Sold, Inc. v. Town of Gorham

STATE OF MAINE SEE SS DUE SUPERIOR COURT

CUMBERLAND, ss. : A CIVIL ACTION

tebe DOCKET NO. CV-02-362--~

SOLD, INC., DESIGN DWELLINGS, INC. 2A SY

GILBERT HOMES, INC.,

BUSQUE & DUCHAINE ASSOCS.,

SUSAN DUCHAINE, THOMAS SHAW, &

JAMES SHAW

Plaintiffs

ORDER ON PLAINTIFFS’ MOTION

FOR SUMMARY JUDGMENT

Vv.

DADA ALT: os

LAR Glee ey

TOWN OF GORHAM,

Defendant. SEP 30 ams

Plaintiffs’ Motion for Summary Judgment is before the court. The parties filed a

Stipulation of Facts, but the parties have also filed a Statement of Material Facts (SMF)

and opposition and reply thereto.!

FACTUAL BACKGROUND

The following facts are based solely on the Stipulation of Facts submitted by the

parties. Plaintiffs are real estate developers, or principals of companies conducting real

estate development in the Town of Gorham. On January 5, 1999, the Gorham Town

Council amended the Gorham Land Use and Development Code (Code) to include the

requirement in Chapter III(C)(4), the Recreational Space Ordinance (Ordinance), that

developers either (a) reserve a percentage of land within the subdivision for “active

recreational use” or (b) pay to the Town of Gorham a fee to be used by the Town for

the construction of new recreational area or the expansion of existing recreation areas.

' Because Defendant's Opposition to Plaintiffs’ SMF was not timely pursuant to MLR. Civ. P. 7(c), 56(c),

Plaintiffs initially contended that all of their SMF were deemed admitted and any objections to their

arguments were waived. See M.R. Civ. P. 7(c)(3), 56(h)(4). However, the parties then agreed to submit

stipulated facts by May 21, 2003, which were filed on May 22, 2003. Following the filing of the

Stipulation, Defendant filed its Opposition to Plaintiffs’ SMF and Plaintiffs filed their Reply to

Defendant’s Opposition to Plaintitts’ SMF. Both parties stated in telephone conversations that the

remained unchanged since then.

As of May 2002, the Town has collected $132,000 in recreational fees and is owed

an additional $30,000.* The Town has not expended any of the fees collected. None of

the Plaintiffs appealed the assessment of the $500 /lot impact fee at the time of its

assessment. In 1999, all of the Plaintiffs, except Gilbert Homes, Inc. and Busque &

Duchaine Assocs., were Plaintiffs in a lawsuit regarding problems with Town officials’

interpretation of Town Ordinances and their application of Town processes in relation

to Plaintiffs’ respective development projects.

Plaintiffs filed a two-Count Complaint. In Count I Plaintiffs seek a declaration

that the Ordinance violates 30-A M.R.S.A. § 4354 because it fails to comply with the

requirements in § 4354. In Count II, Plaintiffs seek a declaration that the Ordinance is

either illegal because was enacted outside of the home rule authority granted to

municipalities under § 4354 to impose impact fees or that it is unconstitutional. With

respect to both Counts, Plaintiffs seek reimbursement of all fees paid pursuant to the

Ordinance together with interest and cosis.

DISCUSSION

Procedural Challenges

Defendant raises three procedural arguments. The procedural challenges will be

addressed prior to the determining the substantive issues at summary judgment.

i. Untimely 80B Appeal

Defendant contends that Plaintiffs’ arguments against the Ordinance should have

been raised before the Planning Board (Board) when their respective subdivisions were

stipulated facts represent only the core facts and the court must sift through the other SMF to determine

whether there are any disputed facts.

? The breakdown for the individual Plaintiffs is as follows: Sold, Inc. $39,000: Desi Dwellings

idual Plaintif 39,900; Design B®,

er)

$18,000; Gilbert Homes, Inc. $16,000; Busque & Duchaine Assocs. $9500 (Susan Duchaine Partn

proper because the Board’s inclusion of this specific Ordinance requirement was merely

a ministerial act and not an “appealable action.” There is significant support for the

Defendant ‘s contention that when a direct appeal from an administrative decision lies,

it is exclusive. Fisher v. Dame, 433 A.2d 366, 372-74 (Me. 1981) (concluding that a direct

appeal was available and was adequate); Colby v. York Cty. Comm'rs, 442 A.2d 544,

547 (Me. 1982) (holding an ordinance that allows for direct appeal is intended as an

exclusive remedy). The Town’s Code includes such a provision permitting appeals to

the Superior Court of any decision by the Planning Board regarding subdivisions.

Code, ch. II, § I1(H) at 161.

The Law Court recognizes three exceptions to the exclusivity of direct appeal: 1)

where direct appeal is not broad enough in scope to allow for judicial review of all of

the issues a plaintiff seeks to have considered: 2) where the claim is that the ordinance

under which the administrative agency acted was unconstitutional; and 3) where the

case involves a “complex course of executive and legislative conduct by municipal

officers as to which a [local] remedy is impossible.” Fisher v, Dame, 433 A.2d at 374.

