Cumberland Farms, Inc. v. Montague Economic Development & Industrial Corp.

United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit

No. 95-1822

CUMBERLAND FARMS, INC.,

Appellant,

v.

MONTAGUE ECONOMIC DEVELOPMENT AND INDUSTRIAL CORPORATION,

Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Nathaniel M. Gorton, U.S. District Judge]

Before

Cyr, Boudin and Stahl,
Circuit Judges.

W. Mark Russo with whom David A. Wollin and Adler, Pollock &

Sheehan Incorporated were on brief for appellant.

Debra L. Purrington with whom Morse, Sacks & Fenton, Martine B.

Reed, and Brown, Hart, Reed & Kaplan were on brief for appellee.

March 12, 1996

STAHL, Circuit Judge. On September 21, 1990, the
STAHL, Circuit Judge.

Montague Economic Development Industrial Corporation

("MEDIC"), after reaching impasse in negotiations to purchase

from Cumberland Farms, Inc. ("Cumberland") a convenience

store in Turner's Falls, Massachusetts, took the property by

eminent domain. That same day, pursuant to Mass. Gen. L. ch.

79, 1, the order of taking was recorded, and as a result,

Cumberland's ownership rights in the property were

extinguished. Mass. Gen. L. ch. 79, 3.

Cumberland, the owner of hundreds of convenience

stores in various states, objected to MEDIC's taking

decision. Cumberland's legal maneuvering, and its

bankruptcy, converted what began as a simple eminent domain

case into a six-year litigious war.

We summarize briefly. Initially, Cumberland

demanded pro tanto compensation for the property, but when

MEDIC obliged, Cumberland rejected its offer and chose

instead to contest the taking. Cumberland initiated various

state and federal court actions, all designed to frustrate

the taking and to deny MEDIC possession. Eventually, in May

of 1992, while still in possession of the contested property,

the Cumberland chain filed for protection and reorganization

under Chapter 11 of the Bankruptcy Code, which further

delayed MEDIC's gaining possession. Suffice it to say that

none of Cumberland's delaying actions had merit, and finally

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on September 3, 1993, nearly three years after acquiring

legal title, MEDIC obtained physical possession of the

premises.

Previously, Cumberland had commenced a state court

action objecting to the amount of MEDIC's original pro tanto

offer and claiming reimbursement for relocation expenses and

damages. MEDIC removed the action to the United States

Bankruptcy Court for the District of Massachusetts, where

Cumberland's bankruptcy case was pending.

The bankruptcy court found that Cumberland was

entitled to recover from MEDIC $380,000 as compensation for

the value of the property and $36,850 for relocation costs,

reduced by $137,250 for the rental value of its use and

occupancy during Cumberland's holdover on the premises,

therefore judgment was issued for the net amount of $279,600.

The court allowed MEDIC's rent claim, even though the eminent

domain statute did not speak to a taking entity's right to

charge reasonable rent during a wrongful holdover beyond the

date when the taken premises must be vacated. The court

disallowed Cumberland's claim for interest on the

compensation payment, because Cumberland could have accepted

the pro tanto payment and obtained use of the funds at that

time. The decision of the bankruptcy court was subsequently

affirmed by the United States District Court for the District

ofMassachusetts, and fromthat affirmance thisappeal followed.

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On this appeal, Cumberland argues that the

bankruptcy court erred in awarding MEDIC fair market rent

during the holdover period during which Cumberland was

challenging the eminent domain proceeding, erred in the

amount of relocation damages awarded to it, and erred by not

awarding damages for the authority's alleged failure to

provide timely and adequate relocation assistance. We find

that none of Cumberland's arguments on appeal merit extensive

consideration.1 We review the bankruptcy court's findings of

fact for clear error and subject its rulings of law to de

novo review. T I Fed. Credit Union v. Delbonis, 72 F.3d 921,

928 (1st Cir. 1995).

Discussion

We begin with Cumberland's claim that it is not

liable for the use and occupancy charges that the bankruptcy

court awarded to MEDIC, an issue that we review de novo. The

applicable Massachusetts eminent domain statute allowed

Cumberland to remain on the premises for a period of four

months after it received the notice of taking. Mass. Gen. L.

ch. 79, 8B. Before exercising its possessory rights, MEDIC

was required to give Cumberland a thirty-day notice to

1. Cumberland's notice of appeal included a complaint about
the court's failure to grant interest to it on the
compensation awarded for the taking. We deem this issue
waived, as Cumberland has not referred to it in its brief.
See, e.g., Willhauck v. Halpin, 953 F.2d 689, 700 (1st Cir.

1991) (issues not fully presented in appellate brief are
deemed waived).

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vacate, sent by registered mail or posted on the property.

Mass. Gen. L. ch. 79, 3.

The bankruptcy court found that MEDIC provided

notice of the taking to Cumberland on October 9, 1990, and

provided thirty-day notice of eviction on January 8, 1991.

Thus, MEDIC was within its rights in requiring Cumberland to

vacate the property by February 13, 1991. MEDIC's

counterclaim to Cumberland's petition for damages sought rent

for the period from February 14, 1991, to August 30, 1993,

when MEDIC finally obtained possession.

