Am. Holdings, Inc. v. Town of Naples
| Decision Date | 23 March 2015 |
| Docket Number | Docket No.: BCD-CV-2014-43 |
| Parties | AMERICAN HOLDINGS, INC. Plaintiff, v. TOWN OF NAPLES, et al. Defendants. |
| Court | Maine Superior Court |
CUMBERLAND, ss
BUSINESS AND CONSUMER COURT
Location: Portland
Plaintiff, American Holdings, Inc. ("American Holdings") moves this court for partial summary judgment for a declaration that neither the Plaintiffs conversion to the condominium form of ownership nor the sale of said condominium units to Katherine Bourbon, Bruce J. Landry, Jennifer M. Landry, and John Hudgins (together "Parties-In-Interest") violated the Defendant Town of Naples's (the "Town" or "Defendant") minimum lot size and subdivision regulations. The Plaintiff further seeks judgment that the Town's mentioned ordinances violate 33 M.R.S.A § 1601-106, which prohibits discriminatory enforcement by the Town.
The Defendant Town opposes Plaintiff's motion and separately cross-moves this court as to the same issues. The Town seeks judgment as a matter of law that Plaintiff's conversion to and sale of condominium units violated the Town's zoning regulations including the Shoreland Zoning Ordinance, Site Plan Review Ordinance, Subdivision Ordinance, as well as Maine Law. Finally, the Town seeks an order directing the Plaintiff to repurchase the subject condominium units from theDefendant Parties-in-Interest and to reintegrate the property and buildings as it existed prior to the formation of the condominium.
Defendant Parties-in-interest request that this court deny the Town's motion and move this court for summary judgment in their favor as to the Town's First Amended Counterclaim.
American Holdings is a corporation duly organized under the laws of the State of Maine. (Def.'s Addt'l S.M.F. ¶ 3.)1 In 1999 American Holdings purchased Sunnyside Village located in the Town of Naples.2 (Pl.'s S.M.F. ¶ 1; Def.'s Opp. S.M.F. ¶ 1.) At the time the Plaintiff purchased the property, the Village contained seven (7) structures including: a main building, a 2-car garage, a mobile home, and four cottages.3 Id. In 2006, the Plaintiff began operating Sunnyside Village as a condominium.4 (Pl.'s S.M.F. ¶ 2; Def.'s Opp. S.M.F. ¶ 2.) Prior to 2006, several changes and alterations were made to the main building and the garage structures at Sunnyside Village. (Def.'s Addt'l S.M.F. ¶ 17.) The Town argues that the changes constitute changes in use for which Town approval was required.5 Id. Christopher Merrill, acting as an employee of American Holdings,completed the work on the various units on the property.6 (Def.'s Addt'l S.M.F. ¶ 28.) Khristopher Klimek claims to have been unaware of the changes made to the property until after Merrill was ultimately fired. (Rep. Addt'l S.M.F. ¶ 28.) The Town claims that it was unaware of any changes made to the property until 2013. (Def.'s Addt'l S.M.F. ¶ 32.) The Town further contends that neither prior nor current Code Enforcement Officers were aware of any alterations or changes in use to the property.7 (Def.'s Addt'l S.M.F. ¶ 33.)
In 2005, Khristopher Klimek was diagnosed with cancer. (Def.'s Addt'l S.M.F. ¶ 35.) While Mr. Klimek was recovering from his illness, Christopher Merrill filed a declaration to establish Sunnyside Village Condominium Association.8 (Def.'s Addt'l S.M.F. ¶ 36.) Merrill signed the document as "Vice President" of American Holdings. (Pl.'s Rep. Addt'l S.M.F. 40; Def.'s Addt'l S.M.F. ¶ 39.) Since the Declaration was filed, there have been three amendments to the document. Merrill signed two of the three amendments.
In 2012, American Holdings sold three (3) cottage condominium units to the Defendant Parties-in-Interest.9 (Pl.'s S.M.F. ¶ 3; Def.'s Opp. S.M.F. ¶ 3.) Unit 4 was sold to John Hudgins. (Def.'s Addt'l S.M.F ¶ 47.) Thereafter, on August 16, 2012, Units 1 and 2 were sold to Katherine Bourbon. Bourbon conveyed Unit 2 to the Landrys on the same day. (Def.'s Addt'l S.M.F 56.)In October of 2012, Renee Carter became the Code Enforcement Officer for the Town of Naples. (Def.'s Addt'l S.M.F 59.) Believing that Mr. Klimek had a valid permit from the previous Code Enforcement Officer, Ms. Carter did not issue a "stop work" order for the ongoing projects. Id. However, in June 2013, Ms. Carter noticed a contractor's vehicle at the site and inquired into the new projects. (Def.'s Addt'l S.M.F ¶ 65.) The contractor informed Ms. Carter that a kitchen was being added to the garage unit. (Def.'s Addt'l S.M.F ¶¶ 67-68.) At that time Ms. Carter stopped the projects.
