Duchaine v. Town of Gorham

STATEOFMAINE SUPERIOR COURT

CUMBERLAND, ss. Soe ts CIVIL ACTION

_ DOCKET NO. CV-99-573

SUSAN DUCHAINE, DANA'H. 3 57 fit ‘gj! Pr. Cy © Of) :

LAMPRON, JAMES E. SHAW, JR.,

THOMAS P. SHAW, DESIGN

DWELLINGS, INC., and SOLD, INC.,

Plaintiffs

Vv. DECISION AND ORDER

THE TOWN OF GORHAM,

Defendant

FACTUAL BACKGROUND

Plaintiffs Susan Duchaine, Dana Lampron, James Shaw and Thomas Shaw

(collectively referred to as the “Individual Plaintiffs”) are the joint owners of

Corporate Plaintiff SoLD, Inc., a Maine Subchapter S corporation engaged in land

acquisition and development. Defendant's Statement of Material Facts (“DSMF”)

1; Plaintiffs’ Opposing Statement of Material Facts (“POSMF”) { 1. Duchaine is also

the President, Treasurer and sole shareholder of Corporate Plaintiff Design

Dwellings, Inc., a Maine Subchapter S corporation engaged in building and

development. DSMF { 2; POSMF 2.

On May 26, 1998, the Plaintiffs filed a notice of claim pursuant to the Maine

Tort Claims Act, listing the alleged difficulties the Plaintiffs have experienced with

Defendant Town of Gorham’s Planning Department “[d]uring the past couple of

years.” DSMF 4 14. The Town of Gorham was insured under an insurance policy

providing limited liability coverage by National Union Fire Insurance Company of

Pittsburgh, Pennsylvania, during the relevant time period. Id. { 46.

The Plaintiffs subsequently filed a nine-count complaint alleging denial of the

right to equal protection (Count I), denial of the right to substantive due process

(Count II), denial of the right to freedom of speech (Count III), denial of the right to

petition for redress of grievances (Count IV), denial of procedural due process

(Count V), negligence (Count VI), injurious falsehood (Count VII), defamation

(Count VIID, and false light (Count IX). The injurious falsehood/slander of title

claim is advanced only with regard to the Forest Estates subdivision project and

concerns events that occurred in 1994. Id. q 45.

Originally, the complaint alleged violations of the United States and Maine

Constitutions. Id. 9 47. After the Town exercised its right to have the case removed

to federal court, the Plaintiffs moved to amend the complaint to remove all federal

claims and remand the case to state court. Id. All federal claims were subsequently

dismissed with prejudice by the United States District Court for the District of Maine

and the case was remanded. The Town now seeks summary judgment on the

Plaintiffs’ amended complaint. For the following reasons, the Town’s motion is

granted.

DISCUSSION

I. Standing

The concept of standing to sue means that the plaintiff has a sufficient

a

personal stake in the controversy to obtain a judicial resolution of that controversy.

Halfway House, Inc. v. City of Portland, 670 A.2d 1377, 1379 (Me. 1996). The

Individual Plaintiffs may not assert the rights of their corporations, but must instead

Nw

demonstrate that they have received some particularized injury to have standing to

raise the claims. See Stull v. First Am. Title Ins. Co., 2000 ME 21, 9 11, 745 A.2d 975,

979. The particularized injury requirement is met “when the defendant's actions —

have adversely and directly affected the plaintiffs property, pecuniary or personal

rights.” Id.

The Individual Plaintiffs argue that they have standing to assert the

constitutional claims because they are owners of the Corporate Plaintiffs and made

personal payments to the corporations which were then used to pay expenses such

as the alleged excessive attorney’s and engineering fees. The Individual Plaintiffs’

positions as shareholders do not override the requirement that they sustain

particularized injury. See Jones v. Niagara Frontier Trans. Authority, 836 F.2d 731,

736 (2d Cir. 1987) (“A shareholder--even the sole shareholder--does not have

standing to assert claims alleging wrongs to the corporation.”); Stull, 2000 ME 21, 4

11, 745 A.2d at 979 (holding that sole shareholder did not have standing to maintain

a suit seeking recovery for the breach of an insurance contract between his

corporation and defendant insurance company because the shareholder failed to

demonstrate particularized injury). While the Individual Plaintiffs did make

personal payments to the corporations, the Town’s conduct did not directly affect

their personal pecuniary interest as required to demonstrate a particularized injury.

