Agency of Transp. v. Timberlake Assoc.

315 A.3d 967

2024 VT 14

AGENCY OF TRANSPORTATION

v.TIMBERLAKE ASSOCIATES, LLC et al. (R.L. Vallee, Inc. and Crystal Clear Hospitality, LLC, Appellants)

No. 23-AP-059

Supreme Court of Vermont.

October Term, 2023

March 8, 2024

On Appeal from Superior Court, Chittenden Unit, Civil Division, Samuel Hoar, Jr., J.

Charity R. Clark, Attorney General, Montpelier, and Mark A. Seltzer, Assistant Attorney General, Barre, for Plaintiff-Appellee.

Alexander J. LaRosa and Daniel A. Seff (On the Brief) of MSK Attorneys, Burlington, for Defendants-Appellants.

PRESENT: Reiber, C.J., Eaton, Carroll, Cohen and Waples, JJ.

WAPLES, J.

¶ 1. Defendants R.L. Vallee, Inc., and Crystal Clear Hospitality, LLC (CCH), appeal a civil division order concluding that they accepted and used payments issued by the Vermont Agency of Transportation in connection with a judgment of condemnation and are therefore barred from further contesting the necessity of the taking or the public purpose of the Agency’s highway project under 19 V.S.A. § 506(c). They argue that the trial court erred in granting summary judgment to the Agency on this basis because: the question of whether their actions with respect to the Agency’s initial payments gave rise to the § 506(c) bar became moot when the Agency subsequently revised the valuations of their property interests; those actions did not constitute "use" under § 506(c); they raised a genuine dispute of material fact; the Agency bore the burden to show that defendants knowingly, intelligently, and voluntarily waived their rights under § 506(c) and failed to do so; and § 506(c) is unconstitutional on its face and as applied. We affirm.

¶ 2. The record indicates the following. In connection with its plans to reconstruct the 1-89 interchange with U.S. Routes 2 and 7 at Exit 16 in Colchester, the Agency sought to obtain certain rights in nearby property. Chapter 5 of Title 19 sets forth the procedures the Agency must use to condemn property rights for a state highway project. See 19 V.S.A. §§ 500-520. Under the statute, if a property owner "has not entered into an agreement stipulating to the necessity of a taking and the public purpose of a highway project, and the Agency wishes to proceed with the taking," the Agency must "file a verified complaint in the Civil Division of the Superior Court in a county where the project is located seeking a judgment of condemnation" which "name[s] as defendants each property owner who has not stipulated to a proposed taking." 19 V.S.A. § 504(a). In the resulting civil action, the owner "has the right to challenge the taking by contesting the necessity of the taking, the public purpose of the project, or both." Id. § 503(d)(4). If the trial court finds the proposed taking lawful, it must issue a judgment of condemnation declaring that title to the property will be transferred to the Agency after the Agency complies with certain statutory requirements, including tendering or depositing payment. Id. § 505(c). The judgment of condemnation may be appealed to this Court, but, under § 506(c), "an owner’s acceptance and use" of the Agency’s payment "shall bar the owner’s right to contest necessity and public purpose." Id. § 506(c), see also id. § 505(e).

¶ 3. The Agency initiated the underlying proceedings in June 2019 by filing a complaint under § 504(a). CCH was named as a defendant, but Vallee—which leases the right to use a driveway on which the Agency plans to perform construction—was not. Vallee moved to intervene and, on appeal from the civil division’s denial of that motion, we held that Vallee was entitled to be named as a defendant in the Agency’s condemnation action as the owner of a legal interest of record in property proposed to be taken that had not stipulated to the taking. Agency of Transp. v. Timberlake Assocs., 2020 VT 73, ¶¶ 16-18, 213 Vt. 106, 239 A.3d 253. As a result, in November 2020 the Agency amended its complaint to add Vallee as a defendant.

¶ 4. The amended complaint identified the Agency’s highway project as "Transportation Project Colchester HES NH 5600(14)" and described each of the property rights proposed to be acquired by parcel. CCH owns Parcel 9, which houses the Hampton Inn and Lighthouse Restaurant and Lounge, while the driveway Vallee leases the right to use is located on Parcel 14.

