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Prof. Carlson Property Outline 2010

I. CREATION AND ACQUISITION OF PROPERTY

PRINCIPAL THEORETICAL EXPLANATIONS OF PROPERTY

1. FIRST IN TIME: taking possessing of an un-owned thing is the way to acquire an ownership interest in it. There is a preference by priority.

See Pierson v. Post, Ghen v. Rich (whaling), Johnson v. M'Intosh, INS v. AP2. LABOR THEORY (LOCKE): John Locke is the originator of the idea that by mixing your labor with

something unowned (e.g. cataching a wild fish), you own the resulting mixture of labor and object. See INS v. AP, Local 1330 v. U.S. Steel, Ghen v. Rich (custom-emphasis on hardest

worker), Popov v. Hayashi, Pierson v. Post (dissent)3. RELIANCE (SINGER): the legal system should recognize and protect the reliance interest of property

owners. Reliance theory is based on the moral argument about protecting the reliance interests of the long-standing user. It is wrong for a true owner to allow a relationship of dependence to be established, then try to cut off that relationship/dependence.

To some degree adverse possession relies on this theory. I.e., it would be immoral to allow the true owner to claim an interest after the possessor has come

to rely on the true owner’s staying away. See Singer, dissent of Local 1330 v. U.S. Steel, Howard v. Kuntos, dissent of Van

Valkenberg v. Lutz, Adverse Possession, Easement by estoppel4. PERSONALITY THEORY: choose a property rule to recognize a distinct property right when the

objects of the property define the owner’s person; similar to reliance. Oliver Wendell Holmes: personality theory p. 118 Charlie's shack and right to exclude/trespass in Van Valkenberg v. Lutz – that is, the shack had

become very essential to Charlie’s personhood, INS v. AP5. UTILITARIAN THEORY (HUME and BENTHAM): David Hume and Jeremy Bentham argued that

property was adopt property was utilitarian. We protect others’ possessions as property because we desire the same protection for our possessions. The implicit root of property in this theory is possession and it attempts to maximize social utility. Hume: private property justified because it is limited resource, also to encourage thrift and industry; perfect equality would lead to impoverishmentBentham: property is nothing but an expectation of protection created by the legislator and established tradition

6. ECONOMIC EFFICIENCY: property is economically efficient. This theory promotes the best consequences for society overall (i.e. markets and consumers). Compare the costs and benefits of alternative property rules or institutions with the goal to adopt rules which will general economic well-being.

See Cheney Brothers v. Doris Silk Corp., Keeble v. Hickeringill, Smith v. Chanel (imitation is the life blood of competition), Pierson v. Post, Ghen v. Rich, INS v. AP

All of the IP cases in one fashion or another are concerned with the tension in protecting creativity v. promoting competition

John Stuart Mill:7. INDIVIDUAL AUTONOMY (FRIEDMAN): favors optimizing individual autonomy through market

decisions even if doing so results in more people living in situations where full control over private property is compromised in some way. John Stuart Mill:security of property is essential for humankind to maximize its potential for liberty

8. INTERNALIZING EXTERNALITIES (HAROLD DEMSETZ): Demsetz believes new property rights emerge when the gains become larger than the costs of internalization of externalities. Property helps to internalize the externalities so that individuals make economically efficient judgments.

9. HOHFELDIAN RIGHTS: attempted to disambiguate the term rights by breaking it into eight distinct concepts with four pairs of jural opposites and correlatives.

Jural opposites: (1) right/no right; (2) privilege/duty; (3) power/disability; (4) immunity/liability Jural correlatives: (1) right/duty; (2) privilege/no right; (3) power/liability; (4)

immunity/disability. Right and duty are correlative concepts. If A has a right against B, this is equivalent to B

having a duty to honor A’s right.

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10. CUSTOM: property has a customary root. People engaged in a common activity (e.g. whaling or cattle ranching) often develop customs that govern their relationships between themselves and toward their objects of acquisition or husbandry (e.g. whales or cattle).

11. Morris Cohen: acknowledge that the essence of private property is always the right to exclude others – but it should not be regarded as inviolable. To be really effective, the right of property must be supported by restrictions or positive duties on the part of owners, enforced by the state as much as the right to exclude others which is the essence of property.

RULES v. STANDARDS FOR PROPERTY RIGHTS

RULES (less discretion): ADVANTAGES DISADVANTAGES

Provides notice to people: outcome known before going to court

-Allows planning of behavior ---Easier and more efficient to administer-Uniform and predictable-Low administrative costs

Advocates of this position must deal with:-Problem of rigidity-Inflexibility to change over time-Creation of cynicism by public

STANDARDS (more discretion):

-Increases Fairness-Considers individual differences-Flexible over time towards individual and PP changes

Advocates for this position must deal with:-Flood of litigation concern-Inefficiency of administration

Decides instant case but leaves future cases open

POLICY ENDS TO THE NATURE OF THE PROPERTY RIGHTS: (1) instrumental ends arguments (channel behavior, reduce consequences of litigation and quarrels); (2) reward productivity and foster efficiency (labor theory); (3) create rules consistent with societal habits, customs, or law; (4) create simple, easily enforceable rules; (5) maximize social utility argument (peace, justice, competition); (6) produce fairness in terms of prevailing cultural expectation of fairness.

MATTER FOR LEGISLATURE OR COURTS?

Why Legislature:-Accountable democratically-Access to evidence/research-More representative-Weighs all issues—not just the single case before them, much more information and not bound by narrow dispute-Benefit of time (no time pressure)-Widespread ramifications-Broad set of witnesses/interests-Big Picture view

Why Courts:-Neutral/not subject to interest group pressures (claim may be overblown)-Competence to decide property right Qs-Reasoned decisions-More efficient process-Tradition of common law development to make property rights decisions-Flexibility to limit case’s applicability, meant to be a more anti-democratic institution-Let court decide, if wrong legislature is a check

A. CAPTURE AND MEANING OF POSSESSION

POSSESSION: is the controlling or holding of personal property, with our without a claim of ownership. Possession requires that the possessor have both (1) an intent to possess/control the property, and (2) actual control

over the item. This second element (or occupancy) was not present in Pierson v. Post.

CAPTURE: Wild animals (ferae naturae) may be one of the few things that are unowned and susceptible to capture.

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1. FIRST IN TIME PRINCIPLE: the first person to occupy the thing/resource owns it and its corollary. A prior possessor prevails over a subsequent possessor.

Not dispositive in Keeble; court promotes competition instead. Not dispositive in Ghen; court promotes custom and incentive to hunt instead.

o Benefits: certainty, descriptive theory, settled expectations, reward capture and foster efficiency o Disadvantages: unsympathetic to the energies pursuer, scarce resources can create inefficiencies,

distributional consequences, and morally unfavorable.

Pierson v. Post (1805) , pp. 18-26: while Post (P) was pursuing a fox, Pierson (D) killed the fox and took possession of it. RULE: a hunter must either trap or mortally wound (deprive it of its “natural liberty”) a wild animal in order to acquire

title or “occupancy” of wild animal. Majority involves a rule of possession so that the first hunter to deprive animal of its natural liberty (wounding

where animal cannot survive on its own or capture) gains possession of it.

Majority’s rationale (PIERSON): possession is given to the person who actually obtains occupancy of animal. This rule would create more certainty and preserve peace and order in society with less litigation costs. This is intended to reward the effective and successful individual and not necessarily the individual that tried. It also encourages more efficient capture of the foxes.

Dissent’s rationale (POST): dissent objects on two grounds: (1) It was better to adopt the customs of sportsmen to determine ownership of fox, and (2) Recognition of a property right in wild animals when there is a reasonable likelihood of capture would conduce to more rapid extermination of foxes. It is unfair and morally unfavorable to award the fox to a person who did not invest the same time and energy in the capture.

2. EQUITABLE DIVISION/PRE-POSSESORY INTEREST: Popov v. Hayashi (2002) : involved rival claims to ownership of a baseball hit by Barry Bonds; both had quasi-possessory interest in baseball.

HOLDING: Both parties have an equal and undivided interest in the ball. Solution to the problem was equitable division (item is sold and the proceeds are split between the two parties).

RULE: Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and is interrupted by the unlawful acts of others, the actor has a pre-possessory interest in the property.

o Pre-possessory interest constitutes a qualified right to possession that can support a cause of action for conversion.

o Conversion is the wrongful exercise of dominion over the personal property of another (in this case the ball). Compare Post to Popov: in Post, the π was not interrupted by outside “unlawful” intervening

event and therefore his right of possession based on labor was insufficient to trump the ∆ right of actual possession, however π in Popov was disturbed inappropriately and therefore his labor granted him a pre-possessory right equivalent to that of ∆ actual possession

3. ACCEPTABLE COMPETITION V. MALICIOUS INTERFERENCE: Keeble v. Hickeringill (1707) , pp. 30-35: when Keeble (P) lured wild-fowl to his land with decoys, Hickeringill (D) frightened the wildfowl away by firing a gun and affecting P’s livelihood.

RULE: a person may not maliciously prevent another from capturing wild animals in the pursuit of his trade. POLICY: court favors protection of those who use their skill/industry to promote trade and fair competition

o If someone damages another’s business by competition, no liability exists. E.g., a schoolmaster lures students away from school by offering better instruction is fair

competition, but it would be unlawful to frighten the students away. Hickergill could gave created BETTER decoys.

o In Keeble, general welfare is best served by promoting social goal of furnishing the markets with duck and defend lawful competition.

Property rights can be affect by policy ends: Hickeringill’s conduct was a dead-weight drag on societal improvement (e.g. fewer ducks for the table). Hickeringill’s conduct might not be unlawful if societal goals are to preserve biodiversity.

o Doctrine of ratione soli: asserts that an owner of land owns the wild animals on that land. Serves to protect a landowner’s constructive right to possession as against a trespasser (Keeble).

Specific instance of constructive possession: control or dominion over a property without actual possession or custody of it.

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4. CUSTOM DICTATING PROPERTY RIGHTS: custom is a practice that by its common adoption and long, unvarying habit has come to have the force of law. Ghen v. Rich ( 1881) , pp. 26-29: Ghen (P) shot and killed a whale, which sank to the bottom of the sea. Three days later, Ellis found the whale and did not notify obvious owner (P); instead, Ellis sold it to Rich (D).

HOLDING: the court can consider custom and usage within an industry to determine the rule of law regarding property ownership.

RULE: title to a wild animal can be acquired when a hunter apprehends the beast in accordance with custom. Mortal wounding is enough, if that is the custom.

o Swift v. Gifford: local custom is important and historical tradition regarding job itself lent to a decision for a hunter.

o Barlett v. Budd: hunter who kills and lays appropriate claim on animal is rightful owner of the animal with possession

ARGUMENTS FOR AND AGAINST CUSTOMArguments For AgainstInstrumental -Works well in practice

- Necessary to the survival of the industry and may collapse if not followed (no one would hunt if chance finder could take fruits of labor)-Society deprived of benefits of industry

-Customs will be formulated for benefit of industry, not society as a whole-Dangerous to those employed-No reason to think that industry could not respond to changes

Economic -Custom may be more efficient at promoting capture of wild animals-Ensure individuals do not grab benefits for themselves that impose net loses on a group

-Wasteful of economic resources (some of the whales “floated out to sea” and were “never recover”)-Lead to overinvestment in technology (bomb lance)

Other Interests -Apply when it “requires in the first taker the only act of appropriation that is possible.”-Application is limited to and relied upon by an industry and experts can be relied upon-Affects few people

-Custom may not internalize all externalities

Individuals conform to customary rule out of self-interest: (1) In the long run, they will be better off; (2) In the short run, deviation from the customs will result in substantial informal sanctions from the group.

RULE OF CAPTURE APPLIED TO OIL AND GAS: because fugitive minerals such as oil and gas appear to be similar to wild animals because they wander, court initially applied legal doctrine pertaining to wild animals.

The underlying issue in those cases, however is really how best to foster productivity by the efficient exploitation of oil and gas.

Rule of capture applies: o The first driller to tap and produce oil or natural gas from a pool underlying the lands of several owners has

acquired possession of the resource brought to the surface, even though it may have drained the pool under the other’s lands.

o Incentives reason to produce oil and gas. Oil and gas characterized as “fugitive resources” similar to wild animals.

EXCEPTIONS: LATERAL DRILLING: drilling straight down from one’s land is not a trespass. Lateral drilling is a trespass.

HYPO: B drills down and takes all the oil in the land. A sues B. Arguments for B:-First-in-time principle: first to deprive the oil of its natural liberty (Pierson) and mortally wound (Ghen).-Instrumental: extract oil for productive uses (Ghen and

Arguments for A:-B is unlawfully infringing on A’s oil under A’s land (Keeble/ ration soli).-A bought the land for oil, A has a pre-possessory interest in

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Pierson).-Oil is analogous to wild animals.

oil (Popov).-Oil is not similar to animals (finite, cannot reproduce)

WATER: A. Surface water (lakes, rivers, and streams)

o Riparian states and rights: water-rich eastern states, each owner of land along a water source has a right to use the water, subject to the rights of other riparians.

o Prior appropriation: water is scarcer in western states and was allocated on the basis of first in time (the first to make beneficial use of water gained a vested right to continue that use). The allocations are controlled by state statute today.

B. Underground or ground water (water found in aquifers): can be classified into two categories (underground stream and water not in a channel or percolating waters) and the owner of property has an absolute right to withdraw percolating water and use it as he willed.

o English rule of absolute ownership: allowed each landowner over an aquifer to withdraw freely without regard to effects on neighbors.

o American rule of reasonable use: water must be used solely on the overlying land if use elsewhere would cause hardship to other landowners with access to the common underground pool of water.

HAROLD DEMSETZ, TOWARD A THEORY OF PROPERTY RIGHTS:Thesis: Demsetz believes new property rights emerge when the gains become larger than the costs of internalization of externalities.

Externality: it is a cost or benefit that a resource user is not forced to take into account when making decisions about how to use the resource (i.e. external costs and benefits).

Transaction costs: trouble with getting numerous parties together, free riders who pay nothing but enjoy resource, hold-outs (if negotiate separately, some parties may way for a better deal at the cost of others), one party may be motivated to negotiate separately at cost of others, lawyers, times, organizing.

Types of Ownership: o (1) Communal: all members exercise right, increased transaction costs because costs not born directly by

each person nor is are owners attentive of them, must negotiate; o (2) Private: exclude others – greatly reduces negotiation costs; o (3) State: state can exclude anyone from use of property; o (4) Anticommons: entails multiple rights to exclude others from ownership of property (under consumption

as number of anticonsumers increases); ANDo (5) Semicommons: combines private and common ownership.o Property regimes in place to manage externalities

Tragedy of commons: tendency to over-exploit a common resource because the full costs of exploitation or externalities are not borne by each user. (Self-interest and common interest collide).

DEMSETZ’S ARGUMENTS: Encourage privatization of property to decrease problems of common property ownership (externalities).

o Fewer owners = fewer externalitieso Promotes sense of freedom, autonomy, privacy. o Easier to negotiate with one owner.

Privatization may not be possible so must follow other schemes to control and minimize deleterious burdens of externalities:

Ways to reduce externalities if privatization not possible: Government and Self Regulation: 1. Government can regulate by legislation and zoning (i.e. Hickeringill zone distance between ponds). 2. Government may impose rules or limits (quotas on hunting animals, require licenses). 3. Industries may be able to self-regulate (e.g. Maine lobster industry which self-regulates and enforces). 4. Let the injured party sue in court for damages. 5. Do nothing and increase competition

HYPO: 100 people own trees in an open lot. All have right to use. Each person has a 1/100th interest in the last tree that remains standing. Worried about externalities if the trees are valuable.

No one can limit use of others.

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Consider the following:

Externalities:-Inefficient use of trees-Land value decrease-$ for trees decreases if cut early in growth-Future generation interests not considered

Interests of Society:-Social order decreases if one person gets all-Decrease in peace-Incentive to cut down trees-Money to some and decrease in wealth for others

Tragedy of Commons:-Individual self-interests collide w/group-Hard to control everyone-Transaction costs increase-Hold out/free rider

The long chain of causation: (1) Changes in technology or the opening of new markets create; (2) Changes in economic values which increase; (3) Internalization (process that enables these effects to bear on all interacting persons); and (4) Lead to property rights. (5) These changes may not be conscious but come about through social mores or common law precedents.

E.g., The development of the fur trade among Indians around Quebec: Indians established property rights after the (beaver) fur trade picked up. Thus, they internalized the externality (overhunting the game), saving the beavers.

However, no property rights existed in the case of the Southwestern Indians. These Indians hunted grazing animals with little commercial value (low benefit of internalization) and the animals wandered a lot (high cost of internalization – hard to keep track of which animals are “yours”)

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B. ACQUISITION BY ADVERSE POSSESSION

RATIONALES FOR ADVERSE POSSESSION: 1. Earning/Social Utility theory: encourages use of property, social utility, and rewards people who use land productively and beneficially for a long time. 2. Sleeping theory: people who ignore their land in braze violation of legal right deserve to be punished. 3. Stability/Quieting Title theory: enables disputes or doubts about land title to be cleared expeditiously by delivering title (quieting title) to the person who has occupied the land as if he were the owner; it facilitates an efficient transfer of property. 4. Reliance/Expectations: longer one uses the property the deeper one’s reliance becomes on the property.5. Personality theory Holmes: the longer someone has been on a property the more it will be apart of one’s person (economic, psychological, and moral concerns). 5. Discourage trespass/reward honest behavior

Two ways an adverse possession suit can be brought: (1) Ejection by property owner; (2) Affirmative case brought by an adverse possessor to rule about who actually owns title (“quite title”)

Claim of title: one way of expressing the requirement of or claim of right on the part of an adverse possessor. Two types of adverse possession:

o (1) Under color of title: a written instrument, faulty deed, or other evidence that appears to establish title, but does not.

Many state statues reduce significantly the statute of limitations period for persons taking possession of property with color of title.

The adverse possessor with color of title who successfully proves an adverse possession claim based on actual possession of a part of the tract described in the document constituting color of title is deemed to be in constructive possession of the whole tract.

Constructive possession: control or dominion over a property without actual possession or custody of it.

o (2) Someone merely begins living on the land and not under color of title.

ADVERSE POSSESSION ANALYSIS

ADVERSE POSSESSION is a means of acquiring title to the property of another when certain conditions are met such conditions are: (1) actual entry; (2) giving exclusive possession which is (3) open and notorious (4) adverse/hostile under a claim of right and (5) continuous/uninterrupted for the statutory period.

Thus, if [adverse possessor] satisfies these conditions for the [identify statutory period], he is able to file an action to quiet title to make the property his [notwithstanding defenses such as laches- unreasonable delay in pursuing a right or claim – almost always an equitable one – in a way that prejudices the party against whom relief is sought].

The owner’s cause of action accrues and the statute of limitations period starts to run at the moment of actual entry and when the owner has actual knowledge of encroachment.

If the owner of the land does NOT take legal action to eject a possessor who claims adversely to the owner, the owner may lose the right to eject the trespasser from the property.

STEP 1: IDENTIFY THE STATUTORY PERIOD FOR ADVERSE POSSESSION (usually 5-21 years): [INSERT ADVERSE POSSESSOR] began adversely possessing the property in [INSERT YEAR] which

trigger the action. Note: even if adverse possessor does not meet the requisite statutory period, he may nonetheless still

succeed under the doctrine of TACKING. Under this doctrine, an adverse possessor may combine a period of possession with a predecessor adverse possession as long as there is privity of estate between the two. (Usually a voluntary transfer of physical possessor or estate in land). Although privity is established

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between the two parties, the adverse possessor’s possession of the land would still need to meet all the elements of adverse possession:

STEP 2: RUN THROUGH THE ELEMENTS OF ADVERSE POSSESSION AND INTERWEAVE FACTS

STEP 3. ACTUAL ENTRY AND USE: has the adverse possessor actually entered onto the land?

-Actual entry onto the land is required, and this entry starts to run against the statutory limit for adverse possession.-Adverse possession may exist even if the occupant does not reside on the property and for long periods of time does not use it.

1. Ewing v. Burnet (1837) : (AP/USE) court found for claimant that used lot primarily for digging sand/gravel when claimant paid taxes on the lot, dug sand/gravel from time to time, permitted others to do so and brought actions against those who did so without permission. Did not reside on property nor for long times used.

-Courts have different standards regarding what is actual/ordinary use:2. Van Valkenberg v. Lutz (1952) : (NO AP/USE) even though P farmed on the land, built

a shack/garage on the land, raised chickens, stored rubbish, planted fruit trees, cut timber, and neighbors attested to Lutz’s ownership. But, P DID NOT UTILIZE substantial portion of land.

3. Petis v. Lozier (1984) : (NO AP/USE) for a claimant that occasionally used the land for gardening, planted grass, posted “No Hunting” and “No Trespassing Signs” and twice removed “For Sale” signs, during statutory period.

STEP 4. GIVING EXCLUSIVE POSSESSION: has the adverse possessor exercised exclusive possession? (#1-2 malleable standards)

-Adverse possessor does not share possession with the owner nor with the public generally.

Note: “sharing with the public generally” does NOT denote excluding the public from the land as a requirement, but rather exercising the rights of ownership; CANNOT relinquish all ownership to the public generally.

STEP 5. OPEN AND NOTORIOUS: has the adverse possessor’s possession been open and notorious (some places require taxes to be paid for limitations period to be met)?

-Adverse possession must be so visible and obvious that a reasonable owner who inspects the land will receive notice of an adverse title claim.-Must use in a way that average true owner would use it under circumstances such that observers would regard occupant as a person exercising exclusive dominion.-Must be applicable to condition, size and locality of the land similar to a typical owner.

Van Valkenberg v. Lutz (1952) : RULE (NY Law): to prove adverse possession it must be shown that the premises (1) are protected by a substantial enclosure, or are (2) usually cultivated or improved.

o DISSENT: an adverse possessor need not use all of the land, only some of it.-Not usually contested unless hidden areas are at issue:

Marengo Cave Co. v. Ross (1937) : (NO AP) court held that open possession of an underground cave is not open, visible, notorious, or exclusive.

-Where encroachment is small, open/notorious requirement may not be met: Manilo v. Gorski (1969) : court remanded case where 15-inch encroachment may have

been too small to satisfy the open and notorious requirement.

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RULE: Possession need not be knowingly and intentionally hostile, but it must be notorious enough to give the true owner actual or constructive notice of the encroachment.

See Mannillo: actual knowledge v. reasonable person knowledge; most jurisdictions use reasonable person knowledge.

STEP 6. ADVERSE/ HOSTILE under a claim of right: has the adverse possessor’s possession been adverse and hostile under a claim of right?If not acting under color of title, proof of adversity is required… This depends on the standard required by the jurisdiction…If we apply the [INSERT] doctrine…

-Adverse/hostile (intent to remain and hostile) = without the owner’s consent Note: WITH the owner’s consent leads to a possible Landlord-Tenant analysis.

-DID [POTENTIAL ADVERSE POSSESOR] HAVE THE APPROPRIATE CLAIM OF RIGHT?

