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Cottle Enterprises v. Town of Farmington
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Decision: 1997 ME 78
Docket: FRA-96-095
Argued November 5, 1996
Decided April 16, 1997


	[¶1]  This appeal arises from the enactment of a sewer moratorium,
the events leading to that enactment, and their alleged impact on the
development of a mobile home park.  Cottle Enterprises, Inc., d/b/a Cascade
Leisure Park, et al. (Cottle){1} appeals from the judgment entered in the
Superior Court (Franklin County) pursuant to summary judgments in favor of
the Town of Farmington, et al. (the Town) on Cottle's claims of an
unconstitutional taking of property (Alexander, J.), and tortious
misrepresentation and denial of equal protection (Crowley, J.), and the
court's dismissal of Cottle's promissory estoppel claim (Delahanty, J.). 
Cottle claims numerous errors in these rulings.  We find none and affirm the
	[¶2]  In 1987 Cottle decided to build a mobile home park in
Farmington for the elderly.  It made sizeable down payments on the
approximately 155 acres where the leisure park was to be located.  The
purchase was contingent on state and local approvals. 
	[¶3]  In February 1988 Cottle filed an application for subdivision
approval with the Town Planning Board.  The subdivision regulations
stipulate that an applicant must demonstrate that the proposed subdivision
will not have an "unreasonably adverse impact on municipal services,"
including the "sewage treatment plant."  Cottle's application included a
letter from Farmington Sewer Superintendent Steve Moore (Moore),
asserting that the sewage system "should have enough capacity to handle the
proposed 30 to 150 units of adult housing."  This letter was not a permit for
the sewer hook-ups. According to the Town's sewer ordinance, such
permits may be obtained only by applying to the Sewer Commission,
comprised of the Board of Selectmen.  
	[¶4]  In March, the Planning Board approved Cottle's project
unanimously, subject to the Maine Department of Environmental
Protection's (DEP) approval.  Cottle completed purchase of the park
property at the end of that month.  Moore visited the property at that time
and told Cottle once more that there would be no problem with the sewer
hook-ups.  Moore confirmed his opinion in May when he signed a letter
provided by one of Cottle's engineers, who was attempting to respond to the
DEP's request for verification that the projected gallons per day of sewer use
"will have no adverse impact" on the sewer system.  This letter was a
statement of the system's then foreseeable capacity.  The DEP approved
Cottle's application in the spring of 1989, noting in its administrative order
that "[t]he proposed project will generate an estimated 33,750 gallons of
waste water [sic] a day . . . .  In a letter . . . Steven A. Moore, Superintendent
of the Farmington Wastewater Treatment Plant, indicates that the additional
wastewater generated by the proposed subdivision will not have an adverse
impact on the [plant]."  
	[¶5]  Meanwhile, the Town had begun to discover problems with its
treatment and disposal of wastewater.  By November 1989 both the state and
federal governments were taking action against the Town because of
problems with discharge measuring procedures and compliance.  The Town
claims it was unaware of any problems at the sewer plant until early that
month, when an engineering firm gave it a report citing capacity problems
at the plant and the DEP's inspector wrote a letter to Moore citing
deficiencies in the plant's operations and performance.  Moore admitted to
the inspector that he had not been conducting the water-sampling properly.  
	[¶6]  After conducting follow-up inspections, the DEP wrote Moore
that the Town's plant had not been in compliance with licensing
requirements "for a long time," that the waste flow probably had not been
measured accurately for years, and that the inspector himself had witnessed
solid sewage being carried into the river from the plant several times.  In
January 1990 the DEP determined that the Town's wastewater discharge
was unacceptably above the license limits and that Moore's failure to report
violations had compromised its honor system.  The DEP reissued a
discharge license to the Town conditioned on suspension of its permission
to receive sewage.  Town Manager John Edgerly (Edgerly) informed all
interested parties, including Cottle, that the Town would issue no new
sewer hook-up permits for at least 60 days beginning that March 20.  In
May, Edgerly informed the DEP inspector of the Town's efforts toward
compliance, including the drafting of a sewer moratorium.  He noted such a
moratorium would create difficulties for those who  were in the process of
developing properties whose operation would be contingent on sewer hook-
	[¶7]  The moratorium was enacted at a special Town meeting in May
as an amendment to the existing sewer ordinance.  It provided that
[o]nly twenty residential permits may be issued in one calendar year. 
