Portland Co. v. City of Portland

• Decision Date: 03 September 2009
• Docket Number: Docket: Cum-08-684.
• Citation: 979 A.2d 1279,2009 ME 98
• Parties: The PORTLAND COMPANY v. The CITY OF PORTLAND.
• Court: Maine Supreme Court

979 A.2d 1279

2009 ME 98

The PORTLAND COMPANY v. The CITY OF PORTLAND.

Docket: Cum-08-684.

Supreme Judicial Court of Maine.

Argued: June 17, 2009.

Decided: September 3, 2009.

Deborah M. Mann, Esq. (orally), Natalie L. Burns, Esq., Jensen Baird Gardner & Henry, Portland, ME, for the City of Portland.

Michael D. Traister, Esq. (orally), Peter S. Plumb, Esq., Murray, Plumb & Murray, Portland, ME, for The Portland Company.

Panel: CLIFFORD, LEVY, SILVER, MEAD, and GORMAN, JJ.

SILVER, J.

[¶ 1] The City of Portland appeals, and the Portland Company cross-appeals, from several judgments of the Superior Court (Cumberland County, Delahanty, J.), following trial, on the Portland Company's complaint alleging an unconstitutional taking of its non-fee interest in three parcels of land owned by the City at the time of the taking. We hold that (1) the appeal was timely; (2) the court did not err in holding that the Portland Company had a property interest in these parcels; (3) there is no basis on which to reject the City's finding of exigent circumstances; (4) the takings are for a public use; (5) the court did not err in finding that the Portland Company waived its coercion claim; and (6) the Portland Company is not entitled to attorney fees.

I. BACKGROUND

[¶ 2] This appeal concerns three contiguous parcels of land, referred to by the parties as A-1, A-2, and A-3, located adjacent to the Ocean Gateway Marine Passenger Terminal at the eastern end of Commercial Street in Portland. The Portland Company asserts an interest, granted to it by deed in 1865, in certain railroad track rights over the three parcels. Pursuant to the 1865 deed, the Atlantic and St. Lawrence Railroad Company and the Grand Trunk Railroad Company granted the Portland Company, which owned adjacent land, the right to connect to railroad tracks over land owned by the Atlantic and St. Lawrence Railroad Company and leased by the Grand Trunk Railroad Company:

The said Grand Trunk Railroad Company also grants to the Portland Company and its assigns the right to maintain a connection from the works of the latter by one or two tracks with tracks of the Railroad Company leading to its station building in such manner as shall be suited to the convenience of both companies. And said Atlantic Company, if it shall be at any time in possession of the said railroad station grounds and buildings will in like manner grant to the Portland Company and its assigns the right to continue and maintain such connection.

[¶ 3] The Atlantic and St. Lawrence Railroad Company land came to be owned by the Canadian National Railway, which in 1988 brought an action against Phineas Sprague Sr., a successor-in-interest to the Portland Company, for trespass and nuisance. See Canadian Nat'l Ry. v. Sprague, 609 A.2d 1175, 1177 (Me.1992). Regarding the track rights at issue here, the referee who reviewed the case issued a report finding that the Portland Company and its successors-in-interest held an easement appurtenant to the land. The referee also found that, although the track rights were in abeyance, they had not been abandoned or extinguished. The Superior Court adopted the referee's report. Canadian Nat'l Ry. v. Sprague, CV 88-1420 (Me.Super. Ct., Cum. Cty., June 3, 1991) (Alexander, J.). We affirmed the judgment following Sprague's appeal from issues other than those raised in the present appeal. Canadian Nat'l Ry., 609 A.2d at 1176-79.

[¶ 4] In 1993, the Canadian National Railway transferred the property at issue to the City, with the exception of a small parcel that it had previously transferred to the Portland Water District. In 1996, the Portland Company, whose president and owner is Phineas Sprague Jr., repurchased the land owned by Phineas Sprague Sr.

[¶ 5] In 2002, the City's planning office completed a master plan to develop the eastern waterfront. The master plan focused on the development of the area adjacent to the Ocean Gateway Marine Passenger Terminal. The development at issue on parcels A-1, A-2, and A-3 is outlined and discussed in the master plan, including the extension of Hancock Street as a city street, the construction of parking garages, and other commercial development.