KEY QUESTION: Does court apply a subjective or objective test? Objective test (Majority): A/P’s state of mind irrelevant; actions of possessor

important and actions of A/P look like under a claim of right.o Adverse possessor uses the land as a reasonable owner would satisfies this

requirement (consider actions of other owners in area)o No subjective intent to claim title necessary, lack of true owner’s permission,

and inconsistent with true owner’s legal rights. Manillo v. Gorski (1969) : possession need not be knowingly and

intentionally hostile, but it must be “open and notorious” enough to give the true owner actual or constructive notice of the encroachment. A minor border encroachment of 15 inches does not satisfy the “open and notorious” requirement for AP.

Connecticut Doctrine – court adopted in Manilo: very nature of the act is proof of intention, so there is no reason to inquire into the mind of the possessor (an objective standard).

Subjective test (Minority X2)o Good faith test (“I thought I owned it”)= adverse possessor must have bona

fide belief that he has title to the property. Van Valkenberg v. Lutz (1952): NO ADVERSE POSSESSION.

VV court said that D voluntarily admitted that P owned land; thus, occupation was not under claim of title and did not meet adverse/hostile requirement.

Howard v. Kunto (1970): ADVERSE POSSESSION. Court said that Kunto’s (D’s) good faith belief that the tract was his land was sufficient to meet the adverse/hostile requirement.

o Bad faith test (MAINE DOCTRINE) = adverse possessor must have intent to claim title to the property against the true owner (i.e. squatters, “I thought I didn’t own it, but I intended to make it mine”)

Maine Doctrine – it must be the intention of the occupant to claim ownership of the land against true owner. A subjective standard—arguably supporting trespass, falsehood, and rewarding greedy A/Ps. Court rejected doctrine in Manilo

COLOR OF TITLE = Adverse Possessor enters the property w/defective/invalid instrument (but appears valid on its face).

o Hostility may be proven by showing instrumento Adverse possessor gains title not only to the lands he possesses, but in

constructive AP of lands described in the deed.o SOL may be lowered (depends on state).

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STEP 7. CONTINOUS/ UNINTERUPPTD: has the adverse possessor’s possession been continuous and uninterrupted for the statutory period?

Requirement is met when the possessor maintains possession for statutorily required period of time by using the property in the CUSTOMARY manner (like the average owner).

Such use must be as continuous as those of a reasonable owner would.o Consistent with the type of property

Interruptions in actual possession do not destroy continuity if AP occupies land as would True Owner in similar circumstances.

o Seasonal use: may constitute continuous element but requires privity (e.g. hunting cabin during hunting season).

Howard v. Kuntos (1970): (AP) Kuntos (D) occupied summer residence under color of title (a defective deed). Met “continuous element” b/c physical use of property was limited to summer months and it constituted “ordinary use.”

Abandonment by AP = intentional relinquishment of possession, resets Statute of Limitations (NO ABANDONMENT? CONTINUOUS)

o #1 AP abandons, #2 AP arrives and SL starts anewo #1 AP abandons with intent to return, #1 can eject #2

TACKING = AP can combine consecutive periods of possession with a predecessor to treat the periods as one continuous period if two are in privity with each other.

o Requires PRIVITY OF ESTATE = voluntary transferred possession or an estate in land. Privity occurs by contract of sale, gift, will, or inheritance.

NOTE: The tacking requirements ought to follow the state of mind requirements.

POLICY see Kuntos: privity requirement is merely judicial recognition of the need for some reasonable connection between successive occupants of real property to raise claim of right above status of wrongdoer or trespasser. Support good faith purchases of ownership, not squatters.

o Land ownership can be divided temporally – that is, by time. The general rule is that the statute does not begin to run against

a person having a future interest in land until the future interest becomes possessory (original owner makes a transfer to new owner).

PAY PROPERTY TAXES FOR STATUORY TIME: required in some areas in west to give notice.

EXCEPTION: DISABILITIES (MUST BE IN PLACE AT TIME AP ENTER AND ACTION ACCRUES) Disabilities = most statutes give an additional period of time to bring action against disabled (SOL v.

disable statue = which one is longer) o Only the disabilities specified in the statue can be considered.

Usually minor or infants, insane or other unsound mind, prisoner or people in military service or those who are absent from the state

o Usually only disability of the owner counts at the time AP entry begins SOL timer.

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o SOL will not run against him or her until disability removed. SOL is TOLLED (suspended) if the owner is disabled from bringing an action to recover

possession at the time the cause of action accrues. No taking of disabilities, but when under more than one, the one of most benefit is

elected. A person taking from or through a person with a disability may take advantage of the

tolling statute to the same extent as the person with the disability (except it ends the day of the sale or gift of land).

Extent of land acquired by APo No color of title = actually occupied or controlled in a manner consistent with ownership of such

premises. o Color of title = AP is in constructive AP of the part of the tract he does not actually possess.

AP does not need to cultivate land. Constructive or actual possession trumps color of title.

EXCEPTONS: THREE ALTERNATIVES TO RESOLVING BOUNDARY DISPUTES: Doctrine of Agreed Boundaries: evidence that the parties agreed about where the lines of the

boundary would be placed (oral agreements) and may be enforceable if explicit. Doctrine of Estoppel: agreed upon boundary where non-owner has RELIED on agreement;

must demonstrate reliance with improvements, etc. Doctrine of Long Acquiescence: long silence between neighbors on ownership of land is

considered an agreement – can be used as evidence between the parties fixing the boundary lines – CA does not recognize. Often applies when one neighbor remains silent in the fact of expenditures by another that suggest the latter’s notion of the boundary’s location.

REMEDIES: Property Rules

o Owner gets property o A/P gets property

Liability Ruleso True owner gets property but must pay A/P for improvementso A/P gets property and pays true owner for it less improvements

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C. ACQUISITION BY RELIANCE IN THE MARKETPLACE

ADVERSE POSSESSION WITH CHATTELS: title to personal property can be acquired by adverse possession. A different often shorter statute of limitations usually applies.

AP not well suited to personal property b/c possession of personal property is not very “open and notorious.”

Exception: latches (did the true owner behave in a way that was sufficiently diligent?)

REPLEVIN: action for repossession of personal property wrongfully detained by another.

3 different rules for SoL: conversion, discovery (New Rule: Majority), or demand (New Rule: Minority).

Thief cannot acquire good title, nor anyone that receives property from a thief.

Bona Fide Purchaser: unaware property was stolen, not able to retain ownership unless SoL tolls

Exception: (UCC) entrusting possession to a merchant dealing in kind of goods given will empower to transfer all rights of entruster to buyer venting good title in buyer.

CONVERSION RULE: Old Rule (Old Rule) SoL begins when property is wrongfully taken and TO is disposed of property (Tolls even if theft is concealed)

DISCOVERY RULE: The modern trend applies the “discovery rule” to adverse possession of chattels.

SoL begins on stolen property once owner discovers where stolen property is-Not accrue while owner uses due diligence to locate property.-Does accrue once owner (1) knows or “reasonably should know” whereabouts of property and (2) identify of possessor

BoP: owner must use due diligence in locating missing item.-Due diligence: what tools were available for recovery?-Conduct of the owner is analyzed and not that of possessor-Rationale: greater protection of innocent owner of stolen property

DEMAND RULE: NYC rule -SoL begins when owner demands return of chattel and GFP refuses return

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-Until “demand” and “refusal” property is not considered “wrongful”

1. ADVERSE POSSESSION WITH CHATTELS: title to personal property can be acquired by adverse possession. A different often shorter statute of limitations usually applies. The modern trend applies the “discovery rule” to adverse possession of chattels.

AP not well suited to personal property b/c possession of personal property is not very “open and notorious.”

O’Keefe v. Snyder ( 1980) : three of O’Keefe’s paintings were stolen from an art gallery. The thefts were not reported to anyone. RULE: the statute of limitations is tolled if the owner of stolen chattel makes diligent efforts to locate and recover the

lost chattel. NEW RULE (DISCOVERY RULE): cause of action will not accrue until (1) when the loss occurs (except where

there is fraud or concealment); or (2) when the owner first discovers, or through reasonable effort should have discovered, the cause of action (including the identity of the possessor).

o Burden of proof on plaintiff (owner) to show reasonable steps taken to pursue a missing chattel, encourages owners to report losses, and undertake reasonable investigations.

o Encourages good faith purchases and discourages trafficking. Accrue: the last element of the cause of action is in place or to come into existence as an enforceable claim or right.

KEY QUESITON: HAS THE POSSESSOR ACTED WITH DUE DILIGENCE IN PURSUING HIS OR HER PERSONAL PROPERTY? (i.e. effective method of notice, contact authoritative institute, etc.)

“Due diligence” rule: after the property disappears, the true owner may toll the statue for the period of time that he or she searches diligently for it, but if the search is discontinued, the statute runs. The true owner bears the burden of proof on the issue of diligence.

o SoL does not run if owner cannot locate object or possessor when all reasonable efforts are made. NY (Guggenheim) RULE: the clock on the SoL does not begin to run until the true owner knows the identify of the

possessor and makes a demand to get the item back. o Museum makes a demand and the demand is refused.o Person who has the art could defend it by latches. Original owner could have DONE MORE. o “Demand and refusal” rule means that a possessor runs the statute from the date of the refusal and that the

statute was tolled beforehand. Note: The Native American Graves Protection and Repatriation Act of 1990

o The act seeks to send back the possessions of Native Americans that were lost as a consequence of European settlement to their erstwhile custodians.

2. ACQUISITION THROUGH RELIANCE/WORKLocal 1330 v. U.S. Steel (1980): two large steel mills shut down in Youngstown, Ohio after U.S. Steel Corporation (D) told workers that if they increased productivity the plant would remain open.

o HOLDING: (1) No precedent would convey authority to the court to require a steel manufacturing corporation to continue operation when its officers and Board of Directors decided to discontinue on the basis of unprofitability; (2) Courts DO NOT have the power to regulate private property.

o D’s argument: it is private property and owners have a right to shut it down; no contractual promise was made to keep it open.

Instrumental arguments for allowing plant to shut down: if forced to stay open more costs, no incentive to open more businesses in U.S., companies may cshift businesses overseas, workers could have seen the closing coming.

o P’s argument: workers have relied on continued operation of the factory; Ds are obligated to keep it open. Instrumental arguments for forcing plan to remain open: fairness in holding company

accountable for misrepresentations, lots of externalities unaccounted for if shut down (jobs, community, etc.), another option is sell to worker or require workers to compensate.

MATTER FOR CONGRESS, NOT COURTS:

SINGER, THE RELIANCE INTEREST IN PROPERTY : Judge Lambros’ initial intuition in U.S. Steel about correct legal result was better. Court should have:

o Recognized property rights arising out of relationship with company. o Placed obligations on the company towards the workers and the community to alleviate social costs of its

decision to close the plant.o Acknowledged precedent of the kinds of property rights that were asserted by the union.

Many property doctrines and legal rules are based on principle of shifting ownership rights when an owner has caused a “reliance interest in property.”

o True owner in U.S. Steel caused possessor to rely on his actiosn and possessor developed a deep attachment.

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o Singer supports shifting some ownership rights to workers.

HOFELDIAN RIGHTS: rights are relational! o Rights: are claims that are enforceable by the state and others act or refrain from acting in a certain manner in relation

to the right holder. o Correlative duty: for each right there is a correlating duty (i.e. right to exclude means others have a duty not to

trespass). o Privilege: permission to act in a certain manner vis-a-vie property without being liable for damages to somebody who

has been affected by the act. o Every Right Correlative Duty o Every Privilege Correlative NO RIGHT

o Privilege to do something and someone else has NO RIGHT to stop.

D. ACQUISITION BY CREATION-INTELLECTUAL PROPERTY

1. LOCKE’S LABOR THEORY: Begins with the belief that every person owns oneself. “Every man has a property in his own hands,” wrote Locke. Locke claimed that because you own your own labor, when you mix that labor with something unowned by anyone, you own the resulting mixture.

2. QUASI-PROPERTY INTERESTISP v. AS (1918): P and D are newsgathering and distributing competitors. P brought suit to restrain D from pirating P’s news by bribes, inducements, and copying from P’s bulletin boards/early editions.

o HOLDING: INS’s conduct violated AP’s quasi-property right in its news presentation. It was misappropriate (application of another’s property or money to one’s own use) and unfair competition in business for INS to copy AP’s new and release it before AP could.

o The rights between these companies were RELATIONAL. o INS had a DUTY not to take from AP’s news.

Each party is under a DUTY not to undercut each other unfairly for competition. o Instrumental arguments for INS: healthy competition is a good thing, even if a particular business is hurt

in the process, better for consumers, drive down cost of news, AP can figure out another way to disseminate news.

o Instrumental argument for AP: newspaper would go under if court ruled in favor of INS, unfair business practices should not be support (Keeble), AP captured the news first (Pierson).

3. NO PROTECTION AGAINST IMITATION: Cheney Brothers v. Doris Silk Corp (1929): D copied P’s popular scarf design and sold the silk at a reduced rate but denied knowledge that it was P’s design.

o HOLDING: skilled imitation of seasonal fabric designs is not so inequitable as to warrant a remedy. o To exclude others from imitating certain chattels may set up monopolies with intense power over

competitors, which the Constitution only allows Congress to determine.

4. NO PROTECTION AGAINST BRAND COMPARISON: Smith v. Chanel (1968):

o HOLDING: court held that perfume company (D) could announce in advertisements that their product was the equivalent of the more expensive Chanel No. 5 (P).o Instrumental argument favoring majority: public is better served because it permits the normal operation of

supply and demand to yield the fair price society must pay for a given commodity and it offered comparable goods at lower prices.

o Fairness/Labor argument: trial court held that D should not be allowed to “take a free ride” on the trademark owner’s goodwill and reputation.

o Monopolies: lead to higher prices, stiffen innovation, and less accessibility to desired products. o Under protect intellectual property less motivation for innovators to create new products. o Over protect intellectual property stiffen innovation.

DOUGLAS G. BAIRD-COMMON LAW INTELLECTUAL PROPERTY AND THE LEGACY OF ISI v. AP (1983), p.63: clear distinctions between possessing “wheat” or “land” as property versus the possession of “information.” Possession of wheat precludes possession by another else; many people can possess the same information. As long as freedom to imitate ideas does not destroy all incentive for people to come up with new devices, it will help promote a market economy.

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Intellectual property law: a category of intangible rights protecting commercially valuable products of human intellect. Patents: the government grant of a right, privilege, or authority.

o Patent holder gets exclusive right to produce the product with no exception (monopolistic) (work need NOT BE ORIGINAL).

o Lasts 20 years from date patent is filed. Copyrights: the right to copy a work, specifically, a property right in an ORIGINAL work of authorship (e.g. books, music, artistic works, articles) fixed in any tangible medium of expression, giving the holder the exclusive right to reproduce, adapt, distribute, perform, and display the work.

o Less protection than patent owners. o Last for author’s life, plus 70 years.

Trademarks: a word, phrase, logo, or other graphic symbol used by a manufacturer or seller to distinguish its product or products from those of others.

o Unlimited duration but the least monopolistic power, e.g., provide limited protection for a word. o Others cannot use trademark for products that will cause consumer confusion. o Only name protected.

Personal image as property: property rights exist in one’s personal image. Today the ability to exploit your image for profit is recognized as a valuable property right because we have created a culture of celebrity in which money can be made from selling image.

o A celebrity’s “right of publicity” is widely recognized as a kind of property interest, assignable during life, descendible at death.

5. PROTECTION AGAINST PROPERTY RIGHTS: WHITE v. SAMSUNG (1992):

o HOLDING: court concluded Samsung’s depiction of a robot clad in blonde wig, dress, and jewels posing in front of the Wheel of Fortune infringed Vanna White’s common law right of publicity.

o RULE: right of publicity can be extended to any “appropriation” of a person’s “identity,” anything that “evokes” their personality, even if it does not use the person’s name or likeness.

o DISSENT (KOZINSKI): criticized this ruling as a “classic case of overprotection” because it extended the publicity right to preclude even images that might remind the viewer of a celebrity.

o This ruling overturned the balance between protection of creative endeavors and leaving room for new innovation; it is a clear violation of the 1st amendment.

E. REFLECTIONS ON ACQUISITION AND POSSESSION

1. THE SOCIALLY CONTINGENT NATURE OF PROPERTY RIGHTS & RELATIONAL INTEREST IN PROPERTY:JOHNSON v. M’INTOSH (1823): M’Intosh (D) acquired title to land under grant from the United States; Johnson (P) acquired title to the same land by purchase from the Painkeshaw Indians.

o HOLDING: U.S. government had a right to take the land, even when the land is in previous possession by native Americans, which is a right granted by the crown and established in this case.

o RULE (“Discovery Doctrine”): discovery of land in American by a European power gives absolute title subject only to the Indian right of occupancy.

o Native Americans were occupants but never really considered “owners” of the land and rights of Native Americans were subservient to dominant society.

o U.S. obtained all rights to realty that England previously had and did not recognize title based on a grant by Indians.

o NOTE: property rights are often what the federal government says they are.

2. PROTECTION OF PROPERTY RIGHTS IN YOUR OWN BODY:MOORE v. REGENTS OF THE UNIVERSITY OF CALIFORNIA (1991): Moore (P) was a patient at Golde’s (D) medical center. P had a special disease and his cells were unique and had scientific and commercial value. P was not told and his cells were used to develop a cell line.

o RULE: (1) A doctor has a duty to disclose the extent of his research and economic interests in a patient’s body parts. (2) Human body party are not property such that they may be converted.

o Three reasons for refusing to extend conversion to the human waste tissue: o 1. Chill medical research o 2. Moral issues involved ought to be left to the political accountable legislature

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o 3. Moore still had available to him claims based on asserted breach of fiduciary duty by his medical care providers.

o Note: no ownership in discarded body parts, statutory laws strictly limit rights over body parts. o DISSENT (MOSK):

o Moore had the “right to do with his own tissue that the defendant did with it.” Moore could have contracted with companies/researches to develop and exploit the commercial

product of his tissue and its products. o It is inequitable and immoral for Moore not to have any share of whatever proceeds of the cell line. o Concept of property is “bundle of rights” and there is a protectable property interest in the body tissue.

o Arguments for Golde: Golde was the brains/labor behind the project, advance scientific research, cell line rare, doctors may not pursue without incentive.

o Arguments for Moore: private/sense of bodily control, property interest in spleen, and first-in-time, Locke’s premise (possession of body parts), right to publicty, exact reproduction can be found from other spleens.

3. MORE ON POSSESSION: THE RIGHT TO EXCLUDE: the right of possession is usually conceived as containing a corollary right: the right to exclude others from possession. MAJORITY RULE: Absolute right to exclusion as limited by state and federal anti-discrimination laws. However, Innkeepers and Common Carrier is cannot exclude arbitrarily with out reasonable cause (disruptive to safety, drunk, criminal)

o JACQUE v. STEENBERG HOMES, INC. (1997): a landowner, Jacque (P), sought punitive damages after a developer, Steenberg (D) deliver a mobile home across the landowner’s property without permission.

o HOLDING: the actual harm is not the damage done to the land, which may be minimal, but in the loss of the individual’s right to exclude others from his property.

o RULE: punitive damages (intended to reform or deter) may be imposed for intentional trespass to property. o RULE: the private landowner’s right to exclude others from his or her land is one of the most essential rights

of property. MINORITY VIEW: When property owners open up property to public for their advantage, they cannot exclude for arbitrary or unreasonable reasons

o STATE v. SHACK (1971): Shack (D) entered Tedesco’s property to give legal aid to migrant farm worker. Shack (D) refused to depart upon Tedesco’s demand and is prosecuted for trespass.

o HOLDING: ownership rights do not include the right to bar access to governmental services available to migrant workers.

o RULE: property rights may not be exercised so as to endanger the well-being of others.

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II. THE SCOPE OF PROPERTY RIGHTS

1. NUISANCE

PRIVATE NUISANCE is affecting a single individual or a definite small number of persons in the enjoyment of private rights not common to the public. There are three elements to private nuisances:

1. It must create a “substantial interference” with the use and enjoyment of others’ properties and can be separated into two types:

2. The D must act intentionally and unreasonably OR3. The D must act unintentionally and result in negligent, reckless, or abnormally dangerous activity for

which there is strict liability. a. NOTE: must use Threshold or Restatement Test to determine whether unreasonable.

2. PUBLIC NUISANCE: is a nuisance that affects the rights of general public and must affect a considerable number of people or an entire community or neighborhood. It is widespread or indiscriminate in its range of effect. The test used for public nuisance is the same for private nuisance: substantial harm caused by intentional and unreasonable conduct or by conduct that is negligent, reckless, or abnormally dangerous.

a. Standing: although a public nuisance suit is usually brought by the attorney general, i. It can be possible to enforce by a private person only if that person can show that the

nuisance is particularly injurious to him (“special injury” requirement for standing).

ANALYSIS FOR NUISANCE PROBLEM

NUISANCE is an unprivileged interference with a person’s use and enjoyment of his land. Interference must comes from an invasion of the land. In turn, the invasion can be particles (gases, noise, vibrations, etc.). All derives from common law principle that one must use one’s land so not to injure neighbors. There are two flavors of nuisance: (1) private nuisance; and (2) public nuisance.

Private nuisance is any conduct that causes a substantial interference with the private use of land and is either (A) intentional and unreasonable or (B) untinentional but {negligent, reckless, or resulting from an abnormally dangerous activity for which there is strict liability}. Defendant’s actions in the fact pattern would likely be considered an {intentional/unintentional}nuisance because {insert analysis here}.

STEP 1: The judiciary must first determine whether the landowner’s conduct was in violation of a statute or considered a nuisance per se.

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STEP 2: If the landowner’s conduct is NOT a nuisance per se, the court will evaluate the facts of the case to determine if defendant’s conduct creates a substantial interference with the use and enjoyment of others’ properties. That is, a person of “normal sensitivities” must deem it as a substantial interference.

Based on the defendant’s actions in the fact pattern would likely be considered an [intentional/unintentional] nuisance because [insert analysis here].

GO TO STEP 3 [UNINTENTIONAL] OR STEP 4 [INTENTIONAL]

STEP 3: Unintentional Nuisance: the harm committed by the landowner is unforeseeable but once a landowner is aware of the harm, it becomes an intentional nuisance.

-Although the defendant’s actions were unintentional, he or she may still be liable under the tort of nuisance if his conduct lowers to the level of (1) negligent, OR (2) reckless, OR (3) abnormally dangerous so harm resulting from that conduct.-There is no balancing test as identified for intentional nuisance, and utility of conduct is therefore not a defense to unintentional nuisance. The reasonableness element refers to negligence/recklessness, or strict liability.-Defendants conduct may be unintentional (and NOT unreasonable) if defendants are abnormally sensitive to the conduct as occurred in Amphitheaters, Inc. v. Portland Meadows (1948) .

STEP 4: Intentional Nuisance: defendant has knowledge of harm, or harm is reasonably foreseeable (ill will not necessary). [Identify the facts supporting that D’s conduct was intentional]

Defendants’ conduct is like defendants’ action in Morgan v. High Penn (1953), who intended to operate a refinery and knew, or should have known, that its operations produced noxious odors that would affect surrounding property owners.

