Does MassHealth’s Lifetime Lien Terminate upon the MassHealth Recipient’s Death?

By Brian E. Barreira

Federal Medicaid law allows states to place a lien on real estate that is not sold during the Medicaid application process. The state

Medicaid agency has the right to recoup what it spent on the Medicaid recipient if the real estate is sold during the Medicaid recipient’s lifetime, and that is the point of the lien. Even if a person applying for MassHealth in Massachusetts has a less than full ownership interest, such as a life estate, the MassHealth agency can place a lien on that ownership interest, with the understanding that, under Section (d) of Massachusetts General Laws, Chapter 118E, Section 31, the agency can collect what is owed to it as of the date of sale. After the MassHealth recipient’s death, however, the provisions of Sections (b) and (c) apply, and the agency is required to file an estate recovery claim against the decedent’s probate estate in order to collect this debt. The actual procedures for making the estate recovery claim are laid out in great detail in Massachusetts General Laws, Chapter 118E, Section 32, and no reference is even made to the lifetime lien.

It is my understanding that the MassHealth agency has recently claimed in court cases that the lien survives the Medicaid recipient’s death, but has glossed over the distinction between the lifetime lien and the post-death creditor claim which is filed against the deceased Medicaid recipient’s probate estate.

The MassHealth agency, which is part of the Executive Office of Health and Human Services of the Commonwealth of Massachusetts, is required to implement federal Medicaid law, and is answerable to the federal government under the funding scheme of Medicaid known as cooperative federalism. The federal agency that directly oversees the MassHealth agency in the federal-state structure, the Centers for Medicare and Medicaid Services, is a part of the U.S. Department of Health and Human Services. As the “single state agency” designated to deal with the federal government, the MassHealth agency is charged with ensuring that all federal laws that govern the Medicaid program are followed. The state agency cannot do anything that is contrary to the directions it has received from the federal government, and cannot take any actions that go beyond the Massachusetts laws that have implemented federal Medicaid law. Thus, in determining whether the lifetime lien survives the death of the Medicaid recipient, we need to look first and foremost at federal law, regulations and guidance, followed by state law establishing the MassHealth agency’s powers and duties, followed last by MassHealth regulations.

In memoranda of law filed at fair hearings, the MassHealth agency has often acknowledged its proper role in the federal-state hierarchy. For example, in the MassHealth memorandum filed in Appeal 1408932, the agency wrote:

[T]he Agency is bound by federal Medicaid law and its sub-regulatory guidance reflected in MassHealth regulations, and relevant Medicaid case law. Medicaid is a statutory program and not a program in equity. See generally Nissan Motor Corp. v. Comm ‘r of Revenue, 407 Mass. 153, 162 (1990) (there is no equity where a statute expresses a clear rule of law) … The state Medicaid statute and regulations are to be construed as showing a primary intent that the MassHealth agency comply with federal law in order to receive federal financial reimbursement. Youville Hospital v. Commonwealth, 416 Mass. 142, 146 (1993); Cruz v. Commissioner of Public Welfare, 395 Mass. 107, 112 (1985); see also G.L. c. 118E, § 11; 130 CMR 515.002(B). The MassHealth regulations themselves make this point. “These regulations are intended to conform to all applicable federal and state laws and will be interpreted accordingly.” 130 CMR 515.002(B). See also 130 CMR 520.018; 130 CMR 520.021. In particular, federal law provides that the federal agency administering Medicaid can deny some of the federal funding to a state if the state commits eligibility errors that exceed a specified threshold. 42 U.S.C. §1396b(u). As the single state agency, MassHealth is charged with ensuring that all federal and state laws that govern the Medicaid program are followed. See generally … G.L. c. 6A, § 16 (designating the Agency as the state Medicaid entity charged with developing policies and programs to implement shared federal-state program); G.L. c. 118E, §§ 1, 2, 7(g), 7(h). … Since Medicaid is a statutory program, it cannot be trumped by common law, state law or equitable principles.

Before reviewing federal and state law on the issue of whether a lifetime lien terminates upon the MassHealth recipient’s death, it is important to note that the U.S. Department of Health and Human Services commissioned and published a 2005 report entitled Medicaid Liens and Estate Recovery in Massachusetts. Here is some of what the 2005 federal report found about our Massachusetts lifetime lien and estate recovery laws and procedures:

Passage of the Tax Equity and Fiscal Responsibility Act (TEFRA 1982) gave states the option of placing a TEFRA or pre-death lien on the real property of permanently institutionalized Medicaid recipients to prevent them from giving away a home in which they no longer reside before the equity in that home can be used to offset long-term care expenses paid on their behalf. In Massachusetts, TEFRA liens are referred to as living liens because they cannot be placed on the property of a MassHealth member once he or she has died. They give the State authority to recover Medicaid payments for a member’s long-term care expenses if his or her property is sold while the member is alive. … The lien gives the State authority to recover Medicaid payments that have been made if the property is sold while the member is alive.

