In re Audet

In re Audet (2003-060); 176 Vt. 617; 850 A.2d 1000

2004 VT 30

[Filed 01-Apr-2004]


                                 ENTRY ORDER

                                 2004 VT 30

                      SUPREME COURT DOCKET NO. 2003-060

                             OCTOBER TERM, 2003

  In re Real Audet d/b/a/ Joe Audet    }	APPEALED FROM:
  Auto and Truck Sales, Inc. and       }
  Joe Audet Auto and Truck Sales, Inc. }	Environmental Board
                                       }	
                                       }	DOCKET NO. #409

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Appellants John and Dorothy Mitchell appeal a declaratory
  ruling by the environmental board that appellee Real Audet does not need to
  obtain an Act 250 permit for his vehicle salvage business in the Town of
  Worcester because of his temporary but now abandoned use of a separate
  parcel of land outside of town.  We affirm.

       ¶  2.  Audet repairs and sells cars and trucks.  His business is
  located on two contiguous tracts of land near the town center.  In January
  2001, Audet purchased a third tract on Hersey Road, about three-tenths of a
  mile away from his main business.  The Mitchells also live on Hersey road,
  and their property surrounds Audet's property on three sides.  Audet's
  Hersey Road tract, named "Parcel 3" in the litigation before the
  environmental board, has a dilapidated house which was condemned in 1989
  after raw sewage was discovered flowing into nearby surface waters. Audet
  initially proposed to build a new house for his daughter on Parcel 3 using
  the old sewage system.  The Mitchells opposed the plan in hearings before
  the Worcester Selectboard, and in later litigation. In that case, the
  selectboard ruled that the property did not have a grandfathered septic
  system and, therefore, prohibited development until Audet constructed a
  compliant sewage disposal system.

       ¶  3.  Shortly thereafter, Audet cleared brush from Parcel 3 and
  began using the cleared area and other parts of Parcel 3 to store junked
  cars, a large pile of used tires, automotive debris, a company truck and a
  flatbed trailer.  Some of the vehicles were owned by the business or
  business clients, and some by family and friends.  In the process of moving
  the vehicles, Audet caused his company pickup trucks and tow-trucks to
  drive to the circle turn at the terminus of Hersey Road directly in front
  of the Mitchells' house, where they would sometimes intentionally spin
  their wheels in the gravel.  In August, Audet told the Mitchells he was
  going to build a garage on Parcel 3 in two weeks, that he was going to
  continue to be a "bad neighbor," and that there was going to be a lot more
  traffic on Hersey Road.  After receiving a permit from the Worcester
  Selectboard in September, Audet graded, filled and graveled portions of
  Parcel 3.
   
       ¶  4.  In response to the impending construction, the Mitchells
  requested a jurisdictional opinion from the District 5 Environmental
  Commission as to whether Audet needed an Act 250 permit to use Parcel 3 for
  his business.  The environmental commission staff determined, on February
  5, 2002, that Act 250 jurisdiction was triggered under 10 V.S.A. §
  6001(3)(A)(ii) because (1) the combined size of all three parcels owned or
  rented by Audet for his business exceeded one acre, (2) all three parcels
  were within five miles of each other, and (3) Audet had improved Parcel 3
  to facilitate his business uses, and had in fact used the improved areas on
  Parcel 3 to store vehicles associated with his business.  

       ¶  5.  Shortly thereafter, Audet ceased using Parcel 3 in any way
  connected with his business.  Then Audet petitioned the environmental board
  for a declaratory ruling that Parcel 3 was not part of his business and,
  therefore, Act 250 jurisdiction did not apply to either Parcel 3 or his
  main business enterprise in the village center.  Following a site visit, a
  three-member panel of the environmental board issued a proposed 2-1
  decision concluding that Audet had used Parcel 3 to store vehicles, which
  was a commercial purpose, and therefore needed to obtain an Act 250 permit
  for his combined business operations.  Audet appealed the proposed decision
  to the full board.  After a de novo hearing, the board reversed the panel
  decision and, in a 5-2 ruling, determined that no Act 250 permit was
  required.  This appeal followed.  

