Town of Charlotte v. Richmond

 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, 111 State Street, Montpelier, Vermont 05602 of any errors in order
 that corrections may be made before this opinion goes to press.


                                 No. 90-528


 Town of Charlotte                            Supreme Court

                                              On Appeal from
      v.                                      Chittenden Superior Court

 J. Michael Richmond, James                   December Term, 1991
 Barton and Maurice Lapierre


 Alden T. Bryan, J.

 Steven F. Stitzel of Stitzel & Page, P.C., Burlington, for plaintiff-
   appellee

 Robert B. Hemley of Gravel and Shea, Burlington, for defendants-appellants


 PRESENT:  Allen, C.J., Dooley and Johnson, JJ., and Peck, J. (Ret.),
           Specially Assigned


      ALLEN, C.J.   Defendants appeal from an amended order of the superior
 court limiting the volume of their used car sales to fifty-two cars per
 year.  The Town of Charlotte cross-appeals, arguing that the court lacked
 jurisdiction to entertain defendants' affirmative defense of nonconforming
 use.  We agree with the town and therefore vacate the court's amended order.
 We remand for an order enforcing the town's determination that defendants
 operated their business in violation of its zoning ordinance and for a
 determination of fines.
      This case originated with a notice, issued by the town's zoning
 administrator pursuant to 24 V.S.A. { 4444(a) in late 1986, that advised
 defendants that their used car business violated the Charlotte zoning
 ordinance and ordered them to cease its operation.  That notice stated, in
 part: "all sales of used, or re-built, vehicles at the property referred to
 as "Hutchins' Garage" . . . must cease immediately."  (Emphasis in
 original.)  The town's position was that the sale of any used cars
 constituted an impermissible changed use from a pre-existing nonconforming
 use for conducting repairs, selling gasoline, and providing towing services.
 In late 1987, following defendants' failure to comply with the notice, the
 town initiated an action in superior court seeking an injunction and
 monetary penalties.  The court ordered defendants to cease operation of
 their used car business and pay fines of $10 per day for the period from
 October 17, 1976 to the date of the order, and pay fines of $50 per day for
 every day of operation in violation of the order.  Defendants moved for a
 stay and modification of the injunction and for a new trial.  On February
 21, 1990, the court granted a stay and suspended accumulation of fines until
 August 13, 1990, to give defendants an opportunity to prepare a transcript
 and memoranda.
      The court amended the original order on October 24, 1990 to permit the
 sale of fifty-two cars per year by defendants, with no more than four cars
 on the lot at one time.  The court based this amendment on its conclusion
 that defendants enjoyed a nonconforming use for fifty-two cars per year that
 pre-dated the zoning ordinance.  The trial court also granted a stay of the
 monetary penalties, pending appeal, retroactive to August 13, 1990.
      Because we rule that the trial court lacked jurisdiction to entertain
 the defense of nonconforming use, we do not reach defendants' three
 arguments, which all flow from that defense.  The town, on cross-appeal,
 makes three claims.  First, the town maintains that 24 V.S.A. { 4472 bars
 defendants' defense of nonconforming use.  Second, they assign error to the
 trial court's conclusion that the defendants' use of the property
 constituted a nonconforming use.  Finally, they claim that the court
 improperly stayed the accumulation of fines.  We agree with the towns' first
 argument, and therefore do not reach the second.  We vacate the amended
 order of October 24, 1990 and remand for an order consistent with this
 opinion including a determination of monetary penalties.
                                     I.
      The first issue raised by the town's cross-appeal is whether the trial
 court had jurisdiction to consider defendants' defense of nonconforming use.
 We conclude that it did not.
      An interested person may appeal any decision or act taken by the
 zoning administrative officer to the local zoning board of adjustment.  24
 V.S.A. { 4464.  This is the exclusive statutory remedy for persons
 aggrieved by local zoning decisions or actions.  24 V.S.A { 4472(a).  This
 Court has "strictly enforced the exclusivity-of-remedy provision consistent
 with the evident legislative intent to require all zoning contests to go
 through the administrative review process in a timely fashion."  Town of
 Sandgate v. Colehamer, ___ Vt. ___, ___, 589 A.2d 1205, 1209 (1990).
 Moreover, 24 V.S.A. { 4472(d) provides that in the absence of an appeal, all
 parties are bound by local zoning decisions and "shall not thereafter
 contest, either directly or indirectly, such decision or act . . . in any
 proceeding, including, without limitation, any proceeding brought to enforce
 this chapter."  In Colehamer, we held that "[b]y its terms, { 4472(d)
 clearly applies to defenses raised in enforcement proceedings . . . ."  ___