It is important to note that, although Medicaid gives states authority to place post-death liens, in Massachusetts a lien is only filed while the member is still alive. A lien is never placed on any kind of property – real or personal – once the member has died. After the member’s death, the Estate Recovery Unit will recover MassHealth costs from the member’s probate estate. A probate estate includes property that a person possesses at the time of death and that descends to the heirs (with or without a will) subject to the payment of debts and claims. The probate estate may include real property on which a living lien was filed. However, the lien is no longer valid after the member’s death and must be released upon the request of the administrator/executor.

Massachusetts uses the living lien to prevent MassHealth members from giving away the home in which they no longer reside before its equity can be used to offset long-term care expenses paid on their behalf.

Upon payment, both the claim and any living lien that had been placed on the member’s real property are released. If there was a living lien on the member’s real property, the Estate Recovery Unit must release it after they have received notification of the member’s death and a copy of the death certificate. Generally the lien and the Notice of Claim are released at the same time. If an attorney representing the member’s estate requests release of the lien prior to settlement of the estate, the Estate Recovery Unit releases it, since a living lien is no longer valid when the member is deceased. However, in the absence of such a request, the lien is not released until the Estate Recovery Unit determines whether the member’s estate will be probated. If the estate is not probated within 1 year after the member’s death, the Estate Recovery Unit will forward a request to probate the estate to the Public Administrator in the county where the deceased member lived.

Since the time of the 2005 report, there was one change in federal estate recovery law, where estate recovery against annuities became mandatory rather than a state option, but otherwise there have been no federal Medicaid changes affecting estate recovery. If this report was not brought to the attention of the judges that the MassHealth agency was arguing before in recent cases, that seems like a significant omission, especially where the agency has the twin duties of candor to tribunals and administrative consistency, and this was a federal report not only about what Massachusetts law is but also how Massachusetts has implemented the federal law.

The MassHealth agency cannot go beyond what the Massachusetts legislature has specifically authorized the agency to do. Where there are specific provisions in Massachusetts General Laws, Chapter 118E, Sections 31 and 32 governing estate recovery, the agency is limited to these provisions of law. One provision in Section 31 explains that the point of the lifetime lien is to allow recovery during the MassHealth recipient’s lifetime, and no provision anywhere states that the lien is meant to survive the MassHealth recipient’s death. In fact, Section (f) of Massachusetts General Laws, Chapter 190B, Section 3-803 (part of the Massachusetts Uniform Probate Code), the most recent Massachusetts legislation that makes reference to estate recovery, may make the point even clearer that the estate recovery claim against the probate estate is the exclusive method for estate recovery by the MassHealth agency after a MassHealth recipient’s death:

If a deceased received medical assistance under chapter 118E when such deceased was 55 years of age or older or while an inpatient in a nursing facility or other medical institution, section 32 of chapter 118E shall govern the notice to be given to the division of medical assistance and such division’s claim for recovery under section 31 of said chapter 118E if the division so chooses.

The lifetime lien on real estate of a MassHealth recipient is the creature of a narrowly-drawn statute with a narrow purpose, and where there are specific provisions detailing what the agency must do after the MassHealth recipient’s death, the MassHealth agency has no authority to enforce the lien unless such action is taken during MassHealth recipient’s lifetime.

A Plymouth-based practitioner, Brian specializes in legal issues involving death, taxation and disability; including estate planning, probate, trusts, estate and gift taxation, MassHealth applications and appeals, guardianship, conservatorship, contested trusts and estates, special needs & elder law.  Brian can be contacted at brian@elderlaw.info.

A Discussion with New Land Court Chief Justice, Gordon Piper (Video)

Balancing Access to Sensitive Information

By Jennifer L. Barnett

During the course of their tenure on an association’s governing board, board members will come into possession of a seemingly endless amount of information. While owners are entitled to access

the association’s books and records regarding the general operation and management of the association, there are certain categories of sensitive information that board members should safeguard and protect from disclosure.

Among those categories of information, are information and materials that are protected by attorney-client privilege, which was previously addressed in depth in a recent alert.  Other categories of sensitive information that a board may come into possession of, include:

·         Delinquency reports;

·         Reasonable accommodation requests;

·         Employee records; and

·         Personal owner information.

In all of the above-referenced categories, boards must balance their obligations to keep owners informed of association business and safeguarding information which could potentially expose the association to liability if improperly disseminated.

DELINQUENCIES

The association’s financial health depends on the proper assessment and collection of common area fees.  While owners may be informed about the total amount of common area fees collected and outstanding, board members should not disclose specific unit owner assessments or delinquencies, nor should board members disclose details about negotiations with these owners, including payment plans.   Moreover, even when a lien enforcement action to recover common area fees is pending before a court, board members are still discouraged from discussing the same with anyone outside of the litigation.

Association managers typically produce monthly information packages for board members containing invoices, records of bills paid, collection totals and other financial details.  Much of this information can be shared with owners upon request, but not all of it.  To that end, board members should refrain from disseminating and disclosing detailed information about individual accounts (aside from that belonging to the specific owner so requesting), including their payment histories and delinquency status.  All of this owner-specific information should be redacted before the reports are circulated to owners, inserted in the minutes, posted on the association’s web site, or otherwise distributed outside of the board. 