The primary factor for determining an intentional nuisance is the unreasonableness of the interference with the neighbor’s use and enjoyment of land.

o The court uses either the THRESHOLD TEST OR THE RESTATEMENT to analyze whether the defendants’ conduct was a reasonable or an unreasonable interference with the neighboring use and enjoyment of property.

The THRESHOLD TEST [minority view/older common law] requires that the thing complained of produce such a condition that is judged by reasonable persons to be above some threshold of normal activity that a person of ordinary sensibility, tastes, and habits should not be expected to bear without redress.

The Threshold Test merely requires discomfort, which lowers the bar to establish a nuisance claim. The Threshold Test finds liability and then balances.

o This differs from the Restatement Test in that the Restatement Test defines behavior as unreasonable only if such behavior is “serious” and the defendant could afford to pay money damages to the plaintiff and continue such behavior.

o The Restatement also incorporates the remedy into liability determination. [Insert analysis on how Defendant’s actions produce discomfort for a reasonable person and use

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the GRAVITY OF HARM ANALYSIS ABOVE]

GRAVITY OF HARM = the gravity of the harm is typically determined by five factors: (A) Extent of such harm (long, often, bad, and time of day) (B) Character of such harm (severity) (C) Social value of the plaintiffs’ use or enjoyment infringed upon

o A high social value is attached to peaceful enjoyment of one’s property, physical and mental stress, anxiety)

(D) Suitability of the use or enjoyment infringed upon to the localityo (1st in time, suitability of plaintiff’s use)

(E) Burden on the person harmed in avoiding the harm (what is the “cheapest cost avoider”)

Under the RESTATEMENT SECOND OF TORTS [MAJORITY VIEW], any intentional invasion of an interest in the private use and enjoyment of the land is unreasonable if the gravity of the harm outweighs the utility of the actor’s conduct.-Applying the restatement test produces an answer not only to the question of whether a nuisance exists (liability) but also to the question of what remedy should be issued.-If the gravity of the harm outweighs the unity of D’s conduct, then the property remedy is to enjoin.-If it does not, then the court goes to prong 2 of the restatement to see if it should award damages.-Thus, the balancing of the gravity of harm against the utility of such conduct requires an extensive examination of the particulars given in the fact pattern [insert analysis with the following elements]:-Utility of conduct = the utility of conduct is determined by analyzing these actions of the defendant:

(A) the social value of the primary purpose of the conduct:o # of jobs, strengthen community ties, customers, size, economic impact to region,

valuable to public at large (B) the suitability of the conduct to the character of the locality:

o Property and D’s activities well-suited to character, industrial/agricultural/residential/mixed-business, 1st in time.

(C) the impracticability of preventing or avoiding the infringement:o Technology, difficulty of brining D to new standards.

STEP 5: Other Considerations: Did plaintiff “come to nuisance”?: knowledge or forseeability, development pattern, nuisance

expanded, nature of harm. Affected parties not represented? Unreasonable fears? Harm characterized as a TRESPASS by THE RESTATEMENT strict liability tort (better for P),

some courts rejected this argument.

STEP 6: Remedies: “balance the equities” under both tests: Considering both the potential harm to the defendants and to the public if an injunction is granted,

and the harm to the plaintiff if the injunction is denied. If gravity of harm is greater than the social utility of conduct:

o IF YES: Unreasonable + Enjoin

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If gravity of harm is outweighed by social utility of conduct:o Does it cause (1) serious harm AND (2) the actor could compensate for that harm without

going out business?o If YES: Unreasonable + Liability + Damageso If NO: No liability

4 Traditional Types of Remedies:1. Enjoin and abate D’s activity (Morgan & Estancias)1a. Mandatory injunctions (tell the D how to behave, what to stop)2. Let the activity continue, D pays damages to P (Boomer)3. Let the activity continue by denying all relief4. Enjoin D but only if the P pays damages to the enjoined actor (such as moving damages, Spur)

Other Considerations:1. Multiple parties: high transaction costs, free riders, holdouts, greater strategic ability, more hesitation to enjoin, post-litigation negotiations difficult.2. Two persons: bilateral monopoly, more confidence in parties’ ability to negotiate.

Advantages of the Threshold Test over the Restatement Test:-Threshold test only requires discomfort to establish a nuisance claim and ignore balancing test until remedies stage.-Restatement test considers harm from both the plaintiff’s and the defendants’ perspectives (more equitable and fair).

Other types of remedies: dismissal of complaint, damages, cost of restoration, repairing the damage, bringing back property to its prior condition, diminution in market value, injunction (court order for D to do OR NOT to do acts), purchased injunction, conditional injunction, order to stop activity on condition that P’s reimburse D.

P may obtain an injunction against D’s conduct when: D’s conduct is UNREASONABLE (causes more social harm than good) and causes SUBSTANTIAL harm to the P.

P may obtain damages but NO injunction if: D’s conduct is reasonable (it causes more social good than harm and should be allowed, but the harm to P is substantial so that it is unfair to burden P with D’s socially useful conduct.

When to apply/Advantages/Disadvantages of Injunction:1. (W) Harm difficult to quantify.2. (W) Not all potential Ps known or present in court.3. (W) Harm so significant it CANNOT continue.4. (W) D intended to cause harm and it was unreasonable, more willing to grant injunction because of fairness.5. (A) Permanently stop defendant from doing

When to apply/Advantage/Disadvantages of Damages:1. (W) Damages to P are significantly less than D’s damages for abatement.2. (W) Measurement cost of abatement possible.3. (A) Redress all Ps at the same time.4. (A) Terminate litigation and costs.5. (D) Subsequent land owners may not be given relief.6. (D) Considerable error in ascertaining permanent

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harmful action.6. (A) Can be obtained more quickly, defendant cannot delay proceedings.7. (D) Inefficient8. (D) Loss in economic and social value of conduct.9. (D) Issues of fairness (e.g., first in time, Spur).

damages: measurement and foreseeability (e.g., Boomer- estimates too low).7. (D) Fails to compensate for other harms by focusing on fair market value. Equities should go beyond the market value, including health or sentimental attachments (e.g. Schultzes, Mahony v. Walter, 1974). General rule: stigma damages are recognized only where P’s property has sustained actual physical injury as a result of D’s conduct. Smith v. Kansas (2007).8. (D) No motivation or incentive on part of D to abate its pollution in future. In effect, licensing a continuing wrong.

NUISANCE CASE OVERVIEWMorgan v. High Penn Oil Co. (p. 639) (1953)

Facts: P lives on 9 acres about 1,000 ft away from D’s refinery. D dumped several large quantities of noxious gases/odors in the area – these gases invaded P’s land.

Holding: Court used threshold test and did not consider the utility of D’s conduct. Court stated that anyone who creates/intentionally creates a nuisance is liable regardless of the degree of care or skill exercised by him to avoid such injury.

Standard for unreasonableness is measured by “sensibilities” of the AVERAGE PERSONEstancias Dallas Corp v. Schultz (p. 646) (1973)

Facts: A/C unit from D’s apartment complex is loud and interferes w/ P’s (Schultz) sleep, ability to converse in house; noise has contributed to P’s lost value of land.

Holding: Court supports a balancing of equities to determine if an injunction should be granted. No evidence that the necessity of others compels P’s to seek relief by way of an action for damages, rather than for an injunction (NO shortage of apartments in City of Houston). Private financial benefit is not sufficient in this case to justify applying the rule of necessity for D’s benefit. D ENJOINED.

Boomer v. Atlantic Cement Co (p. 649) (1970) Facts: D operating large cement plant near a large community. Suit brought by P’s for injury to

land due to smoke, dirt & vibrations. Holding: Factory a nuisance but allows injunction but awards P damages. Rule: courts can grant an injunction conditions on the payment of permanent damages to a

complaining party in order to compensate him or her for the impairment of property rights caused by nuisance.

Reasoning: General rule is where damages are substantial, an injunction will lie to abate the nuisance. However, to grant an injunction in this case would close down a business important to commerce; instead, court grants permanent damages in lieu of injunction.

If the harm is serious and the D can compensate w/o going out of business, then let D pay damages.

Spur Industries v. Dell E. Webb (p. 656) (1972) Facts: Spur (D) is a cattle feedlot in rural Arizona. Webb (P) buys land next to lot and ten

years later decides to develop it w/houses. Spur develops toward Webb and Webb develops toward Spur. P brings suit for public nuisance because of noxious odors and flies.

Rule: an otherwise lawful activity can become a nuisance because others have entered the area of activity, and thus be enjoined; if the party requested the injunction, however, is the one that creates the need for the injunction, that party can be required to provide compensation for the cost of moving or shutting down the activity.

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2. TAKING-EMINENT DOMAIN

Step 1: Is the government exercising its power of eminent domain (aka condemnation proceeding)?

Federal, state, and local governments are prohibited from taking private property unless the taking is for public use and the property owner receives just compensation (“Constitutional Law”). This is referred to as the power of “eminent domain.”

The Fifth Amendment of the U.S. Constitution provides that “private property [shall not] be taken for public use, without just compensation.” This is the so called “Taking Clause” made binding on the states by means of the Fourteenth Amendment.

There is no limit on the power of government so long as it is (1) for public purpose and (2) just compensation.

Any private property can be acquired through eminent domain.o Tangible and intangible personal property are also subject to

condemnation.

Berman v. Parker (1954): plaintiffs owned a department store that was in a rehabilitation zone and claimed its store was not “blighted.” Supreme Court found eminent domain should be decided “as a whole,” and not in a piecemeal fashion.

RULE: Government can use eminent domain to rehabilitate “blighted” area, even if they intend to simply give the land to a private developer, and even if not every single building within the area is “blighted.”

Step 2: Is there a “taking” at the outset?

The government has physically taken land under its power of eminent domain in the first type of taking. This is the traditional use of the power.

A temporary physical “invasion” of land authorized by the government or an overly-restrictive land use regulation may be compensable takings.

Step 3: Is the taking for a legitimate “public use”?

-Supreme court has shifted to a new standard of pubic use: “the public purpose test.”-Public purpose test: as long as the property is taken for a legitimate public purpose (a purpose within the scope of government police power) – the public use requirement is satisfied.

Berman v. Parker : public purpose test gained prominence in decision. Hawaii Housing Authority v. Midkiff: court broadened the scope of “public

purpose” standard as equal scope to the scope of police power. Court established that condemnation decisions are judicially reviewed under

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the deferential “rational basis” standard.o A court can only inquire whether the decision is rationally related

to a conceivable public purpose. Rule 1: Is there evidence of illegitimate purpose?: Government cannot use

“public use” as pre-text to confer a benefit on a private party. Rule 2: Was the transfer of private property to another private owner

aimed to benefit the public good? Government can transfer property used privately to other private user to serve public good. Kelo v. City of New London.

o Strict public use is not necessary rather “public purpose” is the standard which is broader and more flexible.

o Public purpose: some use that benefits public at large based on the legislature’s rational (highly deferential to the legislature).

o In essence “public use” is whatever the legislature rationally thinks is conducive to “the public welfare.”

Kelo v. City of New London (2005): City of New London condemned owner-occupied homes and conveyed them to a private company as part of an economic development project.

HOLDING: the development plan of taking from one private party and given to another for economic redevelopment “unquestionably served” as public use.

MAJORITY RULE: takings of private property for use by other private citizens pursuant to an economic development plan intended for a public purpose are valid under the Fifth Amendment.

o Position is judicial deference and rational basis: while a private party may benefit, it is most important to consider the public purpose served and if the overall public good is enriched.

o Expanded the power of eminent domain since Berman (1954) to rehabilitate ANY area that was not blighted at all.

MINORITY VIEW: CONCURRENCE (O’CONNOR): majority significantly expands the meaning of public use and may allow government to take property so long as it can offer some plausible possibility that the new private user would (1) make it more economically productive and (2) a secondary benefit for the public.

o Public use requirement is to protect the weaker property owner from arbitrary governmental takings for private business use (does not happen here).

EXCEPTION: several states have enacted post-Kelo reform laws either banning both blight and economic development takings, or defining “blight” so broadly that virtually any property can be declared “blighted” and taken. Other states have enacted reforms that provide no real protection to any property owners because of other types of shortcomings.

o E.g., California limits takings to blighted areas.

Step 4: Was there just compensation?

Fair market value standard: Supreme Court defines “just compensation” as the fair market value of the property when the taking occurs.

Sentimental value or special need are NOT taken into account. Future land uses/potential ARE taken into account.

o Three facts are important in making this determination: Physical condition of the land (location, topography, etc.). Current and reasonably probable future zoning of the parcel. Market demand for the particular future use.

Partial takings:o Severance damages: if the partial taking affects the rest of the parcel,

the government must pay severance damages.o If there are positive effects made by the taking, then the positive effects

minus the severance damage cost is what the government will have to pay the owner.

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Institutional Competence (Policy):

Legislature:-Legislature knows local conditions better and can take entire situation into account by deliberative process.-Legislative body can be voted in and out.-Democratic process that can listen to expertise and represents needs of people.-General worry on the part of courts making these decisions b/c these line drawing questions are difficult.-Supreme Court’s highly deferential standard reflects a sense that there’s no reason to substitute their judgment for the legislature’s judgment.

Courts:-Developers may contribute to city councils= land use decisions.-City councils don’t deal with a lot of other issues besides land use.-If there are transfers to private property owners, courts will be suspicious of public or private purpose.-Needs higher order of review.-Government must show that the property is being used for public purposes.

REGULATORY TAKINGS

Governments frequently regulate land use by requiring landowners to obtain a permit for the use. A typical example is a building permit. The regulation requiring a building permit is NOT problematic, so

long as the condition of obtaining the permit is compliant with reasonable health and safety standards or the like.

Step 1: Did the government regulation produce a permanent physical occupation of all or a part of the property?(CATEGORICAL TAKINGS) If YES, taking (Loretto)

A “permanent physical occupation” authorized by the government is a taking without regard to the public interest it may serve.

Under certain circumstances, a government regulation will be considered a per se taking.

Analysis: (A) Permanent Occupation:

o MAJORITY VIEW (LORETTO): focus on effect of activity being regulated (wire permanently on property v. transient protesters).

o DISSENT: focus on character of activity being regulated (the box will always be there v. the protestors can always protest).

(B) Physical occupation (C) Government mandated occupation (D) Facilitating a 3rd party occupation

Questions to ask: (1) Is the owner left with any right to possess, use occupy, or exclude?

o Courts disagree with limitations on rights to exclude. (2) Can owner use property to further a private interest, financial or

otherwise?o Was there interference with reasonable backed expectations?

(3) Does any economic benefit remain after the government regulation? (4) Is a stranger granted right to directly enter and invade owner’s property?

NOTE: Temporary occupations are not per se takings – which should be analyzed under the Penn Central “balancing” test.

The temporary occupation idea still involves a physical occupation, not a restriction on the right to use. So if you saw a regulation that, for example, required landlords to allow the homeless to sleep in their lobbies only on days where the temperature dropped below freezing you might have a temporary physical occupation.

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PER SE TAKINGSLoretto v. Teleprompter Manhattan CA TV Corp. (1982): TAKING. Loretto (P) claimed that a forced cable installation on her building that was authorized by a NY state statute was a taking of her property without just compensation.

o HOLDING: respondent’s installation of cable is a taking b/c cable occupies space within and upon building.

o RULE: a permanent physical occupation (PPO) of an owner’s property authorized by the government constitutes a taking of property which requires just compensation, regardless of the public interests it may serve.

o REASONING: such an occupation effectively destroys the owner’s basis property rights; that is, the right to possess, use and dispose of property, and the right to exclude.

Pruneyard Shopping Center v. Robbins (1980): NO TAKING. P (a mall) was required to allow people to hand out political flyers, temporary occupation. Northern Transportation Co. v. Chicago (1879): NO TAKING. P sought to recover damages sustained by reason of the construction by the city of a tunnel under the Chicago River along the line of La Salle Street. Owner said it obstructed access to business. The temporary dam in river to permit construction of tunnel was not a taking, no entry made on Ps lot.

Step 2: LUCAS TEST (1992): Was there a 100% diminution in property value?

If a government regulation leaves the owner with no economically viable use of his property, and the regulation does not abate a common law nuisance, a taking has occurred.

QUESTION: Are there other economically beneficial or productive uses of land?

o If the land could be rented out to campers, mined on, harvested, est., then it does not trigger the Lucas Test.

o Court suggested that only land “required to be left substantially in its natural state” would deprive an owner of all economically beneficial or productive options for land use.

LUCAS LEFT OPEN EXCEPTIONS TO THE PER SE RULE: Even if the property owner loses 100% of the value of the property, the government may be able to side-step its duty of compensation if (1) background principles

exit OR (2) a common law nuisance is proven to exist.

A. Background principles that limit use if a state statute places a prohibition on a property use may be considered valid. Even if a restriction was in place at the time the property owner acquired title and the restrictions were apart of the “background title,” one can still assert that they constitute a taking.

Palazzolo v. Rhode Island (2001): NO TAKING/TAKING. RI (D) argued that regulations designating most of Palazzolo’s (P) land as protected “coastal wetlands” did not effect a taking partly b/c regulations predated P’s title to the land.

HOLDING: RI S. Ct. erred in holding that enactment of wetlands act was automatically valid b/c Petitioner succeeded to ownership after regulation passed b/c regulation may still accomplish a taking under constitutional precedents. Court did not fully address the issue of whether RI Supreme Court correctly held that petitioner did not endure a total taking b/c some of the parcel remain economically usable.

RULE: the acquisition of title after the enactment of a regulation does not bar a challenge to that regulation under the Takings Clause.

Lucas v. South Carolina Coastal Council (1992): TAKING. 2 years after Lucas (P) purchased two beachfront properties, SC enacted a statute that prohibited construction along the beach, including Lucas’s lots.

HOLDING: The statute that restricted building on barrier

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island property was a taking without just compensation b/c it deprived Lucas (P) of all economically productive use of his property.

RULE: Regulation depriving landowner of all economically viable use of property by prohibiting uses that are permitted under background principles of property and nuisance law results in a per se taking and thus requires compensation.

B. Nuisance Exception: If a government regulates property to abate activities that are common law nuisances, there is no taking, even though the regulations might bar all economically viable uses of the property. [A restriction that is imposed to protect the public health, safety, or morals is NOT a taking- Dissent (Brandeis) in Penn Coal.] If court were not to find a nuisance and not 100% diminution, then move to Penn Central Test.

Through acting within bounds of law, abiding by all zoning rules, the activity conducted is so bothersome to those in immediate vicinity of property owner that it is within police power of state to prevent property owner from performing that activity even if it diminishes expectation of investment, greatly reduces property value, or in some sense physically takes portion of property.

o Police power: power of the sovereign to enact legislation which limits conduct to protect the health, welfare, and safety of its citizens (states have a “robust” police power inherent in sovereignty, allows them to regulate for their citizens).

Apply Threshold Test and Restatement Test to determine if a nuisance exists.

o Gravity of harmo Utility of P’s conduct

Hadacheck v. Sebastian (1915): NO TAKING. L.A. enacted an ordinance forbidding P’s operation of a brick-making business, on the grounds that the continued activity was annoying and inconvenient to his newly arrived residential neighbors.

o RULE: a regulation that deprives an owner of property for the purpose of prohibiting a nuisance is an exercise of the state’s police power, and therefore does not result in a taking which requires just compensation.

o Because the ordinance allowed Hadacheck to remove his clay (but not to make bricks), there was no taking.

o If there is 100% diminution + not a nuisance TAKINGo If there is 100% diminution and a nuisance NO TAKING

The ordinance MUST be a nuisance-controlling to escape having to pay just compensation.

o DO NOT APPLY the old Hadacheck idea that any regulation that is harm preventing or involves the exercise of police power is exempt.

o LUCAS INSTEAD says that if the regulation is preventing a common law nuisance, even if it eliminates 100 percent of the economic value, no taking.

C. “Conceptual severance”: the 100% diminution rule applies only to a regulation that strips the owner of ALL

-Precedence favors looking at the parcel as a whole.-There is a stronger case for conceptual severance if separate owners of discrete parcels.Pennsylvania Coal Co. v. Mahon (1922): TAKING. Penn. Coal Company (D) sold surface rights to Mahon (P), but retained the right to mine underneath the land. Several years later, PA enacted statute forbidding mining of coal in such a way to cause subsidence of homes. Kohler Act went “too far” and destroyed the economic viability of Penn. Central’s property. The underground coal was required to be kept in place and was deemed to effect ENTIRE property. (Separate owners)

HOLDING: Diminution is large and public interest is not sufficient to warrant so extensive a destruction of D’s rights to mine the coal. Court measured diminution saying it was a total diminution in support estate.

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ECONOMICALLY VIABLE USE of the ENTIRE property. Usually need a state statute for conceptual severance. If distinct property interest and can sever, then there may be a taking claims.

RULE: while property may be regulated to a certain extent, if that regulation goes too far in diminishing the economic value of the property, it will be recognized as a taking.

DISSENT (BRANDEIS): Diminution was only small amount of coal to support it. It was little diminution, it prevented a nuisance, and protected public health and safety; thus, NOT a taking. Diminution should be measured by whole parcel, not separate estates (e.g. surface, mineral, and support estates).

Keystone Bituminous Coal Assn. v. De Benedictis (1987): NO TAKING. Court adopted Brandeis’s approach in Penn Coal (1922) to uphold validity of a later Pennsylvania law, the Subsidence Act.

HOLDING: court required coal miners to leave sufficient coal in place to support surface and distinguished the Subsidence Act from the Kohler Act on two grounds: (1) miners failed to prove that they were denied the economically viable use of the property; (2) coal only small fraction of entire coal deposit owned.

Penn Central v. City of New York (1978): NO TAKING. Penn Central made plans to construct a 55-story office building over Grand Central Terminal, but was blocked by a Landmarks Preservation Law. Court unable to conceptually sever air use. Court said it was not a total taking of the airspace rights, and the court would considered the impact of the law on the rights in the parcel as a whole; not just its impact on airspace rights.

RULE: a law which does not interfere with an owner’s primary expectation concerning the use of the property, and allows the owners to receive a reasonable return on his or her investment, does not affect a taking which demands just compensation.

Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002): NO TAKING. Tahoe casts serious doubt on the idea of conceptual severance. TPRA (D) issued 2 moratoria prohibiting development on substantial portion of property for 32 months. P claimed taking. Lucas Test only applies to permanent deprivation of use, not temporary takings. Dist. Ct. was wrong by conceptually severing into temporal segments. Must look at the whole parcel; temporary restriction cannot render the parcel valueless.

RULE: a regulation that prohibits economic use of land for an extended but finite period of time does not constitute a taking requiring that the owner of the property be compensated.

If there is not a 100% diminution in value (only a large diminution), then apply PENN CENTRAL TEST.

Step 3: Case-by-case balancing analysis of the regulation using the Penn Central Test. Courts weigh the public benefits achieved by the regulation

1. ECONOMIC IMPACT of the regulation on the particular owner (Two-Sided Analysis). Subjective:

o Can this particular property owner continue to receive a reasonable economic benefit from this property? (Economic impact on the claimant)

o Lost opportunity cost rather than an actual deprivation of an economic benefit

o Loss of a current use or activity versus loss of a potential use or activity Objective:

o Loss of value of property pre- and post-statuteo No total fixed loss % est. that turns a valid use of police power to a takingo Diminution of market value is not dispositive unless value is reduced to

zeroo Analysis: How should the property be valued? Are there transferable

development rights (TDR-owners of restricted land are given TDRs that can be used for development)? (2 perspectives)

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against the private costs imposed. A regulation is not a taking if it substantially advances a legitimate state objective.

