Fisherman's Wharf Associates II v. Verrill & Dana

Citations: 645 A.2d 1133; 1994 Me. LEXIS 173

Court: Supreme Judicial Court of Maine; August 18, 1994; Maine; State Supreme Court

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Fisherman's Wharf Associates II (FWA II) appealed a summary judgment from the Superior Court favoring the law firm Verrill Dana in a case concerning allegations of professional negligence, negligent misrepresentation, and breach of contract. The Supreme Judicial Court of Maine found that there was a genuine issue of material fact regarding the law firm's negligence, leading to the vacating of the lower court's judgment.

FWA II, a Maine general partnership, aimed to acquire and develop waterfront property in Portland. In January 1987, FWA II sought a legal opinion regarding a citizen initiative petition that aimed to amend the city's zoning ordinance to restrict waterfront development to marine-related uses. The initiative specified that its terms would apply retroactively to all pending applications filed after December 22, 1986.

In a letter dated January 29, 1987, Verrill Dana acknowledged the potential impact of the initiative on FWA II's project, suggesting that, at worst, it could prevent the project if no site plan application was submitted before the referendum in May 1987. The letter referenced a state statute, 1 M.R.S.A. 302, which typically "grandfathered" applications pending during municipal ordinance amendments, creating some uncertainty about its application to initiatives. However, it concluded that if FWA II filed a site plan application before the referendum, it would be processed under existing zoning laws.

Additionally, a partner from Verrill Dana assured FWA II's partners that the Fisherman's Wharf project would not be impacted by the proposed amendment if they filed a site plan application prior to the May election.

In February 1987, FWA II purchased the Fisherman's Wharf property for $8 million, contingent upon returning $1.75 million if the necessary government approvals were not obtained. The Portland Planning Board approved FWA II's site plan on April 28, 1987. Subsequently, on May 5 and May 7, 1987, Portland voters approved an initiated ordinance. Although a building permit was approved on June 4, 1987, the City did not deliver it and instead filed a complaint seeking a declaratory judgment regarding the permitting process due to the citizen initiative. The trial court ruled that the ordinance did not apply to FWA II's application, entitling them to the building permit. However, the City appealed, and the judgment was vacated, indicating that retroactive application of the ordinance was permissible.

The Fisherman's Wharf project was never constructed, and in 1991, FWA II filed a complaint against the law firm representing them. The law firm moved for summary judgment, which the trial court granted after finding that FWA II's evidence failed to meet the legal malpractice standard in Maine. FWA II appealed, arguing that there was a genuine issue of material fact regarding the law firm's alleged negligence in assessing the risks associated with the zoning ordinance amendment.

The law firm's defense rested on its claim of not being liable for failing to predict the decision on the zoning issue. FWA II countered that the law firm did not exercise reasonable professional care in evaluating the risks posed by the ordinance. They supported their argument with the affidavit and deposition of expert attorney Robert E. Miller. The court's examination of the summary judgment focused on whether there was a genuine issue of material fact and whether any party was entitled to judgment as a matter of law, indicating that FWA II's claims presented sufficient grounds to contest the summary judgment.

Testimony indicated that the law firm failed to meet its duty of care to FWA II by conducting insufficient research, leading to a negligent oversight of critical issues related to FWA II's request. Expert Miller asserted that a competent attorney would have warned FWA II about the significant risk of hindrance to its development plans if a zoning initiative passed and would have offered strategies to mitigate that risk. In cases of professional negligence, plaintiffs must demonstrate the existence of a duty, a breach, and that this breach directly caused their injuries, as established in Rowe v. Bennett. Professionals must exercise a standard of skill and care consistent with their field. The court previously vacated a summary judgment in Levesque, emphasizing that the evaluation of expert testimony regarding the standard of care is a factual determination for the jury. Similarly, in this case, the trial court could only have granted summary judgment by improperly judging the credibility of FWA II's expert or misinterpreting the standard of care, both of which should be resolved at trial. Therefore, the court's grant of summary judgment for the law firm was erroneous, leading to a vacated judgment and remand for further proceedings. Additionally, the law firm conceded an attorney-client relationship with FWA II for the appeal's purpose, despite previously contesting it. The trial court's determination regarding the implications for FWA II's additional claims of negligent misrepresentation and breach of contract was not addressed, as the summary judgment was vacated.