Supreme Court rejects Town appeal

By Guy Page

A Vermont Superior Court judge last year sharply rebuked the Town of Colchester for attempting to seize private lakefront property through eminent domain, ruling that the town’s proposed taking was driven by bad faith and unsupported by the careful analysis required by law. 

When the Town appealed the decision, the Supreme Court upheld the lower court decision this year.

In the March 25, 2025 decision in Mongeon Bay Properties, LLC v. Town of Colchester, Judge Samuel Hoar Jr. denied the town’s petition to condemn a portion of Mongeon Bay Properties’ land at 885 East Lakeshore Drive, where the town proposed to demolish an existing camp and construct a stormwater treatment facility. 

Hoar concluded the town failed to prove “necessity” under Vermont law and went further, finding the taking was initiated in bad faith. “Instead, the evidence compels the conclusion that this is a bad faith, pretextual taking, driven not by the careful analysis of costs and benefits and consideration of alternatives that the statute compels, but by the desire to remove what at least the then-Director of Public Works and the Town’s counsel felt was a thorn in the Town’s side,” the judge wrote. 

Pipe failure, lawsuit, and a sudden condemnation

The dispute traces back to an October 2019 storm that caused the town’s stormwater outflow pipe on Mongeon’s property to rupture, undermining the camp structure. The court found the failure was due to corrosion and deterioration resulting from lack of maintenance.

Although the property is burdened by a 1979 easement allowing the town to place and maintain a stormwater drainpipe and catch basin — and obligating the town to indemnify Mongeon for losses arising from that use — Colchester initially refused to accept responsibility for the damage. That refusal forced Mongeon to retain counsel and ultimately file a federal lawsuit, which resulted in what the town’s own Director of Public Works described as a “substantial sum of money” paid in settlement.

Shortly after Mongeon filed suit, Colchester initiated condemnation proceedings. The timing was no accident, Hoar suggested. The judge credited testimony that town counsel told Mongeon’s principal, “if you sue the Town we will take your house by eminent domain.” 

Notably, the town offered no rebuttal testimony to contradict these statements. “The strong inference is that the Town conceded the veracity of this testimony,” Hoar wrote.

No serious analysis of alternatives

The court found Colchester undertook no meaningful study to determine whether the Mongeon property was an appropriate site for stormwater treatment or whether other locations or technologies would better serve the public. 

Earlier town planning documents — including a 2017 Malletts Bay stormwater study identifying 49 potential treatment sites and a 2020 Phosphorus Control Plan listing 34 promising projects — did not include the Mongeon property at all. 

“What appears to have happened,” Hoar wrote, “is that after the October 2019 failure of the stormwater outflow, attorneys got involved,” and the town’s focus shifted to acquiring the property to limit liability rather than to advance a carefully evaluated water-quality strategy. 

The judge described the town’s approach in blunt terms: “Bluntly, this is the antithesis of the careful, comprehensive analysis of the relative costs and benefits of alternatives to the proposed taking that the statute clearly requires.”

Costly project, minimal benefit

Colchester estimated its proposed project would cost about $1.6 million, including land acquisition. Yet the town presented no competent evidence of how much phosphorus the facility would actually remove. 

Using corrected methodologies, the court found the project would likely remove only about 3.29 pounds of phosphorus per year — at a cost of roughly $485,758 per pound removed annually. 

By contrast, an alternative infiltration-based system proposed by Mongeon’s expert could remove approximately 9.6 pounds of phosphorus per year at less than half the construction cost and with fewer environmental and logistical drawbacks.

Hoar fully credited the landowner’s expert and quoted her conclusion that the town’s proposed site “would [not] be even the 2nd, 3rd, or 4th preferred stormwater treatment location in this watershed.” 

Eminent domain as a tool of convenience

At most, Hoar said, the town’s evidence suggested the project would be “a convenient solution to the problem of maintaining an outflow pipe that runs under a property the Town does not own.” But convenience, he emphasized, is not the legal standard.

The court concluded that even if eliminating potential liability were a legitimate public purpose, the town had shown no evidence that seizing and demolishing a private residence was the least inconvenient or least expensive means of achieving it.

In a final, pointed metaphor, Hoar wrote that the proposal “appears tailored to scratch a particular itch, completely unrelated to the stated purpose. And even if scratching that itch could be considered a proper public purpose, the Town has made no showing that amputating the limb on which the itch is found and replacing it with a very expensive prosthetic is the best and most cost-effective solution.” 

The ruling leaves Colchester without authority to take the property and exposes the town to potential responsibility for Mongeon’s court costs.