The U.S. Court of Appeals for the Sixth Circuit has upheld a $100,000 judgment against a farm couple for filling in a sink hole on their land. The couple had accepted a conservation easement on their 100 acre farm upon its purchase from The Nature Conservancy. The opinion affirms the judgment of the district court which found the couple violated the easement they had entered upon purchasing the land in December 2001.
The couple, Larry and Marsha Sims, purchased their Garrard County, Kentucky farm for $60,084 from the Nature Conservancy in 2001. In addition, they made a charitable pledge to the Conservancy of almost $245,000. With the language of the easement, the property appraised for $60,000. A “conservation document report” prepared when the property was sold identified two distinct areas: a “reserve area” in which activities were limited to livestock grazing and a cultivation of hay and a residential/agricultural tract which the purchasers were allowed to use for their constructing their residence and commercial agriculture. Although the easement required the property to “be retained substantially undisturbed in its natural condition” and “to prevent any use” that would impair the “conservation values of the protected property”, the sale of the property contemplated its use as a commercial farm. The terms of the easement comprised more than 3 pages.
The controversy began when the Sims observed two depressions on the property which they described as sinkholes, one of which was located in a field behind the home they constructed on the land. This sinkhole must have been considerable as the trial court found they had filled it with 6,269 cubic yards of material dredged from a farm pond. Although the Sims were also accused of filling the sinkhole with trash (they did acknowledge filling another sinkhole with trash which they subsequently removed), the Conservancy expended at least $14,500 for a geologist to conduct core drilling to verify that no trash was used to fill the hole.
The court determined that the purpose of the easement was “intended to ensure that the overall appearance and topography of the protected property remain substantially unchanged.” By filling the sinkhole with dredged material, the Sims violated the express provision of the easement labeled “topography” which the court found to violate “the plain meaning of the agreement and of the parties intentions.” The nearly $100,000 judgment awarded The Nature Conservancy was comprised of almost $80,000 in attorneys’ fees, plus costs and expenses.
What makes the opinion difficult to understand, however, is that the land was sold as the conservation easement recognized so that a commercial farm could be conducted on at least some portion of the property. This was the point made by Senior Circuit Judge Gilbert Merritt in his dissent. The Sims were not only allowed to use the property “for all purposes not expressly prohibited”, but with the express recognition that they were not obligated “to maintain the Protected Property in the condition in which it exists on the date of the Conservation Easement.”
The case is best understood as standing for the proposition that the easement could be construed broadly – as it was by the two judges in the majority- or narrowly by Judge Merritt in his dissent. It also is a cautionary warning that such easements, especially when granted by environmental groups which tend to take a narrow view of property rights, need to be entered with caution. Although the Sims may have thought that filling the sinkhole with material dredged from pond would simply make their farming easier, this purpose was found to be impermissible under the easement. Other landowners who are approached to enter such easements may find themselves in the role as caretakers of parks and not farmers.
The case is The Nature Conservancy, Inc. v. Larry and Marsha Sims, Nos. 09-5634/6070, U.S. Court of Appeals for the Sixth Circuit (May 21, 2012).
This article was authored by Blair M. Gardner, Jackson Kelly PLLC. Blairis a member of Jackson Kelly’s Energy and Environmental Practice Group in the Charleston, West Virginia office. He may be reached at (304) 340-1146. For more information on the author see here.