Four B Props., LLC v. Nature Conservancy

• Citation: 458 P.3d 832
• Decision Date: 21 February 2020
• Docket Number: S-19-0085
• Parties: FOUR B PROPERTIES, LLC, a Delaware limited liability company and Ranch 10, LLC, a Wyoming limited liability company, Appellants (Plaintiffs), v. The NATURE CONSERVANCY, a District of Columbia non-profit corporation, Appellee (Defendant).
• Court: United States State Supreme Court of Wyoming

458 P.3d 832

FOUR B PROPERTIES, LLC, a Delaware limited liability company and Ranch 10, LLC, a Wyoming limited liability company, Appellants (Plaintiffs),

v.The NATURE CONSERVANCY, a District of Columbia non-profit corporation, Appellee (Defendant).

S-19-0085

Supreme Court of Wyoming.

February 21, 2020

Representing Appellants: Joshua A. Berman, White & Case, LLP, New York, New York; J. N. Murdock, Murdock Law Firm, LLC, Casper, Wyoming; Patrick J. Murphy, Williams, Porter, Day & Neville, P.C., Casper, Wyoming; Timothy J. Pearse, Pearse Law Firm, LLC, Casper, Wyoming. Argument by Mr. Berman and Mr. Murphy.

Representing Appellee: Kim D. Cannon, Davis & Cannon, LLP, Sheridan, Wyoming; Leah Schwartz, Ranck & Schwartz, LLC, Jackson, Wyoming. Argument by Mr. Cannon.

Before DAVIS, C.J., and FOX, KAUTZ, and GRAY, JJ., and BLUEMEL, D.J.

BLUEMEL, District Judge.

[¶1] The district court entered summary judgment finding a conservation easement unambiguously burdened two parcels of property thereby limiting what the owner can construct on those parcels. After additional briefing, the district court entered judgment on the pleadings, dismissing claims of breach of contract and breach of implied covenant of good faith and fair dealing. We affirm.

ISSUES

[¶2] The Appellants raised several issues on appeal, which we rephrase as follows:

1. Did the district court err when it entered summary judgment in favor of the Conservancy and found the Conservation Easement unambiguous?

2. Did the district court err when it entered judgment on the pleadings dismissing Appellants’ claims for breach of contract and breach of the covenant of good faith and fair dealing?

3. Do the Appellants have a claim of equitable estoppel?

FACTS

[¶3] At the heart of this case is a conservation easement governing use on two parcels of land owned by Appellants, Four B Properties, LLC and Ranch 10, LLC. Appellants sought declaratory relief after the Conservation Easement administrator, The Nature Conservancy (the Conservancy), rejected Appellants’ plan to construct a main residence, a guest house, and a caretaker’s quarters on each of the two parcels. Gary Binning, who owns Four B Properties, LLC and Ranch 10, LLC, is a central figure in this case. Throughout this decision, the Court will occasionally refer to the Appellants as Mr. Binning.

[¶4] It all began in 1905 when Gladys Moulton’s family homesteaded a 500-acre ranch (the Moulton property) on the scenic Snake River floodplain in an area where the Snake River is to the west and Grand Teton National Park is to the east. The Moulton property has remained largely undeveloped and provides a rich riparian and wildlife habitat for birds of prey, waterfowl, songbirds, native ungulate species, and a diversity of carnivores.

[¶5] In December 1995, Gladys Moulton, acting as trustee of the Gladys Moulton Trust u/t/a dated as of October 6, 1995, executed and filed with the Teton County Clerk a Warranty Deed and Conservation Easement (1995 Conservation Easement). That deed conveyed two lots, approximately one acre each, to The Nature Conservancy, a charitable organization, and entrusted to the Conservancy a conservation easement imposed "in perpetuity" "over and across" the entirety of the Moulton property.

[¶6] The purpose of the 1995 Conservation Easement is the preservation and protection of the property’s natural habitat. That easement specifically states:

It is the purpose of this Conservation Easement to preserve and protect in perpetuity and to enhance and restore the significant relatively natural habitat and natural ecosystems of Grantor’s Land. Specifically, and without limitation of the general purposes, it is the purpose hereof to preserve, protect, and enhance upon mutual agreement, the natural habitats, including the riparian areas and cottonwood communities on Grantor’s Land. In so doing, it is the purpose of this Conservation Easement to permit the continuation on Grantor’s Land of such ranching, residential and recreational uses as are consistent with the conservation purposes of this Conservation Easement.

The 1995 Conservation Easement specifically requires its provisions be "liberally construed to effectuate their purpose of preserving and protecting habitat for wildlife, unique native plants, and meadow and riparian vegetation communities." Additionally, the 1995 Conservation Easement states that if its terms conflict with any Teton County zoning restrictions, "the more restrictive provisions shall apply."

