In re Mountain Top Inn & Resort

• Decision Date: 24 July 2020
• Docket Number: No. 19-082,19-082
• Citation: 238 A.3d 637
• Court: Vermont Supreme Court
• Parties: IN RE MOUNTAIN TOP INN & RESORT, JO 1-391 (Katherine Hall, Appellant)

238 A.3d 637

IN RE MOUNTAIN TOP INN & RESORT, JO 1-391 (Katherine Hall, Appellant)

No. 19-082

Supreme Court of Vermont.

September Term, 2019

July 24, 2020

James A. Dumont of Law Offices of James A. Dumont, P.C., and Gillian C.A. Cowley, Law Clerk (On the Brief), Bristol, for Appellant.

Christopher D. Roy and Alexis L. Peters of Downs Rachlin Martin PLLC, Burlington, for Appellee.

PRESENT: Robinson, Eaton and Carroll, JJ., Dooley, J. (Ret.), and Wesley, Supr. J. (Ret.), Specially Assigned

CARROLL, J.

¶ 1. Katherine Hall appeals from the Environmental Division's decision granting summary judgment to Chittenden Resorts, LLC and RMT Associates, d/b/a Mountain Top Inn & Resort (the Resort). The Environmental Division concluded that the Resort did not need an amended Act 250 permit to run a rental program where, pursuant to a contractual agreement, the Resort rents out private homes near the Resort. On appeal, Ms. Hall argues that the Environmental Division erred in determining that the Resort did not need an amended Act 250 permit. Specifically, she argues that the Resort needs an amended Act 250 permit because under 10 V.S.A. § 6001(14)(A), the Resort and owners of the homes involved in the rental program are a collective "person." Alternatively, Ms. Hall argues that the Resort exercises "control" over the rental homes within the meaning of § 6001(3)(A)(i). We affirm the Environmental Division's conclusion that the Resort does not need to seek to amend the Act 250 permit governing the Resort property to include the private homes.

I. Legal Framework

¶ 2. We begin with a brief overview of the relevant Act 250 statutes and regulations. "[T]he purpose of Act 250 is to protect and conserve the lands and environment of the state from the impacts of unplanned and uncontrolled changes in land use."

In re N.E. Materials Grp. LLC Act 250 JO #5-21, 2015 VT 79, ¶ 25, 199 Vt. 577, 127 A.3d 926 (quotation omitted). To accomplish this goal, Act 250 "prohibits parties from subdividing land or commencing development without a permit." In re SP Land Co., 2011 VT 104, ¶ 24, 190 Vt. 418, 35 A.3d 1007 (citing 10 V.S.A. § 6081(a) ).

¶ 3. In terms of development specifically, Act 250—and its accompanying regulations—require a new permit for "commenc[ing] development" or "substantial[ly] chang[ing]" a pre-existing development, 10 V.S.A. § 6081(a) - (b), and an amended permit for "material[ly] chang[ing] ... a permitted development," Act 250 Rules, Rule 34(A), Code of Vt. Rules 12 004 060 [hereinafter Act 250 Rules], https://nrb.vermont.gov/sites/nrb/files/documents/2015%20Adopted%20Rules.pdf [https://perma.cc/M83J-DLG5]; see also In re Request for Jurisdictional Op. re Changes in Physical Structures & Use at Burlington Int'l Airport for F-35A, 2015 VT 41, ¶ 7, 198 Vt. 510, 117 A.3d 457 ("The rules implementing the statute also require application for a permit if there is a substantial change to any preexisting development and application for an amended permit if there is a material change to any permitted development."). Development is defined as "[t]he construction of improvements on a tract or tracts of land, owned or controlled by a person." 10 V.S.A. § 6001(3)(A)(i) (emphases added).

¶ 4. What is disputed here is the meaning of the statutory terms "control[ ]" and "person." Id. § 6001(3)(A)(i). Although control is not defined in the statute, § 6001 provides "person":

(i) shall mean an individual, partnership, corporation, association, unincorporated organization, trust or other legal or commercial entity, including a joint venture or affiliated ownership;

(ii) means a municipality or State agency;

(iii) includes individuals and entities affiliated with each other for profit, consideration, or any other beneficial interest derived from the partition or division of land;

(iv) includes an individual's parents and children, natural and adoptive, and spouse, unless [specific criteria are met].

Id. § 6001(14)(A). The Act 250 Rules further define person "[f]or the purposes of a ‘development’ " as:

[A]n individual, partnership, corporation, association, unincorporated organization, trust or other legal or commercial entity, including a joint venture or affiliated ownership; a municipality or state agency; and, individuals and entities affiliated with each other for profit, consideration, or any other beneficial interest derived from the ‘development’ of land.

