Articles Posted in Maine Supreme Court

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This was the second appeal of a matter involving six subdivision lot owners and their attempt to form a road association. In the first appeal, the Supreme Court held that the lot owners were authorized by statute to begin the process of forming the road association. On remand, the superior court issued an order requiring the parties to submit a proposed judgment. The resulting proposal asked the court to clarify what the word "majority" as used in 23 Me. Rev. Stat. Ann. 3101(5) meant. The court answered that the word "majority" as used in section 3101(5) required only a majority vote of those owners physically present at the meeting and those present by proxy and did not require a majority of all lot owners whether present or not. The Supreme Court affirmed, holding that the superior court did not err in declaring that "a majority vote" as used in section 3101(5) meant a majority vote of lot owners actually present or represented by proxy at a properly called road association meeting. View "Goudreau v. Pine Springs Rd. & Water, LLC" on Justia Law

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Plaintiff, an owner of a condominium unit, filed a complaint, individually and derivatively on behalf of the condominium association (Association), against the Association and four members of its board of directors (Board), claiming that Defendants had refused effectively to enforce the condominium's smoking ban. The business and consumer docket dismissed the counts of the complaint related to the smoking ban for failure to state a claim. The Supreme Court affirmed, holding that the court did not err in (1) finding that Plaintiff did not have a right to bring a shareholder derivative action under either the Maine Condominium Act or the Maine Nonprofit Corporation Act; (2) dismissing Plaintiff's individual claims related to the smoking ban; and (3) denying Plaintiff's motion to file a second amended complaint following the partial dismissal of his amended complaint. View "America v. Sunspray Condo. Ass'n" on Justia Law

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The issue before the Supreme Court in this case was whether a resort violated the requirement to pay its employees the minimum wage when it paid wait staff a portion of the standard "service charge" that it added to its banquet customers' bills and treated that portion as a "tip" that satisfied the minimum wage law by qualifying the resort for a tip credit. Allison Hayden-Tidd appealed the superior court's grant of summary judgment to The Cliff House & Motels, Inc. and the denial of her cross-motion for summary judgment. On appeal, Hayden-Tidd contended that the court erred when it rejected her argument that the wage laws required Cliff House to treat its entire banquet staff service charge as a "tip" to be paid to the banquet servers for purposes of the tip credit statute. The Supreme Court agreed that Cliff House's compensation arrangement with its banquet servers did not violate the tip credit statute, and therefore was not a violation of the minimum wage law. View "Hayden-Tidd v. Cliff House & Motels, Inc." on Justia Law

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Former Bushmaster shareholders Thomas Barr Jr. and Claude Warren appealed a judgment entered in the Business and Consumer Docket in which the court granted summary judgment to all defendants on Barr and Warren’s complaint seeking rescission and other remedies based on claims of breach of fiduciary duty, fraud, unjust enrichment, and infliction of emotional distress. The court concluded that the terms of the stock purchase agreement and general release executed in settlement of Barr and Warren’s prior claims must be enforced in the circumstances of this case. The issue before the Supreme Court in this appeal was the enforceability of the contracts executed in settlement of litigation. The Court found that the minority shareholders (Barr and Warren) explicitly disclaimed reliance on the corporation and its officers and directors in determining the value of the stock that they were selling pursuant to the settlement agreement, but they sought to avoid enforcement of that disclaimer-of-reliance clause. The Court concluded that the allegations purporting to demonstrate fraud did not, in the absence of reliance, vitiate the terms of the contract of release executed between these parties, who had access to counsel, understood Bushmaster’s business, and negotiated clear terms at arm’s length in settlement of the earlier contentious lawsuit. Accordingly, the Supreme Court enforced the general release with regard to the remaining claims, and affirmed the judgment disposing of Barr and Warren’s claims. View "Barr Jr. v. Dyke et al." on Justia Law

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Victor Bravo Aviation, LLC purchased an aircraft in Connecticut in 2004 that was flown to Victor Bravo in Connecticut. Victor Bravo did not register the aircraft in Maine but used it regularly in Maine during the first twelve months of ownership. In 2007, the State Tax Assessor assessed Victor Bravo a use tax on its aircraft plus interest, penalties and costs. Victor Bravo appealed. The Business and Consumer Docket entered summary judgment for the Assessor affirming the assessment of the tax and interest, and judgment for Victor Bravo waiving and abating the non-payment penalty. The Supreme Court affirmed except vacated and remanded the issue of interest waiver or abatement. On remand, the court declined to waive or abate the interest as of the date of the reconsideration decision. Victor Bravo appealed. The Supreme Court affirmed, holding that the court properly considered Victor Bravo's arguments for failure to pay the use tax and deemed them unsatisfactory to warrant a waiver or abatement of interest under the statutory scheme.

