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In 1989, the Massachusetts legislature amended Chapter 40A, Section 3 (commonly known as the Dover Amendment) to prohibit “local land use and health and safety laws, regulations, practices, ordinances, by-laws and decisions of a city or town” from discriminating against a disabled person. Since that amendment, the Massachusetts appellate courts have not had an opportunity to discuss the scope of this protection for disabled persons.

In 1997, a trial court judge concluded that the denial of an application for a change of use of property to accommodate a group housing project for recovering substance abusers violated the this provision of Section 3. The Court noted that “disabled” was not defined in the statute, but by looking to analogous statutes under federal law, in particular the Fair Housing Act, recovering substance abusers clearly fell within the definition of “disabled.” See Granada House, Inc. v. City of Boston, 6 Mass. L. Rep. 466 (1997). By refusing to allow the change in use, the Court determined that the City had violated Section 3. Since that trial court decision, there has been little or no appellate opportunity to further define the scope of protections afforded to disabled persons under Section 3.

In Sheppard v. Zoning Board of Appeal of Boston, 81 Mass. App. Ct. 394 (2012), the Massachusetts Court of Appeals had an opportunity to revisit the statute. In Sheppard, a homeowner obtained variances to build a larger single family home than currently existed on a non-conforming lot. An abutter appealed the grant of those variances but lost at the trial level. At the appellate level, however, the Court held that there was nothing unique about the lot, as contrasted to others in the area, which justified the grant of the variance. As a fall back, the property owner argued that he was disabled, and that the changes to the home were necessary to accommodate his disability.[1] Therefore, he argued, the refusal to allow the changes constituted discrimination against a disabled person in violation of the prohibition contained in Section 3.

The Court rejected the argument that the Board could never deny a disabled person relief from the Zoning Act without violating Section 3. While the Court refused to outline the boundaries of Section 3 protections, it noted that in this case the property owner had not made out a claim for discrimination against a disabled individual. It noted that when the property was purchased, the owner intended to live there after the renovation. Although there was some testimony that the home’s design was to accommodate the disability, “there was no testimony that the House’s extended footprint and increased height [which were the subject of the requested variances] were necessary to enable him to live there. Under these circumstances, [the owner] could not make out a claim that he was denied an equal opportunity to enjoy the housing of his choice as a result of a disability.”

While sidestepping the need to define the limits of Section 3 as it relates to disabled persons, the Court did clarify the need for specific evidence that, without an accommodation, the owner would not be able to enjoy the use of his property. The Court rejected the contention that disabled persons have carte blanche to a relaxation of zoning regulations. Rather, those claiming the disability have to demonstrate that the application of the challenged regulation prevented them from enjoying the use of their property. The extent of the negative impact which zoning regulations must have on disabled persons before an accommodation is mandated has been left to another day. What is clear, however, is that the impact must be established by specific evidence which, one presumes, might include expert testimony not only as to the disability itself but as to how application of the zoning regulation detrimentally affects that individual.

[1] The offending structure had already been constructed. The case includes a good discussion of the circumstances under which a tear down order is appropriate.

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John H. Perten is a shareholder at Sheehan Phinney Bass + Green PA. He is a member of the Construction, Litigation and Business Groups. He may be reached at jperten@sheehan.com or 617.897.5641.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.

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The New Hampshire Business Court recently held that while a party can negotiate for a valid release of some future claims, it cannot obtain a release for frauds it might commit in the future. The case of Sabbow & Co., Inc. v. Citizens Bank provided the court with the opportunity to review the validity of a contractual prospective waiver clause in commercial loan documents. Sabbow and Citizens Bank entered into a series of commercial loans.  Several years after the loan documents were signed, Sabbow acknowledged the existence of breakage fees, fees to be paid upon prepayment or default under the loans. The parties ultimately agreed to modify the loans, and Sabbow signed a waiver clause that purported to release Citizens Bank from liability for to claims that were “known and unknown” to Sabbow at the time of the modification. Several months later, Sabbow signed an amendment to the modification that also included a release of all “known and unknown” claims it had against Citizens Bank.

Sabbow ultimately sued Citizens Bank. Sabbow alleged in one of its claims that a representative of Citizens Bank intentionally misrepresented the breakage fees due under the loans. The facts demonstrated, however, that Sabbow had actual knowledge of the breakage fee clauses before it signed the two waivers of all claims against the bank.  Citizens Bank argued that Sabbow released any claims it might have had against the bank when it signed the loan modification and amendment to the loan modification. Sabbow argued that while it knew that the bank representative misrepresented the breakage fee clauses when it signed the waivers, Sabbow did not know that the bank representative intentionally misrepresented the breakage fee terms. Sabbow claimed that it did not discover that the misrepresentations were intentional until after it purportedly released all claims against the bank.  In turn, the bank argued that Sabbow’s release of “unknown” claims extinguished its ability to sue, even if it discovered the frauds after signing the releases.

Clauses in which a party purports to release future, or “unknown” claims must pass three tests to be valid: (1) the prospective release must not offend public policy; (2) a reasonable person reviewing the release must have understood that he/she was releasing future claims; and (3) the released claims must have been within the contemplation of the parties at the time they signed the contract. The second and third tests were easily satisfied in this case. As to the first test, however, the court ruled that prospective waivers of fraud claims violate New Hampshire’s public policy and are therefore invalid.

While contractual waivers of “known and unknown” claims can be useful, businesses should understand their limitations. The holding of the Business Court creates a general and blanket rule that parties cannot release unknown claims for future frauds. The logic of the case, though, might cause courts to find that other claims should be protected as a matter of public policy. What really makes a claim for fraud more worthy of protection than a claim for negligent misrepresentation or simple negligence? New Hampshire’s Constitution guarantees parties the right to recovery for their injuries. Extending the logic of the Sabbow case too far would vitiate the three-part test announced by the New Hampshire Supreme Court, and lead to the invalidation of all prospective waiver clauses. The lesson for now is to examine waiver clauses closely and understand the risk that waivers of future claims might not be ironclad.