REASONABLE ACCOMMODATION REQUESTS

Generally speaking, a person is handicapped or disabled if: 1) they have a physical or mental impairment that substantially limits one or more major life activities (i.e. the condition limits their ability to walk, speak, hear, breath, learn or work); 2) the person has a record of such a physical or mental condition; or 3) the person is regarded as having such a condition (meaning that the person is viewed and/or as suffering from physical or mental disability, even if not formally diagnosed).

The most common types of requests made to a board for a reasonable accommodation are to keep an emotional support or service animal in an association where animals for prohibited, but requests for reasonable accommodations are not limited to any specific type of accommodation or modification if the same is related to a resident’s disability and necessary for that individual to have an equal opportunity to enjoy and use the association. When presented with a request for a reasonable accommodation or modification, boards must evaluate each request fairly, uniformly, and on a case-by-case basis. While boards are entitled to ask for certain information to verify the legitimacy of the request, there is a limitation on the information that boards may request, and boards should not disclose the information received to anyone outside of the board, under any circumstances. Often times, board members are asked why another resident is permitted to avoid strict compliance with the association’s governing documents, i.e., in the case of a resident having an animal in a no-pet community, and in such case, the board should simply state that a request for a reasonable accommodation was made, and granted, without disclosing any details about the resident’s handicap or disability or the information provided in support thereof.

EMPLOYEE RECORDS

Employee personnel records contain private and sensitive information, including performance reviews, medical reports, and disciplinary actions, which should not be disclosed to owners or anyone who does not have a legitimate need for such information.  For that reason, the personnel file should be kept separate from payroll information (job description, salary, promotions, etc.), which can be shared with owners. 

Employees also have general privacy rights that boards are required to protect.  Like reasonable accommodations granted in the context of housing, employee requests for reasonable accommodations in the workplace should be treated as confidential, such as sensitive personal information such as Social Security Numbers, bank accounts, etc. Underscoring that point, is a recent case involving the breach of a computer system, wherein the Pennsylvania Supreme Court ruled that “an employer has a legal duty to exercise reasonable care to safeguard its employees’ sensitive personal information….”

Credit checks and criminal background also checks create additional concerns.  The results of these investigations should be stored in confidential files, access to which should be strictly limited. Some state laws also limit the extent to which employers can use information gleaned from criminal background checks in their hiring decisions, and associations and board members may be exposed to serious criminal and civil sanctions for violations of the applicable laws and regulations pertaining to the same.

Owners may be entitled to know how much employees are being paid, if the employee is being paid directly by the association, and what duties they are expected to perform.  But disclosing performance reviews, reprimands, disciplinary actions and similar information would expose the board to potential legal liability, because evaluations may be contested and revised and disciplinary actions may be reversed.  Employees who are criticized unfairly or wrongly accused of infractions might sue for defamation if those complaints are made public, published or otherwise disclosed. 

Moreover, personnel files should remain confidential after an employee’s departure, in order to limit an employer’s exposure to a claim for defamation by the former employee.  Conditional privilege may be available to board employer to disclose negative information concerning an employee when such disclosure is reasonably necessary to serve the employer’s legitimate interests, i.e., whether an employee can actually perform the duties of the position. However, conditional privilege does not apply (and will not be a viable defense to a claim for defamation) if the negative statement is made recklessly (i.e., with no effort to determine whether a statement is even true) or if the statement is made with actual malice. Conditional privilege also does not apply if the board employer makes the statement to people who have no legitimate interest in the information (i.e., the discharge of a manager is communicated to the company’s office supply vendor).

When contacted for employment references of past employees, board employers are encouraged to err on the side of caution and only provide neutral references (i.e., dates of employment and positions without commentary). If an employee asks for a substantive reference letter (and the board employer does not have an express policy prohibiting the same), the reference letter should only be sent upon the employee’s execution of a written reference authorization and waiver of liability in advance of producing the same.  

              

PERSONAL OWNER INFORMATION

Laws in most states, including Massachusetts, require that any person whom receives, stores, maintains, processes or otherwise has access to personal information acquired in connection with employment or with the provision of goods or services has a duty to protect that information. Personal information includes a surname, together with a first name or initial, in combination with one or more of the following three data elements pertaining to that person: Social Security Number, driver’s license or state-issued identification card number or financial account or credit or debit card number, with or without any other data element, such as a code, password, or PIN, that would permit access to the person’s financial account.  The term “personal information” does not includes information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.

