Title: Littlebrook Airpark Condo. Ass'n v. Sweet Peas, LLC

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
 
 
 
     
    Reporter of Decisions 
Decision: 
2013 ME 89 
Docket: 
Yor-13-26 
Argued: 
September 10, 2013 
Decided: 
October 31, 2013 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and 
JABAR, JJ. 
 
 
LITTLEBROOK AIRPARK CONDOMINIUM ASSOCIATION 
 
v. 
 
SWEET PEAS, LLC, et al. 
 
 
SILVER, J. 
 
[¶1]  This matter comes before us pursuant to M.R. App. P. 24(c) on report 
from the Superior Court (York County, Fritzsche, J.).  Littlebrook Airpark 
Condominium Association (“the Association”) brought this action seeking, among 
other things, a declaratory judgment clarifying the rights of the parties pursuant to 
a lease of real property.  The reported question concerns the effectiveness of an 
unrecorded amendment to a lease that violates a recorded mortgage covenant.  The 
Superior Court concluded that the lease amendment was effective, notwithstanding 
the mortgage covenant and a subsequent foreclosure.  We discharge the report. 
I.  BACKGROUND 
[¶2]  The following facts are drawn from the summary judgment record.  On 
March 18, 1999, John Hardy leased part of the land comprising Littlebrook Airport 
 
2 
in Eliot to Littlebrook Airport Development Co., Inc. (“LADC”), for a term of 
twenty years.  The stated purpose of the lease was to allow for the maintenance and 
sale of hangar units on the property as condominium units for the storage of private 
aircraft.  The same day, Jean M. Hardy, John Hardy’s wife and the president of 
LADC, executed a Declaration of Condominium submitting the leased property to 
the Maine Condominium Act, 33 M.R.S. §§ 1601-101 to 1604-118 (2012).  Both 
the lease and the declaration were recorded in the York County Registry of Deeds.1  
By a recorded deed dated October 17, 2000, John Hardy conveyed his interest in 
the leased property to himself and Jean Hardy as joint tenants.  John Hardy died on 
November 15, 2000, leaving Jean Hardy as the sole surviving owner of the leased 
property. 
[¶3]  By a recorded deed dated June 30, 2005, Jean Hardy sold the leased 
property to Littlebrook Ventures, LLC.  She also assigned to Littlebrook Ventures 
her interest in the lease, as successor to John Hardy.  James Barrett was the sole 
member of Littlebrook Ventures.  Simultaneously with the conveyance from Jean 
Hardy, Littlebrook Ventures executed and delivered to Hardy a mortgage deed for 
the leased property to secure the purchase price.  Pursuant to the mortgage, which 
was recorded, Littlebrook Ventures agreed “not to . . . modify any . . . leases or 
                                         
1  The lease was amended later in 1999 in a manner not relevant to this appeal. 
 
 
3 
tenancies [on the property] . . . in whole or in part, without [Hardy’s] prior written 
consent.”  Both the deed and the mortgage stated that the conveyance was subject 
to the lease and the declaration as amended in 1999.  As further security, 
Littlebrook Ventures assigned to Hardy its interest in the lease.  In the recorded 
assignment, Littlebrook Ventures agreed “not to alter, modify or change the terms 
of [any leases on the property] . . . without the prior written consent of [Hardy].” 
[¶4]  On the same day, LADC, through Hardy as its president, assigned its 
rights as declarant of the condominiums pursuant to the Maine Condominium Act 
to Windmill USA, LLC (“Windmill”).  Barrett was the sole member of Windmill.  
LADC also assigned its interest in the lease to Windmill, which assumed all of 
LADC’s obligations as tenant. 
[¶5]  Windmill, through Barrett as its sole member, executed a document 
styled 
as 
an 
“Amendment 
to 
Declaration 
of 
Condominium,” 
dated 
October 11, 2005.  The document, which was recorded, purports to extend the term 
of the lease to 2059—an additional forty years beyond the original twenty-year 
term—and to give unit owners the right to use the runway on the property without 
a fee.  Two days later, on October 13, 2005, Littlebrook Ventures and Windmill, 
through Barrett as sole member of both entities, signed an “Addendum to Lease” 
purporting to amend the lease in accordance with the declaration amendment by 
 
