Our Lady of Ephesus House of Prayer v. Town of Jamaica, No. 440-9-02 Wmcv (Wesley, J.,
December 2, 2003)



[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the
original. The accuracy of the text and the accompanying data included in the Vermont trial court
opinion database is not guaranteed.]


STATE OF VERMONT                              WINDHAM SUPERIOR COURT
WINDHAM COUNTY, SS.                           DOCKET NO. 440-9-02Wmcv



OUR LADY OF EPHESUS                )
HOUSE OF PRAYER, INC.              )
          Plaintiff
  VS.                              )
                                   )
TOWN OF JAMAICA                    )
          Defendant



                      FINDINGS OF FACT, CONCLUSIONS OF LAW
                                    AND ORDER

       This matter was heard by the Court on August 11, 2003 on Plaintiff's Complaint for

Declaratory Judgment. Plaintiff was represented by Christina Reiss Esq. Defendant was

represented by Robin Stern, Esq. At the close of the evidence, the Court allowed 30 days for the

filing of proposed findings and conclusions, which have been submitted by each party.

Procedural History

       Plaintiff brought a similar suit in 2001, seeking a declaration of tax-exempt status for its

real property located in Jamaica, Vt. The Court issued an opinion and order on August 20, 2001

denying Plaintiff’s prayer as to the entirety of the real property, but holding that $38,494 of a
total assessed value of $511,700 qualified as exempt property due to its use as a chapel by a

religious society, 32 V.S.A.§3832. Neither party appealed from this declaratory ruling.

         In 2002, the Jamaica Listers set Plaintiff’s property in the Grand List at $612,000, which

was reduced by $38,500 in recognition of the 2001 ruling. The assessment remained unchanged

after appeal to the Board of Civil Authority. However, the BCA declined to consider Plaintiff’s

request for expansion of the portions of the property it claimed as exempt, relying on its

conclusion that only this Court has jurisdiction to declare the scope of tax-exemptions. Rather

than taking an appeal from the BCA determination, Plaintiff filed a second complaint for

declaratory relief.

        The Town moved for summary judgment, claiming that all issues sought to be

determined by Plaintiff’s action had been precluded by the 2001 opinion and order. However,

the Court denied summary judgment in an order dated April 30, 2003. Noting that issue

preclusion is rarely applied to tax issues, Commissioner of Internal Revenue v. Sunnen, 333 U.S.

591 (1948), the Court concluded that Plaintiff had demonstrated a dispute as to material facts

regarding changes in the use of the property since the initial decision. The Court also resolved

that Plaintiff was entitled to put forward a new theory for exemption under 32 V.S.A.§3802(4),

in reliance on Sigler Foundation v. Town of Norwich, No. 2001-433 (July 26, 2002), which was

decided after this Court’s 2001 ruling.

        The Court takes judicial notice of its earlier findings of fact in Our Lady of Ephesus

House of Prayer, Inc. v. Town of Jamaica, Doc. No. 47-1-01 Wmcv (Aug. 20, 2001), and

incorporates them by reference as to all matters relevant to the present proceedings. Some of

those findings are repeated below, for ease of comprehension.



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Findings of Fact

       1. Plaintiff is a non-profit corporation organized under Vermont law on Sept. 9, 1997.

Pursuant to its Articles of Association, which were unchanged at the time of the hearing, the

corporation’s purposes include:

       a. To provide facilities for the personal growth of individuals for reflection and
       prayer in the Roman Catholic tradition;

       b. Upon dissolution, to distribute all assets to the Roman Catholic Diocese of
       Vermont, Burlington, Vt., its successors or assigns. In the event the Roman
       Catholic Diocese does not enjoy tax-exempt status upon dissolution, the assets
       may be designated to another tax-exempt organization, so long as such
       organization is “in the Roman Catholic tradition”.

       2. Plaintiff has been granted tax-exempt status under the Internal Revenue Code because

it describes itself as a church. The approval of its 501(c)(3) application, filed on Sept. 27, 1999,

specifically relied on Plaintiff’s representation that it is not a private foundation because it

qualifies as a church under IRS regulations.

