STATE OF MAINE SUPERIOR COURT
KENNEBEC, ss Consolidated Civil
Action Docket No. 1201
State of Maine and Portland )
Water District. )
) COURTS FINDINGS OF FACTS
Leisure Living Communities, Inc. )
History of Development of Frye Island
Leisure Living Communities, Inc. (hereinafter referred to as "Leisure Living") is a Massachusetts corporation with a principal place of business in Fitchburg, Massachusetts. Leisure Living qualified to do business in Maine on September 26, 1969.
Leisure Living is the successor corporation of Sebago Lake Shores, Inc. Sebago Lake Shores, Inc. merged with and into Leisure Living on May 26, 1969.
In 1965, Sebago Lake Shores, Inc., a Maine corporation, purchased approximately 750 acres o Frye Island in Sebago Lake, located in the of Town of Standish, Maine. Said Frye Island is approximately 900 acres in size.
Subsequent to such purchase, Sebago Lake Shores, Inc. engaged the firm of Edward C. Jordan Co. to do engineering and survey work on Frye Island and to produce a succession of subdivision development plans reflecting its progress. A copy of a plan produced during the summer of 1967 and representing an accumulation of six separate subdivision section maps that said Edward C. Jordan Co. had produced over the period of 1955 and 1967 is attached hereto as Exhibit A. Said subdivision plan consisted of approximately 603 house lots, water, electric and telephone utilities, ferry terminals on the island and on the mainland, beaches, country club complex under construction and gravel roads.
As of October 7, 1967, Leisure Living had executed conditional sales contracts for 159 of the lots in Exhibit A and had erected 31 dwelling units.
O n June 2, 1969, Leisure Living entered into a contract with one Dr. and Mrs. Joseph B. Earnhardt for the purchase of approximately 85 acres comprising the single largest remaining parcel on Frye Island. Title to said property passed on September 15, 1969 and gave Leisure Living title to substantially all of Frye Island. At the time of acquisition there were on said land buildings, tennis courts, and other improvements, which had been used by Dr. Earnhardt as a boys' summer camp.
At the time the Earnhardt contract was entered into June, 1969, engineering and survey work was being performed by Wright, Pierce, Barnes and Wyman which had been engaged in place of the Edward C. Jordan Company. Like the Jordan Company, the Wright, Pierce firm first surveyed and engineered separate section plans. By the end of 1969 it produced a comprehensive development plan of Frye Island, including the Earnnardt parcel, which superseded all previous plans, including Exhibit A. A copy of the 1969 comprehensive plan is attached hereto as Exhibit B.
The 1969 comprehensive development plan consisted of approximately 1,304 house lots, an 19 hole golf course, country club, tennis courtsand pools, beaches, recreation buildings, horse riding area, gravel roadwavs and utilities.
Prior to January 1, 1970, the following portions of Exhibit B had been completed or were under construction:
120 dwelling units completed with utilities;
ferry terminals complete;
four community buildings, under construction;
several pools and tennis courts under construction;
a marina at the southern end of the island had been partially dredged;
most gravel roads had been fully constructed;
a central water system had been substantially extended throughout the area;
electricity and telephone lines had been extended to approximately two-thirds of the subdivision;
the stable area had been completed.
At the time of the aforesaid merger and through 1971 Leisure Living was engaged not only in completing roads, recreational facilities and utilities, but also in building homes for lot purchasers. At the end of 1971 Leisure Living discontinued constructing private homes.
Attached hereto and marked as Exhibit C is a copy of Exhibit B marked to indicate those lots on Frye Island sold and conveyed (D) and those lots under installment sales contracts (C), all as of January 1, 1970.
Since the subdivision plan noted as Exhibit B was completed in 1969, the number of house lots in the development plan for Frye Island has been increased to 1,334. A copy of Exhibit D, reflecting the additional lots as numbers 2000 - 2029 is attached hereto. As of November 8, 1972, the date of which Leisure Living last compiled statistics, Leisure Living was a party to written contracts for the sale of 940 of the 1,334 lots in its Frye Island Development and had made conveyances involving 280 of said lots. Said contracts covering 935 of said lots were executed prior to September 23, 1971. Conveyances covering 240 lots were made prior to September 23, 1971 and conveyances covering 40 lots were made between September 23, 1971 and the date of filing of the complaint.
