In re Treetop Development Company Act 250 Development (Treetop at Stratton Condominium Assn., Inc., Appellant) , 201 Vt. 532 ( 2016 )

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court,
109 State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may
be made before this opinion goes to press.
2016 VT 20
No. 2015-168
In re Treetop Development Company Act 250 Supreme Court
Development
(Treetop at Stratton Condominium Association, Inc., On Appeal from
Appellant) Superior Court,
Environmental Division
September Term, 2015
Thomas G. Walsh, J.
A. Jay Kenlan of Kenlan, Schwiebert, Facey & Goss, P.C., Rutland, for Appellant.
Lisa B. Shelkrot of Langrock Sperry & Wool, LLP, Burlington, for Appellees.
William H. Sorrell, Attorney General, and Gavin J. Boyles and Scot L. Kline, Assistant
Attorneys General, Montpelier, for Natural Resources Board.
PRESENT: Dooley, Skoglund and Eaton, JJ., and Tomasi and Bryan (Ret.), Supr. JJ.,
Specially Assigned
¶ 1. EATON, J. This appeal is the latest chapter in an ongoing dispute between the
Treetop at Stratton Condominium Association, Inc. (Association) and the Stratton Corporation,
Treetop Development Company, LLC, Treetop Three Development Company, LLC, and
Intrawest Stratton Development Corporation (collectively, Stratton) over an improperly
constructed stormwater management system. The pending matter follows the Association’s
appeal of the District 2 Environmental Commission’s (Commission) refusal to impose additional
conditions on Stratton’s Act 250 permit, which the Environmental Division of the Superior Court
determined to be invalid and unenforceable. For the reasons stated herein, we affirm.
¶ 2. On November 18, 2002, the District 2 Environmental Commission issued Act 250
Permit #2W1142 to Stratton for the construction of twenty-five three-unit townhouses (the
Treetop Project) in the Town of Stratton, Vermont. Included in the Act 250 permit was approval
for the development and construction of the infrastructure required for the occupancy, use, and
management of the Treetop Project and associated infrastructure, including a stormwater
management system.
¶ 3. A Stratton Corporation affiliate, the Treetop Development Company, LLC,
completed construction of the Treetop Project in 2006, at which point all seventy-five
townhouses were sold and conveyed to third-party owners. Each individual owner acquired an
undivided percentage interest in the Treetop Project’s common areas and facilities, including the
stormwater management systems, which were managed and administered by the Association.
¶ 4. In response to problems with the stormwater management system, the Association
filed suit against Stratton in 2009 seeking damages and remediation for various construction
defects in the Treetop Project, including those involving the stormwater management system.
The parties ultimately reached a settlement agreement, which, relevant to this appeal, required
Stratton to apply for and obtain corrective permit amendments and pay for any work necessary to
bring the stormwater management aspects of the Treetop Project into compliance with its Act
250 permit. On August 13, 2012, Stratton filed an application with the Commission to amend its
Act 250 permit to reflect deviations from the original permit, specifically “to authorize changes
in the original as-built plans to the permit plans submitted.” These changes included repairs and
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modifications to the stormwater management system necessary to fix leaks and seepage and to
bring the system into compliance with the terms of General Permit 3-9010.1
¶ 5. In its Findings of Fact and Conclusions of Law, the Commission expressed its
concern over Stratton’s “failure to build its stormwater system in compliance with its prior
permits.” The Commission conceded that “[w]hile Stratton’s plan is not the only way to [correct
significant stormwater problems], it is the plan on the table[,] . . . [and it] has been approved by
the Agency of Natural Resources and is implementable immediately.” Emphasizing the
importance that “the water quality and safety issues be resolved satisfactorily as soon as
possible,” the Commission concluded that “issuing a permit with conditions is the most effective
way to achieve this outcome.” The Commission provided that it would add “protections in the
permit to ensure that solutions proposed by Stratton are effective in addressing the problems,”
and that it would “retain jurisdiction over these matters.” In its conclusion, the Commission
found that the Treetop Project would be in compliance with Act 250 criteria if it was “completed
and maintained as represented in the application and other representations of the Applicants, and
in accordance with the findings and conclusions of this decision and the conditions [herein].”
