MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2024 ME 50 Docket: Ken-22-53 Argued: October 6, 2022 Decided: July 9, 2024
Panel: STANFILL, C.J., and HORTON, CONNORS, and LAWRENCE, JJ.
STATE OF MAINE et al.
v.
MOOSEHEAD MOUNTAIN RESORT, INC., et al.
STANFILL, C.J.
[¶1] Moosehead Mountain Resort, Inc., appeals from the Superior Court’s
(Kennebec County, Stokes, J.) grant of summary judgment to the State enforcing
restrictive covenants in the Resort’s deed that prohibit timber harvesting on,
and require the Resort to maintain for public use, a ski area. The Resort argues
that the State cannot enforce either covenant because it does not own a parcel
that benefits from the covenants. The Resort also argues that the court erred
in its interpretation of the public use covenant. Finally, the Resort argues that
the court erred in its grant of summary judgment to the State because the public
Although Justice Mead sat at oral argument and participated in the Court’s initial conference, he did not participate further in the development of this opinion. Although Justice Jabar sat at oral argument and participated in the Court’s initial conference, he retired before this opinion was certified. 2
use covenant is unreasonable, the State failed to notify the Resort of its alleged
breach of the public use covenant, and the State is barred from enforcing the
public use covenant by the doctrine of laches. We are unpersuaded by the
Resort’s arguments and affirm the judgment.
I. BACKGROUND
A. Facts
[¶2] The summary judgment record includes the following undisputed
facts, which we view in the light most favorable to the Resort, the nonprevailing
party. See Dorsey v. N. Light Health, 2022 ME 62, ¶ 2, 288 A.3d 386.
[¶3] In 1963, a ski area opened on Big Moose Mountain near Greenville
and Moosehead Lake.1 The ski area opened with four trails and a T-bar lift on
the lower half of the mountain. In 1967, the ski area’s owners installed a double
chairlift to service the upper half of the mountain, increasing the ski area’s
vertical drop from 600 to 1,600 feet. In 1974, the owners donated the ski area,
along with land abutting it and easements benefiting it, to the State.
Then known as the Squaw Mountain Ski Resort, the ski area is now generally called Big Moose 1
Mountain. See History of Squaw Mountain, Friends of the Mountain Moosehead Lake https://skibigmoose.com/history-of-the-ski-area (last visited July 3, 2024). To be clear, the use of “squaw” is offensive. See 1 M.R.S. § 1101(1) (2024). 3
[¶4] The State ran the ski area until 1986. That year, the State sold the
ski area, along with the easements and a portion of the abutting parcel, to the
Big Squaw Mountain Corporation (BSMC). The State’s purpose in selling the
property to a private buyer was to encourage private investment in the
maintenance and improvement of the ski area. Before the sale, BSMC
acknowledged the State’s desire that the ski area be a viable economic resource
in the Moosehead Lake region. The purchase-and-sale agreement therefore
conditioned the conveyance on BSMC replacing the T-Bar with a triple chairlift
and completing at least $260,000 of additional repairs and improvements by
1990.
[¶5] Although the deed did not recite these sale conditions, it did include
the following restrictive covenants:
Timber shall not be harvested from [the ski area] hereby conveyed, except (1) where necessary for trails, lifts, snow-making facilities, construction of transient accommodations and vacation homes for lease or sale, and all related improvements, including roadways, serving the same and the Ski Area and Resort, (2) for firewood or lumber for such resort and improvements, and (3) for the harvest of dead or dying timber or blowdowns.
This conveyance is conditioned upon the continued public use of the Ski Area highlighted on attached Schedule B, which Ski Area includes only the ski trails and lift lines in existence as of the date hereof and further listed on Schedule C hereof. 4
Schedule B appears to be a copy of a map depicting ski trails on Squaw
Mountain Ski Area. Schedule C listed ski lifts and trails on the upper and lower
portions of the ski area.2 Although BSMC originally proposed that these
covenants expire after ten years, the deed does not contain any durational
language.
[¶6] The State retained a small parcel on the summit of the mountain.
The summit parcel includes a fire tower, and the State indicated that it would
limit its use of the summit parcel to the fire tower, radio transmission,
helicopter landings to service the tower, and a hiking trail.
