                                  STATE OF VERMONT

SUPERIOR COURT                                    ENVIRONMENTAL DIVISION



                                     }
Town of Fairfax, Plaintiff,          }
                                     }
              v.                     }     Docket No. 274-11-08 Vtec
                                     }
Leon Beliveau, Defendant.            }
                                     }

                   Decision and Order on Penalties and Injunctive Relief


Procedural History

       In a related case, Docket No. 193-8-08 Vtec, Appellant Leon Beliveau

appealed from a decision of the Development Review Board (DRB) of the Town of

Fairfax, upholding a Notice of Violation for changing the use of his property at 1166

Main Street from the use category of a single-family dwelling to the use category of

a rooming and boarding house, without first obtaining a zoning permit for this

change of use.1 In the above-captioned case, Docket No. 274-11-08 Vtec, the Town of

Fairfax brought an enforcement action against Defendant Leon Beliveau for the

same violation.2 The Town is represented by John H. Klesch, Esq.; Defendant Leon


1  The Court has noted that nothing in the appeal of the Notice of Violation
addresses whether the subject property would or would not qualify for a permit for
the rooming-and-boarding-house use. Like a single-family dwelling use, a rooming
and boarding house is a permitted use category in the Growth Center zoning district
in which it is located. However, a rooming and boarding house also requires site
plan approval. No such application has been made or appealed; therefore its merits
are not before this Court.
2  The two cases were remanded to this Court by the decision in In re Beliveau
Notice of Violation, Nos. 2010-64 and 2010-65, slip op. at 2 (Vt. July 16, 2010)

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Beliveau (Defendant) is represented by Peter J. McDougall, Esq.

      In its September 2, 2011 decision (hereinafter, the September 2011 Decision) in

both In re Beliveau Notice of Violation, No. 193-8-08 Vtec and the above-captioned

case, the Court determined that Defendant violated the Fairfax Zoning Bylaws by

changing the use of his owner-occupied property at 1166 Main Street from the use

category of a single-family dwelling to the use category of a rooming and boarding

house, without first obtaining a zoning permit for this change of use, by charging for

and supplying nine individuals with sleeping accommodations on a month-to-

month basis, that is, for fixed periods of time.      The September 2011 Decision

concluded Docket No. 193-8-08 Vtec, and established the existence of a violation in

Docket No. 274-11-08 Vtec.3 The Court then held a conference by telephone and

issued a scheduling order allowing supplemental discovery relevant to the issue of

monetary penalty to supplement the evidence taken by the Court on that issue in the

earlier phase of the litigation. The scheduling order also set out a briefing schedule

on the penalty issue.

      After the parties filed further memoranda regarding the extent and nature of

the injunctive relief appropriate in this matter, the Court issued an injunctive order

in Docket No. 274-11-08 Vtec on October 24, 2011 that required the following:

      1. Defendant Leon Beliveau shall immediately cease the use of the
      property at 1166 Main Street in the Town of Fairfax, Vermont, as a
      rooming and boarding house, as that term is defined in the Zoning
      Bylaws, [footnote omitted] and shall return the use of the property to



(unpublished mem.). On remand, the parties conducted additional discovery, and
then agreed that the remanded issues should be bifurcated, with the issue of
whether there was a violation again being presented to the Court by cross-motions
for summary judgment without a further evidentiary hearing.
3  The Court suspended entry of a judgment order in Docket No. 193-8-08 Vtec to
allow mediation in both cases and to allow any further appeal to be taken from both
related cases at the same time.

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      that of a single-family dwelling, as that term is defined in the Zoning
      Bylaws, until or unless he obtains a zoning permit for the change in
      use from that of a single-family dwelling.
      2. The Town of Fairfax may have such discovery, including reasonable
      access to the property upon reasonable notice to Defendant, and
      including access to Schedule E of Defendant’s tax returns regarding
      this property, as is necessary to determine that Defendant is complying
      with this injunctive order during the remaining proceedings regarding
      the penalty in the above-captioned litigation. A further permanent
      injunction will be incorporated into the judgment order concluding
      this litigation at that future time.


      The parties conducted supplemental discovery and provided to the Court

evidence as to the rental payments received by Defendant for occupancy of the

subject property during the period October 2, 2010 through October 5, 2011, and

evidence as to attorney time expended on this matter from August 17, 2010 through

September 7, 2011, and as to attorney’s fees billed to the Town from September 8,

2011 through October 11, 2011. Evidence as to earlier periods of occupancy had

already been received by the Court.

