Maine Supreme Court Rules in Favor of State
By Emily Patrick
On July 9th, 2024, a decision was handed down in the case of the State of Maine v. Moosehead Mountain Resort, Inc. The Maine Supreme Judicial Court ruled in favor of the state, reaffirming the Court’s previous decision in favor of the Plaintiffs. There are no appeals left on this case.
To give a bit of background, Big Moose Mountain ski area opened in 1963. In 1967, the ski area installed a chair lift to service the upper half of the mountain. Then, in 1974, the owners donated the ski area and all of the abutting land to the State of Maine. This included restrictive easements in the deed.
The State ran the ski area until 1986, when they sold the ski area, a portion of the abutting land, and the easements in the deed, to Big Squaw Mountain Corporation, or “BSMC.” The State maintains their motivation for selling the property to a private entity was “to encourage private investment in the maintenance and improvement of the ski area.” Furthermore, “Before the sale, BSMC acknowledged the State’s desire that the ski area be a viable economic resource in the Moosehead Lake region.”
Two restrictive covenants in the deed came with the sale: first, that timber not be harvested from the ski area except under certain conditions. Second, the continued public use of the ski area. In its decision, the Court acknowledges BSMC did originally propose that these covenants expire after a period of ten years, but “the deed does not contain any durational language.”
In 1990, BSMC filed for bankruptcy. A creditor foreclosed on the ski area, abutting land and easements in the deed. The property was then conveyed to a trust, and from the trust to the Resort in 1995. In all of these property transfers, the same timber harvesting and public use restrictions were contained in the deed.
From 1995 to 2004, the Resort “operated the ski area without incident.” The Court finds, however, the ski area never made a profit during this time. In 2004, after the upper lift malfunctioned and injured four people, the top half of the ski area was closed and the lift has never been reopened. From 2009 to 2012, the ski area was closed. During this time, the Resort hired a logging company that harvested around 170 acres of timber from the land. The Court points out that some, but not all, of the harvesting was done to cut new trails, which is allowed under the timber harvesting covenant.
Friends of the Mountain, a local nonprofit, has been running the ski area since 2013. The Court finds that, “By all accounts, the lower half of the ski area has improved significantly under the Friends’ stewardship.” Meanwhile, the upper half of the ski area has not only remained closed, but has deteriorated. Estimates to repair the upper lift range from $2-2.5 million.
In 2016, the State filed a complaint with the Superior Court seeking to enforce the timber harvesting and public use covenants. The court granted summary judgment to the State, agreeing the Resort breached both covenants. The court ordered the Resort to pay $136,277.64 to the State in damages (the estimated mill value of the timber harvested) and to place $3.8 million in an account to bring the upper mountain back to its pre-2004 condition. The Resort appealed.
In its appeal, the Resort argued the State couldn’t enforce the covenants because it doesn’t own or use land benefitted by those covenants. In short, the Court ruled the State “has a sufficiently cognizable interest to enforce” the covenants. The Resort also argued the deed requires the ski area remain open for public use, but doesn’t specifically require the Upper Mountain remain open. Again, the Court ruled in favor of the State, saying, “We agree with the Superior Court that, by closing half of the ski area indefinitely, with no plan to reopen, the Resort fell short of its obligation to provide for ‘continued public use of the ski area.’”
The final argument the Resort made in its appeal was the public use requirement to repair and reopen the Upper Mountain is unenforceable because it is unreasonable, the State never notified the Resort they had to make the repairs, and finally that the state is barred by the doctrine of laches.
The State argued the public use requirement was reasonable, the Resort had notice of these requirements, and laches is inapplicable in this case. On all points, once again, the Court agreed with the State, saying the “Resort is a sophisticated business entity that purchased the ski area, subject to the public use covenant… It cannot escape on the grounds of unreasonableness the obligations that it voluntarily incurred.” Further, “…the notice requirement was met here because the covenants were contained in the Resort’s chain of title.”
“Laches is negligence or omission seasonably to assert a right.” The Court continues, “Although the summary judgment record raises a question about the State’s delay in enforcement, it does not include any evidence suggesting that the delay was unreasonable or resulted in any prejudice to the Resort.”
The Supreme Court affirmed the Court’s previous decision in favor of the State. The future of Big Moose Mountain and our beloved ski area remains uncertain.
God bless we mainers