Only the first two of the three exceptions need be addressed in relation to the

present facts. First, a direct appeal would not normally encompass legal challenges to

the ordinance itself. If Plaintiffs had raised the issue of legality before the Board, the

Board would not have had jurisdiction to hear the argument, and a review by the

Superior Court would have been limited to the record and findings of the

administrative body below. See F.S. Plummer Co. v. Town of Cape Elizabeth, 612 A.2d

856, 859 (Me. 1992) (stating that 80B appeals only lie from conduct by Town serving an

4

administrative or quasi-judicial function, not from le gislative decisions); but see Hyier v.

Duchaine $1000; and Thomas & James Shaw $7000. The total amount collected from Plaintiffs is

COA man

Town of Blue Hill, 570 A.2d 316, 317 (Me. 1990) (hoiding that the Planning Board could

examine whether certain development activities were illegal attempts to create a

subdivision). However, the Plaintiffs, in an 80B Appeal, could have moved pursuant to

Rule 80B(d) for a trial of the facts and expanded the record, M. R. Civ. P. 80B(d), or they

could have joined an appeal with an independent action alleging the legal claims. M. R.

Civ. P. 80BGi). Thus, the first exception to the exclusivity of the 80B appeal is unavailing

under the present facts.

The second exception more apily applies to the present case. If the claim is that

an ordinance is unconstitutional, then the contention is also that the Board acted beyond

its lawful authority. Fisher v. Dame, 433 A.2d at 374 (stating “where a claim is made

that the ordinance under which the administrative agency purported to act was

unconstitutional on its face,” a departure from the exclusivity of appeal is warranted).

In the instant case, Plaintiffs allege violations of the United States and Maine

Constitutions. Therefore, Plaintiffs’ claim is not barred for failure to timely appeal an

administrative appeal pursuant to Rule 80B.

2. Failure to Exhaust Administrative Remedies

Defendant puts forward another related argument, contending that the Plaintiffs

have failed to exhaust the administrative remedies available to them because they did

not apply for a waiver, as provided for in the Code. Code, ch. IIL, § I(F). First, the

aforementioned constitutional attack on the Ordinance similarly exempts Plaintiffs’

claim from the administrative exhaustion requirement. Furthermore, the

“administrative remedy” suggested by Defendant is completely inadequate and

inappropriate to remedy the injury alleged. The waiver, which the Town asserts was

available to the Plaintiffs, would require the Plaintiffs to demonstrate that the Ordinance

adherence to the Ordinance. Id.

The waiver is not an “appeal.” The waiver is entitled a “variation.” Id. Therefore,

applying for a waiver is not required in order to have exhausted administrative

remedies. Moreover, if a waiver had been requested, the Plaintiffs’ ground for the

waiver, unconstitutionality, would not have permitted granting the waiver. Finally, the

waiver process would have accomplished nothing with respect to Plaintiffs’ primary

contention that the Ordinance is unconstitutional or otherwise illegal. Town of Freeport

v. Greenlaw, 602 A.2d 1156, 1160 (Me. 1992) (stating “failure to appeal from an adverse

decision of a municipal code enforcement officer can constitute a failure to exhaust

administrative remedies” (emphasis added)).

3. Res Judicata Effect of Prior Litigation

Gorham next argues that the Plaintiffs’ complaint is barred by the doctrine of res

judicata, the principles and application of which are well settled in Maine? See, e.g.,

DuMont v. Fleet Bank of Maine, 2000 ME 197, 760 A.2d 1049; Machias Sav. Bank v.

co A

Ramsdeli, 1997 ME 20, § 11, 689 A.2d 595, 599; Johnson v. Samson Consir. Co, 1997 ME

220, 704 A.2d 866; Connecticut Nat'l Bank v. Kendall, 617 A.2d 544, 547 (Me. 1992)

,

Beegan, 451 A.2d at 643-44. Res judicata is "a court-made collection of rules designed to

ensure that the same matter will not be litigated more than once.” Machias Sav. Bank,

1997 ME 20, J 11, 689 A.2d at 599 (citing Beegan, 451 A.2d at 644). The doctrine of res

judicata requires a plaintiff to plead all theories of recovery then available to him; he

“cannot splinter his claim and litigate it separately in a piecemeal fashion by asserting in

a subsequent lawsuit other grounds of recovery for the same claim when he had

* Res judicata is distinguishable from the related doctrine of collateral estoppel, sometimes referred to

as "issue preclusion," "which merely prevents the reopening in a second action of an issue of fact

actually litigated and decided in an earlier case." Beegan v. Schmidt 451 Ad 642, 644 (Me. 1982) Res

judicata, also referred to as "claim preclusion" "prohibits re-litigation of an entire cause of action...”

Id. The Town has not raised the theory of claim preclusion.

q

reasonable opportunity to raise and litigate the same grounds in the former action.

Barter v. Boothbay /Boothbay Harbor Community School Dist., 564 A.2d 766, 768 (Me.

1989) (citations omitted). Res judicata functions to bar a plaintiff from re-litigation of a

claim “if: (1) the same parties or their privies are involved in both actions; (2) a valid

final judgment was entered in the prior action; and (3) the matters presented for

decision in the second action were, or might have been litigated in the first action."

