  Using deep HST ACS imaging and VLT FORS2 spectra, we determined the velocity
dispersions, effective radii and surface brightnesses for four early-type
galaxies in the $z=1.237$ cluster \cl. All four galaxies are massive, $>
10^{11} M_{\sun}$. These four galaxies, combined with three from \lynx at
$z=1.276$, establish the Fundamental Plane of massive early-type cluster
galaxies at $\bar{z}=1.25$. The offset of the Fundamental Plane shows that the
luminosity evolution in rest-frame $B$ is $\Delta \ln M/L_B = (-0.98 \pm 0.06)
z$ for galaxies with $M > 10^{11.5} M_{\sun}$. To reproduce the observed
mass-to-light ratio ($M/L$) evolution, we determine the characteristic age of
the stars in these $M > 10^{11.5} M_{\sun}$ galaxies to be $3.0^{+0.3}_{-0.3}$
Gyrs, {\em i.e.} $z_{*}=3.4^{+0.5}_{-0.4}$. Including selection effects caused
by morphological bias (the ``progenitor bias''), we estimate an age of
$2.1^{+0.2}_{-0.2}$ Gyrs, or $z_{*} = 2.3^{+0.2}_{-0.2}$ for the elliptical
galaxy population. Massive cluster early-type galaxies appear to have a large
fraction of stars that formed early in the history of the universe. However,
there is a large scatter in the derived $M/L$ values, which is confirmed by the
spread in the galaxies' colors. Two lower mass galaxies in our $\bar{z}=1.25$
sample have much lower $M/L$ values, implying significant star-formation close
to the epoch of observation. Thus, even in the centers of massive clusters,
there appears to have been significant star formation in some massive, $M
\simeq 10^{11} M_{\sun}$, galaxies at $z\simeq 1.5$.
