Cumberland Farms v. Montague Economic

First Circuit

Cumberland Farms v. Montague Economic

CourtCourt of Appeals for the First Circuit

DecidedMarch 12, 1996

Docket95-1822

StatusPublished

This text of Cumberland Farms v. Montague Economic (Cumberland Farms v. Montague Economic) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Cumberland Farms v. Montague Economic, (1st Cir. 1996).

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Opinion

USCA1 Opinion

United States Court of Appeals United States Court of Appeals
For the First Circuit For the First Circuit
____________________

No. 95-1822

CUMBERLAND FARMS, INC.,

Appellant,

v.

MONTAGUE ECONOMIC DEVELOPMENT AND INDUSTRIAL CORPORATION,

Appellee.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge] ___________________

____________________

Before

Cyr, Boudin and Stahl,
Circuit Judges. ______________

____________________

W. Mark Russo with whom David A. Wollin and Adler, Pollock & ______________ ________________ _________________
Sheehan Incorporated were on brief for appellant. ____________________
Debra L. Purrington with whom Morse, Sacks & Fenton, Martine B. ____________________ ______________________ ___________
Reed, and Brown, Hart, Reed & Kaplan were on brief for appellee. ____ __________________________

____________________

March 12, 1996
____________________

STAHL, Circuit Judge. On September 21, 1990, the STAHL, Circuit Judge. _____________

Montague Economic Development Industrial Corporation

("MEDIC"), after reaching impasse in negotiations to purchase

from Cumberland Farms, Inc. ("Cumberland") a convenience

store in Turner's Falls, Massachusetts, took the property by

eminent domain. That same day, pursuant to Mass. Gen. L. ch.

79, 1, the order of taking was recorded, and as a result,

Cumberland's ownership rights in the property were

extinguished. Mass. Gen. L. ch. 79, 3.

Cumberland, the owner of hundreds of convenience

stores in various states, objected to MEDIC's taking

decision. Cumberland's legal maneuvering, and its

bankruptcy, converted what began as a simple eminent domain

case into a six-year litigious war.

We summarize briefly. Initially, Cumberland

demanded pro tanto compensation for the property, but when

MEDIC obliged, Cumberland rejected its offer and chose

instead to contest the taking. Cumberland initiated various

state and federal court actions, all designed to frustrate

the taking and to deny MEDIC possession. Eventually, in May

of 1992, while still in possession of the contested property,

the Cumberland chain filed for protection and reorganization

under Chapter 11 of the Bankruptcy Code, which further

delayed MEDIC's gaining possession. Suffice it to say that

none of Cumberland's delaying actions had merit, and finally

-2- 2

on September 3, 1993, nearly three years after acquiring

legal title, MEDIC obtained physical possession of the

premises.

Previously, Cumberland had commenced a state court

action objecting to the amount of MEDIC's original pro tanto

offer and claiming reimbursement for relocation expenses and

damages. MEDIC removed the action to the United States

Bankruptcy Court for the District of Massachusetts, where

Cumberland's bankruptcy case was pending.

The bankruptcy court found that Cumberland was

entitled to recover from MEDIC $380,000 as compensation for

the value of the property and $36,850 for relocation costs,

reduced by $137,250 for the rental value of its use and

occupancy during Cumberland's holdover on the premises,

therefore judgment was issued for the net amount of $279,600.

The court allowed MEDIC's rent claim, even though the eminent

domain statute did not speak to a taking entity's right to

charge reasonable rent during a wrongful holdover beyond the

date when the taken premises must be vacated. The court

disallowed Cumberland's claim for interest on the

compensation payment, because Cumberland could have accepted

the pro tanto payment and obtained use of the funds at that

time. The decision of the bankruptcy court was subsequently

affirmed by the United States District Court for the District

ofMassachusetts, and fromthat affirmance thisappeal followed.

-3- 3

On this appeal, Cumberland argues that the

bankruptcy court erred in awarding MEDIC fair market rent

during the holdover period during which Cumberland was

challenging the eminent domain proceeding, erred in the

amount of relocation damages awarded to it, and erred by not

awarding damages for the authority's alleged failure to

provide timely and adequate relocation assistance. We find

that none of Cumberland's arguments on appeal merit extensive

consideration.1 We review the bankruptcy court's findings of

fact for clear error and subject its rulings of law to de

novo review. T I Fed. Credit Union v. Delbonis, 72 F.3d 921, _____________________ ________

928 (1st Cir. 1995).

