In this Issue:
- Latest Thoughts on Attorney’s Fees Provisions in Conservation Easements
- Conservation Land and Property Tax Exemption: What Counts as “Enough” Public Recreation?
- E-Bulletin Information
Thoughts on Attorney’s Fees Provisions in Conservation Easements
A recent court case in Wyoming is a good reminder of why it’s important for conservation easements to include carefully drafted attorney’s fee provisions. And folks, I have to be honest, I’m still seeing poorly worded fee provisions in Maine conservation easements. We can do better!
So what happened in Wyoming? Well, the good news is that a land trust easily won a conservation easement violation lawsuit in Douglas v. Jackson Hole Land Trust. The trial court and then the Wyoming Supreme Court had no trouble dispensing with the landowner’s spurious argument that a so-called “accessway” was not a “driveway” for the purposes of the easement, and therefore did not count towards a square footage limitation. However, the courts declined to award the land trust its legal fees, despite a provision of the easement that provided for recovery of “the costs of enforcement of any of the terms.” The courts held that because the lawsuit was brought as a declaratory judgment action by the landowners, the land trust was not “enforcing” the easement.
A better attorney’s fee provision could have avoided this technicality. For example, the provision in the Maine Land Conservation Attorneys Network’s Model Conservation Easement Boilerplate (See Section 10.B) awards the holder its attorney’s fees if it is the prevailing party in any action to enforce or defend the easement. This formulation dodges the question of who initiated the lawsuit and what kind of suit it is.
Another flaw that I occasionally encounter is a two-way fee provision, where each party pays the other’s fees if it loses. Although mutuality sounds fair as a general principle, it’s not a good approach for easement violation issues, where the landowner has a much greater financial incentive to challenge the easement than the land trust does to enforce it. For the most part, Maine land trusts have insisted on these one-way fee provisions, as per the MLCAN Model, but landowners’ attorneys are constantly trying to change this language. Sometimes, to allay a landowner’s concerns about a land trust going rogue and bringing an unfounded enforcement action, I have agreed to compromise language that adds the following sentence to the foregoing MLCAN Model language: “If Holder initiates litigation against the Grantor to enforce this Conservation Easement and if a court determines the litigation was frivolous or in bad faith, then the court may require Holder to reimburse Grantor her reasonable costs and attorney fees incurred in defending the action.” But in no way would I ever agree to an equally balanced two-way fee provision.
All in all, I think that the MLCAN Model language mentioned above is still the best way to go for Maine land trusts. And even when I represent landowners, they usually want a strongly worded one-way fee provision once they realize that it’s much more likely to apply to a successor landowner and not to themselves.
For a deeper dive, check out the Land Trust Alliance’s Practical Pointer on Costs and Fees Recovery (password protected).
Conservation Land and Property Tax Exemption: What Counts as “Enough” Public Recreation?
A pending case in Maine and a recently decided case in Michigan have caught my attention. These cases address what level of public recreation should be required for conservation land to qualify for property tax exemption. As municipalities face an increasingly daunting fiscal situation as fallout from Covid, I wouldn’t be surprised to see similar disputes arise in other towns.
Here in Maine, keep an eye on Peace Ridge Sanctuary v. Town of Brooks, which is currently at the trial level in Waldo County Superior Court. A good summary of the issues is found in this WGME story. In a nutshell, the Sanctuary (PRS) runs one of the state’s largest animal sanctuaries on a 789-acre property. About 140 acres are actively used for animal shelter activities. The remaining 650 acres is forested and is primarily dedicated to land conservation. There are a variety of trails on the 650 acres, and PRS claims that these trails are used both for its own education and animal-related programs (e.g., walking the dogs in custody of PRS) and by the general public, although the level of public or PRS use of these trails is in dispute. PRS does host over 1,000 visitors annually, but mostly for humane and environmental education programs on the 140-acre developed area. It appears that the property was open to the public for hunting and snowmobiling under previous landowners, but PRS prohibited those activities in recent years. The Town denied property tax exemption, claiming that there wasn’t sufficient public use of the 650 acres to provide substantial public benefit. PRS filed suit and the case was scheduled for trial last March, but then Covid hit and now the trial is not expected until 2021.
Meanwhile, in Michigan, the case of Upper Peninsula Land Conservancy v. Twp. of Michigamme has raised some eyebrows in the land trust world. The Conservancy (UPLC) received a donation of a 600-acre parcel in a remote area in 2014. The property hosted habitat for a variety of animals, including moose, loons, and bald eagles. The public was allowed to recreate on the property, but access was challenging. One could enter the property by walking a three-mile round trip along a road, or by vehicle after contacting a UPLC representative to open two locked gates that the surrounding private property owners installed and controlled. Nearby landowners also had placed “no trespassing” and “private road” signs on the road leading up to the first locked gate. UPLC hosted occasional (about once per year) public events on the property, but these were sparsely attended. Based on the lack of public access, the Township denied UPLC’s property tax exemption and UPLC appealed.
The Michigan Tax Tribunal ruled that there was insufficient public access to qualify for a conservation-specific statutory exemption. The Court of Appeals of Michigan affirmed, rejecting UPLC’s argument that the restrictions to the public’s access were a result of the remoteness of the subject property and its conservation efforts. The appellate court further noted that the interactive map of the property on UPLC’s website was of limited use because of the lack of cell phone coverage on the property. Finally, the court suggested that it would have liked to see some “specific conservation efforts” on the parcel, rather than so-called “passive” land management.
UPLC made certain changes in 2019 to increase public access, including a new trail to connect to a nearby state park. Resolution of taxes in 2019 and later years was severed from this lawsuit and remains outstanding, so this opinion is not the final word for UPLC. As a result of this dispute, UPLC policy now requires contacting municipalities regarding tax exemption prior to closing on a new acquisition, and an official document from the township confirming expected taxation status.
So, what steps should a Maine land trust take to ensure that there is “enough” public recreational access on any given property? Keep in mind that the landmark Maine case of Francis Small Heritage Trust, Inc. v. Town of Limington touched on but did not definitively resolve this issue. In deciding in favor of FSHT’s property tax exemption, the Maine Supreme Court distinguished the facts from an earlier case in which public access was restricted. Thus, although the court didn’t go so far as to say that public access is a prerequisite for exemption, the opinion seemed to suggest that where public access is prohibited or significantly restricted, a land trust will have a heavier burden in demonstrating public benefit. The Peace Ridge Sanctuary case looks to be the first to tackle this issue since the FSHT case was decided in 2014. Stay tuned…
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