CREATION AND ACQUISITION OF PROPERTYI.

Court is trying to figure out the true owner of the baseball - general rule - person who possess the ball and intends to control it has ownership

i.

"Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property a nd the failure to continue the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre -possessory interest in the property. That pre-possessory interest constitutes a qualified right to possession which can support a cause of action for conversion."

New rule the court announces: ii.

Illustration of the theories/ideas that underlie what we as a society think possession means - application of older/philosophical rules about possession to modern situations

iii.

POPOV v. HAYASHI (2002)i.

Post is hunting for the fox on an uninhabited piece of land - Pierson knows that Post is hunting for the fox, but comes along and kills it in front of Post

i.

Giving a right to possession to anyone who pursued something/an animal would lead to uncertainty and litigation - it is much more certain when someone kills an animal or completely deprives it of its liberty

1)

Most courts have moved away from the rule of capture2)

Rule of capture (custom) - Pierson has rightful possession because he actually killed the fox - Post's pursuit did not give him a right to possession

ii.

Both the majority and the dissent care about first in time - they just define it differentlyiii.Majority doesn't deal with the underlying question of what is the "right" outcomeiv.If the property was on Post's property he would have had constructive possessionv.

PIERSON v. POST (SUP CT NY 1805)ii.

More certainty - reduces potential litigation - people can determine ahead of time who will win1)Social benefits - lets people know ahead of time what is acceptable and what isn't2)Abiding strictly by a rule might not mesh well with individual circumstances - doesn't allow for flexibility - often reasonable behavior is not cut and dry

3)

Rules:i.

More flexible, allows individual circumstances to come into effect1)Push us harder to decide why we are deciding a certain way - are we accomplishing the right thing/promoting the right values?2)

Standards:ii.

Rules v. Standardsiii.

Keeble owns a decoy pond for ducks, and Hickeringill (without coming onto Keeble's property) fired his gun twice with the effect of scaring away the ducks - Hickeringill also has a decoy pond that he built first

i.

Policy argument - court wants to promote the better societal outcome - it is an endorsement of competition as long as it benefits (in this case) the consumers of ducks

1)

One of the first cases endorsing the notion as healthy competition as an objective we want to achieve2)Outcome would have been different if Hickeringill had simply been the better competitor and lured away the ducks 3)

Court finds for Keeble - say that Hickeringill is interfering with the trade of Keeble for no other purpose than to be violent or maliciousii.

KEEBLE v. HICKERINGILL (QUEEN'S BENCH 1707)iv.

Capture and PossessionA.

First in time explains a lot of early property theory, and makes intuitive sense - somewhat explains a labor theory of property, in that he who worked hardest got there first

i.

Richard Epstein - Possession as the Root of Title - the common and civil law alike adopted the preposition that taking possession of un-owned things is the only possible way to acquire ownership of them; the universal principle is original possession

ii.

The idea that being prior in time matters is not only venerable but persistent - however, the normative case for first possession (its force as a justification) is commonly though to be rather weak

iii.

In generali.

Plaintiff is part of a whaling company who killed a whale - custom is that whoever finds the whale notifies the whaling company and gets a finders fee - instead, someone found the whale and auctioned it off to defendant

i.

Court finds that plaintiff if the owner of the whale because of the very specific whaling custom - which defendant knew or might have known about

ii.

At the same time, technology/other responses might evolve if the rule was different - what is preventing the whaling company for sending someone down to wait at the beaches for the whale to wash up, or hoist the whale onto the ship after killing

1)

Policy argument - for the good of the industry - what would be the motivation to hunt whales if anyone could just come along and take them?

iii.

GHEN v. RICH (MA 1881)ii.

Customiii.

Occupancy TheoryB.

Important to see how you can take the same case and use different aspects to apply to your own case - the technical/definite holding on one hand, and the instrumental/underlying holding on the other handThere is often a conflict between the technical holding and the instrumental aim-

Sometimes the technical doctrine will trump, but judges often care about the underlying result as well

-

Make sure that you are looking at the empirical arguments made by the court and trying to figure out if they make sense - is the instrumental effect of the rule that the court adopts really what they say it is? Challenge the court's assumptions, come up with rebuttals

Formalism of doctrine should not cabin the way you litigate these cases - just because you can't tie facts to a particular doctrine doesn't mean they're not relevant

Property OutlineSaturday, April 05, 2008

5:52 PM

Outline Page 1

In some situations it makes perfect sense to rely on custom if the custom is widely known - people in the industry are actually on the ground engaging in these practices - they likely know more about the practices than the court

i.

Sometimes custom only favors those who were at the table at the time the custom was established - court must ask itself if the custom is taking into account all the appropriate interests

1)

As an empirical matter, custom could be wrong - it may not be correct to embrace things as they have always been done - a legal rule might be favorable to prompt development

ii.

Customiii.

Will the decision enhance certainty and peace? i.Look at the instrumental effect the decision will have on the industry (Pierson, Ghen)ii.Rule should maximize social utility (Keeble)iii.

Instrumental argumentsiv.

Malicious interference (Keeble) - find in favor of person interfered witha)Constructive possession - if someone comes onto someone else's land there is a trespass problem - even if the owner of the land didn't actually possess the animal they still have constructive possession

b)

Custom (Ghen, Swift)c)

Exceptions:1)Need to mortally wound or trap to establish possession (Pierson, Ghen)i.

Doctrinal rulesv.

Plaintiff's father as well as two other grantees had large land companies - purchased land from the Piankeshaw Indians - Johnson was the first to enter the land

i.

After that sale, the US government paid money to the Piankeshaws and granted land to the M'Intosh'sii.Evidence that this was a sham case to determine whether private land companies could purchase land from the Indians - trying to establish legal process for acquiring title

iii.

Right to occupy in the present (Indians)1)Right to transfer the title in fee simple (US government)2)

Two different rights that end up being dividediv.

Johnson does not actually own anything after the case is settledv.Court finds that Indians had no right to grant the land in a way that is prejudicial to the US - they can live on the land, but that's itvi.US government said that the Indians did not have possession in the land because they didn't use the land in a way that Europeans would have - used to justify otherwise indefensible behavior

vii.

Legal formalism - this is how the country has been established - this is the way it is 1)

Marshall is saying he doesn't have a choice here - US has established the rule for how it is conquering/acquiring land and allowing its citizens to be landowners

viii.

Committed to a process which pre-ordained the outcome of things - very formulistic in nature - don't take on instrumental arguments

1)Legal formalistix.

Takes into account policy matters - we should be explicit about that, otherwise we are hiding behind formulism1)Legal realist x.

In many cases, can't just look at a set of facts and determine who has the ownership interest - property rights are really what the courts/legislators say they are, and not just some inherent order of things (at least in a case like this)

1)

Theories often help us decide what ownership rules exist - underlie ethical/moral ideas about property2)With certain limitations, the state has vast power to decide what the property rules are3)

What does this case say about property rights/ownership?xi.

JOHNSON v. M'INTOSH (Sup Ct US 1823)vi.

Entails the sighting or finding of hitherto unknown or uncharted territory - frequently accompanied by a landing and the symbolic taking of possession - acts that give rise to an inchoate title that must (on one view) subsequently be perfected, within a reasonable time, by settling in and making an effective occupation

i.Acquisition by discoveryvii.

The taking of possession of enemy territory through force, followed by formal annexation of the defeated territory by the conquerori.Neither of these two modes of territorial acquisition have much relevance todayii.

Acquisition by conquestviii.

The riches of the earth were initially held in common, but because avarice eventually led to scarcity, the institution of private property become necessary to preserve peace

i.

Private ownership was imagined to have developed according to agreements, explicit ones or those implied by occupationii.

Hugo Grotius - the evolution of private propertyix.

Toward a Theory of Property Rights - Utilitarian account of propertyi.Thesis is somewhat contested, but we still have to face the problem of what to do with externalitiesii.

Most externalities occur when one private property owner imposes harm upon anotheri.For example - Keeble built his pond first, but it is too close as to reduce the ducks in Hickeringill's pond - he has imposed an externality on Hickeringill that he doesn't have to deal with

ii.

Externality - Cost or benefit (much more concerned with cost) that a resource user is not forced to take into account when using the resour ceiii.

Nuisance lawsi.Zoning so that externalities don't exist to begin with - don't allow incompatible land uses next to each otherii.Setback requirements - require some buffer between incompatible land usesiii.

Ways of dealing with externalitiesiv.

A primary function of property rights is that of guiding incentives to achieve a greater internalization of externalitiesi.

Increased internalization results from changes in economic values, which stem from the development of new technology and the opening of new markets (changes to which old property rights are poorly attuned)

1)

Property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization - when it becomes economic for those affected by externalities to internalize benefits and costs

ii.

Internalizing - refers to a process, usually a change in property rights, that enables these effects to bear (in a greater degree) on all int eracting persons

v.

Assume 100 people around a pool of oil - each person has the right to use the oil without limit, no one has the right to exclude anyone else - rule of capture applied

i.Common property v. Private property in reducing externalitiesvi.

Demsetz ArticleC.

Outline Page 2

If the oil is not valuable - no externalities - no one has an incentive to extract the oil1)

Claims of the present generation are given an uneconomically large weight in determining the intensity with which the land isworked - no incentive to preserve for future generations

a)

If the oil becomes valuable - each member wants to extract as much oil as possible, as fast as possible - no one really cares about sustainability - creates perverse incentives (self interest and collective interest collide)

2)

If the land is damaged, the person extracting doesn't bear the costa)Might see an overinvestment in extraction technology to capture quickly - end up wasting resourcesb)If neighbors don't own part of the common pool, they still bear the cost of excessive noise from the extraction, pollution, etc.c)

Who bears the cost of extraction?3)

Transaction costs - can be quite high, especially when dealing with something complicated - may exceed the benefits the community can acquire by acting collectively

a)

Need to police the regulations that are put into placeb)

Free riding on the collective efforts of the group to try and negotiate agreement - if everyone reasons this way, no one will contribute

i)

Problem of holdouts - if one holdout refuses to sign an agreement, they can do whatever they wantii)

Free rider problemc)

The more people you are trying to negotiate with, the harder the negotiationd)

Obstacles in trying to get collective owners to bargain4)

else - rule of capture applied

Lobster industry - exception - have managed to create a tight system of control within their nichea)Conversely, attempts to create a privatized-type system in the fisheries industry has been largely unsuccessfulb)

Real life examples:1)

If one person is given control over the oil field, they will be able to manage the resource more effectively by internalizing the externalities

2)

One owner has much more incentive to determine how to save some resources for the future instead of using them all up as quickly as possible - more incentive to not ruin the land, because you would have the responsibility of fixing it and preserving for the future

3)

Would not eliminate externalities, but might reduce them - Demsetz says it's still superior - anyone looking for a change, a neighbor for example, would only have to negotiate with one person instead of 100

4)

Private ownership gives the owner less incentive to care about the effects on surrounding properties5)

Demsetz says the way to deal with these problems is to transition to private property ownership - highly controversial thesisii.

If group can't establish consensus - government can step in and create regulations - establish what the limits are1)Law and economics - Posner - permeates a lot of property decision-making2)

Other possible solutionsiii.

Seems that members of society would have to agree to reorganization, but agreement requires cooperation and part of Demsetz'sargument is that the absence of cooperation in a regime of common ownership is the problem to begin with

1)

How private property comes about remains a mystery2)

Logical objection is that the theory makes an unjustified leap from assuming efficiency-maximizing behavior of individuals to assuming efficiency-maximizing behavior of society - how does a society reorganize itself out of a system of common property and into one of private property?

i.

Claim that Demsetz ignores how value-laden the process might be that leads from common to private ownership - picturing the matter, rather, as more or less mechanical and value-neutral

ii.

Criticisms of Demsetz's theoryvii.

Seems like it would be in the best interest of the neighbors to offer X $500 to change - most efficient use of land1)However - when transaction costs are taken into account it's not that simple - especially of transaction costs are more than $1000 it is highly unlikely that the necessary bargaining would occur

2)

Suppose X is using land in a way that is hurting his neighbors - an alternative use of land would cost X $500 but confer $1000 of benefits upon his neighbors.

i.Bargaining and Externalitiesviii.

Taking possession of an unknown thing is the way to acquire ownershipi.Pierson, Ghen, Johnson v. M'Intoshii.

First in time/First occupancyi.

When an individual labors over an unknown product and creates something useful of it, he acquires a property right to it - John Lockei.Locke - "It being by him removed from the common state nature placed it in, has by this labor something annexed to it, that excludes the common right of other men"

ii.

INS v. APiii.

Labor theoryii.

Property rules should protect reliance in relationships - based on the idea that it is wrong for a true owner to allow a relationship of dependence to be established, then try to cut off that relationship/dependence

i.

Kunto, dissent in Van Valkenburgh, Local 1330 (but court doesn't know what to do with it), Singer articleii.

Reliance interestiii.

Create a property rule that allows for the greatest wealth - most efficient i.All IP cases in one way or another are concerned with the tension between protecting creativity and promoting healthy competition -want to encourage innovation in a way that will ultimately benefit consumers

ii.

Cheney Brothers, Keeble, Smith v. Chaneliii.

Utilitarianiv.

Should choose a property rule to recognize a distinct property right when the objects of the property define the owner's personi.Similar to reliance - but also the way in which the property has defined someone's lifeii.

Personality theoryv.

Intellectual underpinnings are often infused in judicial decision-making - can help you make stronger arguments as a lawyer/anticipate strong arguments on the other side

vi.

When owners grant rights of access to their property to others, they are not unconditionally free to revoke such access - non-1)

Argues that the wide variety of current legal rules limiting the right to exclude can all be justified in terms of a single underlying moral principle - the reliance interest in property

i.Joseph Singer, The Reliance Interest in Propertyvii.

Theories of PropertyD.

