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State v. Quaker Valley Farms, LLC

Supreme Court of New Jersey

August 14, 2018

STATE OF NEW JERSEY, STATE AGRICULTURE DEVELOPMENT COMMITTEE, COUNTY OF HUNTERDON and TOWNSHIP OF FRANKLIN, Plaintiffs-Appellants and Cross-Respondents,
v.
QUAKER VALLEY FARMS, LLC and DAVID DEN HOLLANDER, Defendants-Respondents and Cross-Appellants.

          Argued January 2, 2018

          On certification to the Superior Court, Appellate Division.

          John R. Renella, Deputy Attorney General, argued the cause for appellant and cross-respondent State of New Jersey, State Agriculture Development Committee (Christopher S. Porrino, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel, Jason T. Stypinski and Timothy P. Malone, Deputy Attorneys General, on the briefs).

          Robert P. Merenich argued the cause for respondents and cross-appellants Quaker Valley Farms, LLC, and David den Hollander (Gemmel, Todd & Merenich, attorneys; Robert P. Merenich, on the briefs).

          Michael B. Lavery submitted a letter brief on behalf of appellant and cross-respondent Township of Franklin (Lavery, Selvaggi, Abromitis & Cohen, attorneys).

          Shana L. Taylor, County Counsel submitted a letter brief on behalf of appellant and cross-respondent County of Hunterdon (County of Hunterdon Office of County Counsel, attorney).

          Lewis P. Goldshore submitted a brief on behalf of amicus curiae New Jersey Farm Bureau.

          Albin, J., writing for the Court.

         Quaker Valley Farms, LLC (Quaker Valley) owns approximately 120 acres of deed-restricted farmland in Hunterdon County. As part of New Jersey's Farmland Preservation Program, the State purchased an easement on the property that prohibits any activity on the property that is detrimental to soil conservation, but permits the construction of new buildings for agricultural purposes. Quaker Valley excavated and leveled twenty acres of the farm -- previously used for the production of crops -- to erect hoop houses (temporary greenhouses) in which it would grow flowers. In the process, Quaker Valley destroyed the land's prime quality soil. The Court considers whether Quaker Valley's excavation activities violated its deed of easement and the Agriculture Retention and Development Act (ARDA), N.J.S.A. 4:1C-11 to -48.

         Quaker Valley operates a wholesale horticultural business. Since 2001, it has used a twenty-acre field of prime soil to grow chrysanthemums. In 2007, Quaker Valley suffered a million-dollar-plus crop loss. To protect against future losses, Quaker Valley planned to construct heated hoop houses to provide cover for its crops. Unlike a traditional greenhouse, a hoop house has no concrete footing, and the sloped field presented a topographical problem because hoop houses are commonly constructed on level ground. As a result, Quaker Valley altered the elevation of the land, excavated the earth on the field, and leveled the ground.

         The State Agriculture Development Committee (SADC), the state agency responsible for the enforcement of the ARDA, assembled a team of experts to investigate the effects of Quaker Valley's project on the agricultural resource value of the farm. The team determined that Quaker Valley's excavation violated its deed of easement and the ARDA. The SADC filed a complaint against Quaker Valley claiming that it permanently damaged prime soil on twenty acres of the farm, precluding use of the soil for a variety of agricultural uses, and that it violated both the deed of easement and the ARDA. The SADC sought a judgment halting Quaker Valley from further degrading the land and proposed the implementation of a remediation plan. Quaker Valley filed a counterclaim asserting that material terms of the deed of easement are vague and unenforceable and that the SADC exercised its police powers to coerce, intimidate, and interfere with Quaker Valley's property rights in violation of the New Jersey Civil Rights Act. Quaker Valley also claimed that because the Hunterdon County Soil Conservation District approved its C.251 Plan to address the storm-water runoff from the construction of the hoop houses, it had complied with the deed of easement.