History of Litigation
This case commenced on February 25, 1970, when plaintiffs, the State of Maine, acting through the Attorney General, and the Portland Water District, filed the complaint in this action. The Plaintiffs alleged, in essence, that development of Frye Island, in Sebago Lake, in the fashion undertaken by the defendant, Leisure Living Communities, Inc., owner of substantially all of Frye Island, posed a danger of bacteriological and nutrient pollution to the lake and requested, inter alia, that the Court enjoin defendants. (Complaint)
On February 27, 1970, a Justice of the Supreme Judicial Court, sitting in the Superior Court, issued the first temporary restraining order, with the consent of all parties, prohibiting sales of unsold lots and construction or alteration of new residences or waste disposal systems. The Court extended the restraining order with the agreement the parties until May 29, 1970.(Orders February 27 aid May 13, 1970)
On April 23, 1970, defendant, Leisure Living Communities, Ire., filed its Answer and Motions to Dismiss, in response to plaintiffs' Complaint.
On May 25, 1970, a hearing was held. on may 27, 1970, the Court issued a new order providing for its retention of continuing jurisdiction over the development of the island and permitting defendants to sell property on the island subject to the provisions of the order, and to construct residences and sewage disposal systems on the island with approval of the State of Maine and the Portland Water District or, in the absence of such approval, by order of Court. The Court also directed the parties to "cooperate in the objective of establishing a controlled sewage collector and interceptor system for transportation of sewage and waste from the island to the mainland for ultimate treat-. ment and disposition". This order was to remain in effect until February 1, 1971.(Order May 27, 1970)
On January 28, 1971, the Court granted a joint motion or all parties to extend the May 27, 1970 order indefinitely to allow the parties time to study preliminary cost figures on the proposed collector and interceptor sewage disposal system to serve Frye Island, which figures had only recently been received. (Order January 28, 1971)
On June 1, 1972, the parties having failed to agree on financing of the Water District's proposed plan for the construction of a sewage collector and interceptor system, plaintiffs moved for the issuance of a new order. temporarily restraining defendants from any further construction on F rye Island. On June 2, 1972, the Court issued an order restraining defendants from any construction until June 20, 1972 and ordered that plaintiffs' prayer for a permanent injunction be set for hearing.(Order June 2, 1972)
0n June 14, 1972, defendants, W. E. Schumacher et als, owners or contractees of lots on Frye Island, filed a motion requesting an order compelling plaintiff, the Portland Water District, to comply with the Court's order dated May 27, 1970 and extended indefinitely on January 22, 1971, alleging the District's absolute unilateral refusal to permit or approve further percolation tests or approve the installation of any septic tank sewage disposal systems on lots on Frye Island, in violation of the spirit of the order.
On June 20, 1972, after hearing on the motion of defendants, W. E. Schumacher et als, to compel compliance of the Portland Water District, as aforesaid, the Court entered a continuing restraining order against further construction except with respect to those persons listed on Appendix A thereto, which persons were allowed to construct a residence and/or sewage or waste disposal system on their lots as identified, provided the plaintiffs agreed on the suitability of such lots and the manner and type of construction or, in the absence of such agreement, by order of Court. (Order June 20, 1972)
Also on June 20, 1972, defendant, Leisure Living Communities, Inc., filed a notion for joinder as parties defendant of all persons, firms and/or corporations owning, leasing, using or otherwise responsible for the use of all real estate located within the lineal distance of 1,000 fact from the shore of Sebago Lake.
On June 28, 1972, the Justice of the Supreme Judicial Court, sitting in the Superior Court, disqualified himself from the case because of a direct interest in the proceedings arising out of the filing by defendant, Leisure Living Communities, Inc., of its motion for joinder of parties defendant. The case was then assigned to the Justice of the Superior Court now presiding.
After argument and by order dated October 20, 1972, and filed October 24, 1972, the court denied defendant, Leisure Living Communities, Inc.'s, motion for joinder of parties defendant. The Court's decision thereon is dated November 20, 1972 and was filed on December 5, 1972. Said motion was decided on the basis of stipulated evidence, which stipulations were dated August 4, 1972.
By order dated November 14, 1972 and filed December 5, 1972, the Court denied defendant, Leisure Living Communities, Inc.`s, motion, filed with its answer, to dismiss the complaint as to the plaintiff, Portland Water District.
During the pendency of this action the Court has ruled and disposed of the following additional motions:
The Court has granted the motions by several hundred lot owners and purchasers of lots on Frye Island pursuant to conditional sales contracts to intervene as defendants.
The Court has granted the motions by the Towns of Scarborough, Windham and the City of South Portland to intervene as plaintiffs.
