The opinion
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
Docket No. CV-07-i~~20
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SEBAGO-LONG LAKE
WATERWAY MARINA INC.,
Plaintiff,
v. ORDER
TOWN OF NAPLES, et al,
Defendants.
Before the court is a motion by plaintiff Sebago-Long Lake Waterway Marina Inc.
(the "Marina") for a preliminary injunction restraining any further proceedings by the
Town of Naples Planning Board with respect to the Marina's application for a building
permit to construct two boat storage facilities.
At a conference on September 28, 2007 the parties agreed that the Marina's
application for a preliminary injunction would be consolidated with its request for a
permanent injunction, and that the court would attempt to call the case in for a hearing
before the end of November. Upon further review of plaintiff's moving papers, the
respective submissions of the parties in connection with plaintiff's motion, and the Law
Court's decision in Adelman v. Town of Baldwin, 2000 ME 91, 750 A.2d 577, the court
determines that on this record, motions for a preliminary and permanent injunction
should be denied and that a hearing is not necessary.
This is a highly unusual action. Invoking the provisions of 30-A M.R.S. § 2605,
the Marina has filed this action accompanied by a petition of 11 residents of Naples
stating that they do not believe Daniel Craffey, the owner and operator of
Mooselanding Marina in Naples,1 would receive a fair and impartial hearing from the
Naples Planning Board and requesting this court to restrain any further proceedings by
the current members of the Planning Board on plaintiff's permit application.
30-A M.R.S. §§ 2605(1)-(4) provide in pertinent part as follows:
§ 2605. Conflicts of interest
Certain proceedings of municipalities, counties and quasi
municipal corporations and their officers are voidable and
actionable according to the following provisions.
1. Voting. The vote of a body is voidable when any official
in an official position votes on any question in which that
official has a direct or an indirect pecuniary interest.
2. Contracts. A contract, other than a contract obtained
through properly advertised bid procedures, made by a
municipality, county or quasi-municipal corporation during
the term of an official of a body of the municipality, county
or quasi-municipal corporation involved in the negotiation
or award of the contract who has a direct or an indirect
pecuniary interest in it is voidable, except as provided in
subsection 4.
3. Restrain proceedings. The Superior Court may restrain
proceedings in violation of this section on the application of
at least 10 residents of the municipality, county or area
served by the quasi-municipal corporation.
4. Direct or indirect pecuniary interest. In the absence of
actual fraud, an official of a body of the municipality, county
government or a quasi-municipal corporation involved in a
question or in the negotiation or award of a contract is
deemed to have a direct or indirect pecuniary interest in a
question or in a contract where the official is an officer,
director, partner, associate, employee or stockholder of a
private corporation, business or other economic entity to
which the question relates or with which the unit of
municipal, county government or the quasi-municipal
corporation contracts only where the official is directly or
indirectly the owner of at least 10% of the stock of the
private corporation or owns at least a 10% interest in the
business or other economic entity.
1 According to the affidavit of Daniel Craffey, Mooselanding Marina is a d/b / a" of plaintiff
/I
Sebago-Long Lake Waterway Marina Inc. Craffey Aft. <j[ 3.
2
When an official is deemed to have a direct or indirect
pecuniary interest, the vote on the question or the contract is
not voidable and actionable if the official makes full
disclosure of interest before any action is taken and if the
official abstains from voting, from the negotiation or award
of the contract and from otherwise attempting to influence a
decision in which that official has an interest. The official's
disclosure and a notice of abstention from taking part in a
decision in which the official has an interest shall be
recorded with the clerk or secretary of the municipal or
county government or the quasi-municipal corporation.
On its face, this statute allows challenges to "the vote of a body" when any of the
voting members of the body have a direct or indirect pecuniary interest. § 2605(1). A
"body" is defined in 30-A M.R.S. § 2604(1) to include a board such as the planning
board.
Under the statute, however, a vote is made voidable only when a voting member
has a "direct or indirect pecuniary interest." § 2605(1). The statute further states that a
member of a planning board is deemed to have a direct or indirect pecuniary interest in
a question on contract where the official is an officer, director, associate, employee, or
stockholder of a private corporation or other economic entity "to which the question
relates," or with which the unit of municipal government contracts "only where the
official is directly or indirectly the owner of at least 10% of the stock of the private
corporation or owns at least a 10% interest in the business or other economic entity"
(emphasis added).
