormwater drainage, and water
delivery systems, roads and abandoned units. Finally, the Court is aware that, based on MHC’s inability or unwillingness to suitably maintain the Park, a temporary receiver will be appointed tomanage and operate the Park.Notwithstanding this backdrop, and mindful of the deferential standard of review which
applies to this G.L. c. 30A appeal, the Court is compelled to REMAND this matter to the Board
for further proceedings, because the Administrative Record submitted by the Board isinsufficient to enable the Court to determine whether its decision is supported by substantial
evidence.Background Pursuant to 940 CMR 10.03(l)-(m), the owner of a manufactured housing park may recover costs resulting from upgrades or repairs of sewer systems through rent increases, only if such costs are associated with “capital improvements.” Pursuant to the Board’s enabling
legislation, Chapter 88 of the Acts of 2013, as well as the Town of Easton’s Rules and
Regulations for Mobile Home Park Accommodations (“Regulations”), the Board must approve any rent increase at a manufactured housing community. R.l, 8. Under Section 6-A of the
Regulations, the owner of such a community may seek a rent increase “to offset the cost of a substantial and necessary capital improvement.” R.10 A “capital improvement” is defined as“[a]ny substantial rehabilitation, addition or other improvement which appreciably adds to the Town of Easton and Easton Mobile Home Owners’ Association, Inc.2 The appeal is governed by G.L. c. 30A, §14, rather than G.L. c. 249, §4, pursuant to the special legislation creating
the Board. See Chapter 88 of the Acts of 2013, §3 (G.L. c. 30A “shall apply to the [Board] ... as if [the Board] werean agency of the commonwealth”).1
value of the manufactured housing accommodations or the manufactured housing community or
prolongs its life or both, but not including ordinary repairs and maintenance.” R.6 (§1-B) The
Board may deny a rent increase if it determines that the property at issue does not comply with
any bylaws or codes regulating the conditions of housing accommodations, and that “such lack
of compliance is due to the failure of the owner to provide normal and adequate repairs and maintenances.” R.9 (§4-C); see also Chapter 88 of the Acts of 2013, §2-b (in acting on a request
for a rent adjustment, Board shall distinguish “capital improvements” from “ordinary repair,
replacement and maintenance”). In considering an application for a rent increase, the Board may
request “any and all relevant documents as may be appropriate,” and the “failure to provide
reasonably requested or subpoenaed information may be grounds for denial of’ the application.R.ll-12 (§8)In 2016, MHC applied to the Board to allow a “capital improvement adjustment” of rent,in order to offset the costs of replacing a pump station and sewer conveyance infrastructure in the
Park, for which MHC had received a quotation of approximately $1,644,000. R.334 The Board held a hearing on February 27, 2017, at the conclusion of which it voted
unanimously to deny the application. R.492 The Board issued no written decision, and provided
no findings or reasons to support its decision. The only material indicating the grounds for the
decision are the minutes of the February 27 hearing