       3. Plaintiff represents to the IRS that it became organized as a church because:

       In 1959, Elizabeth Fraser (deceased), mother of one of the incorporators of the
       church, went to visit the Blessed Mother’s last home in Ephesus, Turkey. While
       she was there praying for her handicapped nephews, the Blessed Mother appeared
       to her. A special devotion was created to Our Lady of Ephesus, and Our Lady of
       Ephesus House of Prayer, Inc. was created.

Plaintiff disclaims any written creed or statement of faith, except as set forth in its by-laws,

which state:

       i. Our Lady of Ephesus House of Prayer is a private institution which exists for
       the purpose of nurturing the spiritual growth and development of all who come
       into association for religious services, periods of meditation, and spiritual retreats.

       ii. The House of Prayer is founded and named on the evidence of sustained
       spiritual significance attached to the ancient abode of Mary, Mother of Christ, in


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       the village by the name of Ephesus, located in the country of Turkey.

       4. Schedule A of Plaintiff’s 501(c)(3) application further describes Plaintiff’s activities

as a church, representing that membership is unnecessary, and that the church is open to

everyone of all faiths. In support of its application, Plaintiff attached a sample order of worship.

It represented that it expected 150 people on average to attend services. In response to a query

specifying other religious services which the church would sponsor, Plaintiff indicated that its

services would include weddings, stations of the cross, rosary, catechism, and occasional

meetings for visiting priests. The church represented that its deacons, ministers and/or pastors

would be formally ordained, and that its religious hierarchy or ecclesiastical government would

be: “Catholic faith - This church does not have a hierarchy”.

       5. By deed from Donald and Mary Tarinelli dated April 23, 1999, Plaintiff became

owner of 81.7 acres of land in Jamaica, together with the buildings situated upon it. The transfer

of real estate was in the form of an unconditional gift to Plaintiff, with no right of reverter to the

donors, nor any restriction on Plaintiff’s further sale of the property. Mary Tarinelli is currently

Plaintiff’s Chair and Executive Director, responsible for the day-to-day management of the

property. The Tarinellis have been Plaintiff’s primary benefactors, whose most significant

contributions have consisted of the funds necessary for the payment of property taxes associated

with the taxable portions of Plaintiff’s real property.

       6. The property was subdivided from lands retained by the Tarinellis, consisting of 199

acres on which they maintain their residence. The Tarinellis’ house is situated on a hill

immediately above and overlooking Plaintiff’s property. A private road serves as the common

driveway for both parcels. Prior to the bequest, the Tarinellis operated a Morgan horse farm on


                                                   4
the premises. As the Court previously found, at the time of the 2001 suit, the property appeared

best suited for boarding and raising horses and associated agricultural uses. Of the 81.7 acres,

approximately 22.8 acres are fenced fields and pastures. The remaining acreage is wooded,

through which runs an extensive network of bridal trails. A portion of the woodlands formerly

supported maple-sugaring operations. In 2001, the buildings consisted of a large main barn, a

smaller barn, three sheds and an abandoned sugarhouse. At that time, the main barn included a

66 x 100 foot indoor space formerly used as a riding ring and viewing room. The west end of the

barn had been converted to a small chapel in which a few church pews had been installed

together with other artifacts associated with religious worship. The area devoted to the chapel

was found to be approximately 10% of the total area of the barn and former riding ring. The

chapel opened onto a small devotional garden, through which a short walk westerly into the

woodlands lead to an area in which the fourteen Stations of the Cross had been recreated. The

space specifically developed for religious observances comprised a small portion of the 81.7

acres of fields and woodlands.

       7. Following the prior proceeding, Plaintiff undertook further renovations in the westerly

portion of the main barn formerly used as the indoor riding ring, with the goal of establishing a

second larger chapel, adjacent to the smaller chapel described by the 2001 ruling. At the time of

the Lister’s 2002 assessment, the renovations were incomplete. Subsequently, in early 2003, a

heavy burden of snow caused a significant cave-in to the portion of the roof of the main barn

covering the riding ring, delaying the completion of the larger chapel. The interior is now

substantially complete although insulation and heating remain to be installed. To date, the larger

chapel has been used only infrequently. According to Richard Anderberg, past chair of


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Plaintiff’s board, possibly three events have been celebrated in the larger chapel.

