Covered Bridge Farms II, LLC v. State

ZARNOCH, J. STATEMENT OF THE CASE Appellants, Covered Bridge Farms II, LLC, Covered Bridge Farms III, LLC, Covered Bridge Farms IV, LLC (collectively “CBF entities”), and Robert Wayne and Melissa Newsome (collectively the “Newsomes”) appeal a judgment of the Circuit Court for Howard County granting summary ⁵³⁷ judgment and declaratory relief to appellees, the State of Maryland and the Maryland Agricultural Land Preservation Foundation (“MALPF” or the “Foundation”). For the reasons that follow, we affirm the circuit court’s rulings. FACTS AND LEGAL PROCEEDINGS Charles G. and Elizabeth S. Grey owned farmland in Howard County. In 1980, the Greys took steps to become part of Maryland’s agricultural land preservation program.

To be part of the program, the farmland has to meet certain soil and location criteria and be at least 50 acres. Before 2007, the farmland had to be placed first in an Agricultural District. 1 Then, the landowner could sell a land preservation easement to the State. The owner had to sell the State an easement “on the entire contiguous acreage of such agricultural land.” CO-MAR 15.15.01.05A (1979); 6 Md. Reg. 19 -21 (Jan. 12, 1979). An agricultural district was created through a district agreement. 2 The Greys’ district agreement required that the owners maintain the property for agricultural use and prohibited the subdivision and development of the land for residential, commercial, or industrial purposes.

One exception permitted the landowner to convey one acre or less to himself and to each of his children for construction of a dwelling intended for personal use — a conveyance that could only be done one time for that owner and each child. The agreement stated that the “subject property” contained 131.347 acres, more or less. ⁵³⁸ In 1984, the Greys sold an easement to the State. The Deed of Easement states that it is an easement “in, on and over the hereinafter described tract or parcel of land ... that is to say: All those three contiguous parcels of land ... described as follows!.]” Throughout the rest of the deed, the three contiguous parcels are referred to as the “described land.” Under covenants, conditions, limitations, and restrictions the deed states, “[s]ubject to the reservations hereinafter contained, the Grantors covenant, grant, and relinquish the following rights: ... [t]he right to subdivide the above described land for any purpose except upon written approval of the Agricultural Land Preservation Foundation!.]” In 1995, the Greys conveyed the entire land to Kenneth Lee and Maureen Fogarty Williams. 3 The two then conveyed the land to Kenneth Lee Williams individually in 1998. In 2001, Williams conveyed the land to Covered Bridge Farms, LLC.

Covered Bridge Farms then reconfigured the three parcels by Deed of Adjoinder Transfer and Deed After Adjoinder Transfer. This changed the parcel lines, the acreage of two of the parcels, and the numbering of the parcels. 4 In 2006, MALPF approved the release of one lot from the easement for a personal residence for Covered Bridge Farm’s owners, the Newsomes. In 2007, Covered Bridge Farms was liquidated and, without requesting MALPF’s approval, it conveyed the three reconfigured parcels to three separate entities, namely Covered Bridge Farms II, III, and IV. MALPF filed a complaint against the CBF entities and the Newsomes in 2011.

MALPF alleged that the three separate conveyances constituted subdivisions of the land in violation of the deed of easement, the ⁵³⁹ district agreement, and Maryland law and regulations. The CBF entities and the Newsomes moved to dismiss the complaint or, in the alternative, for summary judgment. MALPF filed a cross-motion for summary judgment and declaratory relief. The circuit court granted MALPF’s cross-motion, finding that the conveyance was a subdivision in violation of the district agreement, the easement, and State regulations; declaring the transfer null and void; requiring the land to be transferred to a common owner; and ordering the lot lines eliminated or restored to their original configuration.