Machias Sav. Bank, 1997 ME 20, 911, 689 A.2d at 599 (citing Dep’t of Human Serv. ex rel.

Boulanger v. Comeau, 633 A.2d 46, 48 (Me. 1995).

Gorham contends that the Plaintiffs’ Complaint should be dismissed because all of

the Plaintiffs, except Gilbert Homes, Inc., were parties to, or were "in privity” with, the

plaintiffs in Duchaine, et al. v. Town of Gorham, CV-99-573 (Me. Super. Ct., Cum. Cty.,

June 15, 2001) (Crowley, J.) available at 2001 Me. Super. LEXIS 89 (the 1999 action).

Although Busque & Duchaine Assocs. was not a named plaintiff in the 1999 action,

Susan Duchaine is a “decision-making partner of Busque & Duchaine [Assocs].”

“Privity” exists where two parties so identify in interest "'that they represent one

single, legal right." Tungate v. Gardner, 2002 ME 85, {9

“J

Oo

9

>

ho

.2d 738, 741 (quoting

Comeau, 663 A.2d at 48. The First Circuit has held that under certain situations if a

party to the second action was not named as a litigant in the prior suit, the first prong of

the res judicata test may still be satisfied. Gonzalez v. Banco Central Corp., 27 F.3d 751,

758 (1st Cir. 1994). Such circumstances arise where "a nonparty either substantially

controlled a party's involvement in the initial litigation, or, conversely, permitted a

party to the initial litigation to function as its de facto representative." Id. In the instant

case, the parties have stipulated, “Susan Duchaine is a decision-making partner of

with Duchaine and the first prong of the res judicata analysis is satisfied as to all Plaintiffs

except Gilbert Homes.

There is no dispute as to the finality of the judgment in the 1999 action; the parties

do dispute whether the present matter was, or could have been, litigated in the 1999

action. Whether matters could have been litigated depends on whether the same

“cause of action” was before the court in 1999. Currier v. Cyr, 570 A.2d 1205, 1208 (Me.

1990) (citing Beegan, 451 A.2d at 645). “Maine has accepted what is known as a

‘transactional test’ of a cause of action.” Id. (quoting Gurski v. Culpovich 540 A.2d 764,

766 (Me. 1988)).

[T]he measure of a cause of action is the aggregate of connected operative

facts that can be handled together conveniently for purposes of trial. A

prior judgment bars a iater suit arising out [of] the same aggregate of

operative facts even though the second suit relies on a legal theory not

advanced in the first case, seeks different relief than that sought in the first

case, and involves evidence different from the evidence relevant to the

first case

DuMont, 2000 ME 197, ¥ 6, 760 A.2d at 1052.° “’The effect of the prior decision upon the

yi

present aciion is a question of law.’" Id. (quoting Currier, 570 A.2d at 1207-08).

Numerous factors weigh in favor of applying the doctrine of res judicata. The 1999

action was commenced in October of 1999 and a First Amended Complaint was filed on

January 12, 2000. The challenged Ordinance was adopted in February 1999. Per the

Stipulation of Facts, both Busque & Duchaine Assocs. and Gilbert Homes were assessed

* There are also assertions that the development complained about by Duchaine in the first action was

one of Busque & Duchaine Associates’ developments. However, that assertion is not in the Stipulation

of Facis.

° The “transactional test” is also referred to as the “pragmatic concept” of cause of action. Beegan, 451

A.2d at 645.

What factuai grouping constitutes a "transaction," and what groupings constitute a "series," are

to be determined pragmatically, giving weight to such considerations as whether the facts are

related in time, space, origin, or motivation, whether they form a convenient trial unit, and

whether their treatment as a unit conforms to the parties’ expectations or business

understanding or usage.

Id. (quoting Restatement (Second) of Judgmenis § 24 (1982).

7

the $500 /lot fee prior to the filing of the First Amended Complaint. Stip. (4 17, 21. The

1999 plaintiffs could have raised the issue of its constitutionality in that action. Currier,

570 A.2d at 1208 (stating that when a legal right to relief exists a plaintiff must assert it

with all other rights)’; Kradoska v. Kipp, 397 A.2d 562, 568 (Me. 1979) (holding if

plaintiffs was aware of fraud at the time of the first action, then she could have and

should have raised the claim); Barter, 564 A.2d at 768 (holding that plaintiff was entitled

to only one opportunity for relief, notwithstanding a new and distinct legal theory).

Two of the more far-reaching cases, Kradoska and Currier, both found res judicata to

bar a subsequent suit, notwithstanding a different legal theory, different relief sought,

and new evidence. Kradoska v. Kipp, 397 A.2d 562; Currier, 570 A.2d 1205.’

