Cottle Enterprises, Inc. v. Town of Farmington

• Decision Date: 16 April 1997
• Citation: 1997 ME 78,693 A.2d 330
• Parties: COTTLE ENTERPRISES, INC., d/b/a Cascade Leisure Park, et al. v. TOWN OF FARMINGTON, et al.
• Court: Maine Supreme Court

Page 330

693 A.2d 330

1997 ME 78

COTTLE ENTERPRISES, INC., d/b/a Cascade Leisure Park, et al. v. TOWN OF FARMINGTON, et al.

Supreme Judicial Court of Maine.

Argued Nov. 5, 1997.

Decided April 16, 1997.

John E. Nale (orally), Waterville, Stuart W. Tisdale, Jr., Portland, for plaintiff.

Joseph J. Hahn (orally), Lee K. Bragg, Bernstein, Shur, Sawyer & Nelson, Portland, for defendant.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, DANA and LIPEZ, JJ.

LIPEZ, Justice.

¶1 This appeal arises from the enactment of a sewer moratorium, the events leading to that enactment, and their alleged impact on the development of a mobile home park. Cottle Enterprises, Inc., d/b/a Cascade Leisure Park, et al. (Cottle) ¹ appeals from the judgment entered in the Superior Court (Franklin County) pursuant to summary judgments in favor of the Town of Farmington, et al. (the Town) on Cottle's claims of an unconstitutional taking of property (Alexander, J.), and tortious misrepresentation and denial of equal protection (Crowley, J.), and the court's dismissal of Cottle's promissory estoppel claim (Delahanty, J.). Cottle claims numerous errors in these rulings. We find none and affirm the judgment.

Background

¶2 In 1987 Cottle decided to build a mobile home park in Farmington for the elderly. It made sizeable down payments on the approximately 155 acres where the leisure park was to be located. The purchase was contingent on state and local approvals.

¶3 In February 1988 Cottle filed an application for subdivision approval with the Town Planning Board. The subdivision regulations stipulate that an applicant must demonstrate that the proposed subdivision will not have an "unreasonably adverse impact on municipal services," including the "sewage treatment plant." Cottle's application included a letter from Farmington Sewer Superintendent Steve Moore (Moore), asserting that the sewage system "should have enough capacity to handle the proposed 30 to 150 units of adult housing." This letter was not a permit for the sewer hook-ups. According to the Town's sewer ordinance, such permits may be obtained only by applying to the Sewer Commission, comprised of the Board of Selectmen.

¶4 In March, the Planning Board approved Cottle's project unanimously, subject to the Maine Department of Environmental Protection's (DEP) approval. Cottle completed purchase of the park property at the end of that month. Moore visited the property at that time and told Cottle once more that there would be no problem with the sewer hook-ups. Moore confirmed his opinion in May when he signed a letter provided by one of Cottle's engineers, who was attempting to respond to the DEP's request for verification that the projected gallons per day of sewer use "will have no adverse impact" on the sewer system. This letter was a statement of the system's then foreseeable capacity. The DEP approved Cottle's application in the spring of 1989, noting in its administrative order that "[t]he proposed project will generate an estimated 33,750 gallons of waste water [sic] a day.... In a letter ... Steven A. Moore, Superintendent of the Farmington Wastewater Treatment Plant, indicates that the additional wastewater generated by the proposed subdivision will not have an adverse impact on the [plant]."

¶5 Meanwhile, the Town had begun to discover problems with its treatment and disposal of wastewater. By November 1989 both the state and federal governments were taking action against the Town because of problems with discharge measuring procedures and compliance. The Town claims it was unaware of any problems at the sewer plant until early that month, when an engineering firm gave it a report citing capacity problems at the plant and the DEP's inspector wrote a letter to Moore citing deficiencies in the plant's operations and performance. Moore admitted to the inspector that he had not been conducting the water-sampling properly.