2 Specifically, Schedule C listed the following ski lifts and trails:
A. St. John B. Allagash C. 3000' T-Bar D. Kennebec E. Squaw Brook F. 2000’ T-Bar G. Fitzgerald (Upper) H. Fitzgerald (Lower) I. East Branch of Penobscot J. Penobscot K. Moose River L. Piscataquis M. St. Croix N. 6000’ Double Chair Lift 0. Seboomook P. Canada Falls - 4 acres Q. Pony Lift 5
[¶7] The State also granted BSMC the option to purchase the rest of the
abutting land without any restrictions on use. BSMC exercised that option in
1988.
[¶8] In 1990, BSMC filed for bankruptcy and a creditor foreclosed on the
ski area, the abutting land, and the benefiting easements. The creditor
conveyed the property to a trust, and in 1995 the trust conveyed the property
to the Resort. The deed from the creditor to the trust and the deed from the
trust to the Resort include the same timber harvesting and public use covenants
contained in the deed from the State to BSMC.
[¶9] Prior to purchasing the ski area, the Resort retained an attorney
who informed the Resort of the restrictive covenants in the chain of title. The
Resort’s owner, who works in the real estate industry, did not attempt to
remove the restrictive covenants before the sale.
[¶10] The Resort operated the ski area without incident for almost a
decade. It spent about $1.8 million on the ski area from 1995 to 2004, but never
made a profit. Around 2004 or 2005, the Resort closed the double chairlift
servicing the top half of the ski area after that lift malfunctioned and injured
four people. The Resort has not reopened the lift. 6
[¶11] The ski area was closed from 2009 to 2012. During that time, the
Resort hired a logging company to harvest timber on the abutting land.
Although the Resort’s deed prohibited timber harvesting on the ski area except
to cut trails and for other limited purposes, the logging company harvested
about 170 acres of timber from the ski area. Some—but not all—of this
harvesting was done to cut new trails.
[¶12] In 2013, the Friends of the Mountain, a nonprofit organization,
began operating the lower half of the ski area on a limited basis. In the years
that followed, the Friends spent about $530,000 running the ski area. By all
accounts, the lower half of the ski area has improved significantly under the
Friends’ stewardship.
[¶13] The upper half of the ski area, however, has deteriorated. The
Resort obtained an estimate that repairing the damaged lift would cost
$1 million. The Resort spent about $350,000 on repairs, but ultimately
determined that the lift had to be replaced. The Resort estimates that fully
replacing the lift will cost about $2 million to $2.5 million. 7
B. Procedural History
[¶14] In August 2016, the State filed a complaint in the Superior Court
seeking to enforce the timber harvesting and public use covenants.3 The State
sought declaratory relief, equitable relief, and damages.
[¶15] The Resort moved for summary judgment and judgment on the
pleadings. See M.R. Civ. P. 12(c), 56(b). The court denied the Resort’s motion
in part, identifying several unresolved factual issues. After further discovery,
the State moved for summary judgment. See M.R. Civ. P. 56(a). According to
the State, the undisputed facts establish that the State could enforce the
covenants against the Resort and that the Resort violated the covenants. The
court agreed and granted summary judgment to the State, concluding that the
Resort breached both covenants. With respect to the timber harvesting
restriction, the court ordered the Resort to pay damages of $136,277.64 to the
State, which was the estimated mill value of the timber harvested from the ski
area.
[¶16] The court held an evidentiary hearing to determine damages for
breach of the public use covenant. Following the hearing, the court directed the
The State also alleged that the Resort conducted unlicensed timber harvesting, see 12 M.R.S. 3
§ 685-B(1)(C) (2010), breached a contract with the State, and unjustly enriched itself by encumbering the subject property with mortgages. Those claims are not at issue on appeal. 8
Resort to place $3,831,000 into an escrow account to replace the lift servicing
the top half of the ski area and two smaller lifts, and to bring the trails on the
top half of the ski area back to their pre-2004 condition. The Resort timely
appealed. See M.R. App. P. 2B(c)(1).
II. DISCUSSION
[¶17] On appeal, the Resort does not challenge the amount or calculation
of the court’s damages award. Instead, the Resort focuses on whether the State
was entitled to enforcement and any damages at all. We explain below why we
disagree with each of the Resort’s arguments.