In this case plaintiff, in its complaint, originally challenged the impartiality of
four members of the planning board: James Allen, Dan Allen (alternate member),
Anthony Longley, and Kevin Rogers. Longley and Rogers, however, are not challenged
based on any alleged direct or indirect pecuniary interest.
3
Instead, Longley is challenged because at one point he contacted Craffey about
performing excavation work at the Marina and allegedly told Craffey that he was a
member of the planning board and could facilitate any construction projects Craffey
might have. Craffey did not use Longley for excavation work. Longley is also alleged
to have demonstrated bias against Craffey and the Marina at a videotaped preliminary
meeting of the planning board in connection with the Marina's current permit
application and to have engaged in ex parte communications with Naples residents
about the Marina's permit application.
Rogers is challenged because he allegedly demonstrated bias against Craffey at a
previous Planning Board meeting (also videotaped) in connection with an unrelated
application by Craffey for a two-lot subdivision (referred to as the Aubuchon store
project).
These challenges to the impartiality of Longley and Rogers mayor may not have
merit, but they are not cognizable under 30-A M.R.S. § 2605, which is directed to
pecuniary interests. Plaintiff argues that under § 2605(6), the court can nevertheless
restrain further proceedings of the Planning Board based on the alleged bias of Longley
and Rogers even though no direct or indirect pecuniary interest is alleged. Section
2605(6) provides as follows:
Every municipal and county official shall attempt to avoid
the appearance of a conflict of interest by disclosure or by
abstention.
(emphasis added.)
First, this provision applies to conflicts of interest, which is not the same as bias.
Plaintiff is alleging bias here. Second, the language of this provision is precatory, not
mandatory ("shall attempt to"). While § 2605(6) is designed to provide guidance to
municipal officials, that section does not allow a court to restrain the proceedings of
4
planning boards in advance. Only when there is a "violation" of § 2605 can a court
restrain proceedings under § 2605(3), and such a violation requires a direct or indirect
pecuniary interest.
This does not mean that a permit applicant is without a remedy in the case of
bias or conflict of interest. If the Marina's permit application is denied by the Planning
Board and if the Marina contends that certain voting members were impermissibly
biased against it, the Marina can raise the alleged bias in a proceeding under Rule 80B
and, with a sufficient showing, obtain a separate trial of the facts of the issue of bias.
See, e.g., Baker's Table Inc. v. City of Portland, 2000 ME 7 «JI 9, 743 A.2d 237, 241; Ryan v.
Town of Camden, 582 A.2d 973, 975 (Me. 1990); Gashgai v. Board of Registration in Medicine,
390 A.2d 1080, 1084 n.6 (Me. 1978).
This does not resolve the case because the two other Planning Board members
challenged by plaintiff in its original moving papers, James Allen and Dan Allen
(alternate), are in fact alleged to have a direct or indirect pecuniary interest in plaintiff's
application. Specifically, plaintiff's moving papers alleged that these two board
members have a direct or indirect pecuniary interest because they are owners of other
marinas which compete with plaintiff. By letter of August 14, 2007, however, counsel
for plaintiff advised the court that his client is no longer challenging the participation of
Dan Allen.
Whether plaintiff is entitled to relief, therefore, depends on whether James
Allen's position as the owner of a competing marina 2 gives James Allen a direct or
indirect pecuniary interest "in the question" before the Planning Board that would
2 James Allen submitted an affidavit acknowledging that his marina and the plaintiff marina
are competitors but stating that there are sufficient customers in Naples for multiple marinas to
prosper. Allen's affidavit states that he believes he has always separated his personal business
from planning board business and that he would review plaintiff's application on the merits.
5
entitled plaintiff to a restraining order from this court. This in turn depends on whether
the statute is broadly or narrowly construed. Under a broad construction, any
competitor of an applicant would have a direct or indirect pecuniary interest in the
question. Under a narrow interpretation, only a board member owning at least 10% of
the business seeking a permit would have a direct or indirect pecuniary interest in the
question before the Planning Board. Upon examination of the statute and the relevant
policy considerations, the court concludes that a narrow interpretation is called for and
that the statute only applies if a voting official has a direct or indirect pecuniary interest
in the specific business entity which is applying for a permit or in any business entity
which is participating in the proceedings before the board.
