UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Catherine R. Judd, Executrix of the Estate of Ruth A. Hunt, Gregory W. Hunt, Individually and as Trustee of the William W. Hunt Inter Vivos Trust U/T/A Dated 11/7/1987, and William C. Hunt, Plaintiffs

v. Case No. 16-cv-27-SM Opinion No.

Southeast Land Trust of New Hampshire, City of Dover, New Hampshire and Tom Vilsack, Secretary of the United States Department of Agriculture, Defendants

ORDER TO SHOW CAUSE

The parties are at odds with respect to potentially

conflicting interests in the same property, although it is not

entirely clear that an actual and ripe case or controversy

exists. In 2007, plaintiff William C. Hunt and his wife granted

the Strafford Rivers Conservancy (“SRC”), 1 the City of Dover, and

the United States Department of Agriculture (“USDA”), a

Conservation Easement Deed over the Hunt Family Farm, located in

Dover, New Hampshire (the “Conservation Easement”). The

Conservation Easement prohibits subdivision of the parcel.

1 The SRC later merged with defendant Southeast Land Trust of New Hampshire (“SLT”). 1 Subsequently, plaintiffs Catherine R. Judd, Executrix of the

Estate of Ruth A. Hunt (“Judd”), and Gregory W. Hunt,

individually and as Trustee of the William W. Hunt Inter Vivos

Trust (“Gregory Hunt”), brought an unrelated lawsuit against

William C. Hunt. That suit was settled when the parties

executed an agreement that, in part, gave Judd and Gregory Hunt

a contingent use easement to engage in agricultural activities

on a specified area of the same Hunt Family Farm (the “Use

Easement”). The settlement agreement conditioned William C.

Hunt’s grant of the Use Easement on the prior approval of the

holders of the existing Conservation Easement. But the

Conservation Easement grantees declined to approve the Use

Easement because, in their opinion, the proposed Use Easement

would interfere with their existing conservation rights in the

land.

Plaintiffs subsequently filed this action, seeking, in

part, a judgment declaring that the proposed Use Easement does

not conflict with the existing Conservation Easement.

Defendants, the Conservation Easement grantees, moved to dismiss

on grounds that plaintiffs lack standing to bring the action. 2

Plaintiffs object.

2 Defendant’s motion does not distinguish between various plaintiffs, and argues that all plaintiffs lack standing, 2 Background

The relevant facts, drawn from the plaintiffs’ complaint

are as follows. On July 17, 2007, William C. Hunt, and his

wife, Nancy, granted the SLT, USDA and City of Dover a

Conservation Easement Deed over the Hunt Family Farm, located on

Back Road, in Dover. Compl. ¶ 11. The deed recites, in

pertinent part, that:

The Property shall not be subdivided or conveyed in any form in separate parcels. The Grantor further covenants and agrees not to undertake any action that would have the effect of subdividing or conveying any part of the Property.

Id. at ¶ 12.

On May 24, 2010, Judd and Gregory Hunt filed suit against

William C. Hunt (the “Trust Suit”), id. at ¶ 13, in which they

sought the return of the Hunt Family Farm, the family farm

house, and an adjacent lot located at 281 Back Road, as well as

funds paid to William C. Hunt and Nancy Hunt by the SLT, USDA

and the City of Dover in exchange for the Conservation Easement.

The parties mediated their dispute and settled the Trust Suit.

As part of the settlement, William C. Hunt agreed to delineate

because they are not parties to the Conservation Easement deed, apparently seeing the case as one challenging the scope or effect of the Conservation Easement. At oral argument on their motion, however, counsel for Southeast Land Trust seemingly agreed that William C. Hunt, the grantor, has standing, presumably because he granted the Conservation Easement. 3 an area of the Hunt Family Farm with respect to which he would

grant an easement to Judd and Gregory Hunt, permitting them to

“engage in agricultural activities,” or to farm the land. The

necessary lot line adjustments, including the Use Easement

Delineation Line, were approved by the City of Dover Planning

Board, and the City of Dover, and were recorded. Compl. ¶¶ 16,

17.

On November 13, 2012, Judd, Gregory Hunt and William C.