A. Standard of Review
[¶18] “We review the evidence in the summary judgment record in the
light most favorable to [the Resort] to determine, de novo, whether there is any
genuine dispute of material fact and whether the [State is] entitled to a
judgment as a matter of law.” Janusz v. Bacon, 2022 ME 57, ¶ 7, 285 A.3d 288;
see M.R. Civ. P. 56(c). As the plaintiff and moving party, the State has the burden
“to demonstrate that each element of its claim is established without dispute as
to material fact within the summary judgment record.” Cach, LLC v. Kulas, 2011
ME 70, ¶ 8, 21 A.3d 1015 (quotation marks omitted). 9
B. Necessity of a Benefiting Parcel
[¶19] The Resort argues that the State does not have standing to enforce
the covenants because it does not own or use a parcel of land benefited by those
covenants (a “benefiting parcel”).4 The State argues that the covenants are
enforceable even without a benefiting parcel. We agree with the State.
[¶20] The Resort relies on a common law rule preventing the
enforcement of a covenant against subsequent landowners by anyone who did
not own land benefited by that covenant. See Toothaker v. Pleasant, 288 S.W.
38, 42-43 (Mo. 1926); Restatement of Prop. § 537 (Am. L. Inst. 1944); Blasser v.
Cass, 314 S.W.2d 807, 809 (Tex. 1958). In the language of property law, a
person could enforce against subsequent property owners a covenant
“appurtenant” to their land, but not a covenant “in gross.” See Restatement
(Third) of Prop.: Servitudes § 1.5(1)-(2) (Am. L. Inst. 2000);5 Stickney v. City of
4 The Resort also argues that our “stranger to the deed” doctrine prevents the State from enforcing
the covenants because the general public benefits from those covenants. The stranger-to-the-deed doctrine provides that “a reservation to a stranger, meaning an individual who is not a party to the transaction, cannot by its own force pass rights to the stranger.” Midcoast Cohousing Land Acquisition, LLC v. Riverhouse Tr., 2008 ME 70, ¶ 8, 946 A.2d 421. Here, however, the State is enforcing the covenants on its own behalf, which it may do notwithstanding the public’s “right to use the servitude benefit.” Restatement (Third) of Prop.: Servitudes § 2.18 (Am. L. Inst. 2000). The State is not a stranger to the deed. 5“‘Appurtenant’ means that the rights or obligations of a servitude are tied to ownership or occupancy of a particular unit or parcel of land. . . . ‘In gross’ means that the benefit or burden of a servitude is not tied to ownership or occupancy of a particular unit or parcel of land.” Restatement (Third) of Prop.: Servitudes § 1.5 (1)-(2). 10
Saco, 2001 ME 69, ¶¶ 31-32, 770 A.2d 592 (discussing the difference between
easements “appurtenant” and “in gross”).
[¶21] Some jurisdictions have moved away from this common law rule
in favor of the more flexible approach endorsed by the Third Restatement,
which provides, “Ownership of land intended to benefit from enforcement of [a
covenant] is not a prerequisite to enforcement, but a person who holds the
benefit of a covenant in gross must establish a legitimate interest in enforcing
the covenant.” Restatement (Third) of Prop.: Servitudes § 8.1; see, e.g., Lynch v.
Town of Pelham, 104 A.3d 1047, 1055-56 (N.H. 2014). We have cited the Third
Restatement favorably see, e.g., Matteson v. Batchelder, 2011 ME 134, ¶ 14, 32
A.3d 1059; Mabee v. Nordic Aquafarms, Inc., 2023 ME 15, ¶¶ 53-58, 290 A.3d
79; and have recognized that certain servitudes6 in gross, other than covenants
in gross, are enforceable, see Stickney, 2001 ME 69, ¶¶ 31-32, 770 A.2d 592
(easements in gross); Beckwith v. Rossi, 157 Me. 532, 534, 175 A.2d 732, 734
(1961) (profits a prendre). Nonetheless, the enforceability of covenants in
gross remains an issue of first impression in Maine. See Andersen v. Bangor
6“Servitude” is a broad term that encompasses all nonpossessory encumbrances on land, including “easements, irrevocable licenses, profits, and real covenants.” Servitude, Black’s Law Dictionary (11th ed. 2019); see Mabee v. Nordic Aquafarms Inc., 2023 ME 15, ¶ 54, 290 A.3d 79 (defining “servitude” generally as a legal device creating a right or obligation that runs with the land). 11
Hydro‐Elec. Co., No. CV-09-071, 2012 WL 10467424, at *2 n.2 (Me. Super.
