Opinion ID: 1165012
Heading Depth: 3
Heading Rank: 3

Heading: The trust violation.

Text: Because the land was to be held in trust for the university, we must determine whether inclusion of the land in Chugach State park caused a breach of the trust. The trial court concluded that the inclusion of university land in the park violated the trust provision of the federal grant. We agree. The use that can be made of park lands as compared to state lands in general is severely restricted. Trees may not be cut, minerals may not be removed, nor can the land be used for raising farm animals. The general principle is that park lands are to be managed in a way that will increase the value of a recreational experience. [5] It is apparent that this objective is incompatible with the objective of using university land for the exclusive use and benefit of the university. The implied intent of the grant was to maximize the economic return from the land for the benefit of the university. This intent cannot be accomplished if the use of the land is restricted to any significant degree. It is well established in private trusts that [i]t is the duty of a trustee to administer the trust solely in the interest of the beneficiaries. II A. Scott, The Law of Trusts § 170, at 1298 (3d ed. 1967). See G. Bogert, The Law of Trusts and Trustees § 541, at 157 (rev. 2d ed. 1978). Lassen v. Arizona, 385 U.S. 458, 87 S.Ct. 587, 17 L.Ed.2d 515 (1967), makes clear that the same private trust law principles are to apply to federal land granted to the states for school purposes. [6] Lassen involved the question of whether and how much compensation must be paid by a state when it uses school lands for a highway right of way. The Court noted that the enabling act granting the school land unequivocally demands ... that the trust receive the full value of any lands transferred from it... . 385 U.S. at 466, 87 S.Ct. at 588, 17 L.Ed.2d at 521. Further, the intent of Congress was that the grants provide the most substantial support possible to the beneficiaries and that only those beneficiaries profit from the trust. 385 U.S. at 467, 87 S.Ct. at 589, 17 L.Ed.2d at 522 (emphasis added). [7] As noted in a more recent Supreme Court case, Alamo Land & Cattle Co. v. Arizona, 424 U.S. 295, 302, 96 S.Ct. 910, 915, 47 L.Ed.2d 1, 8 (1976), the ultimate conclusion of Lassen is that even where the State itself is the acquisitor, the Act's designated beneficiaries were to derive the full benefit of the grant. [8] The state conjectures that there may still be an economic return from these lands because at some point in the future the Department of Natural Resources may allow ski tows or concession stands to be placed on them. The Supreme Court in Lassen rejected this type of speculation about the possible future value of land. The Arizona Supreme Court had concluded that it was safe to presume that a highway always increases the value of adjacent lands in an amount equal to the value of the right of way that has been taken. The United States, as amicus curiae, had suggested that, instead of using a presumption, any compensation paid into a trust be reduced by any proved enhancement. The Supreme Court rejected both arguments and concluded that the school trust had to be compensated for the actual appraised value of the land taken. From the foregoing discussion, we conclude that the state has breached the trust by not compensating it for the value of the university land included in the park. The appropriate remedy is discussed in detail below.