Act 250 Rule 2(C)(1)(a).

¶ 5. With that relevant legal background, we turn the facts of this particular case.

II. Facts

¶ 6. Unless otherwise noted, the undisputed facts are as follows. The Resort owns and operates the Mountain Top Inn & Resort, which is located on Mountain Top Road in Chittenden, Vermont. As explained by the district coordinator in his jurisdictional opinion, while the Resort initially predated Act 250,¹ it has since gone through several permitting iterations. Act 250 jurisdiction first attached to the Resort in 1974 because "of a proposed ‘substantial change’ to the resort, namely, the addition of 7 lots and [a] 1500 [foot] access road." The Resort subsequently "obtained other Act 250 permits or permit amendments to subdivide and to create multiple lots for private family residences." More recently, the Resort received a permit amendment for a newly constructed subdivision known as Trailside Cottages, which contains eleven private residences.

¶ 7. Several independently owned homes are located in the general vicinity of the Resort along Mountain Top Road and other nearby roads. The owners of these homes can voluntarily enroll in a short-term rental program pursuant to which they allow the Resort to "use reasonable efforts to rent" their homes to "suitable tenants." Each homeowner that enrolls in the rental program signs a standardized property rental agreement. Pursuant to the rental agreement, homeowners grant the Resort "all necessary powers, easements and rights of ingress and egress" to perform "rental, cleaning, and management services" for the property. The Resort specifically agrees to "handle all communications and negotiations with [guests]," and provide "maid service, linen service, and [a] starter set of household supplies (soap, paper towels, toilet tissue, trash bags, fire starter, dishwasher detergent, and dishwashing liquid)." For performing these services, the Resort retains a percentage of the "gross rental receipts" it collects on behalf of the owners when the homes are rented.

¶ 8. The homeowners, on the other hand, are responsible for "completely" furnishing, equipping, and maintaining the "premises in a rentable, suitable condition to accommodate the stated maximum number of occupants." The rental agreement further specifies that homeowners must, at a minimum, provide "a toll-call screened telephone, color TV/VCR, full-strength vacuum cleaner, all furniture, furnishings, appliances, cooking and eating utensils, blankets and pillows, [and] smoke detectors, fire extinguishers, fireplace tools, flashlight, plunger, snow shovel and maintenance equipment." If homeowners fail to provide the required furnishings or equipment, the rental agreement authorizes the Resort to "purchase or otherwise provide for any such furnishings or equipment deemed necessary." Similarly, the rental agreement authorizes the Resort, upon notice to the homeowners, to makes necessary repairs to the property not exceeding $500. However, the Resort at its "sole option" may "make any repairs necessary when damage to the Property is imminent and notice to Owner cannot be made within a reasonable amount of time." The Resort deducts any expenses it incurs repairing the property from the rental payments it collects.

¶ 9. Homeowners that wish to occupy, repair, or inspect their homes are required to provide at least twenty-four hours’ notice to the Resort. The rental agreement provides that the Resort "will attempt to accommodate the Owner but can make no guarantee for use of Property," and occupancy "will be subject to all confirmed reservations." Either party can terminate the rental agreement, "with or without cause," upon thirty days’ written notice. If homeowners enrolled in the program wish to sell their homes, they are required to give the Resort thirty days’ written notice prior to the date the property is listed, and the rental agreement will automatically terminate on the closing date. If the rental agreement is terminated, either by sale or notice, homeowners are required to honor "all previously confirmed rentals."

¶ 10. Guests staying at homes enrolled in the rental program (rental homes) check in and out at the Resort and are considered resort guests. They accordingly have access to all the Resort's facilities and activities. As of August 22, 2018, approximately twenty-three to twenty-six homes were enrolled in the rental program.² The extent to which the rental homes are occupied, by either guests or their owners, varies significantly.³

¶ 11. The Environmental Division found that "the permit status of the Resort Property and the [rental] [h]omes [is] convoluted and confusing, dating back to before the Resort's ownership of the Resort Property." The majority of homes in the general vicinity of the Resort are located on land that was subdivided out of the Resort. Although some of the homes are currently subject to the Resort's Act 250 permit, the parties dispute whether some or all of the homes are in subdivisions that are subject to separate Act 250 permits. To clarify the permit status of the Resort and the rental homes, the Resort submitted a request for a binding jurisdictional opinion⁴ as to whether the rental homes were subject to the Resort's Act 250 permit.

¶ 12. On February 23, 2017, District Coordinator William T. Burke issued a jurisdictional opinion in which he concluded that the Resort needed an amended Act 250 Permit to continue operating the Rental Program:

In summary ..., it is my opinion that the effective expansion of the capacity and uses at the permitted resort facilities

...