Outline Page 3

When owners grant rights of access to their property to others, they are not unconditionally free to revoke such access - non-owners who have relied on the owner may be granted partial/total immunity from having access revoked when it is necessary to achieve justice

1)

When parties create relations of mutual dependence involving joint efforts and the relationship ends, property rights must beredistributed among the parties to protect the legitimate interests of the vulnerable parties

2)

To protect the interests of the more vulnerable persons in reasonably relying on the continuation of the relationshipa)The distribute resources earned by the more vulnerable party for the contributions to joint effortsb)To fulfill the needs of the more vulnerable personsc)

Property rights are distributed from owners to non-owners3)

principle - the reliance interest in property

Acknowledges that the essence of private property is always the right to exclude others - but it should not be regarded as inviolablei.To be really effective, the right of property must be supported by restrictions or positive duties on the part of the owners, enforced by the state as much as the right to exclude others which is the essence of property

ii.

Morris Cohenviii.

ADVERSE POSSESSIONII.

What is the cause of action and what do the doctrinal elements look like? Elements might be different by jurisdictioni.

Is it the use an ordinary owner would make of the property, taking into account the neighborhood conditions, etc.?1)VanValkenburgh - required a lot to prove actual use, gravel case (??), wild geese case (??)2)

Actual/exclusive use - often hotly contestedi.

VanValkenburgh - would a normal person walking by the property assume that Lutz was the owner?1)Kunto should have raised this question2)

Open and notorious - not usually as hotly contested except when talking about boundaries and caves. Connected in some respect with actual use - in part about putting a true owner on notice that the property is being used.

ii.

Majority rule, but should still mention state of mind on exami)If you are representing a true owner and someone is a hostile trespasser - even in this jurisdiction it is a good idea to make a big deal about it because it makes them less sympathetic

ii)

Objective - don't care about state of mind of trespassera)

Other jurisdictions - need a good faith belief that the property is yoursi)Van Valkenburgh (inconsistent as to point - Charlie's shack or encroachment)ii)Kuntoiii)

Good faith beliefb)

Tiny majority/if anyonei)Have to know it's not yours or intend to take it whether or not it is yoursii)

Maine doctrinec)

Split on standard that court is going to apply1)Claim of right - hostility/adversity - often hotly contestediii.

Kuntoa)Hard to divorce from the question of notice - if the true owner would only use during the summer they should be on noticeb)

Intermittent/summer occupancy - can be permitted if it's the way a true owner would use the property1)

Have to get back to the question of what state of mind the trespassers hada)Some jurisdictions require a document for privity in tacking- contractual in natureb)Other jurisdictions - sufficient to transfer from one party to another and we don't care about state of mindc)

Successive possession - tacking question2)

Continuous use - adverse possession has to be continuous. iv.

Some jurisdictions require the payment of property taxesv.

To establish adverse possessionii.

Openness and notoriety likely to be particularly importanti.Manillo says that true owners need actual notice of encroachment - many jurisdictions say that if a reasonable person would have known that is sufficient

ii.

State of mind same as in regular adverse possessioniii.

Courts have developed doctrines when they have sympathy for the encroacher and not for the true owner - may have been something like long acquiescence (most courts don't follow long acquiescence - want some kind of written/verbal agreement)

1)

True owner may be estopped from arguing that the true property is hers if there has been some kind of detrimental reliance(generally fairly reasonable reliance)

2)

Judges are engaging in equity - trying to do what is fair even if the doctrine doesn't really fit - usually where true owner has done something to make the possessor thing they are ok

3)

Singer article talks about some of these equitable solutions4)Doctrine of agreed boundaries - owners agree verbally or in writing where the property boundary is5)

Various equitable doctrines have arisen - can be hard for encroacher to satisfy AP requirements because of openness and notoriety in particular

iv.

Boundary disputes - special categoryiii.

Analyzing an adverse possession caseA.

Method to acquire title to property by possessing the property for a certain period of time as long as you have met certain c onditionsi.Time period is akin to a statute of limitations - adverse possession tends to engender more outrage than a standard statute of limitationsii.In adverse possession, if owner doesn't bring a claim of trespass within a certain period of time they lose their right to ob ject and lose the title to the property

iii.

Claims by the actual owner - trying to eject the adverse possessori.Claim by the adverse possessor - trying to quiet title and settle the claim of adverse possessionii.

Claims usually heard in two waysiv.

Some jurisdictions recognize two forms of adverse possession depending on whether the adverse possessor is addressing their c laim under color of title - in some cases (NY) the statute itself establishes the different requirements based on whether you are establishing your claimunder color of title or not

v.

In GeneralB.

Outline Page 4

under color of title or notPurpose - to automatically quiet all titles which are openly and consistently asserted, to provide proof of meritorious titles, and cor rect errors in conveyancing

vi.

In most jurisdictions if you are claiming based on a faulty written instrument, you do not have to be occupying the entire property to win a claim for adverse possession - you can constructively possess the remainder of the property

i.Color of title claims - based on a faulty written instrument (must be in good faith)vii.

Lutz has already won an easement on the property and has admitted that he does not own the land1)

Dispute between VV and Lutz over lot 19 - big question is whether or not the way the property was used constitutes constructive use (actual use requirement) and whether Lutz is claiming the property under claim of title

i.

Court needs to ask themselves whether the true owner would have used the land in a similar way - need to look at neighborhood norms

1)

Court looks at substantive enclosure, factors supporting "usual cultivation or improvement - " Lutz's farm on the lot, his brother's shack, part of the garage that is encroaching on the lot

ii.

Test by definition needs to be a subjective one - open to manipulationiii.Court finds against Lutz - "proof fails to establish actual occupation for such a time or in such a manner as to establish title by AP"iv.

VAN VALKENBURGH v. LUTZ (CT APP NY 1952)viii.

If ownership changes during possession (the true owner), this is typically not an important issue - adverse possession can happen - unless the possession runs against someone who possesses only a life estate.

ix.

If you start possessing against a life estate holder, you can only possess what that owner ownsx.

Labor theory - reward person actually working the land (in this case, state of mind shouldn't matter)i.Detrimental reliance - want to reward the person who makes an honest mistake and expends labor and such in pursuance of this honest mistake (in this case, we would want an honest belief - don't want to reward trespassers)

ii.

Quiet title - just want to make a decision/settle the claim/determine who owns the property (doesn't tell us who ought to own the property)iii.Statute of limitations argument - we want to punish owners who don't use their landiv.

Why have adverse possession?C.

CA - 5 years, other states - generally 10-15i.Typically require that there has been actual possessionii.Possession must have been open and notorious - most contested in boundary disputesiii.Continuous use (under claim of title, sometimes also called an adversity requirement, or hostile use)iv.For the statutory period of timev.CA/other Western states - must pay the property taxes on the propertyvi.

Typical adverse possession requirementsD.

Idea that person making actual use of the land should get the benefit of the use - ties into labor theory - the person actually using the land has worked harder than the person who has abandoned it

i.

Utilitarian idea - adverse possessor is maximizing the value of the propertyii.

Often same evidence to support actual use also supports open and notorious requirement1)

Notice - part of the requirement is to put the original owner on use that you are using the property - would an owner be able to tell that you are using the property?

iii.

Actual use is often the most hotly contested issue in cases of adverse possessioniv.

Reasons behind an actual use requirementi.

Actual use requirementE.

State of mind required by the adverse possessori.Claim of title - one way of expressing the requirement of hostility or claim of right on the part of an adverse possessorii.Have to be making a claim that is not subordinate to the true owner's - using property in a way that suggests you own itiii.

Could argue that the true owners should have then brought an action against the adverse possessors, but it's a weaker claimi.

Typically a statement to the original owners that you know the property isn't yours and you're just borrowing it defeats the adversity requirement

iv.

Very few courts have taken the view of adversity/hostility to the extreme - idea that you must have a hostile intent by knowing that you are trespassing, or if you're not sure you don't care - Hostile intent requirement is highly disfavored

i.

In a small number of jurisdictions, there is still the idea that you must have a good faith belief that the property is yoursii.

Though outdated for the courts - if your client really had a good faith belief that the property was theirs, makes them more sympathetic. On the other hand, bad faith belief is likely to hurt the possessor

1)In many jurisdictions, state of mind is irrelevant for purposes of the court's decisioniii.

Continuum for state of mind requirementv.

Claim of title/Claim of right/Hostility requirementF.

Adverse possessor could pay the original owner to keep the propertyi.Original owner could keep the property and pay the adverse possessor for any improvementsii.Simple remedy - if adverse possessor wins they get property and vice versaiii.

Remedies in adverse possessionG.

Property Rules, Liability Rules and Inalienabilityi.Property rules - interest cannot be taken from its owner without the owner's consent - all transfers are voluntary - one person or another gets the property

ii.

Liability rules - interest can be taken without the owner's consent but only upon payment of judicially determined damages - transfers are forced - you can keep the property but you have to pay for it

iii.

Calabresi and MelamedH.

Doctrines have developed that are for the most part favorable/sympathetic to the encroacher depending upon the factual circumstancesi.In generali.

Is there actual and exclusive use?1)

Need to look at the requirements of the jurisdiction a)Need to look at when individuals purchased the landb)What the lot looks like - what size? If it's a small lot owner probably should have been on noticec)

Is it open and notorious?2)

Is the possession adverse? State of mind3)

Where do you start? Elements of adverse possession:i.Boundary dispute analysisii.

Boundary DisputesI.

Outline Page 5

What the lot looks like - what size? If it's a small lot owner probably should have been on noticec)Is the possession adverse? State of mind3)Continuity - has the possession been continuous?4)

Parties own rectangular lots next to each other - Gorski made modifications to their house that impeded on their property by 15 inches the same year Mannillos acquired title to their property - appears to have been a mistake

i.

Court's standard is whether the true owner had actual knowledge of the encroachment in order find open and notorious possession -seem to be holding the innocent encroacher to a high standard

ii.

Court says that this favors intentional wrongdoers and not innocent encroachersa)

Maine doctrine - adverse possession cannot be found in an innocent boundary mistake - adverse possessor must have the intention to claim the ownership of the land not in his title

1)

CT doctrine - the very nature of the act (entry and possession) is an assertion of the adverse possessor's title, and a denial of the title of all others. Doesn't matter is the adverse possessor made an innocent mistake

2)

Court seems to be saying they won't be looking at state of mind of adverse possessor from now on3)

Discussion of Maine doctrine v. CT doctrine - court ultimately rejects Maine doctrineiii.

MANNILLO v. GORSKI (SUP CT NJ 1969)iii.

Property rule remedy - If the encroacher prevails they get to keep the land - if the original owner prevails the encroacher has to remove the encroachment

i.

Liability rule remedy - encroacher has to pay for the value of the land the encroachment is on, or the original owner has to pay for the increased land value of the encroachment, or pay for the removal of the encroachment

ii.

Remedies with boundary disputes - property v. liability ruleiv.

Exists when parties agree on a boundary and take action - thereafter the true owner may be estopped from upholding the true boundaryi.If either party sells the house - result depends on whether the dispute has been adjudicated - if not, it is a harder question if the time period has not passed for adverse possession

ii.

Result depends on the circumstances - hard to predict with any certaintyiii.

Doctrine of agreed boundariesv.

Courts may refuse to upset the boundary lines even if there is no overt conversation/act about agreeing on the boundary if the parties have been living with it for a long time

i.

Parties can acquiesce without knowledge - very passiveii.

Doctrine of long acquiescencevi.

Comes into play when one neighbor makes representations about (or engages in conduct that tends to indicate) the location of a common boundary, and the other neighbor then changes her position in reliance on the representations of conduct.

i.

Estoppel has also been applied when one neighbor remains silent in the face of expenditures by another that suggest the latter's notion of the boundary's location.

ii.

Doctrine of estoppelvii.

Remedy depends on the size of the encroachmenti.If the inconvenience caused by an innocent encroachment is so minor as to be trivial, relief might be denied altogetherii.If the encroachment takes up a substantial part of the land in question, removal might be ordered notwithstanding the good faith of the encroaching party, depending on how the court in a particular case strikes a balance between competing considerations

iii.

What would be the harm to plaintiff if removal was denied? Even if that harm is great, removal might be denied upon balancin g the hardship to the plaintiff with the hardship to the defendant if the removal is granted

1)

If the relative hardship test precludes removal of the encroachment, encroaching party acquires either title or an easement i n the land and pays damages accordingly

2)

Courts usually apply a balancing test between the parties iv.

Mistaken improversviii.

If the evidence shows that the deed was intended by the parties to convey not only the described land but also the adversely possessed strip, buyer is allowed to "tack" that strip onto the land described in the deed (Buchanan v. Cassell)

i.Tacking - stringing together successive possession in order to meet the statutory time frame for adverse possessionix.

Some jurisdictions require a written instrument for privityi.Usually includes some sort of legal relationship between the partiesii.Question of how technical this has to be - do we require a written deed or just successive possession?iii.

Privity - rightful owner transferring property to someone else but actually passing more than the deed requiresx.

Three properties on the shore of the Hood canal - everyone is living one lot to the left of the lot they actually hold the deed fori.Millers (predecessors to the Kuntos) have a survey performed which incorrectly ascertained that the deeds and the property lines were in accordance, but Kuntos had only been living on the property for one year - issue is whether or not the time period was sufficient to constitute uninterrupted and continuous use for the time period required for adverse possession

ii.

Relationship between what states think about privity and what they think about state of mind - in privity jurisdictions that require some sort of written instrument, usually people have a good faith mistake about what property is theirs

iii.

WA is worried about rewarding squatters/intentional trespassers, which is not the case hereiv.Policy reasons in favor of Kunto - otherwise you are going to require people to invest a lot of money in surveys, etc.v.In this case, privity was established in favor of Kunto even with a written deed not covering the property in question because there was a good faith belief

vi.

