In re Newton Enterprises

In re Newton Enterprises  (97-105); 167 Vt. 459; 708 A.2d 914

[Opinion Filed 23-Jan-1998]

[Motion for Reargument Denied 12-Feb-1998]

       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.


                            No. 97-105


In re Appeal of Newton Enterprises           Supreme Court

                                             On Appeal from
                                             Environmental Court

                                             October Term, 1997


Merideth Wright, J.

Andrea L. Gallitano of Otterman and Allen, P.C., Barre, for Appellant.

Richard A. Cawley, Bradford, for Appellee.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       DOOLEY, J.   The Town of Fairlee appeals from a decision of the
  environmental court that (1) appellee Newton Enterprises, Inc. received a
  zoning permit by operation of law because a majority of the zoning board of
  adjustment failed to act on its request to change its non-conforming use
  and (2) the Town is not entitled to an injunction against appellee s
  multiple uses. We agree that the permit was not granted by operation of law
  and remand for consideration of the merits.

       Newton Enterprises operates a business, commonly known as Newton s
  Texaco, on a .9 acre lot at the intersection of U.S. Route 5 and the Lake
  Morey Road in the Town of Fairlee. The business was in place before the
  Town adopted a zoning ordinance.  According to the Town, the number of uses
  on this lot have increased since zoning was adopted to the point where
  there are too many uses for the size of the lot.  Newton Enterprises agrees
  there are multiple uses, but asserts they existed before the Town adopted
  the zoning ordinance.

       The matter came to a head in 1995 when Newton Enterprises received a
  state permit to add a grill and food preparation to the convenience store
  it operated on the premises.  On

 

  receiving notice of the permit, the planning commission decided that Newton
  Enterprises operated three independent businesses on the site, but did not
  meet the minimum lot size requirement of the zoning ordinance for this
  intensity of use.  On November 8, 1995, following a meeting between the
  Fairlee Planning Commission and the owners of Newton Enterprises, the
  zoning administrator advised Newton Enterprises that it was in violation of
  the zoning ordinance. The zoning administrator suggested that Newton
  Enterprises apply for a variance, but also informed it that it could appeal
  the violation determination to the zoning board.  When Newton Enterprises
  failed to respond, the zoning administrator issued a cease and desist order
  on January 11, 1996.  When Newton Enterprises again failed to respond, the
  Town, on February 22, 1996, filed an injunction action in the environmental
  court seeking an injunction against the multiple uses.

       The injunction action finally induced Newton Enterprises, on April 3,
  1996, to appeal from the zoning administrator s action to the zoning board. 
  The board denied that appeal on April 26, 1996.  Newton Enterprises
  appealed that decision to the environmental court, but also sought
  zoning-board approval to alter or expand its non-conforming uses from 
  large & small engine repair, sales & service and convenience store  to 
  large & small engine repair, sales & service and convenience store with
  grill and enhanced food preparation and service.

       The zoning board held a hearing on Newton Enterprises  request on
  August 1, 1996. Five of the seven members of the board were present, but
  one member abstained from participating because of a conflict of interest. 
  Following the hearing, the remaining four members of the board voted to
  deny the request on a vote of three to one.  The board notified Newton
  Enterprises of the decision on August 5, 1996, and Newton Enterprises
  appealed this decision to the environmental court.

       The environmental court considered cross-motions for summary judgment
  in each of the three cases before it.  The court granted the Town summary
  judgment in Newton Enterprises appeal of the zoning administrator s cease
  and desist order, ruling that the appeal to the zoning

 

  board was untimely.  It granted summary judgment for Newton Enterprises in
  its appeal of the decision to deny it approval to modify its multiple uses. 
  The court ruled that the zoning board s vote was ineffective because it was
  not joined in by a majority of the board.  As a result, the court further
  ruled that the board had failed to take action within forty-five days and
  Newton Enterprises was entitled to a permit by operation of law pursuant to
  24 V.S.A. § 4470(a). Because it ruled that Newton Enterprises was entitled
  to a permit, it dismissed the Town s request for an injunction, reserving
  decision on the Town s request for a civil penalty.

       On appeal, the Town argues first that the court erred in denying the
  injunction because Newton Enterprises is collaterally estopped from
  claiming that it is not in violation of the zoning ordinance because it
  failed to file a timely appeal from either the non-compliance decision or
  the cease-and-desist order of the zoning administrator.(FN1)  We note, at the
  outset, that this issue involves part of the relief requested in the
  enforcement action and that the enforcement action is still pending before
  the environmental court on the Town s request for civil penalties.  Thus,
  there is not yet a final judgment in the enforcement action; nor has the
  environmental court made the determination required by V.R.C.P. 54(b). 
  Accordingly, we do not have jurisdiction to consider the appeal of the
  denial of the injunction.  See Hospitality Inns v. South Burlington R.I.,
  149 Vt. 653, 656, 547 A.2d 1355, 1358 (1988) (final judgment is ordinarily
  prerequisite to appellate jurisdiction); Szirbik v. R.K. Miles, Inc., 137
  Vt. 108, 108, 400 A.2d 1001, 1001 (1979) (when judgment order does not
  dispose  of all the claims, rights and liabilities of all the parties, 
  there is no appellate jurisdiction absent a Rule 54(b) determination).

