September 28, 2023

Landlord’s damages payment fails to moot tenant’s possession claim: Appeals Court issues first en banc decision

BY Kris OlsenMassachusetts Lawyers Weekly

After she commenced summary process proceedings, a landlord’s tender of money damages to remedy a violation of the state’s water use statute did not moot the tenant’s claim to possession, the Appeals Court has decided.

In Ferreira v. Charland, after the property owner’s life circumstances changed, she initiated a no-fault eviction, intending to move back into the home where she had previously lived.

In a counterclaim, the tenant raised a defense under the state’s water use statute. The tenant had been paying the home’s water bill, and the landlord had not installed “low flow” water conservation devices, as the law requires.

The landlord then sent the tenant a pair of checks sufficient to cover any damages the tenant might be due. A Land Court judge agreed that mooted the tenant’s counterclaim.

But the Appeals Court majority ruled that the judge had erred by failing to recognize that the tenant’s counterclaim carried two potential forms of relief: money damages and a defense to possession, the latter of which had not been mooted.

“In fact, by reading into the statute a landlord’s unilateral right to cure after the filing of a summary process complaint, we would be undermining the Legislature’s efforts to strengthen a tenant’s right to avoid eviction by a landlord in violation of the housing-related statutes,” Judge Amy Lyn Blake wrote for the majority. “Landlords could simply buy themselves free of the consequences of their failure to follow the law by offering the money due their tenants, at least the tenants who become aware of their rights and defend or advance a counterclaim to their evictions.”

Ferreira is the court’s first en banc decision under a pilot program launched in the fall of 2022.

Under the program, after draft opinions are circulated internally, a judge may call for a vote on en banc review, which will be granted if the draft panel decision would conflict with U.S. Supreme Court, Supreme Judicial Court or Appeals Court precedent, making en banc review necessary to maintain the uniformity of the court’s decisions, or if the proceeding involves one or more questions of “exceptional importance.”

The Ferreira case was initially argued to a three-judge panel on Jan. 5, then given an en banc rehearing by video conference on April 28.

As might be expected with so many ears and eyes reviewing it, Ferreira produced a split on the court, with the same eight judges signing onto three dissenting opinions, one of which has struck a chord with attorneys who represent small landlords. (The published decision does not make clear how many of the court’s other 17 judges signed on to the majority opinion.)

“There are many reasons for the housing crisis in Massachusetts, but we would do well to acknowledge that our landlord-tenant jurisprudence is one of them.”

— Judge Joseph M. Ditkoff, in dissent

Judge Joseph M. Ditkoff wrote that Ferreira “adds to the steady judicial drumbeat warning every small residential landowner that, whatever you do, do not rent out your property.”

Ditkoff added that “[t]here are many reasons for the housing crisis in Massachusetts, but we would do well to acknowledge that our landlord-tenant jurisprudence is one of them.”

The 50-page decision is Lawyers Weekly No. 11-092-23.

Need for legislative response?

The landlord’s attorney, Lawrence J. Farber of Amherst, said he was not surprised by the Appeals Court’s decision, even as he continues to believe that the dissenters have a better grasp on the Legislature’s intent in providing defenses to possession under G.L.c. 239, §8A.

“It was a decision that put technical interpretation ahead of the reasonable equities of the situation,” he said.

But Watertown attorney Jordana Roubicek Greenman, who exclusively represents small landlords, said she was “horrified” and “shocked” by the decision. She said it may prompt her either to discontinue handling no-fault eviction cases or at least come up with some kind of form to explain to small landlords why going down the landlord’s path in Ferreira is “the worst way to do eviction and comes with the biggest risk.”

“This decision did not change the statute; it simply enforced §8A as written and intended by the Massachusetts Legislature years ago.”

— Gabriel L. Fonseca, Springfield

However, the tenant’s attorney, Gabriel L. Fonseca of Springfield, noted that §8A has been the law in Massachusetts for decades.

“This decision did not change the statute; it simply enforced §8A as written and intended by the Massachusetts Legislature years ago,” Fonseca said. “It was the people of Massachusetts — through the legislative process — who determined tenants should have a way to defeat an eviction action when a landlord fails to meet its own legal obligations. In Massachusetts, tenants have legal rights and protections, too, and the Appeals Court simply reaffirmed and enforced one of those existing protections.”

To Boston attorney Dick M.W. Bauer, of counsel to the Volunteer Lawyers Project, which submitted an amicus brief supporting the tenant in Ferreira, the result is in keeping with the basic policy of the statute to favor a tenant who has done nothing wrong, aside from perhaps justifiably withhold rent, over a landlord who has violated the law.

Farber said that his client’s case has now settled, allowing her to regain possession of the property. But if he has any lingering frustration from Ferreira, it stems from the stay granted in a second summary process action he had filed after his client remedied the violation of the water use statute by taking over payment of the water bills.

A fairer outcome would have been for the Housing Court to allow the second action to proceed, which would have allowed his client to regain possession of the property more quickly, he said. Even if that technically mooted the tenant’s appeal, the Appeals Court still could have ruled in Ferreira, if it deemed the case as having raised an important question capable of evading review, Farber noted.

