In re Nehemiah Associates, Inc.
In re Nehemiah Associates, Inc. (95-561); 166 Vt. 593; 689 A.2d 424
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
The permittee shall, by deed covenant to all lots, include the
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
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