No person, firm, corporation or legal entity, inclusive of financial and
legal affiliates, may be entitled to more than 2 permits in one calendar
year. . . . After making a determination regarding the Town's current
ability to comply with the Town's discharge license, the Commission
may increase or decrease the total number of residential permits
issued in any calendar year.

The moratorium stipulated further that when 

an applicant for a residential unit permit fails to obtain a permit within
a reasonable time, the applicant may proceed with the installation of
subsurface waste disposal system or sewage storage system in
accordance with State law and regulations.  Once this article has
expired and the Town has given official hookup notice . . . , the
residential units with subsurface sewage disposal systems must
connect to the sewer line within three years; the residential units
with sewage storage systems shall connect within ninety (90) days. . . . 
The connection fee shall be waived for all residential units developed
under the requirements of this article.

The moratorium also included the following "grandfather" clause:  "This
Article shall apply to development for which substantial site improvements
have not been made by the date of adoption of this Article."  The Town
claims that Cottle's leisure park development, which had completed Phase I
of construction (including water and sewer system installations) by May
1990, was protected by this clause.  Cottle asserts that Phase I of the project
was not completed until August 1990, with "seventy-five sites . . .
completed, with 31 ready to go with water and sewer."{2}  In June the Town
received an administrative order from the federal Environmental Protection
Agency requiring the DEP's approval of any new additions to the sewer
collection system.  
	[¶8]  Although John Cottle did not attend the meetings at which the
Town deliberated and voted on the sewer moratorium, he appeared at a
Board of Selectmen meeting in September 1990 to express concern about
the moratorium's effect on his project.   According to the minutes,

John Cottle was present to discuss his sewer situation.  He has an
approved subdivision and he was under the impression that he could
hook into the sewer because of this preapproved subdivision.  John has
invested a lot of money into this development and now he cannot hook
any of the homes into the sewer.  John and his bank have invested a
large sum of money for this investment that is absolutely worthless at
the present time because of the sewer situation.  John does not feel
that the 2 hook ups per year are feasible for a subdivision like his.  He
has financial obligations that cannot be met because of the sewer

At the meeting, however, Cottle did not apply to the Selectmen in their role
as the Board of Sewer Commissioners for hook-ups pursuant to the
moratorium clause.  John Cottle also attended a public hearing in
Farmington in January 1991 to protest having been allowed only two sewer
permits.  There is no evidence that Cottle ever made an application at any
time to the Town for sewer hook-up permits as required by the sewer
ordinance, or for a subsurface septic system or for any other waste storage
facility as permitted by the terms of the moratorium, or to the DEP for an
exception to the sewer permit limitations it was then enforcing.  
	[¶9]  By July 1990 officials of Peoples Heritage Bank (Peoples Heritage
or the bank) were negotiating on Cottle's behalf with the DEP in an attempt
to keep the park project alive.  Cottle was now in default on the notes and
mortgages held by the bank.  That November, to facilitate Cottle's sale of the
leisure park property, Edgerly approached the DEP for an exception from
the two hook-up restriction.  The DEP granted the Town permission,
subject to certain conditions, to allow 25 new hook-ups per year.  The new
hook-ups were given "only . . . to enable sale of the whole property and [do]
not necessarily extend to the present owner [Cottle] in case the whole
property is not sold."  In February 1991 this information was transmitted by
the Town to Cottle, and in May the bank agreed to discharge Cottle's
indebtedness in exchange for a deed to the property.   The property and
project were purchased in September by Cascade Landholdings, Inc. from
the Peoples Heritage assignee for $500,000.  
