McDonald's Corp., In re

• Decision Date: 06 December 1985
• Docket Number: No. 82-516,82-516
• Citation: 505 A.2d 1202,146 Vt. 380
• Court: Vermont Supreme Court
• Parties: In re McDONALD'S CORP.

Page 1202

505 A.2d 1202

146 Vt. 380

In re McDONALD'S CORP.

No. 82-516.

Supreme Court of Vermont.

Dec. 6, 1985.

Marion T. Ferguson and Allan R. Keyes, of Ryan Smith & Carbine, Ltd., Rutland, for appellant.

Jeffrey L. Amestoy, Atty. Gen., and Merideth Wright, Asst. Atty. Gen., Montpelier, for appellee.

Before ALLEN, C.J., and HILL, PECK, GIBSON and HAYES, JJ. HAYES, Justice.

Plaintiff McDonald's Corporation (McDonald's) appeals from a declaratory ruling by the Vermont Environmental Board (Board) which determined that McDonald's was required to obtain an Act 250 land use permit, pursuant to 10 V.S.A. § 6081(a), for a proposed restaurant to be located at 195 Woodstock Avenue in the City of Rutland.

McDonald's contends 1) that the Board was estopped from ruling that an Act 250 permit was required, and 2) that it had a vested interest in construction of the project at the time the petition for declaratory ruling was filed. We disagree and affirm.

A chronology of events facilitates an understanding of the case. In the summer of 1981, McDonald's began negotiations for the purchase of three parcels of land on Woodstock Avenue in Rutland, Vermont. On April 8, 1982 two parcels were purchased outright and a lease with an option to buy was obtained on the third. The total acreage involved was over 1.8 acres, and the area to be developed was slightly in excess of one acre.

On July 16, 1981, prior to purchasing the land on which the restaurant in question was to be constructed, McDonald's obtained from District Number One Environmental Coordinator Brown an advisory opinion that an Act 250 permit was not required because Rutland City had zoning and subdivision regulations. Where a city has permanent zoning and subdivision bylaws, an Act 250 permit is only required for commercial development in excess of ten acres. In a municipality without valid permanent zoning and subdivision bylaws, on the other hand, Act 250 jurisdiction is triggered by commercial development involving one acre or more. 10 V.S.A. § 6001(3).

On March 8, 1982, a project review sheet was issued by the regional engineer of the Agency of Environmental Conservation, which indicated that no Act 250 permit was required by McDonald's. The regional engineer, however, is not responsible for Act 250 jurisdictional decisions.

In April of 1982, about one week after McDonald's purchased the subject real property, neighboring landowners filed a petition for a declaratory ruling with the Environmental Board, contending that an Act 250 permit was required because the proposed restaurant was a commercial development of over one acre in a municipality without permanent subdivision bylaws. The petitioners maintained that the Rutland City ordinance on subdivisions did not meet the standards set forth in the Vermont Planning and Development Act, 24 V.S.A. ch. 117, and was therefore invalid.

McDonald's had notice of the petition for a declaratory ruling filed by the neighboring landowners and, on April 28, 1982, moved to dismiss it. While the petition for declaratory relief was pending, and before the Board had ruled on McDonald's motion to dismiss, McDonald's began construction on June 10, 1982. The motion to dismiss was denied by the Environmental Board on July 13, 1982. On July 21, 1982, McDonald's filed a motion for permission to appeal to the Vermont Supreme Court pursuant to V.R.A.P. 5(b), which was denied by the Board.

McDonald's opened its restaurant for operation several weeks before the Board issued the declaratory ruling which is the subject of this appeal. The Board ruled that the City of Rutland's subdivision bylaws had not been amended to conform to 24 V.S.A. ch. 117 and, thus, had become void. The Board also held that since McDonald's development exceeded one acre, an Act 250 permit would be required.

I.

McDonald's contends that the Environmental Board was estopped from ruling that an Act 250 permit was required. "Estoppel is not a defense that should be readily available against the state, but neither is it a defense that should never be available." Foote's, Dixie Dandy, Inc. v. McHenry, 270 Ark. 816, 822, 607 S.W.2d 323, 325 (1980). Estoppels against the government are rare and are to be invoked only in extraordinary circumstances. The state, however, "may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private party are present and ... the injustice which would result from a failure to uphold an estoppel is of sufficient dimensions to justify any effect upon public interest or policy which would result from the raising of an estoppel." Chaplis v. County of Monterey, 97 Cal.App.3d 249, 258, 158 Cal.Rptr. 395, 400 (1979) (quotingCity of Long Beach v. Mansell, 3 Cal.3d 462, 496-97, 91 Cal.Rptr. 23, 48, 476 P.2d 423, 448 (1970)).

The parties agree that the elements of equitable estoppel, as set forth in Town of Bennington v. Hanson-Walbridge Funeral Home, Inc., 139 Vt. 288, 427 A.2d 365 (1981), are applicable to the present case. Those elements are:

(1) [t]he party to be estopped must know the facts;

(2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended;

(3) the latter must be ignorant of the true facts; and

(4) he must rely on the former's conduct to his injury.

Id. at 293-94, 427 A.2d at 369 (quoting Rosenthal v. National Life Insurance Co., 486 F.Supp. 1018, 1023 (S.D.N.Y.1980)) (emphasis added); see also Fisher v. Poole, 142 Vt. 162, 168, 453 A.2d 408, 412 (1982) (elements of equitable estoppel and its rationale set forth). Furthermore, we have recognized that "[o]ne who invokes the doctrine of equitable estoppel has the burden of establishing each of its constituent elements." Fisher, supra, 142 Vt. at 168, 453 A.2d at 411 (emphasis added). With these standards in mind, we turn to the facts of the present case.

The advisory opinion issued by the district coordinator states in part, "Rutland City has zoning and subdivision regulations, thus, must be ten acres of land for commercial jurisdiction under 250." This opinion, however, was issued without the knowledge that the subdivision regulations of the City of Rutland did not comply with the provisions of the Vermont Planning and Development Act, 24 V.S.A. ch. 117, and were therefore void. Moreover, the second project review sheet was issued by the regional engineer of the Agency of Environmental Conservation, who had no responsibility for Act 250 jurisdictional decisions.

It is uncontroverted that McDonald's began construction on this project knowing that a question of jurisdiction had been raised in the petition for declaratory ruling and continued construction after the Environmental Board had denied its...