¶ 5. After an evidentiary hearing held over the course of four days, the civil division issued a written decision concluding that no defendant demonstrated bad faith or abuse of discretion in the Agency’s determination of the necessity for and public purpose of the project, and the Agency had satisfied its burden of demonstrating the need to take the particular property interests at issue to the extent proposed. See 19 V.S.A. § 505(a)(3) ("The court shall presume that the Agency’s determination of the necessity for and public purpose of a project is correct, unless a party demonstrates bad faith or abuse of discretion …. The court shall review de novo the Agency’s determination of the need to take a particular property and to take it to the extent proposed."). Having found the proposed taking lawful, the civil division issued a judgment of condemnation on February 25, 2022, providing that the land and rights at issue would be transferred to the Agency after the Agency recorded the judgment in the Colchester land records, tendered or deposited payment of its offers of just compensation, and notified the owners of the recording and payment. The judgment order contained the following warning pertaining to the statutory provision at issue in this appeal:

In accordance with 19 V.S.A. § 506(c), except in the case of agreed compensation, an owner’s acceptance and use of [the Agency’s] payment of its offer of just compensation does not affect his or her right to contest or appeal damages under 19 V.S.A. §§ 511-513, but shall bar the owner’s right to contest necessity and public purpose.

¶ 6. Vallee, CCH, and one other defendant appealed the judgment of condemna- tion to this Court on March 9, 2022. Vallee and CCH each filed docketing statements reflecting an intent to challenge the civil division’s conclusions as to necessity and public purpose. The Agency moved to dismiss Vallee and CCH from the appeal or, in the alternative, to stay the appeal and remand to the civil division for the purpose of making additional factual findings with respect to whether actions taken by Vallee and CCH upon receiving the Agency’s payments gave rise to the § 506(c) bar. We granted the latter request and remanded with instructions "for the civil division to make additional relevant factual findings and issue an order concerning whether either appellant’s actions following the civil division’s final judgment constitute ‘acceptance and use’ of payment pursuant to § 506(c)."

¶ 7. On remand, the parties agreed that the issue could be resolved on summary judgment and the Agency so moved. Vallee and CCH opposed the motion, arguing that: (1) the question of whether Vallee "used" the Agency’s initial payment was moot because the Agency later issued a higher revised valuation of Vallee’s property interest; (2) defendants’ actions in depositing the Agency’s checks did not constitute "use" under § 506(c); (3) a genuine dispute of material fact as to whether defendants " ‘used’ the funds" precluded summary judgment; (4) the Agency was required to establish that defendants knowingly, intelligently, and voluntarily waived the constitutional and statutory right to contest necessity and public purpose on appeal to this Court and had not done so; and (5) § 506(c) is unconstitutional on its face and as applied.

¶ 8. The following facts were undisputed for purposes of summary judgment. On March 17, 2022, the Agency sent Vallee’s counsel a check for $750. The mailing included a cover letter with the subject line "RE: Colchester HES NH 5600(14), Parcel Number 14." The body of the letter identified the enclosed check and stated that it was "issued in compliance with a Condemnation Order dated 02/25/2022." The check’s invoice field read "RLCON-DEMN14." Vallee deposited the check into its operating account on April 12, 2022. In June 2022, Vallee placed $750 in a trust account, and in July 2022 Vallee sent the Agency a check from the trust account for the same amount. However, the Agency returned Vallee’s check.

¶ 9. The Agency sent Hampton Inn/Hilton Co., which is owned by CCH, a check for $56,788.05 on April 19, 2022, and a check for $26,411.95 the following day. Each mailing included a cover letter with the subject line "Colchester HES NH 5600(14), Parcel Number: 9." The body of both letters identified the enclosed check and indicated that it was "issued in compliance with a Condemnation Order dated 2/25/2022," and the invoice field of both checks read "CONDCRYSCLEA9." CCH deposited the checks on April 28 and May 2, 2022.

¶ 10. On the basis of these undisputed facts, the civil division granted the Agency’s motion for summary judgment. It held that the question presented was not moot as to Vallee and that defendants’ actions constituted "acceptance and use" of the Agency’s payments under § 506(c). The court rejected defendants’ waiver argument, found the asserted factual dispute immaterial, and declined to reach defendants’ constitutional challenge as beyond the scope of our remand. This appeal followed.

[1, 2] ¶ 11. On appeal, defendants raise the same contentions presented in opposition to summary judgment below, except that CCH—alleging that the Agency has now confirmed that CCH will also receive a supplemental payment in connection with the judgment of condemnation—joins Vallee’s mootness argument. We review a decision on a motion for summary judgment de novo, applying the same standard as the trial court: summary judgment must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." V.R.C.P. 56(a); see also Energy Pol’y...