[¶7] The 1995 Conservation Easement § 7(J) specifies, "Enforcement of the terms and provisions of this Conservation Easement shall be at the discretion of the Conservancy." Any failure by the Conservancy to enforce a provision within the Conservation Easement is not a waiver. "Any forbearance on behalf of the Conservancy to exercise its rights hereunder in the event of any breach by Grantor shall not be deemed or construed to be a waiver of the Conservancy’s rights hereunder in the event of any subsequent breach."

[¶8] The 1995 Conservation Easement authorizes several permissible uses and practices. Any owner of property burdened by the Conservation Easement has the right to, among other things, pasture and graze domestic livestock; build, maintain, and repair fencing related to ranching, recreational and residential uses; and utilize the land for passive recreational and guest ranching activities, such as hiking and horseback riding. In 1995, Section 2(E) of the easement authorized the construction of "no more than (a) four (4) single family residential buildings ... and (b) two (2) additional single family residential structures of up to 2,000 square feet each, plus minor outbuildings, for employee housing at locations reasonably satisfactory to the Conservancy" on the entire Moulton property. Section 2(E) also permitted "[o]utbuildings such as barns, garages, shops, greenhouses, storage sheds and corrals ... under (a) above."

[¶9] Upon Gladys Moulton’s passing, the Conservancy received the entirety of the Moulton property. In 2004, the successor trustee to the Gladys Moulton Trust, executed and filed with the Teton County Clerk the First Amendment to Warranty Deed and Conservation Easement (the 2004 Amendment), which amended the 1995 Conservation Easement. Because the 2004 Amendment amended only a portion of the 1995 Conservation Easement, both must be read together. The Court will refer to the relevant portions of the easements collectively, as "the Conservation Easement."

[¶10] The 2004 Amendment divided the Moulton property into four parcels—the Lower Bench Parcel, the Moulton Parcel, the Upper Bench Parcel, and the Remainder Parcel. The parcels owned by the Appellants, and primary to this case, are the Lower Bench Parcel and the Remainder Parcel—two parcels of approximately 100 acres each. The Lower Bench Parcel is referred to as Ranch 9, and the Remainder Parcel is referred to as Ranch 10.

[¶11] The 2004 Amendment deleted § 2(E) of the 1995 Conservation Easement. Section 2(E) had allowed construction on the Moulton property of no more than four single-family residential buildings and two additional single-family residential structures for employee housing. The 2004 Amendment replaced § 2(E) with specifications for construction allowed on each of the four parcels. On the Remainder Parcel, or Ranch 10, the 2004 Amendment § 1(A) authorizes the following:

To subdivide, transfer and convey the remainder of the Property, and construct, maintain, and replace if destroyed one additional single family residential structure[ ]^[1] and associated improvements within Building Envelopes not to exceed 10 acres each, the location of which shall be approved by the Conservancy, in its reasonable discretion, subject to all applicable Teton County Regulations.

Associated improvements may include barns, garages, shops, greenhouses, storage sheds and corrals ....

The authorization for construction upon the Lower Bench Parcel (Ranch 9) is essentially the same as that for the Remainder Parcel (Ranch 10). The 2004 Amendment also omits any reference to "outbuildings" replacing that language with the phrase "associated improvements."

[¶12] In or around 2005, a developer named Mercer Reynolds purchased both Ranch 9 and Ranch 10 for about $19 million from The Nature Conservancy. Mr. Reynolds and the Conservancy entered into an Agreement for the Purchase and Sale of Real Estate (Purchase and Sale Agreement) for Ranches 9 and 10. Mr. Reynolds assigned his rights under the Agreement for the Purchase and Sale of Real Estate to his company Linger Longer West, LLC, and the Conservancy assigned Ranch 9 and Ranch 10 to Linger Longer West, LLC.

[¶13] The Agreement for the Purchase and Sale of Real Estate had a few amendments. The Third Amendment to the Purchase and Sale Agreement is relevant in this case because the Conservancy agreed to a meaning of "associated improvements" that would allow the construction of a guest house on each of Mr. Reynolds’ parcels. The Third Amendment to the Agreement for the Purchase and Sale of Real Estate between Mr. Reynolds and the Conservancy attempted to clarify, but did not amend, the Conservation Easement. It stated as follows:

The Conservancy hereby confirms to the Buyer that the Conservation Easements permit one (1) residential subdivision of the Property and that each subdivided parcel may contain one (1) ten acre building envelope ... for a total of two (2) residential parcels with one (1) ten acre building envelope on each parcel. These two (2) residential parcels are referred to as the "Lower Bench Parcel" and the "Remainder Parcel" in the First Amendment. Further, the Conservancy hereby confirms to the Buyer that the Conversancy construes the Conservation Easements to permit one (1) guest house not exceeding a total of three thousand (3000) square feet in each building envelope as an "associated improvement" as such term is used on pages 2 and 3 of the First Amendment, provided Buyer obtains

...