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Michigan Land Trust Defeats Effort to Terminate Conservation Easement

When a Michigan land trust sought to uphold a conservation easement and stop logging that significantly violated an approved forest management plan, the landowners filed a complaint against the land trust alleging misrepresentation, tortious interference with business relations, defamation, and intentional infliction of emotional distress and mental anguish. The landowners also sought to dismiss the land trust’s suit to stop the logging and claimed that the land trust overstepped its authority in enforcing its conservation easement and that therefore the conservation easement should be terminated entirely.

Because of the sensitive nature of this case and concerns about the landowner’s privacy, we are keeping the land trust and landowner’s names confidential. But we can still share enough details to make their story helpful to other land trusts that may face similar situations.

Michigan Land TrustIn May 2008 the 13th circuit court in Michigan denied the landowners’ motion to dismiss the land trust’s enforcement suit because facts remained to be determined so no summary judgment was granted. The landowners also dropped almost all of their other allegations immediately before the summary judgment hearing, but continued to press to terminate the conservation easement. The landowners argued that various acts of trespass had occurred from adjacent land owned by the land trust on to the privately-owned land that was subject to the conservation easement, and that the land trust’s failure to prevent the trespass "materially changed the circumstances surrounding the Conservation Easement such that the Conservation Easement is no longer viable, tenable, or in the best interest of the Property." The Court summarily denied this termination count. In doing so the judge cited the broad conservation purposes clauses in the conservation easement, including those that noted that the property in question formed a high, forested, and scenic bluff that was visible from many vantage points within the area, and from Lake Michigan. His remarks indicated that even if one or more trespasses had occurred, the public purpose of the conservation easement would still be served. The underlying dispute regarding the compliance of the proposed logging with the conservation easement remained for further hearing.

Conservation Background

The conservation easement originated from a negotiated partition of property when the land trust bought an undivided one-half interest in 123 acres of land in 1996. The property contained an oak forest with trees in excess of 100 years and 3 feet in diameter as well as 3700 feet of Lake Michigan shoreline. In the partition, the land trust became the sole owner of about 1/3 of the property, while the other 2/3 was subject to either conservation easements preventing development or deed restrictions limiting future development. The conservation easement purposes were to protect scenic open space and a forested buffer to the planned Natural Area that would be open to the public. Also, a parking area was located nearby on a described “parking easement” with a hiking trail limited to a described “access easement” through one of the parcels restricted by a conservation easement to the Natural Area.

The conservation easement permitted selective harvest of trees under an approved forest management plan. Both parties approved the FMP in February 1997 and the land trust approved a subsequent harvest soon thereafter. In January of 2007, nearly a decade after the first harvest, the landowners entered into a contract to conduct another harvest without notifying the land trust. The landowner mentioned the impending timber harvest in the discussion of another matter in the early summer of 2007. When asked for details to determine compliance with the FMP, the landowner was reluctant to share details and referred the land trust to the logger. The land trust called the logger, sent the logger the approved FMP and the conservation easement, and explained that any harvest would have to comply with the FMP. The logger did not supply any details when requested in this initial contact and after some months called to say his crew would be on the land in two days to start the harvest.

Case Background

The land trust then insisted to see the logging contract prior to the harvest. After learning from the logger that the proposed cut was a diameter limit cut measured on the stump rather than at normal breast height, the land trust determined that the proposed cut would violate the approved FMP after visiting the property with a consulting forester. The land trust called the landowner to discuss the problem and received an angry response. The landowner claimed the land trust “had no say in the cut” and reiterated that the land trust staff should take it up with the logger. Later in the motion hearing in front of a judge the landowner contended that the conservation easement agreement only allows the land trust to approve the forest management plan and not to evaluate whether subsequent cuts comply with the plan. “The gist of this dispute is about whether we can log the property,” he said in a newspaper article. The land trust contended that the planned harvest violated the approved FMP because it did not allow for the required interval between cuts, that it was a diameter limit cut measured on the stump that would remove virtually all merchantable trees, and that it did not employ single tree selection.

The land trust attempted voluntary resolution for more than 6 months through direct contacts and through the parties’ attorneys. The landowners refused to discuss modifications to the cut or the logging contract. When it learned from a community member that the logger had active crews in the area, the land trust again contacted the logger and was told that he would begin cutting within about six weeks. The land trust felt it had no option left but to file a lawsuit in order to ensure that logging would be conducted in accordance with the agreed-upon forest management plan. Before the suit was filed the land trust sent letters by certified mail to both the logger and the landowner asking for a resolution or promise to hold off on any cutting until the dispute could be resolved. Getting no answer, the suit was filed in March 2008.

The land trust named both the landowner and the logger in the suit. The logger immediately terminated the contract with the landowner and then the land trust dismissed the logger from the suit. The land trust offered to meet with the landowners to resolve any remaining issues and terminate any further legal action but they refused. Instead, the landowners filed a counter-suit against the land trust with a variety of allegations.

MI Land TrustSummary of Court Hearings

In depositions, the forester who had originally written the FMP was re-hired by the landowners. But in his deposition the forester testified that the logger was not trustworthy, that the logging would have “devastated the land” in such a way that there would be no subsequent timber harvests for up to fifty years. A survey of the parking area and the access trail to the land trust’s Natural Area determined that a small portion of the allowed parking lot was improperly located on a portion of the landowners’ property, constituting a trespass. The landowners amended their complaint to include this new allegation. Also, the landowners claimed that they did not receive proper notice under the terms of the conservation easement, although they received copies of all notices to the logger and had been notified through their hired forester, by telephone and by letter through certified mail. And, with the original logging contract voided, the landowners hired the forester to mark a cut that would comply with the forest management plan, a cut that was subsequently reviewed by the land trust. The land trust stated in writing that the proposed new harvest would comply with the FMP.