       ¶  6.  Act 250 requires a state land use permit prior to the
  commencement of development.  10 V.S.A. § 6081(a).  In a municipality that
  has not adopted permanent zoning and subdivision bylaws, such as the Town
  of Worcester, development is defined as "the construction of improvements
  for commercial or industrial purposes on more than one acre of land."  10
  V.S.A. § 6001(3)(A)(ii).  Under environmental board rules, "the entire
  tract or tracts of involved land owned or controlled by a person" must be
  used in determining the acreage of a project.  Environmental Board Rules
  (hereinafter EBR) § 2(A)(1)(b), 6 Code of Vermont Rules 12 003 001-5-6
  (2003) (emphasis added). The rules provide four methods for counting
  involved land, three of which are relevant here.  See EBR § 2(F)(1), 6 Code
  of Vermont Rules 12 003 001-11.  First, rule 2(F)(1) counts the "entire
  tract or tracts of land, within a radius of five miles, upon which the
  construction of improvements for commercial or business purposes will
  occur."  Id.  Second, the rule adds to that figure,  "any other tract,
  within a radius of five miles, to be used as part of the project," or,
  third, any other tract "where there is a relationship to the tract or
  tracts upon which the construction of improvements will occur such that
  there is a demonstrable likelihood that the impact on the values sought to
  be protected by Act 250 will be substantially affected by reason of that
  relationship." (FN1)  Id.

       ¶  7.  It is undisputed that Audet recently constructed improvements
  for commercial purposes at his main business location in the village
  center.  That enterprise, however, covers only eight-tenths of an acre. 
  Thus, Act 250 would not apply to his business unless Parcel 3, which is a
  quarter of an acre, qualifies as involved land under one of the three
  counting methods prescribed by Rule 2(F)(1).  The environmental board's
  final decision held, under all three methods, that Parcel 3 was not
  involved with Audet's main business.  The Mitchells appeal the board's
  findings of fact and conclusions of law only regarding its determination
  under the second method that Parcel 3 was not "used as part of the
  project." 
   
       ¶  8.  On this point, the board specifically found that "Audet has
  stored motor vehicles, incidental to his business, on a temporary basis, on
  Parcel 3."  Nonetheless, it concluded as a matter of law that such use was
  insufficient to make Parcel 3 part of the project: "while there may have
  been some vehicle storage on Parcel 3 . . . it was at most only temporary,
  intermittent, incidental and peripheral to Audet's Worcester village
  business enterprise . . . and thus did not rise to the level that caused
  the Board to find that jurisdiction has attached."  The Mitchells argue
  that the board erred because: (1) the conclusion that Audet's use was
  "temporary, intermittent, incidental and peripheral" is not supported by
  the board's findings or the record evidence, and (2) the board's ad hoc
  creation of a "de minimis" exception to rule 2(F)(1) violates the Vermont
  Administrative Procedures Act and the Mitchells' due process rights.   

       ¶  9.  "We give deference to the Environmental Board's
  interpretations of Act 250 and its own rules, and to the Board's
  specialized knowledge in the environmental field.  Absent compelling
  indications of error we will sustain its interpretations on appeal."   In
  re Wal*Mart Stores, Inc., 167 Vt.  75, 79, 702 A.2d 397, 400 (1997)
  (internal citation omitted).  "Our deferential level of review, however,
  does not equate with mere judicial passivity in determining the propriety
  of Board interpretations of its own rules.  Rather, as with all legislative
  schemes, we are guided by the intent of the Legislature as evidenced by the
  statutes themselves."  Id.  At 80, 702 A.2d  at 400 (internal quotations and
  citations omitted). 