How should the property be value? TWO VIEWS: 1. Entire property: analysis in terms of entire property

(lost value) 2. Component part: analysis in terms of aspect affected.

2. The extent to which the regulation interferes with the claimant’s “reasonable” DIRECT INVESTMENT BACKED EXPECTATIONS (intent of the landowner). Reliance interest: If the property owner purchased with the reasonable

expectation that they would be able to invest in property and employ that property in a manner that would allow a return on the investment that would be reasonably expected to continue.

What was the status quo at the time of the purchase?o Was the expectation based on what had been at the time of the purchase a

permissible interest which changed only subsequent to that purchase?o “Owners are not entitled to the “most” beneficial use of their property.”

3. CHARACTER OF GOVERNMENT ACTION (Is it arbitrary?): Interference with the right to exclude and physical invasion (most important),

right to use, dispose, or possess. (Loretto and Penn Central). EXCEPTION: RECIPROCITY OF ADVANTAGE: if the reciprocal benefits

or “advantages” of the regulation compensate for its burdens, then it may not be found to be a taking.

o A regulation was justified when the burdens it imposed on landowners were offset by the benefits it conferred on them.

E.g., a local ordinance may prohibit A from building above a 3-story structure which places a burden on A. But A also receives benefits since it prohibits A’s neighbors from building high and restricting his light and air.

o Is there a gain and a downside of the regulation? Or does the regulation single out a class of property owners?

o PENN CENTRAL DISSENT (REHNQUIST): no reciprocity of advantage, only a few buildings were singled out with considerable burdens and no comparable benefits.

EXCEPTION: NUISANCE/NOXIOUS USE: if the regulation is put in place to prevent harm or nuisance (public health, safety, or welfare), it may not be found to be a taking.

STEP 4: Did the government demand an exaction in exchange for a building permit? EXACTIONS: a requirement that a development provide specified land, improvements, payments, or other benefits to the public to help offset the impacts of their development projects. The question is: May the state condition the grant of a building

QUESTION 1: Would the exaction otherwise be a taking absent the development approval process?

If no NO TAKING If yes Move to QUESTION 2

QUESTION 2: Is there an ESSENTIAL NEXUS between the purpose of exaction and the impact of the development? OR is the condition wholly unrelated to the reason for limiting development?

If connection Move to QUESTION 3 If no condition TAKING

o A regulation advances a state interest ONLY IF there is an “essential nexus” between an exaction and a state interest that the exaction is intended to serve.

o Nollan v. California Coastal Commission (1987): NO NEXUS. California Coastal Commission (D) granted Nollan (P) a building permit on the condition that Nollan allow the public to pass across his property to access a public beach.

HOLDING: easement requirement for building a house on the beach did not have an “essential nexus” to the state interest of

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permit on the landowner’s consent to what would otherwise be an uncompensated taking?-The logical order of analysis is: (1) to establish that the condition would be a taking if imposed independently; (2) prove that such a condition satisfies the essential nexus test; (3) show that such a condition exacts concessions that are roughly proportional to the development’s impact.

protecting the public’s ability to see the beach or allowing people to use the beach. The easement would merely help people already on the beach and not advance a legitimate state interest.

RULE: if a regulatory condition is imposed on a development permit, the condition must substantially advance the same governmental purpose that refusing the permit would serve or else the action will constitute a taking and require just compensation.

QUESTION 3: Even if there is an “essential nexus,” the exaction will be a taking unless the government prove that a ROUGH PROPORTIONALITY exists between the proposed development and nature and extent of the exaction. Is it ROUGHLY PROPORTIONAL?

Exactions must “substantially advance” the state interests. Though it is similar to the deferential “reasonable relationship” test, the rough

proportionality test is more stringent.o Burden of proof is shifted to government to justify the exaction.

Dolan v. City of Tigard (1994): NOT PROPORTIONAL. In exchange for the approval of a building permit, a city attempted to force Dolan (P) to convey 10% of land to limiting development on the floodplain to prevent floods, and dedicate an easement for a pedestrian/bicycle pathway to ease traffic. Court held that there was no evidence that justified the floodplain dedication or evidence that the pedestrian/bicycle path was adequately related to the increased traffic.

o RULE: exactions are constitutional provided the benefits achieved are reasonably related and roughly proportional, both in nature and extent, to the impact of the proposed development.

City DID NOT meet burden of demonstrating that the additional number of vehicle and bicycle trips generated by Dolan’s business reasonably related to the city’s requirement for a dedication of the pedestrian and bicycle pathway easement. Also, difficult to see why recreational visitors trampling along Dolan’s (P) floodplain easement is sufficiently related to the City’s (D) legitimate interest in reducing flood problems.

o NOTE: “Rough proportionality” test applies only to exactions.

SUMMARY: The essential nexus and rough proportionality tests are cumulative, not alternatives. Each test must be satisfied for an exaction to be valid without compensation.

STEP 5: REMEDIES FOR REGULATORY TAKINGS

-A remedy for regulatory taking is compensatory damages.-The successful P receives compensatory damages for the “temporary taking” that occurred for the period between the date the regulation first adversely affected the land, and the date of the judgment.

If the government chooses to cancel the regulation, the owner only receives compensation for the temporary taking that occurred during the period when the regulation was effective.

o The measure of damages for a temporary taking is the fair market value of the use of the property during the taking period.

o Generally the court forces the government to pay the “value of property not burdened” (-) the “value of property burdened” (x) market rate of return = payment

If the government elects to keep the regulation in place, the owner is entitled to compensation for a permanent taking (i.e. the fair market value).

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ACADEMIC PERSPECTIVES ON TAKINGS

Joseph Sax: when governments act as “sovereigns” – to resolve disputes about land use – there should be no compensation requirement, but when governments act as “entrepreneurs” – performing functions that are functionally indistinguishable from private economic activity – there should be compensation.

Frank Michelman: offers an abstract utilitarian calculus to determine when compensation should be paid with respect to any given regulation: “Compensation should be paid whenever demoralization costs exceed settlement costs, [and demoralization costs are less than the efficiency gains from the regulation], and not otherwise.”

Bruce Ackerman: if government takes physical possession of property away from its owner, compensation is required. But if regulations diminish the value of property, no compensation is required unless the diminution is so severe that it would be a “bad joke” to claim that the property owner is left with something of value.

Richard Epstein (Takings: Private Property and the Power of Eminent Domain): regulations that redistribute wealth are presumptive takings. Epstein’s views are sweeping; much of the social welfare state would be constitutionally suspect under his view of the scope of the Takings Clause. argues that public use should be confined to the provision of “public goods” – items from which nobody can be excluded from consuming and the consumption of which by one person does not affect other people’s ability to consume the good and “quasi-public goods.” Jed Rubenfield: argues that a compensable taking occurs when a regulation enables the government actually to use the property in question. Without public use, there would be no compensable taking. He grounds this view in a theory that the function of the Takings Clause is to prevent people from being forced to become instrumentalities of the state.

William Fischel: thinks that the legislative process is adequate to protect against overreaching government regulation, except when that process is distorted. Courts are good at overseeing process, so Fischel argues that courts ought to examine regulatory takings claims most to see whether insiders are using their political muscle to extract gains from outsiders, people who can’t protect themselves either by exit (leaving the jurisdiction) or voice (voting).

Thomas Merrill (“The Economics of Public Use”): advocates “means” analysis urging that forced transfers should occur only when transaction costs are sufficiently high to prevent voluntary transfers.

o Michigan Supreme Court: adopted a “means” test asking whether the taking is necessary to accomplish the public end.

VOLUNTARY CONVEYANCE OF PROPERTY (ESTATES)

OVERVIEW o Estate system concerned with ways private people divide property. o Most estates are concerned with disposal of property due to death of testator.

TERMS o Testator/testatrix: person who is willing the property.o Devising property: act of leaving real property to a benefactor.

o Devisee: person who receives real property from testator (can be called beneficiary)o Bequeathing property: act of leaving personal property to a benefactor.

o Beneficiary: person receiving personal property. o Intestate: if you die without a will, you die intestate. o Heirs, next-of-kin: those who receive property if you die intestate are called heirs or next-of-

kin. o Escheat: the passing to the state of title of real or personal property when the owner dies with

no heirs. o Per stirpes: type of statute distribution system that divides property evenly among children

(dead or alive). o Possessory interest: has the right to possess currently; is the possessor. o Future interest: MIGHT or WILL have the right to possess in the future. o Per capital: type of statute distribution system that divides property among descendents

WILL SUBSTITUTES (OR TRUSTS) o Will: a document by which a person directs his or her estate to be distributed upon death. o Trusts: allows settlors to arrange their assets in ways that maximize flexibility in property

management as well sa transfer wealth to future generations. A property interest held by one person (the trustee) at the request of another (the

settlor) for the benefit of a third party (the benefactor) o Devising property: act of leaving real property to a benefactor.

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Devisee: person who receives real property from testator (can be called beneficiary)o Bequeathing property: act of leaving personal property to a benefactor by will.

Beneficiary: person receiving personal property. o Settlor: established a trust.o Trustee: holds legal title to the property and manages the property on behalf of the trusts

beneficiaries. Separates the burdens of property management from the benefits of property

ownership. Trustee is someone designated by the person who establishes the trust, who is known

as the settlor; the trustee manages the property on behalf of the beneficiaries. The trustee is also a fiduciary and thus subject to stringent duties in managing trust

property. Most important is the duty of loyalty. The trustee must act for the exclusive benefit of the beneficiaries and is not permitted to benefit personally.

o Others include: Joint checking accounts Life insurance Pensions All these instruments allow you to designate a beneficiary and you can avoid probate

altogether.

Possessory Estate Language Future Interest Future Interest HolderFee simple absolute “to A and his heirs” “to A” None NoneFee Simple Determinable Durational language (“so

long as,” “while,” “during”)

Possibility of Reverter Grantor

Fee Simple Subject to Executory Limitation

Durational or conditional language “but if…”

Executory Interest Grantee

Fee Tail “to A and the heirs of his body”

Reversion Remainder Grantor, Grantee

Life Estate “to A for life” Reversion Remainder Grantor, Grantee

I. ESTATES GENERALLY: one does not really “own” Blackacre. Instead one owns an “estate in Blackacre.” Traditionally, there are two types of estates: freehold and non-freehold.

1. Freehold estates: The three freehold estates are: a. the fee simple (which may be either absolute or defeasible)b. the fee tail: allows the owner of land to ensure that the property remains within his or her family

(bloodline). i. Specific words of creation: O to A and the heirs of her body

c. the life estate: is an interest which lasts for the lifetime of a person. i. Default estate at old common law

ii. Specific words of creation: O to A for life 2. Non-freehold: the non-freehold estates are:

a. the estate for years; b. the periodic estate; and c. the estate at will.

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II. THE FEE SIMPLE: A. Fee simple absolute: is the most unrestricted and longest estate with infinite duration. “Fee” is the interest in the land. “Simple” connotes that ownership is for unlimited duration. “Absolute” no future interests that could cut short the ownership of the future possessor.

No restriction on use. Specific words of creation: O to A and her heirs.

B. Fee simple defeasible: the holder of a fee simple defeasible may hold or convey the property, but the holder and those who take from the holder must use the property subject to a restriction. Defeasible estates provide leverage that the donor’s intent will be followed even after death.

Defeasible fees: can be cut short by later events. Three types of fee simple defeasible:

o 1. Fee simple determinable: is a fee simple which automatically comes to an end when a stated event occurs (or, perhaps, fails to occur).

Example: To A and her heirs as long as they do not sell alcohol on the land. Other words needed for creating:

so long as until during unless while

The transferor holds the possibility of reverter: the creator of a fee simple determinable is always left with the possibility that title will revert to him if the stated event occurs.

o 2. Fee simple subject to a condition subsequent: a fee simple where the granting words are followed by a limiting condition in favor of the transferor.

The transferor holds a future interest called “right of entry” or power of termination if the condition is broken.

Example: To City, but if the land is not used as a park, W may re-enter and retake the premises.

Fee simple subject to condition subsequent is created with granting language indicating the event or condition.

Other words needed for creating: on the condition that but if provided however that

o 3. Fee simple subject to an executory limitation: a fee simple subject to an executory limitation provides for the estate to pass to a third person (one other than the grantor) upon the happening of the stated event.

Example: O conveys to “A and his heirs, but if A dies without children surviving him, then to B and his heirs.” A has a fee simple subject to an executory limitation.

Does the transferor hold any interest after giving a fee simple subject to an executory limitation? If there is a breach of condition, then the fee automatically terminates.

III. LIFE ESTATES: a life estate is an interest which lasts for the lifetime of a person. Ordinarily, the lifetime by which the life estate is measured is that of the holder of the life estate. Example: “to A during his life” or “to A for life” Defeasible: a life estate may be defeasible, just as a fee simple may be. Life estate pur autre vie: designates the ownership of land for the duration of a person’s life. It is

the duration of the life of a third party. o E.g., Joe gives property “to Sam for the life of Pete.” Joe has created a life estate pur autre

vie for Sam, but when Pete dies, the property automatically reverts to Joe. Life estate determinable

o Example: “To A for life, so long as…”

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Life estate subject to condition subsequento Example: “To A for life, but if…, then.”

RESTRAINTS ON ALIENATION o Courts have found that restraints on alienation, or restraints on transfer rights, are

“repugnant” to fee simples and void for that reason. o Why repugnant? Restraints make the property unmarketable, the land may be unavailable

for its higher and best use; the restraints tend to perpetuate the concentration of wealth; restraints discourage improvements on the land; restraints prevent owner’s creditors from reaching the property.

o 3 types of restraints: Promissory restraint

You convey to A and A promises not to convey. This restraint is enforceable by the contract remedies of damages or an

injunction however usually rare except in landlord-tenant context. Forfeiture restraint

If grantee attempts to transfer his interest, it is forfeited to another person. Forfeiture restraints are generally allowed more than disabling restraints;

why? Because they allow some sort of transfer. Disabling restraint

Holds from the grantee the power of transferring his interest. o Generally, absolute restraints are void, but partial restraints may be upheld (ie: limiting

conveyance to certain persons or putting a time limit on the restraint) o For life estates, it has generally been held that forfeiture and promissory restraints are valid,

but not disabling restraints. RESTRICTIONS ON USE: WASTE

o Waste doctrine restrains the present estate owner from acting in a manner that unreasonably injures the affected land and thus reduces the value of the future interest.

o The law assumes that the original grantor intended the estate holder to pass on the possession of the land to the future interest holder in approximately the same condition as it was received.

o Two principle types of waste: Affirmative waste (or voluntary waste)

Occurs when the voluntary acts of the present estate owner significantly reduces the value of the property.

EX: possessory interest wantonly destroys valuable residence, or opens a new mine and mines all the minerals, collapses land, etc.

Permissive waste Stems from inaction; failure of the possessor to exercise reasonable care

to protect the estate. EX: life tenant fails to repair a dwelling or pay property taxes, mortgage

payments, related expenses. Kimbrough v. Reed (1997): life tenant let the water pump fall into

disrepair with a resulting loss of lawn, shrubs, and trees. The life tenant was assessed damages for waste.

IV. FUTURE INTERESTS: a future estate is a right to receive possession of property at a future time or, more precisely: “An interest in land or other things in which the prvilege of possession or of enjoyment is future and not present.” There are five future estates:

Why create a future interest?o Usually seen in family gifts to ensure that the estate remains in the family and is useful

to the family. o EX: “To G for life, then to D”; G cannot gamble away or sell the estate or do anything

to prejudice D’s interest. Ensures that D will get something later. o Or in charitable or economic motives, can ensure that the estate is used as the testator

wanted.

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Five basic types of future interests (1) reversion, (2) possibility of reverter, (3) right to entry, (4) remainder, (5) executory interest.

A. FUTURE INTERESTS IN THE TRANSFEROR o Rule of perpetuities does not apply to a transferor’s future interests. o Reversion: When an owner conveys an estate deemed “smaller” than the estate he owns, then

he retains a future interest called a reversion. o EX: O has a fee simple and he conveys “to A for life, then to B for life”. O has a

reversion because after A and B dies the estate will revert to him since it is not willed to anyone else.

o A reversion does not have to be certain to become possessory in the future. o EX: O has fee simple and conveys “to A for life, then to B and her heirs if B survives

A”. O has a reversion, that may become possessory but only if B dies before A. o Possibility of reverter: When a transferor creates a fee simple determinable, the future interest

retained is called a possibility of reverter. o EX: O conveys “to L so long as the property is used as an orphanage”. O has a

possibility of reverter. If the estate is not used for an orphanage the estate will revert back to O and will trigger the statutory period for adverse possession. If O does not kick off L in the statutorily created period of time for adverse possession then L will own.

o Right of entry (or power of termination): When a transferor creates a fee simple subject to condition subsequent, the future interest retained is called a right of entry (or power of termination).

o EX: O conveys “to L, but if L fails to use as an orphanage, then O may re-enter and retake the premises.”

o Transferability of these future interests?o These future interests can mostly all be conveyed, transferred and devised in most

jurisdictions. o Valuation/other rights of future interests in the transferor

o Preventing waste: O’s rights as a reversion holder allow him to secure damages for past waste and enjoin for future waste. However, if O holds a possibility of reverter or right of entry, his ability to prevent waste is almost non-existent.

o Right to eminent domain proceeds: Majority view is that a holder of a reversionary interest takes no eminent domain proceeds. Rest. of Property takes a slightly different view: if the defeasible fee would probably not end within a reasonably short period of time, the fee owner should have the entire award.

B. FUTURE INTERESTS IN THE TRANSFEREEE Remainders: a remainder is a future interest created in a transferee that is capable of becoming a possessory estate upon the natural termination of a prior estate created by the same instrument.

o Thus, a remainder can only follow a life estate, a fee tail, or a term of years. o Any future interest in a possessory estate created in a transferee other than a remainder is an

executory interest. o Vested Remainder : a vested remainder is a remainder that is (1) given to an ascertained person,

AND (2) it is not subject to a condition precedent (except the natural termination of a prior estate).

o 1. Indefeasibly vested remainder: the identity of the holder is certain and the remainder is certain to become a possessory estate.

EX: “To A for life, then to C and her heirs”. C’s remainder will someday become a fee simple absolute. The holder of the interest is a known person, C. No future event can intervene to stop C’s remainder from becoming an estate.

o 2. Vested remainder subject to divestment: vested remainder that is subject to a condition subsequent. If the condition is not met, then it is subject to divestment.

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EX: “To A for life, then to B and her heirs, but if B ever smokes a cigar during B’s lifetime, then to C.” B has a vested remainder, because C is ascertainable and his interest is not subject to a condition precedent, but it is subject to divestment if he smokes.

o 3. Vested remainder subject to open: a vested remainder in one or more ascertainable members of a class that may be enlarged by the addition of presently unascertainable persons (e.g. persons that may be born in the future).

The remainder is certain to become possessory, but the size of the holder’s share in the estate is uncertain.

EX: “To B for life, then to the children of C and their heirs.” If C has only one living child, D, then D has a vested remainder subject to open.

o Contingent Remainder : a remainder is contingent if it is either (1) given to an unascertained person, OR (2) it is made contingent upon some event occurring other than the natural termination of the preceding estates.

o Occurs if remainder will take effect only upon the happening of an event that is not certain to happen (that makes it contingent).

o Remainder will go to a person who cannot be ascertained at the time of the initial conveyance.

o Contingent remainder can become a vested remained if the contingency or condition precedent is removed prior to the end of the last estate before the one in question.

o Contingent remained can also become vested if the persons become ascertained (class of people when the children are born a child, has a remainder subject to open b/c the person could have more children.

o EX: “To K for life, then to L and his heirs if L reaches the age of 21.” L is an ascertainable person, but an event must occur before his remainder is eligible to become possessory.

o EX: “To K for life, then to K’s heirs.” There is no subject to condition precedent, but if K has no heirs, it is impossible to determine who gets it. Thus, “K’s heirs” hold a contingent remainder.

o Executory Interest: is a future interest in a transferee that must, in order to become possessory: (1) divest or cut short some interest in another transferee (this is known as shifting executory interest); or (2) divest the transferor in the future (this is known as a springing executory interest). o An executor interest is a future interest in a transferee that must “cut short” or “divest”

another estate or interest in order to become a possessory estate. o EX: “to A for life, then to B and his heirs, but if C returns from France, then to C and his

heirs.” C’s interest may “cut short” B’s interest, and therefore he has a springing or shifting (?) executory interest.

PPE Summary: Fee simple absolute: never ends Defeasible fees: might end Life estate and fee tail: will end

Present Possessory Estate Future InterestsFee Simple Determinable Possibility of ReverterFee Simple Subject to Condition Subsequent Right of Re-entry/Power of TerminationLife Estate & Fee Tail Reversion, Contingent and Vested RemainderFee Simple Subject to and Exec. Limitation Executory Interest

VI. RULE AGAINST PERPETUITIES: applies to all contingent future interests to prevent uncertainty about future ownership and possession from continuing so far into the future that land would become inalienable.

Rationale: reflects the idea that property should be controlled by the living, not by the “dead hand.” Thus, an interest that remains contingent once the perpetuities period expires is void.

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Common law version of the rule by John Chipman Gray: “No interest is good unless it must vest, if at all, no later than 21 years after the death of some life in being at the creation of the interest.”

To comply with the rule it must be logically provable that within a specified period (equal to the length of one life + 21 years) a covered interest will either “vest” or “forever fail to vest (never vest after the period ends).”

If there is a possibility, however, remote, that a covered interest might remain contingent after this perpetuities period expires, the interest is void.

FIVE STEP APPLICATION OF THE RULE

1. Determine if the rule applies to the future interest

The rule applies only to three types of future interests: 1. Contingent remainders; 2. Vested remainders subject to open; AND 3. “Contigent” executory interests

2. Decide when the perpetuities period begins

Different types of interests become effective at different times. A will becomes effective when the testator dies. A deed is effective when it is delivered by the grantor. The perpetuities period being when the interest becomes effective.

3. Determine what must happen for the interest to vest or forever fail to vest

Figure out “why is the interest contingent?” What must happen for the interest to vest or forever fail to vest?

E.g. “To A, then to the first child of A to reach age 30”: For the interest to vest, A must have a child that reaches the age of 30; to forever fail to vest, A must die without having a child.

4. Identify the persons who can affect the vesting- Look for one person who will enable you to prove that the contingent interest will vest or fail within the life, or at the death of that person or within 21 years after that person’s death.

Consider who are the “validating lives”: Length of perpetuities period is equal to one life plus 21 years, so it is crucial to

identify the persons whose lives can be used in the formula. These persons who can potentially be used as yardsticks to measure the length

of the period are called validating lives or lives in being.o Validating lives must have been in being at or before the time at which

the interest in question was created.o Can almost always affect whatever has to happen for vesting to occur.o May include:

Preceding life tenant. The taker or takers of the contingent interest. Anyone who can affect the identity of the takers (such as A in

a gift to A’s children). Anyone else who can affect events relevant to the condition

precedent.

