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SJC-13726
JAMES M. RYAN, executor,1,2 vs. MARY ANN MORSE HEALTHCARE CORP.3
Middlesex. November 5, 2025. - March 13, 2026.
Present: Budd, C.J., Gaziano, Kafker, Wendlandt, Georges, Dewar, & Wolohojian, JJ.
Assisted Living Residence. Landlord and Tenant, Security deposit. Consumer Protection Act, Landlord and tenant, Availability of remedy, Class action. Practice, Civil, Summary judgment, Class action.
Civil action commenced in the Superior Court Department on August 24, 2016.
Following review by this court, 483 Mass. 612 (2019), the case was heard by Maureen Mulligan, J., on motions for summary judgment, and entry of judgment was ordered by Brent A. Tingle, J.
The Supreme Judicial Court granted an application for direct appellate review.
1 Of the estate of Julia W. Ryan.
2 Individually and on behalf of all others similarly situated.
3 Doing business as Heritage at Framingham. 2
AiVi Nguyen (Brian J. Edmonds also present) for the defendant. Joshua N. Garick (Matthew T. LaMothe also present) for the plaintiff. The following submitted briefs for amici curiae: Kevin W. Buono for Massachusetts Assisted Living Association. Andrea Joy Campbell, Attorney General, & Andrew C. Musgrave, Assistant Attorney General, for the Attorney General. Mark A. Aronsson, Derek M. Gillis, & Kevin W. Buono for Tewksbury Living Group, LLC, & others. Sam Wehrle & Kelly Bagby, of the District of Columbia, Eric Carlson, of California, Lindsay Mitnik, John J. Ford, Richard M.W. Bauer, Liane Zeitz, & Stuart T. Rossman for AARP & others.
DEWAR, J. We return in this appeal to the application of
the security deposit statute, G. L. c. 186, § 15B, to fees
charged by an assisted living residence (ALR). We first
considered the application of the security deposit statute to
ALRs in Ryan v. Mary Ann Morse Healthcare Corp., 483 Mass. 612
(2019) (Ryan I). That appeal followed the dismissal of the
class action complaint in this case alleging that the defendant
ALR violated the security deposit statute and thereby also
violated G. L. c. 93A. The complaint challenged the defendant's
practice of charging incoming residents a "community fee" that
the complaint alleged did not fall within the four categories of
fees an incoming tenant may be charged under G. L. c. 186,
§ 15B (1) (b). The judge dismissed the complaint on the ground
that the security deposit statute was entirely inapplicable to
ALRs, which are subject to their own regulatory scheme set forth
in the ALR statute, G. L. c. 19D. 3
In Ryan I, 483 Mass. at 622-628, we concluded that the
security deposit statute and ALR statute could be read in
harmony to effectuate the Legislature's purposes in both
statutes. We held that the security deposit statute does apply
to ALRs as lessors of residential property, see id. at 622-623,
but does not restrict ALRs when they "charge incoming residents
initial fees that correspond to initial ALR-specific services
inapplicable to ordinary landlord-tenant relationships," id. at
628.
Based on the limited record before us in Ryan I, 483 Mass.
at 613-614, we reversed the order dismissing the complaint and
remanded the case to the Superior Court for further factual
development regarding whether the disputed community fee
corresponded to ALR-specific intake services. Following
discovery and certification of a plaintiff class, the parties
each moved for summary judgment. A Superior Court judge allowed
the plaintiffs' motion and denied the defendant's motion, and
the defendant appealed. Before this court, the parties both
contend that there are no genuine issues of material fact, and
that they each are entitled to summary judgment.
We conclude that the defendant is entitled to judgment as a
matter of law based on uncontradicted evidence in the record
establishing that the community fees charged by the defendant
correspond to the defendant's provision of ALR-specific intake 4
services to the members of the plaintiff class. We therefore
reverse the judge's order as to both motions for summary
judgment and remand the case to the Superior Court for entry of
judgment in favor of the defendant.4
Background. 1. Facts. The following facts are
undisputed. We reserve certain details for later discussion.
The defendant, Mary Ann Morse Healthcare Corp. (defendant),
operates an assisted living residence called Heritage at
Framingham (Heritage). The defendant also operates a nursing
home in Natick and offers home care services.
