Appeal of Handy ( 2002 )

STATE OF VERMONT
ENVIRONMENTAL COURT
In re: Appeal of Paul L. and }
Catherine Handy }
} 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
1
schedule a further evidentiary hearing on the merits of the application . 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-square-
foot 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).
2
The Astate statute@ referred to in the minutes is 24 V.S.A. ' 4443(c) as then in 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.
th
Dated at Barre, Vermont, this 11 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 currently-
applicable 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.