Long Green Valley Ass’n, et al. v. Bellevale Farms, Inc., et al.

Long Green Valley Ass’n v. Bellevale Farms, Inc., 68 A.3d 843, (Md. Ct. App. 2013), affirming 46 A.3d 473, 205 Md. App. 636 (Md. Ct. Spec. App. June 8, 2012), modifying 46 A.3d 473, 205 Md. App. 636 (Md. Ct. Spec. App. Feb. 4, 2012) and 2011 Md. App. LEXIS 154 (Md. Ct. Spec. App. Nov. 30, 2011)

State: Maryland

Procedural Status: Case concluded.

Date: 2013

Keywords: Agricultural conservation easement; agriculture; charitable trust; commercial uses; enabling statute; neighbors; public conservation easement; standing; state conservation easement; structure; third party beneficiary; violation.

Summary of Facts and Issues: Bellevale Farms, Inc. (Bellevale) owned a 199-acre dairy farm in the Long Green Valley area of Baltimore County. Yoder owned and operated an adjacent dairy farm. Long Green Valley Association (LGVA) was a community association that encouraged and accepted donations and sales of conservation easements. In 1997, Bellevale sold an agricultural conservation easement to the Maryland Agricultural Land Preservation Foundation (MALPF), a state agency, for $797,000. The easement prohibited commercial and industrial uses, except for “farm uses” and “home occupations.” Furthermore, the easement included a provision that it could be released by MALPF after 25 years upon a determination that farming is no longer economically feasible and upon payment of appraised fair market value by the landowner. Ten years after selling the easement, Bellevale sought and received MALPF’s permission to construct a 10,000 square-foot creamery and farm store, as well as a 10-vehicle parking area, on the protected property. Yoder and LGVA filed suit against MALPF and Bellevale to block the creamery and store as a violation of the easement. The trial court dismissed the suit for lack of standing. On appeal, the plaintiffs claimed standing based on three common law theories: (1) as intended third party beneficiaries, (2) as enforcers of a charitable trust, and (3) as neighbors who are “specially harmed” by the creamery.

Holding: The intermediate appellate court affirmed in part and reversed in part. First, the court held that plaintiffs were not intended third party beneficiaries because the easement only named MALPF as having the right to enforce, and did not grant the public any rights to use the protected property. In particular, LGVA had no special right of standing as a community association. Next, the court held that this particular easement, because it was a purchased easement, did not reflect any charitable intent and thus did not create a charitable trust. Third, the appellate court reversed the trial court on the special harm theory, holding that, based on recent Maryland case law on standing in the context of land use decisions, Yoder and LGVA (whose members include neighbors of the protected property) do indeed have a rebuttable presumption of standing as abutters. Thus, the appellate court remanded to the trial court to reconsider the standing issue.

July 2013 Update: The Maryland Court of Appeals affirmed the intermediate appellate court’s holding that the conservation easement was not a charitable trust and therefore plaintiffs lacked standing under this theory. The Court of Appeals held that the language of the easement and the MALPF enabling statute did not reflect any intent by the parties to create a charitable trust, but rather that the primary purpose was to maintain agriculture as a profitable endeavor. In particular, the Court pointed to the fact that the easement makes no mention of charitable purposes or public benefit and limits enforcement rights to MALPF and the grantor. Next, the Court reasoned that the broad agricultural exceptions to the easement’s prohibitions on commercial and industrial uses further reflected the primary purpose of protecting farming rather than the charitable preservation of land for public use and enjoyment. Finally, although the Court recognized that “consequential benefits flow to the general public,” the primary purpose of the MALPF program and the easement was to support commercial farming.

Analysis and Notes: Together, the Court of Special Appeals and the Court of Appeals opinions present the most thorough and well considered discussion of the application of the charitable trust doctrine to a conservation easement of any published case law to date. (Although see Carpenter v. Commissioner, below, for another recent case.) The Court of Special Appeals opinion cites to numerous law review articles on the issue, and addresses Cohen v. Lynn and Hicks v. Dowd, 157 P.3d 914 (Wy. 2007), below. However, it is important to note that the Court of Special Appeals’ initial opinion of November 30, 2011, was more expansive in its holding that conservation easements generally are not charitable trusts. In its first revised opinion, dated February 4, 2012, upon the request of the Maryland Attorney General, the court narrowed its opinion to nonperpetual purchased easements. The court expressly disavowed any opinion on whether perpetual easements – fully donated or bargain sale -- generally create charitable trusts. In a second revised opinion, dated June 8, 2012, the court slightly broadened its holding to all purchased easements by deleting the word “nonperpetual” from a key sentence. However, the Court of Appeals took a somewhat different direction and did not even focus on the purchase vs. donation distinction. Despite all of the attention paid to the charitable trust issue, the intermediate appellate court’s ruling on standing based on special harm is also significant. The logic of the opinion potentially extends a rebuttable presumption of standing to neighbors of any publicly held conservation easement in Maryland who seek to challenge a decision made by the easement holder that is akin to a land use decision. This outcome stands in marked contrast to the bulk of cases summarized in this section, which deny such standing. Curiously, the defendants did not appeal this part of the decision to the Maryland high court, and so it appears that the case will return to the trial court level on these grounds.

March 2016 Update: The case is stalled indefinitely upon being remanded to the trial court. Yoder no longer owns the abutting farm. If Yoder and LGVA had pursued the matter on remand, the Foundation was prepared to rebut the presumption that they were prima facie aggrieved.