The arguments against barring the present suit are less numerous and are not

persuasive. The overriding principles supporting the imposition of the doctrine of res

judicata are “concerns for judicial economy and efficiency, the stability of final

judgments, and fairness to litigants.” Beegan, 451 A.2d at 646. In the present case,

judicial economy is not completely served because one of the Plaintiffs will not be

| rae tha intare

barred. “[Res judicata] has been applied chiefly in the interests of judicial economy to

bar re-litigation of a cause of action that has already been resolved by a valid prior

° The Currier court reasoned:

[Parties to the present suit may not escape the bar of res judicata by arguing that the court in [the

first action] confined itself to delineating the parameters of the 20-foot public way, but failed to

establish the width, location, or ownership of the entire strip of land between what are now the

Curriers' two parcels. The doctrine of res judicata demands that a plaintiff seeking legal relief

plead all theories of recovery then available to him. A plaintiff "cannot splinter his claim and

litigate it separately in a piecemeal fashion by asserting in a subsequent lawsuit other grounds of

recovery for the same claim when he had a reasonable opportunity to raise and litigate the same

grounds in the former suit." If the predecessors to the Cyrs or the Town had other rights to the strip

of land between the parcels presently owned by the Curriers beyond the Town's 20-foot right of

way, both the predecessors to the Cyrs andthe Town should have asserted those rights in the [first]

action. Their failure to do so does not prevent the prior judgment from acting as a legitimate bar to

the present action.

Currier v. Cyr, 570 A.2d at 1209.

’ The only actual overlap between the 1999 action and the present action is found in { 12 of the 1999

Complaint, which includes allegations that Town officials advised the Planning Board to impose

requirements that were “unauthorized by law” and to carry them out in an unconstitutionally

discriminatory manner. Stip. Ex. 1 ¥ 12(k),(1).

judgment; the scope of the bar extends to all issues tried or that might have been tried

in the prior action.” Kradoska v. Kipp, Me., 397 A.2d at 565 (quoted in Beegan, 451 A.2d

at 644) (internal citation omitted).

Second, although the issue of the legality / constitutionality of the Ordinance

could have been raised in the 1999 action, the plaintiffs in the 1999 action sought relief

from the actions of certain Town officials in applying and interpreting the ordinance to

the development. The 1999 action contested the practices of individuals acting in their

official capacity, not the Town’s decision to adopt and administer the alleged impact fee.

The wrong alleged is a different act - the adoption or administration of an illegal /

unconstitutional ordinance. Cf. Beegan, 451 A.2d at 647-48 (patient sued for same

tortious act under warranty theory) ; Barter, 564 A.2d at 768 (student sued for same

AQ

failure to graduate under new theory). Because the 1999 action alleged tortious acts,

allegedly violating constitutional rights, not the existence and enforcement of an

Ordinance, the two “causes of action” are somewhat distinct.

Despite these arguments, this court finds that Defendant has presented sufficient

undisputed (stipulated) facts to support the application of res judicata. Under the

present undisputed facts, the instant cause of action alleges the

illegality / unconstitutionality of an ordinance that was in existence at the time of the

1999 action, seeks relief for damages that were, in part, cognizable when the 1999 action

was filed, and is based on a legal theory available in 1999 (unconstitutionality and

vioiation of 30-A M.R.S.A. § 4354 (1996 & Supp. 1999)). For these reasons all Plaintiffs

except Gilbert Homes should be barred by res judicata from litigating the present action.

Summarv Judgement

and that any party is entitled to judgment as a matter of law. See Mueller v. Penobscot

Valley Hosp., 538 A.2d 294, 299 (Me. 1988) (holding that granting summary judgment

to either the moving or the non-moving party is appropriate "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 and that any

party is entitled to a judgment as a matter of law"); see also M. R. Civ. P. 56(c). "A fact is

material if it has the potential to affect the outcome of the case under governing law.”

Levine v. R.B.K. Caly Corp., 2001 ME 77, { 4, n.3, 770 A.2d 653, 655, n.3 (citing Burdzel

v. Sobus, 2000 ME 84, J 6, 750 A.2d 573, 575). For the following reasons, summary

judgment should be granted in favor of Plaintiff Gilbert Homes on Count I and against

all other Plaintiffs on Count I, denied to all Plaintiffs on Count I, and granted in favor

of Defendant on Count IL.

1. Applicability of 30-4 M.RS.A. § 4354

In Count I of their Second Amended Complaint, Plaintiffs assert that the

Ordinance is void because it is governed by § 4354 and has failed to comply with the

requirements in § 4354({2) for impact fee ordinances. In response, D

the introductory language of § 4354, which reads, in pertinent part:

§ 4354. Impact fees

A municipality may enact an ordinance under its home rule

authority requiring the construction of off-site capital

improvements or the payment of impact fees instead of the

construction.

30-A § 4354 (2003). Defendant argues that under § 4354, impact fees are fees that are

paid only when off-site capital improvements are not made. It claims that the Ordinance

in the present case requires that developers either dedicate land on-site or pay a fee in

lieu of that dedication. Defendant concludes that the fees charged by the town are

conditions required of the subdivision for development and not impact fees under

apply. Read in isolation, Defendant’s argument is appealing.

However, Defendant has failed to place § 4354 in its proper context. In

construing a statute, the court takes into consideration "the whole statutory scheme for

which the section at issue forms a part so that a harmonious result, presumably the

intent of the Legislature, may be achieved.” State v. Burby, 2003 Me 95, J 4, 828 A.2d

796 (citing State v. White, 2001 ME 65, P4, 769 A.2d 827, 828-29). Here, a reading of

§ 4354 must be coupled with a reading of the definition of impact fees provided in

§ 4301(6-A).