	[¶10]  In November 1991 Cottle filed a three-count complaint alleging
a confiscatory taking, violations of equal protection and due process, and
violation of unnamed constitutional rights pursuant to 42 U.S.C. § 1983.  
Cottle amended the complaint in January 1993 to add an additional count of
violation of equal protection and due process and one count of "breach of
commitment" to provide 155 sewer hook-ups.  In a second amended
complaint, dated March 1993, Cottle alleged confiscatory taking, two counts
of violation of equal protection and due process, violation of 42 U.S.C. §
1983, breach of commitment, misrepresentation, and promissory estoppel.   
In September 1993 the court entered a summary judgment in the Town's
favor on several counts of the original complaint, including the claim of
unconstitutional taking.  In July 1994 it entered a summary judgment in the
Town's favor on the equal protection and tortious misrepresentation claims,
but denied it as to the promissory estoppel claim.  The Town moved to
dismiss the promissory estoppel claim in late 1994, and the court dismissed
it in January 1996.  Cottle appeals from the summary judgments and the
Standard of Review
	[¶11]  In reviewing an appeal from a summary judgment we assess the
evidence in the light most favorable to the party against whom judgment was
entered and review the court's decision for errors of law. Gonzales v.
Commissioner, Dep't of Public Safety, 665 A.2d 681, 682 (Me. 1995).  When
there is no genuine issue of material fact and the moving party is entitled to
a judgment as a matter of law, we must affirm.  Id. at 682-83.  At the
summary judgment stage of the proceeding, the task of the court is not to
decide any disputed factual questions, but to determine whether the record
before the court generates a genuine issue of material fact.  Casco N. Bank,
N.A. v. Edwards, 640 A.2d 213, 215 (Me. 1994).  The court cannot decide an
issue of fact even if the opposing party's chances of prevailing at trial on that
issue are improbable.  Tallwood Land & Dev. Co. v. Botka, 352 A.2d 753, 755
(Me. 1976)  (citing Field, McKusick & Wroth, 2 Maine Civil Practice § 56.4
at 39 (2d ed. 1970)).
Unconstitutional Taking of Property
	[¶12]  Cottle claims that the sewer moratorium's limitation to two
sewer hook-ups per year was an unconstitutional taking of its property.   
Under Maine's "home rule" statute, a temporary moratorium to restrict
access to a public sewer system is an exercise of the Town's police power,
30-A M.R.S.A. § 3001 (Supp. 1995); see Tisei v. Town of  Ogunquit, 491 A.2d
564, 569-71 (Me. 1985).  Government regulation that exacts costs from
private business does not work an impermissible regulatory taking as long as
it is a reasonable use of the police power.  Maine Beer & Wine Wholesalers
Ass'n v. State, 619 A.2d 94, 99 (Me. 1993).  Other courts have held
specifically that developers have no common law rights to available sewer
capacity, Cumberland Village Hous. Ass'n v. Town of Cumberland, 609 F.
Supp. 1481, 1484 n.1 (D. Me. 1985) (town may deny applications to reserve
capacity for future use (citing Tisei, 491 A.2d 564), and that sewer
moratoria constitute attempts to prevent public harms rather than creations
of public benefit for which property owners' attendant losses must be
compensated).  Smoke Rise, Inc. v. Washington Suburban Sanitary Comm'n,
400 F. Supp. 1369, 1382 (D. Md. 1975).  
	[¶13]  In addition, Cottle's position is compromised by its failure to
apply for any sewer permits or for a decision from the Town regarding
application of the moratorium to the development.  Waltman v. Town of
Yarmouth, 592 A.2d 1079, 1079 n.2 (Me. 1991).  Simply put, the takings
claim presented no issue for determination.  MacDonald, Sommer & Frates
v. County of Yolo, 477 U.S. 340, 348-51 (1986) (a final and authoritative
determination of the development legally permitted is an essential
prerequisite to assertion of a regulatory takings claim); Agins v. Tiburon, 447
U.S. 255, 260 (1980) (no concrete controversy regarding application of
ordinance until an application is submitted and decided upon).