HOWARD v. KUNTO (CT APP WASHINGTON 1970)xi.

In every state the statute of limitations is extended if specified disabilities are presenti.A disability is immaterial unless it existed at the time when the cause of action accruedii.After the words "such person" you should insert, as a result of judicial construction, the words "or anyone claiming from, by , or under such person"

iii.

Cause of action accrues only against the true owner - need to look at whether the true owner had the disability at the time the action beganiv.Statute of limitations is frozen until the disability is lifted, then follow whatever the statute specifiesv.

Adverse Possession: DisabilitiesJ.

Under the common law rules, adverse possession does not run against the government - local, state, or federali.Justification - state owns its land in trust for all the people, who should not lose the land because of the negligence of a few state office rs or employees

ii.

Even absent such changes, a government may be estopped from asserting any right to land where a person improves the land withthe knowledge and acquiescence of government officials

i.A number of states have changed the common law rules, whether by legislation or judge -made lawiii.

Adverse Possession against the governmentK.

Personal propertyL.

Outline Page 6

knowledge and acquiescence of government officials

Just as boundary disputes are difficult questions for the attempted possessor due to openness and notoriety - such is the case for personal property - often kept in places where the true owner will never see it

i.

Statute of limitations begins when the original owner knew or reasonably should have known through the exercise of due diligence of the cause of action, including the possessor of the property at issue

i.

Obvious question is what constitutes due diligence - reporting theft to police, registering the theft, etc.ii.

Discovery ruleii.

Some time in 1946 3 paintings disappeared - O'Keeffee doesn't report the paintings stolen to the ADAA (which has some sort of registry for stolen paintings) until 1972

i.

In 1975 discovers the paintings in a gallery owned by Snyder - transaction at some point where paintings were sold to Snyderii.

Must bring suit within 6 years of discovery and exercise of reasonable diligence - can't wait around not knowing where the paintings are

1)

NY Supreme Court establishes a statute of limitations with a discovery rule - statute of limitations begins when the true owner finds the location of the stolen object, so long as they are performing due diligence and searching during that time

iii.

Statute of limitations generally begins at the time of the wrongful takingiv.

Adverse possession - burden is on the possessor to make the possession open and notorious - personal property (as opposed to land) is harder to publicize

1)

Don't want to make the true owner take too many steps to protect themselves - efficiency/fairness issuesa)Court thinks that this might result in less art theft - could lead to second order things happening, like the establishment of an art registry

b)

Statute of limitations with discovery rule - puts more of a burden on the true owner2)

Two competing standardsv.

O'KEEFFE v. SNYDER (Sup. Ct. NJ 1980)iii.

With personal property, the chances of having a problem with the personal property is small in relation to its value.i.Personal property is much less permanent ii.

Title insurance keeps this from happening with real estateiv.

Creates NY rule - NY is home to many of the art galleries in the USi.Statute of limitations for replevin doesn't begin to run in favor of a good-faith purchaser until the true owner makes a demand for return and the good-faith purchaser refuses

ii.

Until demand is made, possession of the stolen property by a good-faith purchaser for value is not considered wrongfuliii.Court thought it was inappropriate to put a duty of reasonable diligence on the true owner, thinking it would encourage illicit trafficking in stolen art by putting the burden on the true owner to demonstrate that it had undertaken a reasonable search - better rule is to require potential purchasers to investigate the provenance of works of art

iv.

Basic rule - if you're the thief you can't raise any of these defenses1)

May actually end up doing the same thing as the discovery rule - allows a defense of latches - can raise a defense saying that the true owner failed to do something which she should have done

v.

GUGGENHEIM FOUND. v. LUBELL (NY 1991)v.

Both the discovery rule and the NY rule allow for consideration of the behavior of the true owner - asking whether they did enough to try and recover the property

vi.

Workers claimed they detrimentally relied on the promises for the factory to remain open1)

Factory had been doing poorly but kept sending messages to workers that it wouldn't shut down as long as they continued to work hard -factory pretty much defined the entire town

i.

Illustration of the way our conceptions of property vary depending on the era in which we liveii.When case was filed it seemed potentially winnable - sense there was something the workers had earned to give them a property rightiii.Very poorly grounded doctrinally - workers are claiming that they have a community property interest in the property that arose because of their reliance on US Steel - therefore US Steel has a duty to give back to community

iv.

Promissory estoppel - workers relied on an oral promise given to themv.Court ultimately says that there is no authority on which to base the workers' claimsvi.

LOCAL 1330 STEEL WORKERS v. UNITED STEEL CORPORATION (6th Circuit Ct Appeals 1980)vii.

Still would have been a big expansion of property rights - but Singer thinks that there are arguments that could have been made to make the court more comfortable in its decision

1)Says that a number of doctrinal areas would provide more support for the plaintiffs than the court even acknowledged i.

Singer said court should not have been thinking about property in absolute terms but instead - asking whose relationships were involved and who is effected by the decision

ii.

Hohfeld - Property rights are not absolute, but are relational - how you think about property depends on which parties are involved and who they are - each time you have a property right it means that someone else can't do something

iii.

Property rights are relational1)Right - I can prevent someone else from doing something2)Privilege - I can do something and no one else can stop me from doing it3)Notion of ownership means different things, depending on the rights and privileges associated with it4)Rights are claims that are enforceable by the state and say that others either act or refrain from acting in a certain manner in relation to the right-holder

5)

Rights are typically thought of as rights to exclude - Hohfeld would categorize this as a right in relation to other people that would want to come onto the property - if I have the right to exclude, you have the duty not to trespass on my property

6)

If I have some legal privilege, right, etc. - that means that someone else doesn't get to do something vis -a-vis my property - more than one person may be effected by a property right

7)

A privilege gives permission to the property owner to act in a certain manner vis -a-vis that property without being liable for damages to others for engaging in that act vis-a-vis the property, and without others being able to summon state power to prevent those acts

8)

If we think about property rights as relational, we don't think of ownership in absolute senses - we instead think how does it effect those around us - who is effected by what we do on our property

9)

Hohfeldian terminologyiv.

Singer says that the most appropriate justification for adverse possession is best cast in terms of a reliance interest - has much more to do with the two parties involved in litigation than who actually owns the property

v.

Sometimes the courts are creative in creating remedies for adverse possession cases - here, really what shifted the ownership was that vi.

Singer articleviii.

Personal propertyL.

Outline Page 7

do with the two parties involved in litigation than who actually owns the propertySometimes the courts are creative in creating remedies for adverse possession cases - here, really what shifted the ownership was that the possessor had relied on possession of this property

vi.

Downside to ruling for plaintiff - might not be the most efficient outcome (might prompt more litigation, put companies at a competitive disadvantage, etc.) - but sometimes we need to be more concerned about fairness over efficiency

vii.

The harms being caused to the workers are externalities that the factory doesn't have to bear - we can force them to internalize these costs

viii.

Theoretically more accountable to the peoplea)Have better means to conduct research and make important findingsb)Plurality (more representative, more ideas)c)Have the ability to weigh all the issues and consequences - not just limited to a single cased)

Congress1)

Purity argument (somewhat immune to political pressure/elections)a)Expertise can be availableb)Reasoned decisions (legislature might ignore certain groups)c)More efficient processd)Narrow case can be limited to a particular casee)Implementation is not a judicial strengthf)

Judges 2)

Courts frequently have concerns that they are institutionally incompetent to make these decisions and that they would better be left to Congress

ix.

Property role that comports with market notions of the freedom to do what you want with your property1)

In deciding for the company, the court is still deciding a property issue - determining that the factory owners have a right to destroy their own property

x.

One overall point - need to think about what you can do/say to make the court more comfortable when you are asking for relief that seems like a big step - make it seem as if it's not a big deal

xi.

INTELLECTUAL PROPERTY LAWIII.

Courts generally strike a balance between rewarding creativity/labor/hard work with what is going to benefit the market generallyi.Under what circumstances do you get property because you worked the hardest, or because your efforts were the most creative?i.

What happens when one labor theory (labor) conflicts with another (utilitarian)?ii.

One problem is that we often see laboring by both parties - how do we decide whose labor matters the most?i.Underlies a lot of IP lawii.

Labor theoryiii.

Case arises out of technological developments - the telephone and the telegraphi.INS is basically stealing news from AP through these new technologies - news can traverse the country quickly - they are copying news from the bulletin board/AP's early editions and using it

ii.

AP is seeking an injunction on the grounds that they have an interest in the format and publication of the news - INS says that as soon as AP publishes/posts the stories they have no further claim

iii.

Relational notion of property - vis-a-vis the public, AP doesn't have a property interest, vis-a-vis INS, AP has a quasi property right in the collection and dissemination of the news

1)Court holds that there is a difference between AP and a consumer and AP and a competitoriv.

If court had ruled for INS, courts thinks that no one would have been able to publish news for a profit - similar to Pierson, Ghenv.On the other hand, companies might start to take safeguards to prevent these kinds of thefts, AP might move its news to the West quicker, prices might get cheaper - possible better results for the public

vi.

Labor argument - INS is putting in some labor - they have a pretty elaborate system to "steal" the newsvii.

INTERNATIONAL NEWS SERVICE v. ASSOCIATED PRESS (Sup. Ct. US 1918)iv.

News continues to not be copyrightable today, but the form of expression is - there is a difference between the substance of the information and the form of the words

v.

Relative contribution in labori.Value added ii.Distributional concernsiii.Person who contributed firstiv.Increase in final value of productv.Replacement value of the original materialsvi.Usually if A takes B's raw materials the ownership interest goes back to B - unless A's labor substantially increases the valuevii.Law of accession - comes into play when one person adds to the property of anotherviii.

Combination of materials/resources - how do you decide who is entitled to the final product? vi.

Plaintiff creates certain designs for silk (no protection for copyright), defendant copies the designs and sells them for cheaperi.Learned Hand rules for Doris silk - might prompt Cheney to lower prices, come up with more designs faster, etc.ii.

Labor theory - they have put labor into making the designs1)Utilitarian - what motivation does fashion industry have to survive if people can just copy designs?2)INS would seem to be helpful3)

Cheney's argumentiii.

Learned Hand says that the ruling in INS is a general doctrine, but limited to the facts of that caseiv.On the flip side - why do we want to spur competition in scarves but not news?v.

CHENEY BROTHERS v. DORIS SILK CORP. (2nd Circuit 1929)vii.

Smith is knocking off Chanel perfume, selling it for cheaper, and advertising as suchi.Court says that not only is this ok, it is in the public interest to do so - imitation is the life blood of competitionii.Court is relying on a utilitarian theory of propertyiii.Says that appellants are not entitled to monopolize the public's desire for the unpatented productiv.

SMITH v. CHANEL, INC. (9th Circuit 1968)viii.

Need to look at various tensions running through IP cases - recent cases have tended to favor the original creator ix.The idea behind copyrights, patents, and trademarks is to grant a limited copyright over the protected material - a monopoly to promote x.

In general - Acquisition by creationA.

Outline Page 8

Need to look at various tensions running through IP cases - recent cases have tended to favor the original creator ix.The idea behind copyrights, patents, and trademarks is to grant a limited copyright over the protected material - a monopoly to promote creative activity, but limited in order to advance competition

x.

Create the most protection for the IP right holderi.For processes, machines, and substances - but not ideasii.Patent holder is not granted an exclusive right to produce the productiii.Last 20 years from the filing dateiv.Generally speaking, the greater the intellectual property right, the shorter its termv.Patents aren't granted for obvious and useless inventions - we don't need IP protection because people will simply invent them at low cost - we don't need a monopoly

vi.

Labor theory - we want to induce people to labor hard and inventi.Utilitarian - in the absence of patents, there is less incentive to create new thingsii.

Theory for patentsvii.

Patent examiner denied plaintiff's patent for a human-made, genetically engineered bacterium capable of breaking down crude oil on the basis that micro-organisms are products of nature, and that as living things are not subject to patent

i.

Court found that "his claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter - a product of human ingenuity," and that "the grant or denial of patents on micro-organisms is not likely to put an end to genetic research or its attendant risks"

ii.

DIAMOND v. CHAKRABARTY (US Sup Ct 1980)viii.

PatentsB.

Conferred for the unique manner of expressioni.Anything expressive can be copyrighted, provided the expressive aspect can be separated from the functionalii.Lasts for the life of the author plus 70 years - can't sell or use a copyrighted work without the author's permissioniii.Fewer protections for copyright holders - can quote a copyrighted work without paying if the use is considered to be "fair"iv.Lots of debate about whether copyrights protect materials for too long, or whether fair use (being a fuzzy term subject to li tigation) puts more power in the hands of copyright owners - also debate about infringement of 1st Amendment protections

v.

Plaintiff wrote a play and claimed that the story was copied by the defendant in making a movie - not verbatim copying but a similarityi.Court found that some details aside, the defendant's movie was too unlike the plaintiff's play to be an infringementii.The right cannot be limited literally to the text, else a plagiarist would escape by immaterial variations - as soon as literal appropriation ceases to be the test, the whole matter is necessarily at large

iii.

NICHOLS v. UNIVERSAL PICTURES CORP (2nd Circuit 1930)vi.

Similar to VCR debate - fear that it would destroy the movie-making market as we know it a)On one side, if you allow people to download songs for free there's no incentive to create - quintessential argument for copyright1)

On the other side, they have purposes that are not only about allowing people who have a computer to rip off the music -encouraging market access to the music, shutting down these industries may stifle technological innovation

2)

Instrumental concerns on both sides about technological innovationi.

Court held that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties"

ii.

"One infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it"

iii.

METRO-GOLDWYN-MAYER STUDIOS INC v. GROKSTER, LTD (US Sup. CT 2005)vii.

CopyrightC.

Provide very limited protection for works/designs that then get associated with a particular producti.Unlimited in duration with a few exceptionsii.