5. Test each relevant life to determine if any one validates the interest

Does any relevant life validate the interest? Each relevant life is tested to see if the interest will necessarily vest or forever

fail to vest during the period equal to that person’s life plus 21 years. The goal is find one relevant life (called the validating life or measuring life)

which will validate the interest.o A party seeking to uphold the interest must meet a difficult standard:

she must prove as a matter of logic that the interest will definitively vest or forever fail to vest within the period.

o Conversely, a party must invalidate the interest by meeting a very easy standard, one based on mere suggestion or imagination.

Easy standard: if the creative legal mind can invent any possible scenario under which the interest might first vest after the perpetuities period expires, no matter how unlikely, the interest is invalid.

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o E.g. O transfers a sum “in trust for A for life, then to A’s first child to reach 21.”

A is the validating life. You can prove that any child of A who reaches 21 will necessarily reach 21 within 21 years of A’s death. The remainder must vest of fail within this period; it cannot possibly vest more than 21 years after A dies.

Remainder is VALID b/c it will vest either in period or forever fail to vest. RAP does NOT invalidate.

o E.g. O transfers a sum “in trust for A for life, then to A’s first child to reach 25.”

A has no child age 25 or older. There is no validating life; the contingent remainder is VOID.

You cannot prove that A’s first child to reach 25 will do so within 21 years after A’s death.

VI. THE PERPETUITY REFORM MOVEMENT: Criticism of RAP:

1. Disregards the intent of the transferor and thereby frustrates the right to transfer property freely. 2. Condemned as serving obsolete policies; the original goal of the Rule was to ensure the marketability of

the land, which requires little protection today. 3. The Rule is increasingly unimportant b/c it can be circumvented by drafting.

o E.g. “to A for life, then to B and his heirs if anyone goes to Saturn” would be invalid, but if it was changed to: “to A for life, then to B and his heirs if anyone goes to Saturn, but if no one goes to Saturn within 21 years after the death of B, then the conveyance to B shall be null and void.”

Modern Reforms: 1. First approach departs from common law rule by focusing on actual rather than possible facts existing

at the end of the estate preceding the future in interest in question. 2. Second stage of reform attended to this difficulty by the method of specific statutory repairs designed to

avoid purely technical violations by altering the common law conventions in certain specific circumstances. 3. “Immediate reformation”: jurisdictions taking this approach have statutes authorizing (or sometimes

directing) courts to reform a disposition in a way that avoids any perpetuity violation while effectuating the transferor’s intent as nearly as possible (called cy pres in Law French).

Most states have modified the common law RAP through legislation a process that began in the 1970s. The measures fall into two basic categories:

o 1. Permitting reformation to validate the interest where consistent with the transferor’s intent. Other states retain the common law rule, but mitigate its impact by adding a new feature:

a reformation or cy pres remedy. If an interest is invalidated by the Rule, a court may rewrite the language of the

conveyance or devise to carry out the transferor’s intent as closely as possible and thereby validate the interest.

o 2. Adopting a wait and see approach in lieu of the “what might happen” rule; and Basic “wait and see approach”: under this approach, the validity of the interest is not

determined at the onset. Instead, the parties merely wait and see whether a contingent interest actually vests within some permissible vesting period.

The interest is valid if it actually vests during the common law perpetuities period and is invalid if it fails to do so.

Arguments in favor: 1. Better implements the transferor’s intent and; 2. Protects the transferor from the malpractice of an incompetent attorney who

fails to draft a will or deed in conformity with the Rule. Arguments against:

1. Impairs the marketability of the land; 2. Keeps wealth out of the flow of commerce for decades;

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3. Also practically difficult to identify the relevant lives to be used in the “wait and see” formula, absent litigation.

Uniform Statutory Rule Against Perpetuities: o USRAP is in force in many states. o Under USRAP, a covered interest is valid if either (1) it meets the requirements of the common

law Rule; OR (2) using the “wait and see” approach, it actually “vests or terminates within 90 years after its creation.”

Jesse Dukeminier & James E. Krier: The Rise of the Perpetual Trust: The two reforms – the wait and see doctrine and USRAP – may have weakened RAP, but they honored its

purpose, taking power away from the dead hand. However, recent waves of state legislation permitting perpetual trusts have undermined these reforms.

o 1. Generation-Skipping Transfer Tax: first enacted in 1916, levies a tax on any property interest transferred by will, intestacy, or survivorship to another person, except for transfers to spouses and charities.

o 2. State legislation: the list of states enacting legislation permitting perpetual, or almost perpetual trusts, within some significant variation in statutory terms is certain to grow.

Problems and Palliatives of Perpetual Trusts:1. Problem of Inalienability: transferability (or “alienability”) of property promotes efficiency.

Perpetual trust do not give rise to a problem of inalienability, the trust assets are freely marketable. 2. Problem of First-Generation Monopoly: problem of first-generation monopoly, meaning by “first generation” the generation of settlor who sets up a perpetual trust. 3. Future of Perpetual Trusts: Congress has come to be in charge of trust duration. Future of perpetual trusts is in its hands, to be dealt with through the tax system.

Types of Rule Against Perpetuities statutes: 1. Common law Rule in effect unchanged (e.g., Alabama).2. Common law Rule completely abolished with no other rule replacing it (e.g. Rhode Island); 3. USRAP in effect unmodified.

Rachel Emma Silverman, Amid Congressional Scrutiny, Huge Sums Pour Into States That Allow “Dynasty Trusts”

A wave of states started to allow so-called dynasty trusts to last for hundreds of years – or even forever – undoing a centuries- old law that prevented perpetual trusts.

Congress is considering repealing estate and generation-skipping taxes altogether, which would eliminate a majority motive for setting up their trusts: saving taxes from generation to generation.

Possible Reforms: 1. Wait-and-see for the perpetuities period

a. Let’s see if all of A’s children are vested within the perpetuities period. b. Problem: keeps a cloud on the title.

2. Wait and see after the devise.

Future of RAP: Common law RAP is fading away. Many states have recently adopted legislation that permits the perpetual trust, regardless of the Rule.

o This particular reform movement began in the early 1980s when Wisconsin, followed by South Dakota and Idaho, abolished the common law Rule Against Perpetuities.

Saving clause in a trust: in drafting a trust creating future interests, experienced lawyers almost always include a perpetuities saving clause.

o Savings clause is designed to terminate the trust, and distribute the assets, at the expiration of specified measuring lives plus 21 years, if the trust has not earlier terminated.

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1. COMMON LAW CONCURRENT INTERESTS

The nature of concurrent ownership: a present estate in real or personal property can be simultaneously owned by two or more persons, each holding the right to concurrent possession. Three basic types of concurrent estates are generally recognized:

1. Tenancy In Common: a. Characteristics:

i. A form of concurrent ownership wherein each co-tenant is the owner of a separate and distinct share of the property, which has not been divided amongst the cotenants. Thus, each cotenant owns a separate undivided interest in the property.

ii. There is NO right of survivorship in a TIC, unlike joint tenants or tenants by the entirety.

1. E.g., if A and B are tenants in common and A dies, A’s tenancy in common interest will pass to his devisees or heirs, NOT to B.

iii. Only unity of possession is required. iv. There may be unequal shares (although it is the presumption they are equal).

1. E.g., A and B are tenants in common. A owns 25% undivided interest and B owns 75% undivided interest. Either can be tenants in common even if they acquired their interest at different times and by different instruments, and even if fractional sizes of their shares are different.

b. Creation:i. Any conveyance or device to two or more unmarried persons is presumed to create a

tenancy in common, absent clear language expressing an intent to create a joint tenancy.

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ii. A tenancy in common can also arise from intestate. 1. E.g., O dies intestate and leaves three children A, B, and C. The laws governing

intestate succession will award each children one-third interest in Blueacre as a tenant in common with the others.

c. Transferability: i. A tenant in common has the right to sell, mortgage, lease, or otherwise transfer all or part

of his interest without the consent of other cotenants; and such a transfer does not end a tenancy in common.

2. Joint Tenancy: (standard language to create JT: to A and B as joint tenants with right of survivorship, not as tenants in common, look at the intent of the conveying party).

a. Characteristics: i. A form of co-ownership between 2+ persons of an interest in real property whereby such

persons own the interests together and each person has exactly the same rights in that interests as his cotenants.

ii. Each has the right of survivorship, the outstanding characteristic of a joint tenancy. 1. This means that if one joint tenant dies, the survivor(s) take his share, and the

ultimate survivor takes all.iii. Can sever without the other tenant knowing. Swartzbaugh v. Sampson (1936)iv. Elements required for Joint Tenancy (“The Four Unities”):

1. Unity of time: requires that each joint tenant’s interest must be acquired or vest at the same time.

2. Unity of title: all joint tenants must acquire title by the same instrument or by a joint adverse possession. A joint tenancy can never arise by intestate succession or other act of law.

a. At [common law], the owner of a fee simple can NOT directly create a JT in himself and another (requires a straw man).

b. At [modern trend], this is allowable w/o a straw man. 3. Unity of interest: all joint tenants must have equal undivided shares and

identical interests measured by duration. 4. Unity of possession: each joint tenant must have the right to possession of the

whole. After a joint tenancy is created, however, one joint tenant can voluntarily give exclusive possession to the other joint tenant. (The unity of possession is essential to a tenancy in common as well; none of the other three unities is.)

a. In such, each joint tenant needs to be entitled to occupy the entire premises, subject only to the same right of occupancy by the other joint tenants.

b. Many people hold in joint tenancy to avoid probate. i. Can be destroyed by simply conveying to third party.

b. Creation: i. English common law required four unities in order to create (and continue) a valid joint

tenancy: time, title, interest, and possession. 1. Joint tenants had to acquire title at the same time, had to acquire title by the

same deed or will, or by joint adverse possession; each interest had to be identical, meaning each joint tenant had to have the same fractional interest in the estate; and each joint tenant had to have an equal right to possession of the entire parcel.

2. Joint tenants can change their interest into a tenancy in common by a mutual agreement destroying one of the four utilities.

3. Many states have eroded the four unities standard. c. Transferability:

i. A joint tenancy interest is virtually inalienable. When joint tenant dies, it is immediately transferred to the joint tenant.

ii. Due to the right of survivorship, a joint tenant’s interest ends upon death, so the interest cannot be devised or descend by intestate succession.

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d. Severance of Joint Tenancy: i. Any joint tenant at any time can destroy the right of survivorship by severing the joint

tenancy. This in effect converts the joint tenancy into a tenancy in common. There are several ways to sever a joint tenancy (but not exhaustive):

1. Conveyance of the interests by a joint tenant 2. Mortgage on the property

a. Majority = lien theory = no severance i. Mortgage seen merely as a security for repayment, not a

conveyance ii. Surviving JT generally takes subject to the mortgage

iii. What if mortgagor dies before not is paid?1. Some ct = mortgage remains effective = can be

enforced against decedent’s interest 2. Some ct = mortgage not effective

b. Minority = destroy unity of title = severance i. Granting a mortgage is deemed to transfer the title to the

mortgagor 3. Lease

a. Common Law= severance b. Modern = no severance

4. Partition = dividing up and distribution of the land = severance 5. K to sell (some cts)

3. Tenancy by the Entirety: a. Characteristics:

i. A joint tenancy between husband and wife. A right of survivorship can only be terminated by the divorce of the couple, death of one spouse, or the agreement of both spouses.

1. More durable than joint tenancy2. One spouse cannot unilaterally break the required unities and thereby transform

the estate into a tenancy in common. ii. Like the joint tenancy in that the four unities (plus a fifth—the unity of marriage) are

required, and the surviving tenant has the right of survivorship. iii. The tenancy by the entirety is now abolished in many states.

b. Creation: i. A tenancy by the entirety requires the four unities plus a fifth – a valid marriage.

ii. Intent to create tenancy by the entirety must be clearly expressed. c. Transferability:

i. Consent of both spouses is required to convey the estate. ii. Presumption favoring joint tenancies has been abolished in all states (with an exception

in a few states where the conveyance is to husband and wife).

4. Termination of Concurrent Estates: a. Severance of joint tenancy: a joint tenant has the absolute right to end or “sever” the joint

tenancy without the consent (or sometimes even the knowledge) of the other cotenants. i. The procedure is simple: joint tenant conveys his interest to a third person.

ii. Joint tenant CANNOT pass her interest in a joint tenancy by will. Inasmuch as the joint tenant’s interest ceases at death, a joint tenant has no interest that can pass by will.

iii. Unequal shares: one of the four utilities of a joint tenancy is equal shares. At common law if A owned a one-third share and B a two-thirds share, A and B could not hold as joint tenants.

iv. Could a joint tenant covert the joint tenancy into a tenancy in common without losing his interest? The formal answer is “no.”

1. Using a strawman a joint tenant could convey to someone interest who conveyed back to him the interest, facilitating the severance and not losing the interest.

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2. Common law courts allowed this b/c facilitated free alienation and encouraged productive use of land since interest was not burdened by right of survivorship.

2. RELATIONS AMONG CONCURRENT OWNERS/SEVERANCE OF JOINT TENANCIES

1. Joint tenancy can be severed without use of an intermediary device: Riddle v. Harmon (1980): Mr. (P) and Mrs. Riddle, husband and wife, purchased some real estate and

took as joint tenants. Mrs. Riddle did not want her husband to get their land automatically when she died, so she tried to sever the joint tenancy and right of survivorship without him. Lawyer prepared deed that allowed Mrs. Riddle to grant an undivided one-half interest in the property to herself through her will.

o HOLDING: Ct. overruled common law doctrine and held that a joint tenant could unilaterally sever the joint tenancy without the use of an intermediary device (e.g. a strawman) by conveying her property interest to herself.

o NOTE: legislature forced transactions to be recorded after Riddle b/c otherwise there may be acts of fraud as deeds may be destroyed or conveyed to different parties secretly.

o Tenancy by entirety cannot be severed by unilateral action of one spouse.

2. Joint tenancy can be severed by an action for judicial partition: A judicial partition: the privilege of each co-owner to transform a concurrent estate into estates held in

severalty.o Free partition is central to the effective use of land. If cotenants cannot decide what to do with

their land, the land may not be developed for its most productive use. o Partition-in-kind: a court-ordered, physical division of land held by joint tenants or tenants in

common by which each tenant’s interest is converted into a parcel taken from the whole and each tenant then takes exclusive possession of their share of the land.

Preferred technique by courts b/c favor protecting interests that already exist – a physical division of the property into separate “equal” parcels.

The value of the parcels might not be equal due to differences in land quality; however, the court can equalize the distribution by ordering a money payment called owelty.

o Partition-by-sale: a court-ordered division of land held by joint tenants or tenants in common by which the land is sold and the procedures are divided among the tenants according to the size of their interests in the land.

If physical division of the land is impossible or impracticable, or inequitable, a court may order partition by sale.

E.g., it is usually impracticable to divide a single family home. Court also considers the interests of the owners that would be promoted or negatively

influenced by the sale. Property is sold and the sale proceeds are divided among the cotenants according to their

respective shares. Partitions (especially by sale) ignore concerns for respecting emotional attachment that

many owners feel toward family residences and other “personhood property.” Delfino v. Vealencis (1980): William Delfino (Ps) and Helen Vealencis (D) owned real property as tenants

in common. Delfinos owned 99/144 of the property and wanted a residential development, while Vealencis owned 45/144 and wanted to keep her garage business on it. Ps brought an action in the T. Ct. seeking a partition of the property by sale. D moved for a judgment of in-kind partition.

o RULE: a partition by sale should only be ordered if the physical attributes of the land in question are such that a partition is impracticable or inequitable, and the interests of the owners would be promoted by a partition by sale.

Lower court failed to consider that a partition by sale would force Vealencis (D) to surrender her home and business, both of which were located on the property.

o NOTE: present trend of court has been to order sales in partition in a great majority of cases. This is usually done in deference to the wishes of all parties, involved, or b/c the courts believe that sale of the property is actually the fairest means of ending any conflict between parties.

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Ark Land Co. v. Harper: NO PARITION BY SALE involves 75 acres of farmland and buildings owned by Caudill family for almost a century. S. Ct. ruled partition by sale was unfair because owners had emotional attachment to land, as in the case of a homestead.

Johnson v. Hendrickson: PARTITION IN KIND Bauman left 160 acre farm to widow (1/3) and children (2/9). Widow, Katie, remarried Karl Hendrickson and had twin sons by him. Bauman children grew up and left him. Kate died and left remaining interest in land to Karl and children. Baum children brought an action for partition, requesting sale of the whole farm. Karl and his two sons asked for partition in kind. Court ordered a partition in kind and gave no weight to interest of Karl and his sons in remaining in homestead.

Gray v. Crotts: PARTITION IN KIND one of the four cotenants argued that upon physical partition, he should be awarded the part of the common property adjacent to his home. Court held that the property should be divided into four parcels of equal value and then the cotenants should draw lots to determine which parcel.

Alternative Options: o Compensation: an alternative approach to sale in kind or by sale. o Owelty: if there is a partition in kind and you can’t divide evenly, then the person who gets the

bigger share can be required to pay the person who gets the smaller share.

3. Joint tenancy can be severed when a cotenant transfers less than her entire interest: Swartzburgh v. Sampson (1936): Mr. and Mrs. Swartzburgh owned 60 acres of land as co-tenants with a

right of survivorship. Mr. Swartzburgh (D1) leased part of some land for a boxing pavilion to Mr. Sampson (D2), but Mrs. Swartzbaugh (P), the joint tenant, never singed the lease and wants to cancel it.

o HOLDING: One joint tenant who has not joined in the leases executed by her cotenant and another cannot maintain an action to cancel the leases where the lessee is in exclusive possession of the lease property.

The leases between D1 and D2 are not null and void but are valid contracts giving to D2 the same right to the possession of the lease property that D1 had.

o RULE: in a joint tenancy each tenant owns an interest equal in all of the fee, and each has a right of possession of the whole.

o RULE: one joint tenant cannot oust a cotenant who is in full possession of the property, nor can the joint tenant charge rent to a cotenant.

o RULE: a lease of all the joint property by one joint tenant to a lessee is not a nullity but is a valid and supportable contract as far as the lessor in the joint property is concerned.

o OTHER OPTIONS FOR PLAINTIFF: 1. Seek partition of lease- put the lease up for sale 2. Seek partition of the entire property – unlikely, as wife would not want to lose right to

survivorship. 3. Ouster- can only be used if wife attempts to enter leased land and is prevented from

entering by lessee 4. Accounting – ascertain all rents paid, and seek equitable division, however, this action

results in wife giving up the option to challenge the lease. If one joint tenant keeps one from entering onto the whole, through affirmative actions

(e.g. changing locks on doors) then the ousted tenant has a right to sue for ouster and the remedy can be one of two things.

Two resolutions: injunction requiring access OR for money damages equal to the value of half of the premises.

4. Remedies Available to Co-Tenants: 1. Repairs: some states hold that you cannot compel contributions from co-tenants for repairs2. Improvements: in most jurisdictions, the person who pays for the improvements is not entitled to contribution. 3. Taxes/mortgages: a cotenant paying more than her share is entitled to contribution 4. Adverse possession: a cotenant who has ousted other tenants and has exclusive possession cannot take property by adverse possession UNLESS she gives clear and convincing notice to other tenants that she is repudiating the title.

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5. Owelty: in a partition in kind, if the court cannot equalize the tracts, it can order payment from the party getting the more valuable portion to the party getting the less valuable portion to equalize.

5. Summary of right/remedies of joint tenants: 1. Rights: right to sell, lease, give away, but a joint tenancy cannot be devised. Right to survivorship is destroyed by selling/giving away joint tenancy, but not by leasing. 2. Remedies: partition in kind or by sale; accounting (to ascertain assets and liabilities, with improvements measured by value added to property, and repairs and rents from leases included) 3. Ouster: only if there exists affirmative evidence that you have been excluded by cotenant; remedy can be either injunction (allows you to reenter property) or damage (equal to half of reasonable rental income).

3. MARITAL INTERESTS (DIVORCE CASES)

English common law system: husband and wife have separate property; ownership is given to the spouse who acquires the property.

Upon divorce property of spouses remained property of spouse holding title. Unity of marriage severed by divorce, so property held in tenancy by entirety was converted into a tenancy

in common.

TWO BASIC APPROACHES: 1. Continental system of COMMUNITY PROPERTY: rests on the notion that husband and wife are a marital partnership (a “community”) and should share their acquests equally.

The community property idea of treating husband and wife as an economic unit has more or less triumphed when spousal property is divided upon divorce, but it has less effect on division of property at the death of a spouse.

2. Rights Upon Divorce: EQUITABLE DISTRIBUTION: Recent trend towards equitable division of property upon divorce. Conception of marriage shifted in the 1970s when divorce laws changed. California introduced no-fault

divorces.o New York retained the fault-based divorce system.

Alimony was paid for two reasons: (1) The at-fault spouse was required to pay alimony to the non-at-fault spouse in order to (1) compensate the other for the divorce; (2) support the spouse for a limited period of time until the spouse could enter the job market or become self-sufficient (“rehabilitative alimony”).

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o Alimony is now viewed as support for a limited amount of time until the spouse can enter the job market and become self-sufficient.

o Courts have limited basis for defining alimony (same as maintenance or spousal support). Court may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance:

(a) Lack sufficient property, including marital property apportioned to him, to provide for his reasonable needs; and

(b) is unable to support himself through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that that the custodian not be required to seek employment outside the home.

o Pledge: the use of personal property as security for the payment of a debt. Uniform Dissolution Marriage Act: does NOT define property; it is up to the courts to interpret.

o It is a no-fault divorce statute that has eliminate the old grounds for divorce and outlines all the procedures for making custody, child support, maintenance or alimony and property division decision.

o For the division property the trial court must determine the value of all the marital property and make an equitable or fair division of marital property.

o Under UDMA, two different components to marital property: (1) property acquired during marriage, other than separate property; (2) appreciation in value of any separate property acquired by gift or inheritance, such as trusts or vested interests in trusts and property.

There are three different approaches to defining the “property” that are subject to equitable distribution: o 1. In some states, statutes authorize a court to divide all property owned by the spouses, regardless

of the time and manner of acquisition. o 2. A second group follows a more restrictive definition, limiting the scope of the marital property

to property acquired during marriage by either spouse from any source (earnings, gifts, inheritance).

o 3. The third group applies equitable distribution only to property acquired from income earned during the marriage (essentially the same definition followed in community property states).

Questions: are education degrees, professional licenses, or careers “property” that are subject to equitable distribution upon divorce?