      Shortly after the parties filed their memoranda and reply memoranda

regarding the Town’s requests for an enforcement penalty and permanent

injunction, the Town filed a Motion for Contempt on December 19, 2011, asking the

Court to find Defendant in contempt of the October 2011 Injunctive Order for failing

to restore the use of the property to that of a single-family dwelling, and to order

additional penalties until Defendant terminates all “boarder occupancies” of the

property. Defendant was given an opportunity to respond to that motion. To avoid

any confusion, the Court will issue a separate decision and order on the contempt

motion.




                                         3
Facts Related to Penalty Assessment

       Defendant owns a house at 1166 Main Street (the House) in the Growth

Center zoning district of the Town of Fairfax.          A single-family dwelling is a

permitted use in the district.4 Appendix B of the Zoning Bylaws defines a dwelling

as “[a] building designed or used as the living quarters for one or more families”

and defines a family as “[o]ne or more persons living as a household unit, but not

including individuals or groups occupying rooming and boarding houses, clubs,

motels, or hotels.” Zoning Bylaws (2007).

       The use category of rooming and boarding house is also a permitted use in

the Growth Center zoning district. A rooming and boarding house use is defined as

“[a]n owner occupied residence where a person or persons, for a fixed period of

time are supplied with and charged for meals or sleeping accommodations or both.”

Id., Appendix B. As well as requiring a zoning permit, a rooming and boarding

house also requires site plan approval prior to the grant of a zoning permit because

it is other than a single-family or duplex residential use. Id., § 4.12.

       On June 5, 2008, the Zoning Administrator issued a formal Notice of Violation

to Defendant, referring to an earlier May 22, 2008 warning letter and stating that

Defendant was using the House as a rooming and boarding house without obtaining

a permit for that use as required by § 2.2.A of the Zoning Bylaws (2007).

       As fully explained in the September 2011 Decision, Defendant has supplied

and charged for sleeping accommodations for fixed month-to-month terms in his

owner-occupied house, which constitutes use as a rooming and boarding house

under the Zoning Bylaws. However, Defendant did not apply for a change of use, or


4
  The version of the Fairfax Zoning Bylaws applicable to this enforcement case and
provided in evidence is the version which became effective in August, 2007. The
parties did not advise the Court of any relevant subsequent changes to the Zoning
Bylaws during the pendency of this litigation.

                                            4
receive approval to change the use of the House to a rooming and boarding house

from its status as a single-family dwelling. The failure to so constitutes a violation of

the Zoning Bylaws, as the Court’s September 2011 Decision concluded.

       Defendant occupied the House as his own primary residence from 1999 until

at least October 25, 2011,5 when his affidavit reflects that he moved to a nearby

house at 1170 Main Street in Fairfax. Since at least January of 2007, Defendant

provided sleeping accommodations and charged for and received payments for

those sleeping accommodation from occupants of rooms in the house. From at least

calendar year 2008 until he moved out of the House, he treated the House for tax

purposes as occupied one-sixth as his own residence (as he maintained a bedroom

for his own exclusive personal use), and five-sixths as rental real estate.

       However, for the purposes of assessing an appropriate monetary penalty for

Defendant’s zoning violation, the relevant date is measured from 7 days after the

June 5, 2008 Notice of Violation was issued, or June 12, 2008, as the statute provides

a seven-day opportunity to cure a violation.6 See 24 V.S.A. § 4451. For the period

from June 12, 2008 to July of 2009, a period of 414 days, Defendant received $17,804

in payments from the various occupants of rooms in the House for their sleeping

accommodations.

       The Court’s first summary judgment decision in this matter, issued in July of

2009, found a zoning violation and directed Defendant to cease the use of the



5  Defendant’s January 11, 2012 affidavit, attached to his opposition to the Town’s
Motion for Contempt, asserts that he moved out of the property on October 25, 2011.
6 Although in the present case the Zoning Administrator gave Defendant until July

21, 2008 to obtain the permit or cease the rooming and boarding house use, to allow
sufficient time for the tenants to move out, before the Zoning Administrator would
proceed to file the enforcement case, the violation was ongoing during that period as
Defendant did not take either action. Therefore, the Court treats the period of
violation as commencing after the statutory notice to cure had expired.

                                            5
property as a boarding and rooming house, until obtaining a zoning permit and any

other necessary approvals required to conduct such a use on the property.

Following the Court’s July, 2009 Order, Defendant did not charge the various

occupants of rooms in the House for sleeping accommodations during the three-

month period of August, September, and October of 2009.