As we described in greater detail in Ryan I, 483 Mass. at
617-619, assisted living residences are "part of the spectrum of
living alternatives for the elderly in the commonwealth,"
St. 1994, c. 354, § 1. ALRs do not provide their residents with
the extensive medical care available at nursing homes but do
provide personal services to assist residents with activities of
daily living. See Ryan I, supra at 618, citing G. L. c. 19D,
§§ 1, 10, 16. To qualify as an ALR, a facility must be able to
4 We acknowledge the amicus briefs submitted by the Massachusetts Assisted Living Association; the Attorney General; Tewksbury Living Group, LLC, Meridian Senior Living, LLC, Esplanade Capital LLC, and EC Tewksbury LLC; and AARP, AARP Foundation, the National Consumer Law Center, the National Academy of Elder Law Attorneys, Dignity Alliance Massachusetts, Justice in Aging, and the Massachusetts Chapter of the National Academy of Elder Law Attorneys. 5
assist its residents with activities such as bathing, dressing,
and ambulation. See G. L. c. 19D, § 10 (a) (2).
ALRs' provision of these services is governed by statute
under G. L. c. 19D and regulations promulgated by the Executive
Office of Aging and Independence.5 ALRs are required to conduct
initial screenings of potential residents to assess whether the
ALR is able to meet each resident's needs. 651 Code Mass. Regs.
§ 12.04(6) (2024). If the ALR determines that it is able to
meet the person's needs and the person chooses to enter the ALR
as a resident, the ALR must prepare an individualized service
plan that describes "the needs of the resident for personal
services and the providers, or intended providers thereof, and
the frequency and duration of such services." G. L. c. 19D,
§ 12 (a). See also G. L. c. 19D, § 2 (v) (requirement to
provide services in accordance with service plan); 651 Code
Mass. Regs. § 12.04(8)(a)(2) (service plan must "address the
[r]esident's particular physical, cognitive, psychological and
social needs"). The service plan must be developed before the
resident moves into the facility. 651 Code Mass. Regs.
§ 12.04(7).
5 This agency, charged with implementing the ALR statute, see G. L. c. 19D, §§ 1, 19, was formerly known as the Executive Office of Elder Affairs, see Ryan I, 483 Mass. at 619, 628; St. 2024, c. 392, § 97 (name change effective Jan. 9, 2025). 6
Heritage accordingly has a screening and application
process for people interested in becoming ALR residents. At the
outset, Heritage's community relations director fields inquiries
from prospective residents and their family members. During the
preliminary screening phase that follows, Heritage gathers basic
information about the prospective resident, including the
person's needs, and shares information about the programs and
services available at Heritage. The community relations
director typically arranges a tour of Heritage's facility and
meetings with members of Heritage's staff for prospective
residents and their family members. For some prospective
residents, this preliminary screening process involves multiple
tours and conversations.
If a prospective resident moves forward with the
application process after the preliminary screening, Heritage
solicits medical documentation from the prospective resident's
physician and requires the prospective resident to provide
information on an application form. Heritage then conducts an
in-person clinical screening. At this step, Heritage evaluates
the applicant's physical and mental capacities, examines the
applicant's medical record, and confers with the applicant's
physician regarding any questions, all with the ultimate purpose
of assessing whether Heritage would be suitable for the
applicant. This clinical screening is conducted by Heritage's 7
resident care director or, if the care director is unavailable,
by a nurse. If the prospective resident is applying for one of
Heritage's specialized programs focused on mental health or
memory impairment, the director of the relevant program also may
participate.
Following the clinical screening, if Heritage determines
that it cannot meet the needs of a prospective resident, it will
decline the application and refer the person to the defendant's
nursing home or to other facilities that better suit the
person's needs. If accepting the application, Heritage creates
an individualized service plan for the new resident. A nurse
completes this task under the supervision of the resident care
director, based on information provided by the resident and in
consultation with Heritage's activities and dietary departments.
When a resident moves in, Heritage completes an additional
series of tasks. A nurse conducts another clinical assessment,
and the resident and the resident's family meet with various
members of staff, including the activities department to discuss
recreational opportunities and the dietary department to review
dietary restrictions and food preferences. Staff members also
may provide assistance with moving in the resident's furniture
and other belongings and installing adaptive equipment. And, in
the week or so after a resident moves in, the various department 8
heads at Heritage each are expected to visit the new resident to
welcome and orient the new resident to Heritage.