Among the safeguards to be considered are:

1. Designation of the individuals who will oversee and maintain the information;
2. Analysis of the reasonably foreseeable risks to the security, confidentiality and integrity of records, in any form, that contain personal information, of the effectiveness of any current safeguards for limiting those risks, and of the need to develop improved safeguards;
3. For paper records, adoption of policy provisions for secure storage or materials containing personal information, including restrictions on physical access to such records and, for electronic records, control measures that restrict access and include secure user authentication protocols;
4. Encryption of personal information that is stored on computers, laptops or other portable devices or is transmitted across public networks or transmitted wirelessly;
5. Adoption of policy provisions to ensure that any electronic records system that is connected to the internet includes firewall protection and operating system security patches, that security software includes malware protections and virus definitions, and that all these programs are reasonably current and updated as needed;
6. Oversight of third-party service providers who have access to personal information, including a process to select and retain service providers that are able to maintain appropriate security measures;
7. Regular monitoring to detect any unauthorized use of or access to personal information, and to identify any areas where upgraded safeguards are needed;
8. Protocol is updated whenever there is a material change in business practices that may reasonably implicate the protection of personal information; and
9. Responses to any breach of security is document, together with all actions taken thereafter to change practices relating to the protection of personal information.

A partner in the litigation department of Marcus, Errico, Emmer, Brooks, PC,  Jennifer concentrates her practice in the areas of civil and appellate litigation, condominium law and real estate law. She can be contacted by email at jbarnett@meeb.com.

New Paid Family Medical Leave Law: A Primer for Employers

By Laurie F. Rubin

As we begin a new year, Massachusetts employers should start to plan for the new Massachusetts Paid Family Medical Leave law,

which will begin to be implemented, in stages, starting in July.  This law will cause sweeping changes.

Under the Paid Family Medical Leave law, Massachusetts employees, and in some cases, non-employees and former employees, will be entitled to receive, on an annual basis:

• Medical leave of up to 20 weeks for the covered individual’s own health condition,
• Family leave of generally up to 12 weeks to care for family members, and;
• Combined medical and family leave of up to 26 weeks.

For employers who are subject to the federal Family and Medical Leave Act (“FMLA”), many of the provisions of the new law will sound familiar.  As under the FMLA, leave applies to time off for the employee’s own serious health condition and to time off in order to care for a family member with a serious health condition.  The term “serious health condition” has the same definition as under the federal FMLA.  In addition to covering conditions requiring in-patient stay in a medical facility, it applies to conditions requiring “continuing treatment” by a health care provider.  The “continuing treatment” prong is broad and is expected to cover chronic conditions and conditions such as pregnancy, as well as conditions resulting in a short-term period of incapacity when combined with ongoing treatment by a healthcare provider.

In addition, and also consistent with FMLA provisions, family leave may also be used to bond with a child in connection with childbirth, adoption, or foster care placement, as well as for certain leaves associated with a family member’s military service.  Under the FMLA, and the new Massachusetts law, leave to care for family members who were injured while performing military service is protected for 26 weeks.

The implementation of the paid leave provisions is delayed until 2021, but employers will be required to start making financial contributions to support the paid leave program starting on July 1, 2019.  The law allows employers to deduct part of the required contributions from each employee’s wages.  Employers with fewer than 25 employees do not have to pay the employer share of the cost.  The initial contributions are set at 0.63 % of each employee’s wages.

The new law is modelled on the federal FMLA — but with some significant differences, including the following:

•  Provides for payments: The FMLA mandates time off, but does not require that such time be paid.  The Massachusetts law requires payment for the absences, to be administered by the newly formed Department of Family and Medical Leave.  Payments will be based on an employee’s average weekly earnings, up to a maximum of $850 per week, with the maximum benefit adjusted periodically.  The first seven calendar days of leave are not paid, but employees may elect to use accrued sick or vacation or other PTO for those days.
• Provides greater amount of protected leave: 12 weeks is required under the FMLA for leave for an employee’s own health condition and for most types of family leave.  Under the Massachusetts law, 20 weeks is required where the leave is for a covered individual’s own health condition and 26 weeks for combined family and medical leave.
• Provides greater protection against terminations while on leave: Under the FMLA, an employer may refuse to reinstate an employee if the employer has grounds for ending the employment unrelated to the employee taking FMLA leave or if the employee is a“key” employee.  In contrast, the Massachusetts law appears to narrow the grounds for denying reinstatement to changes in economic conditions or changes in operating conditions.
• Covers more employers: The FMLA is limited to employers with 50 or more employees within 75 miles of the work site.  The Massachusetts law applies to all Massachusetts employers, regardless of size.
• Covers more employees: The FMLA applies only to employees who have worked at least one year and at least 1250 hours over the previous twelve months.  The Massachusetts laws applies more expansively to any employee who, while working for Massachusetts employers, has earned enough money over the preceding year to meet the financial test for unemployment benefits.
• Covers some former employees and non-employees: The FMLA applies only to existing employees. The Massachusetts law provides for payments to former employees who meet the financial eligibility test at the time of their separation from employment and whose employment ended within 26 weeks of the start of the leave.  The law also applies to independent contractors, when these individuals comprise more than 50% of an employer’s workforce, and to other self-employed individuals who elect coverage. Eligible former employees and self-employed individuals are entitled to the same leave payments as existing employees, but have no right to reinstatement.
• Provides for expanded definition of family member: In determining eligibility for family leave, the FMLA limits a family member to the covered employee’s spouse, child, and parent.  The Massachusetts law includes these family members and also allows a covered individual to take family leave for domestic partners, parents of a spouse or domestic partner, grandchildren, grandparents, and siblings.
• Limits how employers track the benefit year: The FMLA allows employers to track absences under several different methods.  The Massachusetts law requires employers to measure the benefit year going forward for 52 weeks from the Sunday immediately preceding the date that a covered individual first uses protected leave.
• Restricts employers from requiring employees to use paid time off while on protected leave: Under the FMLA, an employer may require an employee to use any paid sick time or vacation time or PTO while taking FMLA leave.  The Massachusetts law prohibits employers from requiring employees to use such time concurrently.  This means that the 40 hours of mandated Earned Sick Time under Massachusetts law (and any other sick leave or vacation benefits) are in addition to the leave available under the Massachusetts Paid Family Medical Leave law.  Leave under the new law, however, is allowed to run concurrently with leave under the federal FMLA and with the 8 weeks of leave for childbirth or adoption under the Massachusetts Parental Leave law.  To run concurrently with the FMLA, the leave must qualify for protection under both laws.  As an example, an FMLA-eligible employee who takes 12 weeks’ leave under the Massachusetts law to care for a grandmother with a serious health condition will not have exhausted any FMLA time because grandmothers are not covered family members under the FMLA.  As a result, this employee would be entitled to an additional 12 weeks’ leave for FMLA-permissible reasons.

