In re S-S Corp./Rooney Housing Developments
Annotate this Case
In re Appeal of S-S Corp./Rooney Housing Developments (2004-080); 179 Vt. 302;
896 A.2d 67
2006 VT 8
[Filed 13-Jan-2006]
NOTICE: This opinion is subject to motions for reargument under
V.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, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
2006 VT 8
No. 2004-080
In re Appeal of S-S Corporation/Rooney Supreme Court
Housing Developments
On Appeal from
Environmental Board
March Term, 2005
Patricia Moulton Powden, Chair
Robert A. Gensburg of Gensburg, Atwell & Broderick, St. Johnsbury, for
Appellant.
William H. Sorrell, Attorney General, Kevin Leske, Assistant Attorney
General, and Jill K. Reymore, Law Clerk (On the Brief), Montpelier, for
Amicus Curiae State of Vermont.
PRESENT: Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and
Gibson, J. (Ret.), Specially Assigned
¶ 1. SKOGLUND, J. S-S Corporation (FN1) appeals an Environmental
Board declaratory ruling requiring it to obtain an Act 250 permit for two
houses it constructed for use as residential care facilities. The Board
concluded the construction of the houses was "development" under 10 V.S.A.
§ 6001(3)(A)(iv) and Environmental Board Rule 2(A)(1)(c) because together
they consist of ten or more units and are "commercial dwellings" under Rule
2(M). S-S Corp. appeals both of these conclusions. We affirm the Board's
rulings.
¶ 2. Yvonne and Catherine Rooney operate residential care homes for
physically and mentally disabled adults. Prior to the construction of the
project at issue, they maintained a facility, known as the Washington
Street home, in which they provided care and living quarters for thirteen
adults. Faced with costly upgrades and residents who found it increasingly
difficult to navigate the two-story home, the Rooneys sought and received
funding from the United States Department of Housing and Urban Development
(HUD) to build two new group homes, the Owen House and the Harvey House
(the Houses).
¶ 3. The Houses are approximately three-and-a-half miles apart and
are seven-bedroom, ranch-style homes intended to house eight residents who
pay rent or fees. Staff members are on duty twenty-four hours a day, seven
days a week; no staff or owners live in either House. Visiting nurses
provide nursing care, and Catherine Rooney is authorized to distribute
medications. The average length of stay for residents in the Rooneys'
homes is twenty years, and at the time of the Environmental Board decision
in 2003, residents in the Rooneys' homes had lived there for between two
and thirty-two years.
¶ 4. After funding for the Houses was secured and construction of
the Owen House had begun, the Assistant District Coordinator for District
Environmental Commission # 4 issued a jurisdictional opinion holding that
the Houses were a housing project requiring Act 250 approval under 10
V.S.A. § 6001(3)(A)(iv). S-S Corp. appealed the opinion to the
Environmental Board, which agreed with the jurisdictional opinion in a
November 2003 decision. S-S Corp. sought reconsideration of the Board's
ruling, and the Board reaffirmed its decision in February 2004.
Specifically, the Board ruled that the construction fell within the
definition of "development" under 10 V.S.A. § 6001(3)(A)(iv) and
Environmental Board Rule 2(A)(1)(c) because: (1) there were a combined
fourteen rooms between the two Houses, thereby exceeding the ten-unit
requirement; and (2) the construction met Rule 2(M)'s definition of a
"commercial dwelling." This appeal followed.
¶ 5. This Court reviews Environmental Board decisions with
deference. Upon review of administrative decisions generally, this Court
presumes a given administrative action is valid and correct absent clear
and convincing evidence to the contrary. In re Devoid, 130 Vt. 141, 148,
287 A.2d 573, 577 (1972). The Court will sustain Environmental Board
interpretations of Act 250 "[a]bsent compelling indications of error," and
defers to the Board's "interpretations of Act 250 and its own rules, and to
the Board's specialized knowledge in the environmental field." In re
Wal*Mart Stores, Inc., 167 Vt. 75, 79, 702 A.2d 397, 400 (1997). The
decisions of the Environmental Board concerning questions of fact are
conclusive if supported by "substantial evidence on the record as a whole."
10 V.S.A. § 6089(c). In this context, " 'substantial evidence' . . . is
evidence properly before the Board that is relevant and which a reasonable
person might accept as adequate to support a conclusion." In re Denio, 158
Vt. 230, 236, 608 A.2d 1166, 1170 (1992). We will affirm the Board's legal
conclusions if they are "rationally derived from a correct interpretation
of the law and findings of fact based on substantial evidence." In re BHL
Corp., 161 Vt. 487, 490, 641 A.2d 771, 773 (1994).
