IN RE NEHEMIAH ASSOCIATES, INC.

• Decision Date: 11 September 1998
• Docket Number: No. 97-223.,97-223.
• Citation: 719 A.2d 34
• Court: Vermont Supreme Court
• Parties: In re NEHEMIAH ASSOCIATES, INC.

719 A.2d 34

In re NEHEMIAH ASSOCIATES, INC.

No. 97-223.

Supreme Court of Vermont.

September 11, 1998.

James P.W. Goss of Reiber, Kenlan, Schwiebert, Hall & Facey, P.C., Rutland, for Appellant.

William H. Sorrell, Attorney General, and John H. Hasen and Rebecca M. Ellis, Assistant Attorneys General, Montpelier, for Amicus Curiae State. Robert E. Woolmington and Elizabeth A. Boepple of Witten, Woolmington, Bongartz & Campbell, P.C., Bennington, for Amicus Curiae Perkins.

Before DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

SKOGLUND, Justice.

Nehemiah Associates, Inc. appeals from a decision of the Environmental Board denying Nehemiah's application for an Act 250 permit amendment to subdivide and develop a 3.38-acre lot into three residential building lots. Nehemiah previously appealed the Board's decision denying its application, and we reversed and remanded for the Board to balance the policy considerations raised by the parties. See In re Nehemiah Assocs., 166 Vt. 593, 595, 689 A.2d 424, 426 (1996) (mem.) ("Nehemiah I"). Nehemiah contends that on remand the Board: (1) erred because our holding in Nehemiah I mandated approval of the permit amendment; (2) applied an improper test and relied upon inappropriate factors to determine whether to grant Nehemiah's application; and (3) abused its discretion by basing its denial of Nehemiah's application on findings and conclusions it altered or added to its pre-remand decision without holding another evidentiary hearing. In addition, Nehemiah claims that, even if the Board used the correct balancing test and considered the proper factors, Nehemiah satisfied the standard. We affirm.

For purposes of this appeal, we must again set forth a brief history. In 1989, Nehemiah purchased twelve acres of land on Route 3 in Pittsford for the purpose of developing the land into a residential subdivision. At the time of the purchase, the property was surrounded primarily by agricultural and limited-usage lands. Nehemiah applied for and received 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 along Route 3 that would be left undeveloped to satisfy the requirements of 10 V.S.A. § 6086(a)(9)(B) (criterion 9B). Criterion 9B is designed to preserve the agricultural potential of prime agricultural soils. To satisfy this criterion, Nehemiah drafted, at the commission's request, a proposed right-to-farm covenant to permit continued agricultural and related farming activities on the 3.38-acre lot.

The district commission found that such use of this parcel would also provide a visual buffer, thereby satisfying the aesthetic considerations of § 6086(a)(8) (criterion 8). Relying on the right-to-farm covenant, the commission further found that the proposed development complied with criterion 9B. The commission then incorporated Nehemiah's proposed right-to-farm covenant into condition 9 of the Act 250 permit, which it granted to Nehemiah on December 27, 1989. Condition 9 of the permit required Nehemiah to insert the covenant regarding the reserve land in all subdivision deeds in order to put buyers on notice of the planned agricultural use of the 3.38 acres and to inform them that they waived their right to sue a farmer for agricultural nuisance. In addition to the agreed-upon covenant language, the commission sua sponte included the following language at the end of condition 9: "Furthermore, the permittee or subsequent landowners association shall maintain the 3.38-acre agricultural reserve lands as open, cleared, uncluttered, and unencumbered land."

Nehemiah divided and sold nine lots in the subdivision, leaving the reserve land undeveloped. The nine deeds each included the right-to-farm covenant of condition 9, but intentionally omitted the open-land paragraph set forth above. When selling the lots, Nehemiah informed all buyers that the reserve land would remain undeveloped because of criterion 9's primary agricultural soils restriction. Nehemiah, however, regarded future development of the reserve land as a reserved right apparent to any person, including the purchasers, who examined the 1989 permit application.

After the commission granted Nehemiah's permit, the Vermont Department of Agriculture instituted an off-site agricultural soils mitigation program (agsoils program).¹ In 1992, citing the availability of the agsoils program, Nehemiah filed an application to amend its land-use permit, requesting permission to subdivide the reserve land into three residential lots. At the hearing, the commission found that participation in the agsoils program would put the development of the reserve land into compliance with criterion 9B. Nevertheless, the commission denied the permit amendment because it found that the development of the reserve land would not conform with the aesthetic considerations of criterion 8. Nehemiah appealed to the Environmental Board.