       ¶  10.  We agree with the Mitchells that if the environmental board
  created a de minimis exception it was error.  See Conservation Law Found.
  v. Burke, 162 Vt. 115, 121, 645 A.2d 495, 499 (1993) (if an administrative
  agency wishes to include a de minimis exception to its regulations, it must
  do so explicitly in rulemaking process).  Nonetheless, we affirm the
  board's decision on the ground that Audet has abandoned his business use of
  Parcel 3 and therefore the board could decide not to count it as part of
  his main business project.  See Sorge v. State, 171 Vt. 171, 174 n.*, 762 A.2d 816, 818 n.* (2000) (Court may affirm despite improper rationale if
  correct result was reached).  Given this conclusion, we do not reach the
  Mitchells' arguments regarding the degree of use that occurred.

       ¶  11.  Under Act 250 and environmental board rules, any construction
  activity, no matter how minute, triggers Act 250 jurisdiction.  See In re
  Rusin, 162 Vt. 185, 191, 643 A.2d 1209,1212 (1994) ("10 V.S.A. § 6081(a)
  mandates a land-use permit before commencement of any construction on a
  development."); EBR § 2(D), 6 Code of Vermont Rules 12 003 001-10 
  ("'Construction of improvements' means any physical action on a project
  site which initiates development for any purpose enumerated in Rule
  2(A).").  The issue here is whether the same strict rule applies when the
  development on involved land consists merely of a change of use with no
  construction.  As put by the board in its response to the Mitchells' motion
  to alter: 

    [A]ny construction is sufficient to trigger jurisdiction.  The
    question here is whether the Board must follow a similar path when
    deciding the question of how much business use is necessary to
    trigger jurisdiction.  Is any business use enough to bring a
    parcel within the ambit of "involved land," or does it have to
    rise to some level before jurisdiction is triggered?
   
  The board decided upon the latter, but did not define what threshold level
  of use would trigger Act 250 jurisdiction.  Instead it held only that
  Audet's "temporary, intermittent, incidental and peripheral" use was
  insufficient in this case.  In addition, the board noted, the conclusion
  that Parcel 3 was not used as part of the project was reinforced by
  evidence showing that Audet had never made a "conscious decision" to use
  Parcel 3 for business purposes, but rather had stored vehicles there only
  to annoy or harass the Mitchells.

       ¶  12.  For different reasons, we agree with the board's decision not
  to apply Act 250 jurisdiction.  Under the unique facts and circumstances of
  this case, we conclude that Audet's now abandoned use of Parcel 3 did not
  effectuate a change in land use and, therefore, does not require state land
  use review.  In reaching this conclusion we look to the intent of the
  Legislature in passing Act 250, as evidenced by the statutes themselves. 
  Wal*Mart Stores, 167 Vt. at 79-80, 702 A.2d  at 400-401.  

       ¶  13.  The Legislature intended Act 250 to protect Vermont's lands
  and environment by requiring statewide review of  "large-scale changes in
  land utilization."  Comm.  To Save Bishop's House, Inc. v. Med. Ctr. Hosp.
  of Vt., Inc., 137 Vt.  142, 153, 400 A.2d 1015, 1020 (1979); see also In re
  Pilgrim P'ship, 153 Vt. 594, 596, 572 A.2d 909, 911 (1990) (one purpose of
  Act 250 is to insure that Vermont's lands and environment are devoted to
  uses which are not detrimental to the public welfare and interests). 
  Generally, as noted by the environmental board dissenters here, once a
  change of statewide impact occurs to land, Act 250 jurisdiction attaches
  and it cannot be undone by later events such as a cessation of the
  development activity.   This case, however, raises a separate question:
  where a change in land utilization involves a change in use but no
  construction, physical change to the land, or other lasting impact, whether
  ceasing and abandoning the change of use may, if supported by sufficient
  evidence, negate the change in land utilization and thus the need for Act
  250 review.
   
