Grand Manor Condo. Ass'n v. City of Lowell

• Citation: 100 Mass.App.Ct. 765,186 N.E.3d 1267
• Decision Date: 17 March 2022
• Docket Number: 20-P-622
• Parties: GRAND MANOR CONDOMINIUM ASSOCIATION & others v. CITY OF LOWELL.
• Court: Appeals Court of Massachusetts

100 Mass.App.Ct. 765

186 N.E.3d 1267

GRAND MANOR CONDOMINIUM ASSOCIATION & others¹

v.CITY OF LOWELL.

No. 20-P-622

Appeals Court of Massachusetts, Middlesex.

Argued November 17, 2021.

Decided March 17, 2022.

Elliott J. Veloso, Assistant City Solicitor, for city of Lowell.

Stacie A. Kosinski & Brian M. Hurley, Boston, for the plaintiffs.

Present: Kinder, Henry, & Hand, JJ.

KINDER, J.

This case involves environmental contamination discovered on property previously used by the city of Lowell (city) as a landfill and subsequently sold to the developer of Grand Manor Condominiums. The plaintiffs are the condominium association and individual condominium owners, successors in interest to the developer. After a trial in 2016, a Superior Court jury found that the city was liable for response costs under § 4A of the Massachusetts Oil and Hazardous Material Release Prevention Act, G. L. c. 21E (act). However, the jury rejected the plaintiffs’ claim for property damage under § 5 (a ) (iii) of the act, concluding that such recovery was barred by the applicable statute of limitations. On direct appellate review, the Supreme Judicial Court determined that the limitations issue should not have been presented to the jury and remanded the case to the Superior Court. See Grand Manor Condominium Ass'n v. Lowell, 478 Mass. 682, 684, 88 N.E.3d 1154 (2018) ( Grand Manor I ). After a second trial, which is the subject of this appeal, a different jury awarded damages for both response costs and property damage. On appeal, the city claims that in the second trial (1) the plaintiffs’ expert witness on damages should not have been permitted to testify; (2) the judge improperly allowed the jury to consider a three-dimensional model of the contaminated area; (3) sovereign immunity bars any award of prejudgment interest against the city; and (4) the judge abused his discretion in awarding attorney's fees and costs to the plaintiffs. For the reasons that follow, we affirm.

Background. We summarize the relevant facts as set forth in Grand Manor I. In 2008, hazardous material from a landfill previously operated by the city was discovered in the soil underlying the Grand Manor Condominiums. Grand Manor I, 478 Mass. at 685-686, 88 N.E.3d 1154. As a responsible party under the act, the city was required to undertake a remediation process, which, in this case, involved installing a cap over the hazardous material and implementing an Activity and Use Limitation (AUL).^{2 ,3} Id. at 687-688, 88 N.E.3d 1154. In 2012, the plaintiffs sued the city under § 4A of the act for response costs, and under § 5 (a ) (iii) of the act for damage to their property (i.e., diminished property value). Grand Manor I, supra at 688, 88 N.E.3d 1154.

The second trial commenced in September 2018. The issues were limited to whether and by how much the plaintiffs’ property values decreased because of the contamination and the AUL. The plaintiffs offered expert testimony from Robert LaPorte that property values diminished by $2,684,750 and were unlikely to return to their previous value given "the environmental conditions and ... risk that will continue with this property for the foreseeable future."⁴ LaPorte reached his conclusion using "the sales comparison approach." First, LaPorte estimated the market value of an uncontaminated unit at Grand Manor by looking at sales of four nearby residential condominium units of about the same age and size. Next, to estimate the market value of a Grand Manor unit with permanent contamination and an AUL, LaPorte "researched and attempted to locate comparable situations where a condominium project may have been constructed on top of a landfill." Unable to find one, LaPorte instead aggregated and averaged sales of Grand Manor units since the contamination was discovered. LaPorte then subtracted that number from his estimated fair market value of a non contaminated Grand Manor unit.

The city cross-examined LaPorte regarding his failure to consider comparable condominium units built on a landfill before moving to strike LaPorte's testimony on that basis. The judge denied the motion, reasoning that LaPorte "was clear that there were no comparables to use" and there was no evidence before the jury that LaPorte failed to use proper appraisal methodology.

Geographic information systems analyst Stephen Washburn testified regarding a three-dimensional computer model of the premises that he created. The model showed the location and geographic extent of contaminated soil on the site and areas of proposed remediation. The city moved to exclude Washburn's model, arguing that it was (1) not scientifically reliable or timely disclosed, and (2) irrelevant and unfairly prejudicial because it did not depict levels of contamination. The judge denied that motion.

