New Hampshire Conservation Organizations Win Against Third Party Challenge
In a clear win for land trusts, a New Hampshire trial court dispelled any notion that neighbors have the right to enforce or interpret conservation easements to which they are not parties. “It's a happy day here, although when we think about what it cost us to achieve this victory, our celebration is more muted,” said Paul Doscher, vice president for land conservation for the Society for the Protection of New Hampshire Forests. “We also learned that land trusts have no control over when and by whom they might be sued.”
The Forest Society’s attorney, Tom Masland of Ransmeier & Spellman, PC concurred, adding that this is “a very good result for the New Hampshire land trust community.
We tried the case for four days in September, all parties filed post trial material, and the Court issued its fifteen page Order quickly, ruling in favor of the conservation community’s interests on all counts and in clear language.”
Elizabeth Tallman filed this case, (Tallman v. Outhouse, et. al.) against her neighbors, Mr. and Mrs. Outhouse, the owners of abutting property partially protected by a conservation easement, the Rockingham County Conservation District (conservation easement grantee) and the Forest Society (executory interest holder in the conservation easement). Ms. Tallman claimed she had a third party right to enforce the easement, and that the Conservation District and the Forest Society were failing to enforce the terms. She also asserted a right of unfettered access to the protected property, which the Court rejected, upholding the landowners' right to post against and to control public access. Essentially, she sought a ruling that the conservation easement prevented her neighbors from building their home on land not encumbered by the easement, and that the easement prevented access to the residence site. Elizabeth Tallman asked the Court to order that, among other things, the easement precluded the construction of the house and access to it, and that the conservation restrictions also extended to the excluded 1.23 acres as a result of an equitable servitude.
The Post Trial Memorandum of Law (without exhibits) submitted by the Forest Society and the Conservation District and the Rockingham County Superior Court Order (dated October 26, 2009) can be viewed here. The Petitioner has thirty days to appeal the decision to the New Hampshire Supreme Court. As a trial court order it has no precedential value, but it contains interesting language about easements and third party enforcement which others may find useful in the future.
Right to Sue a Major Issue
The neighbor’s legal positions required the easement holders to vigorously oppose the assertion that abutters have legal standing to interpret or enforce easements, or to restrict or utilize easement land for their personal goals. There were other related disputes at issue in the lawsuit, but the critical matter for the Forest Society, and for the land conservation community as a whole, was the whether abutters or other third parties can sue to enforce conservation easements granted to land trusts, municipalities and state agencies.
The Forest Society filed a motion to dismiss on the standing issue shortly after the case was filed, but the Court denied the Motion, stating that it was a mixed question of law and fact. The Forest Society then filed a motion for an interlocutory appeal to the New Hampshire Supreme Court, which the trial court granted. However, the New Hampshire Supreme Court declined to accept the appeal, and the case went to trial with all parties involved.
The New Hampshire statute that authorizes conservation easements does not include an express statement that only the holders of a conservation easement have legal standing or a right to sue to enforce the easement.
This was essentially a dispute between neighbors that escalated to include both easement holders. One of the neighbors had very nice land subject to an existing conservation easement. The complaining abutter tried to use the easement as a sword for her personal purposes against the wishes, interpretation, and authority of the easement holders. Voluntary settlement attempts proved fruitless. “It appeared that the Plaintiff did not want to have any house near her home, so she would not be satisfied with any lesser result. It has been an eye opening experience,” says Paul Doscher.
The judge's ruling could not have been clearer
The court ruled explicitly that New Hampshire recognizes no third party right of enforcement, and further that the Outhouses’ plan to build a house on the unrestricted portion of their land cannot be viewed in any way as a violation of the easement. The court also acknowledged that the Outhouse’s use of the historic access route that crossed a small potion of the easement land was not a violation of the easement.
Interestingly, the Judge paraphrased extensively from the Forest Society post-trial memorandum. The Judge also extended his opinion to decide issues that he need not have reached once he determined the neighbor had no standing, in order to give clear direction about conservation easement validity and interpretation. The Judge did not question the validity of the amended conservation easement, which clarified some of the easement terms, and contained an adjustment of 0.14 acres of the easement area and the unrestricted area.
“To say the least, the Society staff is delighted with this ruling, as are our attorneys Tom Masland and John Alexander of Ransmeier and Spellman. Tom and John are to be commended for having prepared an excellent case on our behalf. We are also thankful to Michele Peckham, attorney for the Conservation District, Mary Currier (recently retired Executive Director of the Conservation District) and Jim Bassett and Josh Pantesco of Orr and Reno (the Outhouse' counsel) for their collaboration and cooperation in the case,” said Paul Doscher.
The Court found for the defendants on all counts and also held that the easement did not require open access to the general public. This is what the Conservation District and Forest Society sought from the court and is a very good result for the NH land trust community. Ms. Tallman has thirty days to file an appeal with the NH Supreme Court.
Costs of the legal challenge
Since the litigation commenced in 2007, the Forest Society has spent more than $92,000 defending its executory interest. Forest Society staff spent more than 120 hours on this matter, and will have to spend more time completing the record-keeping for the permanent file of the dispute and resolution.
Any litigation involves the expenditure of time and money, but lost opportunities are a hidden cost of litigation. Paul Doscher said that the Forest Society is large enough to have stewardship staff separate from transactional staff, so the case did not affect pending new conservation transactions. The extra time on the case did reduce landowner stewardship visits, and Paul was unable to devote time to advancing negotiations on several potential projects and fundraising.
Effect on The Forest Society
In the late 1970s and through the early 1990s, the Forest Society supported local conservation work by readily serving as a back-up enforcer. When conservation easements were still new the Forest Society was the only experienced large land trust in New Hampshire. Then the policy was to accept a back-up position whenever asked and when the project met the Forest Society’s land protection criteria. Now the policy is to do this only if absolutely essential to the success of the project, such as when an executory interest is a funder requirement or is insisted upon by a donor. This case in particular solidified that policy shift. The conservation community is far more robust now than thirty years ago, so the back-up holder position has become less essential.
The primary holder of the conservation easement (the Conservation District) had done an excellent job of annual monitoring, and had provided regular reports to the Forest Society However, as the Forest Society held only an Executory Interest, no one from the Forest Society had actually visited the property in the twenty-five years after the easement was granted in 1982 until the easement was amended in 2007, shortly before the Outhouses purchased the property.
Conservation Defense Insurance
Tom Masland notes that “as our case was an out-of-the-blue neighbor's action that could not have been anticipated or prevented by anything the easement holder could have done differently, the experience is a good example of why conservation easement defense insurance is worthwhile.” Research by the University of Wisconsin at Madison shows that litigation is random and unpredictable. These are the types of situations when insurance is most useful.
In this case, if the Forest Society had been the primary holder or a co-holder of the conservation easement, it would have been covered by the proposed conservation defense insurance program. As the primary holder (the Conservation District), a government entity, may not be eligible to be covered by the proposed insurance program. If the primary holder was eligible for insurance and all the other insurance criteria were met, then the Forest Society’s back-up enforcement interest could also be covered. Quasi-governmental conservation organizations are eligible for coverage. Usually quasi- governmental conservation organizations have an independent board of directors.