HAVERHILL — In the latest legal battle over construction of homes at Crystal Springs Golf Course, a state Appeals Court has upheld the city's denials of building permits sought by developer Michael Maroney.

The court also reversed a previous judgment by another court against Maroney that ordered him to pay fines totaling $970,206 including interest, according to court paperwork. 

Although Associate Appeals Court Justices John Englander, Sydney Hanlon and Dalila Wendlandt ruled the city did not follow proper procedures when notifying Maroney of its plan to fine him, the judges upheld the building permit denials because Maroney has no legal interest in the property. That is because he lost it to foreclosure in 2018, the judges said. 

Maroney was appealing a 2018 Superior Court ruling that he did not comply with city regulations when building a 13-acre residential subdivision at Crystal Springs Golf Course, which he owned at the time. Maroney initially purchased Crystal Springs, an 18-hole, 137-acre course off North Broadway, in 2010 for $3.7 million. He filed for bankruptcy in July 2016, and the course was sold at a foreclosure auction in January 2018 for $960,000 to Sterling Golf Management Inc.

Maroney first brought suit against the city in 2015 when Haverhill officials refused to grant him building permits for more units in the development unless he built a water booster pumping station. In February 2018, a Superior Court judge found Maroney was not entitled to city permits related to the subdivision, on which he intended to build a total of 50 homes, 29 of which were already built and sold. Court documents showed the subdivision plan required Maroney to build the booster station prior to the construction of later phases of the project. Once he moved ahead with construction of additional houses before building the booster station, a Superior Court judge halted the issuance of further permits.

"Maroney does not contest he violated both state building code and city bylaws by building on the lots without the required permits; rather he challenges the procedure by which the fines were imposed and calculated," the Appeals Court decision said.

According to court documents, the city's building inspector issued Maroney two cease-and-desist letters, one in July 2015 and the other in August 2016. The letters did not indicate a specific fine amount nor did they state that the fines would be imposed for actions the builder had taken before the letters were issued. The letters included the phrase "(I)f you ignore this order and continue work on these lots, ... additional penalties in the form of monetary fines will be sought against you...,'' according to the Appeals Court decision.

After sending the letters, the city building inspector did nothing further until the counterclaim lawsuit was filed nearly a year later, according to court documents. 

In a memorandum of law filed on July 30, 2018, it was disclosed by the building inspector that he sought $687,000 in fines. According to court paperwork, the fines were calculated at the state level ($1,000 per day per violation) and city level ($300 per day per violation). Fines were sought from the time Maroney commenced construction to the dates of the cease-and-desist letters, according to court documents.

Maroney opposed the city's assessment and said the city had not followed the correct procedures to impose the fines. 

The Appeals Court ruling said the city did not adhere to state law when issuing the letters. At the local level, "a counterclaim in a civil action was not the proper method to impose civil penalties under a local zoning bylaw," the ruling  said. Using Burlington Sand & Gravel as case law, the court said the city should have either pursued the case in district court or pursued Maroney criminally.

The letters submitted to Maroney were not considered official notices because they did not mention the district court and did not indicate that fines were to be imposed for actions that had already occurred, the Appeals Court ruling said. 

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