### Mountain Top Inn & Resort Jurisdictional Opinion (# 1-391)

ENTRY REGARDING MOTION

Act 250 Jurisdictional Opinion (23-3-17 Vtec)

Title: Motion to Compel (Motion 2)

Filer: Katherine R. Hall
Attorney: James A. Dumont Filed Date: September 22, 2017 Response in Opposition filed on 10/10/2017 by Attor ney Christopher D. Roy for Appellant Chittenden Resorts, LLC Reply in Support of Motion filed on 10/24/2017 by A ttorney James A. Dumont.

The motion is GRANTED IN PART and DENIED IN PART.

The Vermont Natural Resources Board (“NRB”) and Kat hy R. Hall (collectively, “Movants”) move to compel RMT Associates, LLC and Chittenden R esorts, LLC (collectively, “Appellants”) to respond to NRB’s Interrogatory #10 and Ms. Hall’s R equests to Produce #5 and #7 (“Hall RTP #5” and “Hall RTP #7”).
The present appeal is of an Act 250 Jurisdictional Opinion (“JO”) issued by the District Coordinator for the District #1 Environmental Commi ssion (“District Coordinator”) on February 23, 2017. Appellants requested the JO concerning a home rental program associated with Mountain Top Inn and Resort (“Resort”). The JO det ermined that the home rental program constitutes a substantial change to the Resort, and a material change to the resort facilities and independently-owned homes associated with the renta l program. The District Coordinator also concluded the rental homes are “involved land” for Act 250 purposes. As we consider the pending motion to compel, we fir st note that the allowable scope of discovery in litigation is generally very broad: pa rties are permitted to make inquiries “regarding any nonprivileged matter that is relevant to any pa rty’s claim or defense and proportional to the needs of the case.” V.R.C.P 26(b)(1). Even if a d iscovery request targets information that would be inadmissible at trial, the discovery may be allo wed, “if the information sought appears reasonably calculated to lead to the discovery of a dmissible evidence.” Id. 

## S TATE OF 

## V ERMONT

SUPERIOR COURT ENVIRONMENTAL DIVISION Docket No. 23-3-17 VtecMountain Top Inn & Resort, JO (#1-391), No. 23-3-17 Vtec (EO on Motion to Compel) (11-2-2017) page 2 of 5.

Interrogatory #10 asks Appellants to “provide an ac counting of all financial gains realized through the Rental Program for each home since 2007 .” Hall RTP #5 asks Appellants to produce various financial and business information, plans a nd statements relating to the income gained from the rental program homes and income gained fro m other accommodations at the Resort. Appellants object, arguing the requests are irrelev ant to the legal issues presented in this appeal and seek confidential and propriety information. F or the reasons stated below, we decline to compel Appellant to respond further to Interrogator y #10 and Hall RTP #5. We first note that this JO appeal appears to raise legal issues of first impression in Act 250 jurisprudence. Appellants initially sought advice from the District Coordinator about the wisdom of applying for and receiving “a stand-alone Master Permit,” to address the “compliance and monitoring challeng[es]” that have arisen from the multitude of state land use permits and conditions that presently encumber the Resort. Let ter from Atty. Roy, dated January 24, 2017, Requesting a Jurisdictional Opinion, at Pp. 1–2.
The investigation concerning a Master Permit appare ntly led to a discussion and disclosure of the components of Appellants’ Resort business. One component of the Resort business has historically been to offer to manage t he rental of nearby single-family homes that are individually owned by others. 1 Some of these nearby homes were built on lots ori ginally created through prior subdivisions of the lands tha t were once included in the Resort lands. When the District Coordinator suggested that these individually-owned homes would need to be included in the Resort developments for purposes of the anticipated Master Permit application, Appellant sought the JO that is the subject of this appeal, seeking a determination of whether “third party participation in the Resort’s rental p rogram . . . is sufficient to subject the[se independently-owned] homes . . . to Act 250 jurisdi ction under the Resort’s land use permit for the Resort Property.” Id. at 1.
In response to Appellants’ request, the District Co ordinator issued JO #1-391, concluding that: [T]he addition of 26 ancillary private homes under the exclusive control of the resort during regular rental periods, offered and a dvertised by the resort and other sources as lodging facilities available at an d offered by the Mountain Top Inn, constitutes a material change to both the perm itted resort and to the permitted private homes. With respect to any priva te homes not presently subject to Act 250 jurisdiction, I conclude that th ose homes constitute both a substantial change to the preexisting features of t he resort and “involved lands” under the Act 250 Rules[ 2 ]—engaged by contract with the Mountain Top Inn. .

