Jss Realty Co., LLC v. Town of Kittery, Maine

177 F.Supp.2d 64

JSS REALTY CO., LLC, a New Hampshire limited liability company, Willey Creek Company, Inc., a New Hampshire corporation, Anne E. Blake, as successor trustee of Trust A of Harold L. Durgin Family Trust, and as successor trustee of Trust B of Harold L. Durgin Family Trust, Flagship Management Company, Inc., and D.L.J. Corp., a Maine corporation doing business as Century 21 Atlantic Realty, Plaintiffs v. TOWN OF KITTERY, MAINE, Defendant

No. 01-67-P-C.

United States District Court, D. Maine.

December 11, 2001.

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Robert S. Frank, Harvey & Frank, Portland, ME, for JSS Realty Company, LLC., Willey Creek Company, Incorporated, Flagship Management Company, Inc., DLJ Corporation, a Maine Corporation doing business as Century 21 Atlantic Realty, Ann E Blake, as successor trustee of Trust A of the Harold L. Durgin Family Trust, and as successor trustee of Trust B of the Harold L. Durgin Family Trust.

Mark V Franco, Thompson & Bowie, Portland, ME, for Town of Kittery.

MEMORANDUM OF DECISION AND ORDER GRANTING IN PART, AND DENYING IN PART, DEFENDANT'S MOTION TO DISMISS

GENE CARTER, District Judge.

This case involves a challenge to the application and validity of a citizen-initiated amendment to a zoning ordinance by the Town of Kittery. The amendment, Plaintiff alleges, reduced the amount of developable area permitted on a parcel and abolished the transfer of retail development rights. Plaintiffs' Amended Complaint sets forth the following claims: the ordinance is a law impairing the obligation of contracts, in violation of Article I, Section 11 of the Maine Constitution (Count I) and Article I, Section 20 of the United States Constitution (Count II); the ordinance takes Plaintiffs' private property without just compensation, in violation of Article I, Section 21 of the Maine Constitution (Count III) and the Fifth and Fourteenth Amendments of the United States Constitution (Count IV); the ordinance is invalid under Maine law because the town counsel failed to approve the ordinance (Count V); Defendant should be estopped from applying the ordinance to Plaintiffs' project (Count VI); the ordinance deprives Plaintiffs of property without due process of law and equal protection of the law, in violation of Article I, Section 6-A of the Maine Constitution and the Fourteenth Amendment of the United States Constitution (Count VII); and an 80B appeal to the Maine Superior Court claiming that Defendant refused to process JSS Realty's application under the land use ordinance as it existed prior to September 26, 2000 (Count VIII). See First Amended Complaint (Docket No. 1B). Plaintiffs seek damages, declaratory relief, and attorneys' fees. See id. Defendant removed the suit to this Court on the basis of federal question jurisdiction. See Notice of Removal (Docket No. 1). The Court now has before it Defendant's Motion to Dismiss (Docket No. 3) Counts I, II, III, IV, V, and VII. After considering the arguments of the parties, the Court will grant in part, and deny in part, Defendant's Motion to Dismiss.

I. STANDARD OF REVIEW

"When evaluating a motion to dismiss under Rule 12(b)(6), [the court] take[s] the well-pleaded facts as they appear in the complaint, extending the plaintiff every reasonable inference in his favor." Pihl v. Massachusetts Dep't of Educ., 9 F.3d 184, 187 (1st Cir.1993). The defendant is entitled to dismissal for failure to state a claim only if "it appears to a certainty that the plaintiff would be unable to recover under any set of facts." Roma Constr. Co. v. aRusso, 96 F.3d 566, 569 (1st Cir.1996).

II. FACTS

Applying the above standard, the Court adopts the following facts as true for the purposes of this order. In 1998 the Town of Kittery had in force a zoning ordinance that provided for mixed use in the area of the intersection of U.S. Route 1 and Lewis Road in Kittery, Maine. Amended Complaint ¶ 8. The provision of the zoning ordinance at issue provided that in a mixed use zone, up to 30% of the developable area of a parcel could be covered by a retail project, but that an owner or developer could acquire unused retail development rights from adjacent parcels that would permit a development to exceed the 30% limit, provided that the total coverage over the parcel and adjacent parcels from which transfer of unused retail development rights were secured would be less than 30%. Amended Complaint ¶ 8. In reliance upon the zoning ordinance as it existed prior to the amendment, Plaintiffs had entered into contracts for the purchase and sale of land and entered into contracts for the transfer of unused retail development rights for parcels adjacent to a site on the corner of U.S. Route land Lewis Road in Kittery. Amended Complaint ¶ 10. This project was known as the Willey Creek project. Amended Complaint ¶ 10. The acquisition of these unused retail development rights was necessary in order to render feasible the retail development project on this site. Amended Complaint ¶ 10.