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Galen Porter was the sole shareholder in County Forest Products. Porter began operating a fuel delivery business as Porter Cash Fuel but never registered that name with the Secretary of State. Porter ordered fuel and gas from A.E. Robinson in a series of transactions that continued for three years. Ultimately, the business relationship deteriorated, and A.E. Robinson refused to deliver any more products. A.E. Robinson sued County Forest and Porter seeking payment on the account. Following a non-jury trial, the court entered judgment for A.E. Robinson jointly and severally against County Forest and Porter in the amount of the invoices plus financing charges and attorney fees. The Supreme Court modified the judgment to remove the award of attorney fees and affirmed as modified, holding that the trial court (1) properly held Porter and County Forest jointly and severally liable; but (2) erred in awarding attorney fees to A.E. Robinson pursuant to Me. Rev. Stat. 2-207.

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Anthem Health Plans of Maine appealed from a judgment entered in the Business and Consumer Docket affirming a decision by the Superintendent of Insurance (1) determining that Anthem's proposed rate increase for its individual health insurance products was excessive and unfairly discriminatory, and (2) indicating that an average rate increase with a lower profit margin for those products would be approved. Anthem appealed, contending that the Superintendent's decision violated Me. Rev. Stat. Ann. 24-A, 2736 (the statute) and the state and federal Constitutions because the approved rate increase eliminated Anthem's opportunity to earn a reasonable profit on its line of individual health insurance products. The Supreme Court affirmed, holding (1) the Superintendent properly balanced the competing interests within the statutory framework of the statute in arriving at its approved rate increase; and (2) because the approved rate provided a built-in risk and profit margin, Anthem's argument that the Superintendent improperly cross-subsidized between Anthem's regulated and unregulated product lines, and the corollary argument that the approved rate resulted in an unconstitutional confiscatory taking, necessarily failed as a matter of law.

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John and Paul Pelletier formed St. Sauveur Development in the 1970s and transferred title of several jointly-owned properties to the corporation. In 2002, an appraiser appraised the corporation's property holdings. After the appraisal, the brothers agreed to divide the properties and how they would be divided, with the understanding that John would make a cash payment to Paul to equalize the division. In 2004, John began making payments to Paul. In 2005, the brothers received an analysis from Paul's accountant that they agreed on the actual amount of Paul's payment and to the payment terms, including the interest rate. Paul subsequently filed a complaint for dissolution and other relief. The business and consumer docket determined and divided John's and Paul's interests in St. Sauveur, concluding that the parties had entered into an enforceable agreement in 2002. The Supreme Court vacated in part, holding (1) the agreement regarding interest was reached in 2005, and therefore, the court's determination that interest should accrue from the date of the 2002 appraisal was error; and (2) the court did not err in failing to find that a check from St. Sauveur that Paul negotiated in 2009 gave rise to an accord and satisfaction. Remanded.

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After Valley Firewood and Tree Farm (collectively, Valley) terminated its firewood business, Gary Voisine, on behalf of Valley, filed a three-count shareholder's derivative action against Valley and Robert Berube, a shareholder and president of Valley. After a bench trial, the superior court found Berube breached his duty to act in good faith toward Valley and awarded damages to Valley in the amount of $1,500,000, with half that sum, $750,000 plus interest and costs, to be paid over to Voisine. At issue on appeal was whether Valley itself was damaged and suffered losses as a result of Berube's conduct and whether Voisine had standing to bring the derivative action on Valley's behalf. The Supreme Court vacated the judgment of the superior court, holding that Voisine lacked standing to bring a shareholder's derivative action on behalf of Valley and was not entitled to damages as a matter of law because Voisine participated in the division of assets of Valley, received the benefits of that distribution, and created a corporation to sell firewood formerly sold by Valley that was intended to replace Valley.

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Employer, an employment agency, hired Employee and assigned him to work at a facility owned by a client company (Client). Employer paid Employee's salary, and Client paid Employer a fee for his services. Employee was injured while working at the Client plant, after which Client ended Employee's assignment at its facility. Employee filed petitions to remedy discrimination against Employer and Client. A workers' compensation board hearing officer denied the petitions to remedy discrimination against Employer and Client. Employee appealed, contending that the hearing officer erred by denying the petition against Client on the ground that Employee was not in an employer-employee relationship with Client. The Supreme Court affirmed, holding (1) the hearing officer did not misconceive the legal standard when focusing on whether a contract for hire existed between Employee and Client; (2) the hearing officer did not err in concluding that Employee had a contract for hire only with Employer; and (3) therefore, Employee did not have a right of action for discrimination pursuant to 39-A Me. Rev. Stat. 353 against Client.