Sep. 21, 2012).
[¶22] We understand that there are factors weighing against covenants
in gross. See Waikiki Malia Hotel, Inc. v. Kinkai Props. Ltd. P’ship, 862 P.2d 1048,
1059 (Haw. 1993). First, a covenant in gross limits the value of one parcel of
land without an offsetting increase in the value of other land. See Restatement
of Prop. § 537 cmt. a (“There is a social interest in the utilization of land. That
social interest is adversely affected by burdens placed on the ownership of land
. . . . Unless a burden has some compensating advantage which prevents it from
being on the whole a deterrent to land use and development, the running of the
promise by which it was created is not permitted.”); Thomas E. Roberts,
Promises Respecting Land Use—Can Benefits Be Held in Gross?, 51 Mo.
L. Rev. 933, 944 (1986) (“Before one can depress the value of land conveyed
there must be an offsetting benefit. Requiring a dominant estate provides this
benefit as at least some land may increase in value.”). Second, a covenant in
gross can extend the disfavored power of the “dead hand” by limiting the use of
property in perpetuity. See Gerald Korngold, Privately Held Conservation
Servitudes: A Policy Analysis in the Context of in Gross Real Covenants and
Easements, 63 Tex. L. Rev. 433, 457 (1984). Finally, the owner of land burdened 12
by a covenant in gross may have difficulty locating the beneficiary. See Roberts
at 945; Waikiki Malia Hotel, 862 P.2d at 1059.
[¶23] These concerns fade, however, when the State holds a covenant in
gross. The State can enforce the benefit of a covenant in gross on behalf of the
public, and its interest in the public benefit remains over time. See Richard R.
Powell, 9 Powell on Real Property § 60.04[3][a] at 60-47 to -48 (Michael A. Wolf
ed. 2000). Moreover, unlike a private party, the State is not difficult to locate.
See Middlefield v. Church Mills Knitting Co., 35 N.E. 780, 782 (Mass. 1894)
(recognizing a benefit in gross held by a municipality in part because the
municipality was “immortal[] and locally fixed”). For these reasons, the Third
Restatement favors allowing governments to “enforce servitudes imposed for
their benefit even though they own no specific land to be benefited by
performance of the covenant.” Restatement (Third) of Prop.: Servitudes
§ 2.6 Reporter’s Note.
[¶24] Thus, whatever our reservations may be in allowing private
parties to hold covenants in gross, we do not see a good reason to prohibit the
State from doing so. The State may enforce a restrictive covenant without
demonstrating that it owns a benefiting parcel if that is consistent with the
original covenanting parties’ intent. See Mabee, 2023 ME 15, ¶ 54, 290 A.3d 79 13
(“[A] servitude should be construed in a manner that carries out the purpose
for which it was created.”). The State was the intended beneficiary of the
covenants at issue here. Although neither the deed nor the circumstances
surrounding its creation indicate that the covenants were intended to benefit
the State’s ownership or use of a benefiting parcel, the State has a sufficiently
cognizable interest to enforce those covenants.7
C. Construction of the Public Use Covenant
[¶25] The Resort argues that the deed only requires that the ski area be
held open for “public use,” and does not specifically require the Resort to keep
the top half of the ski area open.8 Relatedly, the Resort argues that any
ambiguity should be resolved in favor of the free use of property and against
7 The Superior Court also held that “if the State is required to have an abutting, benefitted parcel
in order to enforce the deed restrictions, it does in fact own such a parcel, namely the Summit Parcel.” Nothing in the summary judgment record indicates that the State created the covenants at issue here to benefit its ownership or occupancy of the summit parcel. Rather, the State created the public use and timber harvesting restrictions to benefit the general public by allowing for outdoor recreation opportunities. Because we hold that the State is not required to have a benefiting parcel, we need not address this conclusion further. 8We do not construe the Resort’s argument on this point as a challenge to the relief ordered by the Superior Court. The Resort does not argue, for example, that the evidence at the damages hearing was insufficient to support the court’s damages award. Cf. Brown v. Compass Harbor Vill. Condo. Ass’n, 2020 ME 44, ¶¶ 19-26, 229 A.3d 158 (reviewing the sufficiency of evidence supporting court’s award of damages for breach of contract). Because we were not asked to do so by the parties, we do not address the propriety of the specific relief ordered by the court. See Holland v. Sebunya, 2000 ME 160, ¶ 9 n.6, 759 A.2d 205 (“The failure to mention an issue in the brief or at argument is construed as either an abandonment or a failure to preserve that issue.”). 14
the State. The State counters that the Superior Court properly interpreted the
deed language. Again, we agree with the State.
