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Madison Land Conservation Trust Prevails in Encroachment Cases

The Madison Land Conservation Trust resolved two cases recently involving unwanted tree-cutting on land trust open space.  The timber trespass left, among other stumps, the ghost of a Black Oak that measured 41" in diameter.  Voluntary resolution with the neighbors who encroached was ineffective.  The land trust had to hire experts and an attorney to start the trial process before the defendants who cut the trees agreed to settlements in both cases.   Unwanted intentional tree-cutting on land trust open space is becoming more common nationwide. 

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“It would have been easier on the psyche to walk away from the problem.  We are tree huggers, not fighters,” said Diana Insolio, President and a local attorney, “but, having adopted Land Trust  Standards and Practices, we knew our responsibility as stewards of land entrusted to us for the public good.  We had a responsibility to take action.”

Getting Restoration Costs

Prior to 2006, walking away may have been considered.  In those days, the remedy for tree-cutting was the value of the cut wood as firewood or timber -- barely enough to pay for court costs, let alone attorney's fees.  So land trusts needed to have fully funded defense reserves to pay these costs and the resolve to see these cases through even if it used those reserves.

But in 2006, thanks to the efforts of many individuals and groups, including Charles Leach of the Farmington Land Trust and the Council for Environment Quality,  the Connecticut legislature passed what is now codified as C.G.S. § 52-560a  , which offers a real remedy for nonprofit land conservation organizations, municipalities, and the state.

This statute provides that an encroacher who damages or alters open space owned by any of these tax-exempt or public entities must either restore the land to its former condition or pay the cost of restoration, including management costs.  In addition, the court may order the encroacher to pay the plaintiff's attorney's fees and costs, as well as punitive damages.

 

Land Trust Litigation Steps

As the first step on the road to legal action the land trust hired a forester to evaluate both cuts.  The cut trees were too large to be replaced with nursery stock.  A forester, therefore, had to determine the appraised value of the trees that had been felled.  Using professional standards, the forester extrapolated the value of each tree from the size of the stump, the cost of the largest transplantable tree available, and the cost of installation.  He then adjusted the value based upon the species, condition, and location of each tree.  The forester determined that the replacement value of the nine trees cut on the parcel on the west side of town was $61,541.22.  The replacement value of 14 trees cut on the east side of town was $19,524.04. 

The land trust then hired an attorney to file suit, beginning with an application for a "prejudgment remedy" to allow it to place liens on the trespassing landowners' properties while the land trust waited for a trial date.

In response to the prejudgment remedy actions, the defendants finally took the land trust’s suggestion to contact their homeowners’ insurance carriers to represent them and pay the damages.  Their attorneys, faced with the powerful language of C.G.S. § 52-560a, agreed in each case to a fair settlement. From those settlements, the land trust netted a total of $49, 810.  The land trust will use the funds to restore the affected properties and to set up a stewardship reserve fund which it did not have before.  Perhaps more importantly, the land trust, by using C.G.S. § 52-560a, sent the message - to itself and to the community - that the land trust will not (because we should not) tolerate encroachments.

 

Legal Costs

The attorney worked on a contingency basis, charging 20% of any resulting settlement if the case settled before filing suit.  After filing suit, the attorney fees would have been 33% of any judgment or settlement.  The gross proceeds of the first settlement totaled $40,000.  The legal fee was 20% or $8,000.  Costs totaled $698 (mostly the court filing fee).  The attorney spent between 6 and 10 hours on the matter and the land trust about the same.

The gross proceeds of the second settlement totaled $25,000.  This went to a pretrial and the attorney charged 33% but provided a courtesy discount so his fee was $7,000.  The costs were approximately the same as the first settlement, at around $700.  The attorney spent more time taking this matter to pre-trial conference.  The land trust spent about 10 hours on this matter.

The forester who provided the replacement value of the trees spent a total of 13 hours on both projects at $55 per hour, plus sales tax, totaling about $800 or $400 on each case.

 

Conservation Defense Insurance

The land trust did not  have sufficient financial resources to handle these two trespass claims.  If the state statute did not exist and if the attorney was unwilling to handle the cases on a contingency basis, then the land trust would have had to raise the money it needed to litigate these cases.  Walking away from a serious violation is not an option.  Land trusts need to fully protect their easements and land, especially at a time of increasing risk and litigation.

Conservation Defense Insurance could be a safety net for your land trust from these risks and give your land trust financial certainty about litigation exposure.   Of course, all land trusts will still need funds for ongoing stewardship costs and the annual costs of insurance deductibles as well as exclusions from coverage.

Conservation defense insurance could also help a land trust build confidence with donors, lenders, regulators and legislators in its ability to uphold conservation permanently. The IRS is currently auditing hundreds of easements and land trusts, and has stated that a land trust could lose its tax status or ability to accept further donations if it does not have sufficient funds to monitor and defend easements. Conservation defense insurance would demonstrate to the IRS that land trusts are serious about their responsibilities to defend easements in perpetuity.

The IRS has recently changed the reporting requirements for land trusts and now asks for documentation of the amount of time and money a land trust spends in monitoring and defending its easements. In future versions of the Form 990, the IRS is considering a requirement that all land trusts document the financial resources that they have available to monitor and defend easements.  Given the small number of land trusts with large endowments, most land trusts would have a difficult time answering that question satisfactorily.

The final Terms & Conditions, the commitment letter, the feasibility report executive summary, the full report and more explanatory documents are available at http://www.lta.org/cdinsurance.

 

Questions? Call or write to Leslie Ratley-Beach, Conservation Defense Director, at 802-262-6051or at lrbeach@lta.org.  While we do not have a specific deadline to send the Alliance your commitment to participate, the one-time registration fee increases 50% on July 1, 2010.

 

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Christian Freitag, attorney-at-law and executive director at Sycamore Land Trust (IN), says "I view Conservation Defense Insurance as another step the land trust community is taking to keep our promises. We claim that we will help people protect their land in perpetuity. With this program, the public can be more confident than ever that we take that commitment seriously."

 

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