¶ 6. The dispute in this case centers on whether the Houses are
"development" under § 6001(3)(A)(iv) and Rule 2(A)(1)(c). Section
6001(3)(A)(iv) defines development as "[t]he construction of housing
projects such as cooperatives, condominiums, or dwellings . . . with 10 or
more units, constructed or maintained on a tract or tracts of land, owned
or controlled by a person, within a radius of five miles . . . within any
continuous period of five years." The definition of development in the
Environmental Board Rules is nearly identical: "[t]he construction of a
housing project or projects such as cooperatives, apartments, condominiums,
detached residences, . . . or commercial dwellings with ten or more units
constructed or maintained on a tract or tracts of land owned or controlled
by a person within a radius of five miles." Environmental Board Rule
2(A)(1)(c), 6 Code of Vermont Rules 12 003 001-6 (effective January 12,
2004, and identical to version effective January 15, 2003). The Rules
define a commercial dwelling as "any building or structure . . . including
but not limited to . . . rooming houses, nursing homes . . . and other
places for the accommodation of people, that is intended to be used and
occupied for human habitation on a temporary or intermittent basis, in
exchange for a payment of a fee." (FN2) Environmental Board Rule 2(M), 6
Code of Vermont Rules 12 003 001-11 (effective January 12, 2004, and
identical to version effective January 15, 2003).
¶ 7. There is no dispute that the Houses were built within a
five-year period, are located within five miles of one another, and were
intended for human habitation in exchange for a fee. Therefore, at issue
is whether: (1) the Board correctly defined the term "unit" such that the
Houses together contain more than ten housing units; and (2) the Board
properly determined that the Houses are commercial dwellings under Rule
2(M).
I.
¶ 8. First, we affirm the Board's decision to define a "unit" as a
bedroom in this case. S-S Corp. argues that defining "unit" as a bedroom
defies the plain meaning of the word and is inconsistent with the
application of the term to other types of projects. The State argues that
the definition varies depending upon the space being rented or sold and
that the space being rented in a residential care facility is the bedroom.
Significantly, although the parties proffer different constructions of the
word "unit," they both acknowledge, correctly, that the meaning will vary
according to the type of building under consideration.
¶ 9. It is unsurprising that the meaning of a term undefined by
statute or rule will vary depending on the context in which the term is
used, and that the Board's discretion includes the ability to define a
statutory term with reference to its context. This follows because where a
term is not defined by rule or statute, we accept the interpretation of the
Board, the administrative agency responsible for the implementation of Act
250, absent compelling error. In re Rusin, 162 Vt. 185, 189, 643 A.2d 1209, 1211 (1994). In addition, this Court has recognized that Act 250
decisions are "inherently fact-bound and difficult to reduce to a
straightforward test," Sec'y, Vt. Agency of Natural Res. v. Short, 165 Vt.
277, 281, 682 A.2d 484, 486 (1996), and that the outcome of such decisions
often cannot be "preordained by an inflexible definition" of a term, In re
Rusin, 162 Vt. at 190, 643 A.2d at 1211-12.
¶ 10. For example, in In re Rusin, the Board was required to
determine whether an access roadway qualified as a "road" under
Environmental Board Rule 2(A)(6), which extends Act 250 jurisdiction to "
'[t]he construction of improvements for a road or roads.' " 162 Vt. at
188, 643 A.2d at 1210 (quoting Rule 2(A)(6)). In affirming the Board's
interpretation, we recognized that because the terms "road" and "driveway"
were undefined by rule or statute, "a reasonable measure of discretion
inheres in the determination of what qualifies as a road" under Rule
2(A)(6). Id. at 190, 643 A.2d at 1212; see also Short, 165 Vt. at 281, 682 A.2d at 485-86 (reaffirming In re Rusin); In re Spring Brook Farm Found.,
Inc., 164 Vt. 282, 288-89, 671 A.2d 315, 319-20 (1995) (ruling that
indirect exchange between the developer, who provided facilities to
children, and contributors, who gave donations, constituted a "commercial
purpose" in accordance with Rule 2(L), and stating that "[t]he term
'commercial' . . . can have many different meanings, depending on the
context in which it is used").
¶ 11. Further, the Board's determination that a bedroom was a
housing unit in the current case is consistent with its previous rulings.