The Court has granted the motion by plaintiffs to amend their complaint for the addition of a Count VI to the claims of the State of Maine.
The Court has granted motions to amend the operating restraining order by adding names to Appendix A thereof.
A hearing on the request for a permanent injunction was held before this Court on November 6 through 14, 1972.
The parties have agreed that all property owners on Frye Island were properly served and made parties to the suit at the inception o this action. Subsequent purchasers were made parties pursuant to Court order. Those parties who failed to appear in this action waive all their rights. (R.375-76)
Frye Island is located on the easterly side of Sebago Lake to the west of a point of land known as Raymond Cape. It is located in the Town of Standish in Cumberland County. The island is approximately 900 acres in size, approximately 3 miles long, running in a north-south direction, and approximately a mile wide at its mid-line in an east-west direction. (Pltf's Ex. 3; Pltf's Ex. 11; R. 48,51)
Sebago Lake is one of the largest lakes in the State of Maine and is located approximately 30 miles north of Portland. It serves as the water supply for the Cities of Portland, South Portland, and Westbrook and the Towns of Cape Elizabeth, Falmouth, Gorham, Windham, Standish and Scarborough. Sebago Lake is bounded by the Towns of Naples, Casco, Raymond, Windham, Standish, Baldwin and Sebago. (R. 6)
Sebago Lake is classified as Class A under Title 38 M.R.S.A. Sec. 371 , Sub-Sec. 2. Class A waters are the highest classification of waters in the State of Maine. Title 38 M.R.S.A. Sec. 363 requires that Class A waters "shall be of such quality that it can be used for recreational purposes, including bathing, and for public water supplies after disinfection. The dissolved oxygen content of such waters shall not be less than 75% saturation or as naturally occurs, and contain not more than 100 coliform bacteria per 100 milliliters . . . There shall be no disposal of any matter or substance in these waters which would impart color, turbidity, taste or odor other than that which naturally occurs in said waters, not shall such matter or substance alter the temperature or hydrogen-iron concentration of these waters or contain chemical constituents which would be harmful or offensive to humans or which would be harmful to animal or aquatic life. No radioactive matter or substance shall be permitted in these waters other than that occurring from natural phenomena. There shall be no discharge of sewage or other waste into water of this classification unless specifically licensed by the Commission on finding that no degradation would result to the quality of such waters, and no deposits of such materials on the banks of such waters in such manner that transfer the material into tho waters is likely."
The quality of the water in Sebago Lake is extremely good and is in all likelihood the highest quality of any such body of water used for a public water supply in the State of Maine. The water is very clear and palatable and requires merely some sterilization by means of a combination of a chlorine and ammonia before being used as a public drinking water supply. (R.15-16)
The intakes of the Portland Water District are located in the southern portion of Sebago Lake. The Portland Water District utilizes approximately 22 million gallons of water per day from Sebago Lake, with maximum periods of usage of 45 million gallons of water per day. (R. 36-38)
The present levels of phosphorus, expressed as phosphate, in the lake show an average content of .005 per million. (R. 20)
In November 1972 hearings were held before this Court beginning November 6 and continuing into 7, 8, 9, 10 and 14. The record of these hearings is contained in 645 pages. There were many expert witnesses and 17 plaintiffs' exhibits and 8 defendants' exhibits. In many instances testimony involved highly complex matters and many mathematical formulas. It was the understanding of this Court that following these hearings, the Court would make findings of fact only and not conclusions of law. Accordingly, the Court suggested that both plaintiffs and defendants furnish the Court with proposed findings of facts.
On January 25, 1973 the plaintiff submitted their proposed findings. At the request of the defendant, Leisure Living, the Court met with counsel in Bangor on January 25 for the purpose of exploring a settlement of the matter. At this point it was decided that counsel for Leisure Living-furnish the Court with a proposed plan designed to provide for the continued development of Frye Island under certain conditions.
On March 10 the Court and counsel for all parties explored a possible avenue of resolution of this case and related litigation. The Court proposed that the DEP act as an advisor to the Court on the limited issue of potential water pollution of Sebago Lake from the Frye Island development of Leisure Living. The Court suggested that Leisure Living lay out approximately 300 lots on a master plan and thereafter the DEP would survey the plan and either approve of it in whole or in part and if there were disapprovals, the Court's understanding was that a hearing could be requested by Leisure Living. This proposal was rejected after plaintiff's counsel conferred, with DEP. The reason it was rejected was set forth in a letter to this Court dated March 15, 1973. Thereafter, the defendants submitted their proposed findings of facts on April 30. On May 15, 1973 plaintiffs made reply to Leisure Living's proposed of facts. On June 15, Leisure Living responded to plaintiffs reply to its proposed findings of facts.