¶ 6. Following a decision by the Commission on October 21, 2013 to approve Act 250
Permit #2W1142-D (amended permit) with conditions, both Stratton and the Association moved
to alter and amend the amended permit. After making minor changes, the Commission issued a
Memorandum of Decision on November 15, 2013, granting the amended permit. The amended
permit included several conditions, including conditions that required Stratton to repair the
stormwater retention pond pursuant to approved plans on or before September 1, 2014, and to
1
The Treetop Project’s stormwater management system was originally approved under
Stormwater Discharge Permit #1-1537. That permit expired on August 28, 2007 and was
replaced by General Permit 3-9010, authorizing previously permitted stormwater discharges to
waters that are not principally impaired by stormwater runoff. General Permit 3-9010, issued
under the State Stormwater Permit Program, requires Stratton to correct any deficiencies in the
stormwater management system resulting from substantial deterioration.
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provide weekly reports on the progress of the repairs until completion. By that time of year,
however, the weather made further site work impossible. Relevant to this appeal, permit
Condition 14 provided:
The Commission reserves the right to review erosion, the ability
of the land to hold water, stormwater management and
revegetation issues outlined in these proceedings and to evaluate
and impose additional conditions as needed.
(Emphasis added.). Importantly, neither party appealed the amended permit, which became final
and binding on December 15, 2013.
¶ 7. In January 2014, the Association provided the Commission with information
about the status of the stormwater management system, including a letter from Stratton’s
engineer, plans for remediation dated December 13, 2013, and the Association’s response to
those filings. Shortly thereafter, on February 7, 2014, the Commission issued a Notice of
Reconvened Hearing on the amended permit. The notice was issued pursuant to the authority the
Commission reserved unto itself under Condition 14 and indicated the Commission’s intent to
discuss whether additional conditions were necessary to address problems with the stormwater
management system. Following hearings, the Commission issued a Memorandum of Decision
on May 16, 2014 “declin[ing] to impose additional permit conditions with respect to [the
amended permit],” and affirming the “adequacy of the conditions of the permit, which was not
appealed.” The Commission also noted that, “given there is an active enforcement action
[underway] by both [the Agency of Natural Resources] and the [Natural Resources Board], we
are assured that there will be oversight regarding compliance with the relevant state
requirements, including conditions of [the amended permit], which were not appealed.”2
2
The enforcement action, Docket No. 106-7-14 Vtec, was initiated on April 21, 2014,
when the Natural Resources Board (NRB) and Stratton filed a proposed Assurance of
Discontinuance. The Association was subsequently granted limited rights to intervene in the
4
¶ 8. The Association timely appealed the Commission’s May 16, 2014 Memorandum
of Decision declining to impose further conditions on Stratton to the Environmental Division of
the Superior Court. Stratton then moved to dismiss the appeal, alleging that the questions raised
on appeal were either collateral attacks on the unappealed amended permit or outside the scope
of the Environmental Division’s de novo review. On November 14, 2014 the Environmental
Division dismissed the appeal, finding, relevant to the matter now before this Court, that:
[t]he sole purpose of Condition 14 is to ensure compliance with the
initial Permit and Permit Amendment. This authority does not
belong to the Commission. Rather, it rests with the Natural
Resources Board’s authority to ensure compliance with an Act 250
Permit and its conditions through its enforcement powers . . . the
Association cannot use Condition 14 to privately enforce the
Permit or Permit Amendment.
Treetop Dev. Co. Act 250 Application, No. 77-6-14 Vtec, slip op., at 3 (Envtl. Div. Vt. Sup. Ct.
Nov. 14, 2014), https://www.vermontjudiciary.org/GTC/Environmental/Opinions.aspx (citations
omitted). The Environmental Division also later denied the Association’s motion for relief from
judgment, in which the Association claimed that the Environmental Division acted outside its
authority in concluding that Condition 14 was unenforceable because the amended permit was
not appealed. Treetop Dev. Co. Act 250 Application, No. 77-6-14 Vtec, slip op., at 3 (Envtl.
Div. Vt. Sup. Ct. Mar. 25, 2015), https://www.vermontjudiciary.org/
GTC/Environmental/Opinions.aspx. In response, the Environmental Division noted that “[i]t
would be irrational to read the Commission’s decision on the [amended permit] as granting an
Act 250 permit despite insufficient findings of compliance with Act 250,” and that “a district
commission simply cannot use a permit condition to reserve the authority to reopen a final and
binding Act 250 permit sua sponte in order to enforce the permit or impose conditions.” Id. The
matter, as allowed by 10 V.S.A. § 8020. That matter is currently ongoing before the
Environmental Division.