       We recognize, however, that if the Town s position is correct, the
  environmental court erred in giving Newton Enterprises a permit.  Thus, we
  consider the Town s position as a reason

 

  to reverse the grant of the permit.

       The Town relies on Town of Charlotte v. Richmond, 158 Vt. 354, 609 A.2d 638 (1992), where we held that failure to appeal to the zoning board
  of adjustment from a zoning administrator s decision that a landowner was
  in violation of the zoning ordinance bound the landowner in a later
  enforcement action.  See id. at 357, 609 A.2d  at 640.  Thus, the landowner
  could not raise the affirmative defense of permitted non-conforming use in
  the enforcement action.  See id.; see also Town of Sandgate v. Colehamer,
  156 Vt. 77, 85, 589 A.2d 1205, 1210 (1990).  We agree with the Town that
  Newton Enterprises cannot claim that its current uses conform to the zoning
  ordinance, and therefore are lawful, because it failed to take a timely
  appeal from either the notice of violation or the cease-and-desist order. 
  We do not agree, however, that failure to appeal from the zoning
  administrator s notices prevents Newton Enterprises from seeking a permit
  to make its multiple uses lawful.

       The holdings in Richmond and Colehamer are based on 24 V.S.A. §
  4472(a) which provides that except in certain circumstances  the exclusive
  remedy of an interested person with respect to any decision or act taken .
  . . under this chapter . . . shall be the appeal to the board of adjustment
  ; and on § 4472(d) which provides that failure to appeal to the board means
  that all interested persons are bound by the decision of the administrator
  and may not contest it directly or indirectly in an enforcement action. 
  See Richmond, 158 Vt. at 356-57, 609 A.2d  at 640; Colehamer, 156 Vt. at 85,
  589 A.2d  at 1210.  In this case, the decision of the administrator was that
  Newton Enterprises was conducting at least two separate uses, restaurant
  and retail sales, without adequate lot size under the zoning ordinance. 
  The cease-and-desist order alleged that Newton Enterprises was conducting
  three separate uses, again on a lot that was too small.  By failing to
  appeal these determinations, Newton Enterprises is bound by them.

       Newton Enterprises  application to the zoning board asked for action
  of that board, not the zoning administrator, pursuant to sections of the
  zoning ordinance that allowed the board to approve alteration, expansion or
  enlargement of a preexisting, non-conforming use or change

 

  of such use.  See Fairlee Zoning Ordinance § 4.7(a), (b).  Newton
  Enterprises necessarily accepted as a starting point that it was in
  violation of the zoning ordinance, but asked for zoning board action to
  come into compliance.  Although it was not the route to compliance
  suggested by the zoning administrator, the zoning board apparently found it
  appropriate, but the vote denied the approval on the merits.  In any event,
  it did not directly or indirectly challenge the decisions of the zoning
  administrator.  Neither § 4472(d) nor the decisions in Richmond or
  Colehamer prevented the zoning board or the environmental court from
  granting approval that would bring Newton Enterprises  uses into compliance
  with the zoning ordinance.

       The Town next argues that it is inappropriate to apply the automatic
  approval remedy to these facts and that, in any event, Newton Enterprises
  is foreclosed from using its new permit to defend against the Town s
  injunction request.  Newton Enterprises argues that the case is controlled
  by In re Application of 66 North Main Street, 145 Vt. 1, 481 A.2d 1053
  (1984) and the environmental court correctly ruled that it is entitled to a
  permit by application of law and the permit is a defense to the injunction
  request.

       Central to the environmental court decision is its conclusion that the
  zoning board vote was ineffective.  This conclusion is based on 24 V.S.A. §
  4462(a) which governs zoning board procedure and provides in part:

     For the conduct of any hearing and the taking of any action, a
     quorum shall be not less than a majority of the members of the
     board, and any action thereof shall be taken by the concurrence of
     a majority of the board.

  See also 1 V.S.A. § 172 ("when joint authority is given to three or more .
  . . a majority of such number . . . shall be required in its exercise ). 
  In 66 North Main Street, we held that when two of five members of a zoning
  board voted to deny a variance, at a meeting where only three members of
  the board were present, the decision   was patently defective under the
  statute. 145 Vt. at 3, 481 A.2d  at 1055 (quoting City of Winooski v.
  Barnes, 142 Vt. 27, 30, 451 A.2d 1140, 1141 (1982)); see also In re Lionni,
  160 Vt. 625, 626, 648 A.2d 832, 833 (1993)

 

  (planning commission may not act through vote of less than a majority even
  where it has adopted a bylaw authorizing such action).  Based on 66 North
  Main Street, the environmental court held that the vote to deny Newton
  Enterprises a permit to modify its uses was likewise defective because a
  majority of the board did not join in it.