I was unable to do any work on this case until the month of July, which was my vacation month. As previously stated, the record in this case of the November hearings was lengthy and in many instances contained very complex matters. However, after a thorough digest of the record of the hearings together with a digest of all other materials, including all exhibits, I have concluded that the issues of fact can be simply stated.
During the course of the hearings, the parties stipulated as follows:
"Your Honor, the Plaintiffs, State of Maine and Portland Water District are willing to stipulate at this time that they base their claim of nutrient pollution in the lake upon the introduction of the element phosphorus in the various forms in which it may show up in the lake, and I am not relying upon the introduction. of nitrogen in the form of nitrates or nitrites."(R. 535)
Because of that stipulation the basic underlying issue becomes -- to what extent will the continued development of Frye Island either originally planned, or as modified, add to the already existing phosphorus in Sebago Lake.
The answer to this question requires first a determination critical level of phosphorus, the raising of which would result in algae blooms, which in turn would rob the lake of its oxygen content. This result, unchecked, would eventually cause the lake to die. (R.32, 245-47, 548-49)
The present level of phosphorus in Sebago Lake reported as phosphorus averages between .001 and .0017 MPL (milligrams per liter). Now the question is what is the threshold concentration of phosphorus, that is the critical level. The testimony gave it as anywhere between .01 or less parts per million ie. (milligrams per liter) and .15. In arriving at these various estimates of critical level, the experts indulged in highly complicated mathematical postulates and formulae. In weighing the testimony of experts, I consider the following:
The rules of evidence ordinarily do not permit witnesses to testify as to opinions or conclusions. An exception to this rule exists as to those whom we call "expert" witnesses. Witnesses who, by education and experience, have become expert in some art, science, profession or calling may state their opinions as to relevant material natter in which they profess to be expert and they also. state their reasons for the opinion. If the fact finder should decide the opinion of an expert witness is not based upon sufficient education and experience or should conclude that the reasons given in support of the opinion are not sound, or are outweighed by other evidence, then he may disregard such opinions. I take this, but not verbatim, from Federal Jury Practice and Instructions by Devitt and Blackmer. I am also mindful of dictum in Hann vs Railroad Company 121 Me. 180. While this relates to estimates of times and distances, it also has a bearing upon opinions relating to other types of estimates. The dictum is as follows:
"In fact mathematical calculations based upon estimates either of time or distance are apt to be misleading, as a slight variation in the postulate creates a vast charge in the mathematical result."
So in the instant case slight variations in the postulates used by the experts may well result in substantial changes in the mathematical results. Taking all of the expert testimony relating to critical level of phosphorus in the lake, I estimate and find that the critical level is in the neighborhood of .015 parts per million.
The experts are in agreement that approximately 750 lots may be developed into recreational dwellings each one with septic disposal unit and that these lots, if they pass the percolation tests, would not contribute sufficient additional phosphorus into the lake as to threaten the uses to which it is already being put, namely, to cause algae blooms.(McEwan R. 128, Matusby R. 414, Lawler R. 513-520) I conclude, therefore, that the additional entry of phosphorus from such development would not raise the present level of phosphorus averaging between .001 and .0017 to a point any where near or close to the critica level. (.015)
It should be noted that the phosphorus content of tributary waters emptying into the main lake are at levels ranging from .08 to .15. These ' levels of phosphorus concentrates substantially higher, of course, than steady-state level in the main lake of .001 to .0017.
The plaintiffs are very much concerned that although it appears that 750 lots will be able to pass the percolation tests required by the State Plumbing Code, that if these lots are developed in an area of dense population the flow of matter containing phosphorus will be greatly increased. Plaintiffs maintain that the requirements of the Plumbing code do not take into consideration the problems created by dense development of the type proposed on Frye Island. Two reasons are given. One, that densely developed areas increase saturation of the soil. and concurring reduction in the capacity of the soil to remove nutrients from the waste effluent and two, the erection of structures in a densely populated area aggravates the problems of sewage development by removing from utilization those areas occupied by the structures.
I have no way of knowing if 750 lots are authorized just wheree these lots will be located on the plan calling for 1330. I believe the fears of the plaintiffs are somewhat exaggerated. I still think that 750 lots can be developed for recreational dwellings where ever they may be located on the Island without an increase in pollution input that will raise the existing phosphorus concentrate to a point anywhere rear the critical level.