Hunt finalized the settlement agreement in the Trust Suit. The

terms of the settlement agreement obligated William C. Hunt to

grant a contingent Use Easement, appurtenant to the lots located

at 281 Back Road and 295 Back Road, over that portion of the

Hunt Family Farm delineated on the lot line adjustment plans

approved by the City of Dover and recorded. The agreement

provided:

d. Approvals Required. The parties agree and understand that the grant of the Use Easement herein contemplated requires the [prior] approval of the Strafford Rivers Conservancy (“SRC”) 3 and the United States Department of Agriculture (“USDA”) as holders of the Conservation Easement. The Parties agree that they will work together, as necessary, to obtain such approvals in good faith. In the event that the approvals are not granted by the foregoing agencies, the parties will implement an alternative plan as set forth in section 3 hereof.

3 The SRC later merged with the Southeast Land Trust. 4 Id. at ¶ 19. Section 3 of the agreement provides:

Creation of Leasehold. Only in the event that approval of the Use Easement as set forth in Section 2.d above is denied by the SRC and/or the USDA, [William] and Nancy Hunt shall execute a Land Lease.

Def.’s Mot. to Dismiss ¶ 11. 4 The plaintiffs say it was their

intent that the lease would mirror the terms of the proposed Use

Easement. Compl. at ¶ 19.

William C. Hunt executed a Use Easement deed, as required

by the settlement agreement, which provides:

The GRANTEES shall have, and the purpose of this Easement is to allow the GRANTEES, their heirs, successors and assigns, a non-exclusive right to conduct any and all agricultural activities (the “Use”) not otherwise prohibited by the Conservation Easement granted by GRANTORS to The Strafford Rivers Conservancy, Inc., the United States of America, and the City of Dover collectively as Grantees . . .

Compl. at ¶ 22. The Use Easement deed was not recorded. Id.

On January 20 and February 28, 2013, SRC informed the plaintiffs

that it would not approve the proposed Use Easement because, in

its view, the Use Easement would constitute a “subdivision,”

4 In determining whether a plaintiff has sufficiently alleged standing to sue, a court may consider materials outside the pleadings. Conservation Law Found., Inc. v. Plourde Sand & Gravel Co., No. 13-CV-214-SM,

, at *3 (D.N.H. Nov. 6, 2014) (citing Gonzalez v. United States,

, 287–88 (1st Cir. 2002). 5 which the Conservation Easement precluded. Defendants,

plaintiffs say, are unreasonably and unlawfully withholding

their approval because their opinion is incorrect — the proposed

Use Easement does not create a “subdivision” as defined by New

Hampshire law or as contemplated by the Conservation Easement.

Defendants having declined to consent to the Use Easement,

Judd, Gregory Hunt and William C. Hunt attempted to negotiate

the terms of a lease, as provided for in Section 3 of the

settlement agreement. However, plaintiffs allege, defendants

somehow endeavored to limit the terms of the proposed lease

between them so that it would not mirror the terms of the

proposed Use Easement. Apparently unable to fulfill their

obligations under the settlement agreement, Judd and Gregory

Hunt filed a declaratory judgment action in state court. 5 The

USDA was added as a defendant on November 25, 2015, see Document

No. 3, p. 17, and it removed the case to this court on January

25, 2016, pursuant to

, 1442(a)(1) and 1446.

Plaintiffs ask this court to grant their request for a

declaratory judgment and rule: (1) that the proposed Use

5 During a status conference in the state Trust Suit held on October 26, 2015, counsel for William C. Hunt represented that her client was willing to join the present action as a party- petitioner. See Document No. 3-1, p. 3. He was subsequently joined as a plaintiff to this action by state court order dated November 25, 2015. See Document No. 3, p. 17. 6 Easement does not run afoul of the Conservation Easement, or (2)

that the terms of the alternative land lease must (and lawfully

may) mirror the terms of the proposed Use Easement.

The posture of this case is mildly perplexing. The

plaintiffs’ complaints about “interference” and “unreasonable

withholding of consent” seem widely beside the point.

Defendants have no obvious legal interest in the settlement

agreement resolving the differences between or among the

plaintiffs in the collateral Trust Suit. To the extent

plaintiffs feel ill-used by defendants in that regard, it

appears to be a circumstance entirely of their own making.