         The trial court temporarily enjoined Quaker Valley from continuing construction of the hoop houses. Thereafter, the court entered a preliminary injunction barring earthmoving operations in violation of the deed of easement and the ARDA. The SADC moved for summary judgment. Quaker Valley cross-moved for summary judgment on its claims that the deed was unenforceable and that the SADC had violated the New Jersey Civil Rights Act. In August 2012, the court granted summary judgment in favor of the SADC and dismissed Quaker Valley's civil-rights claim. In June 2013, the court conducted a four-day trial on remediation. The court ordered Quaker Valley to fill the most disturbed areas with specific depths of subsoil and topsoil and to recreate the preexisting slopes. The court also allowed for the maintenance of some hoop houses in the area, provided their presence would be consistent with the remediation plan. Quaker Valley appealed.

         The Appellate Division initially affirmed, recognizing the tension between the deed of easement's soil conservation mandate and its allowance of the construction of agricultural buildings, but discerning no basis to disturb the court's decision on the remedy. Quaker Valley moved for reconsideration, which the Appellate Division granted, reversing its affirmance of summary judgment in favor of the SADC, affirming the dismissal of the civil-rights claim, and noting that any judgment on remedy must await a final determination on whether Quaker Valley is in violation of the deed of easement and ARDA. The appellate panel remanded to the trial court for further proceedings. The Court granted the petitions for certification filed by the SADC, Hunterdon County, and Franklin Township, 229 N.J. 583 (2017); 229 N.J. 605 (2017); 229 N.J. 606 (2017), and a cross-petition filed by Quaker Valley, 229 N.J. 605 (2017).

         HELD: Quaker Valley had the right to erect hoop houses, but did not have the authority to permanently damage a wide swath of premier quality soil in doing so. Quaker Valley clearly violated the deed and the ARDA. Accordingly, the judgment of the Appellate Division, which overturned the trial court's grant of summary judgment in favor of the SADC, is reversed. Those who own deed-restricted farmland must have well delineated guidelines that will permit them to make informed decisions about the permissible limits of their activities. It is only the extreme nature of this case that saves the present enforcement action.

         1. The Right to Farm Act established the SADC to promulgate rules and to administer and enforce the goals of farmland preservation. The SADC is the enforcement arm of the ARDA and authorizes the establishment of State and county organizations to coordinate the development of farmland preservation programs. The ARDA permits the purchase of development easements on farm property, restricting the use of the land solely for agricultural purposes. (p. 26)

         2. The criteria for evaluating an application for a development easement includes factors such as the size of the property, soil quality, the number of tillable acres, the commitment of a municipality and county to the long term viability of the agricultural industry, and the imminence that agricultural land will be converted to a nonagricultural use. Deed restrictions shall be liberally construed to effectuate the purpose and intent of the ARDA. The SADC instructs that the easement must be read, and interpreted, in its entirety, so that the interpretation of each individual provision is consistent with the overall intent of the document and interpretation of all other provisions. The SADC regulation and the deed advance the dual goals of the ARDA: promotion of the agricultural industry and preservation of farmland. The deed's terms must be read reasonably to achieve their aims, so that one is not sacrificed for another. This task is made difficult by the failure of the SADC to promulgate regulations to guide farmers on the kind and extent of agricultural activities that are permissible under the deed. Quaker Valley's leveling activities in preparation for the hoop houses led to drastic and permanent alterations to the quality of the soil. While Quaker Valley had a right to construct hoop houses, it did not have the right to needlessly destroy so much prime soil. Quaker Valley's activities plainly violated the ARDA's goal of preserving the agricultural productivity of the farmland. The provision authorizing the construction of new structures does not override all others and cannot be divorced from the deed's express prohibition against activities detrimental to soil conservation. (pp. 27-32)