The court reaches this conclusion for four reasons. First, this interpretation
makes the disqualification for planning board issues congruent with the disqualification
applicable to contracts. The latter applies to an official with a direct or indirect
pecuniary interest in the business entity with which the municipality contracts. See 30
A M.R.S. § 2605(4). The most reasonable interpretation of § 2605, therefore, is that it is
designed to provide a remedy for self-dealing by municipal or county officials. This
would exclude a broader interpretation applicable to potential competitors.
Second, if the statue were broadly interpreted to apply to persons with a direct or
indirect interest in potentially competing businesses, it would appear to be over
inclusive. For instance, although Dan Allen appears to be in the exact same position as
James Allen (both are owners of marinas which are competitors of plaintiff), plaintiff
has withdrawn its objection to Dan Allen. Under the statute, however, there should be
no distinction between them - either both are covered or neither are covered. 3
3 The statute cannot be reasonably interpreted to permit plaintiff to pick and choose which
board members should be disqualified.
6
Moreover, if any form of actual or potential competition is a disqualifying factor under
§ 2605, the boundaries of the statute are extremely problematic. For instance, if the
owner of a restaurant is on a planning board, does this mean he or she is disqualified
from all matters dealing with any restaurant? If a person owning rental property is on a
planning board, is he or she disqualified from all matters relating to any rental unit?
Third, the remedy under the statute - restraining any further proceedings of a
duly constituted agency of municipal government - represents a dramatic intrusion into
land use decisions that are generally entrusted to local officials and citizens functioning
in the context of democratic government at the municipal level. Such a usurpation of
local authority should be limited to the most egregious of situations and argues for a
narrow interpretation of the statute.4
Supporting this interpretation is the fact that unless the statute is construed
narrowly, § 2605 could become an accepted mechanism whereby permit applicants in
controversial cases attempt to circumvent local planning and appeals boards and the
normal permit application process. Given that applicants such as the plaintiff marina
have an existing remedy under Rule 80B (assuming that their permit applications are
denied - which is not a foregone conclusion), courts should be wary of allowing
applicants to subvert the pennit process.
Finally, the Law Court's decision in Adelman v. Town a/Baldwin, 2000 ME 91 'li'li 6
7, 750 A.2d at 581, strongly supports the proposition that - at least where a remedy
under Rule 80B exists - parties contesting planning board decisions must proceed under
Rule BOB rather than by bringing independent actions under 30-A M.R.S. § 2605.
4 In this case, plaintiff is seeking the appointment of a referee to supplant the Planning Board in
ruling on its permit application. Such a remedy is potentially available but only after a
Planning Board has demonstrated that it cannot possibly afford the permit applicant a fair
hearing. See Mutton Hill Estates Inc. v. Town of Oakland, 468 A.2d 989 (Me. 1983).
7
Adelman suggests that because plaintiff has an adequate remedy at law under Rule BOB,
it may not seek preemptive injunctive relief in this action.
In reaching this result, the court specifically does not reach the merits of
plaintiff's claims of conflict of interest and bias. Thus, even if James Allen does not have
an automatically disqualifying interest for purposes of section 2605, it is possible that he
may have a conflict of interest as the owner of a competing marina and that, if he does
not disqualify himself, this conflict would entitle to plaintiff to relief under Rule BOB.
This may depend upon such issues as the extent to which James Allen's business would
be affected by the permit sought by plaintiff, which cannot be determined on the
existing record. Similarly, the court has not viewed the videotape evidence that
plaintiff contends supports its claim of bias on the part of Longley and Rogers and
expresses no opinion as to whether plaintiff would be entitled to relief because of
alleged bias on their part. s These issues may have to await an evidentiary hearing
under Rule BOB(d), depending on whether any members of the planning board
disqualify themselves and whether plaintiff's permit application is in fact denied.
The entry shall be:
Plaintiff's motions for a preliminary and permanent injunction are denied,
without prejudice to any claims of bias or conflict of interest that may arise in a later
proceeding for judicial review under Rule 80B. Because no other relief is sought in the
complaint, the complaint is dismissed.
DATED: November 2-' ,2007
Thomas D. Warren
Justice, Superior Court
5 In the court's view, it would be particularly problematic if it were proven that Longley
solicited excavation business while stating that he could be helpful on the planning board.
B
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