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State v. Moosehead Mountain Resort

Superior Court of Maine, Kennebec

May 7, 2018

STATE OF MAINE, JANET T. MILLS, ATTORNEY GENERAL, BUREAU OF PARKS AND LANDS, and LAND USE PLANNING COMMISSION, Plaintiffs
v.
MOOSEHEAD MOUNTAIN RESORT and OFLC, INC., Defendants and CARMEN REBOZO FOUNDATION, INC., Party-in-Interest

          DECISION AND ORDER

          William R. Stokes, Justice.

         INTRODUCTION

         This matter is before the court on the motions of Defendant Moosehead Mountain Resort (MMR) for judgment on the pleadings and for summary judgment as to Counts II, III, IV and V of the complaint. Party-in-Interest Carmen Rebozo Foundation, Inc., has joined in the motion for summary judgment. The Plaintiffs have informed the court that they are no longer pursuing Count IV of the complaint alleging breach of contract, and the court considers this cause of action withdrawn.

         This action was commenced by the Plaintiffs[1] on August 1, 2016 with the filing of a five-count complaint seeking to enforce what are described as "deed restrictions" and "public servitudes" that allegedly burden the land of MMR on Big Moose Mountain (f/k/a Big Squaw Mountain) in Greenville. The land in question was formerly owned by the State of Maine and was conveyed to MMR's predecessor in title in 1986. The complaint also seeks monetary damages.

         Count I alleges that Defendants MMR and OFLC, Inc., conducted timber harvesting within a General Development subdistrict without first obtaining a permit from the Land Use Planning Commission. Count I is not included in MMR's motions.

         Count II alleges that MMR conducted timber harvesting in violation of certain deed restrictions applicable to the land owned by MMR, which were imposed for the benefit of the State of Maine.

         Count III alleges that MMR has failed to comply with certain public servitudes imposed on the property owned by MMR, including that designated ski trails and lifts be subject to "continued public use."

         Count V seeks damages on a theory of unjust enrichment.

         MMR filed a timely answer and counterclaim on August 25, 2016. In its counterclaim MMR alleges that the deed restrictions do not apply to it because they "do not run with the land."

         On December 27, 2017, MMR moved for summary judgment and for judgment on the pleadings.[2] The Plaintiffs filed their opposition on February 28, 2018. Amicus Curiae Town of Greenville and Moosehead Lake Region Economic Development Corporation filed their joint opposition brief on March 26, 2018. MMR's reply was filed on April 5, 2018. Oral argument on the motions was held on April 6, 2018.

         FACTUAL BACKGROUND

         The following undisputed factual description is based upon the summary judgment record.

         Big Moose Mountain (f/k/a Big Squaw Mountain) began operating as a ski resort in 1963. Scott Paper Company purchased the ski area in 1970 and operated it until approximately 1974. In late 1974 the ski area was transferred to the Moosehead Resort Corporation (MRC), which was wholly owned by the State of Maine. In 1975 MRC conveyed the ski area to the State of Maine and the Bureau of Parks and Recreation (n/k/a Bureau of Parks and Lands).

         The State of Maine owned the ski area for over ten years. In May 1986 a request for proposals was issued and advertised for the sale of the ski area and resort. Only one proposal was submitted, from the Big Squaw Mountain Corporation (BSMC). On October 17, 1986 then Governor Joseph E. Brennan approved Financial Order 04350 F6 authorizing the Director of the Bureau to convey the ski area and resort to BSMC. The "Statement of Fact" accompanying the Financial Order acknowledged that "[e]xtensive repair and improvements of the resort facility are necessary to keep it available to the public and assure its viability as an attractive and safe resort, benefiting the people of Maine."

         The Financial Order described State policy at the time as recognizing that private capital was "the most appropriate and feasible means of assuring that the needed repairs and improvements are made in the future." Accordingly, it was deemed necessary that the property, including the ski area and resort, would be held in private ownership and that the State's conveyance of the property (and an option to purchase additional property) "is being done exclusively for public purposes."

         The sale to BSMC involved the payment to the State of Maine of $300, 000 (well below its market value at the time of between $3.5 million to $4 million). The buyer (BSMC) was required to invest $700, 000 in improvements to the facility. Moreover, the Financial Order provided:

The resort and ski area will be sold with restrictions on timber harvesting to prevent waste, a requirement for continued public use of the ski area, and a restriction preventing subdivision and alienation of the shoreland parcel on Moosehead Lake from the resort property.

         The Agreement to Purchase between the State of Maine and BSMC dated November 5, 1986 recited that the deed to the "Ski Area and Resort" would contain the "restrictions" referred to above. The Release Deed, also dated November 5, 1986, is at the center of this litigation. The deed emphasizes that the conveyances of the property and the options to BSMC were "done exclusively for public purposes." To drive home this point, the deed provides:

Without limiting the definition of 'public purposes,' it is expressly understood that 'public purposes' shall include the maintenance, expansion, and operation of the Ski Area and Resort on the premises hereby conveyed, and the construction of transient accommodations and vacation homes for lease or sale.

         The deed conveyed the land, buildings and improvements as described in Schedule A. The restrictions mentioned in the Financial Order and Agreement to Purchase were described in greater detail in the Release Deed as follows:

Timber shall not be harvested from parcels FIRST and SECOND, hereby conveyed, except (1)where necessary for trails, lifts, snow-making facilities, construction of transient accommodations and vacation homes for lease or sale, and all related improvements, including roadways, serving the same and the Ski Area and resort, (2) for firewood or lumber for such resort and improvements, and (3) for the harvest of dead or dying timber and blowdowns.
This conveyance is conditioned upon the continued public use of the Ski Area highlighted on attached Schedule B, which Ski area includes only the ski trails and lift lines in existence as of the date ...

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