Overall, there are significant differences between the FMLA and the Massachusetts law, which greatly expand entitlement to leave and the amount of available leave.  The law will pose significant challenges for employers, particularly where an employee has a chronic health condition requiring a significant amount of time off each year.

What employers should be doing in 2019 to prepare for these changes: While the actual leave provisions do not go into effect until 2021, employers should be taking the following steps in the coming year: Employers should be on the lookout for draft regulations, to be issued by March 31, 2019.  Employers who want to comment on the draft regulations will need to comply with the applicable comment period.  Employers should pay special attention to the ways that the draft regulations address the use of intermittent leave, the grounds to deny reinstatement, and the establishment and handling of employee fraud.  These areas have been problematic for employers trying to comply with the federal FMLA.

Employers will need to obtain notices of rights after they are prepared by the Department of Family and Medical Leave.  Employers are required to post these notices and to provide copies of the notices to new employees and, in some cases, to self-employed individuals providing contracted services.

Employers with 25 or more employees will need to start making the required financial contributions as of July 2019.

Employers should review the final regulations, which are expected to be in place by July 1, 2019.  Employers should then start to consider changes to their personnel policies and practices to comply with the law and regulations.  For ease of administration, employers with FMLA policies should consider revising their FMLA policies to make the policies consistent with the new Massachusetts law.  In making changes, employers will need to comply with FMLA requirements, such as providing at least 60 days’ notice of any change to the methodology for determining benefit year.

Overall, the Massachusetts Paid Family Medical Leave law is one of several significant changes affecting Massachusetts employers.  Massachusetts employers should review their policies and practices to make sure that they are complying with this new law and also with the other new laws that went into effect over the past year, including those dealing with pregnancy accommodation (effective in April 1, 2018), equal pay rights (effective July 1, 2018), non-compete agreements (effective October 1, 2018), and permissible criminal history questions (effective October 13, 2018).

A partner at Prince Lobel Tye LLP, Laurie F. Rubin has specialized in employment law and litigation for over 20 years.  She is a co-author of the major treatise on employment law in Massachusetts, the Employment Law volume in the Massachusetts Practice series, and is especially knowledgeable regarding the laws prohibiting discrimination, harassment, and retaliation.  Laurie can be contacted at lrubin@princelobel.com

Boston's Home Rule Petition, H. 4069 (Video)

https://malegislature.gov/Laws/SessionLaws/Acts/2018/Chapter370

Related Article

Housing Regulation on Massachusetts: A Lookback

By Lawrence S. DiCara

Recent discussion concerning the regulation of housing by cities and towns in Massachusetts has resulted in a flashback for those of

us who served in public office in the last decades of the 20^th Century.  Sadly, many lack significant knowledge of the decades of municipal jurisprudence which should be reviewed by those participating in any such discussion.

 

Judge Forest Dillon, Chief Justice of the Iowa Supreme Court, expounded the famous rule known as Dillon’s Rule, which serves as the cornerstone of American municipal law.  Under Dillon’s Rule, a municipal government has authority to act only when the power is granted by the express words of a statute or the charter creating the municipal corporation.  In Massachusetts, Dillon’s Rule has been interpreted quite strictly.  Personally, I don’t like Dillon’s Rule, but it is the law.  Arguably, the last significant change to the relationship between the Commonwealth and its cities and towns resulted from the passage of the so-called Home Rule Amendment to the State Constitution in 1966.

