By statute, a municipal board of abatement may abate taxes “in which there is a manifest error or a mistake of the listers.” 24 V.S.A. §1535(a)(4). The Supreme Court recently declared that a “manifest error” doesn’t have to originate with the listers; the taxpayer requesting abatement is free to try and demonstrate a manifest error independent of actions of the listers. A “mistake of the listers” is an separate and distinct basis for seeking an abatement. Garbitelli v. Town of Brookfield, 2011 VT 122 ¶¶ 11-12.

In Garbitelli , the claimed “manifest error” was the magnitude of the change in assessed value. The taxpayer’s property had been assessed at $1.6 million as the result of a townwide reappraisal. During the reappraisal process, the taxpayer had refused the listers access to the whole property. The subsequent appeal was determined in the Town’s favor, in part because of the denial of access by taxpayer. Garbitelli v. Town of Brookfield, 2009 VT 109 (mem.).

In 2009, the taxpayer allowed the listers to inspect the property, and they assessed it at $957,000. The taxpayer then sought abatement for the prior two years, claiming that the $640,000 difference in assessed value was an “extreme disparity” and an “obvious mistake” amounting to “manifest error.” Garbitelli, 2011 VT 122 at ¶ 13.

The Supreme Court confirmed that a Board of Abatement is permitted, but not required, to abate taxes, and that abatement is an equitable remedy. A party asking for equitable relief must not have engaged in unfair, or inequitable, conduct. The Board of Abatement had denied relief in part because of the taxpayer’s decision to limit or deny the listers access to the property. The Supreme Court declared that the Board of Abatement’s consideration of the taxpayer’s prior behavior was proper, and that its denial of an abatement for that behavior was not an abuse of discretion. The decision below was affirmed.

So, manifest error can exist independent of the actions or inaction of the listers. But abatement is a permissive, not mandatory, outcome, and equitable in nature. The actions of the taxpayers and their dealings with the municipality can be taken into account by the Board of Abatement when making its decision whether to abate taxes.

In a recent decision, In re Champlain Oil Co., Inc. Conditional Use Application, Docket No. 200-10-09 Vtec, the Vermont Superior Court’s Environmental Division (formerly, the Vermont Environmental Court) determined that a proposed three-way gasoline station, retail (convenience) store, fast-food restaurant use was allowed in the Town of Ferrisburgh’s Highway Commercial (HC) Zoning District, notwithstanding that neither “convenience, retail” nor “drive-in facility” was specifically listed as a permissible use in the HC District, and the Town’s Zoning Bylaws contained language stating that “any use not expressly permitted in a district is prohibited in that district.”

The Court reasoned that because “retail store” and “restaurant” were permissible uses in the HC District, and the proposed “convenience, retail” and “drive-in facility” uses were sub-categories or “components” of the more broadly defined uses, they were also allowed in the District. The Court reached this conclusion even though “convenience, retail” and “drive-in facility” were separately defined uses under the Zoning Bylaws.

With regard to the proposed “convenience, retail” use, the Court stated that the mere fact that this use was separately defined in the Bylaws “does not demonstrate the intent to prohibit them in the HC District, particularly when the broader category of ‘retail stores’ is explicitly permitted.” The Court further observed that “[i]f the drafters intend to prohibit convenience stores in the HC District, they must do so with more clarity . . . Merely defining “convenience, retail” in the Bylaws does not give a landowner fair notice that convenience stores are prohibited in the HC District, especially when retail stores are expressly permitted.”

Similarly, regarding the proposed “drive-in facility” use, the Court stated that “there is no indication that a restaurant may not include a drive-in facility. The mere fact that the drafters defined drive-in facilities in the Bylaws is not sufficient, in our judgment, to demonstrate the intent to prohibit drive-in facilities at restaurants in the HC District, especially since restaurants are expressly permitted.” The Court’s decision notes that “[i]f the drafters were inclined to prohibit restaurants from utilizing drive-in facilities, they could have done so expressly, much like what was done to prohibit retail stores from incorporating drive-in facilities” (the Bylaws defined “retail store” as any business that rents or sells products or commodities, “excluding any drive-in facility”). Since no such explicit exclusion was used to define restaurants, the Court concluded that it had no authority to prohibit drive-in facilities in connection with a proposed restaurant use.

This decision should serve as a warning to communities to use care in defining the uses that are allowed in a particular zoning district, to specifically identify prohibited uses, and not to rely too heavily on “any use not expressly listed is prohibited” language as the sole regulatory basis for excluding a use, even where that use is separately defined in the Bylaws.

This decision also contains an extensive discussion regarding the development of so-called "split lots." For further information regarding this decision, please contact Joe McLean.