STATE OF VERMONT

ENVIRONMENTAL COURT

In re: Appeal of Paul L. and 

Catherine Handy 

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Docket No. 96-6-01 Vtec

Decision and Order on AGood Faith@ Issue

 Appellants Paul L. and Catherine Handy appealed a decision of the Zoning Board of 

Adjustment (ZBA) of the Town of Shelburne, applying the amended zoning ordinance rather than 

the 1995 zoning ordinance to their application, upon remand of the application to the ZBA after 

decision by the Vermont Supreme Court in In re Handy and In re Jolley Associates, 171 Vt. 336 

(2000). Appellant-Applicants are represented by Douglas K. Riley, Esq.; the Town of Shelburne is 

represented by Joseph S. McLean, Esq. When the term A Appellant@ is used in the singular it 

refers to Appellant Paul Handy. 

 By agreement of the parties, the merits of this matter were bifurcated, so that the Court first 

would consider and rule on whether the application was A validly brought and pursued in good 

faith,@ as required by the Vermont Supreme Court in its decision, and then if necessary would 

schedule a further evidentiary hearing on the merits of the application1. This first stage of the 

case was submitted to the Court on agreed facts and oral and written argument and memoranda. 

Upon consideration of the agreed facts and the written memoranda, the Court finds and 

concludes as follows on the issue of A good faith.@

 Appellants= property at issue in this appeal is approximately 3 acres in area, and is located at 

the southeast corner of Shelburne Road (U.S. Route 7) and Martindale Road in the Town of 

Shelburne, at an address known as 1918 & 1920 Shelburne Road. It contains an existing 

convenience/liquor store (with a 6150-square-foot footprint) and a residence (with a 1800-squarefoot footprint). Appellant leased the convenience store portion of the property and operated the 

convenience store from approximately 1973 to July 9, 1999, when Appellants purchased the 

entire property, continuing to operate the convenience store.

 In 1991, Civil Engineering Associates developed conceptual plans for the property, including 

an addition to the store property, moving the existing house and garage, and adding gasoline 

service to the convenience store operation. Civil Engineering Associates submitted a so-called >

study plan= depicting such a proposal for informal review by the Town= s Planning Office in 

October 1991, but no action appears to have been requested or taken at that time.

 On April 8, 1993, the Planning Commission approved a two-lot subdivision for the property, 

creating a smaller lot known as Lot 1 with frontage only on Martindale Road, and a larger corner 

lot known as Lot 2. A condition of the subdivision approval was that the house on Lot 2 be moved 

to Lot 1. This subdivision approval is referred to in Exhibit K as having been attached, but was not 

in fact attached to Exhibit K. The two lots appear on all the plans submitted as exhibits in this 

matter, but no facts or exhibits were submitted stating whether any property transfers have taken 

place.

 In January or February of 1996, Appellant retained Civil Engineering Associates to redesign 

the existing convenience/liquor store to add gasoline sales and an expanded retail sales and/or 

expanded motor vehicle service business component. Civil Engineering Associates prepared the 

May 1996 site plan at the direction of its principal Charles R. Dunham, showing the existing 
house to be demolished and removed, and showing a substantially expanded convenience store 

building with gasoline pumps. In June of 1996, Appellant filed applications for setback variances 

and conditional use approval of the proposal as shown on the May 1996 Plan. The Zoning Bylaws 

have not been provided in this appeal; it is not clear to the Court whether any applications were 

made or should have been made under any section governing nonconforming uses or 

noncomplying structures, or whether that was the rationale for the conditional use applications. 

 The Zoning Board of Adjustment (ZBA) conducted a duly warned public hearing on Appellant=

s applications on July 8, 1996. At the conclusion of the hearing, the ZBA voted to continue the 

public hearing to August 12, 1996 and also to conduct a site visit on that date. On August 12, 

1996, the ZBA first conducted the site visit and then reconvened its public hearing on Appellant=

s applications. The ZBA voted to deny the applications and issued a written decision the same 

day. Mr. Dunham of Civil Engineering Associates believed that the size and scale of the original 

project, as well as the proposal to remove the house, were significant factors leading to the 

denial; he notified Appellant of his opinion.

 Following the August 1996 ZBA denial, Mr. Dunham began preliminary discussions with 

Appellant regarding possible changes to the project. He did not bill Appellant for services 

rendered in connection with these discussions during the months when they took place, but it was 

not his practice to do so. During these discussions, Mr. Handy insisted that the gasoline sale 

component remain a part of the project, although he was undecided about other aspects of the 

project. At some time following the August 1996 ZBA denial, Appellant hand-sketched two 

alternative project designs onto copies of the May 1996 Plan. 

 At some time following the August 1996 ZBA denial, Appellant contacted a real estate broker, 

Eric Farrell, for advice regarding development options, including alternatives for adding retail 

space to the property, and they discussed possible uses for the house on the property. No bills or 

other documentary evidence exists of these discussions. 