4 
extending the term of the lease and allowing use of the runway without a fee.  The 
lease amendment was not recorded, and Hardy did not give prior written consent. 
[¶6]  Littlebrook Ventures conveyed the property back to Hardy by a deed in 
lieu of foreclosure dated December 15, 2005, and recorded on March 31, 2006.  
The deed did not discharge the mortgage or reference the 2005 amendments, but 
stated that it was subject to the declaration and lease as amended in 1999.  In 
July 2006, Hardy enforced her statutory power of sale and purchased the property 
at the foreclosure sale.  Hardy then conveyed the property to Sweet Peas, LLC, via 
a quitclaim deed without covenants dated October 25, 2006.  This conveyance was 
explicitly made subject to the 2005 declaration amendment, but not the 2005 lease 
amendment.  Sweet Peas later executed a mortgage in Hardy’s favor. 
[¶7]  On July 8, 2011, the Association filed a nine-count complaint against 
Sweet Peas, naming Hardy as a party in interest.  One of the counts sought a 
declaratory judgment that the 2005 amendments to the lease and declaration were 
effective and binding against Sweet Peas.  The other counts allege breach of 
contract, conversion, violation of airport standards, harassment or nuisance, 
tortious interference with a contract, and retaliatory eviction.  These counts allege, 
among other things, that Sweet Peas has failed to maintain and repair the airport 
facilities; interfered with the Association’s use of the airport facilities; improperly 
demanded reimbursement for expenses; removed a windsock that the Association 
 
5 
had installed on the property; violated various legal provisions regarding the 
operation of airports; advised the individual hangar unit owners to discontinue their 
use of airport facilities and called the police on those who persisted; interfered with 
the Association’s relationship with the unit owners by communicating with the unit 
owners directly; and retaliated against the Association and unit owners in an 
attempt to cause an early termination of the lease after negotiations for the sale of 
the airport to the Association broke down.  Sweet Peas filed a counterclaim against 
the Association as well as a third-party complaint against several individual unit 
owners.  These claims allege that the Association and the named unit owners 
caused damage to the runway and tarmac, and wrongfully withheld rent.  On 
October 31, 2011, Sweet Peas and Hardy both moved for partial summary 
judgment on the declaratory judgment count of the Association’s complaint.  The 
Association opposed the motions and filed a cross-motion for partial summary 
judgment on that count. 
[¶8]  After a hearing on the cross-motions for summary judgment, the court 
entered judgment in favor of the Association on April 26, 2012.  The court 
concluded that “the October 11, 2005 amendment to declaration of condominium 
and October 13, 2005 addendum to lease are valid and enforceable.”2  The court 
                                         
2  On May 7, 2012, Sweet Peas and Hardy moved to alter or amend the judgment pursuant to 
M.R. Civ. P. 59(e).  On August 22, 2012, the court granted the motion to the extent that it sought 
correction of typographical errors in the original opinion, but otherwise denied the motion. 
 
6 
reasoned that “Barrett’s actions constitute [an] act of default but do not void the 
lease amendments” as against the Association because “there was no agreement 
where the [Association] subordinated its rights to . . . Hardy as the mortgage 
holder.”  On January 7, 2013, at the request of Sweet Peas and Hardy, and over the 
Association’s objection, the court reported the case to the Law Court pursuant to 
M.R. App. P. 24(c) for determination of “the legal question with respect to the 
40 year lease amendment and whether or not the lease amendment survived the 
foreclosure.”  The court acknowledged that “a Law Court decision would not ‘in at 
least one alternative finally dispose of the action,’” and that Rule 24(c) should be 
used “sparingly,” but indicated its belief that “the issues are of sufficient doubt and 
importance and would resolve the central dispute in this case.” 
II.  DISCUSSION 
[¶9]  “Rule 24 permits parties, in limited circumstances, to obtain review 
from the Law Court prior to obtaining a final judgment from the trial court.”  
Liberty Ins. Underwriters, Inc. v. Estate of Faulkner, 2008 ME 149, ¶ 5, 
957 A.2d 94.  We have discretion to accept or reject a report pursuant to Rule 24, 
see Despres v. Moyer, 2003 ME 41, ¶ 14, 827 A.2d 61, and have indicated that 
Rule 24 “should be used sparingly,” Bank of Am., N.A. v. Cloutier, 2013 ME 17, 
¶ 8, 61 A.3d 1242; see also Liberty Ins. Underwriters, 2008 ME 149, ¶ 5, 
957 A.2d 94.  Rule 24(c) provides: 
 
7 
If the trial court is of the opinion that a question of law involved in an 
interlocutory order or ruling made by it ought to be determined by the 
Law Court before any further proceedings are taken, it may on motion 
of the aggrieved party report the case to the Law Court for that 
purpose and stay all further proceedings except such as are necessary 
to preserve the rights of the parties without making any decision 
therein. 
 