Tortious Misrepresentation
	[¶14]  Cottle alleges that it relied to its detriment on false
representations of material fact by Moore as to the Town's wastewater
treatment capacity.  Cottle contends that the court erred by ruling that the
Town's insurance does not cover such a cause of action, and therefore it
never waived its immunity pursuant to 14 M.R.S.A. § 8116 (Supp. 1996).{3} 
We do not reach that insurance issue because we affirm on grounds different
than those relied on by the court.  As the Town argues, Cottle's
misrepresentation claim should have been resolved on the basis of its failure
to satisfy the notice of claim requirement of the Maine Tort Claims Act.  
	[¶15]  The misrepresentations at issue were made by Moore no later
than early 1989.  Cottle did not serve a notice of claim on the Town until
May 1993.  The Act requires the filing of a notice of claim within 180 days of
the wrongful act alleged to produce a judicially cognizable injury.{4}  14
M.R.S.A. § 8107(1) (1980 & Supp. 1995); Smith v. School Admin. Dist. No.
58, 582 A.2d 247, 249 (Me. 1990); McNicholas v. Bickford, 612 A.2d 866,
869 (Me. 1992).  Given the facts of this case, neither the "substantial
compliance" provision, 14 M.R.S.A. § 8107(4); see Erickson v. State, 444
A.2d 345, 349-50 (Me. 1982) (substantial compliance exception applicable
only when 180-day requirement is satisfied), nor the exceptions for "good
cause"  apply.  14 M.R.S.A. § 8107(1), (5); see Smith, 582 A.2d at 249-50
(good cause due to physical inability to file a claim); Smith v. Voisine, 650
A.2d 1350, 1352 n.4 (Me. 1994) (noting statutory expansion of definition of
good cause to include belief that governmental entity or its liability insurer
would cover a claim); McNicholas, 612 A.2d at 869 (good cause due to
plaintiff's having been prevented from learning information forming basis of
Denial of Equal Protection
	[¶16]  Cottle claims that the Town denied it equal protection of the
law because the Town arranged an exception of 25 sewer hook-ups per year
to the sewer moratorium for the subsequent owner of his leisure park
property, Peoples Heritage, after allegedly refusing to exempt it from the
moratorium's two sewer hook-up per year limitation.  This claim fails for
several reasons.  First, the Town never denied Cottle anything because it did
not apply to the Town for the necessary sewer hook-up permits.  Second,
even if Cottle had been denied permits, it would have suffered that
deprivation because of acts of the DEP rather than those of the Town.  Only
the DEP had the authority to approve the exceptional sewer hook-ups, and
only the DEP did so.   Finally, Cottle does not allege, much less demonstrate,
that the purported disparate treatment was intentional.  E&T Realty, 830
F.2d at 1112-13 (claim of unequal application of a facially neutral statute
requires proof of intentional discrimination).   
Promissory Estoppel
	[¶17]  Cottle challenges the court's dismissal of its promissory
estoppel claim, which it characterizes anew on appeal as a claim of
"equitable estoppel."  Although the court styled its order as a ruling on a
motion to dismiss, it treated the motion as one for a summary judgment
because it looked beyond the complaint in determining that Cottle's reliance
was unreasonable due to Moore's lack of authority to make binding
representations or issue sewer permits for the Town.  See M.R. Civ. P. 12(b)
("If, on a motion . . . to dismiss for failure of the pleading to state a claim
upon which relief can be granted, matters outside the pleading are
presented to and not excluded by the court, the motion shall be treated as
one for summary judgment and disposed of as provided in Rule 56, and all
parties shall be given reasonable opportunity to present all material made
pertinent to such a motion by Rule 56.").  The parties had a reasonable
opportunity to present pertinent material when the court considered the
previous motion for a summary judgment on the promissory estoppel claim. 