You infringe on a trademark if you are trying to make consumers think that you are selling a trademarked producti.Others can't use the trademark in a way that would create consumer confusioniii.

Product may lose its trademark if the general product becomes so familiarly associated with the name that it is indistinguish able - asprin, kleenex, etc.

iv.

Vanna White sued, alleging infringement of various IP rights - arose out of an advertisement featuring a robot standing in front of a Wheel of Fortune board

i.

Appellate court found for White based on the Lanham act, a federal statute concerned with false representations in advertising ii.

Said that the majority is creating a new and much broader property right, rather than just protecting White's existing rights1)Also said that intellectual property rights aren't free, but are imposed at the expense of future creators and of the public at large2)

Kozinski's dissent - overprotecting IP is as harmful as under protecting it - it is now a tort for advertisers to remind the public of a celebrity

iii.

WHITE v. SAMSUNG ELECTRONICS AMERICA, INC. (9th Cir. 1993)v.

TrademarksD.

RIGHT TO USE AND QUIET ENJOYMENTIV.

Moore was being treated for hairy-cell leukemia at the UCLA medical center, and was told he needed a splenectomy and some seven years of follow-up tests - was not told that blood and cells were rare and extremely valuable

i.

Moore came down to LA on his own dime for testing - probably could have been done in Seattle ii.Moore sued for conversion - wrongful exercise of ownership rights over someone else's property - and other claimsiii.Supreme court holds that Moore has a case for lack of informed consent, but not for conversioniv.Case of first impression - there is no law directly on pointv.

CA Health and Safety Code section 7054.4 - specifies how bodily matter is to be disposed of - suggests that patients aren't in control of what is taken from their bodies/how it is disposed of

1)

However - intent of statute is to safeguard public health, not to create/effect property interests2)

However - just because you can't sell something doesn't mean it's not your propertya)Uniform Anatomical Gift Act - allowed people to donate tissues/organs, but not to receive valuable consideration for them3)

Statutes give some hints in this case - but at the end of the day, none define the issue conclusivelyvi.

Court says that it is not "necessary to force the round pegs of privacy and dignity into the square hole of property in orderto protect the patient, since the fiduciary duty and informed consent theories protect these interests directly by requiring full disclosure

vii.

MOORE v. REGENTS OF THE UNIVERSITY OF CALIFORNIA (Sup Ct CA 1990)i.

In GeneralA.

Outline Page 9

patient, since the fiduciary duty and informed consent theories protect these interests directly by requiring full disclosureAlso - the patented cell line and the products derived from it cannot be Moore's property - the cell line is both factually and legally distinct from the cells taken from Moore's body

viii.

Many different interest groups (doctors, hospitals, researchers, etc.) have an interest in the case coming out in their favor , and patients are likely to be the least powerful group

1)

Legislature can always come in and correct and overstepping by the court - but how do you bring this up in arguing for Moore -hard to question legislature's competence

2)

Question of institutional competence - court seems to be saying that it should be up to the legislature to create new property rightsix.

One possible solution - the majority could have limited Moore's property rights but nevertheless acknowledged and protected them through the cause of action for conversion - concerns about the impact of conversion liability on medical research and development could in turn have been eased by an appropriately tailored measure of damages

x.

UC could argue that the cells weren't valuable by themselves - what's really valuable here is the labor1)Law of accession also comes into question - who contributed the principal materials?xi.

Must prove that you were not informed, that you would not have consented to the procedure had you been informed, and that's the position a reasonably prudent person would have taken

1)

Perhaps Moore could have bargained with the doctor if he had made full disclosure - but do we really want to put patients in the position of bargaining with someone who is in charge of saving their lives?

2)

Fiduciary duty questionxii.

Akin to the idea that property is about relationships/the law creates property rightsi.

The right to possess1)The right to use - nuisance clearly limits the right to use, as does zoning - can also contractually limit2)The right to exclude - enforced through trespass3)

Right to share/give away can be limiteda)Can be forced to share your property in certain instances - easementsb)

The right to include - right to sell/transfer/give away - include someone else in the ownership of your property 4)

The right to transfer - while property may usually be transferred by sale or by gift, this is not always the case5)The right to dispose of - can include the right to destroy6)

The abstraction we call property is multi- not monolithic - it consists of a number of disparate rights, a bundle of them:ii.

Idea is that we can limit all of these things but we don't eliminate the rights to propertyiii.

The Bundle of Rightsii.

Defendant is trying to move a mobile home that is easiest to move across Jacque's property - repeatedly ask Jacques but they keep refusing - defendant moves the trailer over the property anyway - court awards punitives to Jacques

i.

Court upholds $1 in nominal damages and $100k in punitives - says that the right to exclude is "one of the most essential sticks in the bundle of rights that are commonly characterized as property" - but the right is hollow if the legal system provides insufficient means to protect it

ii.

We want to uphold the right to personal liberty/freedom - being able to express ourselves in the privacy of our own homes in the way we want to

1)

Economic argument - if you can't exclude people from your property, you may not have the incentive to invest in your property2)Generally speaking, the right to exclude is pretty inviolate 3)

Private landowners should feel confident that wrongdoers who trespass upon their land will be appropriately punishediii.

JACQUE v. STEENBERG HOMES, INC. (Wis. 1997)i.

Migrant workers are living/working on a farm, and government workers are trying to get on the land to provide medical and legal services - farmer is trying to exercise his right to exclude the government employees from the property

i.

The workers are vulnerable and they live on the farmer's land - there is no other way to get to them1)Court holds that the right to exclude is not absolute, and the farmer has no legitimate reason to excludeii.

STATE v. SHACK (N.J. 1971)ii.

The Right to ExcludeB.

NUISANCEV.

Is this a substantial interference with the use or enjoyment of land?i.

Is the harm sufficiently diffuse/does it effect a large number of people - if so, does the person suing have some sort of special injury?i.Spurii.

Public or private nuisance?ii.

Is there a nuisance per-se (is there a statute on point)?iii.

Is it a physical invasion of the property (smoke, particulate matter, etc.)? If so, could be strict liability. i.Some jurisdictions are starting to apply a balancing test to trespasses that look like nuisance. ii.

Can you characterize this as a trespass?iv.

Morgan, Jost, Estancias, Boomeri)Is this a harm which a normal person would reasonably be expected to endure? Look at zoning, coming to nuisance, use

ii)

First find liability (is there a nuisance?), then decide on the remedy - balance the equitiesiii)If there is a nuisance, balance the equities using restatement-like factors - Estancias (says explicitly to balance the equities)

iv)

Threshold testa)

Balancing the gravity of harm to the plaintiff (extent, character, suitability of use/coming to the nuisance, capacity to avoid) v. social utility of defendant's behavior (social value of their behavior, suitability, impracticability of preventingharm)

i)Restatement testb)

If intentional, is it unreasonable, therefore constituting a nuisance?1)

If it's intentional - defendant knew or reasonably should have known that the harm would occur to the plaintiff, or intended to cause the harm

i.Intentionality - usually a given - Morganv.

Analyzing a Nuisance caseA.

Outline Page 10

harm)If defendant's social utility outweighs - no injunctionii)If gravity of the harm outweighs - injunctioniii)

Serious harm - even if utility outweighs gravity of the harm, defendant should pay if it can - Boomer (uses threshold test, but this is essentially what it is doing)

-

Plaintiff might get damages if defendant can pay damages without going out of business - harm must be seriousiv)

In either test, if there is harm that has happened in the past, must be compensated with damages - can't enjoin past damages - Estancias - damages for past harms, enjoin the action in the future

c)

Unintentional cases are rare1)

If it's unintentional - can still be liable if it was negligent, reckless, or an unreasonably dangerous activity (which would lead to strict liability). Did the defendant negligently/recklessly do something to cause the harm?

ii.

Injunction for plaintiff - Estanciasi.No injunction, but the defendant pays (potentially permanent) damages - Boomerii.No injunction, no damages - no liability for defendant under either jurisdiction - defendant gets to continueiii.Damages for defendant combined with injunction for plaintiff - Spuriv.Mandatory injunctions - tell the defendant how to behavev.

Remediesvi.

Foreseeability - could foresee that the people living there would experience harms a)

Developer with foreseeability brings a number of people to the area - either agricultural or industrial - and it is not natural growth of the city

1)Absolute defense seems to be limited to circumstances that Spur spelled outi.

Somewhere in the mix - is there a coming to the nuisance defense?vii.

The law of nuisance is part torts and part property - torts because nuisance liability arises from negligent or otherwise wrongful activity, and property because the liability is for interference with the use and enjoyment of land

i.

Nuisance law is a means by which common law judges resolve conflicting land usesii.Rests on the concept embodied in the ancient legal maxim - Sic utere tuo ut alienum non laedas - in essence, every person should so use his own property as not to injure that of another

iii.

Court could find land use to be unreasonable even if you are operating a pig sty, for example, in a reasonable mannera)Threshold test - if defendant's behavior seems to cross some threshold that people living near the nuisance shouldn't have to deal with, it is a nuisance

b)

In Morgan court finds unreasonable use even though defendant is operating business appropriately c)Need to look at what is normal for a neighbor to have to put up with - plaintiff-centric viewd)

Intentional - must be unreasonable1)Need to look at whether harm is intentional or unintentionali.

As long as you know that your behavior is going to cause harm, or reasonably should know, there does not have to be malicious intentiv.

Morgans are complaining about the noxious fumes produced by High Penn - they purchased the land before High Penn commenced operations - although they're not plaintiffs, there are a number of other properties in the area which are being effected

i.

Court upholds damages and injunction on behaviorii.

MORGAN v. HIGH PENN OIL CO (Sup Ct North Carolina 1953)v.

Schultz's live near a newly constructed apartment building that has an air conditioning unit located on property immediately adjacent to the Schultz's house - prevents plaintiffs from sleeping or talking to each other in their house

i.

Threshold jurisdiction - court lets Schultz's decide whether they want damages or an injunction - Schultz's win and court grants an injunction - balancing goes on at the remedy stage

ii.

Even if the apartment building is legally allowed to produce the noise - just because something is legal doesn't mean it's normaliii.

ESTANCIAS DALLAS CORP. v. SCHULTZ (Ct App TX 1973)vi.

In GeneralB.

Really only looking at defendant's behavior i.If there is a substantial non-trespasstory invasion of another's land, it is a nuisance - we will decide at the remedy stage whether we want to take into account defendant's social utility

ii.

A lot of the time the restatement factors are taken into account at the remedy stageiii.

Threshold testi.

Looking at the balance of behavior between the twoi.

Coase - nuisance is reciprocal in nature - decide which harm is more serious by balancing the gravity of the harm against the utility of defendant's conduct

1)Infused with Coasian insights - trying to ensure that the person who can best use the land is going to use itii.

When thinking about all the different kinds of factors we naturally want to take into account, the restatement is trying to make sense of them, put them in some sort of calculus that forces courts to be explicit when finding liability/not finding liability

iii.

Character of the harmi)Suitability of use to character of localityii)Can the plaintiff avoid - suitability of plaintiff's useiii)Social value of the plaintiff's useiv)

Gravity of the harm (to plaintiff) - the extent of the harm - how detrimental it is to the person claiming the nuisance, time of day, duration, number of people, lasting effects, etc.

a)

Social value of the defendant's conduct - products, jobs, economic impacti)Suitability of defendant's locationii)Impracticability of defendant preventing the harm - whether or not it can avoid the harm at low costiii)

Utility of defendant's conductb)

Balance the gravity of the harm and see if it outweighs the utility of the defendant's conduct - utilitarian approach1)

Requires compensation - "the harm caused by the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible" (p. 643)

a)

Basically saying that if the harm is serious and the defendant can compensate without going out of business, they should pay damages

b)

Sense that some harms are dangerous enough that plaintiffs should not have to bear them alone 2)

Restatement gives us two prongs/ways of determining liabilityiv.

Restatement testii.

Threshold Test v. Restatement TestC.

Outline Page 11

damagesWhich view dominates is not clear, though it can be said that relatively few courts have followed the Restatement explicitlyiii.Despite the fact that property scholars have succeeded in making lawmakers think about balancing the harms, there is still a sense that some people should not be forced to deal with the harms imposed by people living near them

iv.

Trespass - involving a physical invasion of land, is a case in pointi.

Someone is trying to gain something from your land when they trespass1)

When analyzing a nuisance claim, always look to see if you can claim trespass - easier to prove - strict liabilitya)Some courts have begun to recognize trespass for small particles of matter - would want to argue this as a plaintiff - not the type of trespass typically envisioned by trespass statutes - might not make sense to have strict liability

b)

In a nuisance claim, your purpose is not to use someone else's land - you are using your land and they are using theirs2)

While liability for unintentional trespass is virtually identical to that for unintentional nuisance, the two torts differ markedly if the element of intent is present - in such an instance trespass is treated like the other intentional torts, and nuisance is subjected to inquiries about reasonableness and amount of harm

ii.

Typically, an intentional tort results in liability without regard to the amount of harm or the reasonableness of the activity causing itv.

Mandate that you perform/cease to perform a certain type of behavior - detailed requirements about what the defendant needs to do in order to abate the nuisance

i.

There may be instances in which we don't feel comfortable using damages to compensate - right to stay in a home you are emotionally attached to, paying damages but exposing plaintiffs to harms, etc.

ii.

Appropriate if the harm is highly difficult to quantify, or if there are lots of costs being imposed on others, or the harm is something that ought not continue regardless of the imbalance

iii.

Injunctive relief isn't limited to stopping defendant's behavior - can limit hours of operation, prohibit use on windy days, etc.iv.

Injunctioni.

If cost of abatement would be higher than damages, damages may be appropriatei.Damagesii.

If there are very few parties to litigation, and you feel comfortable that the parties can amicably settle, then choice of remedy may not matter much - they may bargain to the efficient outcome

i.

