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Information from land trust list serve regarding legal issues on conservation easements

A standard clause in conservation easements calls for the Grantor to pay the costs, including attorneys fees, of a legal  action brought to enforce the easement. Is anyone aware of a situation where a court has awarded attorneys fees to a land trust or government agency for the successful defense of a conservation easement? Was the award of fees part of the court's written opinion? Potential lenders for easement defense may be more willing to front the money if there is precedent that the fees can be recovered.

Thanks for your input.

Austin, Texas



The LTA did a survey of easement enforcement that was the subject of a session at the last Rally. In the disputes that went through the litigation process, the land trusts were typically awarded their litigation costs and fees. Of course, most cases don't get all the way through the process.
Settlements often involve waiver of fees, and the certainty of a settlement is often better than the risk of a trial. I am pasting my notes from that session below. These notes are essentially stream of consciousness notes of the session taken on a laptop and do not always reflect my personal views.

The study itself is probably available from the LTA.

The CE provision for recovery of fees is an adaptation of a common attorneys fees provision in many contracts. Someone enforcing such a clause can find good precedent in the general contract cases and would not be limited to looking at the relatively few CE enforcement cases.

A word of warning: California and some other states have statutes that convert a one-way attorneys fees clause into a reciprocal clause with the result that the winning party is entitled to recover fees from the loser even if the contract or CE provides only for the land trust to get fees if
it wins. The California provision is Civil Code section 1717. The result of these provisions is a significant increase in the risks presented by enforcement litigation. Although the land trust can control its own attorneys to some degree, it cannot control the fees incurred by its opponent and may end up having to pay those fees as well as its own if the lawsuit is unsuccessful.

President, The Land Trust of Napa County

Easement Violations

LTA study of violations completed last year, just now revealed. Survey sent to the 209 land trusts that had reported a violation or conservation easement amendment in the 1998 census (out of a total of 1200 land trusts) and got a response rate of 70%, did follow-up on others.

Over 7300 easements are held by land trusts (1.4 million acres); 498 violations reported, of which 383 were minor and resolved without significant commitment of resources, 93 resolved without litigation but with a significant commitment of resources, 22 resolved through litigation or with serious threat of litigation, and 6 of the 22 were adjudicated by the court.

Analysis of types of major violations:
32 prohibited surface violations
28 prohibited cutting of vegetation other than timber (mainly for views)
25 construction of prohibited structures
20 construction of structures outside the permitted envelope
18 prohibited timber harvest
11 alterations of wetlands or watercourses
8 prohibited commercial activities
8 dumping of waste or debris
6 prohibited subdivision
6 denial of access for monitoring
5 unauthorized use
3 noncompliance with management plan

Analysis of litigated violations:
6 construction of prohibited structure
5 prohibited surface alteration'
5 prohibited cutting of vegetation other than timber
4 construction outside building envelope
3 prohibited timber harvest
2 refused access for monitoring
2 failed to request required permission
2 alteration of wetlands or watercourses

Litigated easement violations: not a single one by an original grantor; 14 by subsequent easement landowners, 2 violations by third parties.

Land trusts reported that 9 violations were committed by landowners who acted, in the opinion of the land trust involved, in knowing violating the terms of the easement; 3 involved subsequent landowners who misunderstood or were unaware of the terms.

Easements in the litigated violation cases had been monitored annually; half by land trust staff and the other half by volunteers, all using ground monitoring, one used both ground and aerial monitoring. Most violations discovered by site monitoring; at least 4 were reported to the land trust by neighbors or local residents. Placement of signs identifying eased properties made it possible for neighbors to know where to make a report. Over half were discovered within 3 months.

Legal costs for major violations ranged from $100 to $100,000, with average of $9,100 and median of $2,500. Litigated violations costs ranged from $5,000 to $100,000, with average of $35,000 and median of $27,000. Total spent on litigated cases was $385,000. In most cases, land trusts recovered their costs of litigation.

Reported policy changes made by the land trusts as a result of the violations:

54% clarified their easement documents
15% improved landowner communications
9% strengthened monitoring standards
9% created or improved easement acquisition policies
9% created violation policy resolution procedures
4% created an easement amendment policy

Only one court ruling was in favor of the violator, accompanied by a partial settlement favorable to the land trust. All other litigated violations were settled to the land trust's satisfaction.

Lessons: draft easements carefully and defensively, especially the permitted and prohibited uses sections; good communications are critical; land trusts need to have the financial basis to monitor, enforce and defend easements. Don't take easements without ability to defend them. Regular monitoring is essential and monitoring documents should be prepared with the
assumption that they may be exhibits in a trial. Secure experienced attorneys and consult with them promptly upon learning of possible violations.