See, e.g., In re Marlboro Coll., Dec. Rul. #24 (July 26, 1973) (ruling that
six cottages intended to house four students each comprised more than ten
units together and therefore required an Act 250 permit); In re Burke
Acad., Dec. Rul. #6 (Apr. 23, 1973) (ruling that a housing facility
intended to house sixteen students and one faculty family consisted of
"more than ten dwelling units" and required an Act 250 permit). Similarly,
in this case, the Board based its definition of the term "unit" on the
space being rented by each resident-a bedroom. Thus, the Board properly
exercised its discretion in defining the term "unit."
¶ 12. In support of its contention that the Board erred in
interpreting the term "unit," S-S Corp. cites federal definitions from the
Internal Revenue Code and the Cranston-Gonzalez National Affordable Housing
Act (under which S-S Corp. received funding to construct the homes). We
agree with the Board that federal definitions taken from statutes concerned
with taxation and providing affordable housing for disabled persons are of
little help in the current context. Act 250 was enacted "to protect and
conserve the lands and the environment of the state and to insure that
these lands and environment are devoted to uses which are not detrimental
to the public welfare and interests," and it gave the Environmental Board
and district environmental commissions the authority "to regulate the use
of lands." 1969, No. 250 (Adj. Sess.), § 1. We have previously stated
that terms in Act 250 rules must be viewed "within the context of a land
use statute, not as a tax statute or trade regulation." In re Spring Brook
Farm Found., 164 Vt. at 289, 671 A.2d at 320. Thus, the Board was correct
in declining S-S Corp.'s invitation to import a definition from federal
income tax and housing laws because those laws do not share Act 250's
primary goal of land protection and conservation.
¶ 13. S-S Corp. argues that where there is ambiguity in the
language of a property regulation, the Court must construe the language in
favor of the property owner, citing Secretary, Vermont Agency of Natural
Resources v. Handy Family Enterprises, 163 Vt. 476, 481-82, 660 A.2d 309,
312-13 (1995). The Legislature granted to the Board the authority to adopt
and interpret rules concerning Act 250. 10 V.S.A. § 6025. As we have
noted, some Board determinations are inherently fact-based and do not
easily fall within "inflexible definitions." In re Rusin, 162 Vt. at 190,
643 A.2d at 1212. We will not equate a grant of agency discretion with
ambiguity, nor will we afford to appellant a presumption of ambiguity where
the outcome of a determination depends to some extent upon agency
discretion that has been conferred by statute.
¶ 14. We conclude that the Board's interpretation of the term "unit"
is reasonable and does not reflect any compelling error by the Board.
Accordingly, we affirm its conclusion that the two Houses together, which
have seven bedrooms each, contain greater than ten units.
II.
¶ 15. Next, we turn to the Board's ruling that the Houses are
"commercial dwellings." Under Rule 2(M), a commercial dwelling is any
building or structure that: (1) is for the accommodation of people; (2) is
intended for habitation on a temporary/intermittent basis; and (3) provides
facilities in exchange for a payment or fee. Rule 2(M) includes nursing
homes and rooming houses in a nonexhaustive list of examples of commercial
dwellings. Because it is undisputed that the Houses will be used for the
accommodation of people and that the facilities will be provided in
exchange for a fee or rent, the issue is whether the Board properly
concluded that the Houses are intended for use on a temporary or
intermittent basis. In light of the deferential standard of review this
Court applies when reviewing the Board's interpretation and application of
its rules, In re Woodford Packers, Inc., 2003 VT 60, ¶ 4, 175 Vt. 579,
830 A.2d 100 (mem.), as well as this Court's recognition that, in enforcing
Act 250, the Board's primary concern must be the environmental impact of
the proposed development, In re Spring Brook Farm Found., 164 Vt. at 287,
671 A.2d at 318, we affirm the Board's conclusion that the Houses are
commercial dwellings.
¶ 16. Under the applicable standard of review, see supra, ¶ 5, we
find no compelling indications of error warranting reversal of the Board's
decision. In applying Rule 2(M) here, the Board correctly recognized that
Act 250 "requires a focus on the impact of the land use, not the nature of
the institutional activity." See In re Spring Brook Farm Found., 164 Vt.
at 287, 671 A.2d at 318. To that end, "the proper starting point for
determining Act 250 jurisdiction is the actual use of the land, not
necessarily the overall purpose of a development scheme." In re BHL Corp.,
161 Vt. at 490, 641 A.2d at 773. Accordingly, the Board's interpretation
of Rule 2(M) must, first and foremost, effectuate Act 250's goal of
preventing "usages of the lands and the environment which may be
destructive . . . and which are not suitable to the demands and needs of
the people of the state of Vermont." 1969, No. 250 (Adj. Sess.), § 1.
