McCormick Management Co., Inc., In re, 86-140

• Decision Date: 12 February 1988
• Docket Number: No. 86-140,86-140
• Court: Vermont Supreme Court
• Parties: In re McCORMICK MANAGEMENT CO., INC.

Page 1319

547 A.2d 1319

149 Vt. 585

In re McCORMICK MANAGEMENT CO., INC.

No. 86-140.

Supreme Court of Vermont.

Feb. 12, 1988.

Motion for Reargument Denied

April 29, 1988.

Spokes, Foley & Stitzel, Burlington, for plaintiff-appellee.

Biggam & Fox, Montpelier, for defendant-appellant.

Before ALLEN, C.J., PECK, DOOLEY and MAHADY, JJ., and KEYSER, J. (Ret.), Specially Assigned.

DOOLEY, Justice.

This is a zoning case in which the trial court declared that the zoning ordinance of the Town of Richmond (hereinafter the Town) is invalid for failure of the Town to adopt a prior town plan. In addition, the court held that the plaintiff, McCormick Management Company (hereinafter McCormick), held vested rights in its development plan because of the filing of the plan by its predecessor in title before the Town adopted an interim zoning ordinance. Under either theory, the court held that McCormick was entitled to a permit for its single family housing development despite the fact that the lots did not comply with the one acre minimum lot size requirement contained in the Richmond zoning ordinance. The Town appeals. We reverse and hold that neither theory entitles the plaintiff to a permit.

The permit application involves the Cote Subdivision, so called, in the Town of Richmond. On July 25, 1968, Phillippe Cote filed with the clerk of the Town a subdivision plat showing his property being divided into 81 residential lots. There are actually two types of lots on the subdivision. Those numbered 47 through 81 are large residential lots; those numbered 1 through 46 are very small residential lots, apparently of a size to fit a mobile home or a house of similar size. The plat was too large to be put in the land records. As a result, the clerk stamped, dated and signed the original, put it in her safe and requested that Mr. Cote supply a smaller copy for recording. That evening, the Town selectmen adopted an interim zoning ordinance, the first zoning ordinance for the Town.

Some two months later, Mr. Cote supplied the reduced version of the plat, and it was recorded in the land records. Mr. Cote started to develop the subdivision, building roads, installing utilities and selling lots. By December of 1982, 33 of the 35 large residential lots were developed with houses. Mr. Cote sold the remainder of the land to McCormick at that time. In April of 1983, McCormick applied for a zoning permit to build single family houses on the small lots numbered 1 through 46. The permit was denied because the size of the lots was too small to conform to the requirements of the town zoning ordinance.

On appeal from the denial, the trial court held that the filing of the subdivision plat by Mr. Cote prior to the enactment of the first zoning ordinance in the Town exempts the subdivision from any zoning regulation. As an alternative, it held that the zoning ordinance did not comply with the enabling law, apparently, because there was no preexisting town plan. Pursuant to 24 V.S.A. § 4491(c), such a nonconforming ordinance was valid for only 7 years from its adoption. On finding that the relevant ordinance was adopted in 1970, the court held that the ordinance expired in 1977 and could not serve as the basis for a denial of a permit to plaintiff in 1983. In essence the court ruled that the Town had no valid zoning from 1977 on.

The Town contests both alternative theories, arguing that a subdivision filing on the day of the adoption of a zoning ordinance and in anticipation of the ordinance creates no vested right to develop in accordance with the subdivision plan. ¹ Second, the Town argues that certain savings statutes validate the Town ordinance despite any defects in its adoption, and, in any event, plaintiff's attack on the ordinance was barred by the applicable statute of limitations. We take these issues in order.

McCormick's vested rights theory is based almost exclusively on Smith v. Winhall Planning Commission, 140 Vt. 178, 436 A.2d 760 (1981). In Smith, the plaintiff had applied for approval of a subdivision and was denied. During the review process, the town amended the zoning ordinance of the town in a way that clearly prohibited plaintiff's proposed subdivision development. In this Court, the town argued that the new ordinance applied. This Court rejected that argument and held that plaintiff had a vested right to develop in accordance with his subdivision plan if it was lawful at the time the permit application was made. In doing so, we adopted the minority rule that rights vested "under the then existing regulations as of the time when proper application is filed...." Id. at 181, 436 A.2d at 761. The holding is based in part on the policy considerations of certainty in the law and its administration and avoidance of the litigation a more complicated rule would engender and in part on the command of 1 V.S.A. § 213 that law changes do not "affect a suit begun or pending at the time of their passage." Smith emphasized a statement in In re Preseault, 132 Vt. 471, 474, 321 A.2d 65, 66 (1974), that because of 1 V.S.A. § 213 " 'the intervening adoption of a master plan is, by itself, ineffective to derail proceedings validly brought and pursued in good faith to implement rights available under previous law.' " Smith, 140 Vt. at 182, 436 A.2d at 762.