QUESTIONS PRESENTED Appellants present two questions for review, 5 which we have consolidated into the following question: Did the circuit court err in concluding that the transfer of the three reconfigured parcels from Covered Bridge Farms, LLC to the Covered Bridge entities were subdivisions in violation of the District Agreement, the Easement, and applicable State regulations? For the following reasons, we answer this question in the negative and affirm the judgment of the circuit court. STANDARD OF REVIEW We review a declaratory judgment that was entered as the result of the grant of a motion for summary judgment to determine whether that declaration was correct as a matter of law. Claggett, 412 Md. at 61, 985 A.2d 565 .

DISCUSSION We focus on a case that is on all fours with this one. In Stitzel v. Maryland, 195 Md.App. 443, 448-52 , 6 A.3d 935 ⁵⁴⁰ (2010), we held that the conveyance of a portion of land that was subjected to an agricultural preservation easement was a subdivision of land even though the land had been separate before becoming part of the Maryland land preservation program. Paul F. Stitzel entered into a district agreement with MALPF in 1999. Id. at 445-46 , 6 A.3d 935 .

The agreement placed three separate but adjoining parcels into one agricultural district. State of Maryland, v. Stitzel, Case No. 21-C-06-25292 DJ, (Circuit Court for Washington County, April 3, 2008). Stitzel then sold an agricultural land preservation easement on all the acreage in the agricultural district to MALPF. Stitzel, 195 Md.App. at 446 , 6 A.3d 935 .

In 2005, Stitzel conveyed one of the original parcels to a couple, the Bowers, without consent from MALPF. Id. MALPF filed suit against Stitzel for subdividing the land without permission. Id at 447, 6 A.3d 935 .

In concluding that this was a subdivision in violation of the district agreement and the easement, we explained first that the district agreement stated that “[t]he landowner agrees not to subdivide the land for any purpose unless the Foundation first has approved the proposed subdivision,” and the easement reiterated that “[t]he land subject to this Deed of Easement may not be subdivided for any purpose including subdivision, off conveyance and the movement of boundary lines unless written approval first has been obtained from the [Foundation].” Id. at 448 , 6 A.3d 935 . In defining subdivision, we agreed with the circuit court that the then-current COMAR regulation provided the best guidance. Id. at 449-50 , 6 A.3d 935 . It defined subdivision as: “the division of land into two or more parts or parcels.” COMAR 15.15.01.01-2B(7) (2001), 28 Md. Reg. 1063 (June 1, 2001) (proposed), 28 Md. Reg. 1399 -1400 (July 27, 2001) (adopted).

The circuit court disagreed with StitzeFs argument that because the parcel was separate before the district agreement and easement it was already subdivided. Stitzel, 195 Md.App. at 449-51 , 6 A.3d 935 . Instead, the circuit court ⁵⁴¹ reasoned that all of the property that was included within the district agreement “should be considered one parcel,” as it was sometimes referred to in the documents as the “subject property” or “the land.” Id. at 449-50 , 6 A.3d 935 . For more support on this issue, there was deposition testimony in the record from a representative of the Foundation who expressed the view that, “[r]egardless of how many parcels are under easement, it is treated as one unit under easement.” Id. at 450 , 6 A.3d 935 .

This interpretation was reasonable in light of the evidence in the record that indicated that smaller parcels of land could be less valuable for agricultural uses. Id. at 451 , 6 A.3d 935 . We noted that “the definition of ‘subdivision’ found in the regulation ... simply contemplates the subtraction of a portion of land within an agricultural district or subject to an easement.” Id. at 449 , 6 A.3d 935 . Therefore, we concluded that Stitzel’s conveyance was a subdivision.

Id. at 451 , 6 A.3d 935 . The holding in Stitzel controls the outcome of this case. The restriction on the subdivision of the land is found in both the Stitzel easement and the easement in this case. Here, the restriction reads: “[sjubject to the reservations hereinafter contained, the Grantors covenant, grant, and relinquish the following rights: ... [t]he right to subdivide the above described land for any purpose except upon written approval of the Agricultural Land Preservation Foundation[.]” In Stitzel , the restriction read: “[t]he land subject to this Deed of Easement may not be subdivided for any purpose including subdivision, off conveyance and the movement of boundary lines unless written approval