On July 20, 2024, the Massachusetts Supreme Judicial Court (“SJC”) decided Shoucair v. Board of Appeal of Boston, 494 Mass. 319 (2024), which clarified the standard for imposing a bond on a party who appeals the grant of zoning relief in Boston. Appeal bonds provide security to protect a defendant-permit holder’s interests in the event the permit is upheld on appeal. Because it is an expense which plaintiffs incur at the start of the case, an appeal bond can be a deterrent to litigation. In Shoucair, the SJC held that, unlike in the rest of the Commonwealth, the zoning law applicable in Boston allows a court to require a plaintiff in a zoning appeal to post a bond without regard to whether the appeal was brought in bad faith or with malice.
Boston’s zoning is governed by a special statute. While zoning everywhere else in the Commonwealth is subject to the Massachusetts Zoning Act, General Laws chapter 40A (“Chapter 40A”), Boston instead is subject to the Boston Zoning Enabling Act, Chapter 665 of the Acts of 1956, as amended (the “Boston Act”). Many of the concepts underlying the two statutes, and some of their provisions, are similar, but they are by no means identical, thus raising questions as to when case law under Chapter 40A may be applied to Boston. One area where the statutory language differs concerns the standards for appeal bonds. Under Chapter 40A, an appeal bond is available to aid a defendant in recovery of “costs,” G. L. c. 40A, § 17, third par. In contrast, section 11 of the Boston Act authorizes bonds to indemnify and save harmless defendants from “damages and costs,” Acts of 1956, c. 665, § 11, first par., as amended through Acts of 1993, c. 461, § 5. Both statutes provide that “costs” ultimately shall not be allowed (as opposed to posting of a bond) unless it appears to the court that the appeal was made in bad faith or with malice. Their language is silent as to whether bad faith is also necessary before a bond can be required. Nevertheless, in the 2022 case of Marengi, v. Forest Rd. LLC, 491 Mass. 19 (2022), the SJC decided that a bond in a zoning appeal under Chapter 40A could only be imposed upon a showing that the appeal was brought in bad faith or with malice. The issue posed in Shoucair was whether the same requirements applied to appeal bonds under the Boston Act.
Summary of Shoucair v. Board of Appeal of Boston
In Shoucair, Defendant Pure Oasis LLC, a company owning a chain of cannabis dispensaries, sought a conditional use permit to open a new dispensary in the Brighton section of Boston. After an initial denial, the Boston Board of Appeal granted the conditional use permit. However, plaintiffs William Shoucair and brother Edward Shoucair, abutters to the property, appealed the permit by filing a complaint in Superior Court. They claimed the Board’s decision did not comply with the requirements for a conditional use permit due to alleged negative effects the dispensary would have on the general nature of the residential neighborhood, traffic patterns, and parking conditions. Pure Oasis moved to obtain an appeal bond of $25,000 from each plaintiff in order to indemnify it from the damages and costs it could sustain from a delay caused by the appeal. Pure Oasis argued that, even with only a one-year delay in operation, it could lose an estimated $100,000 in profits, $40,000 in fees like taxes, insurance, and maintenance, and a minimum of $50,000 in legal fees. Ultimately, the trial judge ordered each plaintiff to post a bond of $3,500. The plaintiffs appealed, citing Marengi to argue that a bond could not be required at all because the zoning appeal was not brought in bad faith or with malice. The SJC rejected this argument and upheld the bond, relying on the different language in Chapter 40A and the Boston Act.
Legal Analysis of Section 11 of the Boston Act and Implications of Shoucair
To distinguish Marengi, the SJC pointed out that Chapter 40A only allows bonds to recover “costs.” According to Marengi, “costs” refer to those items directly incurred to litigate the appeal, such as expert witness fees and other consultant fees. Costs, however, do not include attorney’s fees or delay damages. In contrast, the Boston Act authorizes appeal bonds to cover both “damages and costs” that permit holders might incur during pendency of an appeal that is ultimately resolved in their favor. Although the Boston Act, like Chapter 40A, requires a showing of bad faith or malice for an award of costs, this requirement does not apply to an award of damages. Accordingly, the SJC clarified that, under the Boston Act, a plaintiff could be required to post an appeal bond without a finding of bad faith or malice, at least insofar as the bond was securing damages. The SJC considered Pure Oasis’ potential lost profits as damages, but disregarded expenses like property taxes, maintenance, and snow removal, which would have been incurred even without the existence of an appeal. The Court left open to what extent bad faith or malice was required under the Boston Act for a bond for costs.
In response to Shoucair’s assertion that this result would unfairly restrict persons of limited means with meritorious appeals from using the court system, the SJC referred to its 1971 decision in Damaskos v. Board of Appeal of Boston, 359 Mass. 55 (1971), explaining that the bond requirement of the Boston Act is meant to balance the allowance of meritorious appeals with the need to “discourage frivolous and vexatious appeals.” In other words, the statute allows judges discretion in each case to consider each party’s resources in setting an appeal bond.
In short, Shoucair confirms the ability of developers in Boston to obtain appeal bonds under more generous rules than elsewhere in the Commonwealth. No showing is required that a project opponent appealed in bad faith or with malice. As a result, plaintiffs with weak grounds to appeal may think twice before challenging zoning approvals in Boston, thereby eliminating one source of delay in getting projects underway.