 At some time in the fall of 1996, not later than October, Mr. Dunham and Mr. Farrell walked 

through the house on the property and discussed issues related to the economic or development 

potential of the house. Mr. Farrell recalls reporting these discussions to Mr. Handy, but no 

documentary evidence exists of such a report.

 Mr. Dunham took the last week of October and most of November 1996 off for hunting, as is 

his customary practice.

 On December 3, 1996, the Town published notice of a December 19, 1996 Planning 

Commission hearing to consider proposed zoning bylaw amendments. One of these amendments 

proposed to eliminate the use category of A gas station@ use in the Residential-Commercial 

zoning district.

 At some time in December 1996, after Mr. Dunham had returned from hunting, Appellant 

notified Mr. Dunham that Appellant had made up his mind on a project design for the property 

and wanted Civil Engineering Associates to produce an application for zoning approval. Appellant 

instructed Mr. Dunham to prepare a revised plan and application containing certain specified 

elements. No bills, notes or other documentary evidence exists of these discussions. At some 

time in December 1996, Mr. Dunham met with an associate, David Marshall, to brief him on the 

revised project for Appellant and asked him to work on it. No bills, notes or other documentary

evidence exists of this briefing.

 At the December 19, 1996 Planning Commission hearing, the Planning Commission voted to 

recommend to the Selectboard that the amendments be adopted. No representative of Appellants 

appeared or participated at the December 19, 1996 hearing.
 Mr. Dunham first became aware of the proposed zoning amendments some time in December 

1996, but does not recall the circumstances under which he became aware of the proposed 

changes. Mr. Marshall does not recall when he first became aware of the proposed zoning 

amendments. 

 On January 5, 1997, the Selectboard published notice of a January 21, 1997 public hearing to 

consider the proposed zoning bylaw amendments.

 Mr. Marshall began work to produce a revised plan for Appellants= project in late December 

1996 or early January 1997. In connection with that work, he sketched preliminary engineering 

details onto a copy of the March 1996 plan and the May 1996 plan, the later of which was dated 

as having been printed out on January 8, 1997. The work on the revised plan was completed by 

January 10, 1997, and Mr. Marshall submitted it to the Town on or about January 13, 1997, under 

a cover letter dated January 10, 1997. Neither Mr. Marshall nor any other representative of 

Appellant consulted with any representative of the Town in the course of developing or submitting 

this application.

 The application proposed a 4,000-square-foot > superette= with three gasoline pumps, all 

within the footprint of the original 6,150-square-foot commercial building. It included applications 

for conditional use approval and for variances from the setback requirements of the Zoning 

Bylaws. Mr. Marshall= s cover letter refers to the earlier denial, and notes that the size of the 

proposed building has been reduced and that the residential building is to be retained, both A in 

accordance with@ the ZBA comments on the earlier application.

 By letter dated January 17, 1997, the Town= s Zoning Coordinator, Mr. William Youngblood, 

wrote back to Mr. Marshall regarding the application, noting that the 1993 subdivision approval 

would require amendment, noting some concerns (now moot) regarding the Planned Unit 

Development requirements, alluding to their prior discussion of the pending bylaw changes 

affecting gas stations and the need for Selectboard consideration of the application.

 The minutes of the January 21, 1997 public hearing of the Selectboard reflect that Mr. 

Dunham attended on behalf of Appellant. He asked a A procedural question@ regarding

Appellants= application for the enlarged convenience store and gasoline pumps, that had been 

denied in A July@ (actually mid-August) 1996, which he described as being A in the process of 

reworking.@ The minutes state as follows:

It is his understanding that if these [zoning bylaw] revisions are adopted the Selectboard will have 

to hear a request for the new proposal [to] move forward in the approval process. He asked when 

the appropriate time will be to do this. [Town Planner] Bortz explained [that] this situation is 

addressed by state statute, and she is working with the Town= s attorneys on the specifics of how 

to handle this. She said if these revisions are passed at this meeting they will go into effect in 21 

days. Any applications filed during the 21 day period must be heard by the Selectboard.

(Emphasis added).

 The Astate statute@ referred to in the minutes is 24 V.S.A. ' 4443(c) as then2in effect. On 

page 3 of the minutes, a representative of another landowner in the district reported being under 

contract to sell property to another applicant which was: 

nearly ready to make a presentation for a gas station facility. He asked, procedurally, what can be 

done. [Town Planner] Bortz answered that if the revisions are adopted following this hearing, 

an application would have to be heard by the Selectboard. If the revisions are not adopted, or 

if the hearing is continued, an application would take the current route. (Emphasis added).
 Thus, the January 21, 1997 public hearing minutes do not suggest that a gasoline station 

component of a project would necessarily be denied if submitted during the pendency period, but 

only that it would have to be heard by the Selectboard. At the January 21, 1997 meeting of the 

Selectboard, a majority of the Selectboard voted to adopt the proposed zoning bylaw 

amendments. 

 On January 22, 1997, Mr. Marshall responded to the Zoning Coordinator= s January 17, 1997 

letter, enclosing further revisions to the plans and also requesting variances from the Planned 

Unit Development requirements of the Zoning Bylaws.

