November 15, 2024
Business

Court upholds award to ex-ski resort owners

PORTLAND – Maine’s highest court on Tuesday upheld a lower court ruling awarding the former owners of a western Maine ski resort $1.5 million in damages from Camden National Bank.

Camden National had appealed an Oxford County Superior Court jury decision that the bank was to blame for the ski area’s foreclosure because it failed to follow through on a loan commitment made orally but later denied.

Tuesday’s decision draws attention to another long-running controversy involving the same owners and a rifle range off Route 90 in Warren, where the state says it may cost $1.5 million to perform an environmental cleanup.

Tuesday’s action by the Maine Supreme Judicial Court denies the bank’s appeal, ruling that the Oxford County jury decision was correct as a matter of law and that the judge didn’t err in instructions to the jury.

Steamship Navigation Co. filed suit in 2001 seeking unspecified damages against Camden National and Stephen Staples, a bank vice president. Steamship, a corporation controlled by C. Randall and Kathleen C. Dunican, owned Mount Abram ski resort in Greenwood.

Camden National foreclosed on Mount Abram in 2000, about two years after the Dunicans bought it for $455,000. After the foreclosure, the resort sold at auction for $325,000.

In the lawsuit, the Dunicans claimed they had an oral commitment in 2000 from Staples for a loan so they could buy snowmaking equipment.

Camden National’s attorney, Russell B. Pierce Jr. of Portland, said Tuesday he did not know whether the bank would try to appeal the supreme court ruling. He referred questions to bank officials, who did not return phone calls.

Steamship’s attorney, Daniel G. Lilley of Portland, described the situation as “checkmate.” He said there is no further appeal because the case involves Maine law. “There’s no place to go but to write a check.”

Camden National “essentially drove them right out in the street,” he said, by foreclosing on their ski resort, house and automobiles.

The Dunicans still own the defunct R.D. Outfitters rifle range on Route 90 in Warren, where some 220,000 cubic yards of flammable fiber material remains uncovered on the 72-acre property. The owners intended to use the material from Gates Formed-Fibre Products Inc. for a firing mound project that never materialized.

Michael Parker, a project manager for the state Department of Environmental Protection, has said Gates paid the Dunicans approximately $1 million for taking the waste material. Parker could not be reached Tuesday.

The original lawsuit stemmed from oral assurances by loan officer Stephen C. Staples to the Dunicans that they could count on a $239,000 loan for snowmaking equipment for the ski resort.

“In late 1999 Randall and Staples began discussions regarding a loan for the purchase of snowmaking equipment and, in early 2000, Staples orally promised that Camden would make the loan,” the supreme court decision states.

“Although he knew that Steamship’s operating line would come due the following June and that Steamship presently had enough cash to make the payment, Staples advised Randall that Steamship could spend its cash on maintenance and preparations for the equipment’s arrival because, upon issuance of the equipment loan, the operating line would be paid with those funds.”

A loan for less than $250,000 can be oral, Lilley said. A larger loan requires a written notice from the bank stating the loan must be in writing.

There was some confusion over the loan amount, according to the court decision, but the bank did not provide any notice.

The couple fell behind in other loan payments and, when the bank denied the promised money, Camden National foreclosed. The bank, however, has not foreclosed on the rifle range property.

In November 2004, the DEP filed a motion in Knox County Superior Court asking to secure at least $445,000 of the $1.5 million to clean up the Warren property.

In addition, the DEP sought reimbursement of other costs to taxpayers at the state and town levels, including a $100,000 fine for alleged violation of a consent agreement.

The town of Warren is owed nearly $9,000 in back taxes, plus interest, and wants the property cleaned up.

“I hope this means that we might move forward on this problem,” Town Manager Grant Watmough said Tuesday.


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