LTA is considering a shared legal defense fund idea and is also looking into insurance possibilities.

Lots of the settlements arose because the land trust discovered ambiguities in the easement language so their litigation posture was weakened and settlement made more attractive.

Continuing communication with landowners, especially subsequent landowners, is essential because more communication means it is much harder for the land owner to claim reliance on latent ambiguity in the easement documents, to claim lack of knowledge of easement and its restrictions and to claim good faith.

Discussion of 2 serious violations affecting Big Sur Land Trust:

Developer subdivided, put easement on parcels at the top of the ridge, also on two lower parcels, using the original Nature Conservancy form. The 2 parcels permitted one residence each. Parcels were sold, executive director met with new owners, walked the land and new owners
explained their construction plans and showed the planned locations of structures; the executive director believed the described construction presented no violation of the easement development area (but did not have a survey showing the structures and did not review the plans on paper). No one from the land trust visited the properties during construction. The offending structures were fully built before violations were discovered; executive director did not visit to view the construction in process. Only certain of the accessory buildings were in violation (garage and parking pad were in a forbidden location just outside the development envelope; a
chicken coop and hog shed were specifically forbidden by a no new structure prohibition but agriculture was permitted so that could have raised an ambiguity).

Upon discovery of the violations, letters were sent to the landowners explaining violations; the landowners first stonewalled, then responded through a development-minded attorney saying prove it. The land trust had to purchase a survey to establish the violations. Land trust
demanded removal of structures and left door open for negotiated settlement, but no settlement discussions ensued. Land trust hired attorney, drafted complaints and sent them to landowners before filing and urged settlement. One landowner settled with an agreement to revise the easement, adding some new land to the protected area but redrawing the development envelope to allow the buildings to remain. Landowner paid all land trust costs except for about $1000. Other landowner stonewalled, so complaint was filed. Several hearings, finally settled with similar redrawing of the line, basically acre for acre, with no significant improvement in conservation
values. Land trust lost about $1500; owner paid $7300 to land trust.

Redrawing of line freed a portion of the land from the easement restrictions, adding it to the construction envelope, while imposing restrictions on new land.

No settlement is ever totally satisfying. No one goes away happy. Courts are reluctant to order completed buildings torn down so the land trust has a serious disadvantage. Asked if the easements provided for mediation or arbitration, the speakers said it was customary not to put
mediation clauses in easements because the power of injunction forces the landowner to the table.

Board dynamics in a litigation posture raise issues for the land trust. Board members don't like litigation. They have to deal with friends who know the landowner and pressure is often brought to bear toward settlement.

Sending complaints to landowners before filing helped bring them to the table. The board required the executive director to do that.

Lessons: Consider and maybe don't accept easements in a subdivision area where there will be construction. Monitoring problems can be awful and landowners will have sympathy of court. Be sure land trust has assets sufficient to litigate. Tighten up easement language. Monitoring is
critical to do it annually or more often. Have a party for landowners to make them part of the team. Bring them into the fold.

Brandywine land trust violation: $125,000 in fees plus $50,000 in staff time involved in their litigated violation. In 1967, the land trust bought a 42 acre farm in a greenbelt from a farmer, purchasing the more farmable piece on one side of the road. The land was restricted to
agricultural and nature preserve purposes. Land trust sold land subject to the easement. Buyer then resold to a friend at a price believed to be significantly above the fair price for land so restricted, there was no recorded deed. The buyer applied for a permit for 4800 square foot house.
A friendly building inspector notified the land trust of the request and grant of a building permit. The land trust communicated to the buyer that house construction was forbidden. The speaker observed that the land was an orphan parcel where no house was permitted-- a source of problems and suggested that creation of easements on similar orphan parcels was not a good idea. Buyer insisted on building house; land trust sued for TRO, got delayed rulings barring construction (first ruling was 6 months after filing the complaint for reasons not explained) and construction of the house was completed before case was over. At least a large part of the construction occurred in violation of an injunction. One judge held that a person could not farm a parcel unless the person lived on it (?); that judge didn't think the 4800 square foot house was very large when 3 generations would live there; he held that the law favors the land owner over the easement holder. Superior Court took the land trust's appeal, held any residential use was a
violation of the easement and remanded. Owner appealed to Supreme Court which took case, then held Superior Court was correct. The land trust made a settlement offer proposing to move the house to a nearby lot and to purchase the land back from the buyer at the original price. Owner refused. The judge who was then assigned to the case had decided an earlier case in
similar circumstance and ruled in favor of land trust, gave owner 6 months to move the house, found adults in contempt and ordered them to pay $100,000 each. They didn't have money, so the monetary award was little benefit. A new judge then ordered the house demolished and it was bulldozed (after contents and fixtures were removed). Owner sued land trust in federal court in RICO and civil rights violations allegedly arising because the owner was Italian; federal judge imposed sanctions for frivolous lawsuit. Continuing related litigation is still going on involving a neighbor. A bank had loaned $300,000 for construction of house while the injunction was pending despite knowledge of the injunction, and that bank still claims an equitable interest in the property.

