Town of Nantucket v. Beinecke

• Citation: 398 N.E.2d 458,379 Mass. 345
• Parties: TOWN OF NANTUCKET v. Walter BEINECKE, Jr.
• Decision Date: 12 December 1979
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 458

398 N.E.2d 458

379 Mass. 345

TOWN OF NANTUCKET v. Walter BEINECKE, Jr.

Supreme Judicial Court of Massachusetts, Nantucket.

Argued Oct. 2, 1979.

Decided Dec. 12, 1979.

Richard W. Renehan, Boston, for plaintiff.

John D. Dwyer, Boston, for defendant.

Before HENNESSEY, C. J., and BRAUCHER, KAPLAN, WILKINS and LIACOS, JJ.

LIACOS, Justice.

The plaintiff town of Nantucket filed a complaint on June 23, 1978, to obtain declaratory and injunctive relief pursuant to G.L. c. 231A, § 1, and G.L. c. 185, § 1(K ). The defendant, Walter Beinecke, Jr., moved to dismiss the complaint under Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), on the ground, inter alia, that the complaint shows on its face that the action is barred by the statute of limitations. On January 11, 1979, a judge in the Land Court granted the motion to dismiss and ordered entry of judgment for the defendant. The plaintiff appealed, and this court granted the plaintiff's application for direct appellate review. We reverse.

The complaint alleges the following facts. On March 27, 1964, the town treasurer assigned tax title to a certain parcel of land consisting of 47.54 acres to one John J. Gardner, II, for $15.38. On May 8, 1967, one Roy E. Sanguinetti contracted to convey title to the defendant. Gardner conveyed title to Sanguinetti as trustee of Windswept Realty Trust on May 10, 1967, for less than $100. On May 31, 1967, Sanguinetti conveyed title to the defendant for a total consideration of $16,500. During these transactions, Gardner was a tax assessor for the town, and Sanguinetti was town counsel and town moderator. The defendant had actual knowledge of the town offices held by Gardner and Sanguinetti. The complaint alleges an actual controversy between the plaintiff and the defendant over the rights of the town against the defendant under the Conflict of Interest Law, G.L. c. 268A, §§ 19, 20(A ), 21(A ). The complaint prays (a) for a declaration that the deed to the defendant is voidable, (b) for a declaration of the terms under which the defendant should reconvey the land to the plaintiff, (c) for an order requiring the defendant to reconvey the land on such terms, and (d) for any other further relief deemed proper by the court. ¹

The defendant's motion to dismiss raised three basic defenses in seven separate paragraphs: (1) the action is barred by the statute of limitations; (2) the action is barred by laches; and (3) the complaint fails to show that any conflict of interest "substantially influenced" the transfer of tax title in 1964.

The Land Court judge filed an opinion ruling that the plaintiff's claim was time-barred, ² and entered judgment on January 24, 1979, dismissing the plaintiff's complaint with prejudice.

We consider first the question of which, if any, statute of limitations governs actions brought under the Conflict of Interest Law, G.L. c. 268A, § 21. The plaintiff contends that actions brought under G.L. c. 268A, § 21, are not governed by any statute of limitations. We disagree. On other occasions, when faced with similar claims relating to a new right created by a statute which, as here, contained no limitation provision within itself, this court has looked to the essential nature of the right to determine which statute of limitations should be applied. See Baldassari v. Public Fin. Trust, 369 Mass. 33, 42-43, 337 N.E.2d 701 (1975), in relation to an action under G.L. c. 93A, the Consumer Protection Act, and Lynch v. Signal Fin. Co., 367 Mass. 503, 327 N.E.2d at 732 (1975). ³ In relation to an action under G.L. c. 140C, the Truth-in-Lending Act. See also Commonwealth v. Canon, 373 Mass. 494, 388 N.E.2d 1181 (1977), cert. denied, 435 U.S. 933, 98 S.Ct. 1510, 55 L.Ed.2d 531 (1978), where the court apparently assumed that the six-year limitation prescribed in G.L. c. 277, § 63, applied to a criminal prosecution under G.L. c. 268A.

We find nothing in the legislative history of G.L. c. 268A, § 21, which would suggest that the Legislature, by not specifically prescribing a period of time within which an action under § 21 must be brought, intended that actions not be time-limited. If such a result had been intended, it would have been natural for the Legislature to express such an intention. Cf. Boston v. Gordon, 342 Mass. 586, 591, 125 N.E.2d 377 (1961).