After this lawsuit commenced, the defendant performed an
estimate of its payroll costs attributable to paying staff to
perform these components of the intake process for each year of
the class period. Heritage's then-executive director spoke with
employees involved with the intake process, discussed their
roles and the amount of their time spent on the process, and
reviewed some of their job descriptions. The defendant then
estimated the percentage of each employee's time spent on the
intake process on either an annual or per admission basis and,
using the number of new admissions and employee salaries paid
for each year of the class period, calculated its total payroll
costs. The defendant's resulting estimated payroll costs for
the intake process ranged from approximately $131,000 to
$188,000 each year from 2012 to 2020.6 While the plaintiffs
dispute the significance of these estimates for reasons we
reserve for our discussion, the plaintiffs have not presented
evidence disputing the accuracy of the estimates.
6 For 2021 and 2022, the record contains updated salary information for the relevant employees and the number of new admissions each year, but no calculation by the defendant of its total annual payroll costs for the intake process. The plaintiffs make no argument that these figures differ materially from prior years. 9
Heritage enters into a "residency agreement" with each new
resident, a copy of which is required to be included for agency
approval in Heritage's biennial submission for certification
renewal as an ALR. See 651 Code Mass. Regs. § 12.03(2)(f)(8);
651 Code Mass. Regs. § 12.03(7). Among other things, the
agreement enumerates the services to be provided by Heritage,
the other responsibilities and duties of Heritage, and the
resident's rights, responsibilities, and financial obligations.
Among such obligations, Heritage requires each new resident to
pay the last month's rent upon executing the residency
agreement. The agreement acknowledges that Heritage must pay
the resident annual interest on the last month's rent under the
security deposit statute, G. L. c. 186, § 15B (2) (a).
Of most significance here, Heritage also requires new
residents to pay a one-time "community fee." The residency
agreement describes this fee as "intended to cover [(1)] upfront
staff administrative costs, [(2)] the [r]esident's initial
service coordination plan[,] and [(3)] move-in assistance, and
[(4)] establish a replacement reserve for building
improvements."7 Under Heritage's policies for administering this
7 In the trial court, the defendant disputed that this contract language remained the same throughout the class period and asserted that the residency agreement was revised following the commencement of this lawsuit. No alternate version of the contract is included in the record before this court, however, 10
fee, Heritage provides a partial refund of the fee to residents
who move out within 180 days; charges only one such fee to
spouses who move in together; and does not charge this fee to
prospective residents who begin the intake process but
ultimately do not move in. In setting the amount of this fee,
Heritage reviewed market studies of analogous fees charged by
other ALRs, and Heritage typically increased the amount of the
fee by three percent each year.
Julia Ryan entered into a residency agreement with Heritage
and became a new resident of the ALR in 2013. Her monthly rent
was $4,000, and she paid a one-time community fee of $2,800.
Consistent with the typical intake process at Heritage described
above, Heritage gathered her medical documentation, conducted a
clinical screening, created a service plan for her, performed
another clinical assessment when she moved in, collected her
dietary information, and held a series of orientation meetings
for her with various staff members.
From the start of the class period in 2012 to January 10,
2023, newly admitted residents to Heritage like Ryan paid a
total of 288 one-time community fees, ranging from $1,500 to
$3,400. Excluding fees that were later refunded, Heritage
and the defendant also took the position below that its revision to this language in the agreement did not create a genuine issue of material fact. We accordingly discuss the only agreement before the court. 11
collected a net total of $951,225 in community fees. The amount
of community fees that Heritage collected in a single year
during this period ranged from a low of $48,200 for the new
admissions in 2016 to $134,280 in 2022. For each year in the
record for which there are total annual cost estimates, see note
6, supra, the defendant's estimated payroll costs for the intake
process exceeded the total amount of community fees collected.
Heritage deposited all the community fee proceeds, along
with other sources of revenue such as the residents' monthly
rent payments, into its general operating account. Heritage
used its general operating account to pay for various expenses,
including capital improvements that do not relate to ALR-
specific intake services. The defendant concedes that, because
it does not segregate the community fees charged by Heritage
into a separate bank account or otherwise independently account
for them, it cannot trace how each specific dollar of each
community fee was spent.
2. Procedural history. In 2016, the personal
representative of Ryan's estate filed a class action complaint
in the Superior Court against the defendant, claiming violations
of G. L. c. 186, § 15B, and G. L. c. 93A. The complaint
alleged, in essence, that Heritage's community fee was unlawful
because it violated the security deposit statute, and charging
the fee therefore was unfair and deceptive under G. L. c. 93A. 12
See G. L. c. 186, § 15B (1) (b) (prior to commencement of
tenancy, lessor may charge tenant only first month's rent, last
month's rent, security deposit equal to first month's rent, and
purchase and installation cost for key and lock); 904 Code Mass.