‘Impact fee’ means a charge or assessment imposed by a

municipality against a new development to fund or recoup

the cost of new, expanded or replacement infrastructure

facilities necessitated by and attributed to the new

development.

30 M.R.S.A. § 4301(6-A) (2003).

Under § 4301(6-A), the fees charged to Plaintiffs are impact fees because they are

imposed by Gorham against new developments to fund the cost of new, expanded or

replacement recreational space within Gorham that is necessitated by and attributed to

the new development. See 30 M.R.S.A. § 4301(6-A) (2003). Here, Defendant had home

rule authority to enact an ordinance requiring the construction of off-site capital

improvements or the payment of impact fees in lieu of that off-site construction. See 30-

A § 4354 (2003). Rather than offering individuals seeking an alternative to the on-site

land dedication requirement the opportunity to choose between making an off-site

capital improvement or paying impact fees in lieu of that off-site capital improvement,

the Gorham Ordinance simply offers one option- the payment of impact fees.

under the Ordinance are to be used solely for off-site recreational infrastructure, it can

11

be inferred that the impact fees are charged in lieu of requiring off-site construction as

Wy tak te Le

prescribed by § 4354. Hence, the Ordinance is governed by § 4354.

Given that the fees charged are impact fees under § 4354, the Ordinance must

meet the requirements set forth in § 4354(2). Section 4354(2) provides:

2. Restrictions. Any ordinance that imposes or provides for

the imposition of impact fees must meet the following

requirements.

A. The amount of the fee must be reasonably related to

the development’s share of the cost of infrastructure

improvements made necessary by the development

or, if the improvements were constructed at

municipal expense prior to the development, the fee

must be reasonably related to the portion or

percentage of the infrastructure used by the

development.

B. Funds received from impact fees must be segregated

from the municipality’s general revenues. The

municipality shall expend the funds solely for the

purposes for which they were created.

C. The ordinance must establish a reasonable schedule

under which the municipality is required to use the

funds in a manner consistent with the capital

investment component of the comprehensive plan.

D. The ordinance must establish a mechanism by which

the municipality shall refund impact fees, or that

portion of impact fees, actually paid that exceed the

municipality’s actual costs or that were not expended

according to the schedule under this subsection.

30-A § 4354(2) (2003).

Plaintiffs assert that the Ordinance does not satisfy the requirements set forth in

parts A, C, and D of § 4354(2). The court finds that the fees charged by Defendant are

reasonably related to the Plaintiffs’ developments’ shares of the cost of infrastructure

satisfied. There is a nexus between subdivision development and the need for

recreational space in Gorham. The fee charged for each lot in a residential subdivision is

19

reasonably related to the cost of improvin parks and other open space that is made

a9

necessary by the development. See Homebuilders Assn. of Bucks /Montgomery

Counties Inc., v. Borough of Trappe, No. 90-3212, 1991 U.S. Dist. LEXIS 6019, at *43 (E.D.

Pa. May 3, 1991).

However, as stipulated by both parties, the Ordinance fails to establish a

schedule for the use of the collected fees and does not provide a means by which the

unexpended fees would be refunded to developers. Def.’s Reply to Plfs.’ Statement of

Material Facts Not in Dispute, SMF { 6, p.2. Therefore, the court grants Plaintiffs’

Motion for Summary Judgment on Count I.

Given that the court has determined that all Plaintiffs, with the exception of

Gilbert Homes, Inc., are barred from this action under the doctrine of res judicata, only

Gilbert Homes, Inc. may recover under Count I. The court finds that Gilbert Homes,

Inc. is entitled to a judgment of $16,000, the amount paid to Defendant under the

Ordinance, as well as to interest and costs.

2. Legality of Ordinance and Constitutional Claims

In Count I] of their Second Amended Complaint, Plaintiffs assert that if the

Ordinance is not the type provided for in 30-A § 4354, the Ordinance is illegal because

30-A § 4354 limits home rule authority in a manner that allows municipalities to enact

impact fee ordinances only if those ordinances are of the type provided for in the

statute. in addition, Plaintiffs allege that the Ordinance is a violation of their

constitutional due process and equal protection rights. Finally, Plaintiffs claim that the

Ordinance amounts to a taking under the Maine and Federal Constitutions.

A. Legality of Ordinance

In making a determination on Count I of Plaintiffs’ complaint, the court

established that the Ordinance falls under 30-A § 4354. Therefore, the court does not

consider the argument that the Ordinance is illegal on the ground that it is an impact

13

ee ordinance enacted outside of the home rule authority granted to municipalities

under 30-A § 4354,

B. Due Process Claims

The Law Court has held that an ordinance is generally a valid exercise of a

municipality's police powers provided the ordinance does not violate the Due Process

Clauses of the Maine and United States Constitutions.’ Ferraiolo Constr. Co. v. Town of

Woolwich, 1998 ME 179, 9 9,714 A.2d 814, 817 (citing LaBay v. Town of Paris 659 A.2d

263, 266 (Me. 1995)). The Due Process clauses in both constitutions require “(1) that a

municipality's exercise of police power provide for the public welfare (2) that the

legislative means employed are appropriate to achieve the ends sought and (3) that the

manner of exercising the power is not unduly arbitrary or capricious.” Id., 1998 ME 179,

1 9, 714 A.2d at 817 (citing Nugent v. Camden, 1998 ME 92, 7 18, 710 A.2d 245, 249);

State v. Rush, 324 A.2d 748, 753 (Me. 1974). Ordinances are generally cloaked with a

presumption of constitutionality. Id..1998 ME 179, | 9, 714 A.2d at 817 (citing ES.

