Argyle Farm and Properties, LLC v. Watershed Agricultural Council of the New York City Watersheds, Inc. , 24 N.Y.S.3d 436 ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: January 28, 2016 520406
________________________________
ARGYLE FARM AND PROPERTIES,
LLC,
Appellant,
v MEMORANDUM AND ORDER
WATERSHED AGRICULTURAL COUNCIL
OF THE NEW YORK CITY
WATERSHEDS, INC., et al.,
Respondents.
________________________________
Calendar Date: November 19, 2015
Before: Lahtinen, J.P., McCarthy, Egan Jr., Lynch and
Devine, JJ.
__________
Young/Sommer, LLC, Albany (Kevin M. Young of counsel), for
appellant.
Bond, Schoeneck & King, PLLC, Albany (Robert H. Feller of
counsel), for Watershed Agricultural Council of the New York City
Watersheds, Inc., respondent.
Zachary W. Carter, Corporation Counsel, New York City (Jane
L. Gordon of counsel), for City of New York and another,
respondents.
__________
Egan Jr., J.
Appeal from an order of the Supreme Court (Becker, J.),
entered October 15, 2014 in Delaware County, which granted
defendants' motions to dismiss the complaint.
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In 2002, plaintiff purchased a 475-acre farm in the Town of
Andes, Delaware County at auction for $860,000. The property
lies within the Pepacton Basin of the New York City watershed and
is subject to the Surface Water Treatment Rule (see 40 CFR
141.70-141.75). Although the cited rule requires defendant City
of New York to maintain adequate control over land use activities
occurring within its watershed, the City is precluded – except in
certain limited circumstances – from regulating the day-to-day
activities of upstate farmers operating within the various
watershed districts (see Agricultural and Markets Law § 305-a).
To strike an appropriate balance between these interests and to
ensure a quality water supply, the City – consistent with the
provisions of the 1997 New York City Watershed Memorandum of
Agreement and through defendant Watershed Agricultural Council of
the New York City Watersheds, Inc. (hereinafter WAC), a not-for-
profit corporation comprised primarily of local farmers – enters
into voluntary agreements with upstate farmers known as Whole
Farm Plans (hereinafter WFPs). WFPs, in turn, require that farms
implement best management practices in order to avoid pollution
of the watershed. In addition to developing WFPs, WAC also
administers – through its Easement Committee – a conservation
easement program that permits it to purchase development rights
to agricultural land based upon the fair market value thereof.
The conservation easement allows the individual farms to continue
operating while granting the Easement Committee control over
further residential or commercial development of the relevant
properties. A conservation easement is only available, however,
if the land in question is covered by a WFP.
In December 2006, plaintiff and WAC entered into a contract
of sale for a conservation easement covering plaintiff's
property. Plaintiff was to be paid $1,600 per acre – resulting
in a purchase price in excess of $750,000.1 Thereafter, in
January 2007, WAC advised plaintiff that a WFP for the property
would need to be in place prior to closing. Because plaintiff
1
The basis for the discrepancy between the purchase price
set forth in the contract of sale ($770,400) and the sum
allegedly received by plaintiff ($757,920) is not readily
apparent.
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was, at the time, leasing a small portion of the property to a
neighboring farmer for haying operations, WAC offered to extend
the neighbor's WFP to plaintiff's property. Although plaintiff
declined to do so, it appears that the neighbor's WFP nonetheless
was incorporated by reference into the deed conveying the
conservation easement when the closing occurred in January 2008.
Prior to closing, plaintiff was in the process of
converting an existing barn on the property into a residence,
which, in turn, required the installation of a septic system. A
dispute thereafter arose between plaintiff, WAC and defendant New
York City Department of Environmental Conservation as to whether,
in accordance with the provisions of section 14 of the
conservation easement between plaintiff and WAC, the septic
system could be installed outside of the property's Acceptable
Development Areas (hereinafter ADAs) – as such areas were
described in the Baseline Documentation Report, which also was
incorporated by reference into the conservation easement.
Despite ongoing negotiations and disagreements on this point, the
requested permit was issued in January 2011, and plaintiff
thereafter installed the septic system – as planned – outside of
the property's identified ADAs.
In November 2013, WAC issued program guidelines for the
locating of septic systems and generally concluded that such
systems must be located within a property's ADAs; that said, a
septic system could be installed outside of a property's ADAs,
but only with WAC's prior written approval. Recognizing what WAC
acknowledges is an inconsistency between the guidelines and
certain of the conservation easements previously conveyed –
including plaintiff's easement – the guidelines provide for the
amendment of a property's ADAs with the cost and expense thereof
to be borne by WAC. According to WAC, plaintiff was offered but
did not avail itself of this option. Instead, plaintiff
commenced this action in December 2013 seeking, among other
things, rescission of the easement, a declaration of its rights
thereunder and compensatory damages for breach of contract. WAC
and the municipal defendants separately moved to dismiss the
complaint, arguing, among other things, that plaintiff lacked
standing, that plaintiff's claims were time-barred and that
plaintiff's claims should be dismissed for failure to join a
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necessary party, i.e., the Attorney General. Supreme Court
granted defendants' respective motions and dismissed the
complaint, prompting this appeal.