After the Environmental Board held a hearing on the matter, it issued a decision in which it concluded that all the elements of collateral estoppel were met with respect to condition 9. Nonetheless, to avoid applying the doctrine rigidly in an administrative proceeding, the Board engaged in its regular policy analysis, weighing considerations of flexibility against finality. It concluded that, because of Nehemiah's failure to include the open-land paragraph in the deeds, the policy of finality outweighed the policy of flexibility. The Board therefore denied Nehemiah's requested amendment without reaching condition 8. Nehemiah appealed the Board's decision to this Court.

In Nehemiah I, we concluded that Nehemiah had reasonably construed condition 9 with respect to the open-land paragraph, holding therefore that the Board had erred in concluding it was a required deed covenant. See 166 Vt. at 594, 689 A.2d at 425. We further concluded that, while an analysis of finality and flexibility could provide sufficient grounds to deny a permit amendment, the Board erred in relying on collateral estoppel because the doctrine's elements do not constitute appropriate standards with which to evaluate a permit amendment application. Nehemiah I, 166 Vt. at 594, 689 A.2d at 425 (reiterating recent holding from In re Stowe Club Highlands, 166 Vt. 33, 687 A.2d 102 (1996)). We therefore reversed and remanded the Board's decision "for the Board to balance the policy considerations raised by the parties to determine whether to grant the permit amendment." Nehemiah I, 166 Vt. at 595, 689 A.2d at 426.

On remand, the Board again balanced the competing policies of flexibility and finality in relation to condition 9. The second time, however, it considered the open-land paragraph as a substantive condition of the permit rather than as a required deed covenant. It again concluded that the policy of finality outweighed the policy of flexibility and denied Nehemiah's application for a permit amendment. This appeal followed.

We accord deference to the Environmental Board's interpretations of Act 250, its own rules, and to the Board's specialized knowledge in the environmental field. See In re Wal*Mart Stores, Inc., 167 Vt. 75, 79, 702 A.2d 397, 400 (1997). Absent compelling indications of error, we will sustain the Board's interpretation on appeal. See id. Further, the Board's decisions are presumed to be correct, valid, and reasonable. See In re Denio, 158 Vt. 230, 239, 608 A.2d 1166, 1171 (1992).

I.

Nehemiah contends that on remand the Board erred in not automatically granting its application based on our holding in Nehemiah I and the Board's preremand findings. Nehemiah argues as follows. First, the Board concluded in its pre-remand decision that, until such time as Nehemiah fully complied with condition 9 of the 1989 permit by inserting the open-land paragraph into the individual deeds, the policy of finality outweighed the policy of flexibility. Second, this Court concluded that the open-land paragraph was not a covenant and, therefore, that Nehemiah was not required to insert it into the individual deeds. Third, we reversed the Board's pre-remand decision because it was based solely on the erroneous conclusion that condition 9 required inclusion of the open-land paragraph in the deeds. Finally, Nehemiah alleges that, since condition 9, "the sole impediment to issuing the Amendment," was no longer at issue, the Board should have issued the permit on remand because at that point the policy of flexibility outweighed the policy of finality.

This argument, however, overlooks one very important detail. Although we held in Nehemiah I that the open-land paragraph was not a covenant, we recognized that the open-land paragraph was still a permit condition. See 166 Vt. at 594, 689 A.2d at 425 (stating open-lands paragraph is condition of original permit to which Nehemiah seeks amendment). The Board in its preremand decision analyzed the open-land paragraph as a required, but missing, covenant, but failed to balance the policies of flexibility and finality with respect to the open-land paragraph as a condition of the 1989 permit. In fact, the Board expressly noted that, because it based its decision on the doctrine of collateral estoppel, it did not reach the issue of whether the project complied with criterion 8.

On remand, we required the Board to balance policy considerations that were raised by the parties in determining whether to amend the condition 9, which included the open-land paragraph. This is exactly what the Board did; consequently, there is no error.²

II.

Nehemiah next alleges several errors in regard to the test used by the Board and the factors it considered in determining whether to grant Nehemiah's application. First, Nehemiah contends that the Board erred by not applying the ten criteria of Act 250 in determining whether to grant a permit amendment. See 10 V.S.A. § 6086(a). Second, Nehemiah contends that, even if the ten criteria of § 6086(a)...