       8. Since the prior proceeding, pursuant to the permit then in place, Plaintiff has caused

the remodeling of former stables into 8 room units, and has permits for the construction of 12

more. These units are served with individual bathroom facilities, for which a mound septic

system has been installed. Together with the two upstairs units reserved for visiting priests, the

new rooms have resulted in an increase in overnight guests to Plaintiff’s retreat facility. The

rooms may be reserved through Mary Tarinelli on a first-come, first-served basis. Plaintiff

requests a donation of $35 per night for the rooms, which has allowed the organization to

become mostly self-sustaining financially, with the exception of property taxes.

       9. Mary Tarinelli estimates that with the addition of the second chapel, the renovation of

the stalls into rooming units, and the conversion of the indoor ring into an outdoor parking lot,

approximately one-half of the main barn is now dedicated to Plaintiff’s pious activities. No

evidence was presented regarding measurements of the floor area associated with these various

functions.

       10. One of the largest groups to make use of the facility was the Fraser family reunion in

July 2002, when 90 members of Mary Tarinelli’s family visited. Preliminary coordination for

this event was done by making use of the Lady of Ephesus House of Prayer web site, which

included on its menu a “Welcome to the Fraser Family Page” location for receiving information

and directions for the reunion, and posting messages.

       11. Plaintiff has expanded the publication of its activities through newsletters, postings

in public places and newspapers. It also distributes a full-color promotional brochure, and

maintains a web-site. Plaintiff emphasizes in these materials that the grounds are always open to


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the public, outside of the limited schedule of religious services and celebrations. There are now

signs on the road directing the public to Plaintiff’s facilities

        12. In an attempt to better document use of the premises following the 2001 proceedings,

Plaintiff has maintained a guest book. Visitors are encouraged to sign, but not required to do so.

From April 1,2001 through March 31, 2002, 50 people signed the registry. From April 1, 2002

through March 31, 2003, 279 visitors signed, including the members of Ms. Tarinelli’s family. It

is likely that the registry is an inaccurate measure of the use made of the premises, particularly

since not all visitors during the larger celebrations, such as the Advent Festival of Lights or the

Catholic feast days, are likely to sign. Plaintiff’s witnesses estimate that 3000 people have

visited the facility since the inception of Our Lady of Ephesus House of Prayer, but this estimate

is without other explanation in the evidence.

        13. The roof over the riding ring was removed following its collapse, and the space

converted to outdoor parking to accommodate visitors. No evidence was offered to apportion the

use of the parking space between religious observations and the general use of the premises by

members of the public.

        14. Plaintiff has no established members, nor is there a congregation associated with the

premises. The telephone number listed on Plaintiff’s publications is that of Mary and Donald

Tarinelli. Board meetings have become more regular since the 2001 proceedings, occurring

approximately four times per year. Minutes for such meetings are maintained. However, neither

Ms. Tarinelli nor Mr. Anderberg could explain the basis for determining which board members

were entitled to vote, and how many such members constituted a quorum. Minutes of the

meetings reveal that meetings are rarely attended by more than one-half the members of the


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Board. After the 2001 order, Mr. And Ms. Tarinelli authored and delivered to the Board a

Statement of Purposes and Goals for the organization indicating that any current members ought

to subscribe to the mission statement, or leave the Board.

       15. Mary and Donald Tarinelli have caused the removal of many of their personal

possessions, particularly the riding regalia and memorabilia in the viewing room above the riding

ring noted by the Court in its 2001 opinion. The Tarinellis maintain an informal “barter”

arrangement by which they pasture their animals on Plaintiff’s land, in return for allowing the

animals used by Plaintiff in its Festival of Lights access to their pastures.

       16. Notwithstanding some modifications to Plaintiff’s activities, as described herein, the

evidence still strongly supports the Court’s previous conclusion that Mary & Donald Tarinelli

retain virtually unbridled discretion with respect to the use of the property, and that they derive a

disproportionate benefit in comparison with any other members of the public from its proximity

to the adjacent property on which they make their residence. This conclusion is supported by

Mary Tarinelli’s dominant role on Plaintiff’s board, her authority as executive director in charge

of the daily management of all operations - including access to the rooming units. Furthermore,

notwithstanding some increase in the public and pious uses made of Plaintiff’s property, it seems

apparent that, for the vast proportion of the year, the buildings, pastures and woodlands are

largely unused by anyone except the Tarinellis, for whom it serves as an attractive buffer to their

substantial remaining real estate holdings.

