LONG GREEN VALLEY ASS'N, et al.
BELLEVALE FARMS, INC., et al.
Circuit Court for Baltimore County Case # 03-C-08-5467
Bell, C.J., Harrell, Battaglia, Greene, Barbera, Eldridge, John C. (Retired, Specially Assigned), Raker, Irma S. (Retired, Specially Assigned), JJ.
The question of first impression presented by this case is whether the agricultural preservation easement at the heart of the dispute, purchased by a Maryland state agency from a private landowner, constitutes a charitable trust, under Article 14 of the Maryland Estates and Trusts Article, affording non-party "interested persons" standing to seek to enforce the provisions of the easement? Our answer is "No."
Bellevale Farms Limited Partnership ("Bellevale") and Robert E. and Carol A. Prigel ("the Prigels") own and operate Bellevale Farms, Inc. ("Bellevale Farms"), as an organic dairy farm, on 199 acres in the Long Green Valley area of Baltimore County. In 1997, Bellevale sold an agricultural preservation easement on Bellevale Farms ("the Bellevale Easement") to the Maryland Agricultural Land Preservation Foundation ("MALPF"), a state agency that administers a program to preserve and stimulate Maryland's agricultural land and agrarian economy, respectively. A decade later, Bellevale requested the MALPF to permit, under the terms of the easement, the construction of a creamery operation (currently operated by Prigel Family Creamery, Inc.) on Bellevale Farms that would market to the public locally-produced dairy products. This venture was opposed by Petitioners here, the Long Green Valley Association ("LGVA"), a community association of Long Green Valley residents dedicated to the preservation of the "open space, farmland, natural resources . . . and the heritage and character of the Valley, " and John W. and Susan M. Yoder ("the Yoders"), who own real property adjacent to Bellevale Farms. The MALPF approved the proposal.
Petitioners filed a Complaint against Bellevale, Bellevale Farms, the Prigels, the Prigel Family Creamery, and the MALPF in the Circuit Court for Baltimore County, seeking (as relevant to the question presented in the case before us) a declaration that the creamery violated the Bellevale Easement and an order prohibiting the construction and operation of the creamery. The Circuit Court concluded that Petitioners lacked standing to enforce the Bellevale Easement. Petitioners appealed to the Court of Special Appeals, arguing that they possessed standing as third-party beneficiaries to the easement, as "aggrieved" parties, and/or as "interested persons" under Md. Code (1974, 2011 Repl. Vol.) Est. & Trusts Art., § 14-302(a) because the Bellevale Easement constituted a charitable trust. With regard particularly to Petitioners' latter claim to standing, the intermediate appellate court held that the Bellevale Easement did not create a charitable trust. Long Green Valley Ass'n v. Bellevale Farms, Inc., 205 Md.App. 636, 683, 46 A.3d 473, 501 (2012). Accordingly, it affirmed the judgment of the Circuit Court as to the Petitioners' lack of standing under the charitable trust theory. Id.
We granted Petitioners' Petition for Writ of Certiorari. 428 Md. 543, 52 A.3d 978 (2012). We shall affirm the judgment of the Court of Special Appeals.
A. The Relevant Regulatory Scheme — The Maryland Agricultural Land Preservation Program
The MALPF is a State agency within the Maryland Department of Agriculture. The agency's purpose is to preserve the State's agricultural land and economy by acquiring "agricultural easements" through a statutorily-created funding program called the Maryland Agricultural Land Preservation Fund ("Fund"). See Md. Code (1973, 1999 Repl. Vol.), Agric. Art., §§ 2-501,  2-504(3), 2-510(k)(1). The MALPF is required "to attempt to preserve the minimum number of acres which may reasonably be expected to promote the continued availability of agricultural supplies and markets for agricultural goods." Agric. §§ 2-502(d), 2-509(d)(3).
