Napa Valley Updates
Wednesday, November 22, 2006
This article from the Star shows the hypocrisy surrounding the Mennen subdivision, and how certain conservationists want "flexibility" to develop their land on the river banks, but insist on denying it to others. It's a must read.
A six-year legal battle surrounding six acres of land along Sulphur Creek may be reaching its climax, as a Napa judge will soon decide whether St. Helena property owner Susan Card will have to turn over the parcel to the Mennen Environmental Foundation, the organization headed by her neighbor and former friend Peter Mennen.
Card agreed in a May 2000 pledge agreement to donate or provide a conservation easement over a portion of her property, but she refused to sign over the land because she wanted it to be a wildlife refuge, with public access and development prohibited. The Foundation was not willing to adopt those restrictions, and sued Card to make her comply with the agreement.
The two sides locked horns in a six-day trial, which wrapped up Tuesday. After closing arguments are submitted by attorneys, Judge Raymond Guadagni will have 90 days to issue a ruling.
According to Card’s attorney John Bryant, Card has paid nearly $500,000 in legal fees in an effort to retain the land.
Deal started in 1999
The deal originated in 1999, when Card learned that Laryl and Jeryl Smith, owners of Harold Smith and Sons, intended to place their three neighboring parcels on the market. Card wanted to prevent the 23-acre property from development, so she suggested to Mennen that his Foundation buy the Smith properties. In return, she would donate six undeveloped acres of her adjacent eight-acre property, with the understanding that the land be used for the Sulphur Creek restoration project Mennen had been talking about.
The Foundation bought the Smith parcels for $552,000, but Card never handed over her land.
Card’s attorneys maintain she only wanted to donate the land if it would be used for a wildlife refuge, with native vegetation restored along the creek’s banks, fish spawning encouraged, and public access and development strictly prohibited. They claim that Mennen led Card to believe that the restoration project was a done deal, and she only later learned that the Foundation wished to reserve the right to develop the parcel or sell it.
Card’s attorneys also pointed out that similar legal proceedings, with a charity successfully suing a donor to provide promised property, are extremely rare, if not unheard of.
Mennen sought flexibility
The Foundation’s former attorney Greg Coldin, who drafted the agreement, said the Foundation wished to keep the gift unrestricted so it would have the maximum amount of flexibility in using the property. Mennen testified that while he and the Foundation would much rather see the parcel go toward creek restoration efforts, they wanted to reserve the ability to sell the land if acts of God made such efforts impossible or pointless.
Although the Foundation didn’t want to expressly prohibit development, Mennen and his attorneys said the Foundation wanted to retain the ability to develop only so they could build whatever small structure would be necessary to aid restoration efforts.
In September 2000, when the two sides were working out the terms of the donation, Mennen wrote a letter to several St. Helena Elementary School teachers who had contacted him regarding using the property. In the letter, he said it had vigorous land use restrictions, and would not be open to the public. Card read the letter, and wrote to Mennen to express her approval of the terms Mennen had laid out.
In court, Mennen testified he had filled the letter with “a flat lie,” and “b.s.” in an attempt to get the persistent teachers off his back and prevent people from wandering onto Card’s land. He testified he never told Card that the Foundation didn’t intend to enact the restrictions he had mentioned in the letter.
In a letter to the city of St. Helena accompanying an application for the transaction’s lot line adjustment, Mennen said the two sides had agreed that Card’s land, along with the land bought from the Smiths, “would be dedicated to nature as a wildlife refuge, where no development would take place and the property would remain off-limits to the general public.” The adjustment was approved on the condition that the property change hands, but it expired after negotiations stalled.
The two sides also hit a speed bump over an easement on the donated property, which Card requested to get to her home. In December 2001, the Foundation said it would only grant Card an easement for pedestrian access over the first 10 feet from Spring Street. In court Tuesday, Card called the proposal “outrageous.” By early 2002, negotiations had reached an impasse.
One option allowed by the pledge agreement would allow Card to provide the Foundation with a conservation easement over the property in question.
But Card’s attorneys claimed a conservation easement would not be valid because the Foundation does not satisfy the regulations governing nonprofit organizations.
Card’s attorneys pointed out several examples of what they claim are improper self-dealings by the Foundation that benefit Peter and Carlene Mennen, thus violating nonprofit regulations.
In one case, a gardening contract paid for by the Foundation included services on nearby property privately owned by the Mennens.
In another, a Foundation-funded legal battle ended with an agreement that included a provision giving the Mennens a private easement on another property.
In a third example, Card’s attorneys argued that the Foundation’s purchasing and preservation of three parcels increased the value of a fourth parcel privately owned by the Mennens.
Mennen’s attorneys questioned whether Mennen and his wife ever really benefited from the deals, and pointed out that the Foundation is still recognized by the Internal Revenue Service as a 509(a)3 public charity.
Clause is key
Much of the trial has centered on a clause in the pledge agreement that says the gift is unrestricted except for the understandings expressed in the agreement. Mennen’s attorneys said Card signed the agreement even though she knew it did not contain any language requiring that the Foundation make the land a development-free wildlife refuge.
The agreement also references, but does not include, “terms and conditions” that Card’s attorneys argued were to be agreed upon after the pledge agreement was signed. Since no further agreement was reached, the defense argued that the pledge agreement is unenforceable.
The defense argued that “unrestricted” was included for accounting purposes, and did not refer to future land use restrictions. Card’s attorneys have suggested that the Foundation wishes to reserve the right to sell the land to anybody, including a developer.