Regs. § 3.17(4)(a) (2020) (charging tenant fee beyond four
permissible categories enumerated in c. 186, § 15B [1] [b], is
unfair or deceptive practice).
In response, the defendant filed a motion to dismiss,
arguing that the security deposit statute does not apply to
ALRs. The defendant's motion was allowed, and we transferred
the named plaintiff's appeal to this court to address whether
ALRs are subject to the requirements of the security deposit
statute.
Following briefing and oral argument, we concluded that the
security deposit statute applies to ALRs to the extent that an
ALR resembles a traditional lessor, but the statute does not
restrict ALRs when they are charging "additional upfront fees
for the distinct services that such facilities provide that are
not applicable to ordinary landlord-tenant relationships." Ryan
I, 483 Mass. at 622. "To be permissible," we held, "the purpose
and the use of [a] . . . fee must correspond to either the on-
boarding services enumerated in G. L. c. 19D, § 13, or other
services designed specifically for ALRs." Id. at 629. Parsing
the language in Heritage's residency agreement describing the 13
community fee, we noted that the first three categories listed
in the description -- "upfront staff administrative costs, the
[r]esident's initial service coordination plan[,] and move-in
assistance" -- "appear[ed]" to be permissible. Id. The fourth
category, however -- for "establish[ing] a replacement reserve
for building improvements" -- "appear[ed]" to be "potentially
problematic." Id. Accordingly, we reversed the allowance of
the defendant's motion to dismiss and remanded for further
factual development. Id. at 630.
On remand, following discovery and certification of a
plaintiff class of "[a]ll current and former residents of
Heritage at Framingham who paid a '[c]ommunity [f]ee' from
August 24, 2012[,] to the present," all parties moved for
summary judgment. After a hearing, a judge allowed the
plaintiffs' motion as to Heritage's liability and denied the
defendant's motion. The motion judge reasoned that, because the
bank account into which Heritage deposited all community fees
was a general account used to pay for various expenses including
generic capital improvements not related to the provision of
ALR-specific intake services, "[t]he plaintiffs [had]
demonstrated as a matter of law that Heritage does not actually
use the [c]ommunity [f]ees solely for distinctive ALR-related
services." The judge concluded that the defendant thus violated
the security deposit statute by charging a fee in excess of the 14
four permissible categories under G. L. c. 186, § 15B (1) (b),
and thereby also violated G. L. c. 93A.
After cross motions regarding the assessment of damages and
a nonevidentiary hearing, a different Superior Court judge
awarded the plaintiff class the $951,225 in unrefunded community
fees collected by Heritage over the class period. The judge
declined, however, to order treble damages, concluding that the
damages-trebling provisions of the security deposit statute were
inapplicable to these circumstances, and that the defendant's
violation of the security deposit statute was not willful or
knowing under G. L. c. 93A. In total, the defendant was ordered
to pay $2,648,409.47, including $913,509.88 in prejudgment
interest and $783,674.59 in attorney's fees and costs.
The defendant timely appealed, and we allowed its
application for direct appellate review.
Discussion. Where the parties cross-moved for summary
judgment, each arguing for judgment as a matter of law based on
undisputed facts in the record, we review the judge's decision
de novo. See Boston Globe Media Partners, LLC v. Department of
Criminal Justice Info. Servs., 484 Mass. 279, 286 (2020). For
each motion, we determine whether the moving party is entitled
to judgment as a matter of law after viewing the evidence in the
light most favorable to the opposing party and drawing all
permissible inferences and resolving any evidentiary conflicts 15
in the opposing party's favor. See Nguyen v. Massachusetts
Inst. of Tech., 479 Mass. 436, 448 (2018), citing Cabot Corp. v.
AVX Corp., 448 Mass. 629, 636-637 (2007). Where the opposing
party will bear the burden of proof at trial, "[a] moving party
may satisfy its burden [on summary judgment] 'either by
submitting evidence that negates an essential element of the
opposing party's case or by demonstrating that the opposing
party has no reasonable expectation of proving an essential
element of [its] case at trial.'" Tody's Serv., Inc. v. Liberty
Mut. Ins. Co., 496 Mass. 197, 199 (2025), quoting Hill-Junious
v. UTP Realty, LLC, 492 Mass. 667, 672 (2023). "Once this
burden is met, the opposing party must set forth specific facts
demonstrating a genuine issue for trial." Tody's Serv., Inc.,
supra, at 199-200, citing Kourouvacilis v. General Motors Corp.,
410 Mass. 706, 716 (1991), and Mass. R. Civ. P. 56 (e), 365
Mass. 824 (1974).