Any parcel of land preserved through these efforts by the MALPF must be suitable for profitable farming. Hence, each parcel easement considered for purchase must "meet productivity, acreage, and locational criteria determined . . . to be necessary for the continuation of farming" and must be "actively devoted to agricultural use." Agric. §§ 2-509(d)(1), 2-509(b)(1). To this end, the MALPF may not purchase an easement unless (a) the land meets the minimum statutory criteria determined to be necessary for the continuation of farming; and, (b) the easement and the county regulations governing the use of land permit:
(1)Any farm use . . .
(2)[The] [o]peration at any time of any machinery used in farm production or the primary processing of agricultural products . . . . [and]
(3) All normal agricultural operations . . . including, but not limited to, [the] sale of farm products produced on the farm . . . .
Agric. § 2-513(a). The MALPF program requires also that farming of preserved land must be feasible; however, the MALPF has the discretion to allow a landowner, whose land is subject to an easement, to use the land for "farm and forest-related uses and home occupations." Agric. §§ 2-514(a), 2-513(b)(1)(i).
Participation in the MALPF program is quite competitive. Any owner of land that is committed to agricultural use may apply to sell to the MALPF an easement in his or her land. See Agric. § 2-510. According to Agric. § 2-511(a), the MALPF may pay only "the [owner's] asking price or the difference between the fair market value of the land and the agricultural value of the land, whichever is lower." A statewide competition ensues among offerees hoping to receive an offer from the MALPF to buy easements. Generally, landowners discount their asking price in order to increase their chance of having an offer accepted. In the statewide stage of the competition, the landowner's asking price is a crucial factor because applications "are assigned a rank in ascending order with respect to the proportion obtained by dividing the owner's asking price by the State easement value." Agric. § 2-510(f)(2)(i).
Once the MALPF purchases an easement, the easement is enforceable by the landowner, the MALPF, and its Board of Trustees. See Agric. § 2-513(c) (stating that the "[p]urchase of an easement by [the MALPF] does not grant the public a right of access or a right of use" of the land subject to the easement). Standard deeds of easement provide that the MALPF has a right of entry for inspection and enforcement of the easement. See 1974 Md. Laws, ch. 642. This provision has been a common part of the MALPF's typical deeds of easement since the MALPF's governing statute was enacted initially in 1974. Id. The MALPF may impose, moreover, civil penalties when a landowner violates the deed of easement or a regulation governing the MALPF program. See Agric. § 2-519.
B. Establishment of the Bellevale Easement
As noted earlier, Bellevale owns and operates Bellevale Farms, an organic dairy farm, on approximately 199 acres in the Long Green Valley area of Baltimore County, Maryland. The Prigels are partners of Bellevale and owners of Bellevale Farms. They also operate a creamery business, called Prigel Family Creamery, on Bellevale Farms. The 199 acres is in the "rural conservation" zone classification of the Baltimore County Zoning Regulations ("B.C.Z.R."), entitled "R.C.2."
On 12 January 1997, Bellevale, after competing in the rigorous MALPF program application process, offered to the MALPF an agricultural preservation easement ("the Bellevale Easement") on Bellevale Farms. The MALPF accepted Bellevale's offer and purchased the Bellevale Easement for $796, 500. The Easement Agreement designated Bellevale Farm Limited Partnership as the "Grantor, " and "the State of Maryland, to the use of the Department of Agriculture on behalf of the Maryland Agricultural Land Preservation Foundation, . . . [as the] Grantee[.]" The deed of easement stated that it is
the intention of the parties that the said land shall be preserved solely for agricultural use in accordance with the provisions of the Agriculture Article, Title 2, Subtitle 5 . . . and that the covenants, conditions, limitations and restrictions hereinafter set forth, are intended to limit the use of the above described land[.]
The section of the Easement Agreement entitled "COVENANTS, CONDITIONS, LIMITATIONS, AND RESTRICTIONS" provides:
[A](1)(a) Except as otherwise provided in this instrument, the above described land may not be used for any commercial, industrial, or residential purpose . . . .
[A](3) The Grantor reserves the right to use the above described land for any farm use, and to carry on all normal farming practices . . . including any operation directly relating to the processing, storage, or sale of farm, agricultural or ...