M.B. Claff, Inc. v. Massachusetts Bay Transportation Authority

808 N.E.2d 238, 441 Mass. 596, 2004 Mass. LEXIS 272
CourtMassachusetts Supreme Judicial Court
DecidedMay 7, 2004
StatusPublished
Cited by7 cases

This text of 808 N.E.2d 238 (M.B. Claff, Inc. v. Massachusetts Bay Transportation Authority) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
M.B. Claff, Inc. v. Massachusetts Bay Transportation Authority, 808 N.E.2d 238, 441 Mass. 596, 2004 Mass. LEXIS 272 (Mass. 2004).

Opinion

Sosman, J.

In this appeal, we have been asked to rule that the statute setting the interest rate for judgments in eminent domain cases, G. L. c. 79, § 37,1 is unconstitutional because, as applied to this plaintiff, the rate that it prescribes is so low as to be [597]*597confiscatory pursuant to the Fifth Amendment to the United States Constitution (owner entitled to “just compensation” when property taken for public use) and art. 10 of the Massachusetts Declaration of Rights (owner entitled to “reasonable compensation”). The plaintiffs request for utilization of a rate of interest higher than that provided by statute was first made in a motion pursuant to Mass. R. Civ. R 60 (a) and (b) (6), 365 Mass. 828 (1974), filed almost thirteen months after the entry of judgment. The Appeals Court held that the plaintiff had waived its constitutional claim to higher interest when it failed to present evidence on the issue at trial. M.B. Claff, Inc. v. Massachusetts Bay Transp. Auth., 59 Mass. App. Ct. 669 (2003). We granted the plaintiff’s application for further appellate review. For the following reasons, we conclude that there was no error in the judge’s denial of the plaintiff’s rule 60 motion raising the issue, and we therefore affirm the judgment.

1. Background. By order of taking dated December 13, 1993, and recorded on December 30, 1993, the Massachusetts Bay Transportation Authority (MBTA) effected a taking of real property owned by the plaintiff M.B. Claff, Inc. (Claff). Dissatisfied with the MBTA’s pro tanto payment of $80,000, Claff filed an action for compensation on February 14, 1996. See G. L. c. 79, § 14. Claff s complaint did not contain any allegation that the rate of interest set by G. L. c. 79, § 37, was confiscatory.* 2 Nor did Claff raise this issue at any time prior to [598]*598or during trial. On June 16, 1999, the jury returned a special verdict finding damages in the amount of $700,000.

On June 24, 1999, the parties filed a stipulation that the MBTA had paid Claff $80,000 as a pro tanto payment back in December, 1993. Neither party submitted anything on the subject of what interest rate was to be applied. On July 7, 1999, judgment was entered for the plaintiff in the amount of $620,000 “with interest thereon from 2-14-96 in the sum of $252,552.32 as provided by law.” It was apparent from the face of the judgment that the assistant clerk had made two errors in calculating that amount of interest. First, contrary to G. L. c. 79, § 37, the assistant clerk had calculated interest as accruing only from the date of the filing of the suit rather than from the date of the taking. Second, the clerk had calculated interest at the rate of twelve per cent per year rather than the rate set by G. L. c. 79, § 37, which, for a taking occurring in December, 1993, would have been 3.61 per cent per year. See note 2, supra. On August 4, 1999, the MBTA filed a notice of appeal from the judgment. Claff did not file notice of any cross appeal. The MBTA’s appeal was never entered in the Appeals Court.

On July 28, 2000, Claff filed a motion to dismiss the MBTA’s appeal and a motion for relief from judgment seeking to assess interest on the judgment at the rate of seven per cent per annum from the date of taking or, in the alternative, at the rate of 3.61 per cent set by G. L. c. 79, § 37. Claff’s motion for relief was submitted as a motion pursuant to rule 60 (a) and (b) (6). The MBTA assented to that portion of Claff’s motion seeking recalculation of the interest rate at 3.61 per cent per year from the date of the taking, but objected to ClafFs attempt to impose an interest rate higher than that provided by statute.* *3 On August 8, 2000, the judge denied Claff’s request that the interest rate be increased to seven per cent, allowed Claff’s alternative request that the statutory interest rate of 3.61 per [599]*599cent be calculated running from the date of the taking,4 and dismissed the MBTA’s appeal as moot. An amended judgment, reflecting the recalculated interest, then entered. Claff appealed from that portion of the judge’s order that denied its request for interest at the rate of seven per cent.

2. Discussion. The Appeals Court observed that the statutory interest rate does not necessarily equate to constitutionally adequate compensation in all eminent domain cases, but held that Claff had waived its claim for additional interest by failing to raise it in a timely manner. M.B. Claff, Inc. v. Massachusetts Bay Transp. Auth., 59 Mass. App. Ct. 669, 673-674, 677-678 (2003). Specifically, the Appeals Court ruled that a claim for a higher rate of interest had to be raised prior to trial to give “adequate notice to the defendant that there will be a contest on the issue,” and that, absent stipulation or resolution by way of motion for summary judgment, the interest claim would present an issue of fact to be determined by the fact finder at trial. Id. at 675-677. “[Ejvidence of what that [reasonable] rate should be must be presented at trial as part of the plaintiff’s proof of just compensation.” Id. at 675. Where Claff had neither given prior notice of its intent to pursue this aspect of a claim for compensation nor presented any evidence on the issue at trial, the Appeals Court treated the claim as waived. Id. at 677-678.

While Claff (and the Attorney General as amicus curiae) protest that requiring a party to present an interest claim at trial is impractical and needlessly burdensome (there being no issue as to interest unless and until there is a determination that the owner is entitled to compensation above and beyond the pro tanto payment), the Appeals Court’s analysis is conceptually sound. The basis for a court’s award of an interest rate higher than that set by statute is the theory that interest is part of the “just compensation” to which the property owner is entitled, and the determination of what amount would be “just compensation” in a given case is therefore a factual issue to be decided [600]*600by a court, not an issue that can be conclusively decided by legislation. See United States v. Blankinship, 543 F.2d 1272, 1274-1275 (9th Cir. 1976). Thus, the issue of interest is simply part of the claim for “just compensation” that must be raised and proved by the property owner if the owner contends that a statutory interest rate fails to satisfy the constitutional requirement of “just compensation.” Like any other claim, a claim that the statutory rate of interest is unconstitutional as applied to the plaintiff is one that needs to be proved, and a proper articulation in a timely pleading followed by proof at trial is the customary method for establishing a party’s claim.

Relying on Verrochi v. Commonwealth, 394 Mass. 633 (1985), Claff contends that a constitutional challenge to the statutory interest rate may be raised after trial of an eminent domain damages case. During the pendency of the action in Verrochi, the Legislature had amended the statute to increase the interest rate applicable to takings of land from six per cent to ten per cent per year. Id. at 633-635.

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Bluebook (online)
808 N.E.2d 238, 441 Mass. 596, 2004 Mass. LEXIS 272, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mb-claff-inc-v-massachusetts-bay-transportation-authority-mass-2004.