Rogers v. Watson

NOTICE:  This opinion is subject to motions for reargument under 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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-391


Marcia M. Rogers, Herbert & Mary             Supreme Court
Taylor, Edwina Bard, Rudolph &
Dorothy Bondone, Brian & Janet               On Appeal from
Maroney, Michael & Mary Walsh,               Bennington Superior Court
et al.

     v.                                      May Term, 1989

Gerald E. & Kay F. Watson, State
of Vermont Agency of Natural
Resources, and Town of Bennington

     v.

Charles M. & Hazel L. Wilkinson


Arthur J. O'Dea, J.

Lon T. McClintock of Offices of Thomas H. Jacobs, Bennington, for
 plaintiffs-appellees

Timothy L. Taylor and William H. Meub of Kelley, Meub, Powers & English,
  Ltd., Rutland, for defendants-appellants Gerald and Kay Watson

Jeffrey L. Amestoy, Attorney General, and Mark J. Di Stefano, Assistant
   Attorney General, Montpelier, for defendant-appellee State of Vermont
   Agency of Natural Resources


PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.


     DOOLEY, J.   This action began with a complaint by adjoining
landowners for an injunction requiring defendants, Gerald and Kay Watson, to
remove a mobile home they had placed on part of their land.  The complaint
alleged that the mobile home violated a restrictive covenant applicable to
defendants' land.  It also joined the Vermont Agency of Natural Resources,
seeking to require it to enforce certain subdivision regulations that were
allegedly violated by the presence of the mobile home.  The Agency cross-
claimed against defendants to enforce the regulations.  The trial court
found for the plaintiffs and the Agency and granted an injunction requiring
removal of the mobile home.  It also imposed a fine for violation of the
regulations.  Defendants appeal, and we affirm.
     In 1963, defendants purchased a lot in Bennington from Olaf and Edwina
Bard, the first division of a 200-acre parcel into a residential
development.  There are no restrictions in this deed.  Thereafter, the Bards
sold off other parcels, and each deed, except one to the Bards' son and
daughter-in-law, contained a covenant similar to the following:
           No mobile home, trailer, or other similar structure
          shall be placed or maintained on said premises without
          the prior approval in writing of the grantor herein or
          his heirs, executors, administrators or assigns.

In 1977, Edwina Bard (Mr. Bard having died) sold to Charles and Hazel
Wilkinson a lot adjacent to that owned by defendants.  The deed contained
the above restrictive covenant prohibiting the placement of a mobile home on
the land.  In 1981, defendants purchased part of this lot from the
Wilkinsons.  The deed did not mention the restrictive covenant.
     Because the Wilkinsons were subdividing their land, the transfer to
defendants required a permit from the Agency of Natural Resources unless
deferred because defendants waived development rights.  Defendants applied
for and received such a deferral after agreeing that they would not
construct or erect any structure, "the useful occupancy of which [would]
require the installation of plumbing and sewage treatment facilities" on the
lot without first obtaining a permit.  The deed contained this restriction.
     In October 1985, defendants decided to place a mobile home on the lot
they had acquired from the Wilkinsons.  Their son-in-law was afflicted with
a brain tumor, making it necessary for them to house him, their daughter,
and two infant grandchildren.  For this purpose, they purchased the mobile
home, poured a slab foundation, and began to construct the septic system
when they became aware that they might need a permit from the Agency.
Because of soil conditions, the Agency denied a permit for a septic system.
Nevertheless, defendants completed the sewage system but did not connect it
within the home.  Water was available from defendants' nearby house but was
not connected.  The mobile home does have heat and electricity.
Defendants' daughter and son-in-law use the mobile home as their home, but
they go to defendants' home for all living needs requiring water or sewage.
     Plaintiffs in the original action are neighboring landowners, at least
some of whom purchased land from the Bards after the sale from the Bards to
the Wilkinsons.  Edwina Bard was also a plaintiff.  She died while the
action was pending and was replaced by the executor of her estate.
     The trial court found that the restrictive covenant ran with the land,
applied to defendants, and could be enforced by plaintiffs.  It further
found that defendants' actions in placing the mobile home on the land
required a permit under the deferral language and the applicable Agency
regulation.  It found the Agency regulation to be valid.
     On appeal, defendants argue that the trial court erred in granting
plaintiffs an injunction because there was no showing that either the
benefit or the burden of the restrictive covenant was intended to run with
the land.  As to the Agency, they argue that the placement of the mobile
home on the land without connecting the water and sewage does not require a
permit under Agency regulations.  Alternatively, they argue that if the
regulation is applicable, it is invalid because it is unconstitutionally
vague, is beyond the Agency's statutory authority and represents an
excessive delegation of legislative power.
     We begin with defendants' argument that it was improper to enforce the
restrictive covenant against them.  In order to enforce a restrictive
covenant against an owner other than the original covenantee, the covenant
must run with the land.  Chimney Hill Owners' Assoc., Inc. v. Antignani, 136
Vt. 446, 454, 392 A.2d 423, 428 (1978).  At law, a covenant will run with
the land if four requirements are met:
          First, the covenant must be in writing.  Secondly, the
          parties must intend that the covenant run with the land.
          Thirdly, the covenant must "touch and concern" the land.
          Lastly, there must be privity of estate between the
          parties.