Surely they did not have to agree to condition the proposed Use

Easement on defendants’ prior approval. Just as surely

plaintiffs did not have to accept defendants’ views with respect

to the terms of the alternative lease provided for in the Trust

Suit settlement agreement, and they presumably remain free to

amend or modify the settlement agreement.

The plaintiffs accept that under the Trust Suit settlement,

a Use Easement must be granted by William C. Hunt only if

defendants first approve. And they have not. The alternative

lease provision in the Trust Suit settlement seems clear as

well, though it is entirely unclear why the plaintiffs have not

implemented it (no prior approval of the lease by defendants is 7 required). The critical point, however, is that whether William

C. Hunt must, under the Trust Suit settlement agreement, grant

Catherine Judd and Gregory Hunt a Use Easement, or a lease with

particular terms, is a dispute between those parties, and a

dispute over which this court would seem to be without

jurisdiction to resolve. (The dispute does not involve federal

law, the concerned parties are not diverse, and the federal

defendant in this case, the USDA, has no cognizable legal

interest in the proper construction of the terms of the Trust

Suit settlement.) What the parties to the Trust Suit settlement

are or are not entitled to under its terms is up to them, or a

state court, to resolve.

William C. Hunt is not, it seems, claiming that he has

actually given a Use Easement to Catherine Judd and Gregory Hunt

(which he of course could do), or that the settling parties have

waived the contractual obligation between them that requires

defendants’ prior approval before the Use Easement is granted,

or that a genuine dispute arises independently by virtue of the

Conservation Easement holders’ claim of rights in the land

superior to rights presently held by Judd and Gregory Hunt.

Rather he and the other plaintiffs appear to be claiming some

sort of contractual or other legal obligation on the part of the

8 Conservation Easement holders to approve the grant, or at least

to not “unreasonably withhold” their approval.

But the Conservation Easement holders are not parties to

the Trust Suit settlement agreement. They have no apparent

contractual obligations under it, and they are completely free

to hold whatever opinion they choose with respect to whether the

proposed Use Easement might conflict with their interest in the

land.

That William C. Hunt may give a Use Easement or a lease

that may conflict with the Conservation Easement is at this

stage merely speculative. He has not done so; he does not

appear from the complaint to be obligated to do so; and, indeed,

he seems to be insisting that the Conservation Easement Grantees

first approve before he becomes obligated to do so. Plaintiffs

do not plead anything more than that Catherine Judd and Gregory

Hunt should be entitled under the Trust Suit settlement

agreement to a Use Easement from William C. Hunt,

notwithstanding the absence of approval by the Conservation

Easement Grantees. Maybe, or maybe not — that is a dispute

between plaintiffs, subject, if necessary, to resolution in

state court. As the case has been pled, this is a situation in

which the settling parties created a condition precedent (prior

approval) and the condition has not occurred, nor have the 9 parties implemented the alternative lease provision under the

settlement agreement. What is sought is essentially an advisory

opinion, i.e., if Judd and Gregory Hunt were entitled to the Use

Easement, or if they had a lease, would that Easement or Lease

conflict with the Conservation Easement’s terms?

Discussion

Neither party contests the existence of federal subject

matter jurisdiction. However, “[i]t is black-letter law that a

federal court has an obligation to inquire sua sponte into its

own subject matter jurisdiction.” McCulloch v. Velez,

(1st Cir. 2004) (citations omitted); see also Prou v.

United States,

(1st Cir. 1999) (“the question of

subject-matter jurisdiction is always open: courts at every

stage of the proceedings are obligated to consider the issue

even though the parties have failed to raise it”).

The Declaratory Judgment Act,

, provides

that, “[i]n a case of actual controversy within its

jurisdiction,” the court “may declare the rights and other legal

relations of any interested party seeking such declaration,

whether or not further relief is or could be sought.” The Act

“empowers a federal court to grant declaratory relief in a case

of actual controversy. [It] does not itself confer subject

matter jurisdiction, but, rather, makes available an added 10 anodyne for disputes that come within the federal courts'

jurisdiction on some other basis.” Ernst & Young v. Depositors

Econ. Prot. Corp.,

(1st Cir. 1995) (citations

omitted).