 Pursuant to 24 V.S.A. ' 4404(c), the adopted zoning bylaw amendments became effective 

February 11, 1997.

 In In re Handy and In re Jolley Associates, 171 Vt. 336 (2000), the Supreme Court struck 

down 24 V.S.A. ' 4443(c) as providing no standards for the Selectboard review of an application 

during the time before the effective date of the zoning bylaw amendment. The Supreme Court 

remanded for the ZBA in the first instance to apply vested rights jurisprudence and to determine 

whether each appellant= s application was > validly brought and pursued in good faith,= sufficient 

to entitle the applicant to proceed under the older zoning ordinance. The Supreme Court noted 

that the later an application is filed with respect to the bylaw amendment process, the higher is 

the applicant= s A burden to show that it did not engage in a race to put in some development 

proposal before the ordinance became effective.@

 Appellants= and Mr. Dunham= s course of conduct in the present case evidences that 

Appellant originally developed the proposal and plans and sought approval of a gas station 

modification of the existing convenience store/liquor store use on the property for the ZBA= s 

consideration in July and August of 1996. After that denial, Appellant began exploration of various 

ways to modify and/or downsize the project with a view towards resubmitting a modified proposal 

that could be approved. Appellants worked during the remainder of the fall available to them to 

modify that proposal for resubmittal, even though they did not consult with the zoning and 

planning staff during that time. After becoming aware of the zoning bylaw change, Appellants=

representative discussed with the zoning staff the protocol for approval of the application in light 

of the zoning bylaw amendment, and understood that the application would have to go before the 

Selectboard. Appellants have met their burden to show that they submitted their revised proposal 

in good faith.

 The Town argues that the Court should apply the > pending ordinance= exception to 

Vermont= s vested rights doctrine, as recently applied by the Vermont Environmental Board in 

John A. Russell Corporation and Crushed Rock, Inc., Land Use Permit #1R0489-6-EB(Remand)-

EB (January 17, 2002). While that doctrine is a valuable policy analysis, it should not be applied 

automatically to block consideration of the application under the old regulation in this case. 

Rather, we must determine from the sequence of events in this particular case whether this 

particular applicant acted in good faith, because at the time the application was made, the former 

version of 24 V.S.A. ' 4443(c) was in effect and the parties were entitled to act according to its 

provisions to file an application for review by the Selectboard during the > pendency period.= If 

the new regulation were to apply automatically (as it does under the new version of what is now '

4443(d)), then the application could not have been considered on its merits as the proposed uses 

would have been prohibited in the district. If that had been the case, the assurances given to the 

applicant and the public during the January 21, 1997 Selectboard meeting, that the Selectboard 

would consider the application if it was filed at any time until the effective date of the new 

ordinance, would have been meaningless.

 As the Supreme Court explained in its decision in this matter, the filing of an application 

apparently late in the ordinance amendment process may raise an inference or even a 
presumption that the application was not filed in good faith. But that inference or presumption is 

rebuttable, not absolute. It may be overcome by evidence to the contrary, as has been done here.

 Based on the foregoing, it is hereby ORDERED and ADJUDGED that Appellants= 1997 

application was validly brought and pursued in good faith sufficiently so that Appellants are 

entitled to have their application considered on its merits under the older version of the zoning 

ordinance. The hearing on the merits is scheduled for March 28, 2002. However, a conference 

will be scheduled as soon as possible to discuss what remains of the project after the March 6, 

2002 filing, and whether any portion of the regulations applicable to preexisting buildings must be 

considered in the present case.

 Dated at Barre, Vermont, this 11th day of March, 2002.

___________________

Merideth Wright 

Environmental Judge

Footnotes

1 On March 6, 2002, Appellants filed a dismissal of: "All portions of the Application that seek 

commercial use of the house on the subject property, that request approval of the property as a 

Planned Unit Development (PUD), and that seek variances from any of the portions of the 

Shelburne Zoning Regulations dealing with Planned Unit Development." Appellants stated: "In 

connection herewith, Applicants withdraw their proposal to use the house on the property for any 

purpose that is not a valid, pre-existing, non-conforming use or other permitted use. The 

Applicants continue to seek variances from the yard requirements for the Residential-Commercial 

District under Shelburne Zoning Regulations, Section 830.2."

2 This section was struck down by the Vermont Supreme Court in its decision issued on 

November 17, 2000 in In re Handy and In re Jolley Associates, 171 Vt. 336 (2000). The currentlyapplicable state statute was adopted in the 2001 legislative session, 24 V.S.A. §4443(d). Rather 

than establishing standards for the selectboard review in the former statute, it now provides that 

applications filed during the five months (150 days) after the public notice of the first public 

hearing before the legislative body on a zoning bylaw amendment must be reviewed under the 

proposed bylaw. If the bylaw is not adopted or takes longer than the 150 day period, then the 

applicant may opt to have the application reviewed under the old bylaw at no additional expense.