Opinion: The Curious Case of the Lawsuit Over Marion Carll Farm

How the Commack Board of Education (the “Board”) intends to handle the recent lawsuit against the School District (the “District”) over the farmhouse, barns and related property known as the Marion Carll Farm (the “Marion Carll Farm” or the “Property” ) should be of serious concern to the Commack community.

The lawsuit, filed by Marion Carll’s heirs (the “Carll Heirs”) on March 16, 2012, seeks to revert the Marion Carll Farm back to the family (the “Complaint). Based on what little information has been disclosed to the Commack community, the Board has until June 15 to respond to the Complaint, but as stated at a recent Board meeting, is contemplating not opposing the suit and just handing this historic Property back to the Carll heirs. 

However, as explained herein, it appears that the District may have valid defenses to the lawsuit, including statute of limitations and adverse possession.  If true, then the District would not only be able to defeat the lawsuit but may also be able to obtain full “fee” ownership of the property, as well an extinguishment of the conditions of use upon which it was conveyed, meaning the district would own the property free and clear of any restrictions other than government restrictions for properties on the National Historic Register.

If this is indeed the case, it presents a host of questions, which as discussed below, the Commack community should demand the Board answer. The primary question being whether surrendering the property, instead of fighting to keep it, is really in the best interest of the district and community?  And, if the Board knowingly does so, against the community’s wishes, doesn’t such conduct constitute a breach of their fiduciary duty?  

One would hope that the Commack community will demand answers and will not stand idly by and allow the District to lose this historic Property with such a unique link to Commack’s past.  Otherwise, the only thing that will be left of the Marion Carll Farm will be the irony of how it was the District itself, that Marion Carll loved so much, who ultimately betrayed her and failed to fulfill her legacy.

Background

As most of the Commack community knows, Marion Carll was a teacher and , and she also helped organize the District’s first PTA.

The Carll family owned the land on Commack Road since the early 1700’s. The Marion Carll Farm sits on a nine-acre farmstead that once stretched down to Motor Parkway.

The current farmhouse was built around 1860 and some surrounding structures such as a milk barn and sheep barn were built even earlier. The Marion Carll Farm was added to the National Register of Historic Places in 1979. In addition, to the century old structures, the Property also contains antique household items, personal documents and historical relics such as horse carriages -

Unfortunately, rather than honoring Marion Carll’s legacy, the district has shamefully failed to properly maintain the Property and instead has let it deteriorate over the years.   

Marion Carll’s Conveyance to the District

Marion Carll so loved the Commack community and District that when she died in 1968, she conditionally gifted the property to the District in her will, subject to a life estate granted to her niece Albert Ketchum Jenkins, who died in 1993.

The Executor’s Deed issued to the District in 1969 (the “Deed”) provides that the Marion Carll Farm was conveyed to the District on the express condition that it be used:

  (a) to maintain the buildings thereon as historical museums.

  (b) to utilize the land area as a type of farm school, school or  camp for the benefit of the children of the District.

    (c) to make available to the residents of the District, and to the general public if is so desired, access to said premises and said buildings as an historical location.

  (d) to erect on said premises, if so desired, a building to be used as a library for said District.

  (e) to retain in designation of the site the Carll family name.

The failure on the part of the devisee to perform the conditions as set forth in subdivisions ‘a’, ‘b’, and ‘e’ herein set forth shall constitute a reverter and title shall vest in the residuary legatees their heirs and distributees.

Accordingly, to avoid breaching the conditions of the grant, and an automatic reversion of the Property back to the Carll Heirs, the District was required to comply with all three conditions described under a, b and e of the Deed.

The Governing Law

While I hesitate to delve into the complex world of real property law, a brief analysis of the law governing the grant is necessary in order to fully understand the situation at issue.

It appears that the Marion Carll Farm was conveyed to the District in what is known in legal terms as a fee simple determinable or a fee on special limitation. The particular fee type at issue here is known as a “fee simple defeasible subject to executory limitation.” See e.g.