 Vt. at ___, 589 A.2d  at 1210.
      We discern no reason to depart from the clear language of the statutes
 or Colehamer.  Defendants failed to appeal to the Charlotte board of
 adjustment when notified that they were in violation of the zoning
 ordinance. (FN1) Having failed to appeal the determination by Charlotte's
 zoning administrator, defendants were bound by his decision.  Defendant's
 affirmative defense of a permitted nonconforming use was therefore barred by
 their failure to appeal.
      Defendants' argument that they raised constitutional issues at trial
 and thereby met the exception of 4472(b) is without merit.  Section 4472(b)
 establishes a limited exception to the exclusivity-of-remedy provision for
 challenges to the constitutionality of any zoning ordinance or by-law.  In
 such cases, the challenging party receives a trial de novo and need not
 appeal to the board of adjustment.  This exception clearly applies only to
 constitutional challenges to an ordinance, and "does not authorize a
 constitutional attack on the application of the ordinance to . . .
 particular facts."  Hinsdale v. Village of Essex Junction, 153 Vt. 618, 627,
 572 A.2d 925, 930 (1990).  As we noted in Hinsdale, a landowner can readily
 restate a zoning claim in constitutional terms seeking "to undermine the
 finality and stability the Legislature has sought by enacting 24 V.S.A. {
 4472."  Id.  Defendants did not challenge the constitutionality of the
 Charlotte ordinance, but merely reasserted their zoning claim in vague
 constitutional terms.  Our holding in Hinsdale precludes such a challenge.
      Defendants' argument that the town waived its jurisdictional claim by
 failing to assert it below also fails.  24 V.S.A. { 4472 expressly deprives
 the superior court of subject matter jurisdiction when a timely appeal is
 not taken to the board of adjustment.  Subject matter jurisdiction cannot be
 waived, and the town was free to allege that defect for the first time
 before this Court.  In McGlynn v. Town of Woodbury, we ruled that failure to
 pursue the exclusive remedy of direct appeal from the board of adjustment
 to the superior court deprived the court of jurisdiction to consider the
 issues through an action for declaratory judgment.  148 Vt. 340, 343, 533 A.2d 1187, 1189 (1987).  See also Marathon Oil Co. v. United States, 807 F.2d 759, 767-68 (9th Cir. 1986) ("Statutory exhaustion requirements
 implicate concerns of separation of powers and, therefore, the failure to
 comply with the requirements deprives [the courts] of jurisdiction.")  It is
 axiomatic that lack of subject matter jurisdiction of the trial court may be
 raised for the first time on appeal to this court.  See, e.g., Soucy v.
 Soucy Motors, Inc., 143 Vt. 615, 617, 471 A.2d 224, 225 (1983).
      We conclude that the superior court lacked jurisdiction to consider
 defendants' defense of nonconforming use and to permit the sale of fifty-two
 cars per year.  The court was bound by the decision of the zoning
 administrator who found defendants to be in violation of the town's zoning
 ordinance.  We therefore vacate the amended order of October 24, 1990.
                                     II.
      The town claims that the trial court improperly stayed the accumulation
 of fines, assessed in accordance with 24 V.S.A. { 4444(a), by its orders of
 February 21 and October 24, 1990.  The combined effect of these orders was
 to suspend the accumulation of the $50 per day penalty from February 21,
 1990 through the appellate process.  The town does not dispute the authority
 of the court to issue the stay, and we do not address that issue.  The town
 claims instead that the effect of the stay was to permit defendants to
 continue the illegal operation of their business with impunity, contrary to
 our holding in Town of Sherburne v. Carpenter, 155 Vt. 126, 582 A.2d 145
 (1990).  In that case, we held that a trial court may not impose a cap on
 fines by limiting the number of days to which the statutory penalty will
 apply.  Id. at 133, 582 A.2d  at 150.  There, the trial court imposed a fine
 of $50 per day, but recognized only twenty days of violation, thereby
 capping the penalty at $1000.  Id. at 133, 582 A.2d  at 149.
      Here, the court did not expressly impose a cap on the monetary penalty
 by limiting the number of days to which it would apply.  Rather, the court
 issued a stay of its orders pending a motion to modify and pending an appeal
 to this Court.  Carpenter, then, is inapposite.  Although the effect of the
 stay is to reduce the penalty, the town does not challenge the authority of
 the court to issue that stay.  On remand, the superior court may not assess
 penalties for the period covered by the stays.

      The October 24, 1990 order of the superior court is vacated and the
 matter is remanded for issuance of an order not inconsistent with this
 opinion.

                                         FOR THE COURT:




                                         Chief Justice



 FN1.    We find no evidence of an appeal to the board in the record.  The
 failure to appeal is asserted by the town and not contradicted by defendants.