[¶26] We recently explained how we interpret restrictive covenants:
The interpretation of a deed containing a restrictive covenant presents a question of law that we consider de novo. The cardinal rule in the interpretation and construction of deeds, as in the case of any contract, is to seek to ascertain the intention of the parties. In determining the intent of the parties to the deed, we look at the instrument as a whole.
In construing language within a deed, we first give words their plain and ordinary meaning to determine if they create any ambiguity. The ordinary or plain meaning of a term within a restrictive covenant is determined by its dictionary definition if the covenant itself does not define the term. If the language of a deed is unambiguous, it will guide interpretation of the parties’ intent. If language in a deed is ambiguous, meaning that it is susceptible of multiple interpretations and the intention of the parties to the deed is in doubt, then extrinsic evidence may be introduced to determine the parties’ or grantor’s intent.
Morgan v. Townsend, 2023 ME 62, ¶¶ 17-18, 302 A.3d 30 (alterations, quotation
marks, and citations omitted).
[¶27] If extrinsic evidence does not clear up an ambiguity, we apply the
rules of construction of deeds. Id. ¶ 18. Those rules direct us to give effect to
the parties’ intent without violating public policy and, “[a]mong reasonable
interpretations,” prefer “that which is more consonant with public policy.”
Restatement (Third) of Prop.: Servitudes § 4.1; see Morgan, 2023 ME 62, ¶ 18,
302 A.3d 30. Public policy favors “the free use of property,” Morgan, 2023 ME 15
62, ¶ 18, 302 A.3d 30 (quotation marks omitted), so we typically interpret
ambiguous deed restrictions narrowly and against the grantor, Beckerman v.
Conant, 2017 ME 142, ¶ 17, 166 A.3d 1006. However, that rule “does not apply
when the grant is from the sovereign and is not purely a commercial
transaction.” Cushing v. State, 434 A.2d 486, 500 (Me. 1981). To the contrary,
such grants are construed favorably to the sovereign and, by extension, to the
public. See id.
[¶28] The public use covenant at issue here provides,
This conveyance is conditioned upon the continued public use of the Ski Area highlighted on attached Schedule B, which Ski Area includes only the ski trails and lift lines in existence as of the date hereof and further listed on Schedule C hereof.
[¶29] The Resort’s 1995 deed does not define the term “public use,” but
the 1986 release deed from the State to BSMC—which is in the Resort’s chain
of title—does define “public purposes.” The release deed states that the
conveyance is made in accordance with a Financial Order which determined
that the conveyance was to be done “exclusively for public purposes.”9 The
release deed explains,
9 Because the deed specifically references the Financial Order, we may consider it without concluding that the deed language is ambiguous. See Gravison v. Fisher, 2016 ME 35, ¶ 38, 134 A.3d 857 (reviewing a referenced subdivision plan to interpret the language of the deed) abrogated on other grounds by Dupuis v. Ellingwood, 2017 ME 132, ¶ 9 n.4, 166 A.3d 112; see also 328 Owners Corp. v. 330 W. 86 Oaks Corp., 865 N.E.2d 1228, 1234 (N.Y. 2007) (concluding that because the deed “derives 16
Without limiting the definition of “public purposes,” it is expressly understood that “public purposes” shall include the maintenance, expansion, and operation of the Ski Area and Resort on the premises hereby conveyed . . . .
Thus, the release deed makes clear the parties’ intent that BSMC and its
successors maintain, operate, and even expand the ski area.
