Even the Best Managed Land Trusts Have Legal Challenges
Mesa Land Trust in Colorado went 27 years without a significant violation or legal challenge. Then BOOM! - three major cases in the last three years. No land trust knows when it will have to defend an easement or challenge a trespasser. So Mesa Land Trust, accredited in January 2009, had set money aside, built reserves, implemented good practices and had a board that saw as a “sacred commitment” the confidence that landowners and the community put in it to preserve land and to vigorously defend its conservation easements.
Rob Bleiberg, executive director of Mesa Land Trust says that “You don’t know what is around the corner for your land trust, so you need to be prepared for the worst without overreacting.” The three overlapping violations in the last three years put an “amazing amount of stress on the organization especially as they happened during the same time as the Colorado IRS audits.” Mesa Land Trust was able to continue protecting land but many other activities slipped in order to uphold conservation permanence. The challenges were “time consuming and emotionally draining”, according to Rob.
Three Conservation Easement Violations
The gas boom in 2006 from the energy price increases caused exploration activities and a violation of road building across conserved land. Defending that easement cost the land trust over $55,000 in attorney and other expert costs over 16 months of negotiations. Fortunately the land trust recovered its costs from the gas company. The land trust retained an extremely influential and experienced mineral attorney to represent them and credits his efforts for this success.
Big Creek Ranch was the second violation in July 2008 and involved another gas exploration violation this time by a successor landowner who granted an easement for a gas pipeline across his conserved land. Unfortunately due to a limited title search by the gas company, it was not aware of the 1980 conservation easement. Despite issues with the drafting of this old easement that was assigned to the land trust in 1987, the Land Trust managed to negotiate a new, more restrictive agreement with the pipeline builder that contains some sideboards on location, construction, and restoration of the right-of-way. Rob says that they “got best conservation protection possible all things considered.” That effort cost the land trust more than $30,000 out of pocket for attorney fees for which the land trust was not reimbursed, though the pipeline company gave the land trust $5,000 for the stewardship endowment for the conservation easement.
A water rights dispute started in 2007 and is still in progress in mid-2009 overlapping the second gas-related violation. So far the dispute has cost the land trust more than $45,000 in outside expenses and is likely to be much more. The Land Trust filed suit against successor landowners who severed important and valuable water rights from property that is subject to a 1990 conservation easement. The water rights were retained by the sellers when they conveyed the property to new owners in late 2007. They indicated that they intend to sell the water rights to a nearby domestic water supplier for a significant amount of money. The 1990 conservation easement was granted to the land trust by the United States, acting through the Farmer’s Home Administration after it had acquired the property. The conservation easement encumbers all water rights and the sellers acquired the property at a price which reflected that the water rights were encumbered and tied to the property. This case is potentially precedent setting at least in Colorado with respect to water rights encumbered by conservation easements prior to 2003 when Colorado passed specific legislation.
Mesa Land Trust has demonstrated the resolve and the resources to uphold conservation permanence. They were ready and were not lulled into complacency by decades with no problems. Rob quips that “when it rains it pours even here in the desert of western Colorado” when discussing the legal slogging of the last three years. He gives lots of credit to the board over the years because it “knows that we have unquantified liabilities and risk that we take on with each conservation easement.” He continued that “we chose whenever possible to fund annual stewardship activities from operations so that could build our reserves just for the challenges we have seen recently. The board has focused consistently on legal defense so that can deal with simultaneous issues.”
Mesa Land Trust also carefully evaluates these cases after they are concluded for improvements they can make to their already strong systems and sound thinking. Rob emphasizes the importance of requiring the one-way legal fees clause in the enforcement section of all conservation easements. “Don’t give up on that,” he says. “It is critical; land trusts must insist on having that clause despite landowner or attorney objections.” That clause helped bring the gas company to the table faster in the first violation, and its absence in the two older conservation easements has proved to be a considerable expense.
Rob also notes from the second violation case that land trusts need to be aware of the statutory title search period and to record a notice of the conservation easement within statutory period so that title searchers are aware of the conservation easement. In the second violation, the gas company searched title for statutory 25 years but the easement was earlier and so they did not see it and that contributed to the violation.
Finally, Rob asserts that not having to worry about money was critical to their success. They could hire the best help they could find and those experts make all the difference to conservation permanence. “Land trusts must have sufficient reserves,” Rob states. “You need to assume that some day you will need them. It takes years to build adequate funds and land trusts must start now if they do not already have substantial resources available.”
Conservation Defense Insurance
Rob says that he and the Mesa Land Trust board are “very excited to have a backstop through the possible conservation defense insurance program that the Land Trust Alliance is exploring. It gives us and landowners confidence that we have a safety net to steward our portfolio of protected lands.” He adds one last thought, “Through our current litigation, I have been struck by how little conservation easement case law is out there. All organizations are vulnerable to bad court decisions setting bad precedent. Even if you don’t think you’ll ever have to defend an easement or that you have sufficient resources to effectively self-insure, you still have a distinct interest in seeing the defense insurance program flourish. By having as many land trusts as possible participate in the program, we can help bring the best legal defense to as many easement challenges as possible. And that benefits all of us.”
For more information, call or write:
The Alliance website has more information about conservation defense insurance at www.lta.org/cdinsurance.