Rent Control Bd. of Cambridge v. Praught, 92-P-1421

• Decision Date: 10 September 1993
• Docket Number: No. 92-P-1421,92-P-1421
• Citation: 619 N.E.2d 346,35 Mass.App.Ct. 290
• Parties: RENT CONTROL BOARD OF CAMBRIDGE v. Mary PRAUGHT.
• Court: Appeals Court of Massachusetts

Page 346

619 N.E.2d 346

35 Mass.App.Ct. 290

RENT CONTROL BOARD OF CAMBRIDGE v. Mary PRAUGHT.

No. 92-P-1421.

Appeals Court of Massachusetts Middlesex.

Argued June 4, 1993.

Decided Sept. 10, 1993.

Patrick W. Hanifin, Boston, for defendant.

Patricia A. Cantor, Boston, for plaintiff.

Before KASS, JACOBS and IRELAND, JJ.

KASS, Justice.

Mary Praught, a lawyer, resisted a subpoena duces tecum from the rent control board of Cambridge for the production of "[a]ny and all papers or other documents prepared or kept" by her or her law firm concerning the conveyance of a condominium unit at 42 Linnaean Street. The board brought an action in the Cambridge District Court to enforce the subpoena and a judge of that court ruled that Ms. Praught was required "to comply with the subpoena." From the judgment entered so ordering, Ms. Praught has appealed. ¹ We affirm.

Among the substantive arguments that Ms. Praught has raised are (1) the board lacks subpoena power over her and (2) the subpoena invades her client's lawyer-client privilege. Other arguments have produced procedural underbrush which we undertake to clear away as an initial matter.

1. Jurisdiction of the District Court over an application for enforcement of a subpoena issued by the board. Ordinarily, a tribunal authorized to summon, but not to compel, the attendance of witnesses may apply to a judge of the Superior Court or the Supreme Judicial Court for an enforcement order should it encounter resistance to a subpoena which it has issued. G.L. c. 233, § 10. However, under § 5(d) of the enabling act governing rent control in Cambridge, St.1976, c. 36, ² a judge of the District Court "shall have the same power as a justice of the Supreme Judicial or Superior Court to implement the provisions" of G.L. c. 233, § 10. The power to summon persons "to attend and testify" conferred by § 5(d) is in aid of the board's power to "make such studies and investigations, conduct such hearings, and obtain such information as is deemed necessary in promulgating any regulation, rule or order under this act, or in administering and enforcing this act and regulations and orders promulgated hereunder." This is highly inclusive language and brings within its scope rule making and adjudicatory activities of the board.

So plain is the language making the District Court available as a forum to the board for enforcement of its subpoena power ³ that it requires something of a tour de force to place the jurisdiction of the District Court so to do in doubt. Ms. Praught attempts that act of virtuosity as follows. In 1985, the Legislature added to § 5 of the Cambridge rent control act a subparagraph (f) which, in general terms, provided that the adjudicatory proceedings of the board were to be conducted conformably with the State Administrative Procedure Act, i.e., G.L. c. 30A. See St.1985, c. 399, § 1. Under c. 30A, § 12(5), the forum for enforcement of subpoenas of an agency is the Superior Court. It follows, so Ms. Praught argues, that a subpoena of the rent control board of Cambridge can only be enforced by a judge of the Superior Court.

The syllogism is false. Nothing in the 1985 legislation limited the express assignment in § 5(d) of authority to the District Court to enforce subpoenas of the board. The specific provision in § 5(d) trumps the general provisions in § 5(f). ⁴ Risk Mgmt. Foundation of Harvard Med. Insts., Inc. v. Commissioner of Ins., 407 Mass. 498, 505, 554 N.E.2d 843 (1990). Bernstein v. Gramercy Mills, Inc., 16 Mass.App.Ct. 403, 409, 452 N.E.2d 231 (1983). 2B Singer, Sutherland Statutory Construction § 51.05 (5th ed. 1992). Indeed, the design of the 1985 legislation was to broaden, rather than to narrow, the avenues of judicial intervention. Judicial review, previously available only in the District Court in the first instance, was now to be available in the District Court or the Superior Court. See Amari v. Rent Control Bd. of Cambridge, 21 Mass.App.Ct. 598, 600 n. 6, 488 N.E.2d 1180 (1986). Cf. Commonwealth v. Kapsalis, 26 Mass.App.Ct. 448, 455, 529 N.E.2d 148 (1988). The District Court had jurisdiction over an application by the board for enforcement of its subpoena and the case was properly lodged in that court.

