Maryland Environmental Trust v. Gaynor, 1865

• Decision Date: 10 September 2001
• Docket Number: No. 1865,1865
• Citation: 780 A.2d 1193,140 Md. App. 433
• Parties: MARYLAND ENVIRONMENTAL TRUST v. Cathy Cook GAYNOR et al.
• Court: Court of Special Appeals of Maryland

780 A.2d 1193

140 Md. App. 433

MARYLAND ENVIRONMENTAL TRUST v. Cathy Cook GAYNOR et al.

No. 1865, Sept. Term, 2000.

Court of Special Appeals of Maryland.

September 10, 2001.

Christine K. McSherry, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen. and Joseph P. Gill, Principal Counsel on the brief), Annapolis, for appellant.

Warren K. Rich (Mark F. Gabler and Rich and Henderson, P.C. on the brief), Annapolis, for appellees.

Douglas G. Worrall and Wright, Constable, Skeen, LLP, Baltimore, for amicus curiae, Land Trust Alliance, Inc.

Argued before DEBORAH S. EYLER, KRAUSER and PAUL E. ALPERT (Ret., specially assigned), JJ.

PAUL E. ALPERT, Judge, Ret'd, specially assigned.

This case involves the events surrounding the establishment of an environmental easement over the property of appellees, Cathy Cook Gaynor and her husband, Kevin Gaynor. On February 11, 2000, the Gaynors filed a First Amended Complaint in the Circuit Court for Anne Arundel County against the Maryland Environmental Trust ("MET"). The Amended Complaint raised claims of fraud in the inducement; negligent misrepresentation; deceit, concealment and non-disclosure; and, sought a declaratory judgment for ultra vires action.

A court trial was held on March 15, 2000 (Silkworth, J. presiding). At the close of the Gaynors' case, the MET moved for judgment on all counts. The court granted judgment in favor of the MET on the claim for declaratory judgment for ultra vires action. The court held the remaining counts sub curia in order to render a written opinion.

In a written memorandum opinion and order dated September 12, 2000, the trial court found in favor of the Gaynors on their claim for fraud and ordered recision of the Deed of Conservation Easement and all other written and oral agreements underlying that agreement between the Gaynors and the MET. Judgment was entered in favor of the MET on the claims for negligent misrepresentation and deceit, concealment, and non-disclosure. This appeal followed.¹ Subsequently, the Land Trust Alliance, Inc. was granted permission to file a brief as amicus curiae.

ISSUES PRESENTED

The MET presents a single question for our review. That is, whether the trial court erred in finding that it was fraudulent in its communications with the Gaynors.

On cross-appeal, the Gaynors claim that the trial court erred in finding that Mr. Highsaw's promise to inform them of events at the MET board meeting did not create a duty of care and that the MET had no duty to disclose accurately all material facts as required by statute.

The Land Trust Alliance, Inc. asserts that rescinding a conservation easement on the evidence brought forth at trial may do irreparable harm to land conservation in Maryland. It argues that the lower court's ruling should be reversed and that the lower court should dismiss the Gaynors' complaint.

We disagree with the position asserted by the Land Trust Alliance, Inc. We shall hold that the trial court did not err in finding that the MET was fraudulent in its communications with the Gaynors. In light of our holding, we need not address the issues raised in the Gaynors' cross-appeal.

FACTUAL BACKGROUND

The MET is a public agency governed by a Board of Trustees and operating as part of the Department of Natural Resources. Md.Code (1973, 2000 Repl.Vol.), Nat. Res. § 3-202. Its purpose is to "conserve, improve, stimulate, and perpetuate the aesthetic, natural, health and welfare, scenic, and cultural qualities of the environment, including, but not limited to land, water, air, wildlife, scenic qualities, open spaces, buildings or any interest therein, and other appurtenances pertaining in any way to the State." Id. § 3-201(a). One of the ways in which the MET fulfills its purpose is by accepting donated conservation easements. See § 3-203.1. A conservation easement is a legal agreement between a landowner and the MET that restricts the potential uses of the land at issue in order to prevent it from being developed for commercial or industrial uses or for housing developments. See Md.Code (1974, 1996 Repl. Vol.), Real Prop. § 2-118(a) and (b). In exchange for the conservation easements, the landowners qualify for certain property, income, and estate tax benefits.