The circumstances in this case are very different from those present in Smith. Here, McCormick claims vested rights from the act of filing a subdivision plat before the Town adopted any zoning. Clearly, 1 V.S.A. § 213 and its analysis in Preseault have no application to this case. Further, we believe the policy considerations are different from those present in Smith. Finally, in this case, unlike Smith, the legislature has dictated how those policy considerations should apply.

A good starting point for our analysis is an earlier opinion in the Preseault litigation entitled Preseault v. Wheel, 132 Vt. 247, 315 A.2d 244 (1974). In that case, the developer had been issued a building permit but did not start construction within a year because of appeals by adjoining landowners. The building permit was good for only a year and had to be renewed thereafter. Meanwhile, the city had changed its zoning ordinance so that the development did not comply with the new law. The building inspector refused to renew the permit because of the change in the zoning law, and the developer sued for the renewed permit alleging that he had a vested right to it. The Court saw itself as drawing a line between competing considerations:

If there were no limit to the duration of a building permit, a municipality would be hindered in its attempt to control the use and development of land in the face of changing conditions. A developer could do nothing, in effect could sit on his permit, and subsequently commence construction distasteful to, and long proscribed by, the municipality.

On the other hand, a permittee who has done various acts after obtaining the permit should not see his efforts automatically deemed worthless when the municipality amends its zoning ordinances so that his project is nonconforming.

Id. at 252-53, 315 A.2d at 247.

The Town's interest here is great. The subdivision plat involved was filed in 1968, some fifteen years before the permit was sought. During that time, land uses within the Town may have changed dramatically so that the proposed uses would be wholly incompatible with surrounding users. As this Court stated in Vermont Brick & Block, Inc. v. Village of Essex Junction, 135 Vt. 481, 483, 380 A.2d 67, 69 (1977):

A prime purpose of zoning is to bring about the orderly physical development of the community by confining particular uses to defined areas. Nonconforming uses are inconsistent with that purpose and are tolerated only because they are antecedent to the zoning regulation. A goal of zoning is to gradually eliminate these uses.

(citations omitted).

On the other hand, the developer in this case has done little in reliance on the development scheme. While Cote developed some of the lots, McCormick received a large plot of land that is divided only on paper. McCormick has had to make no investments to protect its interests. The fifteen-year time lapse between the filing of the plat and the development was not caused by external factors beyond the control of Cote or McCormick.

The legislature has acted to balance these considerations and establish a policy on subdivisions that are alleged to preexist zoning and subdivision regulation. 24 V.S.A. § 4401(b)(2) authorizes a municipality to adopt subdivision regulations and "approve the development of such plats previously filed in the office of the clerk of such municipality if such plats are entirely or partially undeveloped, under the subdivision regulations of such municipality." This is an authorization for the town to subject preexisting plats to current subdivision regulation to the extent they remain undeveloped. Obviously, this authority would be meaningless if we were to adopt the expansive theory of vested rights asserted by McCormick. It is particularly appropriate to apply the statute where, as here, the lots that remain undeveloped differ greatly in size from those which have already been developed and are physically separate from, although continguous to, the developed lots.

Similarly, 24 V.S.A. § 4406(1) requires that municipalities allow the development of existing small lots--that is, those below minimum lot size requirements--only when the lot is "in individual and separate and non-affiliated ownership from surrounding properties in existence on the effective date of any zoning regulation...." See LeBlanc v. City of Barre, 144 Vt. 369, 372, 477 A.2d 970, 971-72 (1984). The legislative policy would be wholly undermined by a vested rights rule that protected preexisting small lots that are in affiliated ownership from surrounding lots.

Finally, the legislature has adopted a detailed statute on...