Greenman said Ferreira is just the latest sign that the law is growing increasingly blind to the plight of small landlords.

“The big question is: ‘Are evictions going extinct?’” she said.

While stressing that she was not saying it is OK for small landlords to break the law, Greenman said complying with all the applicable laws is simply “not feasible” for people like the non-professional landlord in Ferreira.

Unsurprisingly, Bauer disagreed, finding no problem with holding the landlord to a standard where she either knew or should have known about the violation of the water use statute. Most, if not all, businesses must comply with applicable laws and regulations, he noted.

“This is no different in that regard,” Bauer said.

According to Farber, it would be “very easy” for the Legislature to amend G.L.c. 239, §8A, to address the issue that Ferreira raises: the need to distinguish between corporate landlords that own property on a large scale from property owners like his client, who simply want to move back into their own homes.

The language could specify that for people seeking possession of the property for their own or their family’s use, a Housing Court judge should have the discretion to grant them that possession, Farber said. The provision could be limited to properties with three or fewer units.

The statutes were written to stop large-scale landlords prone to exploiting tenants, not someone like his client, Farber added.

Long road home

In 2016, tenant Laural Charland signed a lease for a single-family home that for the prior three-plus years had been landlord Cassandra Ferreira’s primary residence.

The lease required Charland to pay for utilities, including hot water and city water and sewer charges.

Ferreira notified Charland in July 2020 that she needed to move back into her home. Due to the Massachusetts moratorium on evictions, she could not immediately serve Charland and her co-tenants with a notice to quit.

Once the moratorium was lifted, Ferreira on Dec. 14, 2020, filed a no-fault summary process action, seeking to evict Charland. Charland filed an answer and counterclaims, which asserted that Ferreira violated the water use statute. She sought both possession and money damages.

After Charland served her answer, Ferreira through counsel sent two checks to Charland as reimbursement for the water charges and any damages that may have flowed from the alleged violation.

At a subsequent hearing, Ferreira agreed that she had violated the water use statute but argued that Charland’s counterclaim was moot or waived because she cured the violation prior to the hearing.

Charland’s attorney instead characterized the checks as an offer of settlement, which had not been accepted for consideration.

In his written order, Judge Robert G. Fields found that Ferreira’s tender of damages fully resolved the tenant’s counterclaim under the water use statute, rendering a defense to possession unavailable under G.L.c. 239, §8A, though he also granted a stay of the eviction.

On Oct. 27, 2021, Ferreira filed a second notice to quit followed by a second no-fault summary process action.

Over Ferreira’s objection, the judge stayed the second summary process action pending disposition of Charland’s appeal in the original case.

On April 28, 2022, Ferreira filed a petition pursuant to G.L.c. 231, §118, with the single justice of the Appeals Court seeking interlocutory relief from the stay of the second summary process action, which was denied.

Dissenters sound off

To the Appeals Court majority, it would risk eviscerating the original purpose of §8A to allow landlords to unilaterally moot the remedy the statute provides simply by tendering the amount of damages owed for the breach.

In a more typical situation, a tenant might be withholding rent after a “less scrupulous” landlord failed to maintain the property in a habitable condition, the majority noted.

“While the dissenting opinions assert that §8A works an inequity to the landlord in this particular case, none of them explain how we can reach a contrary result without undermining the purpose of the statute in future cases,” Blake wrote.

But his colleagues’ conclusion prompted dissenting Judge William J. Meade to reach for literary references to express his incredulity.

“While not quite devolving to the level of Charles Dickens’s Bleak House, this case could easily be described as Kafkaesque,” he wrote.

Referencing the majority’s concern about landlords simply buying themselves free of the consequences of their failure to follow the law, Meade said “the majority from LaMancha tilts at windmills.”

To Meade, it was clear that Charland’s claim was mooted when Ferreira made her whole for her water use claim, a “good deed” that “will not go unpunished,” instead forcing her to endure yet another summary process action, which would take a while to resolve.

“At some point, Ferreira may well just give up and accept her judicially-imposed plight,” Ditkoff wrote, which he noted that the Volunteer Lawyers Project believed was “a feature, not a bug, of the tenant’s proposed interpretation of the statute.”

If she ever recovered possession of the property, Ferreira will likely never rent it out again, which Ditkoff said pointed to a flaw in the reasoning of the Attorney General’s Office, which submitted an amicus brief in support of Charland.

While agreeing with his fellow dissenters, Judge John Englander wrote separately to take issue with the majority’s apparent endorsement of a legal scheme that does not require proof that the landlord had advance knowledge of the condition or violation that forms the basis for the tenant’s defenses or counterclaims in no-fault eviction cases.

Englander called the knowledge or notice requirement an “integral component” of §8A.

“The object of the rule is to have the landlord remedy the condition or the services or equipment provided; the object is not (as the majority suggests) to give the tenant an ‘entitle[ment]’ to possession,” Englander wrote.

That Ferreira had not been provided an opportunity to cure was yet another ground on which the judgment of possession in her favor should be affirmed, Englander said.