Naylor v. Bd. of Supervisors of Charlestown Twp. & French & Pickering Creeks Conservation Trust, Inc.

247 A.3d 1182 (Table)

Russell NAYLOR and Suzanne Naylor, h/w

v.BOARD OF SUPERVISORS OF CHARLESTOWN TOWNSHIP and French and Pickering Creeks Conservation Trust, Inc.

Appeal of: Board of Supervisors of Charlestown Township

Russell Naylor and Suzanne Naylor, h/w

v.Board of Supervisors of Charlestown Township and French and Pickering Creeks Conservation Trust, Inc.

Appeal of: French and Pickering Creeks Conservation Trust, Inc.

No. 659 C.D. 2018

No. 707 C.D. 2018

Commonwealth Court of Pennsylvania.

Argued: November 13, 2019

Filed: January 7, 2021

Publication Ordered: March 24, 2021

MEMORANDUM OPINION BY JUDGE WOJCIK

In these consolidated appeals, the Board of Supervisors of Charlestown Township (Township) and French and Pickering Creeks Conservation Trust, Inc. (Trust) appeal the judgment entered by the Court of Common Pleas of Chester County (trial court) in favor of husband and wife Russell and Suzanne Naylor (collectively, Naylors) and against the Township and the Trust. The Township and the Trust assert procedural and substantive errors of law. After careful consideration, we affirm.

I. Background

The Naylors commenced this action in October 2014 by filing a single-count complaint (Complaint) seeking a declaratory judgment under the Declaratory Judgments Act (DJA)² that would permit them to build a single-family dwelling on their property. The subject property is located at 2445 Charlestown Road, Malvern, Chester County (Property), and was once part of a larger tract known as the Baughman Farm. The following is a summary of the protracted history and relevant facts.

The Baughman Farm is situated in the scenic Pickering Creek Valley and is part of the Charlestown National Historic District.³ In August 1986, Arnold Bartschi, then owner of the Baughman Farm, placed his farm into a conservation easement, titled "Open Space Easement in Gross in Perpetuity and Declaration of Restrictive Covenants" (Easement), with the Trust.⁴ At the time, the Baughman Farm was comprised of three tax parcels: Chester County Tax Parcel (CCTP) Nos. 35-2-8, 35-2-73 and 35-2-74. The Easement expressed the desire to preserve, conserve and protect the Baughman Farm and its agricultural, historic, scenic and relatively natural state. The Easement noted the presence of a historic water-powered mill (Mill) and a dwelling house of Victorian architecture (Victorian House).⁵ It prohibited the construction of new or additional buildings or structures unless necessary for agricultural purposes. In exchange for entering into the Easement, the Trust paid Bartschi nominal consideration ($1). Trial Court Op., 7/19/16, at 2; see Easement at 1-21; Reproduced Record (R.R.) at 126a-29a, 1298a-1318a.

Shortly after entering into the Easement, the Victorian House was destroyed by fire and was never reconstructed. Its ruins were bulldozed and grass was planted on the site. Over time, the location of the Victorian House became obscured. Trial Court Op., 7/19/16, at 2.

After the Victorian House was destroyed, William and Elizabeth Anderson (Andersons) expressed interest in purchasing the Baughman Farm contingent on their ability to erect two dwellings – a main residence, in which they intended to live, and a tenant house, in which their parents would live. When the Trust objected, Bartschi filed a declaratory judgment action against the Trust to permit the construction of the two dwellings on the property. The trial court, presided over by the late Honorable Leonard Sugerman, held a bench trial and then issued a decision on October 31, 1991 (Sugerman Decision). Sugerman Decision at 1-15; R.R. at 285a-99a. Judge Sugerman noted that the Trust had agreed that the Easement permitted the erection of a single principal dwelling to replace the Victorian House destroyed by fire. Sugerman Decision at 5-6; R.R. at 289a-90a. Therefore, Judge Sugerman focused on the issue of whether a second dwelling was permitted. Judge Sugerman determined that "the Easement clearly prohibits the construction of two residential dwellings on the Baughman [Farm]." Sugerman Decision at 10; R.R. at 294a. In reaching this decision, Judge Sugerman relied on the Easement's language prohibiting "new or additional buildings or structures" unless "necessary for agricultural purposes." Sugerman Decision at 10-11 (quoting the Easement at 11, 14; R.R. at 1307a, 1310a); R.R. at 294a-95a. Although Mrs. Anderson referred to the second dwelling as a "tenant house," "tenant farmhouse," and "tenant farm dwelling," she testified that she intended to use the second dwelling for her family – initially to house her father-in-law, an obstetrician approaching retirement. Sugerman Decision at 11-12; R.R. at 295a-96a. Judge Sugerman found that the "second dwelling as envisioned by Mrs. Anderson" did not support the position that it was " ‘necessary for agricultural purposes,’ either in the context of the Easement or in the light of Mrs. Anderson's proposals." Sugerman Decision at 12 (quoting Easement at 14; R.R. at 1311); R.R. at 296a. "[A] retired obstetrician is an unlikely candidate for the position of ‘tenant farmer.’ " Sugerman Decision at 13; R.R. at 297a. Thus, Judge Sugerman concluded "that a second dwelling may not be erected on the Baughman [Farm]." Sugerman Decision at 14; R.R. at 298a. Notably, Judge Sugerman was not tasked with determining, and hence did not determine, whether the permitted principal dwelling must be erected at the exact location of and in the same architectural style as the Victorian House. Sugerman Decision at 14 n.5; R.R. at 298a; see Trial Court Op., 7/19/16, at 2-3.