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Environmental Division further provided that “[t]he injustice alleged by the Association stems
from its free, calculated, and deliberate choice not to take an appeal” from the amended permit.
Id.
¶ 9. This appeal from the Environmental Division’s decision followed. Our review of
“issues of law or statutory interpretation is de novo.” In re Vill. Assocs. Act 250 Land Use
Permit, 2010 VT 42A, ¶ 7, 188 Vt. 113, 998 A.2d 712. De novo review allows this Court to
proceed with a nondeferential, on-the-record review. See In re Gulli, 174 Vt. 580, 582, 816 A.2d
485, 488 (2002) (mem.) (“Questions of law are reviewed de novo, allowing us to proceed with a
nondeferential, on-the-record review.”).
¶ 10. The Association alleges that the Environmental Division erred in granting
Stratton’s motion to dismiss the appeal because Condition 14 is a valid and enforceable permit
condition reserving jurisdiction over the stormwater system at the Treetop Project and allowing
the Commission to amend or add conditions as necessary to bring the system into compliance
with Act 250. The Association also asserts that it based its decision not to appeal the amended
permit on the Commission’s reservation of authority to impose further conditions in order to
ensure the stormwater management system’s compliance with Act 250, and that Stratton’s
motion to dismiss is a collateral attack on Condition 14. Stratton, on the other hand, contends
that under the Association’s view, Condition 14 amounts to a key that can be used to re-open the
door to amend the permit at any time and impose additional conditions, preventing finality. Both
Stratton and the NRB argue that Condition 14 is an unenforceable condition subsequent and that
the Association’s appeal is a collateral attack on the amended permit.3 We find that condition 14
3
Although this Court recently addressed an Act 250 permit subject to conditions
reserving jurisdiction over traffic congestion and safety impacts in In re Champlain Parkway Act
250 Permit, 2015 VT 105, ¶ 1, ___ Vt. ___, ___ A.3d ___, we have yet to specifically address
the Commission’s discretion to impose conditions that reserve jurisdiction over a project, either
in part or in its entirety, after making affirmative findings under the relevant criteria. In
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is invalid and affirm the Environmental Division’s decision, rendering Condition 14
unenforceable.
¶ 11. Act 250, codified at 10 V.S.A. §§ 6001 through 6093, was enacted “to protect
Vermont’s lands and environment by requiring statewide review of ‘large-scale changes in land
utilization.’ ” In re Audet, 2004 VT 30, ¶ 13, 176 Vt. 617, 850 A.2d 1000 (mem.) (quoting
Comm. to Save Bishop’s House, Inc. v. Med. Ctr. Hosp. of Vt., Inc., 137 Vt. 142, 151, 400 A.2d
1015, 1020 (1979)). To that end, it falls to the nine District Environmental Commissions to
consider Act 250 permit applications and amendments in the context of the ten statutory criteria
listed in 10 V.S.A. § 6086(a). The Commissions may approve or deny any such applications,
although approval requires that the Commissions make affirmative findings under all ten
statutory criteria before issuing a permit. See In re SP Land Co., LLC, 2011 VT 104, ¶ 25, 190
Vt. 418, 35 A.3d 1007 (Act 250 “[r]ule 21 mandates that a permit may issue only when positive
findings of fact and conclusions of law have been made under all criteria and subcriteria. It
follows, therefore, that findings of fact and conclusions of law on only some criteria—but not
all—are not equivalent to a permit.”). Any changes to the permit or the conditions therein must
be made pursuant to the formal permit amendment procedure outlined in the Act 250 Rules.
Appeals of the Commission’s decision, including decisions approving or denying a permit or the
conditions therein, must be filed within thirty days of the date of the decision. 10 V.S.A.
§ 8504(a).
¶ 12. In order to ensure continued compliance with the statutory criteria, the
Commission is entitled to grant conditional approval by imposing reasonable conditions on a
Champlain Parkway, the Environmental Division found that the project might, rather than would,
cause unreasonable traffic congestion and imposed conditions requiring future monitoring and
reporting as well as conditions reserving the Commission’s jurisdiction over the matter. Id. ¶ 12.
Neither party challenged the condition, and this Court did not consider the court’s authority to
impose conditions in the absence of an actual affirmative finding. Id. ¶ 12 n.3.