[¶30] Next, we note that “public use” is modified by the word
“continued,” indicating that the type of public use required is the same public
use that existed prior to BSMC’s purchase of the ski area. See Continue, New
Oxford American Dictionary (3d ed. 2010) (defining “continued,” when used
with an object, as “carry[ing] on with (something one has begun)”); see also
Continue, Webster’s New College Dictionary (5th ed. 2016) (defining “continue”
as, inter alia, “to go on in a specified course of action or condition; persist” and
further explaining that “continue . . . stresses uninterrupted existence rather
than duration” (emphasis omitted)). In other words, the deeds required that
the public use provided for when the State owned the ski area continue.
[¶31] Finally, the deeds state that they are conditioned on the continued
public use of “the Ski Area.” According to the deeds, “the Ski Area” includes
specifically the trails and lifts listed in Schedule C appended to the deeds. As a
all its validity” from a referenced statute, the statute’s “provisions must be construed into and with the deed” (quotation marks omitted)). 17
result, we read the deed language to reserve a right in the public to use the trails
and lifts itemized in the deeds in the manner that they had been used prior to
BSMC’s ownership, for skiing and similar recreational activities. The
permanent closure of a ski lift or trail is inconsistent with the existence of this
right. The covenants therefore impose at least some obligation on the Resort
to maintain and operate the trails and lifts listed in Schedule C.
[¶32] Because the deed language does not clearly define the scope of that
obligation, we look to extrinsic evidence of the parties’ intent to resolve that
ambiguity. See Morgan, 2023 ME 62, ¶ 18, 302 A.3d 30. The record here
indicates that the parties intended for BSMC and its successors to make
reasonable efforts and investments to keep the whole ski area open for skiing.
It is undisputed that the State sought a private buyer for the ski area as a
strategy to encourage private investment in the maintenance and improvement
of the ski area. It is also undisputed that, before the sale, BSMC acknowledged
the State’s desire for the ski area to be a viable economic resource in the
Moosehead Lake region. Additionally, in the purchase and sale agreement the
State required BSMC to make specific repairs and improvements to the ski area.
Although those specific requirements were not recited in the release deed, they
are relevant evidence of the types of maintenance and improvement 18
obligations the parties envisioned when they agreed to the more general public
use covenant that does appear in the deed.
[¶33] Like the repairs and improvements contemplated by the original
covenanting parties in 1986, an operating lift servicing the upper half of the ski
area is necessary to keep the whole ski area open for public use today.
Moreover, such a lift was specifically listed in Schedule C, which was attached
to and incorporated in the deed. While the Resort initially attempted to repair
or replace the double chairlift servicing the top half of the ski area, it abandoned
those efforts. The entire upper half of the ski area has been closed for two
decades and has fallen into disrepair. 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.”
D. Enforceability in Equity of the Public Use Covenant
[¶34] Finally, the Resort argues that, if the public use covenant requires
it to repair and reopen the top half of the ski area, that requirement is
unenforceable in equity because (1) it is unreasonable, (2) the State did not
notify the Resort that it had an affirmative obligation to make repairs, and
(3) the State is barred by the doctrine of laches from enforcing the public use
requirement. The State argues that the public use requirement is reasonable, 19
the Resort had notice of its requirements, and laches is inapplicable here. Once
again, we agree with the State.
1. Reasonableness
[¶35] “A restrictive covenant will be enforced in equity only if it is
reasonable under the circumstances.” Green v. Lawrence, 2005 ME 90, ¶ 11, 877
A.2d 1079. Reasonableness is a low bar; “use restrictions on property are valid
so long as there is some rational justification for the restriction.” Mabee, 2023
ME 15, ¶ 55, 290 A.3d 79 (alteration and quotation marks omitted).
[¶36] The Resort argues that the public use covenant is unreasonable
because it requires the Resort to invest millions of dollars into a ski area that
has never been profitable. We construe this as an argument that the public use
covenant “imposes an unreasonable restraint on alienation.” Restatement
(Third) of Prop.: Servitudes § 3.1(3); see id. §§ 3.4-3.5.
[¶37] A restrictive covenant may directly impose an unreasonable
restraint on alienation if the covenant explicitly limits the conditions under
which the burdened property may be sold. See Low v. Spellman, 629 A.2d 57,
58-59 (Me. 1993); Restatement (Third) of Prop.: Servitudes § 3.4 & cmt. b. The
public use covenant here does not limit the conditions under which the
property may be sold; the Resort is free to sell the ski area whenever it chooses 20
to whomever it chooses. It need not ask the State or anyone else for permission
to do so, and it may transfer its entire interest, or any portion thereof. The
public use covenant therefore does not directly impose an unreasonable
restraint on alienation.