Albright v. Fish, 136 Vt. 387, 393, 394 A.2d 1117, 1120 (1978).  In equity,
the requirements are relaxed in part:  the touch and concern requirement is
"somewhat more easily met" and the privity requirement "is replaced by one
of notice."  Id. at 393 n.1, 394 A.2d  at 1120 n.1. (FN1) Because this is an
action for injunctive relief, we are dealing with the enforcement of an
equitable servitude rather than a restrictive covenant at law.
     Defendants concede that the first, third, and fourth requirements are
met but argue that there is inadequate evidence of intent to have the
restriction run with the land.  The intent can be implied as well as
expressed.  See McDonough v. Snow Constr. Co., Inc., 131 Vt. 436, 441, 306 A.2d 119, 122 (1973).  Intent can also be shown by extraneous circumstances.
See Welch v. Barrows, 125 Vt. 500, 504, 218 A.2d 698, 702 (1966).  In some
instances, the "promises are so intimately connected with the land as to
require the conclusion that the necessary intention for the running of the
benefit is present absent language clearly negating that intent."  Albright,
136 Vt. at 393, 394 A.2d  at 1120.
     Defendants' main argument is that there is insufficient evidence that
a benefit or burden was intended to run with the land, and consequently, the
restriction cannot be enforced against them.  We will begin with the burden
side of the equation.  The restriction prohibits the placement of a
particular type of structure on defendants' land.  This is the sort of
restriction "so intimately connected with the land" that we find the
"necessary intention . . . absent language clearly negating that intent."
Id. at 393, 394 A.2d  at 1120.
     Extraneous factors also point strongly to the intent to have the burden
run with the land.  The Bards retained adjoining or nearby land.  The
inclusion of the restriction in most, if not all, other deeds from the Bards
shows an intent to create a common development scheme even if it was
implemented imperfectly.  See id. at 394, 394 A.2d  at 1120.
     For the above reasons, we hold that the trial court was correct in its
conclusion that the burden of the restrictions ran with the land and could
be enforced against defendants.  Although defendants make extensive
arguments that the benefit did not run with the land, we need not reach
these arguments.  The covenant specifically requires "the prior approval in
writing of the grantor herein or his heirs, executors, administrators or
assigns."  Although the grantor is now deceased, the executor has joined
this action and can enforce the covenant as a named beneficiary of it.  We
are unpersuaded by defendants' argument that the executor has no power to
enforce the covenant because the real property went directly to the heirs.
It is sufficient that the executor is specifically named in the covenant.
The trial court did not err in granting the injunction to enforce the
restrictive covenant.
     The remaining three issues involve the trial court's conclusion that
placing the mobile home on the lot required a permit from the Agency of
Natural Resources.  Defendants first argue that the court misconstrued the
applicable Agency regulation.  The regulation provides:
          No structure or building, the useful occupancy of which
          will require the installation of plumbing and sewer
          treatment facilities may be constructed or erected on a
          lot subject to a deferral of permit, unless the lot
          owner first obtains a permit as required by these
          subdivision regulations.

