Summary
In Lawrence v. Lei, 98 Mass.App.Ct. 1115 (2020) (Lei I), a panel of this court affirmed orders of the Housing Court appointing the receiver pursuant to G. L. c. 111, § 127I, approving its budget, and authorizing the receiver to foreclose on the property.
Summary of this case from City of Lawrence v. LeiOpinion
20-P-117
10-26-2020
CITY OF LAWRENCE v. Michael Scott LEI & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
The city of Lawrence (city) petitioned the Housing Court for appointment of a receiver, pursuant to G. L. c. 111 § 127I, to remedy sanitary code violations of certain residential property, of which Michael Lei was the record owner. A judge of the Housing Court approved the appointment, and a second judge approved the initial budget of $321,665.08. After the receiver remedied the conditions on the property, the second judge approved its final budget in the amount of $297,132.26, gave the receiver a priority lien, and authorized the receiver to sell the property in order to satisfy its lien. Michael Lei appealed; we affirm.
Background. On December 1, 2016, the city issued an emergency condemnation and order to vacate to Michael Lei. On January 6, 2017, the Lawrence fire department conducted an inspection of the property and issued a report which found the structure to be "an extremely dangerous fire hazard and public safety concern." On March 26, 2018, the city filed a petition in the Housing Court to enforce the sanitary code and for appointment of a receiver to remedy serious health, safety, and security issues at the property.
Avatar's motion to strike Lei's record appendix is denied. We refer to the record appendix only to the extent necessary to aid our review. See Howcroft v. Peabody, 51 Mass. App. Ct. 573, 576 n.4 (2001).
Following several unsuccessful attempts to personally serve Lei with the petition, a judge of the Housing Court allowed the city's motion for alternative service by publication, which was accomplished on June 7, 2018. On June 27, 2018, the petition for appointment of Avatar Financial Services, Inc. (Avatar) as the receiver was allowed, and Avatar was given broad authority to bring the property into compliance with health and safety codes, pursuant to G. L. c. 111, § 127I.
At a status hearing on July 25, 2018, Lei appeared and moved to vacate the appointment of the receiver. Following a hearing, his motion was denied. On August 8, 2018, a judge of the Housing Court approved the receiver's initial budget of $321,665.08, and the receiver began its work on the property. Lei subsequently filed three more motions to vacate the appointment of the receiver, which were denied on April 17, 2019, and August 14, 2019. After an evidentiary hearing to determine whether the receiver had performed its duties in a fiscally responsible manner, the second judge approved the final budget of $297,132.26, plus further expenses for the sale of the property.
Discussion. Lei raises a number of arguments related to the initial appointment of the receiver and approval of the final budget. In reviewing his claims, "we apply the rule that findings of fact made by the judge below are to be accepted by us unless clearly erroneous" (citation omitted). Boston v. Rochalska, 72 Mass. App. Ct. 236, 241 (2008).
1. Appointment of receiver. Pursuant to G. L. c. 111, § 127I, when an affected occupant or public agency, such as a city's inspectional services department, files a petition to enforce the provisions of the sanitary code, the court may appoint a receiver. Rochalska, 72 Mass. App. Ct. at 243. "Generally, the appointment of a receiver rests in the sound discretion of the court." Albre v. Sinclair Constr. Co., 345 Mass. 712, 717 (1963), quoting Falmouth Nat'l Bank v. Cape Cod Ship Canal Co., 166 Mass. 550, 568 (1896). The court's discretion in appointing a receiver is not limited to occupied buildings. Rather, G. L. c. 111, § 127I, applies to vacant buildings as well. See Rochalska, supra at 246-247.
Avatar and the city argue that Lei's claims with respect to the appointment of the receiver are waived because he failed to timely appeal from the order appointing the receiver. An order appointing a receiver is immediately appealable under the doctrine of present execution. See Dickey v. Inspectional Servs. Dep't of Boston, 482 Mass. 1003, 1004 (2019). However, the failure to appeal from such an order does not forfeit a party's right to later appeal from the order when final judgment has entered. See Aiello v. Aiello, 447 Mass. 388, 398 (2006) ; Mass. R. A. P. 3 (a) (2), as appearing in 481 Mass. 1603 (2019) ("A party need not claim an appeal from an interlocutory order to preserve the party's right to have such order reviewed upon appeal from the final judgment").