Discussion __________

We begin with Cumberland's claim that it is not

liable for the use and occupancy charges that the bankruptcy

court awarded to MEDIC, an issue that we review de novo. The

applicable Massachusetts eminent domain statute allowed

Cumberland to remain on the premises for a period of four

months after it received the notice of taking. Mass. Gen. L.

ch. 79, 8B.

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USCA1 Opinion




United States Court of Appeals
                            United States Court of Appeals

                                For the First Circuit
                                For the First Circuit

                                 ____________________



        No. 95-1822



                               CUMBERLAND FARMS, INC.,



                                      Appellant,



                                          v.



              MONTAGUE ECONOMIC DEVELOPMENT AND INDUSTRIAL CORPORATION,



                                      Appellee.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________



                                 ____________________



                                        Before



                                Cyr, Boudin and Stahl,

                                   Circuit Judges.
                                   ______________



                                 ____________________



            W. Mark  Russo  with whom  David A.  Wollin and  Adler, Pollock  &
            ______________             ________________      _________________

        Sheehan Incorporated were on brief for appellant.
        ____________________

            Debra L.  Purrington with whom Morse,  Sacks & Fenton, Martine  B.
            ____________________           ______________________  ___________

        Reed, and Brown, Hart, Reed & Kaplan were on brief for appellee.
        ____      __________________________


____________________



                                    March 12, 1996

                                 ____________________



STAHL, Circuit Judge.   On September 21,  1990, the
                      STAHL, Circuit Judge.
                             _____________



            Montague   Economic   Development    Industrial   Corporation



            ("MEDIC"), after reaching impasse in negotiations to purchase



            from  Cumberland  Farms,  Inc. ("Cumberland")  a  convenience



            store  in Turner's Falls, Massachusetts, took the property by



            eminent domain.  That same day, pursuant to Mass. Gen. L. ch.



            79,   1,  the  order of taking was recorded, and as a result,



            Cumberland's  ownership   rights   in   the   property   were



            extinguished.  Mass. Gen. L. ch. 79,   3.



                      Cumberland,  the owner  of hundreds  of convenience



            stores  in   various  states,  objected   to  MEDIC's  taking



            decision.      Cumberland's   legal   maneuvering,  and   its



            bankruptcy, converted what  began as a simple  eminent domain



            case into a six-year litigious war.



                      We  summarize   briefly.     Initially,  Cumberland



            demanded  pro tanto compensation  for the property,  but when



            MEDIC  obliged,  Cumberland  rejected  its  offer  and  chose



            instead  to contest the taking.  Cumberland initiated various



            state  and federal court  actions, all designed  to frustrate



            the taking and to deny  MEDIC possession.  Eventually, in May



            of 1992, while still in possession of the contested property,



            the Cumberland chain filed  for protection and reorganization



            under  Chapter 11  of  the  Bankruptcy  Code,  which  further



            delayed  MEDIC's gaining possession.   Suffice it to say that



            none  of Cumberland's delaying actions had merit, and finally


-2-
                                          2



on  September 3,  1993, nearly  three  years after  acquiring



            legal  title,  MEDIC  obtained  physical  possession  of  the



            premises.



                      Previously, Cumberland had  commenced a state court



            action objecting to the amount of MEDIC's original  pro tanto



            offer and  claiming reimbursement for relocation expenses and



            damages.   MEDIC  removed the  action  to the  United  States



            Bankruptcy  Court for  the District  of Massachusetts,  where



            Cumberland's bankruptcy case was pending.



                      The  bankruptcy  court  found that  Cumberland  was



            entitled to recover  from MEDIC $380,000 as  compensation for



            the value  of the property and $36,850  for relocation costs,



            reduced  by $137,250  for the  rental  value of  its use  and



            occupancy  during  Cumberland's  holdover  on  the  premises,



            therefore judgment was issued for the net amount of $279,600.



            The court allowed MEDIC's rent claim, even though the eminent



            domain statute  did not speak  to a taking entity's  right to



            charge  reasonable rent during a wrongful holdover beyond the



            date  when the  taken premises  must be  vacated.   The court



            disallowed   Cumberland's   claim   for   interest   on   the



            compensation payment, because Cumberland  could have accepted



            the pro tanto payment  and obtained use of the funds  at that



            time.  The decision of the bankruptcy court  was subsequently



            affirmed by the United States District Court for the District



            ofMassachusetts, and fromthat affirmance thisappeal followed.