I have discounted in my findings of facts a great deal of the technical testimony offered by some of the experts. I have concluded that much of it is not much more than an exercise in sophisticated speculation.We all know that in land damage cases experts using the same three approaches will arrive at fantastically different results. The income approach itself can be completely distorted in result by using different cost or money rates. Understandably the Portland Water District would be delighted if this Court's decision was to forever suspend any further developments on Frye Island. But, such a decision would result in confiscation of property rights or contract rights already existing. The court must stand in the shoes of the plaintiff and try to give careful judgment from the plaintiff's standpoint or view and then stand in the shoes of the defendants and give considerate judgement to their plight. Neither the State nor the Water District have made any overtures that I know about to purchase any of the property on F rye Island in order to stagnate development or partially stagnate it. No offers of compensation have been made to the defendants. Obviously, over-enforcement of laws, rules and regulations does result in confiscation. And so, the objective of this Court has been to carefully weigh the testimony on both sides and then arrive at a judgment which this Court believes to be sound, that will carry practically no rise of polluting the waters of Sebago Lake any more than they are already polluted, or at least to a degree that would approach critical phosphorus levels and thus create algae blooms. On the other hand the Court feels that a decision that 750 lots may be developed will give Leisure Living and other defendants above all that they can expect in view of recent decisions by the courts including the Maine Court (SpringValley Development, 300 2nd 736) that people who buy property must now expect that its "use can be somewhat limited in view of environmental problems.
I find as an ultimate factual conclusion that 750 lots may be developed, each one with a septic tank disposal unit, provided each one passes the State Plumbing Code percolation test and that no dangerous increase in phosphorus concentrate in the lake will result. Obviously if the decision of the defendants is to go forward with the development of 750 lots, that development will take some years before it is accomplished. In the meantime, as I understand it, there are ways of monitoring the input of nutrients from the Island into the Lake. If the time should come when the monitor indicates such an increase in phosphorus effluent from the Island as to in and of itself cause the phosphorus effluent total phosphorus concentrate in the Lake to approach the critical level then certainly both the State and the Water District would have a remedy to halt or to cut down such effluent from the Island.
As of April 20, 1973 a motion was made and granted for consolidation of the case, the State of Maine ex ref James S. Erwin, et al vs Leisure Livingng Communities Inc., et al; Cumberland County Civil Action Docket Number 70-203, with the action pending in Kennebec County. This motion was granted and the cases were consolidated under Kennebec Civil Action Docket Number 1201. The Cumberland County case raises issues of law whereas the Kennebec county case raises issues of fact. Since the parties agreed that this Court would only make findings of fact, I make no decision with respect to the Cumberland County case. It was anticipated when it was decided that this Court should only make findings of fact and the parties thereafter, if agreed, would report to the Law Court the issues of law. They may now do so if they wish. Any legal issues in the Kennebec case together with the legal issues ofthe Cumberland County case can be reported to the Law Court for its decision. If the decision, however, of the parties is to accept the findings of this Court and permit the development of 750 lots, then this Court would be willing, from time to time, to assist counsel as to any controversy that may arise concerning the location of lot development. This the Court would agree to on the ground that its findings of fact might be reviewed as the development progresses.
I am aware that these findings do not analyse at length the complicated testimony of the various expert witnesses. However, as stated above, I discounted much of it as being too speculative to be used as basis for my findings of fact. I did not consider any testimony relative to shore line conditions so that, in effect, I have granted Plaintiffs' motion to strike all testimony relevant thereto. I concluded that my findings should be based only upon the impact of Frye Island development on the already existing concentration of phosphorus natter in the Lake.
Plaintiffs' introduced considerable testimony relating to soil suitability on the Island. I considered as factual the following proposed findings of fact (Plaintiffs')
Pages 13-20 Paras. 2,3,6,7,8,9,10,11
As to the other proposed findings by Plaintiffs I have either covered them in my findings, or did not accept them as presented verbatim.. Defendants did not propose specific findings re soil suitability and otherwise my findings accept parts of those proposed by Defendants and reject others.
My final conclusion is that the disparity between .0017 and .015 is such that qualification under percolation test renders unnecessary minute studies of soil suitability over different sections of the Island. Should the selection of lots concentrate on areas of poor soil suitability to the extent of alarming Plaintiffs' the latter may apply to this Court for a review of the evidence presented at the November 1972 hearings.
James L. Reid
Justice Superior Court
Dated :September 6, 1973