      Defendant thereafter resumed charging the various occupants of rooms in the

House for sleeping accommodations.       For the period from November of 2009

through September of 2010, a period of 334 days, Defendant received $13,857 in

payments from the various occupants of rooms in the House for their sleeping

accommodations. For the period from October 1, 2010 through October 5, 2011, a

period of 370 days, Defendant received $31,481 in payments from the various

occupants of rooms in the House for sleeping accommodations.7

      Adding the periods of violation together, the total period of violation for

which Defendant received payments was 1118 days, or a little over three years. The

total amount received by Defendant for providing sleeping accommodations in the

House during the period of violation was $63,142, or approximately $56.48 per day.

      On October 24, 2011, the Court issued an injunctive order directing Defendant

to cease using the House as a rooming and boarding house and to return it to use as

a single-family dwelling until receiving approval from the Town to use it as a

rooming and boarding house.

      In connection with this enforcement matter, through August 20, 2009, the

Town incurred $10,920.75 in attorney’s fees and $283.93 in court costs and

reimbursable attorney’s expenses, for a total of $11,204.68. From August 21, 2009

through August 16, 2010, the Town incurred $6,513 in attorney’s fees, of which


7 The Town argues that the period of violation should be counted as extending to
the date of the October 24, 2011 Injunctive Order; however, the evidence regarding
payments received by Defendant only covers the period through October 5, 2011.

                                         6
$5,449.50 is attributable to the Supreme Court appeal.        From August 17, 2010

through September 7, 2011, the Town’s attorneys expended 73.30 hours of legal

work on this enforcement matter, valued at $11,414.50, for which the attorneys did

not charge the Town. From September 8, 2011 through October 11, 2011, the Town

incurred $1,146.75 in attorney’s fees. Therefore, the value of attorney time and costs

expended on behalf of the Town in this matter, exclusive of the Supreme Court

appeal, totals $24,829.43, of which $13,414.93 was billed to the Town.



Penalty Analysis

       The violation at issue in this case is that Defendant charged for and supplied

rooms (sleeping accommodations) to others without obtaining a permit for using his

owner-occupied residence as a “rooming and boarding house.” As Defendant did

not apply for a zoning permit (or its prerequisite site plan approval) for a “rooming

and boarding house,” the Court does not have before it any information on whether

the property could be approved for that use. Defendant’s violation has been of a

relatively long duration, especially as Defendant was informed by the Notice of

Violation as early as June of 2008, and repeatedly thereafter, that the rooming and

boarding use of the House required a permit.

       In a zoning enforcement case, the Court assesses a daily penalty for the

period during which the defendant has the benefit of the zoning violation. See 24

V.S.A. § 4451(a) (authorizing the imposition of up to $100 per violation of a zoning

bylaw, and establishing that each day that such a violation continues is a separate

offense); Town of Sherburne v. Carpenter, 155 Vt. 126, 133 (1990) (“As long as

defendant has the benefit of the zoning ordinance violation, the statute requires that

he pay a daily fine.”).

       The Court calculates a penalty “to remove the economic benefit and the

avoided costs achieved by the Defendant from the violation, as well as to

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compensate the enforcement entity generally for the legitimate costs of bringing the

enforcement action.” Town of Calais v. Noordsij, No. 142-6-06 Vtec, slip op. at 7 (Vt.

Envtl. Ct. Aug. 29, 2008) (Wright, J.) (citing City of St. Albans v. Hayford, 2008 VT

36, ¶¶ 15–18, 183 Vt. 596). The Court may also consider the factors enumerated in

the state environmental enforcement statute. See 10 V.S.A. § 8010(b), (c)(2); In re

Jewell, 169 Vt. 604, 606–07 (1999) (stating that the “court has discretion . . . not only

to balance [a defendant’s] continuing violation against its compliance costs but also

to consider such factors as those specified in [10 V.S.A. § 8010(b) and (c)(2)]”).

These factors include deterrence of that defendant from committing further

violations, whether a defendant had reason to know that the violation existed, and

the duration of the violation. 10 V.S.A. § 8010(b)(3), (6), (8).

          In the present case, Defendant had the benefit of the zoning violation from

early 2007 through late 2011, of which 1118 days occurred after June 12, 2008, the

seven-day cure period provided by statute. The Notice of Violation informed

Defendant that he could cure the violation by applying for and obtaining a zoning

permit for the rooming and boarding use of the property or, in the alternative, by

reverting to using the House as a single-family dwelling. Defendant took neither

action.