This means that the fee interest granted to the District in the Marion Carll Farm would automatically end if/when a condition of the grant is violated or not met. In such a case, the District’s property interest is technically forfeited and shifts (i.e. reverts) to the Carll Heirs, albeit they must assert a claim to regain possession of the property. 

A “fee simple defeasible subject to executory limitation” differs from what is known as a “fee simple subject to a condition subsequent” insofar as a violation of the condition does not serve to automatically shift the property interest. Instead, upon a violation of a condition, the original owner has the option to re-assert his right to the property – which is called a “right of re-entry.” 

This distinction is critical, because the statute of limitations period to assert a claim for reverter starts to run from the date of the initial breach of the condition.  In contrast, the statute of limitations period for claiming a right of re-entry does not begin to run until a claim for re-entry is affirmatively asserted and denied.

The District’s Failure to Comply with the Deed's Conditions

It appears that the District first started to use the Marion Carll Farm in 1990, when it leased the property to the Boards of Cooperative Educational Services (“BOCES”) from 1990 to 2000. At some point, a sign designating the property as “the Marion Carll Farm” was also installed, which still exists today. However, at best this only satisfied conditions ‘b’ and “e.” Moreover, the property has admittedly not been used in any manner since 2000 when the BOCES lease expired.  

Notably, the complaint filed by the Carll Heirs expressly alleges that “at all relevant times the school district did not satisfy the deed and will conditions and restrictions.” See Complaint ¶ Forty-Fifth.

 Therefore, the Carll Heirs themselves contend the District failed to comply with the necessary conditions for use of the property from the very first day it was obligated to do so, which is either 1990 when the BOCES lease began (22 yrs. ago) or 1993 when Ms. Ketchum died (19 yrs. ago).

So it seems that the property was never in full compliance with the conditions under which it was granted, thus the fee interest technically reverted to the Carll Heirs by operation of law. However, at no time did the Carll Heirs ever assert a claim seeking possession of the Property, as required, until they filed the recent Complaint. 

The District’s Potential Defenses to the Carll Heirs’ Lawsuit

Based on some limited research performed, there appear to be at least two legitimate defenses to the complaint which the District can avail itself of - statute of limitations and adverse possession. Both would serve to bar the Carll Heirs’ claims. There are other legal defenses available as well, including laches and waiver (which I need not address here). Importantly, these defenses must be asserted in the District’s answer to the complaint.  If not, they are deemed waived.

In New York, a claim based upon reverter is specifically governed by the 10-year statute of limitations period provided by Real Property Actions and Proceedings Law (the “RPAPL”) § 612(1) https://docs.google.com/open?id=0B3cbjRc1NY_pR0RzaVdRSUhxelU; People v. Avilas, Inc., 29 A.D.3d 764, 765, 816 N.Y.S.2d 136, 137 (2d Dep’t 2006) (plaintiff’s action for reverter filed more than 10 years after claim accrued barred by RPAPL 612)     https://docs.google.com/file/d/0B3cbjRc1NY_pc3R5OXRIR1hZeWs/edit.

Therefore, in order to be timely, the Carll Heirs would have had to file their reverter claim by either 2000 (if measured from 1990) or 2003 (if measured from 1993).  Here, the Complaint was not filed until March 2012, well past the limitations period under either scenario, and is untimely as a matter of law.

In addition, under RPAPL § 345 (https://docs.google.com/open?id=0B3cbjRc1NY_peURHcFFvLUxVOVU) a possibility of reverter is generally extinguished automatically unless the owner of such a right records a declaration of intention to preserve that right, within 27 to 30 years after that right was created (i.e., by the will in 1969). There is no evidence available showing such a declaration was ever filed by the Carll Heirs, and their time to do so has also long since expired, as such was required to be done between 1996-1999.

