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Grapes allowed, winery banned in Talbot County

A federal judge has put a cork in a fledgling Talbot County winery.

(Photo by: Don Kasak)

Chateau Bu-De LLC will be allowed to grow and harvest grapes but cannot process them into wine on the property, Judge George L. Russell III ruled last week in a land-use dispute between neighbors. Russell also prohibited Chateau Bu-De from offering tours or tastings or selling the wine on the property, located on the banks of the Choptank River.

“The current landscape is that of a rural residential community that engages in minimal agricultural activity,” Russell ruled in U.S. District Court. “This is the extent of the permitted commercial activity.”

Michael G. Rust, a lawyer for Chateau Bu-De, said in an emailed statement his client is considering all of its options, both in terms of an appeal and in “how to best utilize the subject property in connection with other assets and opportunities.”

The company “appreciates the court’s ruling that CBD is well within its rights to grow and harvest grapes and that the plaintiffs’ efforts to preclude that lawful agricultural activity must fail,” said Rust, of Armistead, Griswold, Lee & Rust P.A. in Easton.

Russell’s ruling resolved competing motions for summary judgment in the case, which was originally filed in Talbot County Circuit Court in November 2012.

The plaintiffs, Joe and Nancy Hollingsworth, purchased their 20-acre property in 2004 and built a house on it. The owner of Delaware-based Chateau Bu-De, Warren Dedrick, purchased 22.5 acres adjacent to the Hollingsworths’ property in 2011 and lives there with his wife, Brenda, according to Russell’s opinion.

In anticipation of opening the winery, Chateau Bu-De hired a winemaker in the summer of 2012 to start making wine off-site and proposed widening a private, gravel road shared by both properties, according to the opinion. The company also had obtained wine manufacturing and wholesale licenses from the state of Maryland and was housing more than 200 cases of wine in an existing garage on the property when the lawsuit was first filed, according to the opinion.

Chateau Bu-De and the Hollingsworth properties originally were part of a 477-acre tract known as Ingleside Farm that was divided into four parcels in 1972, Russell wrote.

Deeds to the parcels said the land should be used for residential use “and not for purposes of trade or business whatsoever,” according to the opinion.

The parcels were also placed under a conservation easement in 1981, which prohibits industrial or commercial activities “with the exception of farming and activities that can be conducted from a residential or farm building” without altering the building’s appearance, according to the opinion.

Lawyers for Chateau Bu-De argued in part that the conservation easement permits a winery and commercial activities the Hollingsworths sought to stop. Russell, while acknowledging there was no case law in Maryland “completely on point,” ruled state courts consistently have held the most restrictive document controls an agreement.

William W. McAllister Jr., a lawyer for the Hollingsworths, praised Russell for not voiding the 1972 deed.

“If all it took to eviscerate deed restrictions was to impose a less-restrictive conservation easement, it would be very easy for anyone to do that,” said McAllister, a principal with Miles & Stockbridge P.C. in Cambridge.

Russell also rejected CBD’s arguments that the Hollingsworths have unclean hands in part because Joe Hollingsworth practices law at his home. Hollingsworth is a partner with Hollingsworth LLP in Washington, D.C., a 65-lawyer firm that handles defense litigation. Hollingsworth uses a small home office but has never served clients there, according to court documents, and Russell said the office is an “incidental use” of the residential property.

The Hollingsworths also grow crops on their property, including sorghum and corn, which Russell said comports with uses of the land by neighbors.