Although the taking statute does not address a

holdover occupant's liability for the fair rental value of

its use and occupancy, the Massachusetts regulation on

relocation assistance appears to contemplate charges for use

and occupancy rent following a taking, because it directs a

taking authority to inform a property owner of the rent to be

paid during any holdover period. 760 C.M.R. 27.03(13).

MEDIC, in its January 8, 1991, notice to vacate, informed

Cumberland that it would seek fair market rent if Cumberland

remained in possession.

The bankruptcy court ruled that Cumberland,

following its failure to vacate as directed, became a tenant

at sufferance, and as a result MEDIC was entitled to rent

pursuant to Mass. Gen. L. ch. 186, 3, which provides that

tenants at sufferance are liable for rent during the period

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of continued occupancy after a demand for the premises has

been made. It also found that MEDIC's claim was fully

justified under a theory of unjust enrichment, because

Cumberland's continued use of the premises was profitable.

Although we find no decision exactly on point, the Supreme

Judicial Court in Lowell Housing Authority v. Save-Mor

Furniture Stores, Inc., 193 N.E.2d 585, 587 (1963), approved

a taking authority's claim for use and occupancy charges from

a tenant who remained in possession after a public housing

authority took the property from the landlord-owner by

eminent domain. Cumberland argues that as an owner its

position is different from that of a tenant. We find

Cumberland's argument unconvincing, and that Cumberland's

wrongful holdover does not differ in any relevant regard from

that of the tenant in Lowell Housing. See 193 N.E.2d at 587.

Because we find that Lowell Housing is apposite, we conclude

that the bankruptcy court did not err in awarding MEDIC the

fair rental value of Cumberland's continued use and occupancy

of the premises. Accordingly, we need not consider unjust

enrichment, the second basis for the court's finding.

Cumberland next argues that the bankruptcy court

erred in failing to grant all of its claimed relocation

expenses, and again our review is de novo. Specifically,

Cumberland claims that the court erred in not finding that it

was entitled to reimbursement for the cost of new gasoline

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pumping equipment for its new location, for license and

inspection fees, and for the cost of certain physical changes

to its new location.

We find no error in the bankruptcy court's award of

relocation costs under Mass. Gen. L. ch. 79A, 7, which

provides that a taking authority must reimburse a property

owner for:

1. actual documented reasonable expenses
in moving himself, his family, his
business, farm operation, or other
personal property;
2. actual direct losses of tangible
personal property as a result of moving
or discontinuing a business or farm
operation, but not to exceed an amount
equal to the reasonable expenses that
would have been required to relocate such
property, as determined by the relocation
agency; and
3. actual reasonable expenses in
searching for a replacement business or
farm.

Although the bankruptcy court awarded payment for certain of

Cumberland's claimed relocation expenses as required by Mass.

Gen. L. ch. 79A, 7, it denied Cumberland's request for the

costs of obtaining new gasoline pumps, for license and

inspection fees, and for certain physical changes to its new

facility. Cumberland urges that the court erred in ruling

these expenses were not recoverable under Mass. Gen. L. ch.

79A, 7 and, in particular, the implementing regulations,

760 C.M.R. 27.09(8), 27.09(13), and 27.09(14). MEDIC's short

answer is that MEDIC is a taking authority governed by Mass.

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Gen. L. ch. 121C, and that the relocation payment regulations

that Cumberland relies upon apply to authorities governed by

Mass. Gen. L. ch. 121A and 121B, but not to 121C agencies.2

See 760 C.M.R. 27.01(4) (listing activities and entities to

which the relocation payment regulations apply). We agree

with MEDIC, as did the district court, and conclude that

Cumberland is entitled to reimbursement only as provided in

Mass. Gen. L. ch. 79A, 7, and not under the more expansive

provisions of 760 C.M.R. 27.09.3

Finally, Cumberland claims that the bankruptcy

court erred in ruling that MEDIC had fulfilled its relocation

assistance obligations to Cumberland. We review this factual

2. The relocation assistance regulations, in contrast to the

relocation payment regulations, appear to apply broadly to

all entities authorized to take by eminent domain. See 760

C.M.R. 27.01(4).

3. We note that the record contains documents provided by
MEDIC to Cumberland that seem to promise reimbursement of the
types of expenses that the bankruptcy court denied.
Cumberland's brief, however, does not contain any arguments
based on estoppel or similar theories. Therefore such
arguments, whatever their merit, are waived. See, e.g.,

Willhauck, 953 F.2d at 700.

We have not considered any of the arguments raised
by Cumberland in its Motion for Leave to Present Rebuttal
Argument Pursuant to Local Rule 34.1(b). Cumberland had an
opportunity to raise rebuttal arguments in a reply brief, but
chose not to submit one. Moreover, Local Rule 34.1(b)
pertains to oral rebuttal during the scheduled argument, and
does not provide an opportunity for further briefing of
issues after oral argument.

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finding4 for clear error, and we find no error, let alone

clear error, in the bankruptcy court's denial of Cumberland's

claims for damages due to MEDIC's failure to provide

relocation assistance.

Affirmed. Costs to appellee.
Affirmed.

4. Cumberland's brief could be read to suggest that the
bankruptcy court's ruling in this regard was a legal
conclusion concerning an earlier order of the Massachusetts
Superior Court. Even though Cumberland has not clearly
presented that argument, a de novo review of the bankruptcy
court's ruling would yield the same result: no error.

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