Many years ago, I served on an advisory committee which worked with Professors Frug and Barron of the Harvard Law School to produce a volume entitled “Boston Bound” which was published by The Boston Foundation.  That volume reminded anyone who saw fit to read it of the stringent legal limitations which restrict the ability of the City of Boston – in contrast to most of the other great cities of the nation – to regulate the lives of its citizens and to generate the revenues necessary to provide needed municipal services.  In recent years, the City Council, of necessity, has petitioned the Legislature for matters as mundane as the number of liquor licenses available in certain neighborhoods.  I hope I live long enough to see a leveling of the playing field in this regard.  There are many aspects of municipal life where there is no questioning of a city or town’s jurisdiction.  Local government controls the public way, for example, and can regulate its use by buses, personal vehicles, trucks, bicycles, TMCs, scooters, etc

.

In no area is there more confusion than in the regulation of housing; there are state codes and municipal codes which impact living conditions and regulate sinks, stoves and other matters.  It is questionable whether the City has extensive powers to regulate housing otherwise.  I am not certain of the underpinnings of recent governmental enactments covering short term rentals, and other current topics of public debate. 

I do know what happened in the past.  In the late 1960’s and early 1970’s, the same type of deficit spending which is occurring under the current administration resulted in significant inflation in rents, and otherwise.  The Great and General Court enacted Chapter 842 of the Acts of 1970 which provided that any city or town in the Commonwealth could enact rent control.   Boston did so.  My recollection is that Brookline, Cambridge and Somerville did likewise although, perhaps, one of them might have also benefitted from a Special Act as did Boston prior to the adoption of Chapter 842.

  

In addition, there was other enabling legislation which gave powers to cities and towns to enact other laws concerning housing.  In the case of Boston, the special acts were Chapter 797 of the Acts of 1969, as amended by Chapter 863 of the Acts of 1970.   Many years later, pursuant to rights enjoyed by the people of the Commonwealth since the Progressive Era, the voters of the Commonwealth repealed all rent control legislation, in 1994.  As a strict constructionist, remembering Dillon’s rule, I would argue that until some enabling legislation is in place, or a home rule petition is sent to the Legislature by a city or town which is then voted upon by both Houses, and secures a gubernatorial signature, there is no broad power to regulate housing in that community.  I don’t think the legal situation is any different than it was 50 years ago.

These are not easy discussions, especially given the pressures upon the housing market in many of our neighborhoods (including Jamaica Plain, where I have lived for the last 30 years).  As is always the case, it is essential that elected officials and advocates for good causes understand the historical and legal contexts in which this discussion should be undertaken.

A mediator with REBA Dispute Resolution’s panel of neutrals, Larry DiCara has practiced real estate and administrative law and has been intimately involved with the development process in and around Boston for more than 40 years.  He served as a member of the Boston City Council for ten years.  For more information about Larry, go to www.disputesolution.net.  To schedule a mediation or arbitration with Larry, email adr@reba.net. 

Clearing The Murky Waters of Standing on Zoning Appeals

By Thom Aylesworth

Massachusetts is a hotbed of zoning disputes. Modern zoning bylaws adopted by municipalities across the Commonwealth have inevitably spawned fights among neighbors over permits and other decisions made by local zoning boards. Typically, such disputes involve concerns over increased traffic, noise, overcrowding of land (a/k/a, “density”), open space, ocean views, and many other impacts. Navigating the murky waters of the law governing legal challenges to zoning board decisions can be challenging to those new to the world of Massachusetts zoning, particularly on issues of “standing” – i.e., whether a neighbor or other affected person or entity has the right make a legal challenge to a zoning board decision.

Modern zoning bylaws adopted by municipalities across the Commonwealth have inevitably spawned fights among neighbors over permits and other decisions made by local zoning boards.

If you do not satisfy the legal requirements for standing, you are prohibited from challenging a decision issued by a local zoning board. For example, if your neighbor obtains a special permit to build shopping center next door, you can file a court appeal of the permit only if you have legal standing. Standing is a threshold requirement, meaning that you cannot challenge the permit allowing the shopping center, even if the permit is illegal, unless you have standing.

1. Only parties aggrieved by a substantial and particularized injury have standing to appeal a local zoning board decision.

The rights of parties to appeal zoning board decisions are governed by a statute, Massachusetts General Laws Chapter 40A, Section 17. Under Section 17, only a “person aggrieved” by a decision of a local zoning board has standing to bring a court appeal of that decision. The question of standing, therefore, turns on the meaning of “aggrieved.” Under Massachusetts law, not every harmful impact caused by a zoning board decision is an aggrievement. To establish standing, the injury to the appealing party must be particular and different from the rest of the community, and the harm must be more than minimal or slightly appreciable. So, the mere fact that the new shopping center next door will significantly increase traffic on your street may not be enough to create standing, because the traffic affects your whole neighborhood, not just you. If, however, the new shopping center includes a traffic light that backs up traffic in front of your driveway, creating lengthy delays when leaving your home, that might be a substantial and particularized harm that creates standing.

