Title: L'Esperance v. Town of Charlotte

State: vermont

Issuer: Vermont Supreme Court

Document:

L'Esperance v. Town of Charlotte  (96-532); 167 Vt. 162; 704 A.2d 760

[Filed 3-Oct-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                            No. 96-532

Roy & Linda L'Esperance                      Supreme Court

                                             On Appeal from
    v.                                       Chittenden Superior Court

Town of Charlotte                            April Term, 1997

Shireen Avis Fisher, J.

Mark A. Kaplan and Richard R. Goldsborough of Jarvis & Kaplan, Burlington,
for plaintiffs-appellees.

Steven F. Stitzel of Stitzel & Page, P.C., Burlington, for defendant-appellant.

PRESENT:  Amestoy, C.J., Gibson, Dooley, and Johnson, JJ. and 
          Allen, C.J. (Ret.), Specially Assigned.

       DOOLEY, J.  Plaintiffs Roy and Linda L'Esperance sued to compel the
  Town of Charlotte to renew their lease for property on Lake Champlain under
  the same terms as their original lease.  The superior court agreed that
  plaintiffs were entitled to renewal and granted them summary judgment.  On
  appeal, the Town of Charlotte argues that (1) the lease violates Chapter I,
  Articles 7 and 9 of the Vermont Constitution, (2) the lease is invalid
  because it is contrary to public policy, (3) the lease is not supported by
  adequate consideration, and (4) the selectmen lacked authority to grant a
  lease that contained an option to renew beyond its initial fifteen-year
  term.  We affirm.

       The Town of Charlotte owns a large piece of property on Lake
  Champlain, known as Thompson's Point, and has subdivided it into lots that
  it leases as sites for homes and summer camps.  In 1979, the Town entered
  into a fifteen-year lease with plaintiffs for a quarter-acre lot with
  one-hundred feet of lake frontage.  The lease is referred to by the parties
  as a "ninety-times

 

  lease" because the annual rent is calculated by multiplying the town tax
  rate by ninety; in 1993, this calculation produced a rent of $138.60 per
  year.  The lease was renewable for an additional fifteen-year period on the
  same terms.  With the approval of the Town, plaintiffs placed a year-round
  residence on the lot, spending in excess of $50,000 on the building and
  improvements. The residence is currently appraised at $86,108 and results
  in an annual property tax liability to the Town of $1,369.

       In July 1993, Roy L'Esperance notified the Town of his intention to
  exercise the option to renew on the lease.  By letter dated September 1993,
  the Town informed plaintiffs that it would renew the lease only if they
  agreed to new terms, including higher rental payments.  The proposed lease
  would set the rent  by multiplying each $10,000 of appraised lot value
  times 200; based on the last appraisal, the rent proposed by the Town would
  be $1,288 per year.  Plaintiffs sued to enforce the option to renew on the
  same terms as the original lease and were granted summary judgment by the
  trial court in May 1995.(FN1)  The Town appealed to this Court, and we
  reversed and remanded the matter to the trial court to resolve an issue of
  material fact as to whether the Town had waived timely notice of renewal. 
  See ___ Vt. ___, 683 A.2d 17 (1996) (unpublished).  On remand, the court
  found that the Town had waived any objection it had to the late notice of
  renewal of the lease.  The Town then filed this appeal.

       There is no dispute that the lease requires the Town to renew for an
  additional fifteen-year term at the same rental rate as the initial term. 
  Thus, the Town seeks to avoid enforcement of the lease on a number of
  theories.  Central to its arguments is the fact that the lease has become a
  bad deal for the Town.  In the decade before 1979, the Town's property tax
  rate reached $7.30 per hundred dollars of appraised value.  At this rate,
  the annual rent under the ninety-times lease would have been $657. 
  Apparently, the Town expected that the rent

 

  calculation would continue to produce a fair return over the years.

       The Town miscalculated.  Valuation assessments increased to fair
  market value, and the tax rate fell below $2.00 per hundred dollars of
  appraised value in the 1980's.  As a result, the rents paid by ninety-times
  leaseholders decreased at the same time as lakeshore property values
  sharply increased.  Where it could, the Town changed the rent-calculation
  formula to $2.00 per hundred dollars of appraised value.  At this rate,
  plaintiffs would pay rent of $1,288 per year.

       The Town's first claim is that the annual rent in the original lease
  violates Chapter I, Articles 7 and 9 of the Vermont Constitution.(FN2)
  Article 7, known as the Common Benefits Clause, provides in relevant part:

     That government is, or ought to be, instituted for the common
     benefit, protection, and security of the people, nation, or
     community, and not for the particular emolument or advantage of
     any single person, family, or set of persons, who are a part only
     of that community . . . .

  The rights guaranteed by the Common Benefits Clause are generally
  coextensive with those protected under the Equal Protection Clause of the
  United States Constitution.  Brigham v. State, 8 Vt. L.W. 41, 47 (1997). 
  When no fundamental right or suspect class is involved, Article 7 requires
  that laws must be reasonably related to the promotion of a valid public
  purpose. McCallum v. Seymour, ___ Vt. ___, ___,