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project. See id. § 6086(c); Act 250 Rule 32(A), 6 Vt. Code of Rules 16-5-200, available at
https://perma.cc/VJ7H-YRPU). Permissible conditions include those with prospective
application that are intended to alleviate adverse impacts that either are or would otherwise be
caused or created by a project, or those necessary to ensure that the development is completed as
approved, such as those requiring permittees to take specific action when triggered by certain
events, incorporating a schedule of actions necessary for continued compliance with Act 250
criteria, and requiring future compliance related filings, including affidavits of compliance with
respect to certain permit conditions. See, e.g., In re North East Materials Grp. LLC Act 250 JO
#5-21, 2015 VT 79, ¶ 27, ___ Vt. ___, 127 A.3d 926 (“[P]ermits are frequently issued with
conditions and requirements mitigating the impact of particular development”); In re R.E.
Tucker, Inc., 149 Vt. 551, 557-58, 547 A.2d 1314, 1318-19 (1988) (approving condition in land
use permit placing limitations on where gravel crusher could be located within tract because
severity of noise pollution depended on placement). For example, this includes conditions
limiting development to areas of land subject to Act 250 jurisdiction, establishing hours of
operation, directing the placement of specific machinery, and requiring reclamation following
completion of a project.
¶ 13. The power to enforce compliance with Act 250 permits and the underlying
conditions is vested exclusively in the NRB and the Agency of Natural Resources (ANR), and
not with the Commission. See 10 V.S.A. § 6027(g) (authorizing NRB to “initiate enforcement”
of Act 250 permits and to “petition the Environmental Division for revocation” of Act 250
permits for, among other things, “noncompliance with any permit or permit condition.”); id.
§ 8003 (stating that NRB has discretion to institute enforcement actions); id. § 8004 (providing
that NRB and ANR act cooperatively to enforce Act 250). It therefore falls to the NRB, and not
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the Commission, to determine whether violations of Act 250, or permits issued thereunder, exist
and to exercise the discretion granted under 10 V.S.A. § 6027(g) to initiate enforcement actions.4
¶ 14. By its terms, Condition 14 reserves continuing jurisdiction over the stormwater
system at the Treetop Project, creating for the Commission a mechanism to continuously amend
the permit as necessary to redress future Act 250 violations or failures under the terms of the
approved project by adding additional conditions. Not only does this exceed the Commission’s
authority, which is limited to considering permit applications in the context of the ten statutory
criteria and either approving or denying the application, and amending permits under the
procedure outlined in In re Stowe Club Highlands, 166 Vt. 33, 37, 687 A.2d 102, 105 (1996), but
it prevents finality, an integral part of the land use permitting process. Furthermore, unlike a
condition with prospective application intended to alleviate adverse impacts, Condition 14 allows
the Commission to circumvent the requirement that projects which have been permitted satisfy
the statutory criteria and prospectively expropriate the NRB’s enforcement authority, effectively
creating a de facto mechanism of internal enforcement for the Commission. This reservation of
extra-statutory authority renders the Commission’s permit approval illusory, simultaneously
approving stormwater system remediation under a set of parameters and reserving the authority
to alter these parameters at any time, including when necessary to correct violations of Act 250.
Such an open-ended condition, effectively endowing the Commission with the prospective extra-
statutory authority to re-open the amended permit and perpetually act, is an invalid condition
subsequent. 5
4
As indicated above, enforcement proceedings against Stratton were initiated by the
NRB on April 21, 2014, and the Association was subsequently granted limited rights to intervene
in the matter as an interested party. While interested parties may participate in enforcement
proceedings, they are without the right to initiate such proceedings or raise additional violations.
5
Although not binding precedent in this Court, we note that the former Environmental
Board likewise found conditions subsequent to be impermissible substitutions for affirmative
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¶ 15. Although the permit itself was unappealed, and is therefore final and binding on
the parties, this does not make Condition 14 enforceable. In our discussions of the failure to
appeal zoning permits, this Court has consistently held that the parties are bound by the terms of
the permit, even where the municipal body’s actions in granting the permit exceeded their
authority. See City of S. Burlington v. Dep’t. of Corrections, 171 Vt. 587, 588-89, 782 A.2d
1229, 1230 (2000) (mem.) (binding permitee following untimely challenge to validity of zoning
permit condition where municipal body lacked jurisdiction over permitee due to sovereign
immunity); Levy v. Town of St. Albans, 152 Vt. 139, 142, 564 A.2d 1361, 1363 (1989) (binding
permitee following untimely challenge to validity of zoning permit where administrator who
issued permit lacked authority to do so). Condition 14, however, does not merely bind the
parties to the terms of the amended permit; rather, it seeks to prospectively expand the
Commission’s authority to include enforcement, allowing it to circumvent the procedure for
permit amendments and to continuously reconsider the Treetop Project’s compliance with the
Act 250 criteria. It is the very infirmity of Condition 14—the creation of prospective, extra-
statutory authority—that renders the condition unenforceable. To hold otherwise would do more
than bind the parties, it would indissolubly expand the Commission’s jurisdiction, creating
perpetual uncertainty as to the terms of the amended permit. For this reason, the Court is not
bound to uphold the Commission’s self-granted enforcement authority simply because neither
party chose to appeal under 10 V.S.A. § 8504(a). We conclude, therefore, that Condition 14 is
unenforceable.