The defendant argues that it is entitled to summary
judgment that it did not violate the security deposit statute
under Ryan I, 483 Mass. at 629, based on uncontradicted evidence
in the record that Heritage provided ALR-specific intake
services to the members of the plaintiff class, and that
Heritage incurred costs in providing those services that
exceeded the amount of the "community fees" it collected under
the residency agreement to "cover" (1) "upfront staff 16
administrative costs," (2) "the [r]esident's initial service
coordination plan," and (3) "move-in assistance." With respect
to the fourth category the fee was intended to cover under the
contract, to "establish a replacement reserve for building
improvements," the defendant acknowledges that the record shows
that the general operating account into which Heritage deposited
the community fees was used to pay for generic capital
expenditures not related to ALR-specific services, among other
expenses. But the defendant contends that Heritage was not
required to segregate the collected community fees into a
separate account, and that where Heritage undisputedly provided
permissible ALR-specific intake services pursuant to the first
three categories in the contract, at a cost greater than the
amount of upfront fees collected, the defendant is entitled to
judgment as a matter of law, regardless of Heritage's generic
capital expenditures from its general operating account.
The plaintiffs counter that the judge's allowance of their
summary judgment motion was proper because, for a host of
reasons, the defendant cannot show that the "actual purpose and
use of the [community] fee," Ryan I, 483 Mass. at 629, was for
ALR-specific intake services. Based on Heritage's commingling
of the collected fees with other funds in a general operating
account used to pay for generic capital expenditures, the
plaintiffs argue that the record undisputedly shows that the 17
fees were not used for ALR-specific intake services; rather, the
fees were used as the "reserve for building improvements"
referenced in the residency agreement, to pay for the kind of
impermissible generic expenses for which a lessor may not charge
tenants an upfront fee under the security deposit statute. They
further argue that the defendant's "post hoc" calculation of
Heritage's costs to provide intake services, undertaken during
this litigation, cannot show the fee's actual purpose and use,
and that various other facts show that the community fee had
"nothing to do with" providing ALR-specific intake services.
Instead, they contend, the community fee was a "junk fee" simply
intended to extract as much money from new residents as
possible.
We agree with the defendant that, on the record before us,
the defendant is entitled to judgment as a matter of law that it
did not violate the security deposit statute, because Heritage's
community fee "correspond[ed] to either the on-boarding services
enumerated in G. L. c. 19D, § 13, or other services designed
specifically for ALRs." Ryan I, 483 Mass. at 629.
It is undisputed that new residents of Heritage paid the
community fee when they executed residency agreements with
Heritage providing that the fee was intended to cover, in part,
"upfront staff administrative costs, the [r]esident's initial
service coordination plan[,] and move-in assistance." We noted 18
in Ryan I, 483 Mass. at 629, that these first three categories
of the community fee "appear[ed] to be permissible," and the
plaintiffs have not argued or pointed to evidence that the three
categories set forth in the contract do not, in fact, encompass
ALR-specific intake services of the kind that an ALR may charge
under Ryan I without violating the security deposit statute.8
And the record developed on remand now shows without
contradiction that Heritage in fact did furnish a host of ALR-
specific intake services requiring administrative coordination,
create service plans for new residents, and provide move-in
assistance. Indeed, the plaintiffs do not dispute that Heritage
maintains an intake process involving preliminary screenings to
determine whether Heritage is a suitable fit for potential
residents, tours of the ALR's facilities and meetings with ALR
staff, consultation with prospective residents' physicians,
application paperwork, clinical assessments, creation of service
plans, and assistance with moving new residents' furniture and
8 While not disputing that the three categories encompass ALR-specific services, the plaintiffs do state in passing that the residency agreement "did not mention salaries as either the purpose of or the use of the '[c]ommunity [f]ees.'" To the extent this statement is an argument that the labor costs of providing ALR-specific services fall outside "staff administrative costs" and costs to "cover . . . the [r]esident's initial service coordination plan and move-in assistance," the argument is undeveloped entirely. We therefore decline to consider it. 19
installing adaptive equipment.9 And the plaintiffs have not made
any argument that these various components of Heritage's intake
process are not ALR-specific services. Cf. G. L. c. 19D,
§ 13 (1) (ALRs to provide "opportunity to apply for assisted
living residence services, and be informed about the eligibility
requirements and the resident's rights and obligations under the
program"); G. L. c. 19D, § 13 (2) (requirement to provide
"initial pre-screening assessment conducted for the purposes of
determining eligibility for and need of assisted living
services"); G. L. c. 19D, § 12 (a) (required service
coordination plan); 651 Code Mass. Regs. § 12.04(6) (required
initial screening).