2. Jurisdiction of the board and the court over the underlying administrative matter. What had triggered these proceedings was a complaint to the board by Constance Thibaut, a self-appointed watchdog (and a member of the Cambridge Tenants' Union) who lived as a tenant at 42 Linnaean Street, that condominium unit 12A in her building had been sold without leave of a removal permit to an owner-occupant in violation of c. 8.44 of the City Code of Cambridge (the "Removal Permit Ordinance"). ⁵ The "removal" of which the code speaks is the removal of a condominium unit from the category of a "controlled rental unit" as that term is defined in the rent control act. See St.1976, c. 36, § 3(b). The parties do not dispute that, prior to the allegedly offending transaction, unit 12A was a controlled rental unit.

Unit 12A, when Thibaut lodged her complaint, was occupied by Kathryn Sammartano. The owner of record was Kathryn Sammartano, trustee of C.V.D. Trust, a nominee trust established by a declaration of trust dated and recorded contemporaneously with the unit deed conveying title to Sammartano as trustee. Thibaut engaged Sammartano in neighborly conversation, during the course of which Sammartano unguardedly identified herself as the buyer of unit 12A. The idea of the parties, as advised by counsel, appeared to be that the trust constituted a sufficient intermediary to avoid the unit being owner-occupied for purposes of the Removal Permit Ordinance. Whether that was so would depend on who had the beneficial interest in the trust and what financial arrangements existed between the trust and the occupant.

In addition to Sammartano, the objects of the complaint of unlawful removal included four other persons: Richard S. Brown and Margaret Gerteis, who sold unit 12A to the trust, Ms. Praught, and Kathleen McCabe, another lawyer in the law firm with which Ms. Praught was connected. Ms. Praught argues that, as none of those individuals "owns" unit 12A and, thus, cannot have violated the Removal Permit Ordinance, neither the board nor a court has jurisdiction over the individuals. There is no merit to the argument because it assumes the conclusion that the trust represents property interests other than those solely of Sammartano. That is what the underlying controversy is about.

Record title is evidence of ownership, but not a decisive factor, particularly in the context of rent control. Kinchla v. Rent Control Bd. of Brookline, 25 Mass.App.Ct. 656, 658-659, 521 N.E.2d 1032 (1988). For purposes of deciding whether an apartment is owner-occupied, beneficial ownership, rather than title, is the more relevant consideration. Trovato v. Walsh, 363 Mass. 533, 535, 295 N.E.2d 899 (1973). The function of the trustee of a nominee trust is perfunctory compared to the more copious duties of a trustee in the conventional fiduciary trust. Penta v. Concord Auto Auction, Inc., 24 Mass.App.Ct. 635, 639, 511 N.E.2d 642 (1987). Apahouser Lock & Security Corp. v. Carvelli, 26 Mass.App.Ct. 385, 388, 528 N.E.2d 133 (1988). In re Grand Jury Subpoena, 973 F.2d 45, 48 (1st Cir.1992). Birnbaum & Monahan, The Nominee Trust in Massachusetts Real Estate Practice, 60 Mass.L.Q. 364, 364-368 (1976). To investigate the complaint made by Thibaut, the board necessarily had to direct its attention to Sammartano, who either was the real party in interest or would know who was. To the extent that a scheme may have been devised to sell controlled rental units to owner-occupants, the sellers were proper subjects of the complaint because they might have devised the scheme and then sold the idea. What the lawyers, as professional advisers, could add to the picture is a subject to which we shall turn later in this opinion. Sammartano was quite capable of being regarded as the owner of unit 12A within the meaning of the rent control act if it turned out that she owned the beneficial interest in the trust. She was not proof against complaint or subpoena, nor were the other persons connected with the transaction.

3. Whether the lawyer-client privilege entitles Ms. Praught to resist the subpoena. One may question what Ms. Praught, as the lawyer for the sellers, Brown and Gerteis, has to contribute to the proceedings and, therefore, the board's wisdom in enmeshing her in them. ⁶ Sammartano ought to know the answers to such pertinent questions as: who owns the beneficial interest in the trust; whether Sammartano pays occupancy charges to any one; from whom the money came to buy the unit; and who signed a promissory note in connection with a mortgage loan, and in what capacity. ⁷ The sellers would know whether they had represented that a sale to a trust would shield a buyer against the Removal Permit Ordinance and whether they had dealt with Sammartano as the buyer. The offer form, if any, the purchase and sale agreement, and the certificate of beneficial interests are documents available from Sammartano and the sellers. The unit deed was a matter of public record, as would be a mortgage or mortgages given by the trust, if any.

Whether it was sensible of the board to slap a subpoena on Ms. Praught is a question different from whether it lawfully could do so. The role of lawyer does not constitute a cloak of immunity against subpoena. Commonwealth v. Anolik, 27 Mass.App.Ct. 701, 709-710, 542 N.E.2d 327 (1989) (documents relating to a real estate transaction not privileged because they were meant to be passed along to third persons). United States v. Klubock, 832 F.2d 649, 657 (1st Cir.1987). What the attorney-client privilege protects is communication between the lawyer and the client (privileged persons) made in confidence "[f]or the purpose of obtaining [on the part of the client] or providing ...