“[T]he phrase ‘case of actual controversy’ in the Act

refers to the type of ‘Cases’ and ‘Controversies’ that are

justiciable under Article III” of the United States

Constitution. MedImmune, Inc. v. Genentech, Inc.,

(2007) (citations omitted). To satisfy Article III’s

requirement, “‘the dispute [must] be definite and concrete,

touching the legal relations of the parties having adverse legal

interests, and [must] be real and substantial and admit of

specific relief through a decree of a conclusive character, as

distinguished from an opinion advising what the law would be

upon a hypothetical state of facts.’” Deutsche Bank Nat. Trust

Co. ex rel. FFMLT Trust 2005-FF2 v. Pike, No. 15-CV-304-JD,

, at *3 (D.N.H. Oct. 13, 2015) (quoting MedImmune,

Inc.,

) (emphasis supplied).

Here, the facts alleged in the complaint raise concerns

that federal subject matter jurisdiction is lacking.

Specifically, it appears that plaintiffs have not sufficiently

alleged a “substantial controversy, between parties having

adverse legal interests,” MedImmune, Inc.,

11 (emphasis added), because they have not alleged a present right

to a Use Easement. Instead, plaintiffs assert what is at best

an inchoate right to a Use Easement, subject to a condition

precedent: i.e., the Conservation Easement holders’ approval.

While plaintiffs vaguely allege that the Conservation Easement

holders (including the USDA) have some undefined legal

obligation to approve the proposed Use Easement, or at least not

“unreasonably” decline to approve it, they have the power to

waive that condition, as they created it. And if they disagree

about their respective rights under the settlement agreement,

this court would seem to have no jurisdiction to resolve that

dispute. The claim regarding defendants’ obligation to approve,

in addition, is unlikely to prove successful. See, e.g.,

Motorsport Engineering, Inc. v. Maserati SPA,

(1st Cir. 2002) (third-party beneficiary to a contract, who did

not sign the contract, has no contractual obligations to the

actual parties to the contract); Tessier v. Rockefeller,

(2011) (Because defendants were not parties to the

settlement agreement, there were no grounds for contract damages

against them.); cf. Bald v. PCPA, LLC, Case No. 15-cv-219-SM,

, at *4 (D.N.H. April 19, 2016) (contractual

obligations cannot be imposed by the parties to a contract upon

a non-party). But, again, that is actually a dispute between or

among the plaintiffs, subject to state court determination.

12 The standing issue raised by defendants is merely

reflective of and turns on several other apparent difficulties

posed by the complaint. If plaintiffs could plausibly claim a

present interest in the land adverse to defendants’ claimed

interests, they would plainly have standing to sue for a

declaratory judgment to resolve competing claims of right.

Under those circumstances, an actual case or controversy would

exist over which this court could exercise jurisdiction, given

the USDA’s involvement. It is difficult to discern what case or

controversy exists here, however, because the complaint does not

plausibly assert a present interest in the land adverse to

defendants’ interests, and resolving plaintiffs’ claim to an

interest (Use Easement or lease) is a matter that plaintiffs

can, as noted, resolve by agreement, or, failing that, becomes a

dispute over which this court is without jurisdiction.

So, the motion to dismiss on standing grounds is better

denied, albeit without prejudice, at this stage, and instead,

the plaintiffs ought to show cause why this case should not be

dismissed for one or more of the following reasons: failure to

state a cognizable claim; because the court lacks jurisdiction

to determine plaintiffs’ respective (and predicate) rights under

the Trust Suit Settlement Agreement; because the complaint does

not describe a cognizable legal claim against the USDA (which

13 agency’s presence as a party supplies the basis for federal

jurisdiction); and because there appears to be no actual

cognizable and justiciable case or controversy between these

plaintiffs and the named defendants.

Conclusion

Plaintiffs shall show cause on or before October 14, 2016,

why this case should not be dismissed. Defendants may, but are

not required to, file a response on or before October 28, 2016.

The pending motion to dismiss on standing grounds (document

no. 6) is denied without prejudice.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

September 13, 2016

cc: Cyrus F. Rilee, III, Esq. Andrea L. Daly, Esq. Frank E. Kenison, Esq. Anthony I. Blenkinsop, Esq. Michael T. McCormack, Esq.

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