Conclusions of Law

       In its previous decision, the Court analyzed Plaintiff’s claim in accordance with the




                                                  8
statutory scheme established by 32 V.S.A.§3802(4) and 3832(2). 1 The Court cleaved to well-

established principles of statutory construction by which statutes providing for exemption from

taxation are to be construed most strongly against those claiming the benefit, although such

construction must be reasonable so as not to defeat statutory purposes. The Experiment in

International Living v. Town of Brattleboro, 127 Vt. 41 (1968). Finding that Plaintiff’s

organization as a religious society was undisputed, the Court concluded that it was a close

question as to whether any of the property was substantially dedicated to the furtherance of the

organization’s purposes. See, Governor Clinton Council, Inc. v. Koslowski, 137 Vt. 240 (1979).

Nonetheless, by a preponderance of the evidence, the Court was satisfied that approximately

10% of the large barn was being used for pious purposes as a chapel, together with the small

portion of the grounds and woodlands developed as a chapel garden and stations of the cross.



       1
           32 V.S.A.§3802(4) provides:
                The following property shall be exempt from taxation:
                :::
                (4) Real and personal estate granted, sequestered or used for public,
                pious or charitable uses; real property owned by churches or church
                societies or conferences and used as parsonages and personal property
                therein used by ministers engaged in full time work in the care of the
                churches of their fellowship within the state...

            32 V.S.A.§3832(2) provides:
                The exemption from taxation of real and personal estate granted,
                sequestered or used for public, pious or charitable uses shall not be
                construed as exempting:
                :::
                (2) Real estate owned or kept by a religious society other than a church
                edifice, a parsonage, the outbuildings of the church edifice or parsonage,
                a building used as a convent, school, orphanage, home or hospital, land
                adjacent to any of the buildings named in this subsection, kept and used
                as a parking lot not used to produce income, lawn, playground or garden,
                and the so-called glebe lands.



                                                    9
See, Medical Center Hospital of Vermont v. Town of Burlington, 131 Vt. 196 (1973) (only

portion of building devoted to exempt use qualifies for exemption). Concluding that 32

V.S.A.§3832 had been enacted as an explicit limit to the exempt uses religious societies might

otherwise claim under §3802(4), the Court rejected as inconsistent with the plain language of the

statute Plaintiff’s claim that the entire property should be exempt as “land adjacent to any of the

buildings named in this subsection.”

       Plaintiff pleads for re-examination of this reasoning, in light of the changes in its use of

the property and the expansion of its activities. Plaintiff also urges reconsideration of the Court’s

application of §3832(2), claiming for the first time that it is not a religious society. In the

alternative, Plaintiff argues that its use of the property is entirely exempt because the portion of

the property not exempt under the Court’s previous application of §3832(2) must be considered

exempt as a public use under the broader limits of §3802(4). The Court is not persuaded that its

earlier construction of §3832(2) was flawed, or that Plaintiff’s remaining lands are exempt under

§3802(4), or that Plaintiff has established entitlement to a broader exemption as a result of the

changes that have transpired since the 2001 ruling.

       Although it concedes that portions of its property are dedicated substantially to pious

uses, e.g. the chapels, the Stations of the Cross and the living quarters set aside for visiting

clergy, Plaintiff now asserts that these uses are not subject to the limitations established by

§3832(2) because it cannot be concluded that Plaintiff is a religious society. As Plaintiff

observes, the term has no statutory definition, and has not been construed by the Supreme Court.

Plaintiff proposes a definition which “connotes stronger bonds among its members and stricter

entrance requirements that those associated with the rotating board members of a non-profit


                                                  10
organization such as OLEHOP.” Plaintiff creatively describes other types of groups that ought

to qualify as religious societies under its interpretation, i.e. Jesuits, Benedictines, Sisters of

Mercy, Christian Science healers, or fall outside the ambit of legislative coverage, i.e.“a

religiously motivated group of Jewish people who form an organization to build and operate a

museum dedicated to the Holocaust or a religiously motivated group of Mormans who form an

organization to recreate Brigham Young’s boyhood home complete with a replica of the first

church he attended.”. To the extent any ambiguity inheres in the term “religious society”,

however, the Court cannot but conclude that the Legislature must have intended to include any

organization which, as Plaintiff did here, represented itself as a “church”to the Internal Revenue

Service.

