Ventures v. Alsham Plaza Llc., Docket No. BCD-09-362.

• Decision Date: 20 July 2010
• Docket Number: Docket No. BCD-09-362.
• Citation: 1 A.3d 416
• Parties: COASTAL VENTURES et al. v. ALSHAM PLAZA, LLC, et al.
• Court: Maine Supreme Court

1 A.3d 416

COASTAL VENTURES et al.

v.ALSHAM PLAZA, LLC, et al.

Docket No. BCD-09-362.

Supreme Judicial Court of Maine.

Argued: May 19, 2010.

Decided: July 20, 2010.

Charles E. Gilbert, III, Esq. (orally), Julie D. Farr, Esq., Gilbert & Greif, P.A., Bangor, ME, for Alsham Plaza, LLC, Alsham Supermarket, LLC, and Basel Soukarieh.

Frederick J. Badger, Jr., Esq., Heidi J. Hart, Esq. (orally), Richardson, Whitman, Large & Badger, Bangor, ME, for Coastal Ventures, William Bush, and Jane Bush.

Panel: SAUFLEY, C.J., and LEVY, SILVER, MEAD, GORMAN, and JABAR, JJ.

GORMAN, J.

[¶ 1] Alsham Plaza, LLC; Alsham Supermarket, LLC; and Basel Soukarieh (Alsham) appeal from a judgment entered in the Business and Consumer Docket ( Nivison, J.) on a pleading by agreement filed pursuant to M.R. Civ. P. 8(g) ¹ by Alsham and Coastal Ventures, William Bush, and Jane Bush (Coastal) in which Coastal alleged a breach of contract resulting from Alsham's purchase of a grocery store and clothing store in Columbia and requested a declaratory judgment concerning the effect of a non-competition agreement. Alsham contends the court erred in: (1) concluding that the parties had a binding agreement for the transfer of $50,000 worth of inventory from the clothing store and enforcing the terms of that agreement; (2) ordering Alsham to restore the flow of water from a well on Alsham's property to Coastal's property; and (3) determining that the parties' non-competition agreement neither applied to subsequent purchasers of Coastal's remaining property nor precluded Coastal from selling competing products in its remaining businesses. Coastal challenges the timeliness of Alsham's appeal and, in the alternative, cross-appeals from the court's denial of its request for attorney fees and costs related to the litigation of the non-competition agreement. We conclude that the appeal is timely and affirm the judgment.

I. BACKGROUND

[¶ 2] The court found the following facts, which are supported by the record and not disputed on appeal. William and Jane Bush are the sole shareholders of Coastal Ventures. In 1984, Coastal purchased a shopping center that spanned both sides of Route One in Columbia. Over the course of more than twenty years, Coastal established and operated several businesses at the shopping center: Columbia Supermarket, Bush's Family Clothing Store, and a gas station on one side of Route One; and Crossroads Ace Hardware Store on the opposite side of Route One. Coastal also owned the real property underlying the businesses. At all relevant times, Coastal sold cigarettes, cleaning supplies, and pet supplies at the hardware store. A well on the supermarket property supplied water to the adjacent gas station property.

[¶ 3] Early in 2006, Coastal engaged a commercial real estate broker to sell the shopping center. Soukarieh learned that the shopping center was for sale and traveled to Maine in June of that year to visit and evaluate all of the stores in the shopping center. Soukarieh then contacted Coastal's broker and expressed his interest in the shopping center, particularly the supermarket. Soukarieh met with the Bushes on the morning of July 13, 2006, to discuss purchasing the supermarket; at that time, Soukarieh walked through all of Coastal's properties again.

[¶ 4] The parties entered into a purchase and sale agreement for a portion of the shopping center on July 17, 2006. In consideration for payment of $1,725,000, Coastal was to transfer two businesses-Columbia Supermarket and Bush's Family Clothing-and the real property housing these businesses to Alsham. Although the sale did not include the adjacent gas station or the property underlying the gas station, the purchase and sale agreement included a reference to a utility easement by which the existing well on the supermarket property would continue to supply water to the gas station. ²

[¶ 5] The purchase and sale agreement included a non-competition clause, and the parties later signed a separate, comprehensive non-competition agreement. In that agreement, Coastal agreed to “no longer engage in the supermarket or clothing store business” nor directly or indirectly compete with the businesses acquired by Alsham for ten years within a twenty-mile radius of the shopping center. As part of the non-competition agreement, the parties agreed: “This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, personal representatives, successors, and assigns.” The parties also included an indemnification clause, providing that “Alsham ... shall indemnify Coastal ... and agree to hold Coastal ... harmless by reason of any losses, injuries, costs or damages, including [attorney] fees, which may arise out of Alsham's operation of the Business ³ after the Closing Date.”

