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Developer Attempts to Extinguish Easement and Build Houses

January 18, 2012 | Washington, D.C.

Andrews v. Western Reserve Land Conservancy Docket No. 10 CV 003211(Ct. Common Pleas, Lake Cty. Nov. 2, 2011 Ohio). Period for appeal still open. In 2000, Victoria Van Loon donated a conservation easement on a 28-acre parcel of land to Grand River Partners, Inc. (GRPI).  Van Loon was in her eighties and her health was declining. She was represented by her regular local counsel who brought in a knowledgeable real estate lawyer from a prominent Cleveland law firm to handle the donation. Later she moved into an assisted living home, then she was placed under guardianship and her guardian (also her lawyer) decided to sell the conserved property to fund her retirement needs. The Andrews brothers purchased the property with full knowledge of the conservation easement and then demanded that the land trust extinguish it. Shortly after, Andrews informed GRPI that they considered the easement invalid due to Van Loon’s incompetency at the time of her donation. As an alternative to litigation, Andrews offered to amend the easement so that it applied only to the stream corridor and wetlands areas. GRPI rebuffed this offer. Publicity ensued. A number of her friends came forward to vouch for Van Loon’s competency and her often expressed wish to preserve her property.

Andrews did not take any action until 2007, when they applied for township subdivision approval of the property into 39 residential lots. GRPI stood ready to oppose the subdivision, and eventually the township rejected the application. In 2009, GRPI, after facing fiscal difficulties, merged with Western Reserve Land Conservancy (WRLC). The conservation easement also contained an assignment provision under which the Owner-Grantor’s consent was required to assign the easement to another qualified organization. GRPI sought the successor owners consent to transfer the easement to WRLC. Following the merger, Andrews refused to let WRLC representatives enter onto the property to monitor the conservation easement, claiming that WRLC was not a permitted assignee.  Andrews then brought an action to declare that WRLC was not a permitted assignee, and WRLC counterclaimed for a declaratory judgment that it was the record holder. GRPI’s attorney, Tom Quintrell, credits WRLC for going through with the merger despite the lawsuit.

The trial court held that under the merger provision of Ohio’s nonprofit corporation act, WRLC, as the surviving corporation, succeeded to all of the rights, obligations, and interests of GRPI. The conservation easement’s assignment provision did not trump this statutory provision. The court also ordered Andrews to pay WRLC’s attorney fees.  This case presents a worst-case scenario of a successor landowner who seems intent on terminating a conservation easement by any means possible as a cost of doing business. Although not official precedent because it is only a trial court opinion, this case is nevertheless reassuring given land trust mergers throughout the nation. The nonprofit corporation statutes in most states are generally similar to Ohio’s. The underlying holding protecting the conservation easement and granting attorney’s fees is also good news.

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