Arguments against Education/Professional License as Property (Majority Approach):1. Has no exchange value2. Is of personal value to the holder3. Has no transferable value in an open market4. Ended on the death of the holder and was not inheritable.5. Cannot be assigned, sold, transferred, conveyed, or pledged.6. Human abilities shouldn’t be considered property since they are inherent abilities that someone possessed before marriage.7. Also the practical difficulty of appraising an education is so speculative that it should not be done.8. Is an intellectual achievement that may assist in future acquisition of property, but

Arguments for Education/Professional License as Property (NY Approach):1. Many types of property have no exchange value (e.g. old love letters);2. Some property rights expire when the holder dies (a life estate)3. Often property rights cannot be transferred (a tenancy for years, prescription drugs, commercial images, social security and pensions, rent controlled apartments)4. Working spouse contributes substantial income and sacrifices personal education, career, and childbearing opportunities all to support spouse’s pursuits that are supposed to ultimately benefit both.5. Also, potentially unfair more to women since they usually take the support role.6. DISSENT (CARRIGAN) of In re Marriage of Graham (1978): court should go beyond narrow concept of property in order to promote equality; most valuable asset acquired during marriage was D’s increased earning capacity from degree. Graham should be compensated for loss of future earnings of

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it is not property in and of itself.9. Product of hard work that cannot be bought.10. In re Marriage of Graham (1978): Anne Graham (P) was the wife of Dennis Graham (D). P, a flight attendant, supported D through business school, covering seventy percent of their expenses, and after D graduated, they got a divorce.

RULE: an educational degree is NOT property, and therefore is NOT subject to division upon divorce.

11. Mahoney v. Mahoney (1982): declined to recognized a professional degree as marital property. Held such an item was too speculative to value.

her husband which were made possible by her investment in his education.7. Elkus v. Elkus (1991): Mrs. Elkus (P), beginning opera singer, married voice coach, Mr. Elkus (D). After P’s career skyrocketed while D coached P during their marriage, D attempted to get an equitable division of P’s career b/c D scarified his own career in order to serve as a coach and care for children.

HOLDING: the extent to which the appreciation in the value of P’s career was due to D’s efforts was marital property.

RULE: an increase in the value of one spouse’s career, when it is the result of the efforts of the other spouse, constitutes marital property and is thus subject to equitable distribution.

8. O’Brien v. O’Brien (1985): whether a husband’s medical license constituted a martial property within the meaning of the state’s equitable distribution law. Held that the product was one of the parties’ joint efforts; the license should be considered marital property.

Rule in other jurisdictions: 1. California rules: (1) basically requires the community (the couple) to be reimbursed for community contributions to education or training that substantially increases a party’s earning capacity; she would be entitled to half of the contributions; if you are divorced 10 years or more after the contributions have been made. 2. NJ required reimbursement alimony 3. NY is alone as defining a professional degree as a martial assert (O’Brien v. O’Brien, 1985).

4. TERMINATION OF MARRIAGE BY DEATH OF ONE SPOUSE

The common law system: With respect to personal property, common law gave surviving widow one-third if there were surviving

issue and one-half otherwise. Idea that land should stay in patriarchal family, but surviving spouses should be supported for their lives. Law accommodated these desires by the institutions of dower and curtesy.

Dower: on death of her husband, a wife had the right of dower. A dower was the right to a life estate in one-third of each and every possessory freehold estate the

husband enjoyed at any point during the marriage which was capable of inheritance by children born of marriage.

Any land owned in fee simple by the husband alone, or by H and a third person as tenants in common, qualified for dower.

o Dower inchoate: while H was alive, W got a right of dower inchoate as soon as land became seized. This meant that any conveyance of the freehold by H to a third party did not affect the right of dower inchoate, so after H died W could still demand her dower rights from the person who bought from H. Interest became perfect upon death of husband and may result in possession and use.

Curtesy: common law gave a husband who survived his wife a right similar to dower, called curtesy.

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o Curtesy attached to all possessory interests in land of the wife, including equitable possessory interests. o Curtesy, like dower, attached to all freehold land of which the wife was seised during marriage and was

inheritable by the issue of husband and wife. o However, unlike dower, curtest only attached if issue were born to the marriage. Once a child was born,

even if it later died, curtesy attached. o Curtesy no longer exists in the United States.

Modern Elective Share (aka four share provision): after Civil War it appeared that dower and curtesy were no longer effective to protect the surviving spouse.

o Forced shared legislation: giving the surviving spouse an elective share in all property (real and personal). o Form of deferred community property; one spouse does not receive a property interest in the other

spouse’s property during marriage, but only at the other spouse’s death. Elective-share statute (aka four share provision): surviving spouse can renounce the will, if any, and

elect to take a statutory share (normally 1/2 or 1/3 of fractional share) of all property the decedent owned at death.

o The modern substitute for dower and curtesy is “elective share” (statutory forced share is usually larger than a dower).

o Effect: one effect of the elective share statute (which all common-law property states but Georgia have) is that one spouse cannot “disinherit” the other.

o Size of share: generally one-half or one-third.o Elective share ordinarily applies only to property that the decedent spouse owns at death. o Elective share usually DOES NOT apply to property held by the decedent and another in

joint tenancy nor to life insurance proceeds. o The elective share can be defeated by lifetime gifts of property.

Uniform probate code: surviving spouse is entitled to keep any property that the will devised to him or her.

5. COMMUNITY PROPERTY SYSTEM

Equitable distribution (keep title separate depending on who earned it): what you earn during the marriage is your property but the court can distribute equitably upon death or divorce.

o NOTE: Women tend to do better in community property jurisdictions versus equitable distribution jurisdictions.

Community property (divides property in advance): American community property systems define community property as the earnings during marriage of either spouse and all property acquired from such earnings.

o In eight states, the rights of husbands and wife in property is governed by civil-law concept of “community property.” These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington.

o General approach: the key tenet of community property is that property acquired during the marriage (with exceptions) belongs jointly to husband and wife from the moment it is acquired. Thus upon divorce or death, the property is treated as belonging HALF TO EACH SPOUSE.

Earnings of each spouse during marriage should be owned equally in undivided shares by both spouses.

Cannot buy title or transfer something to separate property, if community when it was earned.

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Can hold real property as community property. Can also hold as joint tenants or tenants in common.

CA: If couple owns property as joint tenants, and husband devises to the children the property will still go to the wife. Tenancy by entirety it would go to the children.

CANNOT convey to a third party without the other spouses consent if the ownership is in community property (if a joint tenancy or tenancy in common, either spouse can sell to a third party).

Transmute: in most states husband and wife can freely change (“transmute”) the character of their property by written agreement and, in some states, by oral agreement.

o All property that is not community property is SEPARATE PROPERTY. Separate property includes (1) property acquired before marriage or (2) property

acquired during marriage by gift, devise, or inheritance.

Three Regimes: 1. All property has separate ownership (common law system). 2. Property acquired from earnings as community property and inherited property as separate property

(American community property system). 3. All property from whatever source as community property (universal community property).

Divorce: generally, if divorce occurs, the community property is evenly divided. o Some states require equal division of community property; others authorize a divorce court to make

equitable division of community property.Death: upon death of one of the parties, the community property is treated as having belonged half to the deceased spouse and half to the surviving spouse. A deceased spouse’s half is thus subject to his right to devise it b will to whomever he wishes.

Community Property Compared with Common Law: Concurrent Interests:Community property compared with tenancies in common and joint tenancies has these significant differences:

1. Husband and wife: a. Community property can exist only between husband and wife. b. A tenancy in common or joint tenancy can exist between any two people.

2. Conveyance of share:a. Neither husband or wife can change community property into separate property without consent of

other. b. Unlike TIC or JT, neither spouse acting alone can convey his or her undivided one-half share of

community property, except to the other spouse. c. A TIC or JT can act alone and change the form of the estate and has the right to partition; action

unavailable to an owner of community property acting alone. 3. At death:

a. Each spouse has power to dispose by will of one-half the community property at death and no survivorship feature exists, as with joint tenancy.

b. In most community property states, if spouse dies intestate, their share of community property passes to surviving spouse.

4. Sale after death:a. At death of one spouse, the entire community property receives a “stepped-up” tax basis for

federal income tax purposes. b. There are possible considerable income tax advantages in holding property as community property

rather than in common law concurrent ownership form.

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Management of community property: manager of community property is a kind of fiduciary. Community property must be managed for the benefit of the community.

o Beginning in 1960s, community property state enacted statutes giving husband and wife equal management powers.

o Most community property states give either the husband or wife, acting alone, the power to manage community property.

o However these statutes all differ: o Some give either the husband or the wife acting alone the power to manage community property. o However, in certain other situations only one spouse may be empowered to manage.

E.g., if spouse operating a business that is community property, or title of property is only in name of one spouse.

o Neither spouse acting alone may convey their interest in the community to a stranger. o Community property can be conveyed to a third party only as an undivided whole.

o Both spouses join in a conveyance of real property held as community property. Equal management rule: permits either spouse to invest or otherwise deal with deposit or investment

accounts.

Mixing Community Property with Separate Property: the tracing rule applies to commingled property as well. If the sources of commingled property can be identified accurately as separate or community funds, the commingled property will be divided into separate community portions.

1. Inception of right rule: (Texas rule) if you buy a separate property, it remains separate property. Character of the property is determined at the inception of the legal right to the property or when the wife signed the contract.

2. Pro rata rule: (California and Washington) this approach holds that the percentage of the purchase price paid prior to the marriage establishes the portion of the property that is separate, and the percentage of the purchase price paid with community funds establishes the community interest in the property.

3. Time of vesting: this approach holds that the character of the property is determined when title passes and installments are paid.

o Eg. A house bought on installment land contract by the wife paying 1/3 down before marriage, with the remaining 2/3 of the installment paid after the marriage from community funds.

“Inception of right” rule: the character of the property is determined at the time the wife signed the contract of purchase; the house is separate property.

“Time of vesting” rule: title does not pass to the wife until all the installments are made; hence, the house is community property.

“Pro rata” rule: the community payments “buy in” a pro rata share of the title.

Migrating Couples: Whether property is characterized in accord with the community property system or in accord with the

common law property system depends upon the domicile of the spouses when the property is acquired. o E.g. suppose the wife earns 1,000 dollars and buys a horse with it. If the parties are domiciled in

NYC, the horse belongs to the wife alone. o If domiciled in Texas, the horse is community property. o Once the property has been initially characterized, the ownership DOES NOT change when the

parties change their domicile UNLESS both parties consent to the change in ownership. Uniform Disposition of Community Property Rights at Death Act.

o The act provides that real property located in the enacting state, purchased with or traceable to proceeds or income from the community property, will be treated as community property on death.

Hence, only half will be distributed through the decedent’s estate. A move from a COMMON LAW property state to a COMMUNITY property state may leave a

nonworking spouse of a retired worker at a disadvantage. o The community property laws in most states do not give the surviving spouse an elective share in

the decedent spouse’s property owned at death.

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Upon death, the place where the person dies governs the distribution of personal property and the law where real property is located governs the distribution of the land.

5. RIGHTS OF DOMESTIC PARTNERS-VARNUM v. BRIEN

Common law marriage: o To have a common law marriage, the cohabitating parties must manifest their intent to be husband and wife

and hold themselves out to the public as husband and wife. If jurisdiction recognized common law marriage, couples married by common law have same rights as a couple married with license and ceremony.

o Common law was abolished in most states b/c thought to generate more litigation and encourage perjured testimony about an agreement to marry by cohabitant seeking benefits of lawful marriage.

Other reasons: with modern transportation it is not needed, certified marriage made proof easy for government benefits, and common law marriage dignified immorality among persons in lower socio-economic classes.

Modern Movement Toward Extending Property Rights to Unmarried Couples: o Marvin v. Marvin (1976) (CA Law): held that a contract for property division or support can be implied

from the conduct of the parties. Nonmartial parties are not entitled to division of community property, but courts instead enforce express agreements between parties to the extent that these agreements do not rest on an unlawful meretricious consideration.

o OBJECTION #1: NY has rejected the implied contract idea. Morone v. Morone (1980): only a written or oral express contract to share earnings and assets between unmarried partners is enforceable.

o OBJECTION #2: Illinois has rejected enforcing any such contract. Hewitt v. Hewitt (1979): contract between unmarried partners to share acquisition is unenforceable on the ground that this would, in effect, revive common law marriage, abolished by the legislature.

o American Law Institute’s Principles of the Law of Family Dissolution: legal rights and obligations may arise from the conduct of the parties with respect to one another, even though they have created no formal document or agreement setting forth such an understanding.

o The principles require that domestic partners of the same or opposite sex share for a significant period of time share a primary residence and a life together as a couple.

Same-Sex Couples and Property Rights: o Jurisdictions that recognize property rights between unmarried heterosexual couples have sometimes

extended this protection through case law to gay and lesbian couples as well, particularly where an express contract is present.

o Rights and obligations of the marital state are entirely dependent on legislation. o Even where enforceable, a contract cannot create the status benefits of marriage, such as the

(1) right to spousal benefits under social security, pension, and retirement plan; (2) right to file a joint tax return; (3) right to take the marital deduction for federal estate tax purposes (4) right to inherit from one’s spouse in case that surviving spouse dies intestate. (5) right to surviving spouse’s elective share.

o Potential downsides of marriage: Equitable division upon divorce, alimony

o Varnum v. Brien (2009): six same-sex couples, who resided in Iowa, filed suit challenging the constitutionality of Iowa Code 595.2 (1), which provided that “only a marriage between a male and female is valid.” It was an amendment made to Iowa’s marriage statute in 1998.

o HOLDING: Iowa Supreme Court relied on the Iowa Constitution’s equal protection clause to strike down Iowa’s limitation on marriage to opposite-sex couples.

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o REASONING: Iowa court applied so-called intermediate scrutiny in which the challenged classification is presumed to be void unless the state can prove that it is “substantially related to an important state interest.”

State asserted five interests: (1) promoting and protecting the traditional concept of marriage; (2) conserving scarce resources that are expended upon marital status; (3) promoting procreation; (4) promoting childrearing by a mother and father; and (5) promoting stable opposite-sex marriages as cradles in which to raise and nurture children.

Court found the first interest to be circular and thus unimportant and found the remaining interests, even if important, to be insufficiently related to the interest.

Steps in the Analysis of Varnum v. Brien (2009):o Step 1: levels of scrutiny:

1. Rational basis: in most cases the Iowa Supreme Court applies this standard which is very deferential to the legislature.

Only needs to be rational. Plaintiff has the heavy burden of showing the statute unconstitutional and

must negate every reasonable basis upon which the classification may be sustained.

2. Strict scrutiny: heightened level of scrutiny applied to statutory classifications based on race, alienage, or national origin. In these cases statutes must be narrowly tailored to serve a compelling governmental interest.

Law must be narrowly tailored and compelling. Applies to the unequal opportunity of right- procreation, voting, travel

3. “Intermediate scrutiny” or “heightened scrutiny”: middle tier of analysis. Based on gender and illegitimacy. Groups entitled to this tier are often called “quasi suspect” groups. To survive this scrutiny, the law must further an important government interest AND

be substantially related to that interest; it must be a genuine interest and must not depend on broad generalizations.

o Step 2: Threshold Test: The requirement of equal protection – that the law must treat all similarly situated people the same – has generated a NARROW THRESHOLD TEST.

Ps must show that they are similarly situated (to heterosexual persons) for the courts to consider whether their different treatment under a statute is permitted under the equal protection clause.

o Step 3: To determine if legislative classification warrants heightened scrutiny Supreme Court looks to FOUR FACTORS.

1. Long and painful history of discrimination against gay and lesbian people. 2. Sexual orientation is not relevant to a person’s ability to contribute to society. 3. Sexual orientation is highly resident to change (not immutable). 4. Political powerlessness of lesbian and gay people; absolute political powerlessness is not

necessary to subject legislative burdens on a certain class to heightened scrutiny and specific issue lacks supports.

Conclusion: all factors pointed to a heightened level of scrutiny. o Step 4: Consider the State’s Arguments (State Interests) and Refute Each Argument

1. Maintaining traditional marriage (circular argument) 2. Promotion of optimal environment to raise kids (not true based on research) 3. Promotion of Procreation (not substantially related to legislative purpose and many

heterosexual people who get married chose not to procreate) 4. Promoting stability in opposite-sex relationships (no reason why excluding opposite-sex

relationship secure same sex relationship) 5. Conservation of resources (same amount of resources used by different sex couples)

Conclusion: sexual orientation based classification under the marriage statue does not substantially further any of the objectives.

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o Step 5: focus on the constitutionality of the law (disregard the religious opposition b/c of separation of church and state).

Conclusion: exclusion of gay and lesbian people from the institution of civil marriage does not substantially further any important governmental objective.

If gay and lesbian people are denied marriage rights of others without constitutional justification then the law is unconstitutional

Other Courts have reached different conclusion: o California Supreme Court: ruled that governmental sexual orientation classifications are subject to strict

scrutiny, in which the government must prove that its classification is necessary to achieve a compelling objective.

o California court ruling was reversed by a constitutional amendment (Proposition 8 added to state constitution that marriage was to be between a man and woman).

o Massachusetts Supreme Judicial Court: struck down the state’s ban on same-sex marriage under minimal, or rational-basis, scrutiny, in which the challenged classification is presumed to be valid, and the challenger must prove that the government either lacks any conceivable legitimate interest for the classification or that the classification is not rationally related to such a legitimate interest.

o New York Court of Appeals and Washington Supreme Court upheld bans on same-sex marriage under minimal, or rational-basis, scrutiny.

o Only Iowa, Massachusetts, Connecticut, Vermont, and New Hampshire recognize same-sex marriage.

Congress: o Defense of Marriage Act, 28 U.S. C.A. 1738C. provides that no state shall be required under the Full

Faith and Credit Clause of the Federal Constitution to give effect to a same-sex marriage contracted in another state.

Several European Country: give domestic partners almost all the legal rights of a married couple. Conflict of laws:

If a marriage is valid where contracted, it is valid everywhere.

VARNUM DISSENTING OPINION: Main Points: (1) Institutional confidence issue (legislature should decide, not courts, who owe deference to the legislature to decide social and policy issues); (2) there is a rational basis to restrict marriage between a man and a woman

In most of Iowa’s Supreme Court history, the court has been deferential to the legislature on issues that deserve to be considered in a political forum. Although the court ultimately decided to invoke heightened scrutiny in Varnum v. Brien (2009) in reviewing the distinctions based on sexual orientation in Iowa’s code 595.2, this level of scrutiny and the ultimate decision reached by Iowa’s Supreme Court were misguided. This opinion argues that a rational basis exists for Iowa’s Code 595.2, which prohibited same-sex marriage, and that Iowa’s legislature is the proper forum to make a decision on the issue of same-sex marriage.

First, although the Iowa Supreme Court can sympathize for the situation of same-sex couples, the judiciary is the improper institution to provide relief. Moreover, as was persuasively argued in the concurring opinion written by Justice Baxter in In re Marriage Cases, 43 Cal. 4 th 757 (2008) , the California Court expanded its constitutional power and violated the separation of powers by affording same-sex couples the opportunity to marry. That is, the court considered an issue that motivates a response by the California legislature, not the courts. In the words of Justice Baxter, “If there is to be a further sea change in the social and legal understanding of marriage itself, that evolution should occur by similar democratic means. The majority forecloses this ordinary democratic process, and, in doing so, oversteps its authority” (emphasis added). Moreover, Iowa’s legislature is the proper forum to create a right to marry for same-sex couples, and if evolving standards are the reasons to look for a right for men to marry men or women to marry women, gay rights advocates should await recognition of same sex marriage by voter referenda or legislation.

Second, Justice Cady wrote a well-reasoned opinion, but he fails to make the necessary connection between Iowa’s history of progressive civil rights protections of certain classes of persons, such as African Americans or women, and the correlating civil rights that should be provided to those seeking same-sex marriages. Further, it is true that Iowa’s Supreme Court has had a long history of progressive thought. Justice Cady writes, “In the first reported case of the Supreme Court of the Territory of Iowa, In re Ralph (1839), we refused to treat a human being as property to enforce a contract for slavery and held our laws must extend equal protection to persons of all races and conditions.” In addition, Cady notes that thirty years later Iowa was the “first state in the nation” to allow women into its Bar. All of which were noble and praiseworthy decisions by Iowa’s Supreme Court that supported the equal protection of different classes of persons. Here, we can all agree.

The disagreement is on whether the “right to marry” and the “rights of marriage” are the same. In its oral arguments before the Supreme Court, the state noted that the historical definition of marriage has been between a man and a woman; Iowa did not create the definition of “marriage.” Moreover, there is also a fundamental distinction between restricting the “right to marry” based on race or gender and one based upon differences

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in sex (Love v. Virginia, 1967). The Kentucky Supreme Court held that limiting their state marriage statute to opposite-sex marriages did not violate the “fundamental right to marry, the First Amendment, or the Eighth Amendment” (Jones v. Hallahan, 1973). The New York Court of Appeals held that the state could not extend the right to marriage to same sex couples because such a right did not exist in New York’s constitution (Hernandez v. Robles, 2005). Likewise, based on Iowa’s historical understanding of the right to marry and the rights of marriage and its constitution, these rights should only exist in application to opposite-sex couples.

Third, there is a conceivable rational basis to support Iowa’s Code 595.2. The state argued that the code promoted and protected the traditional concept of marriage, childrearing by a mother and father, stability in an opposite-sex relationship to raise and nurture children, stable opposite sex-marriages as cradles to raise and nurture children, and conserved scare resources that would be expended upon marital statuses. Justice Cady in Varnum v. Brien dismissed these interests as either circular arguments or unimportant and held that there was not a rational basis for Iowa’s Code 595.2. By doing so, Cady overlooks important reasons for protecting opposite-sex marriage in the state of Iowa.

D. NONFREEHOLD ESTATES

THE LEASEHOLD ESTATE

Leasehold estate: is a legal interest that entitles the tenant to immediate possession of designated land or real property, either for a fixed period of time or for as long as the tenant and landlord desire.

Lease: a lease is the conveyance of a nonfreehold estate, which is a legal interest that entitles the leasee the immediate exclusive possession of the designated property for a period of time.

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Factors used to determine a questionable lease: (1) users permitted; (2) defined area; (3) rent reserved; and (4) duration.

STEP 1: Identify Type of Tenancy-This tenancy would likely be classified as a [INSERT]

**Landlord almost always owns the fee simple absolute.

Types of Tenancies:1. Term of years tenancy: is an estate that (a) lasts for some fixed period of time OR (b) for a period computable by a formula that results in fixing calendar dates for beginning and ending, once the term is created or becomes possessory.

It can be determinable (ending on a event) Does not expire on death – estate would be liable. Agreement from both the lessor and lessee. Almost all commercial leases and some residential leases utilize the term of

years tenancy. It expires at end automatically; specified ending and starting date.

o NO notice is necessary for termination b/c terms of agreement have date.

2. Periodic tenancy: is a lease for some fixed duration that continues for succeeding period until either the landlord or tenant gives notice of termination.

Classic example of a periodic tenancy is the “month-to-month” residential lease.

o E.g. L and T enter into a month-to-month lease for an apartment, wit the term to begin on Jan. 1. The initial period of the lease is 1 month, but the lease continues month after month until either L or T gives notice of termination.

Creation of periodic term: Identify The Periodic Durationo Expressly statedo Implied stated

Fixed duration is measured by rental periods (when pay the rent)

For annual rent that is payable monthly (majority rule) is that it is an annual periodic lease.