Because the Andersons’ contingency regarding the second dwelling was not met, they did not move forward with the purchase of the Baughman Farm. In December 1991, two months after the Sugerman Decision, Bartschi conveyed the Baughman Farm to the Bartschi Foundation (Foundation) in fee. Trial Court Op., 7/19/16, at 3.

A decade later, the Township asked the Foundation to restore the Mill, which was in ruins. The Foundation lacked funding to restore the Mill and, consequently, applied for a demolition permit instead. The Charlestown Township Historical and Architectural Review Board held hearings on the permit application. Trial Court Op., 7/19/16, at 3.

Following these proceedings, the Foundation and Township agreed to subdivide the Mill from the Baughman Farm and transfer this parcel to the Township for nominal consideration ($10) for purposes of restoring the Mill. The agreement permitted the restoration of the Mill, but prohibited the construction of any new structures. R.R. at 58a-60a. The Township's engineer prepared a subdivision plan, which the Township approved in July 2002. The subdivision plan divided CCTP No. 35-2-74 into two parcels: (1) CCTP No. 35-2-74, which contained 35.5 acres of land, and (2) CCTP No. 35-2-74.2, which contained 1.629 acres of land and the Mill (Mill Lot). On July 30, 2002, the Foundation conveyed the Mill Lot to the Township. Thereafter, the Township restored the Mill. Trial Court Op., 7/19/16, at 3-4.

In 2004, the Foundation approached the Naylors, who own an adjoining parcel, about purchasing the remainder of the Baughman Farm (41.60 acres), i.e. , the Property.⁶ See R.R. at 599a. The Naylors were interested, but only if they could build a principal dwelling on the Property. To that end, the Naylors and the Trust engaged in discussions. At some point, the Township became involved in these discussions and developed a list of concessions that it desired in exchange for its cooperation with the sale. Mr. Naylor withdrew from these conversations, stating "the restrictions/demands that the [T]ownship is placing on me are too severe for me to keep open my offer to acquire this [P]roperty from the Trust." Trial Court Op., 7/19/16, at 4 (quoting Kuhn Transcript, Ex. P-10 (1/10/05 email from Mr. Naylor to Supervisor Kuhn)); see R.R. at 428a.

In 2005, the Foundation and the Naylors reopened their negotiations and reached an agreement for the Naylors to purchase the Property for $874,000.⁷ On December 14, 2005, the Foundation and the Naylors entered an agreement of sale and an addendum. Therein, the Foundation agreed to cooperate in negotiations with the Trust relating to the construction of a dwelling on the Property. Trial Court Op., 7/19/16, at 4.

On January 27, 2006, the Foundation conveyed the Property to the Naylors. The Trust and the Naylors engaged in discussions about restructuring the Easement. The Naylors’ attorney, Timothy Barnard, Esq. (Naylor Attorney), sent the Trust a memorandum, dated July 30, 2011 and revised August 8, 2011, regarding restructuring the Easement (Naylor Memorandum). R.R. at 474a-75a. The Memorandum set forth certain items for clarification, including the identification of two alternate sites on the Property to locate the dwelling. The Naylor Memorandum confirmed that: "Two house sites have been identified and will be recorded on the conservation plan as alternate permitted locations for the one re-built primary residence." Trial Court Op., 7/19/16, at 4-5 (quoting the Naylor Memorandum, ¶5 (emphasis in original)); see R.R. at 475a.

In response, the Trust prepared a "Conservation Easement Preparation and Processing Agreement" (Processing Agreement), which the Naylors and the Trust signed in September 2011. The Processing Agreement provided that the structure and content of the Easement would track the Naylor Memorandum. Pursuant to the terms of the Processing Agreement, the Naylors agreed to pay the cost of updating the Easement and, to that end, the Naylors submitted a $5,000 retainer, which the Trust accepted. Trial Court Op., 7/19/16, at 5.

In early October 2011, Township Supervisor Kevin Kuhn (Township Supervisor) learned of the Processing Agreement and immediately notified the Trust of the Township's dissatisfaction with the agreement, particularly with the Trust's willingness to permit the Naylors to build a dwelling on the Property. Discussions among all of the parties ens...