¶ 17. Here, the Board concluded that the Houses fit Rule 2(M)'s
definition of a commercial dwelling by focusing on "the character of such
homes as a general group of dwellings," not on the "subjective particulars
that may result from their operation." As the Board explained, it
considered "the aspects of the Harvey House and the Owen House that are
relevant to Act 250 and ask[ed] whether the type of construction and
occupation at issue in this matter is typical of the sorts of housing
described in Rule 2(M)." By doing so, the Board remained faithful to its
duty to look to the actual use of the land as the touchstone of its Act 250
jurisdictional analysis. To conclude otherwise based on either the
operators' intent to maintain a stable group of residents or the desire of
the residents to remain long-term would undercut Act 250's mandate to
assess any proposed development primarily in terms of its impact on the
land. That the Rooneys have created an environment that nurtures familial
feelings and long-term relationships among residents and between residents
and caregivers is laudable. But "Act 250 speaks to land use and not to the
particular institutional activity associated with that land use; to exclude
[an organization] from the provisions of Act 250 simply because of [the
nature of its services] could not be justified on environmental grounds."
In re Baptist Fellowship of Randolph, Inc., 144 Vt. 636, 639-40, 481 A.2d 1274, 1276 (1984).
¶ 18. Moreover, the Board's conclusion that the Houses fit Rule
2(M)'s definition is supported by the record, and thus admits of no
compelling indications of error. The Board reached its conclusion for two
reasons: (1) "some residents occupy the Houses temporarily, leaving and
returning intermittently, as their needs require;" and (2) the Houses
resemble nursing homes for purposes of Act 250 review. Focusing on the
first, the Board found that some residents do leave the Rooneys' care for
periods of time, and that, of those, some return and some do not. In
addition, the Board found that some residents have other residences. As
laid out in the Board's ruling on S-S Corp.'s motion to alter, those
findings both have support in the record-specifically, the deposition
testimony of Yvonne Rooney. Thus, those findings are supported by
"substantial evidence" within the meaning of 10 V.S.A. § 6089(c) because
they rest on relevant evidence that was properly before the Board and that
a reasonable person might accept as adequate support. In re Wal*Mart
Stores, 167 Vt. at 80, 702 A.2d at 400-01. Those findings, in turn,
support the Board's conclusion that the Houses are commercial dwellings.
Additionally, there is no dispute that S-S Corp. will accept new residents
when vacancies occur.
¶ 19. In asserting that the Board's and the majority's reasoning
concerning the "subjective particulars" of the Houses is inconsistent, the
dissent argues that the facts that "some residents leave the care of the
S-S Corp. homes for periods of time and some of those do not return" are
"irrelevant because they describe any residency of any type." Post, ¶ 33
& n.7. As the Board noted, however, Rule 2(M) specifically exempts
"conventional residences" from its definition of a commercial dwelling, so
it is unclear how the dissent's comparison of the Houses to "any residency
of any type" advances its analysis.
¶ 20. We recognize there is some tension in the Board's decision
between, on the one hand, the Board's duty to focus on the impact that the
proposed development will have on the land and not on the specifics of the
services provided or the service providers and recipients and, on the
other, the "temporary or intermittent" language in Rule 2(M). Given the
discretion the Board enjoys in interpreting its own rules, it was within
the Board's purview to resolve that tension. And it did so appropriately
in light of Act 250's goals, by refusing to base its decision on the
"identity or the specific characteristics or attributes" of the operators
and users of the Houses. In other words, while we acknowledge that there
is some surface appeal to the argument that the lengthy average tenure of
the residents precludes the Houses from fitting Rule 2(M)'s definition of a
commercial dwelling, the Board correctly looked beneath that surface to the
land-use impact of the proposed development and the "character of such
homes as a general group." For example, the Houses, and other facilities
like them, exist to provide an array of services to their residents, not
merely to collect rents in exchange for living space. Accordingly, we
affirm the Board's conclusion that the Houses fit Rule 2(M)'s definition of
a commercial dwelling.