The Individual Plaintiffs therefore do not have standing to pursue the

constitutional, negligence or slander of title claims.

The Town also argues that the Individual Plaintiffs lack standing to pursue

the defamation and false light claims because the evidence supporting the alleged

damage to their reputations is conjecture and surmise. The Individual Plaintiffs

have standing to assert those claims as damage to reputation is a particularized

injury within the meaning of the term.

IL Constitutional Claims

The Maine Civil Rights Act (“MCRA”), 5 M.R.S.A. §§ 4681-4685 (Pamph.

2000), is the sole vehicle by which a plaintiff may bring a claim alleging a violation

of the Maine Constitution. Andrews v. Dep’t of Env. Protection, 1998 ME 198, ] 23,

716 A.2d 212, 220. Pursuant to the MCRA:

Whenever any person, whether or not acting under color of law,

intentionally interferes or attempts to intentionally interfere by

physical force or violence against a person, damage or destruction of

property or trespass on property or by the threat [thereof] ... with the

exercise or enjoyment by any other person of rights secured by .. . the

Constitution of Maine... , the person whose exercise or enjoyment of

these rights has been interfered with, or attempted to be interfered

with, may institute and prosecute in that person’s own name and on

that person’s own behalf a civil action for legal or equitable relief.

3 M.R.S.A. § 4682 (emphasis added).

In Andrews, the plaintiff alleged a violation of his free speech rights and

sought monetary, declaratory and injunctive relief pursuant to article I, section 4 of

the Maine Constitution. Andrews, 1998 ME 198, § 21, 716 A.2d at 220. The Law

Court held that the plaintiff’s failure to allege an interference with his rights by

“physical force or violence, damage or destruction of property, trespass on property,

or threats thereof” was fatal to his constitutional claim. Id. { 23. Similar to the

plaintiff in Andrews, the Plaintiffs’ statement of material facts is completely devoid

of any facts that would establish this necessary predicate under the MCRA.

Relying on a sentence in Andrews that the Law Court was “declin[ing] to

expand the available remedies for a violation of rights guaranteed by the Maine

Constitution beyond those which the Legislature in its wisdom has provided,” the

Plaintiffs argue that the Law Court did not intend to construe the MCRA to be the

exclusive remedy for all violations of the Maine Constitution. Seeid. The Law

Court made this statement after noting that the plaintiff failed to establish the

necessary predicate for a MCRA claim, however. Id. Taken in context, it is apparent

the Law Court was rejecting the plaintiff's argument to expand the remedies

available under the MCRA to allow a private cause of action for claims that have

not alleged an interference by physical force or violence, damage or destruction of

property, or trespass.

The Plaintiffs suggest that although the MCRA may be the exclusive means of

obtaining monetary damages for state constitutional violations, it does not purport

to foreclose injunctive, declaratory or any other non-monetary relief for such

violations. In light of the holding in Andrews that the plaintiff could not maintain

a private cause of action for monetary, declaratory or injunctive relief under the

MCRA and the statute’s requirement of a physical interference or threat of such an

interference to sustain a “civil action for legal or equitable relief,” the Plaintiffs

argument is without merit. See 5 M.RS.A. § 4682; Andrews, 1998 ME 198, {fj 21-23,

716 A.2d at 220.

Il. Tort Claims

A. Notice of Claim

To maintain any tort claims against a governmental entity, a plaintiff must

file a notice of claim pursuant to 14 M.R.S.A. § 8107. Smith v. Voisine, 650 A.2d

1350, 1352 (Me. 1994). The notice provisions of the Maine Tort Claims Act

(“MTCA”), 14 M.R.S.A. §§ 8101-8118 (1980 & Supp. 2000), require:

Within 180 days after any claim or cause of action permitted by this

chapter accrues, or at a later time within the limits of section 8110,

when a claimant shows good cause why notice could not have

reasonably been filed within the 180-day limit, a claimant or a

claimant’s personal representative or attorney shall file a written notice

Id. § 8107(1). A cause of action accrues for purposes of this 180-day period when the

plaintiff suffers a judicially cognizable injury. Porter v. Philbrick-Gates, 2000 ME 35,

q 4.n.2, 745 A.2d 996, 998. Such an injury arises when “a wrongful act produces an

injury for which the plaintiff is entitled to seek judicial vindication.” McNicholas

v. Bickford, 612 A.2d 866, 869 (Me. 1992) (citation omitted).