.Discussion

As noted, the Board’s enabling legislation provides that G.L. c. 30A “shall apply to the[Board] ... as if [the Board] were an agency of the commonwealth.” See Chapter 88 of the Acts
of 2013, §3. Generally, a state agency acting under G.L. c. 30A must state findings and reasonssupporting its decision. See G.L. c. 30A, §11(8) (every agency decision “shall be accompanied
by a statement of reasons for the decision, including determination of each issue of fact or law
necessary to the decision”);3 see also Taunton Greyhound Assoc, v. State Racing Com.. 10 Mass.App. Ct. 297, 308-311 (1980). While findings and reasons may be dispensed with where “the
agency’s path may reasonably be discerned,” Costello v. Department of Public Utilities, 391
Mass. 527, 535-36 (1984), the absence of findings and reasons supplied by the Board in this
case, coupled with omissions in the Administrative Record, render the Court unable to conduct a
meaningful review of the Board’s decision. Compare NSTAR Elec. Co. v. Dep’t of Pub. Utils.,462 Mass. 381, 382 (2012) (agency failed to provide statement of reasons for imposing condition on utility, and factual determinations were not adequately supported by subsidiary findings); Boston Edison Co. v. Dep't of Pub. Utils.. 419 Mass. 738, 740, 743 (1995) (agency failed to furnish adequate statement of reasons for decision, and decision was not adequately supported by record).Specifically, the Court can discern from the hearing minutes that the Board concluded
that MHC did not provide, as requested, information that would show whether the work MHC3 G.L. c. 30A, §11 applies to “[ajdjudicatory proceedings.” An adjudicatory proceeding is “a proceeding before an
agency in which the legal rights, duties or privileges of specifically named persons are required by constitutional
right or by any provision of the General Laws to be determined after opportunity for an agency hearing.” G.L. c.30A, §1. Although the General Laws do not require a hearing on a petition for a rent increase, the Board’s Regulations do. R.10 (§5-C)2
proposes is truly a capital improvement, or merely repair and maintenance which MHC has been
ordered, but failed, to perform. R.490-492 If MHC in fact failed to provide information requested by the Board that reasonably related to the request for a rent increase, denial of the
application would be justified. See Board’s Regulations, §8 (R.ll-12)However, MHC argues that it did provide the Board with the information necessary to
determine that the work is a capital improvement. MHC further argues that the Board erred in
basing its decision on issues related to maintenance of the Park’s wastewater treatment system,
which, MHC argues, is a separate piece of infrastructure from the collection system that is the
subject of the application. As such, MHC argues, the Board requested information that was
irrelevant.After reviewing the Administrative Record in its entirety, paying particular attention to
the portions cited by the parties, the Court is unable to determine whether the Board’s finding
that MHC failed to provide sufficient, relevant information is supported by substantial evidence.The Court finds the Record deficient in the following regards:
First, the Record is unclear as to what the specific requests for information by the Board
were, preventing the Court from considering both whether the requests were reasonable, and
whether MHC provided responsive information. To the extent the requests are reflected in email
chains included at the end of the Record (R.496-500), these emails appear inconsistent with one
another, and with the Board’s description in its motion papers of the information it sought. To illustrate: the Board argues in its motion papers that it sought “receipts, invoices and other information demonstrating that repairs and maintenance of the wastewater treatment system ...had been undertaken;” and that the Board “carefully explained to MHC what information it was
seeking.” Cross-Motion, at 15, 16. However, the Record contains no requests of this specific
nature.Second, the Record lacks evidence as to what information MHC provided. MHC stated
during the hearing that the requested information had been submitted “several times” (R.491),and the Board’s counsel acknowledged that MHC had provided “a ton” of information, but
disputed that it was what had been requested.4 Id. Without any findings by the Board as to what
was provided, and how it was not responsive to what the Board requested, the Court cannot
determine the merits of the Board’s conclusion that MHC did not provide responsive information. Compare NSTAR Elec. Co.. 462 Mass, at 389 (“the department should have set
forth the showing that NSTAR was required to, but apparently did not make”); Boston EdisonCo.. 419 Mass, at 748 (in absence of findings, “the department’s bald contention that Edison’s submissions are deficient ... is unconvincing”).The Court also notes an email in the Record from MHC’s counsel that apparently was accompanied by material reflecting work done at the Park. (R.493-94)
Third, it appears MHC provided information supporting its position that the project is a capital improvement, but the Board did not consider it, nor explain why it did not consider it.Specifically, MHC submitted a letter from its environmental consultant stating that “[tjhis project is a full replacement of most of the existing conveyance system” and that, because of the
material used in the original system (which was constructed prior to MHC’s purchase), “[tjhere
is no type of maintenance program that could have prevented this from happening.” R.342Further, MHC’s engineer and the environmental consultant appeared at the February 27 hearing,
but the Board did not hear from them. Without any explanation as to why the Board did not consider the opinion of the consultant, nor hear from the experts at the hearing, the Court is“precluded from determining if the exclusion of the evidence deprives the plaintiff[] of
substantial justice.” Boston Edison Co., 419 Mass, at 749; see also NSTAR Elec. Co., 462 Mass,at 390-91 (“[t]he department's failure to state whether and, if so, why it believes [expert’s]testimony to be mistaken or flawed leaves us without the tools to evaluate, on the record as a whole, the reasonableness of the department’s apparent conclusion”).Because the infirmities in the Record leaves the Court “unable to determine whether the[Board’s] order is supported by sound reasoning and fact finding,” the Court declines to affirm the order, and instead remands this matter to the Board. NSTAR Elec. Co., at 386.'’ This civil action shall remain open pending proceedings on remand, which shall occur as follows:1. MHC, through the receiver, shall inform the Board within 90 days of this Order
whether it wishes to continue to pursue a rent increase.2. If the receiver determines not to pursue a rent increase, the parties shall so inform the Court, whereupon this matter will be dismissed.3. If the receiver pursues a rent increase, the Board shall re-open the record, hold additional proceedings, and issue a decision explaining its reasons. Following issuance of the decision on remand, any party to this matter aggrieved by the Board’s decision may file a Notice of Appeal of the decision on remand with this Court under the present docket number. Said Notice shall be filed within 30 days of the Board’s
filing of its decision on remand. Thereafter, the appeal shall proceed in accordance
with G.L. c. 30A.If no party files a Notice of Appeal of the decision on remand within 30 days of the
decision, the parties shall inform the Court that a decision has been rendered and no
appeal has been filed, whereupon this matter will be dismissed.4.If the parties resolve this matter by some other means than described in this Order, the parties shall inform the Court, whereupon this matter will be dismissed.5.5 In its Opposition to the Board’s Cross-Motion for Judgment on the Pleadings, MHC attached invoices which it claims reflect maintenance at the Park and expenditure of funds from a $25/month capital improvement fee, as well as Affidavits from its engineer and consultant. The Board filed a Motion to Strike these materials, arguing primarily that they were not part of the proceedings below. Because this matter is being remanded, the Court finds the Motion moot and takes no action on it.4
ORDER

Accordingly, the Court REMANDS this matter to the Board in accordance with the
above.

Date: January 3, 2020

Jackie Cowin
Associate Justice of the Superior Court