¶ 21. In further support of its argument that the Houses should be
treated as single-family residences, not commercial dwellings, S-S Corp.
cites cases from other jurisdictions that address the status of group homes
under zoning ordinances and restrictive covenants. For example, the
Nebraska Supreme Court held that a group home for five mentally retarded
women and their house parents complied with a restrictive covenant limiting
lot use to "residential purposes" with only one "single family dwelling,"
because the group home operated as "a permanent residence intended to allow
[the] . . . women to lead fuller and more normalized lives in the community
than would be possible in an institution." Knudtson v. Trainor, 345 N.W.2d 4, 5-6 (Neb. 1984) (quotations omitted); see also Linn County v. City of
Hiawatha, 311 N.W.2d 95, 99-100 (Iowa 1981) (holding that foster home met
municipal zoning code's definition of a single-family home, where code
defined "family" as "(o)ne or more persons occupying a dwelling and living
as a single housekeeping unit" (quotations omitted)); Costley v. Caromin
House, Inc., 313 N.W.2d 21, 24-26 (Minn. 1981) (ruling that a group home
was a single-family residence in conformance with restrictive covenant
allowing construction of "[o]nly one dwelling and one garage" and local
zoning ordinance permitting "one and two-family dwelling groups"
(quotations omitted)). At the heart of Knudtson and the other cases cited
by S-S Corp. is the application of restrictive covenants and zoning
ordinances that threaten to exclude group homes altogether. Yet, in the
case at bar, no such issue exists. The Harvey and Owen Houses are not
threatened by exclusionary zoning because the Board's decision requires
only that the Houses conform with land-use standards set forth by Act 250.
And, as we have observed,
Act 250 is to be distinguished from the bulk of traditional zoning
and subdivision legislation, which is merely state enabling
legislation permitting regulation of land use on a local or
regional level. See 24 V.S.A. §§ 4401-4493. Act 250 establishes
a mechanism for review of certain land use activity at the state
level. It supplements pre-existing legislation authorizing local
zoning and subdivision control.
Comm. to Save the Bishop's House, Inc. v. Med. Ctr. Hosp. of Vt., 137 Vt.
142, 145, 400 A.2d 1015, 1017 (1979).
¶ 22. S-S Corp. also argues that the Board misconstrued 24 V.S.A. §
4409(d) as prohibiting group homes larger than six persons from being
considered single-family dwellings. Section 4409(d) provides that a
"residential care home or group home, serving not more than six persons who
are developmentally disabled or physically handicapped, shall be considered
by right to constitute a permitted single-family residential use of
property." (FN3) Thus, as S-S Corp. correctly notes, § 4409(d) does not
deprive zoning boards of their discretion to treat group homes with more
than six residents as single-family dwellings. Section 4409(d), however,
is a zoning statute intended to protect residential care facilities from
exclusionary zoning, In re Appeal of Bennington Sch., Inc., 2004 VT 6, ¶
17, 176 Vt. 584, 845 A.2d 332 (mem.); it does not govern Act 250 decisions.
¶ 23. Further, the Board appeared aware of this distinction, as it
merely pointed to § 4409(d) for "further guidance," and not as dispositive
authority, in determining that the homes, which each house eight persons,
were not "conventional residences" under Rule 2(M). While the three
concurring Board members "reluctantly" joined in the decision because they
were "persuaded" by the definition in § 4409(d), nothing in the concurrence
suggests that they believed they lacked discretion under § 4409(d) to
decide otherwise.
¶ 24. In sum, we see no reason to disturb the Board's conclusions
that the Houses qualify as "commercial dwellings" under Rule 2(M) and that
together they contain more than ten units under Rule 2(A) and 10 V.S.A. §
6003(3)(a)(iv). Therefore, the Board correctly concluded the Houses were
"development" subject to Act 250 review.
Affirmed.
FOR THE COURT:
_______________________________________
Associate Justice
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Dissenting
¶ 25. DOOLEY, J., dissenting. To accept the holding on the second
issue in this case, I must agree that residents of a community care home
are transients although they are predicted to live in the home, on average,
three times as long as the average Vermonter will remain in his or home.
(FN4) I also must agree that homes that are predicted to keep residents
three times as long as average for all residences in Vermont are "intended
for habitation on a temporary/intermittent basis." These propositions are
so obviously wrong that no standard of review or creative legal
interpretation can save them. Therefore, although I agree with the
majority on the first issue-that S-S Corp. has constructed ten or more
units-I can't agree that its facilities are "commercial dwellings" as
defined in Environmental Board Rule 2(M) and respectfully dissent.