But not every particularized harm will create standing. The law requires that the private interest the aggrieved party seeks to protect must be within the scope of the intended protections of the statute, Chapter 40A, or the local bylaw. Consequently, Massachusetts courts have generally rejected standing arguments based on the appealing party’s disapproval of architectural or visual elements of a project, except in cases where a local bylaw expressly requires the permitting board to consider the visual impact of a proposed structure. Moreover, it is common for an appealing party to argue that his/her/its property value will be diminished by a project approved under a zoning permit. Massachusetts courts have determined, however, that diminution of property value is not, alone, a ground for standing, otherwise any person challenging a zoning permit or other decision could get around the standing hurdle merely by asserting a loss of property value. The only exception is where a local zoning bylaw expressly is intended to protect property values, in which case a loss of property value may create standing.

What are the private interests that do create standing? There is no bright line test, and the issue requires consideration of the particular facts presented, Chapter 40A, and the applicable local zoning bylaws. Impacts such as significant noise, dust, odors, loss of light and air, increased traffic, reduced public parking, and overcrowding of land may create standing, although this list is not exhaustive. Conversely, concerns over aesthetics, appearances, architecture, etc. typically will not create standing, absent a local zoning bylaw that protects such concerns.

2. Abutters enjoy a rebuttable presumption of standing.

Under the law, any abutter to land that is subject to a zoning board decision enjoys a “rebuttable presumption” of standing, meaning that the abutter does not have to prove standing unless and until the defending party offers evidence showing there is no substantial particularized harm to the abutter. If the defending party does offer such evidence, then the burden of proof shifts to the abutter. Evidence of the abutter’s speculative personal opinions about the impacts of the board’s decision is not enough. Instead, proof of standing must be shown by facts, often through sworn statements or testimony of experts.

It is not unusual for a court to dismiss an appeal of a zoning board decision early in the case if the appealing party lacks standing. Accordingly, even though an abutter has the presumption of standing, the appeal may be dismissed in short order if the defending party offers evidence to rebut the presumption, and the abutter is not prepared to meet the burden of proof to establish standing.

Anyone faced with a question of standing in bringing or defending against an appeal of a local zoning board decision is well-advised to consult with an attorney to discuss the attending facts in the context of the applicable zoning law and local bylaws.

Should you have any questions regarding this article, please contact Thom Aylesworth at 781-817-4900 or by email at taylesworth@lawmtm.com.

Attorney-Client Privilege Is Valuable and Frighteningly Easy to Lose

By Jennifer L. Barnett

Condominium board members are often encouraged to be open, honest, and transparent in their communications with the

condominium community. However, because of their leadership position, board members often possess confidential information, the disclosure of which, may have significant legal and financial implications for the community associations they represent.  Confidential information protected by attorney-client privilege is of particular concern. 

Contrary to a common misunderstanding, the attorney-client privilege doesn’t belong to the attorney; it belongs to the client – the condominium board, for purposes of this discussion.  The privilege is important because it precludes third parties who may have a grievance against the association from compelling the disclosure of information (including documents, reports and written communications), board members share with the association’s attorney. 

The attorney-client privilege is the equivalent of a locked door.  Third parties can’t demand that the door be opened, but board members may unlock the door or leave it ajar, intentionally or accidentally.  Generally speaking, the disclosure of privileged information and communications to third-parties who do not play an essential role in the dispute for which the attorney was retained, will likely result in the loss of the privilege, even where the disclosure is unwitting or unintentional.  

There are legal mechanisms through which privileged information disclosed unintentionally may be recovered, but there are no guarantees these “claw-back” efforts will succeed.  And even if you do recover the information, you can’t force the individuals who have seen it to ‘un-see’ it.  

Accidental Disclosures

The accidental or inadvertent disclosure of privileged information happens more frequently than one might think, sometimes due to oversight, but often because board members don’t understand how the privilege is applied.  A few all-too-common examples:

• Board members are meeting with the association’s attorney in the board president’s living room to discuss legal strategy in a pending lawsuit and a member of the board president’s family overhears part of the conversation.  Unless the family member plays an essential role assisting the attorney in representing the board, the confidential matters discussed at the meeting, are likely no longer privileged. 

• The minutes of a board meeting (at which only the board members and counsel were present), disclose the attorney’s recommendations about how to proceed with a pending lawsuit as well as unflattering (and possibly defamatory) comments a board member made about the opposing party in that action.   Not only are the minutes now probably no longer privileged, they may also compromise the board’s position in the case, and potentially expose the board to further controversy.

• A board member responding to a series of e-mails between the board and counsel discussing a contract dispute inadvertently hits ‘forward,’ sending the message to everyone in the community, thereby likely waiving any privilege that might otherwise be claimed.

The obvious advice to board members:  Be very careful about what you say (or write) and to whom you say and write it, and where possible direct that all privileged (or even potentially privileged) communications be routed through your attorney.  This includes communications to and from people who are, or might be, expert witnesses in a law suit. 

Right to Know vs. Need to Protect

How do you reconcile the board’s need to protect privileged information with its obligation to keep owners informed of important association matters (and litigation would certainly qualify as an important matter)?  Maintaining this balance between ‘need to protect’ and ‘right to know’ isn’t easy, but it is important.  

Anything that is a matter of public record, such as pleadings or rulings in an ongoing case, may be discussed with owners and shared with them. However, board members should avoid the disclosure of documents reflecting discussions of litigation strategy between the board and association counsel, and information related to settlement negotiations. 