       ¶  14.  Such an abandonment is exactly what happened here.  By
  storing on Parcel 3 motor vehicles and automotive parts associated with his
  business, Audet effectively began using the tract as part of his village
  business enterprise.  Technically, at that point development jurisdiction
  attached.  See EBR § 2(F)(1) (involved lands include any other tract,
  within a radius of five miles, to be used as part of the project). When
  faced with the prospect of having to obtain an Act 250 permit as a result
  of this expansion, however, Audet changed his plans and ceased the use.  We
  conclude that the environmental board could find that no further Act 250
  jurisdiction existed at that point , so long as Audet's change of plans was
  made in good faith and occurred without any sort of construction, physical
  change to the land or other ongoing impact that would require Act 250
  review.  To hold otherwise would mean that once the use but not the
  physical condition of land changes, for the purposes of Act 250
  jurisdiction that change is considered permanent and irreversible
  regardless of the owner's ability and desire not to effect such a change. 
  Such an interpretation - effectively forcing the land use change and its
  concomitant impacts to continue permanently - would be absurd given that
  the Legislature's purpose in enacting Act 250 was to protect and conserve
  the lands and environment of the state from the impacts of unplanned and
  uncontrolled changes in land use.  See 1969, No. 250 (Adj. Sess.), § 1
  (findings and declarations of intent); Braun v. Bd. of Dental Exam'rs, 167
  Vt. 110, 117, 702 A.2d 124, 128 (1997) (statutes construed with presumption
  "that the Legislature does not intend an interpretation that would lead to
  absurd or irrational consequences").  

       ¶  15.  We note that this is not a new interpretation of Act 250. 
  Indeed, environmental board rules provide for exactly such an abandonment
  in the case of a subdivision project.  See EBR § 2(B)(3), 6 Code of Vermont
  Rules 12 003 001-10 (Act 250 jurisdiction over subdivisions shall cease to
  be found if a project is retracted or revised below jurisdictional levels
  any time prior to the construction of improvements); see also 10 V.S.A. §
  6091(b) (nonuse of an Act 250 permit after three years constitutes an
  abandonment of the development).

       ¶  16.  Here, Audet would meet the test set out by EBR § 2(B)(3). 
  The record shows that although Audet used Parcel 3 briefly for vehicle
  storage, he abandoned the use almost two years ago, did not construct
  improvements on the land for business purposes, left no lasting impression
  on the landscape, and has no plans to re-enter Parcel 3 for reasons related
  his vehicle salvage business. (FN2)  Thus, there is no historic impact or
  current or planned use of Parcel 3 that is "part of the [vehicle sales and
  repair] project" for the environmental commission to review.  Cf. In re
  Agency of Admin., State Bldgs. Div., 141 Vt. 68, 79, 444 A.2d 1349, 1354
  (1982) (Act 250 development jurisdiction triggered only when a project "has
  achieved such finality of design that construction can be said to be ready
  to commence").  The only effect of a jurisdictional ruling at this point
  would be to make Audet go through Act 250 review for his business
  enterprise in the village center.  Given that the village business occupies
  less than one acre, and has no connection with any other parcel, such
  review would be inconsistent with the purposes of the Act.  Thus, so long
  as Parcel 3 remains uninvolved land, Act 250 jurisdiction does not attach
  to Audet's business.

       Affirmed.

                                       BY THE COURT:

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Paul L. Reiber, Associate Justice



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                                  Footnotes


FN1.  This and other relevant statutes and regulations have been revised
  since this matter commenced.  None of the revisions involved any
  substantive changes, but rather were organizational only.  Thus, for ease
  of use, in this opinion we cite to the current statutes and regulations.

FN2.  It is undisputed that Audet cleared, filled and graded portions of
  Parcel 3, and later stored vehicles on the improved area.  The
  environmental board, however, found that these improvements were not
  related to Audet's business, but rather were done to enable possible
  removal of the condemned house or for Audet's express intent of building a
  new residential unit on the lot. The Mitchells did not appeal this finding,
  and it is therefore final.