If there are multiple parties, you can assume that the transaction costs will be highii.Sometimes transaction costs of litigation/lawyers fees/uneven information prevents us from achieving an efficient outcomeiii.

Coasing outiii.

One problem is that it compares the general loss to the public, such as loss of jobs, while it only considers specific loss to the private land owner, i.e., the specific money damage to his property, notwithstanding he may be damaged in many general ways which cannot be translated into specific damages

i.Balancing of equities - as in Boomeriv.

No simple answer about remedies - have to explore all possibilitiesv.

Atlantic Cement is operating in Albany - neighbors alleging injury to property from dirt, smoke, and vibration emanating from the planti.Cost to Atlantic in shutting down the plant far exceeds plaintiff's damagesii.

Can't grant a temporary injunction to wait for advances in technology - advances might not happen1)Notes that the parties could settle this litigation at any time if defendant pays enough money and the imminent threat of clo sing the plant builds up pressure

2)

This relief might also spur development in technology - other factory owners would want to avoid damages3)"It has been said that permanent damages are allowed where the loss recoverable would obviously be small as compared with thecost of removal of the nuisance"

4)

Court uses threshold test - grants an injunction conditioned on the payment of permanent damages to plaintiffsiii.

BOOMER v. ATLANTIC CEMENT (Ct App NY 1970)vi.

In a public nuisance case can complain about environmental harms - harms that might not even be specific to them1)Makes sure that all the harms inflicted on a community are taken into account2)

Public nuisance case - idea that the conditions are dangerous to the public healthi.

Under threshold jurisdiction could have argued that Webb came to the nuisance - still not an absolute bar to finding nuisance liability - it is relevant to the question of reasonableness/balancing

1)

Court takes coming to the nuisance into account in the remedy stage 2)

Court does not analyze under threshold/restatement because there is a statute on point - makes it a nuisance per-seii.

At what point do we say that we are going to allow a farm to commit nuisances even though it may inhibit future land uses?1)Coming to the nuisanceiii.

Emphasizes the relational nature of property - really matters who your neighbors areiv.

Court grants injunction, but Webb has to pay Spur for costs1)Limits this particular remedy to situations where there is a developer who expands to an area which is not part of the "natur al" expansion of an urban area, and there is foreseeability

2)

Happens when developer buys in a traditionally agricultural area where what wasn't a nuisance turns into one3)Same as Calabresi and Melamed's fourth rule - since the entitlement can be in either of two parties and it can be protected by either of two means, there must be four possible outcomes

4)

Court issues a purchased injunction v.

SPUR INDUSTRIES, INC. v. DEL E. WEBB DEVELOPMENT CO. (Sup Ct AZ 1972)vii.

RemediesD.

Where an act constitutes an unreasonable interference with a right common to the general publici.Public nuisance protects public rights; private nuisance protects rights in the use and enjoyment of landii.Any member of the affected public can sue for public nuisance, but usually only if the person bringing the suit can show "spe cial injury - " injury or damage of a kind different from that suffered by other members of the public

iii.

Public NuisanceE.

Nuisance law has an obvious bearing on environmental problemsi.

Nuisance litigation is expensive, cumbersome, and somewhat fortuitous means for resolving modern environmental problemsi.Potential plaintiffs, each usually bearing only a small part of the social costs of a large problem, have weak incentives to bring expensive lawsuits that promise limited rewards and difficult problems of proof

ii.

Judges are poorly equipped to deal in a competent fashion with issues that demand considerable scientific expertise and are probably iii.

There are a number of reasons to conclude that its contributions must be limited onesii.

Nuisance and Environmental ControlsF.

Outline Page 12

even less able to devise and oversee an ongoing program of technological controlsiii.

Class actionsi.Provision of attorney's fees to plaintiffs bringing suit in the public interestii.Special environmental courtsiii.

Problems might be overcome byiii.

The general conclusion is that nuisance litigation is ill-suited to other than small-scale, incidental, localized, scientifically uncomplicated pollution problems

iv.

To date, virtually all legislative-administrative efforts to control environmental problems have taken the form of regulation - proceeds by telling pollution sources how much, and sometimes how, to control

i.

Classic example is the emission or effluent fee - a charge on each unit of air or water pollution, set so to yield an appropriate level of control in the aggregate

1)

Much more decentralized than regulation2)

Incentive systems stand in sharp contrast - rather than command, they induce ii.

Alternative to judicial resolution of pollution problems is legislative and administrative interventionv.

TAKINGSVI.

Traditional public use and public ownership tend to be less problematic1)

Highly deferential to legislature (Kelo)i)Need a well thought out plan for economic development or other purposesa)

Private property can go to another private interest if there is a public use ( Kelo)2)

Blight is OK3)

Hawaii case - mentioned in Kelo - statute was upheld even though title was immediately transferred to private individuals - it is only the takings purpose (breaking up oligopoly) that matters, and not its mechanics

a)Breaking up land ownership 4)

Open question about purely private to private transfer5)

CA statute requires blighta)May be heightened standard of review - questioning of what means are required to reach the ends (means-ends test)b)

Some states may be more stringent6)

Public use i.

Determined at market value1)Just Compensationii.

Eminent Domaini.

If yes - taking (Loretto)1)Is there a permanent physical occupation?i.

Nuisance/restatementa)Background law of property - Palazzo doesn't bar post-enactment claimsb)

100% diminution in economic value, except:1)

If not 100% diminution - go back to Penn Central2)

Can use this argument here, or in the economic impact section of Penn Central (harder to win there in any event)a)Penn Coal - taking, Lucas - says something , not entirely clearb)

Favorably cites the idea to use the whole parcel - less favorable to property ownersi)TRPA - severance regarding time didn't seem to work, at least in that casec)

Can you make a conceptual severance argument?3)

Lucas testii.

Court is willing to sustain large economic impact (as in Penn Central, Pallazolo)a)Economic impact on owner1)

Penn Centrala)Pallazolo - context of the background property rights in Lucas - not a bar to bringing action just because the regulation was in place before the owner purchased the property - Timing matters, but not dispositive

b)

More sophisticated the transaction, the higher standard you hold the property owner toc)

Distinct investment-backed expectations2)

Most important in the "bundle -" the right to excludea)

Average reciprocity of advantagei)Public program adjusting benefits/burdens - not likely a takingb)

Hadacheck idea - if government is regulating nuisance-causing behavior - pretty certain it would be upheld (court has never talked post-Hadacheck about a nuisance exception from the Penn Central test

i)Idea that some regulations may unfairly single out the property ownerc)

Character of government harm3)

If no - if it's a temporary physical occupation - apply Penn Central factorsiii.

Exaction is a condition of granting the permit1)If it is a facial constitutional challenge, not in the world of exactions2)

Is exaction, on its own, a taking?a)If it is a taking, what is the purpose the government is trying to accomplish/what is the harm it is attempting to avoid/minimize?

b)

Court says state could have banned the development all together - not that importanti)

Is there an essential nexus between the anticipated harm of the proposed development and the purpose of the exaction (Nollan)

c)

Make individualized determinations based on the particular propertyi)Is there a rough proportionality between the extent and nature of the harm and the exaction? (Dolan)d)

Analysis3)

Exactionsiv.

Regulatory Takings/Inverse Condemnationii.

Analyzing TakingsA.

In GeneralB.

Outline Page 13

"Public use" is the most disputed and litigated portion of the clausei.Just compensation = market valueii.

"Nor shall private property be taken for public use without just compensation"i.

In modern times, local/state governments are much more likely to be subject to Takings Clause, as they are in business of zoning/ determining land use

i.Historically, Takings Clause was only applied to acts of eminent domain by federal governmentii.

Property can be considered taken, under the 5th amendment, even if it is not physically appropriatedi.Main question- "Under what circumstances does a regulation go too far, and disproportionately burden property owners?"ii.In some cases, if a regulation is found to effect a 'taking', then the court would simply invalidate the lawiii.However, in First Evangelical , court held that government must compensate for period of time during which you cannot use your property due to a regulation

iv.

Practically impossible for government to compensate for every diminution in value that occurs as a result of regulationsv.

Takings Clause extended in 1922- Pennsylvania Coal v. Mahon - if a regulation goes too far, it results in an unauthorized takingiii.

Private properties would not be able to do anything about the holdouts, but municipalities can use eminent domain and purchas e for market value

1)

City created a redevelopment plan to revitalize New London, and in the process wants to use eminent domain to acquire property from unwilling owners

i.

The government's purpose is economic development - court is trying to decide whether the city can use eminent domain to engage in economic development projects

ii.

Dissent says that deferring to legislature results in big business/majority overpowering small, powerless individual defendants1)

Majority notes that true test is whether there is a "public purpose -" some use that benefits the public at large and also is very deferential to legislative intent (believes that legislature is better equipped to determine what constitutes public use)

iii.

Just because private parties are benefitted doesn't mean it's not a public purpose1)

Court says that they long ago rejected any literal requirement that condemned property be put into use for the general public- public purpose is defined broadly

iv.

KELO v. CITY OF NEW LONDON (Sup Ct US 2005)iv.

Heightened level of scrutiny in cases where property is being transferred from one private owner to another (court must look & weigh whether stated purposes of development are compelling enough)

i.

No eminent domain allowed when transfer is between two private partiesii.CA rule - no economic development eminent domain unless area is deemed "blighted" - tends to be serious slum conditionsiii.Some state courts have found that transfer of property by eminent domain between private individuals violate state constitutionsiv.Federal standard is very deferential - unlikely to lead to any eminent domain being invalidatedv.

Other possibilities for resolutionv.

Focuses on the contemplated ends of an act of condemnation - if the ends are sufficiently "public" in one sense or another, the test is passed

i.

Can result in a very sweeping taking powerii.

Public use - ends testvi.

Idea here is to ask whether the power of eminent domain is really necessary to accomplish whatever aim the government has in mindi.Public use - means testvii.

GM conceived of a project, determined its cost, allocated financial burdens, established the site, etc. and then asked the city of Detroit to condemn the neighborhood and give it to GM

i.

Argument was that this property would help GM and stimulate the economy - after GM had closed 2 plants and there were very high unemployment levels in Michigan

ii.

Court upheld decision to give property to GM, but in a later case established a much more stringent standardiii.

POLETOWNviii.

In GeneralB.

Some argue that compensation in a constitutional sense is not full compensation, because market value does not necessarily ta ke into account the value an owner places on their property

i.

Under fair market value, the owner is entitled to receive what a willing buyer would pay in cash to a willing seller at the t ime of the takingii.

Compensation at fair market value would be used (as at present) in the case of takings for classic public usesi.As the uses in question move away from the classic model in the direction of private to private transfers, compensation awards would increase as a function of increasing judicial skepticism about the public benefits of the government action in question

ii.

Using liability rules instead of property rules to deal with eminent domain iii.

However - the less powerful you are, the less power you have to retain a lawyer - less power to negotiatei.

Keep in mind that most people actually get more than market value when they negotiate with the government - government has an interest in preventing litigation

iv.

Just CompensationC.

Loretto is complaining about the physical invasion of a cable on her property - plus the screws, etc. required to attach iti.If there is a permanent physical occupation, regardless of damage, it is a taking - court characterizes as a per-se ruleii.

Person suing is the property owner - alleging that government activity is so severe it is as if the government physically appropriated the property

1)

Statute in place says that apartment owners are required to allow cable companies to attach wires to their property, for justcompensation of $1

iii.

Language in this case is pretty strong on the right to exclude - character of the harm matters a lotiv.Court doesn't address the issue of damages - that's where usefulness, etc. will be taken into accountv.

Take account of the public purpose of the government regulation - seems we should analyze differently if the government is trying to prevent harm to tenants rather than just provide an amenity

1)Cities can require landlords to install all kinds of things (smoke detectors, etc.) on their propertyvi.

This case represents the Supreme Court endorsement of a rule of long standing - PPO = takingvii.

LORETTO v. TELEPROMPTER MANHATTAN CATV CORP (Sup Ct US 1982)i.

Permanent physical occupation - if yes, inquiry is over, don't look to purpose, etc.i.

Character of government action/harm1)Temporary physical occupation - out of the realm of a per-se rule - need to balanceii.

Permanent v. temporary physical occupationii.

Physical OccupationD.

Outline Page 14

Bigger the economic impact on the property owner, the worse it is a)If you buy a piece of property and have the expectation that you can use it in a certain way, and this use is thwarted by thegovernment, this is an important factor to consider in determine whether the government is taking the property

b)

Economic impact of the regulation, especially the degree of interference with investment- backed expectations2)

Right to exclude - right to dispose, right to usea)Rights implicated3)

Also a support estate - governs the land that is supporting the surface estate1)Three types of estates: surface, mineral, support2)

Surface rights are different from the mineral rights - Mahon owns the right to the land above ground, but not below the groundi.

PA legislature was worried that if someone removed all the minerals the land could collapse - act is meant to maintain public safety by preventing mining companies from removing all the coal from underneath someone's land

ii.

Legislature basically says that they are doing away with these contractual provisions1)

Contract between the property owner and Penn Coal gives the company the right to take the minerals and waives suits for damages to the surface estate

iii.

Holmes says this is not all about public safety - more about private regulation - property owners are given notice before any minerals are extracted so the safety concerns are eliminated

iv.

The statute would constitute a taking - it is giving the property owners more rights than they boughtv.

We want to worry about those regulations which seem to burden an unfair number of property owners - those cases in which people are really unfairly burdened - regulation is singling you out disproportionately

1)

Average reciprocity of advantage - there are many regulations that may burden you a bit, but you also gain something from them -averages out

vi.

What is the public purpose? If it's harm preventing, we don't even balance1)If it is benefit conferring, we look at the extent of the diminution of value of property - at some point it goes too far2)Extent of the public interest v. the diminution of the value of the property3)

Test that Holmes uses to say that something is a taking - if the regulation "goes too far" vii.