Plummer Co., 612 A.2d at 859 (Me. 1992)): Putnam v. Town of Hamden, 495 A.2d 785,

787-88 (Me. 1985); Penobscot Area Housing Dev. Corp. v. City of Brewer, 434 A.2d 14,

23 (Me. 1981).

In the case at bar, all three Due Process requirements have been met. First, the

municipality is using its police power to provide for the public welfare by preserving

recreational space in Gorham. Second, the Ordinance is an appropriate means to

achieve that end. See Associated Home Builders, Inc. v. Walnut Creek, 484 P.2d 606, 615

(Cal. 1971) (upholding a statute that authorized the governing bodies of cities or

counties to enact ordinances requiring the dedication of land, the payment of fees in lieu

therof, or a combination of both, for park or recreational purposes as a condition to the

approval of a final subdivision map); Jenad, Inc. v. Village of Scarsdale, 218 N.E. 2d 673

N.Y. 1966) (upholding a statute which required, as a condition precedent to the

approval of subdivision plats which show new streets or highways, that the subdivider

allot some land within the subdivision for park purposes or, at the option of the village

planning board, pay the village a fee in lieu of such allotment); Jordan v. Village of

Menomonee Falls, 137 N.W. 2d 442, 501 (Wisc. 1965) (upholding an ordinance that

required developers to dedicate a certain portion of each subdivision for school, park,

and recreational needs or to pay an equalization fee per lot in lieu of the dedication); but

see Aunt Hack Ridge Estates Inc. v. Planning Comm’n, 230 A.2d 45, 47 (Ct. 1967)

(upholding the dedication requirement of a similar statute, but striking down the

requirement that a fee be paid in lieu of dedication on the ground that its use was not

confined for the benefit of the subdivision).

As explained by the Walnut Creek court:

The rationale of the cases affirming constitutionality

indicate[s] the dedication statutes are valid under the state’s

police power. They reason that the subdivider realizes a

profit from governmental approval of a subdivision since his

land is rendered more valuable by the fact of subdivision,

and in return for this benefit the city may require him to

dedicate a portion of his land for park purposes whenever

the influx of new residents will increase the need for park

and recreational facilities. Such exactions have been

compared to admittedly valid zoning regulations such as

minimum lot size and setback requirements.

Walnut Creek, 484 P.2d at 615 (citations omitted).

Finally, the $500 fee is not unduly arbitrary or capricious. See Borough of

Trappe, No. 90-3212, 1991 U.S. Dist. LEXIS 6019, at *43 (holding that “it is not irrational

or arbitrary for a municipality expecting growth, to impose certain fees on developers

so that it may abate anticipated difficulties arising out of those developers’ subdivision

projects.”). Given the nexus between subdivision development and the disappearance

* See Me. Const. art. L § 6-A; U.S. Const. amend. XIV.

14

of open and recreational space, the imposition of exactions on all individuals who

subdivide property for multi-lot developments survives constitutional scrutiny,

Once an ordinance passes the threshold tests for constitutionality, the party

challenging the constitutionality of the ordinance bears the burden of "establishing the

complete absence of any state of facts that would support the need for the enactment.”

E'S. Plummer Co., 612 A.2d at 859; Tisei v. Town of Ogunquit, 491 A.2d 564, 569 (Me.

1985). Here, Defendant has shown a legitimate basis for the enactment of the

Ordinance: the need to promote and protect the availability of recreational facilities and

open space in Gorham. The Town’s Comprehensive Plan contains provisions regarding

the town of Gorham’s need and desire to promote and protect the availability of

recreational facilities and open space in Gorham. DSMF { 73.

In addition, the need for the ordinance is supported by a March 16, 1998 report

by Gorham’s Recreational Director, in which she indicated that “[a]s [Gorham] has

grown over the past decade, the need for more playing fields and open space has

increased” and that ““open space’ in Gorham is disappearing at a steady rate of a

minimum of 100+ acres per year.” DSMF { 74 In this same report, the Director

concluded that

[nJew development is putting a terrific strain on existing

facilities and resulting in the inability to keep up with the

demand. While it is our mission to ensure that everyone

hals] the opportunity to ‘play,’ the extent to which we will

be able to meet that mission will be largely up to the

availability of open space for active and passive recreation

opportunities we commit to acquire and maintain.

Id. Given the existence of these material facts, which have been stipulated by both

parties, Plaintiffs cannot claim that there are no facts supporting the need for the

enactment. Thus, their Due Process claim cannot survive.