         3. The Court finds no merit in Quaker Valley's argument that their adherence to the C.251 Plan is evidence that their activities were not detrimental to soil conservation. The C.251 Plan did not authorize Quaker Valley to permanently alter the soil profile or to intermix layers of the topsoil and subsoil and did not authorize the despoiling of large quantities of prime soil. Although the record indicates that the SADC has considered parameters regarding soil disturbance on preserved properties, the agency has not exercised its statutory authority to promulgate any relevant standards regarding the nature and extent of soil disturbance that is allowable for construction projects. The ARDA and the existing SADC regulation have a dual purpose: to strengthen the agricultural industry and to preserve farmland. There is no indication in the history or language of the ARDA or the SADC regulation that one goal should inevitably supersede the other. Rather, the approach must be to balance farmland preservation and strengthen the agricultural industry. (pp. 32-35)

         4. The most relevant point of uncertainty here involves the construction of new structures for agricultural purposes -- an activity expressly permitted by the SADC regulation. Some degree of soil disturbance will be incidental to the construction of such structures. Farmers are entitled to sufficiently definite regulations and standards so that administrative decision-making is fair and predictable. The SADC is in the best position to promulgate such guidelines. If the SADC fails to undertake the necessary rulemaking to establish guidance on the extent of soil disturbance that is permissible on preserved farms, then it can expect administrative due process challenges to its enforcement actions. It is only the extreme nature of this case that saves the present enforcement action. (pp. 35-37)

         5. Quaker Valley's civil-rights claim is without merit as the SADC's efforts fell fully within its mandate, and the Court affirms the dismissal of that claim. (pp. 37-38)

         REVERSED except as to dismissal of the civil-rights claim, which is AFFIRMED.

          CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE ALBIN'S opinion.

          OPINION

          ALBIN JUSTICE

         Quaker Valley Farms, LLC (Quaker Valley) owns approximately 120 acres of deed-restricted farmland in Franklin Township, Hunterdon County. As part of New Jersey's Farmland Preservation Program, the State purchased an easement on the property that limits the use of the land to agricultural purposes. The deed of easement prohibits any activity on the property that is "detrimental to . . . soil conservation," but permits the construction of "any new buildings for agricultural purposes." The tension between those impermissible and permissible activities is at the heart of the controversy in this case.

         Quaker Valley excavated and leveled twenty acres of the farm previously used for the production of crops to erect hoop houses (temporary greenhouses) in which flowers would be grown. In the process, Quaker Valley destroyed the land's prime quality soil. The State Agriculture Development Committee (SADC) investigated Quaker Valley's excavation activities and concluded that Quaker Valley had violated its deed of easement and the Agriculture Retention and Development Act (ARDA), N.J.S.A. 4:1C-11 to -48 -- one of the statutes implementing the Farmland Preservation Program.

         The SADC brought an action in the Superior Court to enforce the restrictions placed on the use of Quaker Valley's farmland and to halt the further destruction of the property's premier quality soil. The trial court granted summary judgment in favor of the SADC, halting Quaker Valley's project and ordering the remediation of the despoiled land.

         The Appellate Division reversed, finding that the imperative of soil conservation had to be reconciled with the permissible construction of buildings for agricultural purposes under both the deed of easement and the ARDA. The panel construed the deed of easement to permit the construction of hoop houses, "so long as the landowner conserves soil to the extent practicable." The panel remanded to the trial court to determine "whether [Quaker Valley] took the necessary steps, to the extent practicable, to conserve the soil disrupted by the land-grading activities."

         We now conclude that the Appellate Division erred in overturning the grant of summary judgment in favor of the SADC. The incontrovertible evidence of record is that Quaker Valley permanently damaged premier soil on twenty acres of farmland protected by the deed of easement and the ARDA.

         The preservation of high quality soil and open space for future generations is one of the chief aims of the Farmland Preservation Program. Although Quaker Valley had the right to erect hoop houses, it did not have the authority to permanently damage a wide swath of premier quality soil in doing so.