Question of what you look at for diminution of value - the entire property or just the support estate?viii.

PENNSYLVANIA COAL COMPANY v. MAHON (Sup Ct US 1922)i.

Looks identical to Penn Coal, but court does not find a takingi.Purpose was not just to balance private economic interests, but rather to protect the public interest in health, environmental quality, and fiscal integrity

ii.

Court also did not find a total diminution in economic value - found that the millions of tons of coal that had to stay in place were not a separate segment of property, but only a few percent of the total coal owned by the companies

iii.

KEYSTONE BITUMINOUS COAL ASSN. v. DEBENEDICTIS (US Sup Ct 1987)ii.

Question of which property interest you measure the diminution of property value againsti.Generally speaking, state courts appear to reject conceptual severance - they consider the impact of a land use regulation on the value of a property owner's entire parcel as opposed to its impact on just the regulated part - Federal Courts tend in the opposite direction

ii.

Conceptual Severanceiii.

NYC designates 400+ sites as historical landmarks in exchange for giving TDRs to the property owners - basically a taking through eminent domain where the property owner is compensated

i.

TDRs make this case easier - harder to argue complete diminution in economic value1)

Court finds that this does not constitute a taking because the restrictions imposed are substantially related to the promotion of the general welfare, permit reasonable beneficial use of the landmark site, and also affords appellants opportunities further to enhance the terminal site and other properties

ii.

Property owner would want to argue that they are being singled out unfairly to bear costs that society as a whole should bear1)NY argues that this is just conferring an average reciprocity of advantage - adjusting the benefits and burdens of public lifeiii.

PENN CENTRAL TRANSPORTATION COMPANY v. CITY OF NEW YORK (Sup Ct US 1978)iv.

Some courts have effectively read investment-backed expectations out of taking law by holding expectations are frustrated only when a land-use regulation denies all economically viable use of land

1)

Other courts have found distinct investment-backed expectations only in instances when regulations interfere with investments that have already been made, as opposed to regulations limiting possible future investment activities

2)

Courts have different interpretations:i.Distinct investment-backed expectationsv.

Court in Penn Central left unresolved the question whether TDRs can provide the "just compensation" required if a taking has occurred -it appears to be the court's view, however, that TDRs can ease the burden of a regulation such that it will not amount to a taking

i.

TDRs is a clever way to get out of takings - once there is a taking, the Constitution requires just (i.e. full) compensation, but a regulatory taking generally does not occur so long as the land retains substantial (albeit not its full) value - the government can get away with paying a lot less by paying it before a taking has been found

ii.

Transferable development rights (TDRs)vi.

Measuring and BalancingE.

In 1986 Lucas paid almost $1 million for two residential lots , lots later decided to be in "no building" zonei.Court says that it is a false dichotomy between harm-reducing and benefit-producing terms - if you tell the legislature they need to formulate their behavior in a certain way, they will just re-characterize their behavior - these are basically word games

ii.

New rule - 100% diminution in economic value constitutes a taking - like losing the property/whole bundle of rightsiii.Flip of average reciprocity - singling out a property owner who is forced to bear the entire burden - we shouldn't make Lucas donate his land for the greater good

iv.

True in the most literal sense - restatement test/common law nuisance - also true in Penn Central analysis1)We don't analyze in these terms any more - we don't ask if it's harm-preventing - we apply either Loretto, Lucas, or Penn Centralfactors - in the background, we care about whether a regulation provides an average reciprocity of advantage, or whether it is singling out particular property owners

2)

Restatement 2nd rule - per-se rule - If the behavior being prohibited would otherwise be a nuisance - no takingv.

Court said that SC must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found - only then can they claim that the state is taking nothing

vi.

Aftermath - Lucas is rarely used to strike down regulations, except where cases cite to the 100% diminution rule - and even then, courts rarely find this condition to exist

vii.

LUCAS v. SOUTH CAROLINA COASTAL COUNCIL (Sup Ct US 1992)i.

Total Diminution in Economic ValueF.

Outline Page 15

rarely find this condition to existvii.

Better if you're a property owner to get one of the per-se rules applied to you - otherwise you're using an ad hoc test that is unlikely to favor you

ii.

1959 - Palazzolo buys 3 lots of largely submerged wetlands - periodically applies for permission to fill but is denied - doesn't do anything else until 20+ years later - in 1971 RI issued regulations to protect wetlands

i.

Huge ripeness issue here - whether Palazzolo has exhausted his remedies - all of his applications have been haphazardii.Take out of this case some hesitancy to apply the conceptual severance - Lucas is pretty limited in its application unless you can conceptually sever

iii.

"A blanket rule that purchasers with notice have no compensation right when a claim becomes ripe is too blunt an instrument to accord with the duty to compensate for what is taken

iv.

"State may not evade the duty to compensate on the premise that the landowner is left with a token interest"1)

Court finds that there was not a total diminution because there is some economic value left in the land - but remands because the claims under the Penn Central analysis were not examined

v.

PALAZZOLO v. RHODE ISLAND (Sup Ct US 2001)iii.

Issue - does the 32 months moratorium on development constitute a temporary taking?i.First English - it used to be the case that the state could just roll back the regulations, but court here says that if a regulation even only temporarily restricts development/use of land, compensation should be due

ii.

Lucas doesn't apply because this isn't permanentiii.

Better approach to a temporary taking requires careful examination and weighing of all the relevant circumstances - temporary nature does not preclude a finding of taking, but should not be given exclusive significance

1)

Court concludes that they cannot adopt a broad categorical rule that temporary ban on development, no matter how brief, constitutes a compensable taking - would apply to normal delays in obtaining building permits, changes in zoning ordinances, etc.

iv.

TAHOE-SIERRA PRESERVATION COUNCIL, INC. v. TAHOE REGIONAL PLANNING AGENCY (US Sup Ct 2002)iv.

If a government regulation results in a taking, then the government must pay just compensation from the time the regulation first worked the taking until the government rescinds the regulation or changes it in such a way that no takings occurs

i.

Hence, an undue delay - normal delays brought on by the development permitting process and the like are put to the side - results in liability for a temporary taking

ii.

FIRST ENGLISH v. COUNTY OF LOS ANGELES (US Sup Ct 1987)v.

Passed by voter initiative in the 70's, has extensive land use authority on land within the coastal zonei.Has a history of being quite environmentally strong, and trying to ban/limit a lot of development in order to preserve the coastline for the state of CA

ii.

Members of the commission are appointed - recently a lot of the appointments have been democratsiii.

FYI - California Coastal Commissionvi.

Typically local governments (sometimes states), in exchange for the right to develop, ask the property owners to give somethi ng back in returni.Common example of historic use of exactions - developer building a development has to give up land for public streets/sewer lines/etc.ii.

Local governments increasingly begin to rely on exactions - asking developers to donate land/amenities that the government can't afford in response to permits

i.

In CA, Prop 13 passes - limits pretty severely property taxes, which were once the major funding source for local governments. Dramatically limits property taxes, and prohibits re-assessment of property, except in a change of property - only 2% increase per year is allowed. Limits local government's ability to raise taxes without a 2/3 vote of the populace.

iii.

CCC says that Nollan can only replace his old, dilapidated house with a new one if he allows an easement along the front of the house to promote public access to the beach

i.

Court says that the CCC could have banned use altogether - and it would still not work a taking because there is already a house on the property - they just can't condition development upon an unconstitutional use of the property

ii.

Is there an essential nexus between the condition being exacted and the harm the developer is causing? Needs to be a relatio nship between the two

1)

To determine whether there is a taking in the case of an exaction - have to look at the "fit - " what harm is the property owner causing by developing the property, and does the exaction fit that harm?

iii.

NOLLAN v. CALIFORNIA COASTAL COMMISSION (1987)iv.

Dolan wanted to expand a commercial development - city wants her to put in a bike path/walkway and greenway - both public easements

i.

Overall, city has a right to do this - but still might constitute a taking as applied to an individual property ownerii.

As opposed to Nollan, this court wants to see more specific findings - say they need to see a rough proportionality - roughly proportional to the harm that is going to be caused

1)

Some states have developed a more stringent test that says that the harm needs to be directly proportional to the exaction - how you measure that is a tough question

2)

Court says there needs to be some sort of individualized determination - what's the harm going to be, and how is that going to be offset by what the city is demanding?

3)

Is there is a nexus between the development requested by Dolan and the exaction requested by the city?iii.

No evidence that the bike/footpath will actually reduce traffic1)

Court finds that the exaction here is not roughly proportional - it's one thing to set aside land that may protect against floods, but there's no reason why we have to allow people to walk on that property - better fit if we don't require property owner to open the property to the public

iv.

Local governments often have revenue problems1)This case is not deferential to local governments - court is suspicious of local governments in these circumstancesv.

DOLAN v. CITY OF TIGARD (Sup Ct US 1994)v.

Development regulation consists of one-time games and repeat gamesi.One-time games - when developers only have single projects in mind, nexus/rough proportionality review may lead regulators to impose less severe development conditions, or even allow unconditional development conditions in some cases

ii.

Repeat games - nexus/rough proportionality review may make little difference, because developers will not risk their goodwill with regulators by suing to challenge conditions that they had previously purported to accept

iii.

David A. Dana - game-theoretic modelvi.

Michelman article??i.Epstein on takingsii.

Academic perspectives on takingsvii.

ExactionsG.

Outline Page 16

Essentially libertarian line of thinking - basic argument is that any governmental modifications of rights of possession, use, and disposition of property are takings, with the exception of nuisance controls

1)

Room for the police power in this analysis2)

Government's action, though it burdens claimants, might provide offsetting compensation by restricting the rights of other people to the advantage of the claimants

a)

Some of the takings that result under the analysis can be approved without explicit compensation because they carry implicit compensation with them

3)

Epstein on takingsii.

When government conscripts someone's property for state use, then it must pay 1)

For example, if state orders destruction of contaminated trees - no compensation because state wasn't putting the land to use

a)

The function of the Fifth Amendment's takings provision is to prevent the government from turning individuals into instrumentalities of the state

2)

Rubenfeld on public useiii.

Estates and LandVII.

If you die without a will, your property is disposed of by statute of descent, or intestacy statutei.Can also dispose of property by trust or other will substitutes ii.

Estate system - Concerned with the way the state regulates private agreements (often wills or trusts) made by landowners which purport to divide specific entitlements in the same parcel among different parties. Mostly concerned with the disposition of property u pon death, but not always. Many of the cases deal with disposing of property by will, but wills are not the only means by which to dispose of p roperty upon death.

i.

Testator/Testatrix - person writing the will/disposing of the propertyii.Devising - act of leaving real property in a will to a beneficiaryiii.Bequeathing - act of leaving personal property (sometimes gets used interchangeably with devising)iv.Devisee - recipients of devised real propertyv.Beneficiaries - recipients of personal propertyvi.

You cannot be an heir or have heirs until someone dies1)Heirs - those who inherent under the statute (sometimes next of kin or distributees)i.

Issue - descendants (children, grandchildren, etc.)ii.Ancestors - parents usually take as heirs if the decedent leaves no issueiii.

Rules for determining which of the more remote collateral kindred take were rather complicated at common law and remain so today

1)Collaterals - all persons related by blood to the decedent who are neither descendants nor ancestorsiv.

Property “escheats” to the state if you die with no heirs and no will.v.

If someone dies intestate (without a will), property is divided up according to their state's intestacy statutevii.

In other words, the property is divided by sharei.Perstirpes - Under intestate statutes, property typically descends by representation (per stirpes)viii.

Typically designed to separate the burdens of property management from the benefits of ownershipi.

Today most life estates are created in trust1)Trustee - person designated by the settler (person who established trust) - manages property on behalf of the beneficiariesii.

Trusts have the result of avoiding the probate system - can be an expensive/time consuming processiii.

Trustsix.

Life insurance, pensions, joint checking accounts - can designate a beneficiary, and avoid probate all together/don’t need to do anything in a will

i.Will substitutesx.

Different way to control the use of property - can be used to limit what is done with property in the future. Also determines who will own the property in the future. The legal system authorizes owners to control who will own the property in the future by defining ways to divide the property interests over time.

i.

Interest which is or may become possessory, and is measured by some period in time, even if that period is indefinite ii.

Possessory interest - entitlement that gives someone a right to land at a given moment - the owner has a right to possess now1)

Future interests are presently existing interests, even if the owner does not have the right to possession until a future date -the owner of a future interest still has immediate rights.

a)Future interests either will or might give you the right to land at some future date2)

All interests in land are either possessory or future:iii.

Life estate per autre vie - if A transfers his life estate to B, B has a life estate per autre vie - that is, an estate that is measured by A's life-span, not B's

iv.

Estatesxi.

if first person owns the land in question, they cannot completely waste that property/reduce its valuei.First person has duties to maintain the land, and second person has corresponding rights to prevent the wasteii.

Wastexii.

Largest estate on terms of ownership, and connotes absolute ownershipi.Absolute ownership can still be limited by things like nuisance law, adverse possession, etc.ii.Fee = interest in land, simple = of indefinite duration, absolute = no interests that could restrict ownershipiii.If you transfer the fee simple to a new owner, the new owner will likewise have all of these rightsiv.

Under modern law it is presumed that transfer will transfer the largest estate that the testator owned - special language is not required

1)Traditionally, to transfer a fee simple absolute, you had to use the right words, without which the transfer would not be honored v.

Fee simple/fee simple absolute on life estatesxiii.

Either reverts back to original transferor (reversion), or it goes to a 3rd party (remainder)1)Followed by every life estate is a future interesti.

Life estatexiv.

Jessie Lide dies leaving a handwritten will (no witnesses) appointing Perry as executrix and White to live in her home but not sell iti.WHITE v. BROWN (Sup Court TN 1977)xv.