Plaintiffs’ argument that the Ordinance denies them equal protection under the

laws because Defendant charges a fee to owners of lots within subdivisions and not to

owners of lots outside of subdivisions is also without merit. In general, legislation like

the ordinance in the present case is presumed valid and will be upheld if the

classification drawn by the statute is rationally related to a legitimate state interest. See

City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432, 440 (1985) (citations

omitted). “When social or economic legislation is at issue, the Equal Protection Clause

allows the States wide latitude.” Id. A party challenging a statutory classification that

does not affect fundamental rights or draw upon distinctions based upon a suspect class

bears the burden of establishing that there is no rational basis for the classification.

Peters v. Saft, 597 A.2d 50, 52 (Me. 1991) (citations omitted); Starlight Sugar, Inc. v. Soto,

253 F.3d 137, 145 (1* Cir. 2001) (citations omitted). Once it is established that a

classification is prima facie violative of equal protection, the government then bears the

burden of establishing that there is a rational basis for the classification. Vella v. Town

of Camden, 677 A.2d 1051, 1054 (Me. 1996). Where an ordinance draws a Classification

in an arbitrary, irrational, or unreasonable manner, the ordinance must be found

unconstitutional. Downey v. Wells Sanitary Dist., 561 A.2d 174, 176 (Me. 1989).

Here, Plaintiffs have not made a prima facie case that the Ordinance is violative of

equal protection. The Law Court has held that equal protection law does not require

towns to regulate all lots in the same manner. Downey v. Wells Sanitary District, 561

A.2d 174, 176 (Me. 1989). In Downey, A defendant town’s decision to impose a sewer

impact fee on residential and commercial developments for which occupancy permits

ing exactions from subdivision developers and not from non-

17

subdivision lots, as it is reasonable to assume that the town will need to abate certain

negative impacts caused by the subdivisions. See Borough of Trappe, No. 90-3212, 1991

U.S. Dist. LEXIS 6019, at *43. Therefore, Defendant cannot be found to have violated

Plaintiffs’ equal protection rights.

D. Takings Claims

Plaintiffs assert that the Ordinance is an unconstitutional taking under state and

federal law. Before discussing the substance of these takings claims, it is should be

noted that Defendant incorrectly asserted that Plaintiffs’ federal takings claim should be

dismissed because it is not ripe for review. Ina recent case involving state and federal

takings claims, the Law Court reversed the lower court’s erroneous dismissal of a

federal takings claim. MC Assocs. v. Town of Cape Elizabeth, 200] ME 89, {4 8-10, 773

A.2d 439, 442-43. In that case, as in the present case, the defendant relied on Williamson

County Reg’l Planning Comm‘n v. Hamiltion Bank, 473 U.S. 172, 186 (1985) to argue

that until the plaintiffs had obtained a final decision from the lower court restricting the

use of their property (“the finality prong”) and had sought and been denied

compensation from the state when state law provides such an avenue for relief (“the

compensation prong”), their claim was premature. MC Assocs., 2001 ME 89, { 9,773

A.2d at 443.

In that case, the Law Court explained that if it allowed the lower court's dismissal

to stand, “collateral estoppel would likely preclude the successful assertion of the

federal claims in the subsequent action whether brought in state or federal court” Id.

(citing Madeline J. Meacham, The Williamson Trap, 32 Urb. Law. 239, 239 (2000);

Thomas E. Roberts, Ripeness and Forum Selection in Fifth Amendment Takings

r

Litigation, 11 J. Land Use & Envti. L. 37, 66-67 (1995)). it also held that “lalithough state

hee aL

s claims must be resolved before a federal claim arises, they need not be resolved

IR

With respect to Plaintiffs’ state takings claim, the Maine Constitution states that

private property cannot be taken for public use without just compensation. Me. Const.

art. I § 21. However, the Law Court has held that the government “is not required to

pay a property owner every time it enacts a law that adversely affects property

interests.” MC Assocs., 2001 ME 89, 7 4, 773 A.2d at 441. The general takings rule does

not apply when, “the government's physical occupation of private property constitutes

a requirement imposed on a land owner as a condition for the government’s approval

of a land development application.” Curtis v. Town of South Thomaston, 1998 ME 63, |

4,708 A.2d 657, 659 (citations omitted),

The United States Supreme Court has developed a two-part test for determining

whether a land dedication requirement is logically related in substance and scope to

legitimate regulatory objectives and thus a lawful exercise of the police power. This test

has been adopted by the Law Court. Id., 1998 ME 63, { 5, 708 A2d. at 659. The

reviewing court must first determine whether there is an essential nexus between the

legitimate government interest and the permit condition required by the government

9 {4

entity. Nolan v. California Coastal Comm’n, 483 U.S. 825, 837 (1987); Dolan v. City of

Tigard, 512 U.S. 374, 386 (1994). In making this determination, the court looks at

whether the permit condition “advances the same public aim as would the permit

denial.” Curtis, 1998 ME 63, | 5, 708 A2d. at 659 (citing Nollan, 483 U.S. at 837; Dolan,

912 U.S. at 386). Second, the court must determine whether there is a rough

proportionality between the conditions imposed and the effects the proposed land use

will have on the community. Dolan, 512 at 388. The "rough proportionality"

requirement cannot be satisfied by a conclusory statement made by a government

at te ra LAA Mm: “¢ 1 1 q C W 1 : 1 1 tal

autnority. Id. at 396. Rather, it must be the product of a "determination that the

In the case at bar, the Ordinance satisfies both prongs of the Nollan/Dolan test,

First, there is a nexus between Gorham’s legitimate interest in protecting and ensuring

recreational opportunities for all of its residents and the dedication / fee requirement.