¶ 26. S-S Corp.'s facilities need an Act 250 permit only if they are
commercial dwellings. I quote the Rule:
"Commercial Dwelling" means any building or structure or part
thereof, including but not limited to hotels, motels, rooming
houses, nursing homes, dormitories and other places for the
accommodation of people, that is intended to be used and occupied
for human habitation on a temporary or intermittent basis, in
exchange for payment of a fee, contribution, donation or other
object having value. The term does not include conventional
residences, such as single family homes, duplexes, apartments,
condominiums or vacation homes, occupied on a permanent or
seasonal basis.
Rule 2(M). As the majority decision states, "[u]nder Rule 2(M), a
commercial dwelling is any building or structure that: (1) is for the
accommodation of people; (2) is intended for habitation on a
temporary/intermittent basis; and (3) provides facilities in exchange for a
payment or fee." Ante, ¶ 15. I agree that the first and third
requirements of the Rule are met. Nothing in the evidence, nor in a
reasonable construction of Rule 2(M), supports, however, a holding that the
second requirement is met.
¶ 27. The meaning of the rule with respect to the second requirement
is unambiguous. A building or structure can be a commercial dwelling only
if it is intended to be used and occupied for human habitation on a
temporary or intermittent basis. While the rule gives examples of
buildings that might meet this requirement, they are commercial dwellings
only if they meet the general standard. Thus, some, but not all, hotels
are commercial dwellings.
¶ 28. The evidence is clear that residents of the homes in question
intend to remain in those homes permanently. More importantly, in terms of
the regulation wording, the evidence is clear that S-S Corp. intends that
the residents will occupy the homes permanently and not on a temporary or
intermittent basis. In fact, S-S Corp. has a track record on this issue
regarding its residents; in a similar home S-S Corp. owns, the average
length of stay is over twenty years. Thus, S S Corp.'s intent and
experience with permanent housing are entirely consistent.
¶ 29. In view of this evidence, how can those people whose occupancy
of living places are among the most permanent in Vermont be labeled as
transient? The Board and the majority appear to have three arguments to
accomplish this legerdemain.
A. The Decision Must be Based on Environmental Impact of the Proposed
Development
¶ 30. Exactly where this point leads is not clear from this Court's
decision, but it is very clear from the Board's majority (FN2) decision.
In its reconsideration decision, the Board wrote:
Likewise, the Environmental Board is empowered to regulate
property based upon its use, not the identity or the specific
characteristics or attributes of its users. Thus, the Board
cannot make a distinction between the Harvey and Owen Houses with
their long-term residents, and other group homes, which might be
identical in all relevant physical and operational respects to the
Harvey and Owen Houses, but whose residents stay only a few weeks
or months before, for whatever reasons, they move out.
(Emphasis supplied). Earlier, in footnote 3 of that decision, the Board
said of the distinction discussed above that "such a distinction would be
irrational, something the Board must avoid."
¶ 31. If these words appeared in a decision striking down Rule 2(M)
as beyond the rule-making authority of the Board or impermissibly
arbitrary, I could understand their presence. Their usage in a decision
interpreting the rule demonstrates a Board at war with itself. The
distinction between intended temporary occupancy and intended permanent
occupancy is exactly the distinction drawn in the Environmental Board Rule
and it is that distinction that the Board is now calling irrational. While
we have no record of why the Board adopted this distinction in the first
place, we must assume that it found a difference in environmental impacts.
Without even attempting to understand why it drew that distinction in the
first place, it is trashing its own work.
¶ 32. If the Board wants to strike down its own regulation, the
effect of its action in this case, it at least has to give notice to
persons who will rely on the language of the rule. This case is a good
example of why we should not accept repeal-by-interpretation, as occurred
here. S-S Corp. concluded that it did not need Act 250 permits for the
Harvey and Owen Houses, accepted large federal grants for their
construction and began construction on the Owen House before it was finally
informed that a state official had months earlier sought an official
opinion on whether an Act 250 permit was needed. Anyone who read the
regulations would conclude that dwellings intended to be residences for
persons for twenty years or more are not intended to be occupied on a
temporary basis. Persons should not be put in the position of making
investment decisions on the risk that the Board will unpredictably change
the rules without warning. If the Board is to abandon the distinction it
made in the rule, it must do so by rule making
B. The Intent and Record of S-S Corporation is Irrelevant
¶ 33. In fact, both the majority and Board appear to be talking out
of both sides of their mouths on this point. Although the Board said it
would not rely on the "subjective particulars" (FN6) of the operation of
the homes, it went on to do just that where it thought those "subjective
particulars" supported its result. The majority has followed that same
path. This is particularly apparent in the Board's findings that some
residents leave the care of the S-S Corp. homes for periods of time and
some of those do not return. (FN7) Having ruled that the specific intent
and track record of S-S Corp. is irrelevant, these facts are also
irrelevant if one accepts the Board's rationale.
