Covered Bridge Farms II, LLC v. Maryland

Md Court of Special Appeals, No. 1920, September Term, 2011, March 22, 2013: Agricultural Preservation Easement granted on separate adjoining lots in one ownership can’t be subdivided.

A predecessor in ownership of appellant Covered Bridge Farm II, LLC (CBF II) sold an agricultural preservation easement to the State of Maryland Agricultural Land Preservation Foundation (MALPF) on three contiguous lots the predecessor owned. The preservation easement said the Grantor gave up the right “to subdivide the above described land for any purpose” except upon written approval of MALPF. The land was eventually bought by an LLC and in 2007 that LLC was liquidated and conveyed three reconfigured parcels of the land to three separate entities, including CBF II, without getting MALPF’s approval. MALPF sued. The lower (circuit) court found for MALPF. CBF II appealed.

The Court of Special Appeals agreed with the circuit court and MALPF that the conveyance violated the agricultural preservation easement. It held that its decision in Stitzel v. Maryland, 195 Md. App. 443 (2010) was squarely on point. In Stitzel the court had held that the conveyance of a portion of land that was subjected to an agricultural preservation easement was a subdivision of land even though the land had been a separately described parcel before becoming part of the Maryland land preservation program. The same factors that pertained to Stitzel were present here.

The court said that as in Stitzel the relevant definition of subdivision is the state regulation defining it as “the division of land into two or more parts or parcels.” In Stitzel the court said this definition “simply contemplates the subtraction of a portion of land within an agricultural district or subject to an easement.” As in Stitzel, the land subject to the easement was already subdivided before it entered into the agricultural program, and the easement described the three separate parcels as one “land,” one agricultural district and refers to the three parcels as the “subject property” or “the land.” As in Stitzel, and MALPF representative put into evidence that MALPF routinely accepts into the state agricultural land preservation program farms composed of separately described parcels, that it considers the entirety of the multiple parcels covered in the easement as one “land” and one “parcel” subject to the subdivision prohibition and that the subdivision prohibition exists to prevent destroying the farm’s financial viability by dividing into pieces that would not be profitable agricultural units.

Although the purpose of maintaining financial viability that applies to agricultural land would not necessarily apply to open space conservation or historic preservation, the court had no reason to elaborate as to how important to its decision this one factor was.

The primary distinction between the facts in Stitzel and in this case was worse for CBF II’s case than the facts in Stitzel. Unlike in Stitzel, where the subdivided property lines were the same as they had been before the easement was granted, the three parcels in this case had different boundaries that the original parcels.

Accordingly the court found for MALPF that a prohibited subdivision had occurred without MALPF’s consent and upheld the circuit court ruling declaring the transfer null and void, requiring the land to be transferred to a common owner, and ordering the lot lines eliminated or restored to their original configuration. The court also awarded MALPF costs.

The decision is available at http://mdcourts.gov/opinions/cosa/2013/1920s11.pdf.

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