Terminationo Occurs when either the L or T terminates by delivering oral or

written notice to the other.o Year-to-year tenancy requires a half a year notice to terminate.o A tenancy of less than a year requires a notice of termination given

equal to the length of the period, but not to exceed sixth months.o Death does not necessarily extinguish.o Also notice must terminate the tenancy on the final day of the period,

not in the middle of the tenancy. Some states have statutes that shorten the length of notice

required and have permitted month-to-month tenancies to be terminated at any time following 30 days notice.

If there is an invalid termination (Split jx) the termination is treated as null or

invalid (Split jx; Restatement 2nd of Property) the invalid

notice carries over and effectuates the next date for termination (become valid).

3. In Tenancy at will, there is no stated duration. It is a tenancy of no fixed period that endures so long as both landlord and tenant desire.

Common Law: either party can terminate it at any time (places a lot of power into the hands of one party), without any notice, on the day the tenant abandoned the premises or the landlord delivered notice of termination.

o A tenancy at will automatically terminates if either the landlord or tenant attempts to assign it, or dies (treated a constructive notice to

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terminate).o However, payment of rent coverts to implied periodic tenancy.o When in doubt, construe as periodic tenancy.

Modern Statutes: ordinarily require a period of notice – say 30 days or a time equal to the interval between rent payments, in order for one party or the other to terminate the tenancy at will.

**A landlord is required to provide a (1) legal lease, has a (2) duty to mitigate and abide by (3) statutory requirements, must maintain a (4) covenant of quiet enjoyment for the tenant, and uphold the (5) implied warranty of habitability.

THE LEASE

STEP 2: Identify the duration of the LEASE-Thus, the duration of the lease would be [INSERT]

**Landlord grants another person or entity (corporation) the present right of exclusive possession but less than a free-hold estate.

**Landlord cannot enter into an illegal lease. That is, one where a landlord knows the property is in violation of many housing codes (often applied to residential properties).

Lease: a contract by which a rightful possessor of real property coveys the right to use and occupy the property in exchange for consideration, usually rent.Illegal Lease: unlike a claim based on quiet enjoyment and constructive eviction, the tenant could withhold rent and still stave off the landlord’s inevitable action to evict for nonpayment . (Alas, it appears that it is dead letter for the tenant).

The lease sets forth the agreed-upon terms that will govern the tenancy, including the amount of the rent, the duration of the tenancy, and the location of the leased premises.

Conveyance of Contract?o Common law: lease is viewed as a conveyance.o Recent trend: lease is increasingly viewed as a contract, governed by

contract law. A lease transfers a possessory interest in land, so it is a

conveyance. But it is also the case that leases usually contain a number

of promises (such as the promise to pay rent or promise by landlord to provide utilities), so it is a contract too.

Statute of Frauds: if the duration of the tenancy is for one year or more, then the Statute of Frauds requires that the lease be in writing.

This requirement applies primarily to the term of years tenancy. Month-month leases can be oral, since the initial lease was only 30 days, not

long enough to trigger the Statute of Frauds. Oral lease

o Any oral lease for a duration over 1 yr. is treated as a tenancy at will.o Renewal of oral lease

For an oral lease that is renewable at the option of the lessee, the lease is usually treated as extending to the end of the option period.

Thus, the lease becomes void if the extension puts over the short-term lease exception, thus creating a tenancy at will.

Form leases and question of “bargaining power” : The legal rights of residential tenants have been dramatically expanded by

judicial decisions and statutes based in part on the perception that the ordinary tenant is unable to protect his or her interests in lease negotiations due to the superior bargaining power of the landlord.

o Due to shortage rental housing in many urban areas, the tenant was effectively forced to acquiesce to the landlord’s terms without any opportunity for meaningful negotiation.

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1970s: tenants gained legal protection and most of the reforms tent to be more pro-tenant; legislation recently put into play requires full disclosure of landlords’ and tenants’ duties, rights, and remedies.

Difference between licenses and leases: License: granting someone permission to use the land.

Difference between an assignment and a sublet: Assignment: one tenant transfers entire interest to another in a lease. Sublet: give up less than a full-interest in lease.

o **Note: a landlord could sue (privity in estate) if there is an assignment.

o Landlord can only come after the renter, not the subletter for breaking the law.

o Various doctrines have been interpreted to allow the landlord to go after the subletter but it can still make a difference.

NOTE: If privity of estate exists, the landlord can sue the person in possession if breach occurs (e.g. for nonpayment of rent).

**Where a lease requires a landlord’s consent, jurisdictions vary on whether such consent can be withheld arbitrarily. For example, let’s consider the case of Kendall v. Ernest Pestana (1985).

Kendall v. Ernest Pestana (1985): Ernest Pestana (D) demanded increased rent from Kendall (P) in exchange for consent to assign a lease. Bixler requested consent from Pestana (D) for the sublease to Kendall (P), but D contends he may arbitrarily refuse consent. P contends that this provision is against public policy since it is an unreasonable restrain on alienation.

MINORITY RULE: A commercial landlord may only withhold consent under such a contract if it had a “commercially reasonable objection” to the transferee or the proposed use (even in the absence of a provision in the lease stating that consent to assignment will not be unreasonably withheld).

o FACTORS the jury may consider in applying the standards of good faith and commercial reasonableness:

1. Financial responsibility of the proposed assignee; 2. Suitability of the use for the particular property; 3. Legality of the proposed use; 4. Need for alteration of the premises; 5. Nature of the occupancy, i.e. office, factory, clinic, etc. **Denying consent solely on basis of personal taste, convenience or sensibility is

NOT commercially reasonable. o REASONING:

1. Rule benefits society by ensuring that the land is devoted to its highest and best productive use (freedom of alienation).

Courts generally want property to change hands if it needs to and ensure efficient use of the property is made.

2. Relationship between lessor and lessee has become more and more impersonal. Thus, lessor is just as likely to find a high quality tenant in the assignee as the lessee.

3. Lessor’s interests are protected by the fact that the lessee remains contractually liable to the lessor.

4. A lease is increasingly viewed as a contract. As a result, since the lessor has discretion in withholding consent, the lessor can without consent only in good faith.

MAJORITY RULE: where a lease contains an approval clause (a clause stating that the lease cannot be assigned without the prior consent to the lessor), the lessor may arbitrarily refuse to approve a proposed assignee no matter how suitable the assignee appears to be and no matter how unreasonable the lessor’s objection.

NOTE: Minority rule seems to be in favor of current trend in the law that supports tenants above landlords.

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NOTE: Most residential tenants can withhold consent arbitrarily. However, if the tenant abandons, and the landowner has the duty to mitigate, the landlord may need to accept a tenant that he or she does not necessarily approve of (especially during hard economic times).

**If the landlord denied the lease assignment, the next question to consider is whether the lease assignment was denied “unreasonably”? Also, consider whether the proposed use is suitable in light of other commercial or residential uses of the property.

Pay ‘N Pak Stores, Inc. v. Superior Court (1989): (REASONABLE DENIAL) shopping center landlord’s refusal to consent to a sublease was held “reasonable” b/c subtenants sold products the landlord also sold and owner has right to protect its property.

Kriger v. Helmsley-Spear, Inc. (1973) : (UNREASONABLE DENIAL) court found for the tenant holding that it was “unreasonable” for landlord to refuse consent b/c the proposed subtenant was a tenant of another building owned by landlord and would create a vacancy in that other building. Court held that the “clause is for the protection of the landlord in its ownership of that particular building, not general economic protection.”

American Book Co. v. Yeshiva Univ. Dev. Found. (1969): (UNREASONABLE DENIAL) some years after American Book Company leased three floors and basement space in a commercial building, Yeshiva University Development Foundation acquired the building. When American Book sought consent to assign its lease to Planned Parenthood – World Population, the new landlord (Yeshiva Univ.) denied its consent on basis that it considered activities of proposed subtenant inconsistent with present use of premises and educational activities of university. Court concluded that denial of consent was “unreasonable” b/c subtenant was “financial responsible, engaged in a respectable and legal activity, and intended to use the entire space of the prime tenant for identical purposes.”

Giordano v. Miler (2001): (UNREASONABLE REFUSAL TO CONSENT TO ASSIGNMENT OF LEASE) court held that landlords could not demand a fee as a condition precedent to granting their consent. Lease did not provide for such a fee.

Walgreen Arizona Drug Co. v. Plaza Center Corp (1982): tenant breached its lease agreement when it ceased operation at the premises and boarded up its location. Court found no implied covenant within lease agreement. Language of contract did not give rise to any implication of an implied covenant. Ct. agreed with T. Ct. that arrangement constituted a sublease, not an assignment.

TENANT’S DUTIES & LANDLORD’S RIGHTS AND REMEDIES

Step 3: What are the landlord’s rights and remedies?-Tenant’s duties:1. Can’t Waste: duty not to commit waste is breached if a tenant makes such a change

1. MODERN VIEW: Landlord may NOT use self-help for retaking possession: Common law standard: a landlord entitled to possession could resort to self

help without fear of civil liability – so long as he used no more force that reasonably necessary.

o Tenant may be able to recover damages for wrongful eviction where landlord had no right to possession or where the means used to removed the tenant were forcible, or both.

Modern view: self-help banned by majority of states. Where self-help is allowed there still arises the difficult issue of just what constitutes reasonable or permissible force.

Berg v. Wiley (1978): landlord (D) leased to tenant (P) for a term of five years during which P operated a restaurant. Dispute arose between P and D based on P’s remodeling of restaurant without permission and violation of health codes.

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as to affect a vital and substantial portion of the premises; as would change its appearance; the fundamental purpose of the erection; or the uses contemplated; or a change of such a nature, as would affect the very realty itself, extraordinary in scope and effect, or unusual in expenditure2. Sublease/ assignment: some responsibility on the part of the tenants/ some on the part of the landlords-Landlord: (1) summary proceedings are the alternative to self-help; (2) duty to mitigate damages

After not remedying health code violations and failing to complete remodeling within two-week period set by D, D changed locks without P’s knowledge.

o HOLDING: The only lawful means to dispossess a tenant who has neither abandoned nor voluntarily surrendered, but who claims possession of property, is by resort to judicial process.

o RULE: a landlord may NOT use self-help to regain possession of land.

o TWO WAYS TO EVICT LEGALLY IN MINN.: (1) no more force than reasonably necessary; (2) Use judicial proceedings.

Reasons in favor of modern move towards judicial proceedings instead of self-help: (1) Judicial process (summary proceedings) are becoming faster; (2) self-help is never “peaceable”; (3) discourage forcible taking of possession (deter violence); (4) Protect families from being left with no where to go.

o Problems with Summary Eviction Proceedings: such judicial proceedings are intended to be quick and efficient means by which to recover possession (and in some jurisdictions, rent) after termination of tenancy. But, such proceedings can still be time-consuming and expensive, even if uncontested.

o Other downsides: (1) Tenant advocates argue that tenants are unable to effectively represent themselves in litigation and have insufficient resources to retain attorneys; (2) Landlord advocates complaint that judges drag out summary proceedings b/c judges are biased in favor of tenants.

2. MODERN VIEW: Landlord DOES have a duty to mitigate damages after abandonment:

Traditionally: landlord did not have a duty to mitigate damages after abandonment.

Modern Trend: require landlord to make a reasonable effort to mitigate damages caused by a tenant’s abandonment in order to recover the rent due under the lease. View lease in large measure as a contract so apply contract principles.

Sommer v. Kridel (1977): L, Sommer (P), leased a two-year term to T, Kridel (D). T wrote a note explaining that T would have to abandon, and L did not respond to T’s letter. After T abandoned, a third party subsequently inquired about the apartment, but P said that someone already had leased it. L failed to make efforts to re-let the apartment and sued T for the full amount due under the 2-year lease.

o RULE: a landlord is under a duty to mitigate damages by making reasonable efforts to re-let an apartment wrongfully vacated by the tenant.

o POLICY: rule promotes use of scarce housing resources and avoids deadweight losses that can be mitigated by landlord.

Riverview Realty Co. V. Perosio (1976): T entered into a 2-year lease but vacated after only 1 year. L wanted back rent from T who abandoned. Court held that landlord must treat apartment as if it was any of his vacant apartments, and he must prove he used reasonable diligence.

Burden of proof: burden of proof that landlord used reasonable diligence to re-let the premises differs from different jurisdictions. Most require the tenant to prove that the landlord has not mitigated the damages – others put burden on the landlord (as in Sommer, may be minority rule).

o Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc. (1997): burden of proof mitigation or its absence on tenant.

o Snyder v. Ambrose (1994): burden of proof on landlord. Questions to consider if landlord used reasonable diligence : (1) Whether

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advertisement for space in apartment? (2) Whether there was a market for housing? (3) Consider the sophistication of the landlord.

NOTE: some jurisdictions allow landlords to contract around duty to mitigate. New Jersey law does not allow parties to contract around such a duty.

o Sylva Shops Limited Partnership v. Hibbard (2006): a “no-mitigation” clause in a commercial lease has been upheld where there was no “inequality of bargaining power” and public policy did not forbid such clauses.

o NY’s highest court opted to stick with the old common law rule where landlord need not mitigate.

Arguments against Mandatory Mitigation

Arguments for Mandatory Mitigation

1. Tenant has “purchased” an interest in real estate and is stuck with it;2. Landlord should not be forced into a personal relationship with new tenant he does not wish to accept;3. Landlord should not be required to seek out new tenants continually;4. Law should not encourage abandonment of property by putting a duty of mitigation of damages on the landlord (Rest.).

1. Utilitarian arguments focus on waste of housing resources;2. Traditional rule effectively removes many units from the market, decreasing the availability of rental housing;3. Landlord is in a better situation to re-let the unit then the abandoning tenant since they are familiar with it and may have programs already in play for marketing;4. Mitigation is justified as a matter of basic fairness, equity, and efficiency to others interested in renting or purchasing the housing.

Other Landlord remedies and devices: Rent and damages: if landlord terminates because of a breach of lease, he may recover – in

addition to back rent and other damages – the present value “of the amount by which the unpaid rent for the balance of the term…exceeds the amount of such rental loss that the lessee proves could be reasonably avoided,” provided the lease either expresses such a remedy or the landlord has relet in mitigation (CA statute)

Security deposits: security deposits can be used to protect the landlord in the event that a tenant defaults on rent, damages the premises, or otherwise breaches the lease. However, security deposits are heavily regulated in order to prevent abuse.

Other techniques: Landlords can ask for deposits such as “liquidated damages” or other things in order to avoid the legal strictures on security deposits, such as advanced rent or rent acceleration (upon tenant’s default, all rent for entire term is due and payable).

LANDLORD’S DUTIES & TENANT’S RIGHTS AND REMEDIES

STEP 4: What are the Landlord’s Duties?- Covenant of quiet enjoyment/ Constructive Eviction

The covenant of quiet enjoyment is breach if the landlord

Common Law: duties to maintain premise fell almost entirely on the tenant; tenant took the premise “as is” and landlords were under no obligation to warrant their fitness.Modern Revolution: duty to maintain lease falls more on shoulders of residential landlord.COVENANT OF QUIET ENJOYMENT: under the covenant, the tenant has the right of quiet enjoyment of the premises, without interference by the landlord.- The covenant is always implied (although it is usually expressly provided in the lease).- However, this covenant is dependent, which in this context means that landlord performance of the covenant of quiet enjoyment is only in play if tenant fulfills his covenant to pay rent. Generally includes a duty to make promised repairs, abate immoral conduct or other nuisances on property.- NOTE: if tenant wants to stop paying rent must leave.

Reste Realty Corp. v. Cooper (1969): L, Reste (P), leased the basement of a commercial office building to T, Cooper (D). The basement that T was leasing flooded whenever it rained. Building manager promised to remedy flooding but

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either actually or constructively evicts a tenant.

died, L failed to remedy and ignored T’s complaints. T vacated the premises.o RULE: a tenant may vacate premises and terminate the lease if his quiet

enjoyment is interfered with by the landlord. NJ STANDARD (Reste/Expanded standard of quiet enjoyment/Minority

Rule): court suggested that “any act or omission of the landlord which renders the premises substantially unsuitable for the purpose for which they are leased, or which seriously interferes with the beneficial enjoyment of the premises” constitutes constructive eviction of the tenant.

TRADITIONAL COMMON LAW STANDARD Constructive Eviction (CE): occurs when a landlord has substantially interfered with the tenant’s use of the property, but has not actually barred the tenant from entering the leased property.

o The elements of CONSTRUCTIVE EVICTION are (1) the L breached a duty owed to T which caused (2) substantial interference or breach with the T’s enjoyment of the premises or rendered it unfit for the purpose for which it was leased (3) the T vacates the premises (some jurisdiction requires abandonment); (4) within a reasonable time after the L’s actions.

o Breach of duty: (1) required a positive or affirmative act of interference by landlord (not an omission); (2) Withholding something essential and included in the terms of the lease.

NOTE: If tenant is aware of landlord’s wrongful conduct when taking possession, the right to assert constructive eviction in the future is waived.

o Landlords have a duty to disclose : (1) latent defects in the premises that existed at the time the lease was entered into, were or should have been known by the landlord, and were not apparent on reasonable inspection by the tenant; (2) to maintain common areas; (3) undertake careful any repairs; (4) abstain from fraudulent misrepresentation as to condition of lease premises; and in some jurisdictions, (5) abate immoral conduct, and other nuisances that occurred on property.

Two other remedies for tenant if premises are unsatisfactory: (1) she may stay, continue to pay rent, and sue for damages; or (2) may vacate and be relieved under his lease under the doctrine of constructive eviction.

Additional Cases on Constructive Eviction

- Eskanos & Supperstein v. Irwin (1981): (CE) held that landlord’s acts of omission constituted constructive eviction regardless of lack of intent to evict b/c intent to commit the omissions was enough. Tenants repeatedly complaint about noise in shopping center that interfered with business and tenants vacated. - Fidelity Mutual Life Insurance Co. v. Kaminsky (1989): (CE) tenant, a gynecologist, abandoned leased premises and claimed that landlord constructively evicted him by breaching the covenant of quiet enjoyment in that landlord failed to prevent anti-abortion protestors from picketing his office. Court agreed with tenant; landlord’s acts or omissions could form the basis of a constructive eviction b/c tenant was deprived use and enjoyment of premises, and neither landlord made effort to prevent protestors. - Sciascia v. Riverpark Apts. (1981): (NO CE) held that unless a lease expressly placed a duty on landlord to provide security from criminal activity, there was NO constructive eviction of tenants who were victimized by criminal activity and vacated premises without proper notice. Landlord took reasonable precautions to protect tenants which arises from the covenant of quiet enjoyment. - Kent v. Humphries (1981): (NO CE b/c tenant at will) held that although landlord could constructively evict (since tenant was a “tenant at will”), tenant was deemed a “periodic tenant” who entered an invalid lease. Based on her periodic tenancy, P had a sufficient interest in the property to maintain a nuisance claim.

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STEP 4: What are the Landlord’s Duties?- Implied Warrant of Habitability (inception of the lease); Implied Continuing Covenant of Habitability

IMPLIED WARRANTY OF HABITABILITY (inception of the lease) (generally applies to residential, not commercial, uses): are the premises safe and fit?

The implied warranty of habitability requires that the rental premises be offered and maintained in a physical condition that provides “safe, clean, and habitable” housing for tenants.

o One or two minor defects that do not affect habitability are insufficient.

NOTE: do not necessary have to leave if tenant wants to stop paying rent.

Factors to consider whether there was a breach of warranty: Was it a substantial breach? Most states define the scope of warranty by reference either to: (1) local

housing codes; or (2) fitness for human habitation. If no housing code exists in the jurisdiction, then the courts will look to the

safety of the dwelling.o Must be so serious that a reasonable person would find the premises

“uninhabitable”; covers latent and patent defects, and common areas.o NOTE: A tenant cannot waive the warrantyo NOTE: Tenant has a duty to inform the landlord of defects and

landlord is NOT responsible for defects created by tenant. Only if landlord is (1) put on notice; and (2) fails to correct a “substantial” defect, not caused by a tenant, is there a breach.

Main question: is there a substantial violation of the warranty such that the tenant’s health or safety might be in jeopardy?

Hilder v. St. Peter (1984): L, St. Peter (D), leased an apartment unfit for habitability to T, Hilder (P). T informed L of several defects, including broken window, broken door lock, defective toilet, leaking water pipers, odors of raw sewage, etc. L failed to remedy them.

RULE: Vermont S. Ct. held that there is an implied warranty of habitability in every residential lease.

REASONING: court noted that local housing code may provide a “starting point” for determining breach, but suggested that the key question was whether the defect has an impact on the health or safety of the dress.

o NOTE: a landlord might breach the implied warranty even if the premises comply with the code but fail to be “fit for human habitation.”

o NOTE: generally do NOT allow landlords to contract around health hazards.

Procedure to prove implied warranty:1. T must first provide the L with notice of the defect, then allow a reasonable

time for the repairs to be completed.2. Notice must be specific enough to inform L about nature of the defect.

Remedies for Breach of Implied Warranty:1. Remain in possession and withhold rent2. Remain in possession and use “repair and deduct” remedy3. Remain in possession and sue for damages4. Terminate lease and sue for damages**Damages = value of dwelling as warranted – value of dwelling as it exists in its defective condition (may include punitive and compensatory)**Punitive damages may be available to a tenant in the appropriate case where the breach is of such a willful and wanton or fraudulent nature.**NOTE: some jurisdictions require escrow (proof you are not just trying to get

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out of the lease); and L cannot evict T for complaining of defects.

Arguments against Implied Warranty Arguments for Implied Warranty1. Compliance with warranty imposes extra costs on landlords.2. Landlords will tend to pass these costs onto tenants through increased rents.

1. Caveat lessee rule is ill-suited to address the needs of new urban tenant.2. Today’s tenant usually lacks specialized skills needed to effect repairs in complex modern buildings, nor does today’s tenant have time to inspect premises and pt them in tenantable condition.3. Typical modern tenant cannot protect her interests through negotiation – disparity of bargaining power.4. Landlord knows about defects and is in better position to remedy.5. Housing codes already impose a duty on L and this is a way to help enforce them.

Implied Warranty of Habitability Compared to Covenant of Quiet Enjoyment1. Don’t have to abandon with IWH.2. Sue for damages and punitive damages above and beyond compensatory damages with IWH.3. Any act or omission that renders it uninhabitable may infringe on IWH.4. Covenant of quiet enjoyment is often the only remedy that commercial tenants have b/c most tenants will not get an implied warranty of habitability (only for residents).5. Protects against patent defects with IWH.

4. DISCRIMINATION IN THE SELECTION OF TENANTS

Common law: did not restrict a landlord’s freedom in selecting or evicting tenants. Modern trend: federal and state statutes prohibit certain types of discrimination in the rental or sale of real property.History: with Great Depression many homeowners could not pay off loans.

o Homeowners Loan Corporation: formulated plans to refinance and systematized loans. o Banks stopped financing “red lined” neighborhoods.” o Conclusion: led to homogenous housing and later housing acts to prohibit discriminatory housing

practices. Anti-discrimination legislation – The Fair Housing Act of 1968 (DOES NOT requires proof of intentional or purposeful discrimination, but cap on damages):

o Principal federal statute affecting the landlord-tenant relationship is the Fair Housing Act.o 3604 (c). Discrimination in the Sale or Rental of Housing and Other Prohibited Practices. It bars

discrimination based on race, color, religion, sex, familial status, national origin, or handicap in connection with the sale or rental of a “dwelling”.

o The Act DOES NOT prohibit discrimination based on marital status or sexual orientation. o The Act DOES NOT prohibit discrimination based on advertising, even if advertising for some unit for

which allowed to discriminate. o 3604(a)- prohibits discrimination on the basis of race, color, religion, sex, familial statue, or national origin

for: 1. Refusing to rent or sell; 2. Discrimination in the terms, conditions, facilities, or services involving in a rental or sale; 3. Falsely representing that the property is not available for inspection, rental, or sale; and

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4. Publishing any advertisement that indicates any preference or limitation on prospective tenants or buyers.