It is also appears possible that the District may have a colorable claim to the Marion Carll Farm based on adverse possession. “A party seeking to obtain title by adverse possession must show that (1) the possession was hostile and under claim of right; (2) it was actual; (3) it was open and notorious; (4) it was exclusive; and (5) it was continuous for the statutory period of 10 years.  RPAPL § 501 https://docs.google.com/open?id=0B3cbjRc1NY_pS19qeDFzUWtnVkU; Kelly v. Bastianic, 93 A.D.3d 691, 693, 940 N.Y.S.2d 152, 155 (2d Dep’t 2012) https://docs.google.com/open?id=0B3cbjRc1NY_pZzBrMURFTWRCM3M. “Hostile possession,” for purposes of adverse possession, does not require a showing of enmity or specific acts of hostility; all that is required is a showing that the possession constitutes an actual invasion of or infringement upon the owner’s rights. 

In this instance, an argument can be made that because the Marion Carll Farm automatically reverted to the Carll Heirs once the District breached the Deed’s restrictions back in 1990 when it first started to use the property, as the property was no longer given or appropriated for a public purpose by its legal owners, the Carll Heirs. The same holds true even assuming the first breach occurred in 1993 (when Ms. Ketchum died) or 2000 (when the BOCES lease expired), since these dates are still well past 10-year limitations period. Accordingly, the District may be entitled to the property free and clear of the restrictions in the deed because, as even the Carll Heirs admit, the District had used the property since that time in a manner adverse to the Deed’s conditions.

Questions that the Board Should Answer

It’s difficult to believe that the District’s legal counsel Lamb & Barnosky, LLP, a reputable firm that has a real estate practice area, has not examined the issues raised herein.  If they haven’t, then perhaps the District needs new counsel. If they have, then the Board is likely aware of these potential defenses, and probably has been for years. Oddly, they have never mentioned this to the community, why not?  It also begs the question as to why the District has never tried to assert a claim for ownership of the property during all these years and obtain clear title?  Instead, they apparently have been claiming they are bound by restrictions on the property that they know may no longer exist.

While it is true that the Board requires a referendum when it wants to sell the District’s real property, the decision whether to prosecute or defend a lawsuit rests entirely within the discretion of the Board. However, the Board knows very well that the Commack community’s interest is in the District keeping the Marion Carll Farm.

That much was made clear in June 2010 when Commack voters rejected the Board’s attempt to sell the Marion Carll Farm for $750,000 to The Holiday Organization of Westbury, who planned to build 30 condominiums on the site which adjoins the Hamlet.  

At the time, it was claimed that the District decided to try and sell the property because it purportedly could no longer afford to maintain the farm at costs of more than $200,000 per year, in addition to costs of repairing the collapsing buildings. However, this alleged cost estimate appears to have been grossly exaggerated, as it is unsupported by the District’s record of past expenditures on the Property.    

The short time frame that the Board provided for notice of the 2010 referendum, approx. two weeks, was also curious.  The manner in which this was done suggests it was designed to ensure a low voter turnout in the hope of increasing the chances of the referendum passing. Fortunately, if this was the plan, it backfired. Some believe the District’s motivation for endorsing the condo development was because they were geared to people without kids, thus generating new tax revenue but no new students entering the District.  

Another point to consider is if the District knew in 2010 that it had a viable claim for full ownership of the property, why would they have agreed to sell it for only $750,000?  Rumor is the total deal with the Holiday Organization was around $4 million. If true, it means the District was prepared to allow the Carll Heirs to receive over $3.2 million. Yet, a claim for full ownership would have entitled the District to the full sale price.  How was that a good deal? Could they be that inept?  In any event, these questions must be left for another day.  

The question at hand now is whether the Board will defend the suit? How could they not? Since the Board knows that the Commack community opposed the sale of the Marion Carll Farm for $750,000, how then could they possibly believe that the community would be agreeable to letting the District surrender the property for nothing? How would doing so be in the community’s best interest?    

