Opinion ID: 2353245
Heading Depth: 2
Heading Rank: 2

Heading: Challenges to the Validity of the Contract

Text: [¶ 16] Mason and Johnson contend that the purchase and sale agreement is void because the City failed to comply with statutes, ordinances, the City Charter, and a City Order; property dedicated to a specific public purpose may be held only for such a public purpose; the ad hoc committee lacked a formal charge and acted outside of public proceedings; the developer received preferential treatment; and the City contracted with an entity other than the entity authorized by the City Council. [¶ 17] The LLC and the City argue that the City was not required to perform all steps necessary to close the school before entering into a conditional purchase and sale agreement. According to the LLC and the City, in the event those conditions cannot be fulfilled, the transfer will not proceed, and the agreement accounts for this possibility. The LLC and the City contend that the City Charter and Code of Ordinances do not impose any restrictions on the manner of contracting for the sale of City property. They further contend that Mason and Johnson failed to preserve their argument that the property was devoted to a public use, and that this argument relies on the cy pres doctrine, which is inapplicable. Finally, the LLC and the City argue that Mason and Johnson have failed to establish any procedural errors that would invalidate the conditional purchase and sale agreement. [1] [¶ 18] Because the facts are stipulated, we review de novo the legal issues presented to the Superior Court. See Christian Fellowship & Renewal Ctr. v. Town of Limington, 2006 ME 44, ¶ 9, 896 A.2d 287, 291. Any issue not raised to the Superior Court is not preserved for appellate review. Bickford v. Onslow Mem'l Hosp. Found., Inc., 2004 ME 111, ¶¶ 7-8, 855 A.2d 1150, 1154. Examining each argument Mason and Johnson have raised on appeal, the relevant inquiry is whether any defect they purport to identify invalidates the contract between the City and the LLC.
[¶ 19] Section 4102 prescribes the conditions that must exist before a school administrative unit may close a school building. 20-A M.R.S. § 4102. Because the school closure was only anticipated at the time the City and the LLC executed the contract, these requirements had not yet become relevant. There is nothing in this statute that prohibits a city from entering into a purchase and sale agreement in anticipation of a school closure, conditioned upon compliance with the statute. See Murray v. Inhabitants of Lincolnville, 462 A.2d 40, 42-43 (Me.1983).
[¶ 20] The City Charter outlines the powers and duties of the City Council: The administration of all the fiscal, prudential and municipal affairs of the city, except as otherwise provided by this Charter, shall be and are vested in one (1) body called the city council. All members of the council shall be qualified voters of the city, and shall be sworn in the manner hereinafter prescribed. The city council shall exercise its powers in the manner hereinafter provided. Augusta, Me., City Charter, art. II, § 4 (2006). Mason and Johnson contend that this provision was violated because, without an appraisal or a full and accurate legal description of the property, the City Council could not make accurate determinations of the value and extent of the land being sold. [¶ 21] It is unclear how the lack of an appraisal or a legal description offends section 4 of article II, which provides a general grant of authority to the City Council. Here, the City Council acted within the scope of its duties to administer the fiscal, prudential, and municipal affairs of the City pursuant to the City Charter when it approved the execution of a conditional contract that included a general description of the property to be sold and a process for potentially adjusting the purchase price or terminating the contract based on a future appraisal.
[¶ 22] Section 2-293 of the City's Code of Ordinances provides a process for competitive sealed bidding for certain City contracts: All contracts of the city for purchases of supplies or construction at or in excess of three thousand dollars ($3,000.00) and for the purchase of services at or in excess of three thousand dollars ($3,000.00) shall be awarded by competitive sealed bidding except as otherwise provided in this article. Augusta, Me., Code of Ordinances § 2-293(a) (2006). When competitive sealed bidding is required, [t]he City Council shall be notified at a regular Council meeting of all pending purchases of supplies, construction and/or purchase of services. Augusta, Me., Code of Ordinances § 2-306 (2006). [¶ 23] The City complied with these Ordinances in the process of obtaining the bids for the redevelopment of the Cony property. That other purchased services might have been obtained without competitive bidding does not affect the validity of the purchase and sale agreement with the LLC. Even if the city manager executed the contracts for services with the surveyor or the planning and design consultant without competitive sealed bidding, there are no facts in the record demonstrating any link between those services and the execution or terms of the purchase and sale agreement. Although ordinance violations might affect the validity of the service contracts themselves, such violations are not grounds for invalidating the purchase and sale agreement at issue here.
[¶ 24] City Council Order 466, dated May 2, 1994, directed that City-owned land be examined by the Conservation Commission: WHEREAS, the Augusta City Council has indicated on numerous occasions a desire to have the Augusta Conservation Commission examine and make recommendations regarding any and all land owned by the municipality which may be offered for sale, NOW, THEREFORE BE IT ORDERED, That all city owned land be directed to the Conservation Commission for their examination and recommendations. BE IT FURTHER ORDERED, that in the event the City Manager deems it necessary that a certain parcel of property should take precedence that the Conservation Commission be notified to that effect and that said property be brought forward to top of the list for examination and recommendation by the Conservation Commission within ten (10) business days. (Emphasis in original.) [¶ 25] This order did not require the Conservation Commission to examine land and make recommendations on an ongoing basis. Rather, the City Council ordered the Conservation Commission to review a list of the property then owned by the City and make recommendations to the Council, with priority given to any properties identified by the city manager. This order directing the Conservation Commission to take certain actions in 1994 cannot be understood to have the same ongoing effect as a properly adopted municipal ordinance. See 30-A M.R.S. §§ 3001-3012 (2006). [2] The order does not state that it is a standing order, and there is no reason to assume that the order has ongoing effect. Accordingly, the purchase and sale agreement is not rendered void or invalid by the City's failure to obtain recommendations from the Conservation Commission before entering into the conditional purchase and sale agreement.
