Title: In re Nehemiah Associates, Inc.

State: vermont

Issuer: Vermont Supreme Court

Document:

In re Nehemiah Associates, Inc.  (95-561); 166 Vt. 593; 689 A.2d 424

[Filed 6-Dec-1996]

                               ENTRY ORDER

                      SUPREME COURT DOCKET NO. 95-561

                              JUNE TERM, 1996

In re Nehemiah Associates, Inc.      }     APPEALED FROM:
                                     }
                                     }
                                     }     Environmental Board
                                     }
                                     }
                                     }     DOCKET NO.        1R0672-1-EB

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

       Nehemiah Associates, Inc., appeals from a decision of the
  Environmental Board, which denied Nehemiah's application for an Act 250
  permit to subdivide and develop a 3.38-acre lot. Nehemiah argues that the
  Board improperly applied the doctrine of collateral estoppel to deny a
  permit amendment.  We agree and reverse.

       In 1989, Nehemiah purchased twelve acres of land on Route 3 in
  Pittsford and obtained an Act 250 permit authorizing it to subdivide the
  land into eleven lots: ten residential lots each less than one acre and a
  single 3.38-acre lot.  Nehemiah proposed to preserve the 3.38-acre lot
  undeveloped due to the prime agricultural soils, and proposed covenants to
  protect the farming viability of this land.  Condition 9 of the permit
  states:

      The permittee shall, by deed covenant to all lots, include the
      following restriction:

        By acceptance of this deed, Grantees . . .
        acknowledge that . . . 3.38 acres . . . are retained
        and made available to third parties for agricultural
        and related farming purposes . . . [and] waive any
        cause . . . of action against Grantor or any person
        utilizing the said retained lands for agricultural
        purposes, arising out of or pertaining to odors, run-
        off, or noise associated with any agricultural
        operation on said retained lands.

        Furthermore, the permittee or subsequent
        landowners association shall maintain the 3.38 acre
        agricultural reserve lands as open, cleared,
        uncluttered, and unencumbered land.

       (Emphasis added.)  The district commission also found that the
  3.38-acre lot "will provide a visual buffer for travellers on Route 3, by
  helping to maintain the rural character of the area." As of May 1994,
  Nehemiah had sold nine of the ten residential lots.  Each of the deeds
  contained the paragraph above waiving the grantees' rights to bring actions
  for agricultural nuisance.  None of the deeds contained the second
  paragraph reserving the open lands.

 

       In November 1992, Nehemiah filed an application for a permit to
  subdivide the 3.38-acre lot into three residential lots.  The permit was
  denied by the district commission and Nehemiah appealed to the
  Environmental Board.  In reviewing the application, the Board applied the
  doctrine of collateral estoppel and concluded that all elements were met. 
  Noting that the doctrine should not be applied as an inflexible rule in
  administrative proceedings, the Board then balanced policy considerations
  for and against granting the permit amendment.

       The Board concluded that changes in the surrounding area, from rural
  agricultural to residential, supported amendment of the permit.  It also
  noted that, since the 1989 permit was issued, the Vermont Department of
  Agriculture had created a program that allows Act 250 applicants to
  mitigate the impact of developments on agricultural soils by paying fees to
  an agricultural preservation fund.  On the other side of the balance, the
  Board concluded that Nehemiah had failed to comply with condition 9 of the
  1989 permit because it did not include the second paragraph of condition 9
  in the deeds to the lots it sold.  Solely because Nehemiah failed to comply
  with condition 9, the Board denied the permit amendment.  Nehemiah appeals.

       Nehemiah first argues that the Board erred by employing the doctrine
  of collateral estoppel to evaluate an application for a permit amendment. 
  We recently held in In re Stowe Club Highlands, No. 95-341, slip op. at 5
  (Vt. Nov. 8, 1996), that the elements of collateral estoppel are not
  appropriate standards to evaluate an application for a permit amendment. 
  Thus, we agree with Nehemiah on this first issue.

       Nonetheless, in Stowe Club, we concluded that the Board's analysis of
  policy considerations could provide sufficient grounds to deny a permit
  amendment.  Id. at 5-6.  In that case, the Board found that there had been
  no relevant changes in factual or regulatory circumstances, no
  unforeseeable changes in the development, and no changes in technology, all
  factors weighing against a permit amendment.  In addition, the Board found
  that purchasers of adjacent lots relied upon the permit condition --
  restricting development in the open lot -- and that the district commission
  relied upon this restriction to mitigate the impact of the overall
  development.  Absent any relevant changes in circumstances, we held that
  the reliance by the neighboring landowners and the district commission
  provided sufficient grounds to deny the permit amendment.  Id. at 8-9.

       In this case, we are unable to uphold the decision of the Board. 
  Here, the Board found both regulatory and factual changes in circumstances
  since 1989 beyond the control of the applicant.  Nehemiah committed to pay
  the preservation fund fee necessary to mitigate the loss of 3.38 acres of
  primary agricultural soils.  Moreover, the surrounding area has been
  developed for residential use since the original permit.  Both factors
  weigh in favor of granting the permit amendment.  More importantly,
  however, the Board denied the amendment solely on the ground that Nehemiah
  failed to comply with condition 9 of the original permit, and we conclude
  that the Board erred in finding a failure to comply.

       The Board held that condition 9 required Nehemiah to include both
  paragraphs -- the agricultural nuisance covenant and the reservation of
  open lands -- in the deeds for each lot. Nehemiah argues that the second
  paragraph was not intended to be a covenant included in the deeds.  We
  agree with Nehemiah that the Board's construction of condition 9 is
  inconsistent with the language.  The paragraph waiving agricultural
  nuisance claims is written as a covenant, in terms of "grantor" and
  "grantee," and Nehemiah copied this language verbatim into all nine deeds. 
  The open lands paragraph is not written as a covenant; it refers to
  Nehemiah as the "permittee" not as "grantor."  This language would not make
  sense incorporated into a deed in which there is generally no "permittee." 
  Nehemiah reasonably construed condition 9 to require the agricultural
  nuisance covenant only to be included in the deeds.

 

       The open lands paragraph is a condition of the original permit to
  which Nehemiah seeks an amendment.  Because the Board denied the amendment
  solely on the ground that Nehemiah failed to include the open land
  paragraph in the deeds, we reverse.

       Reversed and remanded for the Board to balance the policy
  considerations raised by the parties to determine whether to grant the
  permit amendment.

     BY THE COURT:

     _______________________________________
     Frederic W. Allen, Chief Justice

     _______________________________________
     Ernest W. Gibson III, Associate Justice

     _______________________________________
     John A. Dooley, Associate Justice

     _______________________________________
     James L. Morse, Associate Justice

     _______________________________________
     Denise R. Johnson, Associate Justice