¶ 34. Yet, the Board spends a third of its reconsideration decision
quibbling over these irrelevant facts. The point for the Board is not that
residents leave the homes for some periods, and some do not return, but
that these facts differentiate the residents from others and warrant Act
250 review. Although the facts are entirely against it, the Board wants to
raise the inference that the residents of S-S Corp. homes-or mentally
disabled residents of community care homes generally-are transient and
temporary. The inference is wrong, transparently an attempt to evade the
permanency of occupancy in S-S Corp. homes without a factual basis. Rather
than adding to the Board's decision, the unexplained caviling over the
facts of occupancy in S-S Corp. homes raises questions about its confidence
in its primary rationale.
¶ 35. Assuming that the majority of the Board remained true to its
point that S-S Corp.'s current operations were irrelevant, this position is
plainly inconsistent with the wording of the regulation. Again the holding
of the Board was that the permanency of occupancy of the residents, or S-S
Corp.'s intent with respect to that permanency, could not be considered.
Thus, the exact determination that the regulation required the Board to
make-the same determination the majority of this Court states is a
requirement to find that S-S Corp.'s homes are "commercial dwellings"-is
found to be irrelevant by the Board. The Rule specifically requires that
the buildings being constructed be "commercial dwellings." That
requirement is simply not met by a generalization that community care homes
are "commercial dwellings" without examining the particular buildings
involved.
C. All Nursing Homes are Commercial Dwellings; Community Care Homes are
Indistinguishable from Nursing Homes
¶ 36. This is the actual rationale of the Environmental Board.
Since the majority of this Court has not stated an alternative rationale, I
assume it has accepted the Environmental Board's rationale without stating
so. This rationale involves a construction of the rule that is patently
wrong.
¶ 37. The premise of this argument is that all nursing homes are
commercial dwellings since nursing homes are contained in the nonexclusive
list in the regulation. The logic after the premise is that: (1) community
care homes are like nursing homes so all community care homes are
commercial dwellings; and (2) S-S Corp.'s homes are community care homes so
they are commercial dwellings. The problem with this construction is that
the premise is clearly wrong because of the presence of the inconvenient
language "that is intended to be used and occupied for human habitation on
a temporary or intermittent basis." In order to accept the premise, we
must accept that the inconvenient language has no independent regulatory
significance or that all nursing homes are intended for temporary occupancy
as a matter of fact.
¶ 38. Not even the majority of this Court accepts that the language
has no independent regulatory significance since it holds that occupancy on
a temporary or intermittent basis is a requirement of a commercial
dwelling. See ante, ¶ 15. Indeed, such a construction makes the language
superfluous, or mere surplusage, contrary to our construction maxim to
avoid such a result. See, e.g., In re Estate of Cote, 2004 VT 17, ¶ 13,
176 Vt. 293, 848 A.2d 264. We could sustain the Board's construction of
the regulation only if we hold that there is no independent requirement
that any facility be intended to be occupied on a "temporary or
intermittent basis."
¶ 39. Further, such a construction necessarily means that the
dependent clause in issue-"that is intended to be used . . . on a temporary
or intermittent basis"-modifies and explains the list of
facilities-"hotels, motels, rooming houses, nursing homes, dormitories"-and
not the general description of facilities "any building or structure or
part thereof." Rule 2(M) (emphasis added). The construction is impossible
because the dependent clause is stated in the singular, and thus plainly
limits the term "any building or structure or part thereof," which is also
in the singular. Rule 2(M). The phrase reads: " '[c]ommercial
[d]welling' means any building or structure or part thereof . . . that is
intended to be used . . . on a temporary or intermittent basis."
¶ 40. Nor is there anything in the record to support the proposition
that all nursing homes intend occupancy on a temporary basis. Terms like
"nursing homes" or "community care homes" are broad umbrellas
differentiated only by the extent to which they offer nursing care. I have
no doubt that, similar to the community care homes run by S-S Corp., there
are nursing homes with long-term permanent residents. In any event, if
there are facts on this issue, the Board must find them. It failed to do
so here.
