Claggett v. Land Preservation

• Decision Date: 06 October 2008
• Docket Number: No. 578, Sept. Term, 2007.,578, Sept. Term, 2007.
• Citation: 957 A.2d 1083,182 Md. App. 346
• Parties: Herschell B. CLAGGETT, Sr. v. MARYLAND AGRICULTURAL LAND PRESERVATION FOUNDATION, et al.
• Court: Court of Special Appeals of Maryland

957 A.2d 1083

182 Md. App. 346

Herschell B. CLAGGETT, Sr. v. MARYLAND AGRICULTURAL LAND PRESERVATION FOUNDATION, et al.

No. 578, Sept. Term, 2007.

Court of Special Appeals of Maryland.

October 6, 2008.

William C. Parker, II (Sarah M. Schoenfelder, Parker Counts & Melton, LLP on the brief), Easton, for appellant.

Thomas F. Filbert (Craig A. Nielsen, Douglas F. Gansler, Attorney General on the brief), Annapolis, for appellee.

Argued before KRAUSER, C.J., HOLLANDER and CHARLES E. MOYLAN, JR. (retired, specially assigned), JJ.

HOLLANDER, J.

This appeal involves the terms of an agricultural preservation easement conveyed by Herschell B. Claggett, Sr., appellant, to the Maryland Agricultural Land Preservation Foundation ("MALPF" or the "Foundation"), appellee,¹ a division of the Department of Agriculture. The easement, tendered in February of 2000, applied to a tract of land owned by appellant in Kent County, over 200 acres in size (the "Property").²

Under the terms of the Deed of Easement, as well as the law then in effect, appellant retained the right to apply to the Foundation for release from the easement restrictions of a lot of up to two acres "for the purpose of constructing a dwelling house" for his use (the "Owner's Lot"). For that purpose, in 2002 appellant received a "preliminary release" of a two-acre lot. Thereafter, effective October 1, 2004, the General Assembly amended the applicable statute to require that, absent the approval of MALPF, "[a]ny release or preliminary release ... shall include ... [a] statement that the owner's ... lot may not be transferred for 5 years from the date of the final release." In 2005, the Foundation tendered to appellant a proposed "Final Release," which incorporated the provision required by the amended statute.

Appellant refused to sign the proposed release, and proceeded with construction of a residence on the Owner's Lot. He also filed a declaratory action against the Foundation in the Circuit Court for Kent County, contending that he is not bound by the five-year restriction on his right to alienate the Owner's Lot. The circuit court granted dismissal or summary judgment in the Foundation's favor as to all counts of appellant's Complaint.

This appeal followed. Appellant poses two issues:

I. Whether the Circuit Court erred by finding that the Appellees' retroactive application of Md.Code Ann Agric. § 2-513(b)(2)(vi) to the Deed of Easement did not impair Appellant's vested contractual rights[.]

II. Whether the Circuit Court erred by finding that the Appellees' retroactive application of Md.Code Ann. Agric. § 2-513(b)(2)(vi) to the Deed of Easement did not impair Appellant's substantive rights[.]

For the reasons that follow, we shall reverse.

FACTUAL AND PROCEDURAL BACKGROUND

The Foundation is empowered "[t]o acquire ... easements ... to restrict the use of agricultural land ... to maintain the character of the land as agricultural land...." Md.Code (2007 Repl.Vol., 2008 Supp.), § 2-504 of the Agriculture Article ("Agric.").³ See also Agric. § 2-502 (establishing the Foundation). The terms of such easements are dictated by the Agriculture Article, and require the grantors to covenant, "for so long as profitable farming is feasible" on the burdened land, Agric. § 2-514(a), that the land will not be used "for any commercial, industrial, or residential purpose." Agric. § 2-513(b).

MALPF acquired an "agricultural preservation easement" from Claggett on February 1, 2000, "in consideration of the sum of ... $262,190.50."⁴ At that time, Md. Code (1999 Repl. Vol.), § 2-513(b) of the Agriculture Article ("Ag-1999") provided, in relevant part:

§ 2-513. Use of land for which easement purchased.

* * *

(b) Use for commercial, industrial, or residential purposes. — (1) Except as otherwise provided in this section, a landowner, whose land is subject to an easement, may not use the land for any commercial, industrial, or residential purpose.