[¶ 6] In 2003, based on the provisions set forth in the master plan, the City issued a request for proposals for a parking garage and other development on parcel A-2. The development of this garage and other parking garages is part of an overall plan to increase the number of available garage parking spaces near the waterfront. The request for proposals required the developer to commit to a 600-car structured parking facility; to participate in the "Park & Shop" program; to operate with hours compatible with the Casco Bay Island Ferry schedule; to charge not more than 110% of the average rates charged by city-owned parking garages; to be available for snow-ban parking; and to allow for off-hours residential use.

[¶ 7] During 2004 and 2005, the City, seeking to extinguish the Portland Company's track rights, negotiated with the Portland Company for an exchange of the track rights for certain marina rights. They were unable to reach an agreement.

[¶ 8] In April 2005, the City accepted the proposal of Riverwalk, LLC for the development of parcel A-2. Riverwalk's proposal included a multi-story building with a combination of residential and commercial uses on parcel A-2, along with the construction of a parking garage on privately owned land on the opposite side of Fore Street, across from parcel A-2. Shortly after the City accepted Riverwalk's proposal, the Portland Company granted Riverwalk an option to purchase the track rights in an amount to be set by an appraiser, but not to exceed $2,000,000. In June 2005, the City offered $5002 for the release of the track rights, based on an appraisal obtained by the City. The City stated that it would pursue condemnation if the Portland Company would not agree to a sale, because time was of the essence. The Portland Company declined the City's offer. The Portland Company's appraiser valued the track rights at between $1,900,000 and $2,000,000.

[¶ 9] The City passed an order of condemnation in July 2005 to acquire the Portland Company's track rights and thereby extinguish them. The condemnation order's declaration of purpose states that the track rights are to be taken so that the land "can be used for the construction of a municipal road, to create public parking on a nearby lot and for economic development." The condemnation order's findings state that the "public exigency requires the immediate taking of the property interest" of the Portland Company.

[¶ 10] Parcel A-1 is a newly created city street known as the Hancock Street Extension. The condemnation order findings state that it would not be in the best interest of the public or the City to construct a railroad station on any of the City owned land and that, for safety, the City intends to prohibit rail crossings on the Hancock Street Extension.

[¶ 11] Parcel A-2 has since been transferred from the City to Riverwalk for the development of a condominium, retail space, and public space. The City and Riverwalk entered into a lease agreement for the parking garage pursuant to which the City agreed to rent half of the parking spaces and Riverwalk agreed that at the termination of the lease, residents of islands within the City would be placed at the head of any waiting list for individual monthly parking spaces.

[¶ 12] Parcel A-3 is to be used for economic development as buildings and an additional parking garage. The condemnation order findings further state that the Portland Company's track rights on parcel A-3 make it "impossible to market the City's property for economic development," and that the track rights also impede lending and prevent development. The condemnation order and subsequently issued certificate provide for damages of $5002.

[¶ 13] In July 2005, the Portland Company filed a verified complaint. The Portland Company alleged an unconstitutional taking, challenging the City's findings of public exigency and public use and appealing the City's award of damages. The Portland Company also asserted several other claims, including a claim that the City violated 23 M.R.S. § 154-B (2008)¹ by coercing the Portland Company to accept a less advantageous agreement with Riverwalk than the Portland Company otherwise could have obtained.

[¶ 14] Shortly after the Portland Company filed its complaint, the Portland Company and Riverwalk executed a memorandum of agreement pursuant to which Riverwalk agreed to pay the Portland Company $100,000 for the Portland Company's track rights in parcels A-1 and A-2, provided the City would agree to certain stipulations. In August 2005, the City and the Portland Company entered into a stipulation pursuant to which the City agreed not to use the Portland Company's release of the track rights to Riverwalk as evidence that the track rights are without value, and agreed not to use the agreement between the Portland Company and Riverwalk in defending against the Portland Company's challenge to the legality of the taking. The stipulation also provided that the Portland Company waived "any claim to receive damages or other payment or relief" with respect to parcels A-1 and A-2.

[¶ 15] The court held a three-day jury-waived trial in May 2007. In a judgment entered on September 13, 2007, the court found that the City took the Portland Company's rights in parcels A-1 and A-2 for a public use and demonstrated exigent circumstances. However, the court restored the Portland Company's rights in parcel A-3 because it found that the City did not demonstrate public exigency as to that parcel. In reaching this conclusion, the court found that development of parcel A-3 was not included in the immediate plan for development and that its projected use as a parking facility is not a change from its current use. The court also found that the City had not acted in...