[¶ 6] In an addendum to the purchase and sale agreement, the parties agreed that the sale of the clothing store included “all personal property used in the business and the business inventory which shall be capped at $50,000.” The parties also agreed that before closing, they would conduct an inventory of the clothing store business to determine which items would be transferred as part of the sale.

[¶ 7] Although the parties originally agreed to close the sale on September 29, 2006, the closing did not occur until October 19, 2006. Because the inventory of the clothing store had not been completed, however, Soukarieh held back $50,000 of the agreed-upon purchase price to cover the subsequent purchase of the inventory.

[¶ 8] The parties unsuccessfully attempted to coordinate a time to complete the inventory over the next several months, but the inventory was never conducted, and that portion of the sale was never completed. Coastal continued to operate the clothing store until January of 2007, and after the store closed, one of Coastal's employees set aside clothing that she believed was worth $50,000 and could be sold when Alsham took over the business. Coastal retained this inventory through the present litigation.

[¶ 9] In April or May of 2007, Alsham stopped the flow of water from the well on the supermarket property to the gas station after receiving a letter from the Department of Health and Human Services regarding state regulation of public water supplies. Alsham determined that it could not legally supply water to the gas station from the well without complying with the regulation, and did not want to incur the costs associated with compliance.

[¶ 10] On August 31, 2007, the parties filed a pleading by agreement, pursuant to M.R. Civ. P. 8(g), in the Superior Court (Washington County). Coastal sought a declaratory judgment, pursuant to 14 M.R.S. §§ 5953, 5955 (2009), regarding its rights and obligations under the non-competition agreement, and specifically asked: (1) whether Coastal would violate the agreement by selling the gas station or hardware store to a third party that might compete with Alsham; and (2) whether Coastal's sale of cigarettes, pet supplies, and cleaning products in the hardware store was in violation of the non-competition agreement because Alsham sold similar products at the supermarket. Coastal also asserted breach of contract claims from Alsham's refusal to proceed with the sale of the inventory and to supply the gas station with water. Alsham counterclaimed for damages for misrepresentation, unpaid rent, and conversion of a television set. ⁴ The case was transferred to the Business and Consumer Court Docket on September 19, 2007.

[¶ 11] The court conducted a non-jury trial from January 7, 2009, to January 15, 2009, and issued its decision on February 3, 2009. On Coastal's claim for declaratory judgment, the court found that the parties intended the non-competition agreement to be a personal obligation of the Bushes, and Coastal was neither restricted from selling overlapping products nor prohibited from selling its remaining businesses to a third party that may compete with Alsham.

[¶ 12] On Coastal's breach of contract claim for the well easement, the court found that Alsham was obligated to supply water to Coastal and ordered Alsham to restore the flow of water. Because Alsham presented no evidence to support its assertion that it was unable to legally supply water to the gas station, the court rejected Alsham's argument, but allowed Alsham to calculate the costs of complying with the relevant drinking water statutes, and then submit the issue back to the court if the parties failed to agree on whether those costs were an undue burden on Alsham's estate.

[¶ 13] On Coastal's breach of contract claim regarding the inventory, the court found that the only unmet condition to fulfilling the sale was the completion of the inventory. The court found that both parties were at fault for the delay in conducting the inventory, but that neither party was in breach of the agreement. The court concluded that the parties still had a binding agreement “for the transfer of the clothing store, including the inventory, and that the value of the inventory to be transferred is $50,000.” The court ordered the parties to arrange for a valuation of the inventory within thirty days, Alsham to pay up to $50,000 for the inventory, and Coastal to transfer the items. The court allowed the parties to return to court within fourteen days should they not agree on an entity to conduct the valuation.

[¶ 14] In response to Alsham's motion requesting additional time to comply with the court's order related to the inventory, the court clarified its judgment on March 3, 2009. The court ordered the inventory to be conducted according to traditional industry standards within thirty days, and again allowed the parties to return to court should they not agree on an entity to conduct the valuation. Because the parties still could not agree, the court designated RGIS Inventory Specialists to conduct the inventory in a second post-judgment order dated March 17, 2009.

[¶ 15] RGIS...