. .. In summary, without consideration of the cumulative , aggregated impacts of use of resort facilities by all guests, the District Co mmission and statutory parties are deprived of the ability to adequately address poten tial or actual impacts under the Act 250 criteria. This is contrary to the provisio ns of both statute and rule.

1 The Resort appears to be not too far away from th e Killington Mountain Resort and is attractive to s hortterm renters visiting the area. Id. at 2.

2 A footnote that provides a detailed quotation of Act 250 Rule 2(C)(5) was included here in the JO.Mountain Top Inn & Resort, JO (#1-391), No. 23-3-17 Vtec (EO on Motion to Compel) (11-2-2017) page 3 of 5.

JO #1-391 at 6. 3
In response to the JO, Appellants filed a timely ap peal with this Court and thereafter filed its Statement of Questions, raising three legal iss ues:

1. For purposes of evaluating the scope of Act 250 jur isdiction, does Mountain Top exercise “control” over private homes voluntarily participating in Mountain Top’s short-term vacation rental program f rom time to time?

2. Does the participation of private homes in Mountain Top’s voluntary shortterm rental program, considered alone, subject thos e house lots to coverage under an Act 250 permit governing Mountain Top’s la nd and operations?

3. Are the answers to the above questions altered if t he private homes previously received “separate” subdivision approval pursuant to Act 250, and are thus already subject to Act 250 jurisdiction pursua nt to those permits? Appellants’ Statement of Questions, filed April 6, 2017, at 1.

We recite this procedural history to provide contex t to this somewhat unique jurisdictional appeal. In essence, the challenged legal determinations assert that multiple private property owners have engaged in a jurisdiction-trig gering joint venture, such that (a) their business relationships should be considered “materi al changes” to the previously permitted development at the resort, and (b) that those same business relationships should be regarded as a “joint venture”, such that the separately-owned r ental homes should be regarded as “involved land” and be subject to the terms and conditions of any Act 250 permit governing the Resort activities. The parties have not presented any citation to a pr ior proceeding that presents precedent for these legal issues, either before a district co mmission, the former Environmental Board, this Court, or our Supreme Court. Our own research has found none, either.
For purposes of the pending motion, we are not on c ompletely uncharted waters. We reference the legal issues presented by the challen ged JO and Appellants’ Statement of Questions in order to frame what facts may be relevant to thi s litigation. When determining what facts are relevant, we look to the legal issues that a litiga tion presents. See Vermont Turquoise Hospitality, LLC, No. 131-8-14 Vtec, slip op. at 3 (Vt. Super. E nvtl. Div. Jun. 24, 2015) (Durkin, J.) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
The pending motion and Appellants’ objection to it raise challenges concerning what facts are relevant to this litigation. Movants argue the ir discovery requests seek evidence of a “joint venture” between Appellants and relevant homeowners

. 4 Appellants assert that the Movants’ discovery requests seek confidential information th at is not determinative of the legal issues concerning whether a “joint venture” has been estab lished. For the reasons stated above and

3 Copies of Attorney Roy’s Jan. 24, 2017, letter, r equesting the JO, as well as JO #1-391, have been f iled as part of the record in this appeal.