The defendant also has presented evidence, again
uncontradicted by the plaintiffs, that Heritage incurred payroll
9 The plaintiffs have not created a triable issue of fact as to whether, notwithstanding the express terms of the residency agreement and Heritage's undisputed provision of various intake services, Heritage in fact did not charge the fee for these services, based on deposition testimony from Heritage's president that "[t]here are no charges when we provide a tour" or "when [Heritage does] these initial phone calls or meet[ings] with staff to see if it's a good placement" and that Heritage does not charge an "application fee," nor impose any charges for gathering "medical documentation," for the initial "clinical assessment . . . of the [applicant's] current medical state," for "the service coordination plan," for "redo[ing] the service plan" if "there's a change in clinical status for a resident," or for "move-in assistance." In context, the only reasonable understanding of this testimony is that Heritage does not charge for each of these services at the time the service is rendered, as the witness specified in response to the initial questions in this lengthy series. 20
costs to provide these ALR-specific intake services that exceed
the total amount in community fees collected. In depositions
pursuant to Mass. R. Civ. P. 30 (b) (6), as appearing in 489
Mass. 1401 (2022), current and former Heritage employees
testified regarding the roles of the community relations
director, resident care director, and other employees in the
intake process for new residents. Heritage's controller and its
former executive director then described how Heritage's payroll
costs attributable to this intake process were estimated for
each year of the class period, based on each employee's role in
the intake process, the percentage of the employee's time spent
on intake tasks, and the employee's salary for the year. While
the plaintiffs' brief asserts that "[d]efense counsel simply
invented percentages of various individuals' salaries that could
be attributable to various on-boarding tasks," they do not cite
to any record evidence contradicting the defendant's evidence
regarding either the amount of the payroll costs Heritage
incurred to provide the specified intake services or the manner
in which the defendant went about calculating those costs.10
10In the Superior Court, the plaintiffs requested that the defendant's motion for summary judgment be stayed under rule 56 (f) "to the extent that the court believes [evidence of time each staff member spent on intake tasks] to be material." See Mass. R. Civ. P. 56 (f), 365 Mass. 824 (1974) (where party opposing summary judgment "cannot for reasons stated present by affidavit facts essential to justify his opposition, the court 21
On this record, the defendant is entitled to summary
judgment that its collection of the community fee did not
violate the security deposit law. The required degree of
"correspond[ence]" between an upfront ALR fee and the provision
of ALR-specific intake services, Ryan I, 483 Mass. at 628, is
reached when the ALR did provide ALR-specific intake services of
kinds the fee stated it was intended to cover and the ALR's
costs in providing such services exceed the fees collected for
them. In such circumstances, no more extensive inquiry into
"the actual purpose and use of the fee" is required. Id. at
629. As we recognized in Ryan I, id. at 627, the Legislature
"explicitly permit[ted] upfront charges that pertain to initial
resident assessments" when it enacted the ALR statute, in
may . . . order a continuance to permit" further discovery "or may make such other order as is just"). The basis for the plaintiffs' motion, which is included in the defendant's record appendix, was that the defendant had objected on privilege grounds to the deposition of its counsel and other discovery concerning any role counsel played in creating the "post hoc" estimate of Heritage's payroll costs for providing ALR-specific intake services. Defense counsel responded that the plaintiffs instead should seek the information from Heritage or other witnesses. The plaintiffs subsequently questioned the defendant's rule 30 (b) (6) deponents regarding how the calculations were performed; in these depositions, defense counsel did not object to questions concerning how the percentages were calculated, nor was any privilege invoked; and the witnesses identified by name various current or former Heritage employees who performed roles in the intake process over the course of the class period. The plaintiffs' brief on appeal does not mention the rule 56 (f) motion, let alone argue that more discovery is needed. 22
furtherance of the statute's stated purpose to promote the
availability of ALRs and the services they provide, see St.