M.R. App. P. 24(c).  When the trial court reports questions for review, we 
independently determine whether acceptance of the report “is consistent with our 
basic function as an appellate court, or would improperly place us in the role of an 
advisory board.”  Cloutier, 2013 ME 17, ¶ 8, 61 A.3d 1242; see also Liberty Ins. 
Underwriters, 2008 ME 149, ¶ 6, 957 A.2d 94.  In making this determination, we 
consider the following factors: (1) whether “the question reported is of sufficient 
importance and doubt to outweigh the policy against piecemeal litigation”; 
(2) whether “the question might not have to be decided because of other possible 
dispositions”; and (3) whether “a decision on the issue would, in at least one 
alternative, dispose of the action.”  Cloutier, 2013 ME 17, ¶ 8, 61 A.3d 1242; 
see also Liberty Ins. Underwriters, 2008 ME 149, ¶¶ 7-9, 957 A.2d 94; Despres, 
2003 ME 41, ¶ 14, 827 A.2d 61. 
A. 
Sufficient Importance and Doubt 
[¶10]  The final judgment rule “promotes efficiency and reduces costs by 
requiring parties to obtain a final judgment at the trial level before seeking 
appellate review.”  Liberty Ins. Underwriters, 2008 ME 149, ¶ 5, 957 A.2d 94.  
 
8 
Because Rule 24 is an exception to the final judgment rule, we will accept a report 
only if the significance of the issue presented outweighs the policy underlying that 
rule.  See Cloutier, 2013 ME 17, ¶ 8, 61 A.3d 1242; see also Guardianship of I.H., 
2003 ME 130, ¶ 6, 834 A.2d 922 (“We consider whether our acceptance of the 
report will encourage piecemeal litigation.”)  In making this determination, we 
have considered whether the issue is novel and capable of repetition.  See, e.g., 
Baker v. Farrand, 2011 ME 91, ¶ 9, 26 A.3d 806; Liberty Ins. Underwriters, 
2008 ME 149, ¶¶ 7, 11, 957 A.2d 94; York Register of Probate v. York Cnty. 
Probate Ct., 2004 ME 58, ¶ 12, 847 A.2d 395.  We have rejected reports “when the 
issue is not novel, when it can be resolved by applying well established rules of 
law, and when it does not require statutory interpretation.”  Despres, 2003 ME 41, 
¶ 14, 827 A.2d 61; see also Guardianship of I.H., 2003 ME 130, ¶ 6, 834 A.2d 922 
(“When the answer to a reported question is readily apparent from the record, we 
discharge the report as improvidently granted by the trial court.”). 
[¶11]  The parties have not cited, and we cannot locate, any Maine authority 
squarely addressing the precise issue of whether an unrecorded lease amendment 
prohibited by a prior recorded mortgage is effective as between the mortgagee and 
a third party following a foreclosure on the property.  Although novelty of an issue 
can meet the requirement of importance and doubt, see Liberty Ins. Underwriters, 
2008 ME 149, ¶ 7, 957 A.2d 94, we think that this issue may be resolved on the 
 
9 
basis of broader principles of law.  This factor therefore weighs against acceptance 
of the report.  See Despres, 2003 ME 41, ¶ 14, 827 A.2d 61; Guardianship of I.H., 
2003 ME 130, ¶ 6, 834 A.2d 922. 
B. 
Other Possible Dispositions 
[¶12]  We will not accept a report if the question reported “might not have to 
be decided because of other possible dispositions.”  Cloutier, 2013 ME 17, ¶ 8, 
61 A.3d 1242; see also Despres, 2003 ME 41, ¶ 14, 827 A.2d 61.  “If, for example, 
fact-finding or determination of a preliminary issue such as the statute of 
limitations may render the reported question moot, the question may be 
discharged.”  Liberty Ins. Underwriters, 2008 ME 149, ¶ 8, 957 A.2d 94.  Because 
there do not appear to be any dispositive threshold issues and the parties have filed 
cross-motions for summary judgment on largely undisputed facts, it does not 
appear that further proceedings would likely render the reported question moot.  
See Cloutier, 2013 ME 17, ¶¶ 9-10, 61 A.3d 1242 (accepting a reported question 
where “given the . . . pending motion for summary judgment, and the apparent 
absence of disputed facts in the record, it did not appear that resolution of the 
question could be avoided.”).  This factor therefore weighs in favor of acceptance 
of the report. 
 