The court was correct about the limits of Moore's authority, and the
deficiencies of the estoppel claim, whether couched in equitable or
promissory terms.{6}  See Shackford & Gooch, Inc. v. Town of Kennebunk,
486 A.2d 102, 106 (Me. 1984) (unauthorized act of a municipal officer
cannot be grounds for equitably estopping the municipality); Sirois v. Town
of Frenchville, 441 A.2d 291, 294-95 (Me. 1982) (same with respect to
promissory estoppel).  Thus, we affirm the court's entry of a judgment for
the Town.  Gonzales, 665 A.2d at 682-83 (this Court must affirm a summary
judgment when there is no issue of material fact).
	Therefore, the entry is:
		Judgment affirmed.

Attorneys for plaintiff: John E. Nale, Esq. (orally) P O Box 2611 Waterville, ME 04901 Stuart W. Tisdale, Jr., Esq. P O Box 572 Portland, ME 04112 Attorneys for defendant: Joseph J. Hahn, Esq. (orally) Lee K. Bragg, Esq. Bernstein, Shur, Sawyer & Nelson P O Box 9729 Portland, ME 04104-1200
FOOTNOTES******************************** {1} We refer to the parties collectively as "Cottle." However, due to John Cottle's personal participation in many of the proceedings described, we refer to John Cottle personally in some contexts. {2} John Cottle claims in an affidavit that his efforts to investigate the alternative of installing septic tanks were frustrated because the property's soil conditions would not support such a use. According to a bank official, however, Cottle never made an attempt to investigate such alternatives further, in part because, as John Cottle stated, the project had been "approved the way it was approved. The town did what they did, and he wasn't going to spend any more money in putting in septic systems per lot." {3} The statute states in pertinent part: . . . If the insurance provides coverage in areas where the governmental entity is immune, the governmental entity shall be liable in those substantive areas but only to the limits of the insurance coverage. . . . {4} Without suggesting that a complaint in a civil action can serve as a notice of claim under the Act, we note that such an argument would avail nothing here. Cottle filed its first complaint in November 1991, well beyond the 180-day time frame of the Act. {5} Cottle claims it did not realize that Moore had misrepresented the extent of the Town's sewer capacity to it in February and May 1988 until consulting its attorney in December 1992, after the attorney had made inquiries at the DEP. As Cottle admits, however, the Town manager notified all interested parties, including Cottle, that there would be no new sewer hook-ups for 60 days as of March 1990 because of severe problems with sewer capacity. Furthermore, even if Cottle were temporarily unaware of the voters' adoption of the sewer moratorium at the town meeting in May 1990, it appeared at a Board of Selectmen meeting in September 1990 to complain about the impact on its leisure park development. By then Cottle must have understood that Moore's representations had been, at the very least, inaccurate. {6} Cottle's brief on appeal argues equitable estoppel, but the relevant count of its complaint alleges promissory estoppel. Given this confusion, we must clarify the difference between the two theories. Promissory estoppel is a contract doctrine invoked to enforce promises which are otherwise unenforceable so as to avoid injustice. Chapman v. Bomann, 381 A.2d 1123, 1127 (Me. 1978) (adopting Restatement (Second) of Contracts (Restatement) § 90 (1981)). Thus, a claim of promissory estoppel requires demonstration of "[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person. . . ." Restatement § 90. Equitable estoppel, sometimes referred to in our cases as "estoppel in pais," 381 A.2d at 1128, does not involve promises. Instead, it involves misrepresentations, including misleading statements, conduct, or silence, that induce detrimental reliance. Littlefield v. Adler, 676 A.2d 940, 942 (Me. 1996); see also Pino v. Maplewood Packing Co., 375 A.2d 534. 539 (Me. 1977) (citing Colby v. Norton, 19 Me. 412, 418 (1841) (misrepresentations need not be intentional)). As Cottle seems to have understood belatedly, the facts of this case suggest a misrepresentation theory rather than an estoppel claim based on a promise.