4 Pursuant to 10 V.S.A. § 6001(14)(A), those engaged in a “joint venture” are treated as the same “pers on” for Act 250 development and jurisdictional purposes

.Mountain Top Inn & Resort, JO (#1-391), No. 23-3-17 Vtec (EO on Motion to Compel) (11-2-2017) page 4 of 5.

below, we conclude that the financial information s ought in Interrogatory #10 and Hall RTP #5 is beyond the scope of allowable discovery in this lit igation. We first note that Appellants have asserted, and Mo vants have not contested, that the detailed financial data sought is confidential in n ature, and that Movants have not provided a justification for why these confidences and trade s ecrets should be breached and disclosed. More to the point, we note that Appellants have alr eady responded to Movants’ discovery requests by disclosing and producing copies of thei r rental management agreements with the individual homeowners, albeit with the specific per centages and figures redacted from those contract forms. These two undisputed procedural fa cts compel us to deny the pending motion regarding these two discovery requests. Moreover, we question how, particularly in light of the disclosures already made, revelations of the details concerning the Resort’s confidential business secrets will shed any further light on the legal issues presented. A joi nt venture requires “an agreement to share in profits and losses, joint control or right to contr ol, and joint proprietary interest in the subject matter and a community of interest in the performan ce of the common purposes.” Winey v. William E. Daily, Inc., 161 Vt. 129, 140 (1993) (ci tations omitted). Important to our analysis here, the Winey v. Daily precedent does not rely upon a s pecific measure of the shared profits and losses. Simply put, we reject Movants’ assertion t hat the percentage or gross receipts that Appellants receive through these rental management arrangements provides any further context to the question of whether Appellants and the indep endent homeowners are engaged in a joint venture or what further impacts, if any, these rent al management arrangements could or are likely to cause in connection with the Resort opera tions. Appellants have provided spreadsheets showing the frequency that the individual homes hav e been rented through the Resort’s efforts. We cannot discern how the specific fees received by the Resort for the rental of the individual homes is relevant to the jurisdictional issues rais ed in this appeal. We agree with Appellants that the requested financi al information is confidential in nature and provides no further revelations regardin g the relationship between the Resort and the independent homeowners. 5 Therefore, we DENY the motion to compel Appellants’ response to Interrogatory #10 and Hall RTP #5.
Hall RTP #7 asks Appellants to produce various docu ments pertaining to impacts from the rental home program. Appellants object, arguing th at impacts are not relevant to the jurisdiction determination. We disagree.
Any material change to the Resort would constitute a development activity, which would require a permit amendment. A material change is a change in permitted development “which may result in a significant adverse impact” to an A ct 250 criterion. Act 250 Rules, Rule 2(c)(6). While impacts themselves may not create Act 250 jur isdiction, they are relevant when determining if there has been a material change suc h that Act 250 jurisdiction requires an application for amendment to an existing permit. I mpacts are similarly relevant when determining if the land is “involved” or if there h as been a substantial change to preexisting

5 To the extent there is any relevance in the reque sted information, the Court finds it too remote to the proportional needs of the case. V.R.C.P. 26(b)(1).Mountain Top Inn & Resort, JO (#1-391), No. 23-3-17 Vtec (EO on Motion to Compel) (11-2-2017) page 5 of 5.

development. Act 250 Rules, Rule 2(c)(5)(a), 2(c)( 7). We therefore conclude that Movants’ motion to compel a response to Hall RTP #7 must be and is GRANTED

. So Ordered.

Electronically signed on November 2, 2017 at Newfan e, Vermont, pursuant to V.R.E.F. 7(d).

________________________________ Thomas S. Durkin, Superior Judge

Notifications: Christopher D. Roy (ERN 1352), Attorney for Appella nts RMT Associates, LLC and Chittenden Resorts, LLC Gregory J. Boulbol (ERN 1712), Attorney for the Ver mont Natural Resources Board James A. Dumont (ERN 1948), Attorney for Cross Appe llant Katherine R. Hall
Interested Person Patrick Max
Interested Person Patricia Bick Interested Persons Robert and Joanne Pye
Interested Person Laurie Wilson Interested Persons Gerald and Christine Gormley

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