Court-ordered mediation in October 2008 failed to resolve the differences between the parties. Part of the reason was that the landowners had paid substantial attorney fees and hoped to make the land trust pay those fees if they prevailed in court.

A December 2008 case evaluation was ordered to deal with the money claims of trespass on the parking lot, logging claims ($25,000 for lost value of trees) and attorney fees. A panel of 3 lawyers heard the parties’ claims and suggested restitution of $5000 for the parking trespass, 0 for the logging claims, and they refused to consider the attorney’s fees. In January 2009 both sides accepted the results of the case evaluation. But the parties were still left with the original dispute regarding logging. The land trust made the necessary modifications to the parking area.

In February 2009 the landowner died from complications following surgery. The land trust offered to drop everything if the surviving spouse would settle without prejudice. She refused, wanting a settlement with prejudice. The land trust feared that agreeing to a settlement with prejudice would tie its hands in dealing with potential future logging disputes. The land trust needed to be certain that if the same events occurred in the future it would be entitled to take similar actions to enforce the conservation easement. While its legal position in the case was strong, in light of the landowner’s death, the leadership of the land trust thought dismissal was the right thing to do. But they were concerned that the terms of dismissal should not limit their future ability to enforce the easement.

At the required pre-trial settlement conference, held on March 17, 2009 all remaining issues in the lawsuits were settled. The judge took the respective parties’ lawyers into his meeting room where it became immediately apparent that the surviving spouse was not yet convinced to settle. It took the entire day, but ultimately a settlement was reached.

Settlement Conditions

There are six points in the final settlement conditions:
a. The remaining claims in the case were settled with prejudice and with each party paying its costs and attorney's fees. However, neither party waived any of its rights under the conservation easement with respect to any future actions.
b. When Notice is required under the conservation easement the land trust agreed to send notice by certified mail and by regular mail.
c. The land trust agreed to provide notice and agreed to arrange a mutually agreeable meeting time when it enters the property for monitoring purposes. If the land trust needs to enter for enforcement purposes, it agreed to notify the owner within 24 hours of its entry and the reasons for the entry.
d. The owner agreed to provide notice and an opportunity to review marked trees prior to any timber sale.
e. The cut marked by the forester (which had already been agreed-to by the land trust) would go forward in the fall of 2009 as planned.
f. The parties accepted the results of the case evaluation with regard to the monetary claims. (Both sides had previously agreed to this.)

The land trust believes that this is a better result than it would have obtained if the parties had agreed to dismiss without prejudice as they had offered following the death of the landowner. Dismissal "with prejudice" for claims in the past means that the petty grievances and claims of trespass by visitors to the Natural Area, for instance, should not come up in any future dispute. Explicit language that both parties reserve all of their rights under the conservation easement means that the settlement has not jeopardized any enforcement rights going forward. And for the first time, the owners of the property must give us notice before signing any logging contract.

Lessons Learned

1. Easement drafting is critical. This easement was from 1996 and did not specify a process for approving a logging cut and verifying its consistency with the forest management plan.
2. Be persistent in communication with the landowner, even a hostile landowner. Because communication with the landowner was so strained, the land trust generally worked through the lawyers rather than communicating directly. When the landowner finally understood that the logger was not paying anywhere near the market value of the trees, the landowner said to the land trust, “why didn’t you just tell me?” It would have been better to give the landowner a few days to cool down after the violation notice and then try direct conversation again.
3. Keep good notes and accurate records. The handwritten notes showing the owners’ attitude when contacted on the phone (“They are my trees. You can’t stop me.”) were persuasive to the judge and critical in winning several motion hearings.
4. Even when the land trust wins on virtually every legal point, a determined and angry owner can and will carry on. Once both sides are engaged and have inflicted the pain of discovery and depositions on each other, and a landowner has incurred significant legal fees and other costs, it is very hard to unwind the whole process.
5. On some issues a land trust cannot afford to settle. The land trust could move the parking lot but could not agree to allow a timber harvest that would violate the conservation easement. It also could not agree to a settlement that would diminish its ability to enforce the conservation easement in the future.
6. Based on contacts with the land trusts office, the larger community seems to have supported the land trust’s actions in the case. This land trust had never been involved in a lawsuit during its 20 years of operation and therefore was very concerned about community reaction. The land trust tried to avoid publicity, but when it had to address the subject, emphasized its responsibility to enforce the conservation easement values even if it costs money.

The land trust spent more than $35,000 enforcing this conservation easement in various summary hearings and settlement discussions. The matter was resolved before trial but not before substantial attorney time in discovery and trial preparations. The land trust’s leaders believe that a lawsuit can occur at any time and even the best managed land trust may be forced to take similar legal action to enforce easement terms. The land trust is accredited.

The land trust’s leadership, after this experience, is very excited about participating in the conservation defense insurance program that the Land Trust Alliance is exploring. Even with substantial reserves, they feel it is prudent to have this insurance to prevent diversion of resources to litigation and to protect against potential elimination of the reserves in an action that goes to trial and even to appeal.

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