In General/Definitions A.

Outline Page 17

Jessie Lide dies leaving a handwritten will (no witnesses) appointing Perry as executrix and White to live in her home but not sell iti.Lide has two sisters who quitclaim any interest in the estate, and 12 nieces and nephews who are the ones suingii.This case shows what happens when you have ambiguities - what default positions will courts take when trying to interpret ambiguous language?

iii.

We don't want to assume that someone who had a will is nonetheless going to be subject to intestacy statute - want to avoid intestacy whenever possible

iv.

Court concludes that Lide meant to pass a fee simple absolute to White - but declared the attempted restraint on alienation voidv.

Such restraints make property unmarketable - particular land may be unavailable for its highest and best usei.Restraints try to perpetuate the concentration of wealth by making it impossible for the owner to sell property and consume the proceeds of the sale - restrained owner cannot dissipate the capital

ii.

Restraints discourage improvements on land - owner is unlikely to sink money into improvements on land that he cannot selliii.Restraints prevent the owner's creditors from reaching the property, working hardship on creditors who rely on the owner's enjoyment of the property in extending credit

iv.

It is sometimes said that a restraint on alienation is repugnant to a fee simple and void for that reasonv.

Disabling restraint - withholds from the grantee the power of transferring his interest ( White)1)Forfeiture restraint - provides that if the grantee attempts to transfer his interest, it is forfeited to another person2)Promissory restraint - provides that the grantee promises not to transfer his interest - if valid, is enforceable by the contract remedies of damages or an injunction. Rare except in the landlord-tenant context.

3)

Classification of restraints on alienationvi.

Restatement provides that all absolute restraints on fee simples are void, but partial restraints are valid if, under all the circumstances of the case, the restraint is found to be reasonable in purpose, effect, and duration

vii.

Rule against direct restraints on alienationxvi.

An estate upon the happening of another eventi.

Can go to original grantor or 3rd partyi.Defeasible fee - The present interest that occurs upon the happening of some other event besides the death of the ownerii.

If the future interest goes automatically to the grantor upon the happening of the stated eventi.Future interest is the possibility of reverterii.Fee simple determinable is of a durational nature - see language like "so long as…, while used as…, until…, during the time that…, while"iii.Sometimes see the possibility of reverter actually spelled outiv.Any language you see that looks like it's limiting ownership to a time period where certain conditions are met will generallybe interpreted that the grantor meant to cut off possession automatically if the condition wasn't being met

v.

Fee simple determinableiii.

Discretionary right - owner retains the right to re-enter the property, but doesn't have to - comes back to owner only if she chooses to exercise her rights - can retain the right to decide whether she is going to exercise her right to re-take the property

i.

Courts when in doubt like to assume that it was a fee simple subject to condition subsequentii.

Unlike a possibility of reverter, the right of re -entry needs to be spelled out - we don't imply it1)Future interest is called right to re-entry or power of terminationiii.

"provided that…" 1)Words you need to say are different from fee simple determinable - connote a conditioniv.

Fee simple subject to condition subsequentiv.

Fee simple absolute is unlimited in durationi.Reversionary interest may or may not be certain to become possessoryii.Possibility of reverter (??)iii.

Reversion - amount left to owner if he transfers less than he actually owns v.

SoL begins to run when the condition is broken - property should transfer automatically - original owner should do something to make sure that happens

1)

In theory, it doesn't automatically revert - you have to go out and do something to get the property back - if no one does anything about the possibility of reverter, it kind of works in the same way as a right to re -entry

2)

Not impossible to imagine adverse possession - if the person who owns the Fee Simple Determinable violates the condition but continues to use it in an open an notorious way, and then claims adverse possession because the statute of limitations has ru n

3)

Fee Simple Determinable i.

SoL doesn't begin to run until you attempt to re-enter and are rebuffed1)

Might have a defense of latches - equitable defense - not really faira)You should have come forward and exercised your right, and therefore you're barred from bringing this actionb)

If you are the person in possession of the Fee Simple Subject to Condition Subsequent, and you start to use it in a very obvi ous way, what would your argument be after doing this for 12 years?

2)

Fee Simple Subject to Conditions Subsequentii.

Different defense - not a defeat of the adverse possession claim, but just that original owner doesn't get to bring their action1)Reality is, the different between a FSStCS and a FSD is slighter than it appearsiii.

Big difference between Fee Simple Determinable and Fee Simple Subject To Condition Subsequent is how the statute of limitatio ns is applied vi.

Breach of a covenant leads to damages or an injunctioni.Court prefers covenantsii."Provided that…" "On the condition that…"iii.

If you see conditional language (not fee simple determinable language) with nothing following it (don't spell out right to re -entry) general rule of construction is that courts are likely to construe this as a covenant, not a fee simple determinable

vii.

If you are the holder of a possibility of reverter - not much value - as long as the condition is being met, you don't get anything foreveri.

Courts are reluctant to uphold that - they say there is still value when the condition has been violateda)Value is probably what it would take for the city to acquire similar property for similar purposes - difficult to tell b)

In that instance the city is suddenly saying that they don't have to compensate you for the value of the future interest, eve n though the grantor would get it back if they hadn't given it to a public entity

1)More complicated if the gift has been to a public jurisdiction and they want to stop using the property for the reason it wasgivenii.

How to value defeasible estatesviii.

Courts don't mind upholding cutoff of support if the condition isn't trying to prevent re-marriage, but instead just making sure that the ex-spouse has adequate support throughout their life

i.Devises that attempt to cut off support to spouses who remarryix.

Defeasible EstatesB.

Outline Page 18

ex-spouse has adequate support throughout their lifei.

Courts will, generally speaking, construe restraints on marriage as narrowly as possible ii.

Absolutely vested remainder - not subject to change, no question that the person who is supposed to get the remainder will get the remainder

1)

If the remainder will be divided among people to be born in the future (typically children or grandchildren)a)Could have the very same devise and it would be a contingent remainder - for example, contingent upon A's children being born - something can switch from being a contingent remainder to a vested remainder subject to open

b)

Class typically closes when a remainder becomes possessory - "to B for life, then to A's children and their heirs" - class closes when B dies, whether or not A has more children - the rest of A's children who are not born yet are out of luck (unless it's drafted differently)

c)

Vested remainder subject to open - vested remainder subject to partial divestment2)

Vested remainder subject to divestment - can be removed by the executory interest - remainder that you're going to get, but you still could lose it - condition after that could take it away from you

3)

Vested Remainder (3 types)i.

The remainder will take effect only upon the happening of an event that is not certain to happen - you get something if something else happens

1)

Will also occur if it is to go to a person who cannot be ascertained at the time of the initial conveyance2)Contingent remainder can become a vested remainder when the contingency is removed3)

B has a vested remainder subject to divestment - will be taken from him if he fails to graduatei)

VRStD contains language where the condition is attached after there's a vested interest, and can then be taken away - "To A for life, then to B and his heirs, but if B should fail to graduate from law school, then to C"

a)

"To A for life, then to B if he graduates from law school, otherwise to C"i)Contingent remainder is the same idea, drafted differently - incorporates the condition into the giftb)

In above, B gets it, and if he never meets the condition it is divested from him upon death-

VRStD becomes possessory after the life estate expires, then can be taken away if condition isn't met - CR is drafted in a way so that B doesn't get the property until he graduates from law school, and C gets it in the meantime

i)

Exception - VR subject to open (class gifts) are subject to the rule-

CR are subject to the rule against perpetuities - VRStD are notii)

Two differences that are relevantc)

Courts prefer vested remainders d)If it is clearly drafted as a contingent remainder it is a contingent remaindere)

Difference between a vested remainder subject to divestment and a contingent remainder is pretty small4)

Contingent Remainderii.

Two types of remainders:i.

RemaindersC.

Any future interest in a grantee that is not a remainder is an executory interesti.If it cannot become a present interest at the natural end of prior interests created in the devise/conveyance, it is an execu tory interestii.

No legal different between swinging and switching executory interesti.

If it will divest another interest of a prior transferee , it is an executory interest - future interest in a third party that must cut off/cut short someone else's interest in land

iii.

Executory InterestsD.

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 creat ion of the interesti.Rule is an attempt to limit dead hand control - the extent to which someone can control their property beyond their deathii.Only three interests are subject to the rule - contingent remainders, executory interests, and class giftsiii.Oddity of the rule is that you are trying to determine whether there is any possibility that the executory interest, continge nt remainder, Vested Remainder Subject to Open will be void, no matter how remote the possibility

iv.

Will - at the time of the death of the testatori.Trust - at the time the trust is signed for a revocable trustii.Conveyance - at the time conveyance is creatediii.

Need to look for a validating life - someone who is alive at the time an interest is created v.

Trying to find an enabling life who will allow you to prove that the contingent interest will vest within the life of, or at the death of, the validating life, or within 21 years after the death of the validating life

vi.

Anyone named in the conveyance or the devisei.

O grants to A, but if A ceases to use the land for gambling purposes, to the grandchildren of B1)Validating lives: A, B, B's children, B's grandchildren who are alive at the time of the devise - intervening generation (B's children) can be lives in being

2)

Intervening generations who were alive at the time the interest was createdii.

Who can be a life in being?vii.

From O to A, as long as used for gambling purposes then to B - B's executory interest will vest when the land ceases to be used for gambling

1)Executory interest - the moment the contingency occurs - at exactly that moment the future interest becomes possessoryi.

O grants to A for life, then to B provided that B finishes law school1)Might not necessarily become possessory when B finishes law school if A is still alive2)

Contingent remainder- when the condition that makes it a contingent remainder disappears, even if it does not become possessory at that moment

ii.

O to A for life, then A's children who reach the age of 211)Vested remainder subject to open is fully vested at the time the last child turns 212)

Vested remainder subject to open - Vests when each class member's interest is fully vestediii.

When does an interest vest?viii.

If the future interest violates the rule, strike it out and see what's left - whatever's left must also comply with the rulei.

In applying rule (1) identify vested interest (2) ask yourself what lives were in being at the time the transfer took place, and (3) determine if the future interest will vest more than 21 years after the deaths of the lives in being

ix.

Frequently a problem with the rule against perpetuities - fee simple determinable followed by executory interestx.

Rule against perpetuitiesE.

Rule against perpetuities reformF.

Outline Page 19

Wait and see for the common law perpetuities period - figure out what actually happened and did it happen within the appropriate time framei.

Seems to make sense on one level - gets rid of ridiculous assumptionsi.On the other hand, could have to wait and see quite a long time - keeps a cloud on titleii.

Anything wrong with the wait-and-see jurisdiction?ii.

Wait and see for 90 years after the devise, then try to reform the contingent interest to conform with the interests of the owneri.Might make sense in cases like the school board cases - probably the owner's intent to leave the property with the school boardii.

Final reform (CA)iii.

Rule against perpetuities reformF.

CONCURRENT INTERESTSVIII.

What rights flow from each of those concurrent interestsi.What remedies exist for joint tenants who can't get alongii.

What are the separate and concurrent interests?i.

How do the elective share provisions work, and what assets do they cover?ii.

What happens when community and separate property is mingled?i.Community propertyiii.

What happens with each of the concurrent interests if a couple moves to a different state - how does that interact with forced share or non-forced share provisions?

iv.

Joint tenancyv.Tenancy in commonvi.Tenancy by the entiretyvii.Community propertyviii.(keep in mind which carry rights to survivorship and which don’t)

Riddle v. Harman - how you can destroyix.

Delfino - partition by sale/partition in kindi.

Joint tenant can file an ouster for rent (??)1)Swartzbaugh - lease interest without destroying joint tenancyii.

Co-tenants can not compel repair money from another co-tenant, but can get credit for a repair in an accountingiii.For improvements to a property, co-tenants can't get a contribution from other co-tenants, but in an accounting gets the increase in value as a result of the improvement

iv.

What are the remedies if the concurrent owners split?x.

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

xi.

Consequences of community property upon death or divorcexii.Equitable distribution v. community propertyxiii.Is a degree property? Conflicting viewsxiv.

Outline - Common law concurrent interestsA.

Importance - benefits and burdens of property distribution that flow from marriagei.

What are the provisions upon which the MA supreme court relies?i.What are the arguments about whether prohibiting same-sex couples from marrying are rational?ii.

Rights of domestic partners to marryi.

Each person has a separate but undivided interest1)Each person has the rights to the whole property, but owns a fraction2)Parties do not have to own equal fractions of the land3)Can be conveyed at different times, by grant or will4)No right of survivorship - surviving tenants do not get the share of one who dies - passes by intestate succession5)Can be reached by creditors before and after the tenants death6)Favor for a tenancy in common, not joint tenancy (flips historical presumption)7)Even if you qualify for tenancy in the entirety/joint tenancies, you can still just own as tenants in common8)Example - to A for life, then to A's children - children are tenants in common9)Most states will presume a tenancy in common over a joint tenancy10)

Tenancies in commoni.

Time - tenants must take interest at the same timea)Title - must acquire interest by the same instrument - can never arise by intestate succession or other act of lawb)

Largely ignored today when it countsi)Interest - must have equal undivided shares and identical interests measured by durationc)

Possession - must have the right to possession of the whole - cannot exclude a co-owner from any part of the property. If they do exclude, the excluded joint tenant could have a cause of action for ejectment

d)

Unities:1)

Estate continues in the survivors free from the interests of the decedent - decedent's rights are extinguisheda)Most important fact - carries with it the right of survivorship - interest immediately transferred to joint tenant upon death2)

Advantage - avoids probate 3)

If one person conveys her joint tenancy to a third party, time and title unities are destroyed - Have the same interests, but only as tenants in common

a)

Joint tenancy can be destroyed by any of the tenants conveying to a 3rd party - in most jurisdictions, without notice to the other tenant

4)

Joint tenancy cannot be conveyed by will - joint tenant's interests disappear upon death5)

Joint tenanciesii.