The basic facts of the instant case are not in dispute. In 1989, Kevin Gaynor, who is an attorney with substantial experience in environmental matters, and his wife, Cathy Cook Gaynor, contacted the MET to inquire about donating a conservation easement on their property. They were informed that the MET normally accepts easements on property consisting of 50 acres or more. Thereafter, the Gaynors contacted several of their neighbors about donating easements simultaneously so that the aggregate acreage of the properties donated would qualify them for MET conservation easements. Several neighbors expressed interest in donating conservation easements to MET, including the Chalmers, the Servarys, and the Schumacher/Parker family.

In June 1989, Grant Dehart and Jim Highsaw of the MET had a meeting with the Gaynors and their neighbors. It is undisputed that, thereafter, Mr. Highsaw became the primary contact person from the MET and Mr. Gaynor served as the "point man" for the property owners. Negotiations occurred throughout the summer of 1989. Notwithstanding Mr. Gaynor's designation as the "point man" for communications between the group of property owners and the MET, individual easements were required for each property, and the terms of each of those easements varied.

On September 11, 1989, the properties were presented to the MET board. The board voted to accept the easements with certain conditions. The minutes of the meeting state as follows:

The Board voted to accept the easements, subject to the following conditions:

1.) The donors['] proposed dispute resolution language should be modified ...; 2.) The deeds must contain a clause to state that MET may unilaterally make the 501(c) local land trust a co-grantee...; 3.) Staff should ask for a `no subdivision' provision in the Servary deed, and also in the Gaynor and Schumacher deeds. This is most important for the Servary deed. However, the Board will accept the easements without this provision if necessary.

(Emphasis in original).

The case at hand involves the communications between Mr. Highsaw and Mr. Gaynor that followed this decision by the board. Mr. Gaynor testified that he spoke to Mr. Highsaw by telephone on September 12, 1989, and that Mr. Highsaw told him about the board meeting. Mr. Gaynor got the impression from that conversation that the board would not accept the easements unless the property owners agreed to the subdivision restriction. According to Mr. Gaynor, Mr. Highsaw told him that the board "wanted" the restriction and "felt strongly" about it. Mr. Gaynor assumed that this meant that the board required the restriction in order to accept the easements.

On September 15, 1989, Mr. Highsaw sent the following letter to Mr. Gaynor:

Dear Kevin:

As I discussed with Barbara Parker this week, our Board of Trustees agreed to accept the easement offers on the condition that the proposed dispute resolution language be changed to read discuss the matter for 30 day instead of discuss referring the matter to arbitration. The Board also advised that the deeds should contain a provision stating that MET may unilaterally make the 501(c) local land trust a co-grantee of the easements. I will have to get the exact wording to you after further discussion with a Board member.

The board requests that the owners consider adding a "no subdivision" provision to the Gaynor, Schumacher/Parker, and Servary deeds to ensure that the properties remain intact under one ownership. Because of its smaller size, the Board especially recommends this provision for the Servary property. With such a provision, the second home site on each property could not be subdivided off and sold to a new owner as a separate lot. Please report this to each property owner, and discuss this request at your September 18th meeting and get back to me.

I will proceed with asking the Board of Public Works to ratify the easements at their October 4th meeting. In the meantime, I will need your response to the "no subdivision" provision.

(Emphasis in original).

According to Mr. Gaynor, Mr. Highsaw never specifically stated that the board would accept the easements without the subdivision restriction. Mr. Gaynor relied on the minutes of the September 11, 1989 meeting as evidence that Mr. Highsaw deceived him, because the minutes clearly state that "the Board will accept the easements without [the subdivision] provision if necessary," but Mr. Highsaw never made that statement to Mr. Gaynor orally.

Mr. Highsaw testified that he had no independent recollection of his telephone conversations with Mr. Gaynor in 1989. Mr. Highsaw drafted the minutes of the September 11, 1989 board meeting because, he testified, that was one of his duties as the staff person in attendance. Mr. Highsaw also testified that he believed that he told the property owners that the board had accepted their easements without the "no subdivision" provision and that this information was conveyed in his September 15, 1989 letter.

One of the other property owners, Barbara Parker, testified at trial that Mr. Highsaw's September 15, 1989 letter made clear that the request for a subdivision restriction was not a requirement. She testified that she remembered "looking at [the letter] and saying, look, it says that they want us to consider adding a no subdivision provision. We have considered it. We've talked about it; we've considered it. We're not going to do it." Ms. Parker was certain that she told Mr. Gaynor and the other property owners that she and her husband would not agree to the "no subdivision" provision, and no such provision was included in the easement the Schumacher/Parker family donated to the MET.

In 1994, Mr. Gaynor joined the Board of...