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Pinnacle Point Partners

Land Use Litigation / 2018

Client: Pinnacle Point Partners
Type of case: Land use litigation
Court: Chancery Court for the Eleventh Judicial District of Tennessee
Result: Defense verdict for Pinnacle Point Partners

Pinnacle Point Partners own property encumbered by a conservation easement held by a land trust. The conservation easement allows Pinnacle Point to build a road across the property to access adjoining property belonging to it so long as the road is not used to access "commercial or industrial" development and is used only to access "approximately 30 residences."

Pinnacle had a developer lined up to buy the adjoining parcel and build a $26 million, 85-room assisted living facility (“ALF”) on it. The land trust refused consent to the building of a road across the property to access the adjoining property, claiming:

  1. the proposed ALF would be commercial in nature, not residential; and
  2. even if an ALF was "residential," an 85-room ALF would exceed the limitation of "approximately 30 residences" in the conservation easement.

We filed a declaratory judgment action asking the Court to construe the conservation easement in our favor. This was heavily opposed by the land trust, who forced extensive depositions, discovery and trial delays. In the lead-up to trial, we defeated a Motion to Exclude Parol Evidence that sought to keep out our most crucial trial evidence. During a full-day bench trial, we put on three witnesses, including an expert traffic engineer who testified to the traffic impact of an 85-room ALF versus 30 stand-alone homes.

The judge ruled in our favor on all points. She held that the ALF is a "residential" property use because people reside there. She rejected the land trust's argument that the for-profit nature and services provided to residents renders it "commercial" in nature. She also held that the 85-room ALF comports with the "approximately 30 residences" restriction. She relied on our traffic impact study, as well as our argument that this contractual provision shouldn't be strictly construed in light of some oddities regarding the way it came to be included into the contract in the first place. This was a tremendous win for our client. If the land trust had won, our client's contract with the ALF developer would have been terminated, and the client would have been left with property having a significantly diminished value.

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