Wildlands Trust of Southeastern Massachusetts, Inc. v. Cedar Hill

Summary of Facts and Issues: The Ballou Channing District Unitarian Universalist Association, Inc. (Ballou) owned a 12-acre parcel of land in Duxbury. The property was used as a retreat center by various Unitarian churches. Ballou acquired the property in 1980 through a deed that imposed certain restrictions on its use, but the restrictions were to expire in 2009. John and Cynthia Reed lived on an abutting parcel of land and were concerned about the pending expiration of the deed restrictions. In 2007, the Reeds, through their private foundation (the Foundation), entered into an agreement with Ballou whereby the Foundation would make a contribution of $3 million in return for the grant of a conservation easement. The Reeds intended for the donation to alleviate the need to engage in any commercial activities on the Ballou property and to cover what was anticipated to be Ballou's annual operating expenses of $150,000. However, the gift arrangement was never committed to writing. Pursuant to this arrangement, Ballou conveyed a conservation easement to the Wildlands Trust of Southeastern Massachusetts (Wildlands Trust) in 2008. The easement's purpose was to preserve the property in its predominately natural, scenic and open space condition. One key provision of the easement allowed "classes, conferences, and retreats, all consistent with the Purposes set forth in Section II above, and fees may be collected in connection with such activities." In 2009, Ballou created Cedar Hill Retreat Center as a spinoff 501(c)(3) organization, to own and operate the property. Neither the deed nor the conservation easement mentioned the foundation's $3 million gift. And contrary to the Reeds' expectations, Ballou kept $1.6 million of the $3 million for itself and only conveyed $1.4 million to Cedar Hill. Cedar Hill proceeded to use the property for event and overnight rentals, and permitted activities such as food preparation, alcohol consumption, and weekend family reunions. Wildlands Trust and the Foundation filed suit against Cedar Hill and Ballou, claiming that these activities violated the conservation easement. In particular, Wildlands Trust initially claimed that Cedar Hill could host only retreats that had a religious or charitable purpose. In other words, Wildlands Trust viewed family and business rentals, and overnight stays as prohibited. Over time, Wildlands Trust moderated its position, and an amended complaint alleged that the easement did not bar retreat rentals that promoted the preservation, protection, or study of the protected property. At trial, Wildlands Trust focused on what it perceived as the overuse of the protected property, contending that Cedar Hill was in effect using the Protected Property as a commercial hotel or resort, causing damage from excessive foot and vehicular traffic. The plaintiffs also claimed that Ballou's retention of $1.6 million of the $3 million violated what was an enforceable gift agreement. They also included claims of unjust enrichment, estoppel, and a violation of the state's consumer protection statute. Ballou filed a motion to dismiss all claims and Cedar Hill filed a motion to dismiss all claims except the easement violation.

Holding: In Wildlands Trust I, applying a motion to dismiss standard that is quite deferential to the plaintiffs, the court held as follows: (1) Both the Foundation and Wildlands Trust potentially had a specific interest in the $3 million gift that was unique to them and distinct from the interests of the public. Hence, based on Massachusetts case law, they had standing to enforce the gift as a charitable trust against Ballou. (2) Because Cedar Hill was not a party to the gift agreement, it could not be liable for any violation of the agreement, and this claim against it was dismissed. (3) The gift agreement could not be performed within one year because its purpose was to protect the property in perpetuity, and therefore under the Statute of Frauds a written document was necessary to enforce it against Ballou. (4) The conservation easement itself could not constitute a written memorialization of the gift agreement because it makes no mention of the $3 million gift. (5) The Foundation and Wildlands Trust should have on opportunity to conduct discovery to turn up other documents sufficient to satisfy the Statute of Frauds. Thus, the motion to dismiss this count was denied, although the court hinted that it could very well grant summary judgment if no such documents were identified. (6) There is no claim against Ballou for violation of the conservation easement because its obligations under the easement ended once it conveyed the premises to Cedar Hill. (7) The claim for violating the easement could be maintained only by the Wildlands Trust and not by the Foundation, because the latter was not a party to the easement, and under Massachusetts' conservation easement enabling act only the holder and the Attorney General had standing to enforce. (8) The unjust enrichment and estoppel claims were alternative theories if the gift agreement were held to be unenforceable, and as such they survived vis a vis Ballou, but were dismissed as to Cedar Hill. (9) The consumer protection violation was dismissed because neither Cedar Hill nor Ballou had engaged in unfair and deceptive conduct, nor were they engaged in 'trade or commerce' in their dealings with the Foundation or Wildlands Trust.