1994, c. 354, § 1. Holding that an ALR nonetheless may be
liable under the security deposit statute for charging a fee for
ALR-specific intake services that the ALR provided, where the
fee does not even cover the ALR's costs in providing the
services, risks detracting from the Legislature's aim to
encourage the provision of these services. See Ryan I, supra at
620, quoting School Comm. of Newton v. Newton Sch. Custodians
Ass'n, Local 454, SEIU, 438 Mass. 739, 751 (2003) ("In the
absence of explicit legislative commands to the contrary, we
construe statutes to harmonize and not to undercut each other").
We thus conclude that the defendant is entitled to summary
judgment notwithstanding that the residency agreement states
that the community fee was intended in part to cover what
remains a "problematic" fourth category of costs, Ryan I, 483
Mass. at 629, the "establish[ment of] a replacement reserve for
building improvements," and notwithstanding that Heritage used
the same general operating account into which Heritage deposited
the collected community fees (as well as residents' monthly rent
and fees) to pay for generic capital expenditures among other 23
expenses.11 This evidence does not compel judgment in favor of
the plaintiffs or create a triable issue of fact in the
circumstances of this case for two reasons.
First, the fact that Heritage undisputedly cannot trace its
expenditure of each dollar of community fees collected and
therefore cannot show that no dollar raised through the fee was
spent on generic capital expenditures does not amount to a
violation of the security deposit statute. Contrary to the
plaintiffs' argument, the security deposit statute contains no
provision requiring ALRs to segregate funds raised through
upfront fees for ALR-specific services, nor does it require that
an ALR be able to trace the expenditure of each dollar it
receives in such fees. As the plaintiffs emphasize, the
security deposit statute does require a lessor to take various
measures with respect to tenants' security deposits and payments
for the last month's rent, such as paying the tenants interest,
keeping the security deposits in a separate interest-bearing
11The defendant characterizes the evidence regarding Heritage's use of its operating account as demonstrating that Heritage never "establish[ed]" a separate "replacement reserve" fund "for building improvements" pursuant to the fourth category of the residency agreement. There is evidence in the record of a "routine capital reserve" line item in Heritage's capital budgets, however. Because we draw reasonable inferences in favor of the plaintiffs when considering the defendant's motion for summary judgment, we infer that Heritage did in fact use its general operating account in part as a "reserve" for capital expenditures. 24
account, and providing tenants with an itemized list of any
damages and associated cost of repairs deducted from a security
deposit. See G. L. c. 186, § 15B (2) (a), (3) (a)-(b),
(4) (iii). But these provisions do not apply to upfront fees
for ALR-specific intake services, which are neither security
deposits nor payments for the last month's rent. The security
deposit statute thus does not require segregation or prohibit
commingling of fees collected for ALR-specific services.12
Second, and relatedly, in the particular circumstances
here, the existence of generic capital expenditures from the
general operating account into which Heritage deposited the fees
does not create a triable issue of fact as to whether the
community fee actually "correspond[ed]" to the provision of ALR-
specific intake services. As we have discussed, the record
shows without contradiction that Heritage in fact did provide
12Nor does any such requirement arise from the ALR statute or implementing regulations brought to our attention by the plaintiffs. The plaintiffs assert that segregation of fees for ALR-specific intake services is required by language in the ALR statute permitting services to "be offered . . . on a fee for service basis," G. L. c. 19D, § 13, and the regulation requiring ALRs to provide "[a] clear explanation of the services included in any fees, a description and itemization of all other bundled services as well as an explanation of other services available at an additional charge," 651 Code Mass. Regs. § 12.08(2)(a)(9). The plaintiffs' assertion has no apparent grounding in the plain language of these provisions, which, as relevant here, simply permit the charging of, and require a clear and itemized explanation of, certain fees -- without stating any restrictions on how an ALR must segregate funds raised through the fees. 25
ALR-specific services of kinds the residency agreement states
the fee was intended to cover, and the cost of providing those
intake services exceeded the amount of fees collected. This
degree of "correspond[ence]" is, for the reasons discussed,
sufficient to avoid liability under the security deposit
statute.13
For similar reasons, we are unpersuaded by the plaintiffs'
other arguments in favor of affirmance of summary judgment in
their favor. In short, the plaintiffs argue that undisputed
facts show that Heritage did not charge the community fee for
the purpose of providing ALR-specific intake services, because
the amount of the fee was decoupled from the actual costs of
providing the services. Chief among various arguments to this
