Cercena v. Cote

572 A.2d 487, 1990 Me. LEXIS 107
CourtSupreme Judicial Court of Maine
DecidedMarch 30, 1990
StatusPublished
Cited by4 cases

This text of 572 A.2d 487 (Cercena v. Cote) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cercena v. Cote, 572 A.2d 487, 1990 Me. LEXIS 107 (Me. 1990).

Opinion

McKUSICK, Chief Justice.

This case arises from the failed attempt of three partners to build a hunting lodge in Eustis. In 1985 plaintiffs Robert Cerce-na and George Cohen, visitors to Maine from New York State, and defendant Donald Cote, a resident of Franklin County, entered into an oral agreement to join in building the lodge, with each contributing $15,000 to the project. Cote would build the lodge, would provide the necessary maintenance and pay the taxes and insurance, and would be allowed to use the lodge as the base for his bear-hunting business. Cote also agreed to pay $1,500 interest per year to each of his partners. Cerce-na and Cohen would have the use of the lodge as they wished when vacationing in the area.

To facilitate the lodge construction, Cote and Cercena opened a joint checking account. After construction on the lodge began, the parties modified their agreement. Cote’s obligation would increase to $25,000 and he would be allowed to move his family into the lodge. Cote borrowed the $25,000 for his share from Cercena and the two men signed a contract incorporating both the terms of the loan and of their earlier overall oral agreement for building the lodge.

As construction wore on, the parties’ relationship wore thin. Cote did not pay Cercena and Cohen $1,500 per year as agreed. He also failed to pay the property taxes one year. Cercena and Cohen also discovered that Cote was using the joint checking account for personal expenses.

By a complaint filed on March 16, 1987, and an amended complaint filed on March 7, 1988, Cercena and Cohen sued Cote for money allegedly due, for equitable partition, and for other relief. The parties agreed to refer the case to a retired judge pursuant to M.R.Civ.P. 53. After extensive hearings, the referee reported the following recommendations:

1) That Cercena recover $25,000 from Cote for money lent;

2) That Cercena and Cohen each recover $3,000 for interest for two years;

3) That Cercena recovery $867 as reimbursement for real estate taxes paid on Cote’s account; and

4) That, in consideration of the parties’ respective contributions and other equitable factors, the property be equitably partitioned, with Cercena having the first *489 right to purchase his partners’ shares at a price set by the referee.

The judgment entered by the Superior Court (Franklin County, Bradford, J.) adopted in full the referee’s recommendations and awarded plaintiffs prejudgment interest and costs. On Cote’s appeal, we affirm in all substantial respects.

I.

$25,000 Award to Cercena for Money Lent

The referee recommended that on his money lent claim Cercena recover $25,-000, the sum he loaned Cote when the parties modified their oral agreement. The referee found that the parties intended their joint checking account to be used exclusively for construction purposes. The referee then concluded that Cote had violated the parties’ agreement by his extensive personal use of the account, that Cote’s violation constituted a material breach of the parties’ agreement, and that therefore the $25,000 loan had become due. Pursuant to M.R.Civ.P. 53(e)(2), the Superior Court is required to adopt the referee’s factual findings unless they are clearly erroneous. On appeal, we will uphold the adoption of those findings if there is credible, probative evidence supporting them, even though there may be evidence to support contrary findings. See Walker v. Provost, 566 A.2d 749, 750 (Me.1989).

Ample credible evidence supports the referee’s findings. Both Cercena and a witness from the bank testified that the account was opened for the exclusive purpose of paying lodge construction expenses. The parties’ contract also states that the money was “advanced by Cercena for purposes of construction of [the lodge].” Cote admits using the account for his personal expenses, and the record contains dozens of checks drawn on the account for the personal use of Cote and his family.

The referee was justified in concluding that Cote’s misuse of the joint account constituted a material breach of the agreement. When Cote violated material terms of the agreement, he was in total breach and Cercena was entitled to regard the whole transaction at an end. Cote became liable for immediate repayment of Cerce-na’s $25,000 loan to him. See 4 Corbin on Contracts § 946, at 809-10 (1951).

II.

Equitable Partition

All parties agreed that equitable partition was the appropriate vehicle to resolve their dispute. Based upon the parties’ respective contributions of money, time, and labor, along with other equitable considerations, see Libby v. Lorrain, 430 A.2d 34, 40 (Me.1981), the referee concluded that “Cote and Cercena are effectively equal contributors with Cohen to be credited at one-half of their level.” Contrary to Cote’s contention, that finding is not clearly erroneous.

Both Cote and Cercena contributed roughly equal amounts of money to the lodge construction fund. Cercena provided the liquidity necessary to sustain the project. Cercena also contributed some labor to the project. Cote personally contributed more labor to the project than Cercena and, in effect, served as the general contractor in arranging for others to work on the construction. A significant portion of Cote’s time and energy, however, was expended in constructing a garage that his partners did not want or authorize. The referee treated the garage as Cote’s personal property to be removed by him from the premises. Cohen contributed significantly less money to the project and virtually no personal labor. Although the evidence might support different findings of fact relative to the parties’ respective contributions, the referee’s conclusions are not clearly erroneous. See Harmon v. Emerson, 425 A.2d 978, 982 (Me.1981).

After determining each party’s contribution, the referee recommended that Cerce-na be given the first option to purchase the other shares in the property. 1 Cercena *490 would be permitted to buy the lodge by tendering to Cohen an amount equal to 20% of the appraised value of the lodge and to Cote 40% of the appraised value, less Cote’s indebtedness to Cercena and Cohen on their other claims. The decision to give Cercena the first option to purchase falls well within the equitable discretion of the court. See Libby v. Lorrain, 430 A.2d at 40.

Among the three contributors, Cohen has only a 20% equitable interest in the property and, as the referee concluded, should receive last priority in purchasing the property. Although Cercena and Cote contributed equally to the project, the equities between them favor Cercena.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Libby v. Vachon
Maine Superior, 2004
Down East Energy Corp. v. RMR, INC.
677 A.2d 1070 (Supreme Judicial Court of Maine, 1996)
Wellington Associates, Inc. v. Capital Fire Protection Co.
594 A.2d 1089 (Supreme Judicial Court of Maine, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
572 A.2d 487, 1990 Me. LEXIS 107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cercena-v-cote-me-1990.