[¶38] A restrictive covenant may also indirectly impose an unreasonable
restraint on alienation if it “lacks a rational justification.” Restatement (Third)
of Prop.: Servitudes § 3.5(2); see Mabee, 2023 ME 15, ¶ 55, 290 A.3d 79. A
restrictive covenant is not rendered unreasonable, however, merely “by
limiting the use that can be made of property, by reducing the amount
realizable by the owner on sale or other transfer of the property, or by
otherwise reducing the value of the property.” Restatement (Third) of Prop.:
Servitudes § 3.5(1). Nor is a restrictive covenant rendered unreasonable
merely because it requires “ongoing affirmative activity on the part of the
promisors,” including ongoing maintenance. Day v. McEwen, 385 A.2d 790, 793
(Me. 1978).
[¶39] We therefore do not agree with the Resort that the public use
covenant constitutes an indirect unreasonable restraint on alienation. That
restriction is sufficiently justified by the State’s interest in fostering economic
development and outdoor recreation in the Moosehead Lake region. The 21
Resort is a sophisticated business entity that purchased the ski area, subject to
the public use covenant, in an arm’s-length transaction. It cannot escape on the
grounds of unreasonableness the obligations that it voluntarily incurred.
2. Notice
[¶40] A restrictive covenant cannot be enforced in equity against a
subsequent landowner who lacks notice of the covenant. See Wykeham Rise,
LLC v. Federer, 52 A.3d 702, 715 (Conn. 2012). The Resort argues that it is
therefore entitled to notice of the State’s specific interpretation of the public
use covenant. We disagree; the notice requirement was met here because the
covenants were contained in the Resort’s chain of title and in the deed to the
Resort.10 No more is required.
3. Laches
[¶41] “Laches is negligence or omission seasonably to assert a right. It
exists when the omission to assert the right has continued for an unreasonable
and unexplained lapse of time, and under circumstances where the delay has
been prejudicial to an adverse party, and where it would be inequitable to
enforce the right.” Brochu v. McLeod, 2016 ME 146, ¶ 13, 148 A.3d 1220
(quotation marks omitted). The Resort notes that the lift servicing the top half
10 Moreover, before the sale, the Resort’s attorney specifically told the Resort that the covenants
were contained in the chain of title. 22
of the ski area stopped operating in 2004, and that prior owners of the ski area
arguably also violated the public use requirement, but the State did not seek to
enforce that covenant against the Resort until 2016. Therefore, according to
the Resort, the State is barred by the doctrine of laches from enforcing the
public use covenant, or there is at least a genuine issue of material fact on that
point.
[¶42] To avoid summary judgment on the basis of an affirmative defense
such as laches, the non-moving party must offer “admissible evidence in
support of that defense by alleging facts . . . sufficient to establish that the
summary judgment record contains disputed issues of fact to generate [the]
defense[].” Lubar v. Connelly, 2014 ME 17, ¶ 50, 86 A.3d 642 (quotation marks
omitted); see also Quirk v. Quirk, 2020 ME 132, ¶ 11, 241 A.3d 851 (describing
laches as an affirmative defense). 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. Thus, the Resort did not generate a genuine issue as to
a laches defense. 23
III. CONCLUSION
[¶43] The State’s conveyance of the land on Big Moose Mountain to the
Resort’s predecessor-in-interest was done for public purposes, including the
operation and maintenance of the existing ski area. The deed’s restrictive
covenants required the continued public use of the ski area and limited the
grantee’s right to harvest timber. Those restrictive covenants are enforceable
by the State on behalf of the public without regard to the existence of a
benefiting parcel of land.
The entry is:
Judgment affirmed.
Elliott R. Teel, Esq., Teel Law Office, Portland, and Jonathan M. Flagg, Esq. (orally), Flagg Law, PLLC, Portsmouth, New Hampshire, for appellant Moosehead Mountain Resort, Inc.
Aaron M. Frey, Attorney General, and Lauren E. Parker, Asst. Atty. Gen. (orally), Office of the Attorney General, Augusta, for appellees State of Maine et al.
Kennebec County Superior Court docket number CV-2016-147 FOR CLERK REFERENCE ONLY