To the extent that Lei argues that the court should not have appointed the receiver because (1) the Lawrence inspectional services department did not have authority to petition the court, and (2) the property was unoccupied, his arguments are directly foreclosed by Rochalska, 72 Mass. App. Ct. at 243. Moreover, Lei's argument that the Housing Court did not have jurisdiction to appoint the receiver is equally unavailing, as the statute expressly permits such petitions to be brought in the Housing Court. See G. L. c. 111, § 127I.
Lei additionally appears to argue that a receiver should not have been appointed because the city was the record owner of the property when the sanitary and health code violations were discovered. He does not cite any support for this proposition, and did not raise this argument below. Thus, it is waived. See Carey v. New England Organ Bank, 446 Mass. 270, 285 (2006). Nevertheless, we address the argument briefly.
Prior to discovering the health and sanitary code violations, the city obtained a judgment foreclosing and barring all rights of redemption on a tax lien on the property. Upon finding that the property was unfit and unsafe for human habitation, the city conducted an inspection, boarded up the property, and eventually filed a motion to vacate the judgment of foreclosure. The judgment of foreclosure was vacated on September 5, 2017, and Lei was thereafter the record owner. It is clear that the property has suffered from sanitary and health code violations for quite some time, and the violations were not cured by Lei after the vacation of the judgment of foreclosure. As a result, the city filed a petition to enforce provisions of the sanitary code, and sought the appointment of a receiver. See Rochalska, 72 Mass. App. Ct. at 247. A judge of the Housing Court found that the property was owned by Lei, Lei failed to manage and maintain the property in compliance with the sanitary code, and his failure to do so endangered the health and safety of the public. Appointing a receiver was well within the judge's discretion.
Lastly, Lei contends that Avatar in particular should not have been appointed as the receiver because it is not a licensed engineer or contractor, and is not registered to do business in Massachusetts. It is not a requirement of G. L. c. 111, § 127I, that the receiver itself perform the repairs on the property. Rather, a receiver has full power to enter into contracts as the receiver deems necessary to "repair the property and maintain it in a safe and healthful condition." G. L. c. 111, § 127I. Lei's allegation that Avatar is not properly licensed to do business in the Commonwealth is unsubstantiated by the record. Further, the Housing Court judge explicitly credited Avatar's owner, who testified to completing approximately 150 court-appointed receiverships in Massachusetts. "[T]he judge, who has a firsthand view of the presentation of evidence, is in the best position to judge the weight and credibility of the evidence" (citation omitted). Rochalska, 72 Mass. App. Ct. at 248. It was not an abuse of the judge's discretion to appoint Avatar as the receiver of the property.
2. Approval of final budget. Lei finally contends that Avatar was not financially responsible in carrying out the receivership. In its appointment, Avatar was given broad authority to rehabilitate the property and correct any illegal conditions. Avatar entered into contracts with three different companies for contracting, plumbing, and electrical work on the property. The owner of Avatar testified that he had previously worked with these companies on prior receiverships, and that each company provided reliable and reasonably-priced work. Avatar submitted to the Housing Court invoices from the three companies, including photographs of the property before and after completion of the repairs covered by the invoices, and requested approval of its $297,186.15 final budget. The judge noted that the budget did not exceed the initially approved amount, expressly credited Avatar's owner's testimony, and found that the receivership was carried out in a fiscally responsible manner. She approved the final budget (with a reduction of $53.89 due to a minor miscalculation in the request), as well as additional expenses for the sale of the property. "As previously stated, we accept as true the judge's findings of fact unless they are clearly erroneous." Rochalska, 72 Mass. App. Ct. at 248. We discern no error in the judge's approval of the final budget.
Lei makes no separate argument regarding the judge's order granting Avatar a priority lien and authorizing Avatar to sell the property in order to satisfy the lien.
To the extent that we have not addressed all of Lei's arguments, they have not been overlooked. Either we find nothing in them that requires discussion, or they do not rise to the level of adequate appellate argument as required by Mass. R. A. P. 16 (a) (9) (A), as appearing in 481 Mass. 1628 (2019). See Department of Revenue v. Ryan R., 62 Mass. App. Ct. 380, 389 (2004).
Conclusion. The orders appointing the receiver, approving the receiver's final budget, and assigning the receiver a priority lien with authority to sell the property in order to satisfy the lien, are affirmed.
Avatar's request for appellate attorney's fees and costs is allowed. Avatar may submit, within fourteen days of the date of issuance of this decision, a petition for fees and costs, together with supporting documentation, as discussed in Fabre v. Walton, 441 Mass. 9, 10-11 (2004). Lei shall have fourteen days thereafter to respond.
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So ordered.
Affirmed.