         Quaker Valley crossed a threshold that clearly violated the deed and the ARDA. Nevertheless, those who own deed-restricted farmland must have well delineated guidelines or rules that will permit them to make informed decisions about the permissible limits of their activities. The State has yet to promulgate such guidelines or rules. The imperatives of due process require that the State give farmers reasonable notice of the permissible agricultural uses of the land, particularly when there are seemingly conflicting provisions in a deed of easement. Farmers must know where the goalposts are set before the State burdens them with costly enforcement actions.

         In this case, however, we hold that even under the existing law and the present deed, any reasonable person should have known that despoiling so much prime quality soil was an unauthorized activity. We remand to the trial court to continue with the remediation plan earlier ordered.

         I.

         A.

         The State Agriculture Development Committee (SADC) is a state agency responsible for the enforcement of the Agriculture Retention and Development Act (ARDA), N.J.S.A. 4:1C-11 to -48. The ARDA is a legislative scheme that authorizes the "State and county organizations to coordinate the development of farmland preservation programs within identified areas where agriculture will be presumed the first priority use of the land." N.J.S.A. 4:1C-12(c). It is the county-level agriculture development boards, established under N.J.S.A. 4:1C-14, that are largely responsible for reviewing and approving applications to the Farmland Preservation Program. N.J.S.A. 4:1C-15; N.J.A.C. 2:76-6.5(a) to (e). The SADC is empowered to financially help a county purchase an easement on farmland for the purpose of preserving its agricultural use in perpetuity. See N.J.S.A. 4:1C-8; N.J.A.C. 2:76-6.5(f).

         Quaker Valley owns approximately 120 acres of deed-restricted farmland property subject to the ARDA. In February 2008, the SADC filed in the General Equity Part of the Superior Court a verified complaint against defendants Quaker Valley and David Den Hollander, an owner and operator of Quaker Valley (collectively Quaker Valley). Shortly after the filing of the complaint, the court allowed Hunterdon County and Franklin Township to intervene as plaintiffs with the SADC (collectively SADC).

         The complaint alleges that Quaker Valley permanently damaged prime soil on twenty acres of the farm while in the process of excavating and leveling the land for the construction of seventy-two "greenhouse-type 'hoop' houses." The complaint also alleges that Quaker Valley's "destruction of the soil precludes its use for a variety of agricultural uses" and thus directly violates not only the deed of easement's command to conserve the soil, but also the ARDA. The SADC maintained that immediate action had to be taken to ensure that Quaker Valley did not cause "any further destruction of the soil profile of the site." As relief, the SADC sought a judgment halting Quaker Valley from further degrading the land and from constructing more hoop houses. The SADC also proposed the implementation of a remediation plan that would restore the soil to its original profile "to the extent possible."

         Quaker Valley filed a counterclaim asserting, in part, that material terms of the deed of easement are vague and therefore unenforceable and that the SADC exercised its police powers to coerce, intimidate, and interfere with Quaker Valley's property rights in violation of the New Jersey Civil Rights Act, N.J.S.A. 10:6-2(b) and (c).

         The SADC and Quaker Valley both moved for summary judgment. We recite the relevant facts from the summary judgment record.

         B.

         The Mathews family owned the 120-acre farmland in Franklin Township, Hunterdon County for over a hundred years, growing and harvesting corn, wheat, oats, soybeans, and hay. In 1989, Harold and Rosalie Mathews applied to the SADC to sell an easement on their property that would restrict its use to agricultural purposes. At the time of the application, approximately 100 acres of the Mathews' farmland were actively used for crop production. Ultimately, the Hunterdon County Agricultural Development Board selected the Mathews' property for inclusion in New Jersey's Farmland Preservation Program. The Mathews' property was chosen for the program, in part, because of the high quality of its soil -- described as "prime" soil -- which has the ingredients to produce a wide variety and high yield of crops.

         In 1993, in consideration for a deed of easement, which restricts the use of the farm for only agricultural purposes, Hunterdon County paid the Mathews $402, 680.07.[1] In 1997, Quaker Valley purchased the ...


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