Sigler v. Town of Norwich, 01-433.
| Decision Date | 26 July 2002 |
| Docket Number | No. 01-433.,01-433. |
| Citation | 807 A.2d 442 |
| Parties | Andrew C. and Margaret R. SIGLER FOUNDATION v. TOWN OF NORWICH. |
| Court | Vermont Supreme Court |
Geoffrey J. Vitt and Eric D. Jones of Vitt & Jones, PLC, Norwich, and Robert B. Hemley and Johan W.E. Maitland of Gravel & Shea, Burlington, for Plaintiff-Appellant.
Glenn C. Howland of McKee, Giuliani & Cleveland, P.C., Montpelier, for Defendant-Appellee.
Present: AMESTOY, C.J., DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.
The Andrew C. and Margaret R. Sigler Foundation, Inc. (the "Foundation") is a § 501(c)(3) charitable foundation that operates the Dream & Do Farm (the "Farm"), a state-of-the-art dairy farm on 5.26 acres in Norwich, Vermont. It appeals from a superior court order denying its request for a property tax exemption pursuant to 32 V.S.A. § 3802(4). The trial court concluded that the Farm provided direct benefits to a "definite," rather than "indefinite," class of persons and, therefore, failed to meet the second prong of the three-part test in American Museum of Fly Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 110, 557 A.2d 900, 904 (1989). Because we find that the Farm directly benefits an indefinite class of persons who are part of the public, we reverse the trial court's order denying the Foundation tax exempt status. In so doing we also clarify proper application of this Court's prior precedent handed down in New York Institute for Education of the Blind v. Town of Wolcott, 128 Vt. 280, 286, 262 A.2d 451, 455 (1970), regarding a "definite" class of persons.
We exercise plenary review in determining whether the trial court's conclusions of law are consistent with applicable law. Barrett/Canfield, LLC v. City of Rutland, 171 Vt. 196, 198, 762 A.2d 823, 824 (2000). If consistent with applicable law, and if supported by findings of fact, we will uphold the court's conclusions. Carpenter v. Central Vermont Med. Ctr., 170 Vt. 565, 566, 743 A.2d 592, 594 (1999) (mem.). In this case, the trial court's conclusions of law are not consistent with its findings of fact nor with applicable law.
The following trial court findings of fact are undisputed and will not be disturbed unless clearly erroneous. In re M.B., 162 Vt. 229, 237-38, 647 A.2d 1001, 1006 (1994). The Foundation's mission is to encourage the preservation, survival and advancement of dairy farms in New England. As stated in its Articles of Association and By-Laws, the Foundation's specific goals are: to develop advanced farming techniques and improved dairy animals, to make available the benefits of advanced farming techniques to commercial dairy farmers and consumers, and to improve the economic performance of family run dairy farms and small producers. An additional goal of the Foundation is education, and to further that end the trial court found that the Foundation devotes "considerable time and resources to educate students at all levels." The following groups and individuals have received support and benefits from the Foundation: (1) local 4-H organizations and local schools; (2) agriculture students from regional universities and colleges who regularly visit and take courses at the Farm, and whose schools receive financial support from the Foundation; (3) dairy farmers who regularly visit the Farm and receive information about a wide variety of sound dairy farming practices; (4) scientists and researchers of agriculture technology who are provided access to the Farm and its resources to develop new technologies and procedures to assist small family farms; (5) students from nursery, elementary, and high schools who visit the Farm with their teachers to learn about dairy farming; (6) foreign exchange students who live and work at the Farm to learn about dairy farming and herd management so that they can return to their home countries with useful knowledge of modern farming techniques; (7) citizens of Norwich who benefit from having an operating dairy farm in town and who benefit from the preservation of open and rural space, consistent with the Town's long-term planning mission; and (8) members of the general public who want to learn about dairy farming and those who benefit from the Foundation's commitment to preserving and assisting small dairy farms. The Farm has also given grants to one individual, colleges, universities and 4-H foundations, and has sponsored research on the sexing of embryos at the Farm. The Farm is open to the public and "[n]o one is required to complete an application, attend an interview, or be subject to any selection criteria or prerequisites" in order to visit the facilities. Additionally, the trial court found: "Aside from identifying broad categories of beneficiaries, the specific persons who receive benefits and support from the Foundation cannot be identified, determined, or defined."
The trial court further found that "[a] public policy of the State of Vermont is the preservation and survival of small dairy farms," and that the "Foundation's mission and work serves this public interest." Additionally, the court found that the state has a public interest in the education of Vermont farmers:
The State has an interest in having local educational programs that permit agriculture students to receive quality education in Vermont. The Foundation's work in education serves these public interests ... [and the State's additional interest] is to educate persons without agriculture backgrounds about agriculture issues. Since agriculture generally, and dairy farming specifically, is important to Vermont, the State's interests are served by enhancing public awareness of agricultural matters. The Foundation's work with school children, preschool children, and general members of the public serves this public interest.
The Foundation sought a declaration in the court below that the Dream & Do Farm was exempt from taxation under 32 V.S.A. § 3802(4) as real property "used for public, pious or charitable uses." We have previously outlined the controlling three-part test to determine when property is entitled to tax-exempt status as a "public use" under this statute:
(1) the property must be dedicated unconditionally to public use; (2) the primary use must directly benefit an indefinite class of persons who are part of the public, and must also confer a benefit on society as a result of the benefit conferred on the persons directly served; and (3) the property must be owned and operated on a not-for-profit basis.
American Museum of Fly Fishing, Inc., 151 Vt. at 110, 557 A.2d at 904. Applying this test, the trial court found that the Farm met the first and third prongs of the test. The court further concluded that the property conferred a benefit on society, but that the Farm's primary uses of conducting educational classes, engaging in scientific research and dairy operations provided direct benefits to "definite classes of farmers, students, and researchers," and thus, it failed to satisfy the second prong of the test. In reaching this conclusion the court applied the definition of definite classes of persons laid out in New York Institute, 128 Vt. at 286, 262 A.2d at 455, and determined that the above beneficiaries are "definite" classes because they are groups determined by a process of choice or selection involving voluntary action or judgment on their part. This was error.
In New York Institute, we held that blind children were an indefinite class of persons and the institute which provided them remedial education, having met all other prerequisites, was tax exempt under § 3802(4). 128 Vt. at 287, 262 A.2d at 455. In rejecting the town's argument that blind children constituted a definite class of people so as to preclude a grant of tax exemption to the school, we observed that "class" is "a group determined by choice or selection and implies some kind of voluntary action or judgment," and rejected as "unrealistic" the argument that being blind places a person in a distinctive category or class of people under the law. Id. at 286-87, 262 A.2d at 455. The Court emphasized that the institute was a school for educating members of the public, "who because of blindness need specialized training." Id. at 287, 262 A.2d at 455.
In reaching this determination the Court distinguished the indefinite class of blind children from the definite class of Boy...
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