Court of Appeals of Maryland,No. 65, September Term, 2012, June 24, 2013: Maryland agricultural preservation easement not a charitable trust.

This case is the appeal of the decision in Long Green Valley Ass’n v. Bellevale Farms, Inc., 205 Md. App. 636, 683, 46 A.3d 473, 501 (2012) (Long Green Valley I). It holds that in Maryland, the agricultural preservation easement at issue, granted to the Maryland Agricultural Land Preservation Foundation (“MALPF”), a state agency, is not a charitable trust, and therefore the appellants, private parties, do not have standing to seek enforcement of the easement.

As reported here previously, the owners of Bellevale dairy farm sold an agricultural preservation easement to MALPF.  MALPF later approved Bellevale’s proposed construction and operation of a creamery, processing facility, farm store and parking on the property. The owners of an abutting property (Yoders) and a conservation organization (Long Green Valley Association or LGVA) claimed the creamery, etc., violated the easement and brought suit, asking the court to compel MALPF to enforce the easement.  LGVA was denied standing in the lower courts on the basis that the agricultural preservation easement did not constitute a charitable trust (under § 14-302(a) of the Maryland Estates and Trusts Article). Had the easement been deemed a charitable trust a non-party “interested persons” like LGVA would have had standing to seek to enforce the provisions of the easement. LGVA brought this appeal to the higher Court of Appeals to gain standing to enforce a charitable trust.

The court reasoned that to reach a decision it had to determine whether the parties that created the easement had the intent of creating a charitable trust. LGVA sought to prove the intent to create a charitable trust by focusing on evidence extrinsic to the language of easement. The court, however, wrote, “We need not resort to extrinsic evidence in parsing the plain meaning of the Respondents’ [Bellevale Farms, Inc.] intent because the language of the Bellevale Easement demonstrates clearly that the Respondents did not intend for the Easement to impose a charitable trust.” Having said that, the court nevertheless felt the need to review the intent of the MALPF program’s statutory purpose to counter LGVA’s interpretation that the MALPF’s program fulfilled a charitable purpose (an element necessary to creation of a charitable trust in Maryland).

As to the language of the easement, the court took note of the following easement wording:

  • “[T]he intention of the parties that the said land shall be preserved solely for agricultural use in accordance with the provisions of the Agricultural Article;”
  • That it is the “Grantor [who] covenants for and on behalf of Grantor, the personal representatives, successors and assigns of the Grantor, with the Grantee, its successors and assigns, to do and refrain from doing” the various covenants and restrictions (emphasis added);
  • That “the parties, for themselves, their personal representatives, successors and assigns, further covenant and agree as follows . .. .” (emphasis added);
  • That the State, “to the use of the Department of Agriculture on behalf of” the MALPF, may enforce the Easement, but expressly excluding any other individual from enforcing it;
  • That the MALPF as Grantee, and not any member of the public, has “the right to enter on the above described land from time to time for the sole purpose of inspection and enforcement of the easement, covenants, conditions, limitations and restrictions . . . .”;
  • That it is the MALPF, and no other entity, that is entitled to determine whether any proposed use of Bellevale Farms may violate the provisions of the easement;
  • Several terms and provisions regarding the definition of “agricultural use,” including that the “agricultural” use to which Bellevale Farms is restricted, includes farm operations “relating to the processing, storage, or sale of farm, agricultural, or woodland products”; and
  • The same permitted uses of Bellevale Farms for purposes of profitable farming and sale of farm products, rather than for a charitable preservation of land for public use and enjoyment.

Taken together, the court found the intent was not to provide a public benefit or create a charitable trust.

The court then turned to the MALPF’ statutory scheme (somewhat reluctantly: “Resort, if need be [emphasis added], to the statutory scheme of the MALPF program provides further support for the conclusion that the Bellevale Easement has no charitable purpose.”) The court wrote, “Although public benefits potentially and incidentally flow from the MALPF program, we conclude that the overarching purpose of the program is not charitable because its primary goal is to promote and enable profitable farming by purchasing easements in privately-maintained land.”

[Editorial notes:

[The court did not examine why the state found it necessary to promote and enable private profit if not for a more fundamental public purpose, saying only that saying only that “some consequential benefits flow to the general public in Maryland” as a result of “a program that is market-oriented and profit-driven.”

[In the end, the court’s holding that the parties did not intend for the easement to create a charitable trust, and that therefore LGVA does not have standing to ask a court to enforce the easement, was based on both the instrument creating the easement and the statutory scheme of the MALPF program through which the easement was purchased. It is not at all clear that the court would have reached the same conclusion had the easement not been purchased under a statutory program to support local agricultural enterprises.]

The decision is available at http://mdcourts.gov/opinions/coa/2013/65a12.pdf

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