In 2014, the Town asserted violations of the Town's subdivision and minimum lot size ordinances. The Code Enforcement Officer demanded that American Holdings repurchase the condominium units and restore the property to its pre-2006 use. (Pl.'s S.M.F. ¶ 4; Def.'s Opp. S.M.F. ¶ 4.) The Town has adopted separate Minimum Lot Size, Shoreland Zoning, Land Use, and Zoning ordinances. (Pl.'s S.M.F. ¶ 5; Def.'s Opp. S.M.F. ¶ 5.) Plaintiff contends that there is no restriction in the various zoning ordinances prohibiting it from converting property to the condominium form of ownership. Id. The Defendants, on the other hand, believe the facts demonstrate that American Holdings' actions violated the Town's Shoreland Zoning Ordinance, Site Plan Review Ordinance, Subdivision Ordinance, and Maine Law. (Def.'s Opp. S.M.F. ¶ 4.) On May 14, 2014, American Holdings filed a third amendment to the condominium declaration. (Def.'s Addt'l S.M.F ¶ 87.) In said document American Holdings reduced the total number of condominium units to seven consisting of four cottages, a main building, a mobile home, and a garage structure. (Def.'s Addt'l S.M.F. ¶ 89.)
The Town of Naples has a definitional Ordinance.10 (Pl.'s S.M.F. ¶ 6; Def.'s Opp. S.M.F. ¶ 6.) The Plaintiff contends that Sunnyside Village today contains an identical mix of dwellingsrecognized by the Ordinances of the Town of Naples as existed when the property was purchased by American Holding in 1999. However, the Town denies this assertion. The Town contends that previous non-conforming uses for the garage on the property do not allow for residential uses.11 (Def.'s Opp. S.M.F. ¶ 7.)
M.R. Civ. P. 56(c) instructs that summary judgment is warranted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any . . show that there is no genuine issue as to any material fact set forth in those statements and that any party is entitled to a judgment as a matter of law." To survive a motion for summary judgment, the opposing party must produce evidence that, if produced at trial, would be sufficient to resist a motion for a judgment as a matter of law. Rodrigue v. Rodrigue, 1997 ME 99, ¶ 8, 694 A.2d 924. For purposes of summary judgment, "[a] material fact is one that can affect the outcome of the suit." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573 (citing Kenny v. Dep't of Human Services, 1999 ME 158, ¶ 3, 740 A.2d 560); see also McIlroy v. Gibson's Apple Orchard, 2012 ME 59, 7, 43 A.3d 948. A genuine issue exists when sufficient evidence supports a factual contest to require n fact-finder to choose between competing versions of the truth at trial. See Prescott v. Tax Assessor, 1998 ME 250, 5, 721 A.2d 169 (citing Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)).
A party wishing to avoid summary judgment must present a prima facie case for each element of a claim or defense that is asserted. See Reliance Nad Indem. v. Knowles Indus. Servs., 2005 ME 29, ¶ 9, 816 A.2d 63. "If material facts are disputed, the dispute must be resolved through fact-finding." Curtis v. Porter, 2001 ME 158, ¶ 7, 784 A.2d 18. When the court rules on a motionfor summary judgment, "'[it] is to consider only the portions of the record referred to, and the material facts set forth, in the Rule 7(d) statements.'" Handy Boat Serv., Inc. v. Prof'l Servs., Inc., 1998 ME 134, ¶ 16, 711 A.2d 1306 (quoting Gerrity Co. v. Lake Arrowhead Corp., 609 A.2d 293 (Me. 1992)). The court will view the evidence in light most favorable to the non-moving party. See, Sleeves v. Bernstein, Shnr, Sawyer & Nelson, P.A., 1998 ME 210, ¶ 11, 718 A.2d 186.
On November 16, 2006, Christopher Merrill, the acting Secretary of American Holdings, filed a Declaration of Condominium (the "Declaration") and established the "Sunnyside Village Condominium Association." Mr. Merrill signed the Declaration as "Vice President" of the corporation. Both Khristopher and Barara Klimek indicated in their depositions that tho Declaration and subsequent amendments were filed without authorization of American Holdings and were fraudulent.12 (Def.'s Addt'l S.M.F. ¶¶ 43-44.) The Defendants argue that Merrill lacked authority to bind American Holdings and therefore the Declaration is invalid. (Def.'s Mot. 10.) Under this argument, the Sunnyside Condominium was never established and the property remains as it was in 2006. (Def.'s Mot. 11.)
"Whether an agency relationship exists is a question of fact" QAD Investors, Inc. v. Kelly, 2001 ME 116, ¶ 18, 776 A.2d 1244 (citing Williams v. Inverness Corp., 664 A.2d 1244, 1246-47 (Me. 1995); Clapperton v. United States Fidelity & Guar. Co., 148 Me. 257, 266, 92 A.2d 336, 341 (1952)). Agency is the fiduciary relationship "which results from the manifestation of consent byone person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Libby v. Concord Gen. Mut. Ins. Co., 452 A.2d 979, 981 (Me. 1982) (citing Defosses v. Notis, 333 A.2d 83, 86 (Me. 1975)); see also J&E Air, Inc v. Stale Tax Assessor, 773 A.2d 452, 456 (Me. 2001). In this case, it is undisputed that Christopher Merrill was employed by, and held himself out as an agent for American Holdings at the time...
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