We now turn to the question of which statute of limitations should govern such actions. Looking to the " 'gist of the action' or the essential nature of the plaintiff's claim" (Hendrickson v. Sears, 365 Mass. 83, 85, 310 N.E.2d 131 (1974)), we conclude that an action brought under G.L. c. 268A, § 21, sounds in tort. This is in accordance with early Massachusetts case law where suits concerning violations of official duty were viewed as actions in tort. See Connors v. Stone, 177 Mass. 424, 59 N.E. 71 (1901). ⁴ The tort statute of limitations is applicable to the variety of types of actions possible under G.L. c. 268A, § 21, whether land is involved or not. The statute of limitations for recovery of land which the plaintiff alternatively urges us to apply (G.L. c. 260, § 31) has possible relevance only where a parcel of land is the object of recovery. We conclude that the essence of an action under the statute is breach of official duty, and the fact that the plaintiff seeks to recover land as opposed to money or some specific chattel is only of subsidiary importance. ⁵

The plaintiff contends that the trial judge erred in applying the two-year tort statute of limitations contained in G.L. c. 260, § 2A, as opposed to the three-year period contained in St.1973, c. 777, §§ 1, 4, applicable to the causes of action "arising on and after" January 1, 1974. The judge applied the two-year statute of limitations implicitly finding that that cause of action arose prior to 1974. We agree with this aspect of the judge's decision, it being clear that the cause of action arose prior to 1974. Gardner received tax title to the locus in 1964, and Sanguinetti purchased and sold the same to the defendant in 1967. These activities, both occurring prior to the effective date of the three-year statute, gave rise to the plaintiff's cause of action. The judge properly applied the two-year tort statute of limitations contained in G.L. c. 260, § 2A.

We now turn to the judge's determination that the town was on notice by 1975. The judge correctly stated that "(r)ecent Massachusetts decisions make it clear that the statute commences to run when the plaintiff knew or should have known of the wrong." Friedman v. Jablonski, 371 Mass. 482, 358 N.E.2d 994 (1976); Hendrickson v. Sears, supra, 365 Mass. at 91, 310 N.E.2d 131; Mansfield v. GAF Corp., 5 Mass.App. 551, 364 N.E.2d 1292 (1977). ⁶

To apply this principle properly in a proceeding brought by a town under G.L. c. 268A, § 21, it is necessary to decide what person or persons in the town need know of the wrong in order to put the town on notice. Certainly each and every citizen in the town need not know, and likewise knowledge by a few unofficial persons is clearly insufficient. Even knowledge by certain town officials may be insufficient to charge the town with knowledge. For example, the town treasurer who assigned tax title to Gardner in 1964 clearly knew of the wrong complained of here, yet her involvement in the allegedly illegal transaction (even if such involvement was not culpable under the statute) precludes her knowledge from being charged to the town.

We feel that a realistic notice concept is appropriate under the Conflict of Interest Law, G.L. c. 268A, § 21, in order to further the purposes of the legislation. The statute is aimed at restraining municipal employees from maintaining a financial interest in contracts made by a municipal agency. The purpose of the Conflict of Interest Law, at least in part, is to protect municipalities from overreaching by their employees. It would be anomalous to ignore this protective policy by charging the knowledge of the culprits as notice to the municipality being wronged by their acts, as the defendant suggests.

While we express no opinion as to when a town will be charged with knowledge in each and every case, we suggest, as a general proposition, that only when those disinterested persons who are capable of acting on behalf of the town knew or should have known of the wrong, should the town be charged with such knowledge. ⁷ While it might be claimed, in another case, that knowledge of town counsel is sufficient to charge the town with notice, that certainly cannot be said in this case due to his active involvement in violating the statute. Obviously, in a town where the board of selectmen have been appointed as agents to bring suits on behalf of the town, their knowledge would be sufficient to charge the town. See G.L. c. 40, § 2; Inhabitants of Great Barrington v. Gibbons, 199 Mass. 527, 85 N.E. 737 (1908).

The trial judge, in deciding that the town was on notice by 1975, made reference to certain dicta in a Nantucket Probate Court decision coming to the attention of the board of selectmen of Nantucket on September 16, 1975. While the judge's focus on knowledge by the board of selectmen was entirely appropriate, the use of judicial notice with respect to the manner in which the board necessarily acquired such knowledge was erroneous. The judge stated: "By decision dated September 16, 1975 and filed on the following September 19, 1975, the Nantucket Probate Court dealt harshly with the conduct of which the Town now complains. . . . ⁸ While this was dicta in the case, it cannot have failed to have been brought to the attention of the Board of Selectmen of Nantucket. This Court takes judicial notice of the geographical size of the town, its sparse population, particularly in September, the presence of a weekly newspaper which as a usual practice fully covers pending litigation and the controversies which have engaged its residents for the past several years. On September 19, 1975...