-3-
                                          3



On   this  appeal,   Cumberland  argues   that  the



            bankruptcy court  erred in  awarding MEDIC  fair market  rent



            during  the  holdover  period  during  which  Cumberland  was



            challenging  the  eminent  domain  proceeding,  erred  in the



            amount of relocation damages awarded  to it, and erred by not



            awarding  damages for  the  authority's  alleged  failure  to



            provide timely and  adequate relocation assistance.   We find



            that none of Cumberland's arguments on appeal merit extensive



            consideration.1  We review the bankruptcy court's findings of



            fact for  clear error  and subject its  rulings of law  to de



            novo review.  T I Fed. Credit Union v. Delbonis, 72 F.3d 921,
                          _____________________    ________



            928 (1st Cir. 1995). 



                                      Discussion
                                      __________



                      We begin  with Cumberland's  claim that  it is  not



            liable for the  use and occupancy charges that the bankruptcy



            court awarded to MEDIC, an issue that we review de novo.  The



            applicable  Massachusetts  eminent   domain  statute  allowed



            Cumberland to  remain on  the premises for  a period  of four



            months after it received the notice of taking.  Mass. Gen. L.



            ch. 79,   8B.  Before exercising its possessory rights, MEDIC



            was  required to  give  Cumberland  a  thirty-day  notice  to



                                
            ____________________



            1.  Cumberland's notice of appeal included a complaint  about

            the  court's  failure  to   grant  interest  to  it   on  the

            compensation  awarded for  the  taking.   We deem  this issue

            waived, as  Cumberland has not  referred to it in  its brief.

            See, e.g., Willhauck  v. Halpin, 953 F.2d 689,  700 (1st Cir.
            ___  ____  _________     ______

            1991)  (issues not  fully presented  in  appellate brief  are

            deemed waived).



                                         -4-
                                          4



vacate,  sent by registered  mail or posted  on the property.



            Mass. Gen. L. ch. 79,  3.



                      The  bankruptcy  court  found  that MEDIC  provided



            notice of  the taking to  Cumberland on October 9,  1990, and



            provided  thirty-day notice of  eviction on January  8, 1991.



            Thus, MEDIC was  within its rights in requiring Cumberland to



            vacate   the  property  by   February  13,  1991.     MEDIC's



            counterclaim to Cumberland's petition for damages sought rent



            for the  period from February  14, 1991, to August  30, 1993,



            when MEDIC finally obtained possession.



                      Although  the taking  statute  does not  address  a



            holdover  occupant's liability for  the fair rental  value of



            its  use  and  occupancy,  the  Massachusetts  regulation  on



            relocation assistance appears to  contemplate charges for use



            and  occupancy rent following a  taking, because it directs a



            taking authority to inform a property owner of the rent to be



            paid  during any  holdover period.  760  C.M.R.    27.03(13).



            MEDIC, in its  January 8,  1991, notice  to vacate,  informed



            Cumberland  that it would seek fair market rent if Cumberland



            remained in possession.



                      The   bankruptcy  court   ruled  that   Cumberland,



            following its failure to vacate  as directed, became a tenant



            at sufferance,  and as  a result MEDIC  was entitled  to rent



            pursuant  to Mass. Gen. L. ch. 186,    3, which provides that



            tenants at sufferance are liable  for rent during the  period


-5-
                                          5



of  continued occupancy after  a demand for  the premises has



            been  made.   It  also  found that  MEDIC's  claim was  fully



            justified  under  a  theory  of  unjust  enrichment,  because



            Cumberland's continued use  of the premises was  profitable. 



            Although we  find no decision  exactly on point,  the Supreme



            Judicial  Court  in  Lowell  Housing  Authority  v.  Save-Mor
                                 __________________________      ________



            Furniture  Stores, Inc., 193 N.E.2d 585, 587 (1963), approved
            _______________________



            a taking authority's claim for use and occupancy charges from



            a tenant who  remained in possession  after a public  housing



            authority  took  the  property  from  the  landlord-owner  by



            eminent  domain.   Cumberland  argues that  as  an owner  its
                                                               _____



            position  is  different from  that  of  a  tenant.   We  find
                                                       ______



            Cumberland's  argument  unconvincing, and  that  Cumberland's



            wrongful holdover does not differ in any relevant regard from



            that of the tenant in Lowell Housing.  See 193 N.E.2d at 587.
                                  ______________   ___



            Because we find that Lowell Housing is  apposite, we conclude
                                 ______________



            that the bankruptcy  court did not err in  awarding MEDIC the



            fair rental value of Cumberland's continued use and occupancy



            of  the premises.   Accordingly, we need  not consider unjust



            enrichment, the second basis for the court's finding.