The District currently has a $6.6 million surplus budgeted into its unreserved fund. So it certainly can afford to defend the suit, and can justify doing so considering the value of the property at stake and the community’s proven desire to keep it. Moreover, it’s possible for the legal issues underlying the case to be decided as a matter of law through motion practice. Therefore, it is unlikely that an extended costly litigation will be required.

Even assuming the legal analysis here is completely incorrect, shouldn’t the Board still be having an open dialogue with the community about the lawsuit and related issues? Why is the next Board meeting not scheduled until June 14, the day before the District’s response to the Complaint is due?  Is the Board not disclosing information in order to just do what they please and intentionally circumvent the will of the Community? We should hope not.    

During the past 20+ years the District has invested over a million dollars of taxpayer money into maintaining the property, including restoring the cow and sheep barns and silo in the 1990’s. This restoration alone cost approx. $1 million, funded in part with a matching grant from the State of New York. Wouldn’t walking away from the property at this point result in taxpayer money having been spent for nothing?  Especially, when the District has never afforded the community public access to the property?

While the Board may have discretion in such matters they must nevertheless still exercise it in a manner consistent with their duty. If they fail to do so, then they will have to answer to the community, and could potentially face personal liability for their actions.

The intention here is not to tell the Board what their duty is, just to remind them of it.  The Board members are trustees who owe fiduciary duties to the District and to the people of the Commack community who they serve. Their duties involve care, loyalty, and obedience. The duty of care requires that each Board member must act in good faith and exercise the degree of diligence, care, and skill that an ordinary prudent individual would use under similar circumstances in a like position. In particular, the trustees have a fiduciary responsibility:

  -  for the assets, finances, and investments of the institution and exercise due diligence, care,  and caution as if handling one’s own personal finances; and

  -  to use one’s own judgment in analyzing matters that have an impact on the institution.

Presumably, the property is worth a few million dollars. Yet, has the Board done any due diligence, such as having a professional property appraisal done to determine how much the 9-acre Marion Carll Farm is worth in today’s market?  Wouldn’t it be prudent to do so?

Can each Board member honestly say that, under these circumstances, that they would surrender a potential ownership claim to the multi-milllion dollar Marion Carll Farm property without a fight if the situation were theirs personally?  One would highly doubt that such would be the case.

In closing, while no one can pretend to have an answer to all the issues concerning the property, one must believe that there are many possibilities on how to raise money for needed repairs, including the holding of funding drives by Commack students. Members of the Commack business community could be asked to donate materials and volunteers found to help repair and fix up the property (under the proper and required supervision). There are also many organizations from which funding for the Property can be pursued, including the Society for the Preservation of Long Island Antiquities and the National Trust for Historic Preservation. 

Surely, a way can be found to operate the Marion Carll Farm so it could be self-sustaining, and maybe even made profitable. Other farms on Long Island have done so. My understanding is that the Commack Community Association had a group interested in leasing the property for use as an equestrian center. Interest has also been shown in establishing a community-farming project and in growing and selling blueberries – a farmers market, where the produce grown can be sold to the public. Perhaps a competent not-for-profit organization can be found to take it over and run it successfully as a museum and farm for educational purposes as Marion Carll originally envisioned.

If an economically feasible plan cannot be found then the community may be even be convinced that, as a last resort, it’s necessary to sell off a few acres in order to save the Marion Carll Farm. Perhaps the community will agree to allow a smaller number of condominiums to be built, in a pared down version of the 2010 deal with Holiday Organization. The money from the sale could then be placed into a trust to help fund the Property’s repair and operations.

Commack can meet this challenge and doing so will help develop a greater sense of community and enable future generations to benefit from the effort. The District only needs to work with and coordinate this endeavor with the community - something they have not yet shown a real desire to do. In short, where there is a will.. there is a way, but a collective effort is required and concessions may need to be made by all parties.