Court of Special Appeals of Maryland, No. 1017, October 5, 2010: Sets aside the conveyance of a portion of land encumbered an agricultural preservation easement that was deeded without the prior approval of the easement holder; affirms that conveyance requires such prior approval.
In 1999, owner Stitzel entered into an Agricultural Land Preservation District Agreement with the Maryland Agricultural Land Preservation Foundation (“Foundation”), to keep approximately 264 acres of real property in agricultural use for a minimum of five years. By Deed of Easement (“the Easement”) in 2002, Stitzel also granted to the Foundation an agricultural preservation easement. In 2005, Stitzel conveyed a 15.91 acre lot (“Lot 14″) within the Easement land to the Bowers.
The trial court, ruling in favor of the Foundation, held that the conveyance violated covenants contained in the District Agreement and the Easement against subdividing the land unless the Foundation first has approved the proposed subdivision. Stitzel had argued that the Maryland statutory definition of subdivision [Art. 66B] allowed him to convey the lot. The appeals court decided that the regulations governing agricultural easements [COMAR 15.15.01] control. The regs state: “A landowner may not subdivide land subject to restrictions of an agricultural land preservation district or easement without written approval from the Foundation.” They define “subdivision” as “the division of land into two or more parts or parcels.”
The appeals court reasoned that it was, “the intent of the Maryland General Assembly to preserve tracts of land that are large enough to accommodate agricultural activities. In view of the evidence in the record that indicated that smaller parcels of land can be less valuable for agricultural uses, we conclude that the circuit court did not err in finding that the sale of Lot 14 to Bowers was a subdivision that required the prior approval of the Foundation.”
The court also said that the deed to Bowers, as a contract, could be found unenforceable using the balancing process reasoning of Restatement (Second) of Contracts § 178, which process the court undertook de novo. “Where the legislation does not expressly provide for unenforceability, the promise will be declared unenforceable on grounds of public policy if ‘the interest in its enforcement is clearly outweighed in the circumstances by a public policy against the enforcement of such terms.’… We agree with the circuit court that the factors favoring enforcement are clearly outweighed by the public policy favoring preservation of large tracts of agricultural land. That public policy is best served by setting aside conveyances that are not approved in advance by the Foundation.”
Bowers had joined the Foundation in asking for the conveyance to be voided. The Easement was not discovered by Bowers’s title search because the Foundation’s title company erroneously recorded the Easement in the wrong county. Bowers’s title company did not bring to Bowers’s attention the District Agreement that had been recorded in 1999.
Decision available at http://www.leagle.com/unsecure/page.htm?shortname=inmdco20101005233.