        Plaintiff fares no better as to the newly advanced claim that portions of the property not

used for pious purposes are nonetheless exempt under §3802(4) because they are substantially

dedicated to a public use. Even if this claim could be supported as a matter of law, a proposition

the Court disputes below, Plaintiff has not established a factual basis to advance it. By the terms

of its articles of incorporation, by-laws and application for tax-exempt status, Plaintiff was

established as a church to advance religious and spiritual goals; i.e.” to provide facilities for the

personal growth of individuals for reflection and prayer in the Roman Catholic tradition”, and

“for the purpose of nurturing the spiritual growth and development of all who come into

association for religious services, periods of meditation, and spiritual retreats”. Plaintiff now

contends that while certain areas of the property are clearly dedicated to pious uses, other areas

are “devoted purely to ‘public’ uses (the acreage, the rooms for overnight visitors, the Replica

house, the bathroom facilities)”, which are “open to the public on a non-denominational basis”.


                                                   11
Plaintiff also maintains that there “is no comparable property in Town to which the public has

unrestricted access other than land which has not been posted and for which permission to enter

may or may not be granted according to the wishes of the landowner.” Plaintiff’s Proposed

Findings, ¶¶15&17.

        Plaintiff advances these facts attempting to establish that portions of the property are

dedicated unconditionally to public use, see American Museum of Fly Fishing, Inc. v. Town of

Manchester, 151 Vt. 103 (1989), because the “acreage is necessary and substantially devoted to

OLEHOP’s central purpose of providing a quiet and peaceful location of great natural beauty to

which the public may come to meditate, contemplate and pray.” Plaintiff’s Proposed Findings,

¶14. Nonetheless, as its written documents or organization clearly show, Plaintiff was not

formed to advance purely public purposes, nor is it unconditionally bound to do so. No formal

statement of purpose establishes the nature and scope of Plaintiff’s claim of unconditional

dedication to public use; beyond the opening of its religious retreat center on a non-

denominational basis to all members of the public, no such “public” purpose arises from

Plaintiff’s activities. Yet, these activities are inherent in Plaintiff’s organization as a church, and

have no clearly recognizable separate purpose in advancing a public function.2

        Apart from the lack of factual support, Plaintiff’s reliance on §3802(4) is based on a

flawed application of the statutory scheme. As argued by the Town, the limitations imposed by

§3832 apply to all public, pious or charitable uses which might otherwise by claimed under


        2
          Even if Plaintiff were able to claim an organizational purpose to promote the public good
separate from its pious goals, the evidence does not establish that the property in question has been
substantially dedicated to this purpose. As indicated by the findings, Mary and Donald Tarinelli remain



                                                   12
§3802(4). Indeed, the introductory paragraph to §3832 states “[t]he exemption from taxation of

real and personal estate granted, sequestered or used for public, pious or charitable uses shall not

be construed as exempting...” The section goes on to specify in subparagraph two that all real

estate owned by a religious society is not to be exempted, with strictly limited exceptions:” a

church edifice, a parsonage, the outbuildings of the church edifice or parsonage, a building used

as a convent, school, orphanage, home or hospital, land adjacent to any of the buildings named in

this subsection, kept and used as a parking lot not used to produce income, lawn, playground or

garden, and the so-called glebe lands”. There is simply no support in §3832 for Plaintiff’s

contention that real estate owned by a religious society may qualify for exemption under
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§3802(4) as long as it is used primarily for a public, rather than pious purpose.