Expert real estate appraiser Joel Tran testified for the city that the current market value of the units at Grand Manor had been reduced by $3,054,700 because of the contamination. Tran opined, however, that the market value would fully recover within two years of complete remediation. Tran also "employed the sales comparison approach" to reach his conclusions, and compared five previously contaminated properties that had been remediated and redeveloped. Tran compared the market value of units at these properties following the discovery of further contamination.

The jury reached a different conclusion than either expert and awarded the plaintiffs damages of $1,419,550.⁵ Following the verdict, the plaintiffs submitted a proposed judgment that included prejudgment interest of twelve percent. The city responded with its own proposed judgment and a supporting memorandum arguing that prejudgment interest was barred by sovereign immunity. The judge adopted the city's argument before receiving the plaintiffs’ response.

The plaintiffs moved to amend the judgment to include prejudgment interest at a rate of twelve percent per annum since 2012, arguing that the act contains an implicit waiver of sovereign immunity. The plaintiffs also moved to amend the judgment to include costs and attorney's fees in the amount of $1,134,516.97, "consisting of $606,187.48 from the first trial, $72,637.50 for a successful appeal, $329,507.50 for the second trial and $126,184.49 in expert fees/costs and deposition/transcript costs over two trials." The judge reversed his earlier ruling with respect to prejudgment interest, concluding "that waiver of sovereign immunity for prejudgment interest is a ‘necessary implication’ of the terms of the statute, G. L. c. 21E, § 5." As to attorney's fees and costs, the judge agreed with the city that the plaintiffs should not be reimbursed for their appeal in Grand Manor I and denied the request for those fees in the amount of $72,637.50. The judge found that the plaintiffs’ remaining requests for fees and costs were adequately supported and were not excessive.

Discussion. 1. Evidentiary rulings. a. Expert testimony. We see no abuse of discretion in the judge's denial of the city's motion to strike the testimony of the plaintiffs’ expert because he did not use the comparable sales method of valuation. Trial judges have discretion to determine "what evidence should be admitted on the subject of valuation," as well as "whether special conditions exist so that methods other than comparable sales can be used in establishing value." Lic, Inc. v. Hudson, 10 Mass. App. Ct. 815, 816, 406 N.E.2d 397 (1980). Here, there was evidence that there were no comparable sales of residential condominium units originally constructed on contaminated land. Id. The units considered by the city's expert as comparable sales had already been "remediated to the point of no significant risk to public health." Grand Manor I, 478 Mass. at 685, 88 N.E.3d 1154. Thus, this case is not like Young Men's Christian Ass'n of Quincy v. Sandwich Water Dist., 16 Mass. App. Ct. 666, 670-671, 454 N.E.2d 514 (1983), upon which the city relies, where the expert misapplied a method of valuation. The plaintiffs’ expert did not misapply the comparable sales method; he simply chose not to include sales that were not comparable. The city's contention, that LaPorte's testimony was based on inadequate information, "goes to the weight and not the admissibility of the testimony." Commonwealth v. Rintala, 488 Mass. 421, 429, 174 N.E.3d 249 (2021).

b. Three-dimensional model. Washburn's testimony and the three-dimensional model were admissible if they were reliable and relevant, see Commonwealth v. Hinds, 487 Mass. 212, 218, 166 N.E.3d 441 (2021) ; Mass. G. Evid. §§ 402, 702 (2021), and if their probative value was not "substantially outweighed" by the danger of prejudice, Mass. G. Evid. § 403 (2021). Decisions on those issues are matters within the judge's discretion. Carrel v. National Cord & Braid Corp., 447 Mass. 431, 446, 852 N.E.2d 100 (2006), and cases cited.

We see no abuse of discretion here. Washburn testified that he created the model using software programs that "are widely used for visualization of topographic and subsurface features in both 2D and 3D," and are "accepted methodology in [his] field." There was no contrary evidence. Indeed, the city's own expert in environmental modeling was familiar with the use of computer software to create three-dimensional computer models, and had done so himself. Thus, the evidence sufficiently established that the process on which Washburn's testimony was based had "general acceptance in the relevant community." Rintala, 488 Mass. at 428, 174 N.E.3d 249, quoting Commonwealth v. Patterson, 445 Mass. 626, 640, 840 N.E.2d 12 (2005), overruled on other grounds by Commonwealth v. Britt, 465 Mass. 87, 987 N.E.2d 558 (2013).

Although the city's expert opined that Washburn's model was inaccurate, that opinion was not based on Washburn's methodology. We have carefully reviewed the model and agree with the judge that it was relevant as "an aid to testimony" and not overly prejudicial simply because it did...