JSS Realty filed applications with the Kittery Planning Board for the development of property. Amended Complaint ¶¶ 11-14. JSS Realty "received substantial and substantive review of its application," and the Kittery Town Planner declared JSS Realty's application "complete" so as to warrant a hearing. Amended Complaint ¶¶ 1, 15. On October 3, 2000, the Kittery Town Planner advised JSS Realty that an amendment to the mixed use zoning ordinance was enacted by referendum on September 26, 2000, with an effective date of October 26, 2000. Amended Complaint ¶ 16. The amendment reduced the coverage limit to 15% of the affected parcel, and abolished the transfer of unused retail development rights. Amended Complaint ¶ 17. After the effective date of the amendment, JSS Realty formally requested that the Kittery Planning Board evaluate the Willey Creek Project application under the land use ordinance as it existed prior to the amendment. Amended Complaint ¶ 18. Plaintiffs were "informed and believe that the Town of Kittery [] intends to apply the zoning amendment to JSS Realty's permit application" despite the fact that the application had been deemed complete prior to October 26, 2000, the effective date of the amendment. Amended Complaint ¶¶ 1, 18. The application of "the zoning amendment renders JSS Realty's project economically infeasible, and nullif[ies] the value of Plaintiffs' contracts related thereto." Amended Complaint ¶¶ 1, 19.

III. DISCUSSION

A. Federal Claims

Plaintiffs assert claims under the federal Constitution for violation of the Contracts Clause, Takings Clause, Due Process Clause, and Equal Protection Clause. All of these claims are brought under 42 U.S.C. § 1983. Plaintiffs also bring claims for violations of the Contracts Clause, Takings Clause, Due Process Clause, and Equal Protection Clause of the Maine Constitution. Neither party asserts that any of the provisions of the Maine Constitution necessitate application of a standard different from that applicable under the federal Constitution. The Court will, therefore, address only federal constitutional law in this opinion.

1. General Objections to the Federal Claims

Defendant asserts that Plaintiffs seek to simultaneously appeal the Kittery Planning Board's decision to the Maine Superior Court and pursue federal civil rights act claims. Defendant states that "Because Plaintiff[s are] still pursuing remedies under the [Kittery] ordinance in the Maine Superior Court, [their] constitutional claims cannot be considered ripe for action." Defendant Town of Kittery's Motion to Dismiss at 5. Although Plaintiffs' Amended Complaint seeks relief pursuant to 80B in the Maine Superior Court, this Court determined in its opinion on Plaintiffs' Motion for Remand that because there has been no final action, or failure to act, by the Kittery Planning Board, Plaintiffs' 80B appeal was not ripe. Therefore, despite the inclusion of a claim for 80B relief in their Amended Complaint, Plaintiffs are not concurrently pursuing their claims in Maine Superior Court and federal court. In the alternative, Defendant argues that even if Plaintiffs are not proceeding with a concurrent action in state court, they should be. Defendant seems to forget that it removed this case to this Court.

In reliance on Creative Environments, Inc. v. Estabrook, 680 F.2d 822, 832 n. 9 (1st Cir.1982), Defendant next asserts that this is a matter of Maine zoning law, not appropriate as a section 1983 action. Plaintiffs respond that their Amended Complaint challenges the enactment and the validity of the ordinance as distinguished from the Kittery Planning Board's action. The Court finds that although this action arises in the context of land use regulation, it is distinguishable from Creative Environments. In Creative Environments, Plaintiffs § 1983 claims were based on the town's denial of their subdivision plan. Whereas here, Plaintiffs' § 1983 claims arise out of the enactment and validity of the land use ordinance.

2. Obligation of Contracts (Counts I and II)

Counts I and II of Plaintiffs' Amended Complaint allege that the amendment to the Kittery zoning ordinance is a law impairing the obligation of contracts in violation of the Maine Constitution (Count I) and the Constitution of the United States (Count II). Defendant asserts that these claims must be dismissed because the prohibition against impairing the obligation of contracts does not prevent a state from exercising its powers for the promotion of the public good.

When evaluating a claim under the Contracts Clause, the Court "must first decide whether a change in state law has resulted in a `substantial impairment of a contractual relationship.'" Parella v. Retirement Bd. of R.I. Employees' Retirement Sys., 173 F.3d 46, 59 (1st Cir.1999) (quoting General Motors Corp. v. Romein, 503 U.S. 181, 186, 112 S.Ct. 1105, 1109, 117 L.Ed.2d 328 (1992)). This question is properly addressed in three...