10 
C. 
Dispose of the Action in One Alternative 
[¶13]  M.R. App. P. 24(a) requires that “the decision [on the reported 
question] would in at least one alternative finally dispose of the action.”  Although 
Rule 24(c) has no similar language, we nevertheless consider this factor in 
deciding whether to accept a Rule 24(c) report.  See Liberty Ins. Underwriters, 
2008 ME 149, ¶¶ 7-9, 957 A.2d 94; see also Alexander, Maine Appellate Practice 
§ 24.1 at 191 (4th ed. 2013) (“[Although] Rule 24(c) does not explicitly require a 
determination that . . . the report will, in at least one alternative, finally dispose of 
the action, . . . precedent establishes that . . . [this] prerequisite[] govern[s] Law 
Court consideration of Rule 24(c) reports.”).  In discussing former M.R. 
Civ. P. 72(c), the predecessor to Rule 24(c), see Despres, 2003 ME 41, ¶ 14 n.2, 
827 A.2d 61, we have indicated that “the reporting of an interlocutory issue is not 
strictly limited to those cases in which a decision by the Law Court would, in at 
least one alternative, dispose of the action, [but] certainly this fact would be 
relevant to the trial court in assessing whether to report an issue pursuant to 
Rule 72(c) and to us in deciding whether to accept the report,” Meiners v. Aetna 
Cas. & Sur. Co., 663 A.2d 6, 8 (Me. 1995); see also Morris v. Sloan, 
1997 ME 179, ¶ 7, 698 A.2d 1038 (“Although Rule 72(c) does not require us to do 
so, we may take into account whether our decision will in at least one alternative 
dispose of the action.” (quotation marks omitted)).  In considering this factor, “[i]t 
 
11 
is sufficient that there be one possible avenue for decision that would dispose of 
the action.”  Liberty Ins. Underwriters, 2008 ME 149, ¶ 9, 957 A.2d 94. 
[¶14]  Here, because the original lease term has not yet expired, most of the 
remaining counts of the Association’s complaint—including counts alleging 
damage to or failure to maintain airport facilities, interference with the 
Association’s relationship with the individual unit owners, and conversion of a 
windsock—do not turn on the validity of the lease amendment.  Indeed, the lease 
amendment would impact the remaining counts only to the extent that they involve 
fees for use of the runway, which the lease amendment purported to eliminate.  As 
the trial court found, “a Law Court decision would not ‘in at least one alternative 
finally dispose of the action.’”  This factor therefore weighs against acceptance of 
the report. 
D. 
Conclusion 
 
[¶15]  On balance, we conclude that acceptance of the report in this case 
would not be “consistent with our basic function as an appellate court” and “would 
improperly place us in the role of an advisory board.”  See Cloutier, 2013 ME 17, 
¶ 8, 61 A.3d 1242.  We therefore exercise our discretion to reject the report.  See 
Despres, 2003 ME 41, ¶ 14, 827 A.2d 61.  We take this opportunity to reiterate that 
Rule 24 should be used sparingly, in accordance with the analysis we have 
 
12 
articulated.  See Cloutier, 2013 ME 17, ¶ 8, 61 A.3d 1242; Liberty Ins. 
Underwriters, 2008 ME 149, ¶¶ 5, 7-9, 957 A.2d 94. 
The entry is: 
 
Report discharged.  Remanded for further 
proceedings consistent with this opinion. 
 
__________________________________ 
 
On the briefs: 
 
Gene R. Libby, Esq., Libby O’Brien Kingsley & Champion, LLC, 
Kennebunk, for appellants Sweet Peas, LLC and Jean M. Hardy 
 
James A. Hopkinson, Esq., and Gerald B. Schofield, Hopkinson & 
Abbondanza, P.A., Portland, for appellee Littlebrook Airpark Condominium 
Association 
 
 
At oral argument 
 
Gene R. Libby, Esq., for appellants Sweet Peas, LLC and Jean M. Hardy 
 
James A. Hopkinson, Esq., for appellee Littlebrook Airpark Condominium 
Association 
 
 
 
York County Superior Court docket number CV-2011-148 
FOR CLERK REFERENCE ONLY