The Plaintiffs’ only notice of claim was filed May 26, 1998. Only claims that

accrued during the last week in November, 1997 through May 26, 1998 may

therefore be addressed in this lawsuit.

The Plaintiffs argue that all of the Town’s allegedly wrongful conduct is

properly included in their claims because the alleged wrongful conduct is comprised

of a series of events that ripened into tort claims within the 180-day window. The

Plaintiffs therefore seek to reach back and include conduct that would otherwise be

barred.

A plaintiff may be excused from the timely filing of a notice of claim if good

cause is shown. Smith, 650 A.2d at 1352. The Law Court has held good cause to exist

in only two situations: when the plaintiff was “unable to file a claim or was

meaningfully prevented from learning of the information forming the basis for his

or her complaint.” Beaucage v. City of Rockland, 2000 ME 184, { 6, 760 A.2d 1054,

1056 (citation omitted). There is no evidence that the Plaintiffs were prevented

from learning the information that forms the basis for their claims. To be able to

reach back and include the claims accruing before November, 1997, the Plaintiffs

must be able to show that they were unable to file a claim.

The Plaintiffs’ argument that it was only in November, 1997 that they realized

that their dealings with the Town amounted to tort claims does not rise to the level

of good cause. Inability to file a claim does not include “ignorance of the existence of

the claim.” Martin v. City of Biddeford, 568 A.2d- 1103, 1105 (Me. 1990). The

Plaintiffs knew all of the facts comprising the alleged tort violations but failed to

make a timely filing.

Only the alleged tortious conduct occurring within the 180-day window may

therefore be addressed in this lawsuit. All claims accruing prior to November, 1997

are barred. Any claims accruing after May 26, 1998 are not part of this case.

1. Slander of Title

The Plaintiffs have failed to allege any slanderous statements disparaging the

title of their properties that occurred within the 180-day window. See Colquhoun v.

Webber, 684 A.2d 405, 409 (Me. 1996) (holding that a slander of title claim requires

publication of a false, slanderous statement disparaging claimant's title that was

made with malice or in reckless disregard of its falsity and caused actual or special

damages). The only allegation supporting the slander of title claim presented by the

Plaintiffs is that the Town Planner filed a document in the Registry on August 2,

1994 that contained false statements concerning SoLD’s Forest Estates project. DSMF

q 45; POSMF 4 67. A corrective document was subsequently filed in the Registry of

Deeds on December 15, 1994. POSMF { 67. Because this alleged tortious conduct did

not occur within the 180-day window, the Defendant is entitled to summary

judgment on the slander of title claim.

2. Defamation

The Plaintiffs’ statement of material facts does not contain any allegation that

the Town made.a false statement about the Plaintiffs or that such statement was

published to a third party within the 180-day window. See Cole v. Chandler, 2000

ME 104, 9 5, 752 A.2d 1189, 1193 (holding that defamation requires a false and

defamatory statement, unprivileged publication to a third party, fault amounting to

at least negligence, and actionability irrespective of special harm or the existence of

special harm caused by the publication).

3. False Light

In Cole, the Law Court adopted the following definition of publicity that

places a person in a false light:

One who gives publicity to a matter concerning another that places the

other before the public in a false light is subject to liability to the other

for invasion of his privacy if (a) the false light in which the other was

placed would be highly offensive to a reasonable person, and (b) the

actor had knowledge of or acted in reckless disregard as to the falsity of

the publicized matter and the false light in which the other would be

placed.

Id. ] 17, 752 A.2d at 1197 (quoting RESTATEMENT (SECOND) OF TORTS § 652E (1977)). The

term “publicity,” as it is used in connection with a false light claim, means that “the

matter is made public, by communicating it to the public at large, or to so many

persons that the matter must be regarded as substantially certain to become one of

public knowledge.” Id. (citation omitted).

Although the Plaintiffs refer generally to televised Planning Board

proceedings and harmed reputations, no specific dates are attached to the references.

See, e.g., POSMF Q{ 7-8, 29, 58-60. The Plaintiffs have therefore failed to raise an

issue of fact that the Town gave publicity to any matter placing the Plaintiffs in a

false light within the 180-day window.

B. Immunity

The MTCA provides for governmental immunity from suit on “any and all

tort claims seeking recovery of damages.” 14 M.R.S.A. § 8103. Because immunity is

the rule under this act, the statutory scheme has been described as an “exception-to-

immunity” approach rather than an “exception-to-liability” approach. Young v.