       Relying again on 66 North Main Street, the environmental court then
  applied 24 V.S.A. § 4470(a), which requires the zoning board to  render a
  decision, within 45 days after hearing. 145 Vt. at 3, 481 A.2d  at 1055. 
  The court further noted that § 4470(a) goes on to provide a consequence for
  failure to act within the time limit:

     If the board does not render its decision within the period
     prescribed by this chapter, the board shall be deemed to have
     rendered a decision in favor of the appellant and granted the relief
     requested by him on the last day of such period.

  Id.  The environmental court applied this provision and held that Newton
  Enterprises  permit was deemed approved because the board failed to act
  within the statutory period.

       We acknowledge, as Newton Enterprises argues, that the environmental
  court s decision follows our holding in 66 North Main Street, but agree
  with the Town that the result carries the deemed approval remedy well
  beyond its intended purpose.  In this case, Newton Enterprises applied for
  zoning board approval to alter, expand or enlarge its non-conforming uses
  or to change them.  Thus, a majority of the board had to vote for its
  proposal for Newton Enterprises to receive a permit.  Yet, the vote that
  occurred, albeit defective, showed that Newton Enterprises could never
  obtain the requisite number of votes.  Of the five-members present on the
  zoning board, two members voted against Newton Enterprises  proposal and
  one recused himself because of a conflict of interest.  Even if the two
  absent members had been present and had voted for Newton Enterprises, the
  final vote would have been a tie with neither side receiving the requisite
  majority.

       In recent decisions, we have cautioned against using the
  deemed-approval remedy beyond its purpose  to remedy [zoning board]
  indecision or protracted deliberation.   In re Fish, 150

 

  Vt. 462, 464, 554 A.2d 256, 258 (1988); see also Hinsdale v. Village of
  Essex Junction, 153 Vt. 618, 623-24, 572 A.2d 925, 928 (1990).  We must
  balance this purpose against the paramount obligation to protect the safety
  and general welfare of the public.  See Leo s Motors, Inc. v. Town of
  Manchester, 158 Vt. 561, 564, 613 A.2d 196, 199 (1992); City of Rutland v.
  McDonald s Corp., 146 Vt. 324, 330, 503 A.2d 1138, 1142 (1985).  Thus, we
  recognize that improper application of the deemed-approval remedy can
  operate to grant permits wholly at odds with the zoning ordinance.  See In
  re Knapp, 152 Vt. 59, 65, 564 A.2d 1064, 1067 (1989). Because of that
  consequence, we have strictly construed the remedy to apply only when it
  clearly implements the statutory purpose.

       Application of the deemed-approval remedy in this case produces a
  perverse result unrelated to the statutory purpose.  Instead of remedying
  indecision or excessive deliberation, the granting of the permit turns a
  negative decision into a positive one with no finding that the landowner
  meets the requirements of the zoning ordinance.  Thus, the landowner, who
  does not have the requisite votes to obtain the necessary board approval,
  receives a permit by operation of law.  We doubt the situation here is
  unique.  Recusals are probably common in small towns and would have the
  same effect in many cases.  As our recent decisions make clear, we will not
  apply the deemed-approval remedy in this wooden fashion.  See Leo s Motors,
  Inc., 158 Vt. at 565, 613 A.2d  at 199; Nash v. Warren Zoning Bd. of
  Adjustment, 153 Vt. 108, 115, 569 A.2d 447, 451-52 (1989).

       The governing statute, 24 V.S.A. § 4470(a), requires the board to
  render a decision within forty-five days after completing the hearing on
  the application.  We hold that the board has rendered its decision when it
  issues a written decision and the votes are sufficient that the outcome
  could not change by the involvement of other members of the board.  See In
  re White, 155 Vt. 612, 616, 587 A.2d 928, 930 (1990) (decision is  rendered 
  under § 4470(a) when board makes a decision and communicates it to
  landowner even though decision does not fully

 

  comply with the statute).(FN2)  To the extent that the decision in 66 North
  Main Street is to the contrary, it is overruled.

       In this case, the board rendered its decision on August 5, 1996, only
  four days after the completion of the hearing.  Therefore, Newton
  Enterprises is not entitled to a permit by operation of law and the court
  should have reached the merits of the dispute before it.

       Reversed and remanded.

                              FOR THE COURT:



                              _______________________________________
                              Associate Justice


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                                  Footnotes



FN1.  The first notice the zoning administrator sent to Newton
  Enterprises appraised it of its right to appeal the administrator s
  decision to the zoning board.  See Town of Randolph v. Estate of White, 8
  Vt. L.W. 51, 53 (Feb. 28, 1997) (to meet due process requirements, notice
  of violation must inform the landowner how to contest the decision).  Thus,
  Newton Enterprise has raised no issue of adequacy of notice.

FN2.  We do not reach the circumstances where the requisite number of
  members do not vote for the action taken, but a contrary decision might be
  reached after a later hearing.