¶6 After conducting follow-up inspections, the DEP wrote Moore that the Town's plant had not been in compliance with licensing requirements "for a long time," that the waste flow probably had not been measured accurately for years, and that the inspector himself had witnessed solid sewage being carried into the river from the plant several times. In January 1990 the DEP determined that the Town's wastewater discharge was unacceptably above the license limits and that Moore's failure to report violations had compromised its honor system. The DEP reissued a discharge license to the Town conditioned on suspension of its permission to receive sewage. Town Manager John Edgerly (Edgerly) informed all interested parties, including Cottle, that the Town would issue no new sewer hook-up permits for at least 60 days beginning that March 20. In May, Edgerly informed the DEP inspector of the Town's efforts toward compliance, including the drafting of a sewer moratorium. He noted such a moratorium would create difficulties for those who were in the process of developing properties whose operation would be contingent on sewer hook-ups.

¶7 The moratorium was enacted at a special Town meeting in May as an amendment to the existing sewer ordinance. It provided that

[o]nly twenty residential permits may be issued in one calendar year. No person, firm, corporation or legal entity, inclusive of financial and legal affiliates, may be entitled to more than 2 permits in one calendar year.... After making a determination regarding the Town's current ability to comply with the Town's discharge license, the Commission may increase or decrease the total number of residential permits issued in any calendar year.

The moratorium stipulated further that when

an applicant for a residential unit permit fails to obtain a permit within a reasonable time, the applicant may proceed with the installation of subsurface waste disposal system or sewage storage system in accordance with State law and regulations. Once this article has expired and the Town has given official hookup notice ..., the residential units with subsurface sewage disposal systems must connect to the sewer line within three years; the residential units with sewage storage systems shall connect within ninety (90) days.... The connection fee shall be waived for all residential units developed under the requirements of this article.

The moratorium also included the following "grandfather" clause: "This Article shall apply to development for which substantial site improvements have not been made by the date of adoption of this Article." The Town claims that Cottle's leisure park development, which had completed Phase I of construction (including water and sewer system installations) by May 1990, was protected by this clause. Cottle asserts that Phase I of the project was not completed until August 1990, with "seventy-five sites ... completed, with 31 ready to go with water and sewer." ² In June the Town received an administrative order from the federal Environmental Protection Agency requiring the DEP's approval of any new additions to the sewer collection system.

¶8 Although John Cottle did not attend the meetings at which the Town deliberated and voted on the sewer moratorium, he appeared at a Board of Selectmen meeting in September 1990 to express concern about the moratorium's effect on his project. According to the minutes,

John Cottle was present to discuss his sewer situation. He has an approved subdivision and he was under the impression that he could hook into the sewer because of this preapproved subdivision. John has invested a lot of money into this development and now he cannot hook any of the homes into the sewer. John and his bank have invested a large sum of money for this investment that is absolutely worthless at the present time because of the sewer situation. John does not feel that the 2 hook ups per year are feasible for a subdivision like his. He has financial obligations that cannot be met because of the sewer limits.

At the meeting, however, Cottle did not apply to the Selectmen in their role as the Board of Sewer Commissioners for hook-ups pursuant to the moratorium clause. John Cottle also attended a public hearing in Farmington in January 1991 to protest having been allowed only two sewer permits. There is no evidence that Cottle ever made an application at any time to the Town for sewer hook-up permits as required by the sewer ordinance, or for a subsurface septic system or for any other waste storage facility as permitted by the terms of the moratorium, or to the DEP for an exception to the sewer permit limitations it was then enforcing.

¶9 By July 1990 officials of Peoples Heritage Bank (Peoples Heritage or the bank) were negotiating on Cottle's behalf with the DEP in an attempt to keep the park project alive. Cottle was now in default on the notes and mortgages held by the bank. That November, to facilitate Cottle's sale of the leisure park property, Edgerly approached the DEP for an exception from the two hook-up restriction. The DEP granted the Town permission, subject to certain conditions, to allow 25 new hook-ups per year. The new hook-ups were given "only ... to enable sale of the whole property and [do] not necessarily extend to the present owner [Cottle] in case the whole property is not sold." In February 1991 this information was transmitted by the Town to Cottle, and in May the bank agreed to discharge Cottle's indebtedness in exchange for a deed to the property. The property and project were purchased in September by Cascade Landholdings, Inc. from the Peoples Heritage assignee for $500,000.

¶10 In November 1991 Cottle filed a three-count complaint alleging a confiscatory taking, violations of equal protection and due process, and violation of unnamed constitutional rights pursuant to 42 U.S.C. § 1983. Cottle amended the complaint in January 1993 to add an additional count of violation of equal protection and due process and one count of "breach of...