Greater Portland Transit District, 535 A.2d 417, 419 (Me. 1987). The statutory

exceptions to immunity are inapplicable to this case. See 14 M.R.S.A. § 8104-A. The

Town may have waived its immunity by procuring insurance covering areas in

which it would otherwise be immune. See id. § 8116.

During all relevant times, the Town of Gorham had limited liability coverage

from National Union Fire Insurance Company of Pittsburgh, Pennsylvania. The

Town’s insurance policy applies to “Wrongful Acts committed in, and suits brought

against the insured in, the United States of America. ...” Def.’s Ex. 1 at 6.

“Wrongful Act” is defined as “any actual or alleged error or misstatement or

misleading statement or act or omission or neglect or breach of duty, including

misfeasance, malfeasance and nonfeasance.” Id. at 2. This definition clearly

includes the Town’s negligent acts. The Town has therefore waived its

governmental immunity from suits seeking monetary damages for negligence.

The Town argues that even if it did waive immunity by procuring insurance,

it is not liable for any torts because it was either undertaking a quasi-judicial act or

was performing a discretionary function within the meaning of the MTCA. See 14

MRSA. § 8104-B(2) & (3). The insurance coverage waiver provision “extends to all

activities within the general immunity afforded by-the Act.” Moore v. City of

Lewiston, 596 A.2d 612, 615 (Me. 1991) (emphasis added). This includes the

immunity afforded by undertaking quasi-judicial acts or discretionary functions.

See, e.g., Comfort _v. Town of Pittsfield, 924 F. Supp. 1219, 1237-38 (D. Me. 1996)

(determining that the town lacked insurance and therefore did not waive its

discretionary function immunity), Rippett v. Bemis, 672 A.2d 82, 88 (Me. 1996)

(holding that the sheriff, as a governmental official, waived his immunity to the

extent he enjoyed protection of liability insurance for his discretionary functions).

C. Negligence

10

To recover for negligence, the Plaintiffs must prove that (1) the Town owed

them a duty of care, (2) the Town breached that duty, and (3) the breach was the

actual and legal cause of their injury. See Adams v. Buffalo Forge Co., 443 A.2d 932,

938 (Me. 1982). Whether the Town owes Plaintiffs a duty is a question of law. See

Searles v. Trustees of St. Joseph’s College, 1997 ME 128, ¥ 5, 695 A.2d 1206, 1209. Duty

involves the question of whether the Town is under any obligation for the benefit

of the Plaintiffs. See id.

The Plaintiffs cite Googin v. City of Lewiston, 103 Me. 119, 68 A. 694 (1907) to

support their argument that the Town’s Land Use Code created a duty of care to treat

the Plaintiffs in an equal manner when rendering permit and enforcement

decisions. In Googin, the Law Court held that the city of Lewiston was liable for

breach of a duty of care because the city was charged by private and special law with

the duty to maintain and care for sewers. Id. at 698. Unlike Googin, however, the

Town is not charged with a duty of care to treat the-Plaintiffs in a fair and equal

manner by statute, ordinance or otherwise. A claim of unequal treatment is viable,

if at all, as a constitutional claim.

The entry is

The Defendant’s motion for summary judgment is GRANTED.

Alita. _

Robert E. Crowley

Justice, Superior Court

Dated at Portland, Maine this 15th day of June, 2001.

11

Date Filed 10-07-99 CUMBERLAND

Docket No. _ CV_ 99-573

County

Action CONSTITUTIONAL RIGHTS

SUSAN DUCHAINE

DANA H. LAMPRON

JAMES E. SHAW JR

THOMAS P. SHAW

DESIGN DWELLINGS, INC.

SOLD, INC.

VS.

TQWN OF GORHAM

Plaintiff's Attorney MICHAEL TRAISTER, ESQ.

JOHN C. BANNON ESQ 773-5651

PO BOX 9785

PORTLAND ME 04104

Date of

Entry

Defendant’s Attorney 11g, FITZGIBBON BENDETSC

AND MARK FRANCO ESQs 774-2500

PO BOX 4630

PORTLAND ME 04112

WILLIAM DALE ESQ (COCOUNSEL)

PO BOX 4510 775-7271

PORTLAND ME 04112

+999 eee anette ses scecmmnamma toss sasaaassa aaa,

Dat . Dr Oemteneenetil