Wetlands Am. Trust, Inc. v. White Cloud Nine Ventures, L.P.
291 Va. 153
| Va. | 2016Background
- Wetlands America Trust (WAT) holds a perpetual conservation easement (Deed of Gift) given in 2001 covering ~400 acres; White Cloud Nine Ventures (White Cloud) purchased ~200-acre Caeli tract in 2008 that remained subject to the Easement.
- White Cloud (to be used by adjacent Chrysalis vineyard/winery) constructed a building, parking, road and bridge to operate a creamery, bakery, wine storage/tasting room and related commercial sale and sampling of products derived from the property.
- WAT sued for declaratory relief and injunction, alleging multiple violations of the Easement’s restrictive covenants; White Cloud denied liability and asserted defenses including vagueness, estoppel and laches.
- The trial court (bench trial) found most disputed provisions ambiguous, applied the common-law rule that restrictive covenants are strictly construed against restriction, and ruled mostly for White Cloud; WAT appealed.
- The Supreme Court of Virginia affirmed: it held the disputed terms were ambiguous, applied the strict-construction rule to restrictive covenants (including conservation easements), and rejected WAT’s proof on key substantive claims.
Issues
| Issue | Plaintiff's Argument (WAT) | Defendant's Argument (White Cloud) | Held |
|---|---|---|---|
| Applicability of strict-construction rule to conservation easements | VCEA and public policy favoring conservation abrogated the common-law rule; ambiguous terms should not be construed against grantee | Long-standing common-law rule for restrictive covenants remains applicable; VCEA does not expressly alter interpretive rules | Court: VCEA did not abrogate the strict-construction rule; ambiguous restrictive covenants must be strictly construed against restriction |
| Meaning of “farm building” (Section 3.3(A)(iv)) | “Farm building” should be read narrowly to prohibit the commercial/visitor uses White Cloud proposes | Statutory/dictionary definitions and Easement text (Section 3.1, 3.3(D), 4.1) allow commercial agricultural processing, storage, marketing and retail on-site | Court: term ambiguous but reasonably includes commercial agricultural uses described by White Cloud; building permitted as a farm/agricultural building |
| “Highly erodible areas” prohibition (Section 3.3(C)(vi)) — timing of erodibility test | The USDA identification of the property as highly erodible prohibits construction regardless of post-grading condition | Sections 3.3(C)(vi) and 3.6 must be harmonized; erodibility is properly assessed after grading for permitted construction | Court: harmonized provisions; erodibility must be tested post-grading; WAT failed to prove post-grading erodibility so no violation proven |
| Grading/alteration of topography for parking (Section 3.6 and 3.12) | Grading for parking required prior written approval and cannot be permitted without WAT consent under water-resources provision | Section 3.6 permits grading “as required in the construction of permitted buildings”; Section 3.12 is limited to dams/ponds/wetland construction | Court: grading for required parking adjacent to a permitted farm building is allowed under Section 3.6; Section 3.12 does not apply to typical grading for permitted buildings |
| Overall conservation-purpose covenant (Section 1.1) — whether cumulative impacts violate conservation values | Totality of White Cloud’s construction and use significantly impairs conservation values and departs from the Baseline Documentation Report (BDR) | Easement permits agricultural (including commercial/industrial) uses; property need not be frozen to BDR; experts showed de minimis or no significant impact | Court: trial court credited White Cloud’s expert testimony; WAT failed to prove significant impairment under Section 1.1; permitted uses may change property character from BDR |
| Bridge construction claim (Section 3.3(C)(v)) — pleading/late-raise issue | WAT argues trial court should have considered evidence that bridge violated setback/floodplain restriction despite complaint omission | White Cloud contends it was prejudiced and not on notice because WAT did not plead the claim | Court: claim was not pleaded; trial court properly refused to consider unpleaded claim (WAT did not seek to amend pleadings) |
Key Cases Cited
- Waynesboro Village, LLC v. BMC Props., 255 Va. 75 (Va. 1998) (restrictive covenants are disfavored and strictly construed against restriction)
- Friedberg v. Riverpoint Bldg. Comm., 218 Va. 659 (Va. 1977) (burden on party enforcing restrictive covenant; ambiguities resolved in favor of free use)
- United States v. Blackman, 270 Va. 68 (Va. 2005) (recognizes negative easements in gross for conservation and discusses the VCEA in context of public policy favoring conservation)
- CNX Gas Co. v. Rasnake, 287 Va. 163 (Va. 2014) (rules for interpreting deeds; ambiguous deed language construed against grantor)
- Perel v. Brannan, 267 Va. 691 (Va. 2004) (appellate review standard: factual findings not disturbed unless plainly wrong)