While boards may confirm that the association is engaged in active litigation, the association’s attorney should be the one charged with responsibility for commenting on pending (or threatened litigation), in order to control the information that is shared.  To that end, boards should ask counsel to prepare any periodic updates the board wants to send to owners, or to review updates prepared by the board. Boards may also want to ask their attorney to attend owner meetings at which the litigation is going to be discussed, so the attorney can manage and control the discussion.

Mortgage lenders often require condominium buyers to disclose any pending or anticipated litigation involving the association as a condition of approving a loan.  When responding to these information requests, (particularly in the case of a sale), it is a good practice to ask the owner and prospective buyer to execute a release and indemnification agreement in favor of the board and its agents before any information is disclosed.  The release is aimed at shielding board members and their agents from liability for any negative consequences resulting from the disclosure of the requested information. Additionally, boards should limit these disclosures to information that is already in the public domain and should avoid disclosure of any settlement-related information. 

Because it is often difficult to predict precisely what information will ultimately become important in a lawsuit, or even which disputes will eventually be litigated, you should get the association’s attorney involved as early as possible – if the board is contemplating litigation or thinks the association might be sued.

Protecting Transition Studies

The transition from developer to owner control of an association can be overwhelming for new board members, who may not know how to manage any known or potential claims against the developer. To get the professional advice they need, boards should engage a property manager first and then an attorney to help guide them through the transition process. After the attorney is in place, boards should retain an engineer (or other expert) to prepare a reserve study and a conditions study. These reports should be separate from each other, because the assumptions in a reserve study (which is primarily a financial planning document) may be inconsistent with the findings contained in the conditions study, which may form the basis for a board to pursue a lawsuit arising out of construction defects and deficiencies.  And these inconsistencies may be used to attack the credibility of the conditions report. 

Because the conditions report plays a critical role in a suit brought to recover damages for construction defects and deficiencies, boards should be mindful that when report is prepared in anticipation of litigation, it should remain confidential.  If possible, the expert should send preliminary drafts and the final report to the attorney, who can then send them, in the form of an attorney-client memorandum, to the board. The board should send any comments or questions about the reports in a privileged communication to counsel, who can relay them to the expert.  The attorney should also be present or involved in any discussions between the expert who prepares the transition reports and the board. While these precautions won’t guarantee that all communications will be privileged, such precautions are aimed at affording an added layer of protection.  

In order to preserve any and all privileges that may claimed with respect to  the conditions report (including but not limited to attorney-client privilege), board members should not share it with any third parties, with the exception of association counsel and other board members.  Additionally, if the reserve study is prepared in anticipation of litigation, or if an adverse party might contend that it was, boards should preserve its confidentiality, and avoid disclosing it to third parties, as well.  Distributing either or both reports with owners or sharing them on request would likely destroy any privilege the board might otherwise claim to prevent their disclosure to an adverse party in a law suit. If the reports are subject to discovery (due to a waiver of applicable privilege or otherwise), developers could then use the reports (which are often preliminary in nature), to attack the credibility of the association’s experts, if they identify problems that weren’t cited in the preliminary reports the experts submitted.  Developers might also use these reports to challenge a board’s right to recover for any construction defects or deficiencies, by arguing that the board had notice of potential claims and did not act on them   within the applicable statutes of limitations and/or statute of repose. 

Additionally, if the conditions report is freely circulated, a party pursuing a negligence claim against the board might very well use the report as evidence that the board was aware of the common area defect that caused that party’s injury and that the board acted negligently in failing to correct them.

Common Sense

When it comes to protecting attorney-client privilege, mindfulness is the best strategy and common sense is an effective guide.  A few specific suggestions for boards: 

• Don’t include information related to litigation or potential litigation in the minutes of board meetings.

• Discuss all matters involving the association’s attorney, including but not limited to pending or threatened litigation, in executive session. Do not take minutes of meetings held in executive session, because disseminating a written record of the session would defeat the purposes of the meeting.

• Don’t include in e-mail communications anything you wouldn’t or shouldn’t discuss publicly.  This applies generally to all board communications, but it applies specifically ─ in spades and capital letters ─ to information to which attorney-client privilege applies.  

• When producing financial records requested by owners or others, remove legal bills or redact them to exclude references to attorney work products or other information protected by attorney-client privilege. Sharing un-redacted legal bills with third parties could waive the attorney-client privilege for any communications or information to which the bills refer. 

• Don’t guess.  If you aren’t sure whether information should be shared, ask the association’s attorney.

• Pick up the telephone.  We have become so reliant on e-mail that we forget it is also possible – and may be more prudent – to communicate by phone.  An e-mail communication intended for one party might be shared accidentally with others; a telephone conversation could not be.  There are no ‘forward’ or ‘reply all’ buttons on a phone.

A partner in the litigation department of Marcus, Errico, Emmer, Brooks, PC,  Jennifer concentrates her practice in the areas of civil and appellate litigation, condominium law and real estate law. She can be contacted by email at jbarnett@meeb.com.