                      Cumberland next  argues that  the bankruptcy  court



            erred  in failing  to  grant all  of  its claimed  relocation



            expenses, and  again our review  is de  novo.   Specifically,



            Cumberland claims that the court erred in not finding that it



            was  entitled to reimbursement  for the cost  of new gasoline


-6-
                                          6



pumping  equipment  for  its new  location,  for  license and



            inspection fees, and for the cost of certain physical changes



            to its new location.



                      We find no error in the bankruptcy court's award of



            relocation  costs under  Mass. Gen.  L. ch.  79A,    7, which



            provides  that a taking  authority must reimburse  a property



            owner for:



                      1. actual documented  reasonable expenses

                      in  moving   himself,  his   family,  his

                      business,   farm   operation,   or  other

                      personal property; 

                      2.  actual  direct   losses  of  tangible

                      personal property as  a result of  moving

                      or  discontinuing  a   business  or  farm

                      operation,  but not  to exceed  an amount

                      equal  to  the reasonable  expenses  that

                      would have been required to relocate such

                      property, as determined by the relocation

                      agency; and

                      3.   actual   reasonable    expenses   in

                      searching for  a replacement  business or

                      farm.



            Although  the bankruptcy court awarded payment for certain of



            Cumberland's claimed relocation expenses as required by Mass.



            Gen. L.  ch. 79A,   7, it denied Cumberland's request for the



            costs  of obtaining  new  gasoline  pumps,  for  license  and



            inspection fees, and for certain  physical changes to its new



            facility.  Cumberland  urges that the  court erred in  ruling



            these expenses were  not recoverable under Mass.  Gen. L. ch.



            79A,    7 and,  in particular, the  implementing regulations,



            760 C.M.R. 27.09(8), 27.09(13), and 27.09(14).  MEDIC's short



            answer is that MEDIC is  a taking authority governed by Mass.


-7-
                                          7



Gen. L. ch. 121C, and that the relocation payment regulations



            that  Cumberland relies upon apply to authorities governed by



            Mass. Gen. L. ch. 121A  and 121B, but not to 121C  agencies.2



            See 760 C.M.R.  27.01(4) (listing activities and  entities to
            ___



            which  the relocation payment  regulations apply).   We agree



            with  MEDIC, as  did the  district court,  and  conclude that



            Cumberland is entitled  to reimbursement only as  provided in



            Mass. Gen. L.  ch. 79A,   7, and not under the more expansive



            provisions of 760 C.M.R. 27.09.3



                      Finally,  Cumberland  claims  that  the  bankruptcy



            court erred in ruling that MEDIC had fulfilled its relocation



            assistance obligations to Cumberland.  We review this factual


____________________



            2.  The relocation assistance regulations, in contrast to the
                               __________

            relocation  payment regulations,  appear to apply  broadly to
                        _______

            all entities authorized  to take by eminent domain.   See 760
                                                                  ___

            C.M.R. 27.01(4).



            3.  We  note that the  record contains documents  provided by

            MEDIC to Cumberland that seem to promise reimbursement of the

            types  of   expenses  that   the  bankruptcy   court  denied.

            Cumberland's brief, however,  does not contain  any arguments

            based  on estoppel  or  similar  theories.    Therefore  such

            arguments,  whatever their  merit, are  waived.   See,  e.g.,
                                                              ___   ____

            Willhauck, 953 F.2d at 700.  
            _________

                      We  have not considered any of the arguments raised

            by Cumberland  in its  Motion for  Leave to  Present Rebuttal

            Argument Pursuant to Local  Rule 34.1(b).  Cumberland  had an

            opportunity to raise rebuttal arguments in a reply brief, but

            chose  not  to submit  one.    Moreover,  Local Rule  34.1(b)

            pertains  to oral rebuttal during the scheduled argument, and

            does  not  provide  an opportunity  for  further  briefing of

            issues after oral argument. 



                                         -8-
                                          8



finding4 for  clear error,  and we find  no error,  let alone



            clear error, in the bankruptcy court's denial of Cumberland's



            claims   for  damages  due  to  MEDIC's  failure  to  provide



            relocation assistance.  



                      Affirmed.  Costs to appellee.
                      Affirmed.
                      ________


____________________



            4.  Cumberland's  brief could  be read  to  suggest that  the

            bankruptcy   court's  ruling  in  this  regard  was  a  legal

            conclusion concerning an  earlier order of the  Massachusetts

            Superior  Court.    Even though  Cumberland  has  not clearly

            presented that argument,  a de novo review  of the bankruptcy

            court's ruling would yield the same result: no error. 



                                         -9-
                                          9

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