We affirm. Assuming, without deciding, that (1) plaintiff
has standing to maintain causes of action one through nine, (2)
certain of those causes of action are not barred by the
applicable statute of limitations, and (3) all of those causes of
action should not otherwise be dismissed for failure to join the
Attorney General as a necessary party, it nonetheless is clear
that causes of action one through nine are barred by the
provisions of ECL 49-0307 and were appropriately dismissed on
that basis. "Conservation easements are of a character wholly
distinct from the easements traditionally recognized at common
law and are excepted from many of the defenses that would defeat
a common-law easement" (Stonegate Family Holdings, Inc. v
Revolutionary Trails, Inc., Boy Scouts of Am., 73 AD3d 1257, 1261
[2010] [citation omitted], lv denied 15 NY3d 715 [2010]; see ECL
49-0305 [2], [5]; Matter of Friends of Shawangunks v Knowlton, 64
NY2d 387, 392 [1985]). Pursuant to ECL 49-0307 (1), "[a]
conservation easement held by a not-for-profit conservation
organization may only be modified or extinguished" (1) pursuant
to the terms of the instrument creating the easement, (2) in a
proceeding pursuant to RPAPL 1951, or (3) by eminent domain.
Notably, ECL 49-0307 provides the exclusive means by which a
conservation easement may be modified or extinguished (see ECL
49-0305 [2]).
There is no question that WAC is a not-for-profit
conservation organization (see ECL 49-0305 [3] [a]; 49-0307) and,
further, that the action before us is not in the nature of either
an RPAPL 1951 proceeding or an eminent domain proceeding. Hence,
the subject easement cannot be modified or terminated except
under the terms set forth therein. In this regard, the easement
provides that it may be amended or modified upon the written
consent of plaintiff and WAC, but a "material[] amend[ment]"
thereof requires the additional consent of the Attorney General.
Termination of the easement itself is permitted in only two
instances – in the context of a condemnation proceeding upon
notice to plaintiff, WAC, the Attorney General and the City or,
alternatively, upon the joint request of such parties if –
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preliminarily – the "conditions on or surrounding the [p]roperty
change so much that it becomes impracticable to fulfill" the
purpose of the easement.
Here, plaintiff's first five causes of action seek
rescission of the easement upon basic contract principles, i.e.,
mutual mistake, intentional misrepresentation, negligent
misrepresentation and frustration of contract. None of these
grounds are set forth in either ECL 49-0307 or the easement
itself and, as the statutes and legislative history make clear,
defenses that exist at common law have no application in the
context of a conservation easement (see ECL 49-0305 [2], [5];
49-0307 [1]; Mem in Support, Bill Jacket, L 1983, ch 1020).
Similarly, to the extent that plaintiff asserts that causes of
action six through nine merely seek an "interpretation" of its
rights under the conservation easement and, hence, would not run
afoul of the provisions of ECL 49-0307, we disagree. Plaintiff
effectively is seeking to reform the easement, and it is readily
apparent that the "interpretation" advanced by plaintiff in this
regard would result in either the termination of the easement
itself or a material amendment thereto. As nothing in the record
suggests that the conditions on or surrounding the property have
changed to the point that it has become impracticable to fulfill
the terms of the conservation easement, and as no other
statutorily recognized grounds exist for the termination or
modification thereof, Supreme Court properly dismissed
plaintiff's first nine causes of action as barred by the
provisions of ECL 49-0307.
We reach a similar conclusion with respect to plaintiff's
cause of action premised upon the alleged violation of General
Business Law § 349. "A cause of action to recover damages
pursuant to [this statute] has three elements: first, that the
challenged act or practice was consumer-oriented; second, that it
was misleading in a material way; and third, that the plaintiff
suffered injury as a result of the deceptive act" (Benetech, Inc.
v Omni Fin. Group, Inc., 116 AD3d 1190, 1190 [2014] [internal
quotation marks and citations omitted], lv denied 23 NY3d 909
[2014]). For purposes of the statute, consumers are defined "as
those who purchase goods and services for personal, family or
household use" (id. at 1191 [internal quotation marks and
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citations omitted]). Although plaintiff alleged that WAC's
conduct relative to the procurement of the conservation easement
was misleading and deceptive and that plaintiff, in turn,
sustained damages as a result thereof, noticeably absent is any
allegation that WAC's actions and practices were directed at or
had "a broader impact on consumers at large" (id. at 1190
[internal quotation marks and citations omitted]). Inasmuch as
plaintiff failed to satisfy this threshold requirement, Supreme
Court properly dismissed this particular cause of action (see id.
at 1191).
Turning to plaintiff's remaining causes of action (10, 11
and 12), plaintiff essentially alleges that it has been damaged –
primarily in the form of a reduction in its overall property
value – by virtue of WAC's voting procedures (specifically with
reference to applications placed before its Easement Committee)
and its policies relative to the siting of septic systems outside
of the property's ADAs. Supreme Court dismissed these causes of
action, finding that plaintiff lacked standing to maintain them.
"Standing is a threshold issue requiring an actual legal stake in
the outcome of the action, namely an injury in fact worthy and
capable of judicial resolution" (Matter of Ferran v City of
Albany, 116 AD3d 1194, 1195 [2014] [internal quotation marks and
citation omitted]). Absent any indication that plaintiff has
sought WAC's approval to site another septic system outside of
the ADAs identified on its property, that WAC has thwarted
plaintiff's efforts to place such an application before the
Easement Committee or that any application so submitted has been
denied, plaintiff's alleged injuries and claimed damages are
entirely speculative, as they are predicated upon hypothetical,
future events that may or may not come to pass (see generally
Schulz v Cuomo, 133 AD3d 945, 947 [2015]). While it arguably may
be more accurate to say that plaintiff's claims – as set forth in
these particular causes of action – are not justiciable (see id.
at 947), the fact remains that they were properly dismissed.
Plaintiff's remaining arguments, to the extent not specifically
addressed, have been examined and found to be lacking in merit.
Lahtinen, J.P., McCarthy, Lynch and Devine, JJ., concur.
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ORDERED that the order is affirmed, without costs.
ENTER:
Robert D. Mayberger
Clerk of the Court