the principle users and beneficiaries of Plaintiff’s acreage.
        3
            As the Court has previously explained: “The central dilemma plaguing Plaintiff’s claim is its
failure to acknowledge the legislative purpose underlying §3832(2), which was plainly meant to restrict
expansive claims for pious purposes made previously under §3802(4). This was made explicit by the
Supreme Court in In Re Tax Appeal of Abbey Church, 145 Vt. 227 (1984), which overturned the superior
court’s decree granting tax exempt status to owners of property which was leased to a church:
         The trial court thus interpreted the language of §3832(2) as expanding the scope of
         §3802(4). Section 3832, however, was enacted after §3802(4) and limits its scope of
         application. Fletcher Farms, supra, 137 Vt. at 584...; In re Aloha Foundation, Inc., 134
         Vt. 239, 240 ...(1976). This intent is clearly apparent from the language of §3832, which
         states that §3802(4) “shall not be construed as exempting” certain uses.
Id. at 229". Our Lady of Ephesus House of Prayer v. Town of Jamaica,, Doc. No. 47-1-2001 (Opinion &
Order, Aug 20, 2001, pp. 8-9).
        4
           Even if §3832(2) did not preclude Plaintiff’s claim for an exemption, the claimed “public use”
falls within the limiting strictures of §3832(7), which denies tax exemption for “real and personal
property of an organization when the property is used primarily for health or recreational purposes, unless
the town or municipality in which the property is located so votes at any regular or special meeting duly
warned therefor.” In a series of cases spanning almost six decades, the Supreme Court addressed
Middlebury College’s claim to tax-exemption of a large tract of forest and lands in Hancock, which it
claimed to be using for the benefit and enjoyment of the public under a theory similar to the one advanced
by Plaintiff here.
            There is no doubt that the so-called Snow Bowl property was “granted” to Middlebury
         College as a park for the use and benefit of the public. Middlebury College v. Central


                                                      13
       As limited by 32 V.S.A. §3832(2), and as the Court determined by its earlier ruling,

Plaintiff is entitled only to an exemption for the portions of its property previously identified by

the Court as dedicated substantially to pious uses for a chapel, the meditation garden and the

Stations of the Cross. Although Plaintiff now claims that the pious uses recognized by §3832(2)

have expanded, the Court disagrees. The larger chapel was under construction when the petition

for declaratory relief was filed and remains incomplete. Furthermore, it remains unclear whether

its use will be sufficient to warrant the conclusion that it is unconditionally dedicated to public

and pious purposes. In addition, the Court cannot interpret §3832(2) to cover as a “parsonage”

the rooming units occasionally reserved for visiting clergy. The use for this purpose is

intermittent, and the rooms are often made available to other members of the public when not

used by clergy. Even if they were strictly reserved for clergy, the rooms do not qualify as a”

parsonage”, a term commonly applicable to the residence quarters of a settled minister or priest.

Finally, as predicted by the prior opinion, the Court concludes that the parking lot established on

the grounds occupied by the former riding ring does not primarily serve the chapel; rather, it is

used indiscriminately for celebrations, and for day and overnight visitors to the grounds,


       Power Corp., 101 Vt. 325,342...(1928). Therefore, it is clear that, without more, the
       plaintiff would be entitled to the tax exemption it claims. Unfortunately for plaintiff’s
       position, there is more; there is 32 V.S.A.§3832. This statute appears on the scene as the
       nemesis of plaintiff’s position and a deus ex machina in favor of the defendant.
          Standing alone, §3802(4) exempts from taxation all “[r]eal..estate granted, sequestered
       or used for public...uses,” i.e., for public purposes, such as the Snow Bowl land.
       Nevertheless, §3832, which did not exist in its present form at the time of the 1947
       Middlebury College case, limits the availability of the §3802(4) public use exemption.
       Section 3832 provides that the public use exemption “shall not be construed as
       exempting” certain specific properties. Among these, under §3832(7), are “[r]eal and
       personal property of an organization...used primarily for...recreational purposes,” unless
       the town votes to grant an exemption.
Middlebury College v. Town of Hancock, 147 Vt. 259(1986); see, also Middlebury College v. Town of
Hancock, 115 Vt. 157 (1947).


                                                 14
including those who are charged for their accommodations, and thus its use falls outside the

scope of the exemption recognized by §3832(2). See, Our Lady of Ephesus House of Prayer v.

Town of Jamaica,, Doc. No. 47-1-2001 (Opinion & Order, Aug 20, 2001, p.10 ,fn. 1).




                                             ORDER

       For the reasons stated in this opinion, Plaintiff’s petition for declaratory judgment is

DENIED.

       Dated December 2, 2003 at Brattleboro, VT.




                                                          John P. Wesley
                                                          Presiding Judge




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