Agency of Natural Resources, Environmental Protection Rule { 3-06, 5 Code of
Vt. Rules, Rule 1203301, at 020 (1982).  Defendants concede that the mobile
home is a building but argue that the useful occupancy does not require
installation of either plumbing or water facilities as shown by the actual
use of the home without these facilities.
     We start by emphasizing that absent compelling indications of error we
must accept the interpretation of administrative regulations by the agency
responsible for their implementation.  In re Vitale, 151 Vt. 580, 582, 563 A.2d 613, 615 (1989).  As the United States Supreme Court stated in
Gardebring v. Jenkins, 485 U.S 415, 430 (1988), "when it is the Secretary's
regulation that we are construing, . . . we are properly hesitant to
substitute an alternative reading for the Secretary's unless . . . compelled
by the regulation's plain language or by other indications of the
Secretary's intent at the time of the regulation's promulgation."  See also
United States v. Larionoff, 431 U.S. 864, 872 (1977) (administrative inter-
pretation of regulation entitled to "'controlling weight unless it is
plainly erroneous or inconsistent with the regulation'") (quoting Bowles v.
Seminole Rock Co., 325 U.S. 410, 414 (1945)).
     For three reasons, the Agency's reading that the regulation applies in
this instance is not plainly erroneous.  First, as the Agency emphasizes,
the regulation establishes an objective standard.  Thus, the question is not
whether defendants are using or occupying this particular mobile home
without the need for water and sewage facilities.  Instead, it is whether a
mobile home of the type involved here can be usefully occupied without sewer
or water facilities.  We have to answer that question in the negative unless
we are going to allow all mobile home construction, and probably all home
construction, to escape permitting because it is possible to use a home
without water and sewage facilities.  At the extreme, even a large home can
be used solely for storage, but it would be unreasonable to construe this
regulation as governed by the theoretical extremes.  If we change the
nature of the structure to eliminate components normally needed for full-
time occupancy, such as a kitchen and a bathroom, we will reach a point
where possible use reaches a practical probability.  We are far from that
here.
     Second, an alternative interpretation, premised on case-by-case
permitting requirements, imposes an impracticable enforcement burden on the
Agency.  The Agency would be unable to require a permit for a mobile home
until it determined that there were sewer and water connections and that
these facilities were actually being used.  Not only would the enforcement
burden created by such an interpretation be unreasonable, it is highly
unlikely that an agency responsible for drafting the regulation would ever
intend to assume such an unreasonable burden. (FN2) In construing a statute or
regulation, one of our primary concerns is to implement the intent of the
adopting body.
     Third, we are dealing here with an exemption from a general
requirement to obtain a permit in the case of certain subdivisions of land.
We typically construe exemptions narrowly so they do not undermine the
general rule.  See, e.g., Kingsland Bay School, Inc. v. Town of Middlebury,
153 Vt. 201, 206, 569 A.2d 496, 499 (1989) (tax exemptions strictly
construed).  Thus, if we allow loopholes to extend permit deferrals
indefinitely, developers will be much less likely to obtain permits at the
time of subdivision, which is when water and sewer issues are better
resolved.
     We recognize that countervailing considerations support defendants'
interpretation.  But, as the United States Supreme Court noted in Larionoff,
we cannot tarry over "the various ambiguous terms and complex interrelations
of the regulations."  431 U.S.  at 872.  Whether, if writing on a blank
slate, we would interpret the regulation as the Agency has is beside the
point.  Our holding is only that the Agency's interpretation is not plainly
erroneous, and there is no compelling indication of error.
     Defendants' second argument is that the regulation is so vague that
ordinary persons cannot understand what conduct is prohibited, and arbitrary
and discriminatory enforcement is encouraged.  See Kolender v. Lawson, 461 U.S. 352, 357 (1983) (applying void-for-vagueness standard to penal
statute).  In evaluating this argument, we must first recognize that we are
dealing with an area where some imprecision and generality is necessary and
inevitable.  Our void-for-vagueness test is less strict where the
regulation is economic and the landowner can seek clarification of its
meaning or resort to administrative processes.  Village of Hoffman Estates
v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498 (1982).  The test is
also less strict because the regulation does not threaten to inhibit the
exercise of constitutionally protected rights.  Id. at 499.
     We must look at the regulatory scheme in its entirety.  Thus, it is
important that defendants had the opportunity to clarify their
responsibilities and did not use it.  See Arnett v. Kennedy, 416 U.S. 134,
160 (1974) (in government employment termination case for "such cause as