(2) Except as provided in paragraph (5) of this subsection, on written application, the Foundation shall release free of easement restrictions only for the landowner who originally sold an easement, 1 acre or less[⁵] for the purpose of constructing a dwelling house for the use only of that landowner or child of the landowner subject to the following conditions:

* * *

(iii)[⁶] The landowner shall pay the State for any acre or portion released at the price per acre that the State paid the owner for the easement. (iv) Before any conveyance or release, the landowner and the child, if there is a conveyance to a child, shall agree not to subdivide further for residential purposes any acreage allowed to be released. The agreement shall be recorded among the land records where the land is located and shall bind all future owners.

(v) After certifying that the landowner or child of the landowner has met the conditions provided in subparagraphs (i) through (iv) of this paragraph, the Foundation shall issue a preliminary release, which shall:

1. Become final when the Foundation receives and certifies a non-transferable building permit in the name of the landowner or child of the landowner for construction of a dwelling house; or

2. Become void upon the death of the person for whose benefit the release was intended if the Foundation has not yet received a building permit as provided in this subparagraph.

(vi) Any release or preliminary release issued under this paragraph shall include a statement of the conditions under which it was issued, a certification by the Foundation that all necessary conditions for release or preliminary release have been met, and copies of any pertinent documents.

(vii) Any release, preliminary release, building permit, or other document issued or submitted in accordance with this paragraph shall be recorded among the land records where the land is located and shall bind all future owners.

(viii) The Foundation may not restrict the ability of a landowner who originally sold an easement to acquire a release under this paragraph beyond the requirements provided in this section.

(Emphasis added.)

The Deed of Easement ("Deed" or "Easement") recited that its "covenants, conditions, limitations and restrictions ... are intended to limit the use of [the Property] and are to be deemed and construed as real covenants running with the land," and provided that the Property could "not be used for any commercial, industrial, or residential purpose." Referring to appellant as "Grantor" and the Foundation as "Grantee," the Deed further specified: "This easement shall be in perpetuity, or for so long as farming is feasible on the Grantor's land ...."

Under the terms of the Deed, as dictated by then-existing provisions of Ag-1999, § 2-513(b), appellant retained the right to apply to the Foundation to release a lot of up to two acres from the easement restrictions, "for the purpose of constructing a dwelling house for the use only of [appellant] or [appellant's] child," provided that appellant covenant for himself and "all future owners" not to "further subdivide" the released lot, and that he repay the Foundation for the price of the lot at the per-acre price originally paid for the Easement.⁷

In accordance with the statute, the Deed set forth a two-step release procedure, by which MALPF, after receiving appellant's application and payment, would issue a "Preliminary Release," which would "become final when the Foundation receives and certifies a non-transferrable building permit in the name of [appellant] ... for the construction of a dwelling house...." The Deed also set forth the following provisions relating to the release option:

[A(1)]

(b) As a personal covenant only and one that is not intended to run with the land, the Grantee, on written application from the Grantor, shall release free of easement restrictions only for the Grantor who originally sold this easement, 1 acre or less[⁸] for the purpose of constructing a dwelling house for the use only of the Grantor or the Grantor's child subject to the following conditions:

* * *

(ii) The Grantor shall pay the Grantee for any acre or portion thereof released at the price per acre that the Grantee paid the Grantor for the easement provided that the ... Foundation's Board of Trustees have the right to approve the location and configuration of the parcel(s) so conveyed; it being the intent that the agricultural use of the property not be impaired by said partitions;

(iii) Before any conveyance or release, the Grantor and the child, if there is a conveyance to a child, shall agree not to subdivide further any acreage allowed to be released; the agreement shall be recorded among the land records where the land is located and shall bind all future owners;

* * *

(c) Application for Lot Exclusion. Before a lot may be released from an easement's restrictions for the construction of a dwelling house, the landowner shall submit an application to the Foundation that:

(i) The landowner has signed;

(ii) Contains a declaration that the lot and dwelling house are only for the use of the landowner or the landowner's child, whichever is the case (if the use is for the landowner's child, identify the child);

* * *

(d) After certifying that the landowner or child of the landowner has met the conditions provided in subsections (a) and (b) of this section, the Foundation shall issue a Preliminary Release which shall:

(i) Become final when the Foundation receives and certifies a non-transferrable building permit in the name of the landowner (or child of the landowner if the proposed lot is intended for the landowner's child's use) for the construction of a dwelling house; or

(ii) Become void upon the death of the person for whose benefit the release was intended if the Foundation has not yet received a building permit as provided in this regulation.

(e) Any preliminary or final release, building permit or other document issued or submitted in accordance with this...