Local government has no responsibility to enforce easements, so the land trust received more benefit than it might have expected through the notice given by the building inspector. Publicity was adverse at one point in settlement negotiations before the house was bulldozed, the land trust had given the occupants an additional 30 days to move house which made date fall at Thanksgiving so owner sought sympathy for being thrown out of house. One newspaper supported land trust, and its editor and board members got threatening letters warning that they should die.

Other Brandywine violations settled: one house was removed from site, in another the owner gave up other permitted house sites in exchange for keeping a house built in violation of the easement.

Lessons: don't let land trust get associated with one political party. Presidents of Brandywine in both cases were Democrats in a Republican county, and the weird rulings from one judge were believed to relate to political differences. As land subject to easements becomes increasingly valuable, there is increasing pressure to violate the easement. Owners will have more to gain from violations as time passes. Build an endowment and keep it growing because land trust will need it.

Networking is critical. Have committee and board members throughout the community so land trust can get information quickly of sales, violations, issues. Locate other organizations that will file amicus briefs
to support land trust if there is litigation, to explain importance of easement and precedents.

Be careful when neighbor calls to report a suspected violation because neighbors do squabble and the report may be deliberately or accidentally false. Don't take the neighbor's word go and check immediately. Inquire first before challenging. Land trust is both a policeman and a spouse of the landowners and will have to live with them forever. Keep a data base on the landowners how many children, other residences, employment, special interests, etc. Prepare memos for record about all conversations with landowners. The land trust can't know which conversation will be relevant to a later dispute so document everything.

Locate the best lawyers. Manage the lawyers carefully. Have good communications with them so they do what the land trust wants.

Write restrictions realistically in light of enforcement. Post signs that land is under easement because that creates an informal network of people who will inform on violations. Good PR and early warning systems are critical.

Discretion is the worst thing the land trust can get into. Have clear lines and avoid gray areas. Never play favorites.

Press and media strategy: sent out press releases regularly. Keep good relations with the press. Communicate the land trust's obligation to enforce its easements and its efforts to be reasonable. Don't be seen as a bully. Let it be known the land trust tried to resolve the dispute if that is true.

Research ownership records regularly to locate changes in ownership. Include a penalty provision in the easements if the landowner sells without informing land trust. It is essential for the land trust to find out the status of land at time of changes in ownership because, without certainty as to who did what the land trust may have to sue both old and new owner if there is a violation and land trust doesn't know who did it. Communicate with title companies. Try to be sure sellers and buyers seek a clean bill of health at time of transfers.

Settlements for a swap of land changes the public's perception of easements, reveals them as open to amendment and weakens the land trust's position of strength. Try to be sure any amendment that is made is very clear both that the land trust actually ended up with greater conservation values and is perceived by the public and by land trust members to have gotten greater benefits. There is great danger in loss of public perception that the easement is perpetual.

Have a separate newsletter for landowners with easements, keeping them informed about easement facts, legal developments relating to easements, land trust activities, addition of new easements. Make the landowners perceive the land trust as their ally, their advocate.

Include a right of first refusal in easements as a means for the land trust to be sure it is notified of each offer to purchase the land.

Don't include restrictions that preclude things that an owner will naturally be likely to do. For example, don't say never cut any tree when owner has trees near the house that may need to be cut after a windstorm. It's important to have procedures to deal with violations realistically so
that minor violations are dealt with in light of their minor nature.

From: bjltlst1@texas.net
 Sent: Wednesday, July 19, 2000 2:02 PM
 To: landtrust@indiana.edu
 Cc: d_braun@mindspring.com


The Violation Study, which includes discussion of costs, recovery, etc., was published in the Winter 2000 volume of Exchange (Vol. 19 #1, pg. 5-9)

Associate Director
Land Trust Alliance Northwest Program
3517 NE 45th St.
Seattle, WA 98105 206.522.3134