will promote the efficiency of the service," availability of agency general
counsel to inform employee of agency's interpretation was important to
rejecting vagueness challenge).  Here, the trial court found that when
defendants learned from the Agency that they could not obtain a permit,
they proceeded unilaterally to try to eliminate the need for one.  The court
also found that the Agency representatives did not tell defendants that they
could proceed with the installation of the mobile home if they did not
connect the water and sewage facilities.
     We conclude that the regulation, as we have construed it, is
sufficiently precise that an ordinary person using the means available and
ordinary common sense can understand the meaning and comply.  See Brody v.
Barasch, ___ Vt. ___, ___, 582 A.2d 132, 137 (1990) (not necessary to
"detail each and every act or conduct that is prohibited" as long as
language "conveys a definite warning as to proscribed conduct when measured
by common understanding and practices").  The regulation is not void for
vagueness.
     Defendants' third argument is that the regulation intrudes on the
exclusive powers of the Legislature because it exceeds the statutory
authority and gives too much discretion to Agency officials.  The short
answer to the first part of defendants' argument lies in the applicable
statutory authority.  The regulations involved here were first adopted by
the Vermont Board of Health in 1969.  See Vt. Board of Health, Chapter 5,
Subchapter 10 (adopted December 18, 1969).  Section 1218(a) of Title 18
provides that the 1969 subdivision regulations "are ratified and given full
force and effect as of that date."  The effect of this language is to enact
the regulations as if they were legislation.  See In re Spencer, 152 Vt.
330, 336, 566 A.2d 959, 962 (1989).
     The deferral language at issue here is contained in an amendment to the
original rules.  Section 1218(b) of Title 18 specifically gave the Board of
Health (later transferred to the Secretary of the Agency of Natural
Resources) "the power to amend or repeal the regulations referred to in
subsection (a)."  Thus, there can be no doubt that the amendment was within
the Board's power.
     The second part of defendants' argument is that the delegation of power
to adopt the regulations is so broad that it amounts to an unconstitutional
delegation of legislative power.  Although the Legislature may delegate the
power to administer a law to an administrative agency, the delegation may
not be "unrestrained and arbitrary."  State v. Auclair, 110 Vt. 147, 163, 4 A.2d 107, 114 (1939).  As a result, the delegation statute must contain a
"basic standard -- 'a definite and certain policy and rule of action for
the guidance of the agency created to administer the law.'"  Id. (quoting
State ex rel. State Board of Milk Control v. Newark Milk Co., 118 N.J. Eq.
504, 522, 179 A. 116, 125 (1935)); see also Vincent v. Vermont State
Retirement Board, 148 Vt. 531, 535, 536 A.2d 925, 928 (1987); State v.
Chambers, 144 Vt. 234, 239, 477 A.2d 110, 112-13 (1984).  The regulations
were originally promulgated pursuant to the Board of Health's power to make
rules and regulations "to prevent the pollution and to secure the sanitary
protection of . . . waters."  18 V.S.A. { 1203 (later repealed).  The
rulemaking power of the Board extended "to all matters relating to the
preservation of the public health."  18 V.S.A. { 102.  These statutes
provide a sufficient standard or policy to guide the Agency's actions.
     Moreover, this argument is basically futile.  As discussed above, the
original regulations have been ratified by the Legislature; no unlawful
delegation argument can be made with respect to them.  Those regulations
required a permit in all instances with no ability to defer it.  The
deferral language, challenged here, benefited the landowner by allowing the
permit requirement to be moved into the future.  If we were to find the
deferral language invalid because of a lack of standards in the power to
amend the regulations, the effect would be to restore the original, ratified
regulations that did not allow any deferral of permits.  In any event,
defendants would need a permit.

     Affirmed.

                                             FOR THE COURT:



                                             ______________________________
                                             Associate Justice



FN1.    We recognize that Albright has been criticized for maintaining an
artificial historical distinction between law and equity in this area.  See
Note, Vermont's Law of Promises Running with the Land: Formal Restraints on
a Practical Doctrine, 6 Vt. L. Rev. 437, 464 (1981).  The present case does
not require us to consider the distinction because defendants argue only
that no intent to run with the land is present -- an element required both
at law and in equity.

FN2.    In this case, as discussed infra, the regulation was actually
drafted by the Board of Health for enforcement by the Health Department, and
the enforcement burden was shifted to the Agency of Natural Resources.  The
fact that the agency now responsible for implementation is different from
the drafting agency does not change the point.