The definition of “dwelling” extends to most housing; however, two categories of property are exempted from almost all of the Act (the advertising prohibitions apply to all types of residential property):

EXCEPTIONS: o 3603 (b)(1) [Exemptions]: single-family residence rented or sold without the

assistance of a real estate broker or salesperson; and o 3603 (b)(2) [Exemptions]: an owner-occupied building with four or less units.

Whether one can discriminate depends on the size of the building. POLICY: should be able to discriminate and have a right to associate. E.g., a homeowner should have the opportunity to live with whom he

or she decides; one can make a strong constitutional argument on that basis.

o Pursuing a Claim under the FHA: 1. Discriminatory motive need not be proved in order to make a prima facie case under FHA. 2. Cap on damages 3. Claimants in Title VIII actions need merely demonstrate that an action or practice carries a

discriminatory or segregative impact in order to shift the burden to the defendant.

Civil Rights Act of 1866 (requires proof of intentional or purposeful discrimination, but NO cap on damages): o “All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed

by white citizens therefore to inherit, purchase, lease, sell, hold, and convey real and personal property.”

o Jones v. Alfred H Mayer (1968): 1866 provision bars all racial discrimination, private and public, in the sale or rental of property.

o The Act of 1866 prohibits discrimination based on race in the leasing or sale of ANY type of property. Court construed 1866 act to ban discrimination based on race, which included nationalities

that were also considered “races.” o The Act applies to all types of property, without any special exception for single-family homes or

owner-occupied property. o The Act only applies to one type of discrimination – racial discrimination, and it does NOT cover

advertising, sexual discrimination, or familiar discrimination. o Also, the 1866 Act only seems to bar intentional discrimination. o 1866 law is narrower than the FHA in that it reaches only racial discrimination; it does NOT deal with

discrimination in pro vision of services and facilities, and does NOT prohibit discriminatory advertising – it is broader, however, in that it contains none of the exemptions found in the FHA.

Proving Discrimination: o Most courts agree that a plaintiff can establish a prima facie case under the Act by showing a

discriminatory effect. Typically require testers to prove intent.

o The burden then shifts to the defendant to prove a good faith legitimate reason for the conduct in question, such as a reasonable business purpose.

If such a reason is shown, then the burden shifts back to the plaintiff to prove there was a pretext for discrimination.

State Legislation: many states and localities prohibit discrimination in the sale or leasing of housing. Some states provide enhanced protection against discrimination (14th amendment)

o Minn., C.A., and other states prohibit discrimination based on marital status, which includes the refusal to rent to an unmarried couple.

o A number of states also ban discrimination based on sexual orientation.

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COVENANTS & RACE

Real covenant: a formal agreement or promise, usually in a contract. A real covenant is a promise relating to land use that runs with the land to successors in interest and is enforceable at law (damages). The covenant often (1) benefits and burdens the original parties to the promise and also their successors; and (2) is enforceable in an action for damages.

Covenants can be (1) affirmative (promise to perform a certain act) or (2) negative (promise to not perform a certain act).

Types: 1. Building restriction or use restriction: covenants may restrict certain uses, or they may restrict

construction of certain types of buildings. 2. Residential purposes: many covenants limit use to “residential purposes.” The content of this term is

not self-evidence, b/c people commonly use their residences for a variety of purposes. 3. Racial restrictions: an unpleasant fact about our national past is racial bias manifested by covenants

restricting use and occupancy of property to white people. These covenants, while often still of record b/c they were created years ago, are not enforceable.

o Shelly v. Kramer (1948): a black couple, the Shelleys (P), was buying a house while unaware of a racially based restrictive covenant on the street. The white homeowners tried to stop them. 31 of the 39 owners of the nearby property signed the covenant that restricted use and occupancy to persons “of the Caucasian race,” and specifically barring ownership, use, or occupancy by “people of the Negro or Mongolian race.” Ds brought suit to restrain the Ps from taking possession of the parcel they bought.

RULE: judicial enforcement of a restrictive covenant based on race constitutes discriminatory state action, and is thus forbidden by the equal protection clause of the Fourteenth Amendment of the Constitution.

Once state action intervenes (here judicial enforcement) to uphold the restrictive agreements, the 14th Amendment has been violated.

NOTE: under the Restatement (Third) of Property, Servitudes, 3.1 a racially restrictive use covenant would be invalid even if it were not unconstitutional to enforce it.

FHA enacted by Title VII of Civil Rights Act of 1968 20 years after Shelly v. Kramer.

o Barrow v. Jackson (1953): Supreme Court held that a court cannot give money damages against a seller who breaches a covenant not to covey to a nonwhite. Such action is state action.

o Mayers v. Ridley (1972): the court permanently enjoined the District of Columbia recorder of deeds from recording deeds containing racial covenants.

E. EASEMENTS

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1. SERVITUDES

Servitudes: an encumbrance consisting in a right to limit use of a piece of land or other immovable property without the possession of it. Servitudes law draws a dichotomy between two major types: easements and covenants. Easement: an irrevocable right to use another person’s land for a specific purpose.

A limited interest in someone else’s property. Transferable/irrevocable/inheritable. A permanent right to enter/control property owned by someone else.

Easements are classified as real covenants and equitable servitudes1. Real Covenants (bind later land owners of same rules-enforceable at law): to promise or undertake in a

covenant or formal agreement or promise (usually in a contract). a. Covenant enforceable at law (real covenants): principle issue concerning these covenants

(created only by express agreement) is whether they may be enforced by or against subsequent owners of the land burdened or benefited by the premise.

i. Main question: does privity of estate exist? 2. Equitable servitude (bind later land owners of same rules-enforceable in equity): describes a

nonpossessory interest in land that operates much like a covenant running with the land. a. Covenants enforceable in equity (equitable servitudes): may be created by agreement or, in

some states, by implication from a development scheme undertaken by a common owner. i. Privity is not required for these promises to be enforceable by or against successors to the

estate. ii. Enforced by damages and there are different elements to enforce one versus another.

Holders of covenants seek MONEY DAMAGES.b. Enforced by injunctions. Holders of equitable servitudes seek INJUNCTIONS. c. It is more difficult to get DAMAGES than INJUNCTIVE RELEIF.

Types

Appurtenant or gross?

1. Appurtenant: benefits the dominant owner or possessor of a particular piece of land (usually transferable). Requires both a dominant tenement (or estate) and a servient tenement.

Dominant tenement or estate: property has the benefit of the use of the easement

o Cannot bring ejection actions against third parties. Servient tenement or estate: property that is burdened by the easement

2. Gross: benefiting a person whether or not the person owns any specific property, such as benefiting business use/capacity (personal or commercial). Involves no dominanet estate, only a servient state.

NOTE: if ambiguous, courts generally construe as appurtenant. POLICY: parties usually have in mind easement will benefit a tract of land.

Land value is increased (dominant usually increased more than servient). Court disfavors easements in gross.

Affirmative or 1. Affirmative/positive (most common): owner has right to go onto the land of another

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negative? and makes active use of someone else’s land.2. Negative (limited and rare): owner can prevent owner of servient from doing something on servient land that may harm another or preventing someone else from making use of their land that they would otherwise be permitted to make.

Profit a prendre: right to enter another’s land without liability for trespass, and remove minerals, animals, timber, other things constituting a natural “part” of the land.

Courts disfavor enforcing negative easements (instead prefer restrictive covenants/equitable servitudes).

U.S. does not recognize negative easements by prescription.

License? License: privilege to go upon the land of another, but not an easement. It is an oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass. A license is REVOCABLE where an easement is NOT.1. NOT an interest in land.2. Statue of Frauds (SOF) does NOT apply3. Revocable at the will of the licensor (revocable anytime/non-transferable/non-inheritable)

EXCEPTIONS to Irrevocable licenseso 1. Easement by Estoppel: if licensee invests substantial amounts of

money/labor in reliance on the license, it turns into equivalent of affirmative easement. Licensors is estopped from revoking the license. Licensee has developed a property interest and become an easement by estoppel. Land may be used as long as it is improved.

Majority: only lasts until the owner receives sufficient benefit to reimburse himself on reliance expenditures

Minority: potentially infinite duration EXCEPTION: if dominant holder does not get authorization

from serviant holder either express or implied to make improvements, and cannot establish “reliance” on serviant holder. Court will allow revocation of license in spite of improvements.

o 2. License coupled with an interest is one that is incidental to ownership of a chattel on the licensor’s land.

Vendee of a chattel Termination of tenancy (to get chattels) Inspection for waste (owner of FI in land) R(3) of Property, Servitudes 1.2(4)(2000): a license that

cannot be revoked is treated as an easement.4. NOT alienable/assignable

Essential characteristics of a license is that it is personal to the licenseee

Creation

Statute of Frauds: no interest in land can be created or transferred without a written document. EXCEPTIONS: leases for less than three years, estoppel, prescription (adverse possession), necessity,

implied from prior use. POLICY: reduce fraud, dispute, and perjury.

Five Ways to Create an Easement:

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1. By an express grant (which generally must be in writing): in writing and comply with Statute of Frauds and if pertinent they run with the land and transfer with the property; 2. By implication as part of a land transfer; 3. By strict necessity to prevent a parcel from being landlocked; 4. By prescription, similar to the obtaining of a possessory estate by adverse possession; and 5. By estoppel (Holbrook v. Taylor, 1976)

How is an Easement Created?

1. EXPRESS EASEMENT: easement over grantor’s land may be granted to a third party voluntarily in a deed, will, or other written instrument.

The express easement may arise either by grant or reservation. Grant: the deed conveying the easement by grant must comply with the

same SoF requirements applicable to all deeds. Reservation: like easement by grant, but can be reserved for a third

person.o Court generally frown on easements by reservation.

Statute of fraud is a written instrument signed by grantor.Duration: called easement in fee simpleAmbiguous instrument: presumption of fee simple.

2. EASEMENT BY ESTOPPEL OR IRREVOCABLE LICENSE: if the licensee has constructed substantial improvements on either the licensor’s/licensee’s land, and relies on the license. MUST BE IN WRITING.

Holbrook v. Taylor (1976): Holbrook (D) gave permission to Taylor (P) to use the road from 1964 to 1970. Then, D wanted P to put in writing that P would relieve D of any responsibility in case someone were injured or otherwise damaged on road and to buy the land on which road was situated for $500. D tried to block off a road on property with “no trespass signs” after P did not comply and used it extensively while building a tenant house for himself.

HOLDING: an easement can be established by estoppel, even when the person making use of the property does not do so adversely, but with the permission of the property owner.

RULE: a license cannot be revoked after the licensee has erected improvements on the land at considerable expense while relying on the license.

REASONING: P made improvements on land at considerable expense with explicit consent from D; thus, license irrevocable and easement established by estoppel.

Requirements for Easement by Estoppel:1. Dominant tenement holder relies on serviant holder (either affirmatively gives permission or acquiesces land by sitting back and doing nothing).2. Consent implied or expressed by serviant holder.3. Dominant tenement has spent money and made efforts to improve land in reliance of license/behavior of servient holder to use land.Ways to protect against Easement by Estoppel: get provisions in writing; property interest transferred in writing.Shepard v. Purvine (1952): (NO WRITTEN CONTRACT) held b/c word was considered as good as bond, court ruled that Ps were not negligent in not insisting upon a formal transfer of rights.Henry v. Dalton (1959): (WRITTEN CONTRACT) held that better for law to require interests in land to be evidenced by deed than to leave it to the chancellor to construe an executed license as a grant, depending upon what, in his view, may be equity in the special case.

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3. EASEMENT IMPLIED BY PRIOR USE:(SEE BELOW FOR TWO MAIN TYPES OF IMPLIED EASEMENTS)

Implied from existing use: courts may find that the parties intended to continue such use after the tract is divided. Courts will IMPLY an easement if the circumstances are in place but there is no written agreement but upon sale of the benefited parcel the purchaser could reasonably expect the use to be included in the sale. Courts try to be true to what parties intended. Courts will frequently imply easements in situations where property is subdivided, and some showing is made of necessity.

If PRIOR to division into lots A VISIBLE/APPARENT use exists on the SERVIENT part Implied by grant: large parcel divided by owner. When purchaser needs an

easement for something (e.g. power lines across part of newly divided lot), the owner/seller “impliedly grants to purchaser.” Easement is implied in favor of the grantee when the original owner subdivides (dominant tenement is the new owner).

Implied reservation: when owner/seller subdivides and sells land but needs and easement on the portion of newly subdivided land that is being purchased. The seller/owner “reserves” an easement for herself (dominant tenement is the seller).

There are TWO TYPES OF IMPLIED EASEMENTS:

1. An apparent and continuous (or prior) use of a portion of the tract existing when the tract is divided. ( Van Sandt ) Quasi-easement: part of the pre-divided property there existed an easement. Use by owner of two adjoining parcels of land of one of the parcels to the benefit of other.Quasi-dominant tenement: part of land that benefits from use.Quasi-servient tenement: part of the land burdened with the particular use.A quasi easement may become an easeent upon transfer of one or both of the parcels. Or courts will look doctrinal requirements.

1. Easement by an “apparent and continuous” (or prior use):Principle factors to establish an easement implied by prior use:1. Common owner: prior to division, the quasi-servient estate and the quasi-dominant estate must be owned by the same person.2. Reasonable necessity: the prior use must be reasonably necessary for the use and enjoyment of the “quasi-dominant estate.”3. Continuous use: the prior use must be continuous, not sporadic.4. Intended continuation: the parties must intend, at the time of division, to continue the prior use.5. Exisitng use: the prior use must be existing at the time of division, a requirement implied by the element of intended continuation.6. Apparent: the prior use must be apparent, which does not necessarily mean that it is visible.Van Sandt court gave rule that if it can be discovered by reasonable inspection, it meets tests for apparent.

Van Sandt v. Royster (1938): (EASEMENT BY IMPLICATION) Van Sandt (P) claimed he never granted an easement for a sewer drain which connected his house to two others and flooded his basement. Original lot had sewer line built to reach a home on the back Lot 4 owned by Gray (D) and Lot 20 owned by Royster (D). P claimed that NO easement was ever created in his land and eat even if one was created, P’s property could not be burdened with it b/c P had NO notice. Ds argued that easement was created by implication when lot 19 was severed from Bailey lot (previous landowner) as a result of sale to Jones.

RULE: the implication of an easement will depend on the circumstances under which the conveyance of land was made, including the extent to which the manner of prior use was or might have been known by the parties.

o Each party will be assumed to know about reasonably necessary uses which are “apparent” upon reasonably prudent investigation; an easement may be implied for a grantor or grantee on the basis of

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necessity alone. REASONING: when Jones bought lot 19 he was aware of lateral sewer drain.

Original owner implied through use that sewer line would be reserved and easement for drain was necessary for comfortable enjoyment of property. (An easement can be implied on basis of necessity alone.) Court found it impracticable to rereoute or make a new sewer line. P also had notice of lateral sewer b/c P made a careful inspection of property (easily detectable).

o NOTE: “apparentness” could be debated as there no real record of sewage line.

Court considers the following factors from Restatement of Propert:A. Whether the claimaint is the conveyer or conveyee,B. Terms of the conveyance,C. Consideration given for it,D. Whether the claim is made against a simultaneous conveyee,E. The extent of necessity of the easement or the profit to the claimant,F. Whether reciprocal benefits result to the conveyor and the conveyee,G. The manner in which the land was used prior to its conveyance, andH. The extent to which the manner of prior use was or might have been known to the parties.

Comment j: prior use must have been known to the parties at the time of the conveyance, or, at least, have been within the possibility of their knowledge at the time.

Degree of necessity required to imply an easement in favor of the conveyance is greater than that required in the case of the conveyee.

Previous use would aid both cases.

B. Claimed easement is NECESSARY to the enjoyment of the claimaint’s land and that the necessity arose when the claimed dominant parcel was severed from the claimed servient parcel (Othen )

This is an EASEMENT BY NECESSITY.

2. Easement by necessity: severance of land under common ownership creates the need for an easement.Principle factors to establish an easement by necessity:1. A common owner severed the property just before a conveyance: an easement by necessity can be created only over property owned by the person who also owned the landlocked parcel and who divided the property to create access problem.2. The necessity came into existence at time of and caused by severance of common ownership – not prior use: necessity must exist at the moment the property is divided. No prior use is needed to establish an easement by necessity.3. The easement is strictly necessary for the egress and ingress to the landlocked parcel

Easement by necessity terminates when the necessity ceases. That is reasonably NECESSARY for the enjoyment of the DOMINANT

part

CONFLICT OVER DEGREES OF NECESSITY REQUIRED:1. Mersac Inc. v. National Hills Condominium Assn., Inc. (1997): (NO EN) holding retained land locked when developer inadvertently failed to retain an easement of access; doctrine of implied reservation of easement by grantor not recognized.2. Simmons v. Timmons (1999): (NO EN) refusing to recognize an easement by necessity when allegedly “landlocked” parcel had access to a public road on foot, down a steep cliff; the fact that the cost of building a road over the cliff would be $700,000 was deemed irrelevant.3. Leo Sheep Co. v. United States (1970): (NO EN) the Court held that the

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United States had no easement by necessity to reached landlocked government lands because it has the power of eminent domain.4. Weaver v. Cummins (2001): (EN) courts have granted easements by necessity where access to the land exists but it is claimed to be inadequate, difficult, or costly.

Duration: an easement by necessity lasts as logn as the necessity exists. If the necessity is removed, the easement is terminated.

**(Majority) Reasonably necessity: easement must be “reasonably necessary” to the enjoyment of what is claimed to be the dominant tenement.

**(Minority) Strict necessity: without the easement, the property must not be able to be “effectively” used without disproportionate effort or expense. This is a tougher-to-meet standard that the “reasonably necessary” standard for easements by implication created by a grant.

Othen v. Rosier (1950): Othen (P) used a roadway on Rosier’s (D) property to access public highway, but Rosier (D) later built a levee which made the road impassable for Othen (P) and deprived P of access to his farm. P wanted temporary writ of injunction to keep D from maintaining the leveee and a mandatory writ of injunction to keep D from interfering with P’s use of roadway.

HOLDING: no easement by necessity b/c no proof that when Hill, the common owner, had conveyed the Rosier property to Rosier’s predecessor in interest it was that conveyance that landlocked the Othen Parcel. Rather, it appeared that at the time Hill had conveyed the Rosier parcel, Hill owned other land (never identified by Othen) that was contiguous to both the Othen parcel and a public roadway. Thus, Othen had an easement implied by necessity across some property, but not Rosier’s property.

RULE: An easement can be created by implied reservation only when it is shown that there was (1) unity of ownership between the alleged dominant and servient estates; that the easement is a necessity and not a convenience; and (3) that the necessity existed at the time the two estates were severed; an easement by prescription can only be acquired if the use of the easement was adverse.

NOTE: (1) Test of necessity created by original subdivision cannot be determined b/c no records that necessity was created upon conveyance of land to Rosier as Hill owned other land contiguous to roadway; (2) Prior use test not met b/c no records; (3) Easement by estoppel not met, no exclusive use and D permitted P to use road. D also maintained road; (4) Reliance is best argument for P as P invested in building a house and relied on use of road to do so.

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4. EASEMENT BY PRESCRIPTION: is drawn from adverse possession doctrine. Easements are not possessory interests, so an easement cannot be acquired by adverse possession, but adverse use for a sufficient period of time can ripen into an easement by prescription.Elements: (1) Actual use; (2) Open and notorious; (3) Continuous use; (4) Under claim of right; (5) For a statutory period – typically the same period of time as adverse possession; (6) Can be some notion of exclusivity.

Doctrinal requirements: 1. Actual use:

o ONLY affirmative easement can be acquired by prescription 2. Open and notorious use: must be discovered by any reasonable

inspection. 3. Hostile/adverse use under a claim of right: not with the permission of

the owner.o Objective test: whether a neutral observer would think the use is

under a claim of right and not permissive.o Subjective test: requires adverse user to prove that she had a good

faith belief that she had a right to use the land, and not just permission to do so.

o If dominant tenement is using the owner’s land with permission of owner, then it may be considered permissive and not hostile use.

4. Continuous/uninterrupted use for the statutory prescriptive period: engages in activity on property that is normal for an easement of that kind.

**NOTE: “exclusive use” element is so altered from its meaning in adverse possession that it is effectively not required.

o For prescriptive purposes, exclusive use does not mean that the adverse user was the only user; rather, it means that the adverse user’s claim “does not depend on a like right in others.”

o Othen v. Rosier (1950): discussed under easements implied by necessity. Other’s alternative argument was that he had aquired an easement for right of way across Rosier’s land by prescription, but the Texas courts rejected this claim b/c Othen used the roadway in common with Rosier.

Easements by prescription may be (1) appurtenant (as when one homeowner acquires a driveway easement over his neighbor’s land); or (2) in gross (as when repeated hunting or fishing create a prescriptive easement in gross in favor of the hunter or fisher).

Public prescriptive easements: some jurisdictions permit the public at large to acquire prescriptive easements in private lands, so long as the elements of prescription are satisfied. Other jurisdictions achieved the same result through implied dedication, custom, or the public trust doctrine.

Courts often place greater burdens on claimants to a public prescriptive easement than they do on persons asserting private prescriptive easements.

Some states do not recognize public prescriptive easements at all on the ground that an “unorganized public” cannot establish rights for the public as a whole.

E.g. Rockefeller Center, in NYC, a private street called Rockefeller Plaza is situated between the GE Building and the sunken skating rink. In order to preserve Rockefeller Center’s right of ownership of the street, each year the street is closed to all traffic, even pedestrian, for one day. Lawyers for Rockefeller Center believe that this formality is necessary to prevent the public from acquiring a permanent right of way in the street.

Beach access: in state bordering the sea, the availability of coastal beaches for public use is a matter of considerable importance. In most states, the state holds, in public trust, the beach from the water to the mean high-tide line (the foreshore or wet sand area).

o In CA, public prescriptive easements have been abolished by statute except on land within 1,000 yards from the ocean.

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Scope:Depends on how the easement was made.

Scope of easement may be increased in scope to meet the needs of the dominant tenement as they develop (express/implied easement).

Termination: 1. Terms of grant 2. Purpose of easement ends 3. Merger 4. Forfeiture for misuse 5. Release 6. Abandonment

Mere nonuse, no matter how long the duration of the nonuse, does NOT constitute an abandonment. Need manifestation of an intent to abandon

7. Estoppel 8. Prescriptive

Servient estate owner must use the easement in a manner adverse to the easement holder’s right9. Eminent domain