findings under the Act 250 criteria. See Town of Stowe, #100035-9-EB (May 22, 1998),
http://nrb.state.vt.us/lup/decisions.htm; OMYA, Inc., #1R0271-9-EB (Feb. 7, 1991),
http://nrb.state.vt.us/lup/decisions.htm; Norman R. Smith, Inc. & Killington Ltd., #1R0584-EB-1
(Sept. 21, 1990), http://nrb.state.vt.us/lup/decisions.htm, aff’d, In re Killington, Ltd., 159 Vt.
206, 616 A.2d 241 (1992); Paul E. Blair Family, #4C0388-EB (June 16, 1980),
http://nrb.state.vt.us/lup/decisions.htm.
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¶ 16. We note that this decision does not affect the Association’s right, as a matter of
law, to appeal the Commission’s decisions generally or to seek permit amendments. The
Association claims that although it believed the amended permit to be significantly deficient, it
relied on the Commission’s right to impose further conditions if necessary to ensure compliance
with Act 250 rather than file an appeal, and that the Environmental Division’s decision deprives
them of their right to challenge this decision. An interested party’s right to appeal a decision by
the District Commission is clearly defined by statute. Under 10 V.S.A. § 8504(a), any person
aggrieved by an act or decision of the District Commission may file an appeal in the
Environmental Division within thirty days. This includes the Commission’s decision granting
the amended permit. Had the Association appealed the amended permit to the Environmental
Division, it would have been entitled to challenge the sufficiency of the amended permit and its
conditions, including those regarding the stormwater management system. Furthermore, there is
a formal procedure regarding the amendment of permit conditions, which depends on factors
outlined in In re Stowe Club Highlands, 166 Vt. at 37, 687 A.2d at 105. These factors are
intended to “assist in assessing the competing policies of flexibility and finality in the permitting
process.” In re Nehemiah Assocs., 168 Vt. 288, 294, 719 A.2d 34, 37 (1998). They include:
whether were (1) “changes in factual or regulatory circumstances beyond the control of a
permittee”; (2) “changes in the construction or operation of the permittee’s project, not
reasonably foreseeable at the time the permit was issued”; and (3) “changes in technology.” In
re Stowe Club Highlands, 166 Vt. at 37, 687 A.2d at 105. The Association chose not to exercise
these rights, however, and the unappealed amended permit is final and binding. For this reason,
despite our decision affirming the Environmental Division’s decision, the Association has not
been denied a mechanism to challenge the Commission’s decisions generally. That right existed
at the time the permit was issued and was not exercised. It will also exist regarding any amended
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permits Stratton may seek and which may properly issue following a new application, should
those circumstances be presented.
¶ 17. This result does not leave the Association without possible recourse relative to
Stratton’s alleged violations of the amended permit and Act 250, generally. As indicated above,
both NRB and ANR have undertaken enforcement actions against Stratton pursuant to their
authority in 10 V.S.A. §§ 6027(g) and 8004. The agencies have indicated that “there will be
oversight regarding compliance with the relevant state requirements, including conditions of [the
amended permit], which were not appealed.” The NRB and ANR are empowered to enforce Act
250 and the amended permit and the Association, as an interested party, may participate, and in
fact is participating, in those proceedings by the rights vested under 10 V.S.A. § 8020. The
Association remains free to raise any concerns it might have about Stratton’s compliance with
the permit conditions and may request that the NRB or ANR enforce or investigate possible
violations under 10 V.S.A. § 8005(a)(2).
Affirmed.
FOR THE COURT:
Associate Justice
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