November 2018 Update: There has been much activity in this case over the past couple years, including four separate judicial decisions, as follows:

In Wildlands Trust II, the trial court resolved a discovery dispute between the Wildlands Trust and Cedar Hill. The court allowed limited discovery of Cedar Hill's business activities in order for Wildlands Trust to gather evidence as to whether Cedar Hill had violated the commercial prohibition in the conservation easement. The court further held that a mediation requirement in the conservation easement did not apply to each separate possible violation event. • In Wildlands Trust III, the court dismissed new claims brought by Wildlands Trust and the Foundation, finding them unsupported by any evidence. In particular, the court rejected an argument that a newly discovered letter agreement between Cedar Hill and Ballou gave Wildlands Trust or the Foundation third party enforcement rights to this agreement. The court further reiterated its rulings in Wildlands Trust I by declining to dismiss certain claims against Cedar Hill and Ballou. The court admitted to its frustration in having to rehash the same arguments proffered by the parties in Wildlands Trust I.

In Wildlands Trust IV, the court interpreted the substantive provisions of the conservation easement for the first time, making several notable findings. Based on its broad purpose provision and restrictions language, the easement barred all uses not expressly allowed in the document. Thus, the Court construed the provision allowing conferences, classes and retreats to meant that these activities are permitted so long as they materially involve the preservation or study of the natural conditions of the protected property. Furthermore, no fees could be charged for any other activities. Meanwhile, a separate provision that allowed recreational activities by the 'Grantor and its invitees (but not the general public)' did not prohibit Cedar Hill from publicizing recreational opportunities on the protected property, so long as the actual recreational activities did not exceed a reasonable number of specific invitees. Finally, the court declined to issue permanent injunctive relief requested by Wildlands Trust because too many facts were still in dispute. Thus, the case proceeded to trial.

In Wildlands Trust V, in a brief opinion the court denied Wildlands Trust's motion for reconsideration.

December 2019 Update: After a bench trial, the Superior Court ruled in April 2019 that Wildlands Trust had not proved that Cedar Hill committed any material violation of the conservation easement. In particular, the judge reiterated his ruling on summary judgment that conferences, classes and retreats were permitted so long as they materially related to the preservation or study of the natural conditions of the protected property. Based upon this interpretation, the judge determined that Cedar Hill's rentals to businesses and families did not violate the easement because, inter alia, the renters enjoyed the protected property's natural features and views during their stays. The judge also found that Wildlands Trust had failed to give prompt written notice of certain violations and to make reasonable efforts to resolve disputes concerning alleged violations, thereby waiving its right to bring a lawsuit as to those violations. Finally, the judge found that Cedar Hill's decision to continue renting the premises to families and businesses until the parties resolved the dispute did not constitute a material breach of the dispute resolution provisions of the restriction. The judge found that any such violation was 'technical' and 'immaterial.' In Wildlands Trust VI, the court denied Cedar Hill's motion for sanctions by which it sought reimbursement of its $437,000 in attorney's fees and costs. The court was not convinced that all or substantially all of the claims against Cedar Hill were frivolous and not advanced in good faith.

November 2020 Update: The appellate court affirmed the trial court's interpretation of the easement in favor of Cedar Hill, but on somewhat different grounds. In particular, the appellate court held as follows: (1) The easement allowed commercial rentals for classes, conferences, and retreats provided that such activities do not materially impair the conservation purposes. But diverging from the trial court's analysis, the appellate court ruled that a separate subsection allowing Cedar Hill and its invitees the 'quiet enjoyment' of the protected property for a variety of uses was not applicable to the commercial rental provision. (2) The appellate court agreed with the trial court that rentals did not have to affirmatively promote conservation, and there was no evidence presented that showed that the rentals damaged the protected property or were inconsistent with the conservation purposes. The appellate court acknowledged that such rentals in theory could lead to such damage, through an overburdening analysis, but those facts were not evidenced in the record. (3) Assuming arguendo that the trial court was incorrect in ruling that Wildlands Trust had waived its right to contest pre-2016 rentals, Wildlands Trust could not prevail because of the substantive determination that such rentals were permitted under the terms of the easement. (4) Assuming arguendo that Cedar Hill violated the easement by continuing the disputed rental activities during the pendency of the litigation, there was no actionable breach of contract claim because of the failure to show any damages.

Analysis and Notes: There is much to chew on in this sprawling and messy case. As the court noted, the parties seem eager to litigate every possible point of contention, and there are sure to be even more decisions to come, and an appeal seems likely. The conservation easement is rather unusual insofar as it essentially prohibits public recreational access, and there is no indication of fragile habitat to undergird such a provision.

November 2020 Update: The appellate court opinion is worth a close read by conservation easement drafters for instructive lessons on whether to prohibit or allow commercial uses for activities that are not inherently harmful to conservation values or purposes. Increasingly, land trusts are eschewing blanket commercial prohibitions, instead trying to target more directly impactful surface alteration, structures, and vegetation management restrictions. Taking a step back and reading between the lines, the land trust holder seemed to be heavily influenced by the neighbors, who appeared to be primarily interested in preserving their privacy. The result is hundreds of thousands of dollars in litigation costs over a four-year period, and nothing much to show for it.