¶ 41. Although the Board adopted the rationale that all nursing
homes are commercial dwellings, it failed utterly to square that rationale
with the wording of the regulation. In response to S-S Corp.'s argument
that under the regulation some nursing homes would be commercial dwellings,
and others would not-depending on whether or not the nursing homes were
operated on an intermittent occupancy basis-the Board answered "there is no
such distinction in the Rule" and "the Board is empowered to interpret its
own Rules." (FN8) The former statement is totally inconsistent with the
wording of the rule. The latter is essentially a statement that the Board
can do whatever it wants. (FN9)
¶ 42. I end where I started. Labeling buildings with tenants who
stay in them for at least twenty years as intended for temporary or
intermittent occupancy is nonsensical. But equally bad is the fancy
footwork it takes to reach such a decision. The Board adopted a rule that
contains a regulatory distinction the Board now opposes. The right
response to this new opposition is to amend the rule to eliminate the
distinction. The wrong answer is to eliminate the distinction under the
guise of tortured construction. By upholding a decision based upon the
wrong answer because of a narrow standard of review, we abdicate our
responsibility to ensure a fair and just adjudication system.
¶ 43. S-S Corp.'s homes are not commercial dwellings as a matter of
law. I dissent.
_______________________________________
Associate Justice
------------------------------------------------------------------------------
Footnotes
FN1. S-S Corporation controls the nonprofit corporations the Owen House,
Ltd. and the Harvey House, Ltd., which each received federal funding to
develop residential care facilities to house disabled adults. The original
request for a declaratory ruling from the Environmental Board was made by
S-S Corp./Rooney Housing Developments; the Owen House, Ltd. and the Harvey
House, Ltd. appealed the Board ruling to the Vermont Supreme Court. For
consistency with the Environmental Board ruling and for ease of
composition, we refer to appellant here as S-S Corp.
FN2. In 1985, the Legislature, in unambiguous terms, ratified all Board
rules relating to the administration of Act 250. In re Barlow, 160 Vt.
513, 521, 631 A.2d 853, 858 (1993). Therefore, the Board's Act 250 rules
have "the same effect as . . . any law passed by the Legislature in the
first instance." Id. (quotations omitted).
FN3. In May 2004, the Legislature repealed § 4409, effective September 1,
2005. 2003, No. 115 (Adj. Sess.), § 119(c). The Legislature replaced §
4409 with § 4412(G), which is similar to § 4409 but increases the size of a
group home that shall be considered a single-family residence by right from
six to eight residents.
FN4. The 2000 Census provides the median year in which Vermont residents
moved into the housing they occupied when they answered the census
questionnaire. For all residents, the median year was 1993, seven years
before the census. For homeowners, the median year was 1989. For renters
it was 1998. Thus, occupants of S-S Corp.'s houses stay in the home
approximately three times longer than the average stay for other Vermont
residents; they stay twice as long as homeowners, and ten times as long as
other renters. Vermont Housing Data Website, at
http://www.housingdata.org/profile/profileMainResult.php?submitted=stateProfile
(last modified Aug. 4, 2005).
FN5. The Environmental Board decision was decided five to three on the
issue on which I dissent. The Environmental Board dissenters, led by the
Chair of the Board concluded:
These Houses (and other homes developed for this population) are
not intended to be occupied on a "temporary or intermittent"
basis.
FN6. The Board's concept of "subjective particulars" migrated between its
first and second decision. In the first decision it explained as follows:
While S-S's record of providing quality care may be inferred
from the length of time that residents lived in the Washington
Street Home, the Board's jurisdictional determination in this case
cannot depend on the personal level of satisfaction of the
residents in the care that they receive. Rather, the Board must
look to the aspects of the Harvey House and the Owen House that
are relevant to Act 250 and ask whether the type of construction
and occupation at issue in this matter is typical of the sorts of
housing described in Rule 2(M). Thus, the Board must look to the
physical structures and general usage of the Harvey House and the
Owen House, not to the subjective particulars that may result from
their operation.
By the second decision, the only thing relevant about the homes was that
they have similarities to nursing homes. It specifically held that the
long-term occupancy by the residents was irrelevant.
FN7. These "facts" are truly irrelevant because they describe any residency
of any type.
FN8. It also answered that the distinction is irrational as discussed in ¶¶
30-31 above.
FN9. It is particularly unpersuasive for the Board to quote, in support of
this reason for its construction, the standard of review applicable to this
Court when it reviews a Board's interpretation of a regulation.
Essentially, the Board is saying its interpretation is correct because it
is the Board and is entitled to deference. I would urge the Board not to
use this "might makes right" rationale in future cases.
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