[¶ 26] Mason and Johnson argue that, because the school property was dedicated to a public use, it cannot be transferred to a private party, and therefore the purchase and sale agreement is void. Mason and Johnson did not raise this issue in their complaint or other filings with the Superior Court. Nor did they argue the issue orally in the Superior Court. The issue is therefore unpreserved and we do not address it on appeal. See Bickford, 2004 ME 111, ¶¶ 7-8, 855 A.2d at 1154.
[¶ 27] Title 1 M.R.S. § 402 (2006) defines the term public proceeding to include the functioning of any municipal board, commission, agency, or authority: 2. Public proceedings. The term public proceedings as used in this subchapter means the transactions of any functions affecting any or all citizens of the State by any of the following: . . . . C. Any board, commission, agency or authority of any county, municipality, school district or any regional or other political or administrative subdivision. The board, commission, agency, or authority must provide public notice of such public proceedings if the meeting involves three or more persons: Public notice shall be given for all public proceedings as defined in section 402, if these proceedings are a meeting of a body or agency consisting of 3 or more persons. This notice shall be given in ample time to allow public attendance and shall be disseminated in a manner reasonably calculated to notify the general public in the jurisdiction served by the body or agency concerned. In the event of an emergency meeting, local representatives of the media shall be notified of the meeting, whenever practical, the notification to include time and location, by the same or faster means used to notify the members of the agency conducting the public proceeding. 1 M.R.S. § 406 (2006). [¶ 28] Mason and Johnson have not indicated how any violation of section 406 by the ad hoc committee would invalidate the purchase and sale agreement. Although the ad hoc committee was charged with reviewing proposals, and had some involvement in the process leading up to review by the City Council and the ultimate execution of the contract, Mason and Johnson have not provided a legal basis for their contention that the ad hoc committee's failure to provide public notice of its meetings somehow renders the purchase and sale agreement invalid. The City Council was the body with the power to authorize entry into the purchase and sale agreement. See Augusta, Me., City Charter, art. II, § 4 (2006) (authorizing the City Council to administer all the fiscal, prudential and municipal affairs of the city). The City Council did, in fact, meet and vote to authorize the city manger to execute the purchase and sale agreement. Mason and Johnson have not asserted any defect in the City Council's notice of its meetings. They have therefore failed to establish their claim that the purchase and sale agreement is invalid on the basis of the public notice statutes.
[¶ 29] Although Mason and Johnson contend that Boulos and the LLC received preferential treatment in the proposal process, the only fact that might support their argument is that the developer's name was mentioned frequently by the city manager and City Council throughout the process. This fact alone cannot establish bias in favor of Boulos or the LLC that would somehow invalidate the purchase and sale agreement. Further, Joseph F. Boulos and Partners was the only entity to submit a redevelopment proposal. That the City Council elected to pursue the only proposed plan for redevelopment does not establish bias in favor of that developer.
[¶ 30] The order of the City Council that granted the city manager authority to execute the purchase and sale agreement authorized him to execute a purchase and sale agreement between the City of Augusta and Joseph Boulos and Partners. The Boulos proposal was made on behalf of Joseph F. Boulos and Partners and/or designee and stated, A single-purpose entity will be established for the purposes of this development, the principals of which will include Joseph F. Boulos, Gregory W. Boulos, Daniel M. Greenstein, and C. Anthony McDonald. The City Council was aware that a single-purpose entity  now, the LLC  would be organized pursuant to the proposal's terms. Because that entity had not been named beforehand, the City Council ordered the city manager to contract with the party that had submitted the proposal: Joseph F. Boulos and Partners. The subsequent execution of the contract by the LLC, rather than Boulos and Partners, does not invalidate or void the contract, which complies with the intent of the City's Order. The City Council made explicit its approval of the city manager's conduct when it ratified his execution of the purchase and sale agreement with the LLC by authorizing amendments to the agreement with the LLC after the LLC had filed its articles of incorporation. Cf. Sch. Admin. Dist. No. 3 v. Maine Sch. Dist. Comm'n, 158 Me. 420, 427, 185 A.2d 744, 748 (1962) (The law is well settled that a committee, which has been given authority to make a certain contract on behalf of a municipal corporation, may ratify such a contract when made by a minority of its members.). [¶ 31] In sum, the stipulated facts do not demonstrate any procedural errors by the City that render the conditional purchase and sale agreement void or unenforceable. In these circumstances, the City is entitled to a judgment in its favor on Mason and Johnson's complaint for declaratory and injunctive relief. The entry is: To the extent that the judgment dismissed the complaint for lack of subject matter jurisdiction, the dismissal is vacated and the matter is remanded for entry of a judgment for the defendants on the merits of the complaint. Denial of Mason and Johnson's motion for a preliminary injunction affirmed.