          The economic benefit Defendant obtained from the violation was the $63,142

he received in payments for the sleeping accommodations he supplied at the 1166

Main Street house during the 1118-day period of violation.8


8
   Defendant argues that the economic benefit he obtained from the violation should
be measured by the avoided cost of compliance, that is, of making the site plan and
zoning application, citing Agency of Natural Res. v. Deso, 2003 VT 36, 175 Vt. 513.
However, the present case is unlike Deso, which was an environmental enforcement
action in which the use as a gasoline station was legal, but the volume of gasoline
sold had triggered the need for the new vapor recovery equipment to be installed.
Id. ¶¶ 2–4, 24. Rather, the present case is a zoning enforcement action in which the

                                             8
      It is not appropriate to reduce the economic benefit obtained by Defendant

from the violation by any of the amounts shown as rental income expenses on his

tax returns.   Not only would Defendant have had to pay the taxes, mortgage,

utilities, repairs, supplies, cleaning, maintenance, and insurance on the House as his

owner-occupied residence if he had not rented out rooms, but these expenses

support the very use—a rooming and boarding house—that is illegal without a

permit.

      In addition to “remov[ing] the economic benefit” obtained by Defendant due

to the violation, the penalty amount should also generally compensate the Town for

the costs of bringing the enforcement action. Noordsij, No. 142-6-06 Vtec, slip op. at

7. In the present case, an appropriate penalty amount must also be sufficient to

deter Defendant from continuing to violate the zoning ordinance, as Defendant

continued to charge for providing sleeping accommodations for years after the

issuance of the June 5, 2008 Notice of Violation. The length of time the violation

existed was within Defendant’s control. At any time he either could have applied

for approval of the rooming and boarding house use, or could have restored the

single-family use of the House.9



use itself is illegal unless a permit is obtained, and there was no evidence that the
property could qualify for site plan approval and therefore for a zoning permit. As
such, it is similar to City of St. Albans v. Hayford, in which the Vermont Supreme
Court upheld this Court’s removal of economic benefit from a rental use operated
without the required permit. 2008 VT 36, ¶¶ 15–18, 183 Vt. 596.
9  The Court notes that a group of unrelated persons can rent a single-family house
together without triggering the rooming-and-boarding-house issue if they live “as a
household unit.” Defendant did not show that he and those renting the rooms were
living together as a household unit or that they had entered into a single lease
agreement for the house as a whole. To the contrary, the little evidence produced on
this issue suggested that the occupants did not share meals, household tasks, or
common living spaces, and that Defendant treated all the occupants as separate
renters of separate rooms for tax and accounting purposes, and received separate

                                          9
      In the present case, Defendant has continued to obtain a substantial economic

benefit from renting out rooms in his house during the period of violation. Because

the total economic benefit Defendant has derived from the violation is so large,

assessing a penalty from Defendant for this amount—$63,142—will be sufficient to

remove the economic benefit as well as to compensate the Town for the expenses it

incurred in conducting the enforcement litigation.10 In addition, this amount

recognizes the length of the knowing violation in this case and will be sufficient to

deter Defendant from persisting in the violation. This amount, allocated over the

period of the violation, equals a penalty of $56.48 per day, well within the available

statutory penalty of $100 per day. See 24 V.S.A. § 4451(a).

      The Town requests a penalty of $93,420, adding its litigation expenses,

including the amount not actually billed to the Town and the amount attributable to

the Supreme Court appeal, to the removed economic benefit. Although this amount

would still be within the statutory $100 per day, it is unnecessary to add these

litigation expenses in order to adequately compensate the Town, as the entire

penalty is payable to the Town.



      Accordingly, based on the foregoing, it is hereby ORDERED and ADJUDGED

that in Docket No. 274-11-08 Vtec, the Court imposes a penalty of $63,142, payable to

the Town of Fairfax under 24 V.S.A. § 4451(a), calculated as $56.48 per day for a

violation period of 1118 days. Defendant Leon Beliveau shall immediately cease the

use of the property at 1166 Main Street in the Town of Fairfax, Vermont, as a



payments under separate oral lease agreements, even from those occupants who are
related to him.
10 The penalty assessed is sufficient to compensate the Town regardless of whether

the Towns litigation expenses are measured as the $13,414.93 as billed to the Town,
or as the $24,829.43 including the attorney’s fees not charged.

                                          10
rooming and boarding house, as that term is defined in the Fairfax Zoning Bylaws,

and shall return the use of the property to that of a single-family dwelling, as that

term is defined in the Fairfax Zoning Bylaws, until and unless he obtains a zoning

permit for the change in use from that of a single-family dwelling.




      Done at Berlin, Vermont, this 30th day of March, 2012.




                           _________________________________________________
                                 Merideth Wright
                                 Environmental Judge




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