The condition of the permit preserves recreational opportunities for all of Gorham’s

residents, by providing more recreational land for more citizens. Similarly, the denial

of a permit preserves recreational opportunities for all of Gorham’s residents by

slowing the rapid growth that results from the construction of subdivisions and

allowing Gorham citizens to enjoy the recreational opportunities already in existence.

Even if the lots that would have been used for subdivisions become residences, the

denial of the permit affords the town of Gorham more time to acquire additional open

space and recreational land.

Second, there is a “rough proportionality” between the condition imposed and

the effects of the proposed developments will have on the community. As discussed

above, case law on point establishes that subdivisions inevitably end up taxing

community resources and, therefore, compelling exactions from developers is

AT

reasonable. See Borough of Trappe, No. 90-3212, 1991 US. Dist. LEXIS 6019, at *43. In

addition, the dedication requirements for subdividers are determined pursuant to a

sliding scale, depending on average lot size? The $500/lot fee is not a requirement

imposed by the Ordinance, rather it is an option available at the developer's choice.

Finally, the Ordinance only applies to residential subdivisions and not to commercial

and industrial subdivisions, as the need for more recreational and open space is

proportional to the number of residential subdivisions in the community.

9 For example, under the ordinance, a lot over 80,000 square feet is required to reserve a minimum of 3%

of the total parcel for recreational purposes, whereas a lot over 40,000 square feet and under 80,000

square feet must reserve a minimum of 4% of the total parcel for recreational purposes, and a lot up to

10,000 square feet must reserve a minimum of 13% of the total parcel for recreational purposes. See

Code, ch. TI(C)(4) at 166.

On

In sum, there has been no taking under Maine law. In addition, given that the

Nollan/ Dolan test also applies to takings under the United States Constitution, this

court does not find that there has been a taking under federal law,

Given that the court finds all of Plaintiffs’ claims in Count II unavailing and that

Defendant is entitled to judgment on Count II as a matter of law, summary judgment

on Count II is granted in favor of the Defendant.

The entry is

Plaintiffs’ Motion for Summary Judgment for Count I is GRANTED as to Gilbert Homes

and DENIED as to all other Plaintiffs.

Plaintiffs’ Motion for Summary Judgment for Count II is DENIED.

Summary Judgment in favor of Defendant for Count IT is GRANTED.

Dated at Portland, Maine this 26" day of September, 2003.

Robert E. Crowley

Justice, Superior Court

91

SOLD INC. - PLAINTIFF

Attorney for: SOLD INC.

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

DESIGN DWELLINGS, INC - PLAINTIFF

Attorney for: DESIGN DWELLINGS, INC

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

SUSAN DUCHAINE - PLAINTIFF

Attorney for: SUSAN DUCHAINE

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

DANA LAMPRON-DISMISSED - PLAINTIFF

Attorney for: DANA LAMPRON-DISMISSED

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

JAMES SHAW - PLAINTIFF

Attorney for: JAMES SHAW

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

THOMAS SHAW - PLAINTIFF

Attorney for: THOMAS SHAW

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

BUSQUE AND DUCHAINE ASSOCIATES - PLAINTIFF

Page 1 of 10

SUPERIOR COURT

CUMBERLAND, ss.

Docket No PORSC-CV-2002-00362

DOCKET RECORD

Printed on:

09/26/200

PORSC-CV-2002-00362

DOCKET RECORD

Attorney for: BUSQUE AND DUCHAINE ASSOCIATES

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

PETER BUSQUE-DISMISSED - PLAINTIFF

Attorney for: PETER BUSQUE-DISMISSED

GREGORY CUNNINGHAM

BERNSTEIN SHUR SAWYER & NELSON

100 MIDDLE ST

PO BOX 9729

PORTLAND ME 04104-5029

GILBERT HOMES INC - PLAINTIFF

VS

GORHAM, TOWN OF - DEFENDANT

Attorney for: GORHAM, TOWN OF

MARK FRANCO

THOMPSON & BOWIE

THREE CANAL PLAZA

PO BOX 4630

PORTLAND ME 04112-4630

Attorney for: GORHAM, TOWN OF

WILLIAM H DALE

JENSEN BAIRD ET AL

10 FREE STREET

PO BOX 4510

PORTLAND ME 04112

Attorney for: GORHAM, TOWN OF

SALLY DAGGETT

JENSEN BAIRD ET AL

10 FREE STREET

PO BOX 4510

PORTLAND ME 04112

Filing Document: COMPLAINT Minor Case Type: OTHER CIVIL

Filing Date: 07/25/2002

Docket Events:

07/25/2002 FILING DOCUMENT - COMPLAINT FILED ON 07/25/2002

07/25/2002 Party(s): SOLD INC.

ATTORNEY - RETAINED ENTERED ON 07/25/2002

Plaintiff's Attorney: GREGORY CUNNINGHAM

Party(s): DESIGN DWELLINGS, INC

Page 2 of 10 Printed on: 09/26/200