effect, the plaintiffs argue that, although the defendant has
shown that Heritage provided various intake services to new
residents and incurred costs in doing so, the defendant has not
13The plaintiffs argue that Heritage nonetheless is liable under the security deposit statute because the language of the residency agreement –- which is submitted for agency approval as part of the ALR certification process –- violates a regulation requiring ALRs to provide "[a] clear explanation of the services included in any fees, a description and itemization of all other bundled services as well as an explanation of other services available at an additional charge." 651 Code Mass. Regs. § 12.08(2)(a)(9). Just as the problematic fourth category in the residency agreement is immaterial in the circumstances of this case, so too is any alleged lack of particularity in the contract's language. 26
shown that it set the community fee based directly on a
calculation of the costs of providing the services; rather, the
plaintiffs object, the defendant's calculation of its costs was
performed only "post hoc," during this litigation.14
We agree with the plaintiffs that an ALR cannot belatedly
fabricate a purported correspondence between an upfront fee and
permissible ALR-specific intake services when such a
correspondence did not exist at the time that the fee was
charged. Here, however, as discussed above, the ALR-specific
services that Heritage provided fell within categories that the
residency agreement executed at the same time the fee was
charged stated the fee was intended to cover, and it is
undisputed that Heritage incurred costs in providing these
14In a similar vein, the plaintiffs argue that (a) Heritage, rather than performing an assessment of its own costs of providing ALR-specific intake services in setting the fee, instead relied on "industry survey studies" to determine how much it could reasonably charge; (b) Heritage did not alter the amount of the community fee based on changes over time in its costs of providing ALR-specific services; (c) Heritage charges only a partial community fee when a resident leaves within 180 days of moving in and does not charge any fee, despite rendering ALR-specific services, when a prospective resident is the spouse of an existing resident or chooses not to move into Heritage after beginning the intake process; (d) the "payroll for the individuals who purportedly performed these services dwarfed the amount of the collected [fees]"; and (e) starting in July 2020, the defendant consolidated Heritage's payroll with the payroll for the defendant's nursing home and paid both businesses' payrolls out of an account associated with the nursing home rather than from the general operating account into which the community fees were deposited. 27
services exceeding the amount of the fees collected. We hold
today that such evidence is sufficient to show that the fee
"correspond[s] to initial ALR-specific services inapplicable to
ordinary landlord-tenant relationships." Ryan I, 483 Mass. at
628. Accordingly, other evidence regarding the relationship
between the amount of the fee and Heritage's costs, and the
manner in which the fee was set, see note 14, supra, is not
material in the circumstances of this case.
Moreover, we reject the plaintiffs' suggestion that the
amount of an ALR's upfront fee for ALR-specific intake services
must mirror the ALR's costs exactly. Although the security
deposit statute limits a lessor to charging for "the purchase
and installation cost for a key and lock" (emphasis added),
G. L. c. 186, § 15B (1) (b) (iv), the statute contains no
analogous requirement with respect to fees charged by ALRs for
ALR-specific services that would limit an ALR to charging only
for its actual costs in providing ALR-specific services. Thus,
while an ALR's upfront fees are permissible under the security
deposit statute only if the fee "correspond[s] to initial ALR-
specific services inapplicable to ordinary landlord-tenant
relationships," Ryan I, 483 Mass. at 628, the security deposit
statute imposes no further requirement that the amount of the 28
fee be the exact amount of the ALR's costs in providing the
services.15
In so holding, we recognize that the plaintiffs' arguments
relate to important questions of public policy, "which, of
course, the Legislature is free to address" (citation omitted).
21 Merchants Row Corp. v. Merchants Row, Inc., 412 Mass. 204,
207 (1992). We ourselves are limited to interpreting, and
attempting to harmonize and give effect to, the statutes the
Legislature has enacted. See Ryan I, 483 Mass. at 622.
Conclusion. We reverse the order granting the plaintiffs'
motion for summary judgment and denying the defendant's motion
for summary judgment and remand the case for entry of judgment
in favor of the defendant.
So ordered.
15Likewise, nothing in the security deposit statute prohibits ALRs from charging community fees based on average costs -- rather than the costs incurred in connection with the intake of each individual resident -- to which the plaintiffs object in passing. While we reject the plaintiffs' various arguments to the effect that the amount of the fee must mirror exactly the ALR's costs of providing services, we need not reach in this case, and express no view on, circumstances in which an ALR collects upfront fees in amounts exceeding its costs of providing the ALR-specific intake services.