Three types of concurrent interests - All involve co-ownership - owners own at the same time, not consecutively as estates are concerned withi.

In GeneralB.

Outline Page 20

Joint tenancy cannot be conveyed by will - joint tenant's interests disappear upon death5)

If creditor waits until joint tenants death, they have nothing to go aftera)If a creditor acts during the lifetime of a joint tenant, can seize and sell the interest - severs the tenancy6)

For estate tax purposes, the interest the survivor possesses is subject to estate tax (big marital deduction)7)Right of survivorship in a joint tenancy is contingent upon surviving your joint tenant, and not getting screwed over by your joint tenant

8)

Same requirements as joint tenancies, plus marriage1)Generally speaking can only be created in a husband and wife2)Like joint tenancy, have right to survivorship3)Can't sever without consent of the other party4)Typically, tenancies by the entirety are severed by divorce or death5)Community property title can also not be severed without consent of the spouse6)Exists today in fewer than half the states7)

Tenancy by the entiretyiii.

In the past, couldn't sever a joint tenancy by simply transferring a deed to yourself1)If Mrs. Riddle had wanted to do this "legitimately," she would have to enlist an intermediary strawman - would grant the property to this third party, who would then grant it back - could argue that this is helpful because it involves more witnesses

2)

Mr. and Mrs. Riddle purchased real estate as joint tenants, but Mrs. Riddle doesn't want her husband to get the right of survivorship -shortly before her death, Mrs. Riddle sees a lawyer in order to terminate the joint tenancy

i.

True even if the person against whom the severance is worked can't make plans for his/her disposition of the property1)Issue of notice to co-tenant - across the US notice is not required - even if the purpose is to mislead the other joint tenantii.

CA has a rule that the severance will only be effective if you record the notice before the death of either tenantiii.Most states require evidence that you clearly intended to severiv."Common sense as well as legal efficiency dictate that a joint tenant should be able to accomplish directly what he could otherwise achieve indirectly by use of elaborate legal fictions"

v.

RIDDLE v. HARMON (Ct App CA 1980)ii.

If tenants in common or joint tenants cannot solve their problems by mutual agreement, any one of them can bring an action for judicial partition

i.

In a partition action, a court will either physically partition the land into separately owned parts or order the land sold and divide the proceeds among the tenants

ii.

Not available for tenants in the entiretyiii.

Judicial partition i.

Angelo and William Delfino own 99/144 interest in the property, Helen Vealencis owns 45/144i.Plaintiffs want to create a residential subdivision - want a partition by sale (split the value of the land/purchase the land themselves)ii.

Defendant has run garbage disposal business on her land since the '20s, but no garbage is actually ever on the land - (no nuisance)1)Defendant wants to partition the land in kind - basically just split the landiii.

Presumption is partition in kind - Courts say that they prefer partition in kind, but usually end up partitioning by sale1)

Not the case here - it's a 20.5 acre rectangular ploti)

Physical attributes are such that partition in kind is impractical or inequitable (gives you more room to argue) - land isn't easily divisible

a)

AND

By definition, each party thinks they have different interests or they wouldn't be engaged in the partition argumenti)Seems to be a completely meaningless standard in some waysii)

Whether the interests of the owner would be promoted by saleb)

Partition by sale factors:2)

Standard for deciding whether to divide the land in kind or partition by saleiv.

Court awards Vealencis three lots, but makes her pay Delfinos for the inconvenience of running her garbage businessv.

DELFINO v. VEALENCIS (Sup Ct CT 1980)ii.

Involved 75 acres of farm land and buildings owned by the Caudill family - in 2001 Ark Land bought 2/3 of the property and wanted to purchase the rest but family refused to sell

i.

Ark Land sought petition by sale, hoping to purchase remaining interests - trial court granted relief because of evidence that partition in kind would add millions of dollars of cost to the coal mining operation Ark Land was planning

ii.

The fact that the economic value of the property as a whole would be less if partitioned in kind is relevant but not disposit ive 1)

Supreme Court of appeals reversed - said that partition by sale can work hardship on owners unwilling to sell because they have emotional attachments to the land - money alone cannot compensate for losses

iii.

ARK LAND CO v. HARPER (W. Va. 2004)iii.

Partition has much to do with fair and equitable treatment of the interests of co -tentants - often there is no clear answer one way or the otheriv.

PartitionC.

Husband Swartzbaugh signs two agreements to lease land to Sampson in order to hold boxing matches - wife Swartzbaugh sues to cancel leases, claiming that she did not consent to leases - Property is owned by husband and wife as joint tenants

i.

In order to prove that she has been excluded, Sampson would have to take some action that would bar her from property (changing locks, erecting barriers, etc.)

1)

Court holds that joint tenancy is not destroyed by the husband leasing a portion of the property, and there is no evidence that wife has been ousted or prevented from using the lease property

ii.

Since wife has not lost anything (husband merely conveyed his legal right to occupancy to Sampson), she cannot demand compensation from husband OR void the lease

iii.

Seek partition of lease - Put the lease up for sale1)Seek partition of entire property - Unlikely, as wife would not want to lose right to survivorship 2)Ouster - Can only be used if wife attempts to enter leased land and is prevented from entering by lessee3)Accounting - Ascertain all rents paid, and seek equitable division - however, this action results in wife giving up the option to challenge the lease

4)

Options available to wifeiv.

Once husband dies, his interest would expire, and then wife would be free to void/cancel leasev."A lease to all of the joint property by one joint tenant is not a nullity but is a valid and supportable contract in so far as the interest of vi.

SWARTZBAUGH v. SAMPSON (Ct App CA 1936)i.

Benefits and Burdens of Co-ownershipD.

Outline Page 21

"A lease to all of the joint property by one joint tenant is not a nullity but is a valid and supportable contract in so far as the interest of the lessor in the joint property is concerned"

vi.

Logic is that a fee simple holder, by himself, is not required to make repairs, so should not be compelled to contributea)Some states hold that you cannot compel contributions from co-tenants for repairs1)

Other states hold that contributions must be made from co-tenants2)In an accounting, the person who has paid for repairs receives a credit, and essentially receives a little more in an equitab le proceeding

3)

Repairsi.

In most jurisdictions, the person who pays for the improvements is not entitled to contribution1)In an accounting, the person making the improvements gets any additional value added to the sale by the improvement, but otherwise does not receive a credit

2)

Improvementsii.

A cotenant paying more than her share is entitled to contribution1)Taxes/mortgagesiii.

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

1)Adverse possession1)

In a partition in kind, if the court cannot equalize the tracts, it can order payment from the party getting the more valuabl e portion to the party getting the less valuable portion to equalize

1)Owelty2)

Remedies available to co-tenantsii.

Right to sell, lease, give away, but a joint tenancy cannot be devised1)Right to survivorship is destroyed by selling/giving away joint tenancy, but not by leasing2)

Rights1)

Partition in kind or by sale1)Accounting (to ascertain assets and liabilities, with improvements measured by value added to property, and repairs & rents f rom leases included)

2)

Remedy can be either injunction (allows you to reenter property) or damages (equal to half of reasonable rental income)a)Ouster (only if there exists affirmative evidence that you have been excluded by cotenant)3)

Remedies2)

Summary of right/remedies of joint tenantsiii.

8 states, including CA1)Spouses are part of a community to which they contribute to equally - proceeds of community are owned 50% by each spouse2)Earnings of either spouse during marriage, and items purchased with such earnings are community property3)Property brought to the marriage or received by one spouse through gift or inheritance is separate property4)If in doubt, presumption is that property is community property5)Spouse can only convey interest/share with consent of other spouse6)Community property cannot be changed into separate property merely by stating intention to do so7)

Burden of proof is on party claiming that property is separate and not communitya)Upon divorce, presumption is that all property of the couple is community property unless it can be shown otherwise8)

Since they hold as joint tenants, wife owns entire house. However, if the house was held as community property, husband could will his share to children

-

Example- couple owns house in Cali as joint tenants. Husband dies, and devises his portion of the house to his kids. Who owns house?

i)Spouse can devise by will their half of community propertya)

Differences from joint tenancy9)

Husband cannot devise property to children, as there is a right to survivorshipi)Tenancy in the entirety can only be destroyed with consent of spouse or divorceii)

Same example as above, except that house is owned in tenancy in the entiretya)Differences from tenancy in entirety10)

CA recognizes quasi-community property - if you move from NY to CA, property acquired in NY is treated as quasi community property

a)

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

b)

Upon death, the laws of the decedent's domicile at death govern - law where land is located governs the disposition of landc)

Once something is community property, it doesn't change without consent of both spouses - even if you move11)

The community property must be managed for the benefit of the community - each spouse must act in good faith in exercising authority

12)

Community property1)

Based on historical concept of husband and wife as one entity, and husband had right to full possession and control of proper ty, including property brought into marriage by wife

1)

Some include all property owned by either spouse, whenever and however acquired, others limit to property acquired during marriage, some limit to property acquired by the earnings of marital partners

a)Differences occur in the way the states define what marital property is subject to equitable distribution2)

Common law - upon divorce property was given to title holder (usually man) - woman was not regarded as a legal entity once married; and barriers to divorce existed

3)

Recent trend toward equal division of property upon divorce 4)

Equitable distribution2)

Two basic approachesi.

Women are more likely to have custody of children1)In both, women and children tend to have a lower standard of living following a divorce than men1)

In equitable distribution states, women are more likely to get less than 50% of all assets1)Alimony is more common now, but not nearly as common as it was prior to the institution of 'no fault' divorce in early 1970s2)

Community property vs. equitable distribution-do women or men fare better in one or the other?ii.

Mixing separate and community propertyiii.

Marital propertyE.

Outline Page 22

In equitable distribution states, women are more likely to get less than 50% of all assets1)

Character of the property is determined at the time the spouse signed the contract of purchase - community is entitled only to a return of community payments plus interest

a)

Life insurance policy owned by him, community is entitled to contributions - $7K plus interestb)

Inception of rights state (Texas)1)

3/10 is H's - goes to son, 7/10 is community - 3.5/10 goes to her, 3.5/10 is H's - goes to his soni)Community payments "buy in" a pro rata share of the title a)

Pro rata state (CA, WA)2)

In the case of installment payments on a property/house, title does not pass to the purchaser until all of the installments are paid - determined when the title actually passes

a)Time of vesting rule3)

Suppose that H had taken out life insurance policy before marriage - $3K in premiums had been paid before marriage and $7K during. 1)Mixing separate and community propertyiii.

Anne Graham spent the whole duration of their marriage working, plus doing all of the housework1)Dennis got both a bachelors and masters degree during the course of the marriage2)Anne contributed 70% of the cost of living during the marriage3)

Issue is whether an MBA can be counted as property upon dissolution of marriage1)

Anne wants part of the earning capacity that he gets from the MBA - she doesn't qualify for alimony because she can provide for herself -they don’t have any assets to split

2)

Organs - you have the right to them, but can't sell thema)Social security - can't sell it to someone else but it's yoursb)Pensions/causes of action have value but you can't sell to someone elsec)

Doesn't have exchange value, however...1)

Life estate is not inheritablea)Joint tenancy is not inheritable - just right to survivorshipb)

Not inheritable, however...2)

Like the Moore case where the court assumes that property has to have certain attributes - can counter a lot of these assumptions3)

Labor theory drives this intuition - but there are other kinds of property that are all about labor - patent, copyright a)Court also says that a degree is a result of years of accumulated education and hard work4)

Court's arguments about why degree doesn't constitute property3)

Have to also take into account what's fair/what were the expectations of the parties4)Court concludes that education can be a relevant factor in determining spousal support, but not property in and of itself5)

IN RE MARRIAGE OF GRAHAM (Sup Ct CO 1978)iv.

Basically requires the community (the couple) to be reimbursed for community contributions to education or training that substantially increases a party's earning capacity

1)

She would be entitled to half of the contributions2)If you are divorced 10 years or more after the contributions have been made -no reimbursement requirement3)

California rules:1)

NJ required reimbursement alimony 2)NY is alone as defining a professional degree as a marital asset (O'Brien v. O'Brien)3)

Rules in other jurisdictionsv.

Couple got married while they are in school, Frederica had a career that was just beginning - by the end she is making $$$1)The husband is supposedly her voice teacher, critiques her performances, travels with her, takes photos, etc., and is the primary caregiver to the two children - his argument to why he is entitled to equitable distribution of her future earning capacity - he helped her during a career, made it possible for her to become so successful

2)

Best argument why this does not constitute property - it is an innate talent, not a degree3)

Future goodwill that the person has earned from their reputation/from their career1)Celebrity goodwill and professional good will are things that most courts recognize - subject to equitable distribution4)

Court found that it is the nature and extent of the contribution by the spouse seeking equitable distribution, rather than the nature of the career, whether licensed or otherwise, that should determine the status of the enterprise as marital property

5)

ELKUS v. ELKUS (Sup Ct NY 1991)vi.

For personal property, wife typically took a 1/3 upon her husband's death if there were children, otherwise 1/21)For land, would get 1/3 of a life estate2)Now extended to husbands in few jurisdictions that recognize dower3)

Doweri.

Typically spouse can renounce a will if the share you get in the will is less than the elective share in the statute - basically can't just disinherit a spouse

ii.

Termination of marriage by deathF.

Contract for property division or support can be implied from the conduct of the parties1)In this case, girlfriend had supported boyfriend through his career though they were unmarried2)CA has extended implied contract theory to same-sex relationships3)

MARVIN v. MARVIN (CA 1976)i.

7 same-sex couples apply for marriage licenses in MA and are denied - court upholds the right for same-sex couples to marry1)Court found that the marriage ban did not meet the rational basis test for either due process or equal protection2)

One argument that it may make more sense to have judges stay away from the discussions - legislatures might actually be more lenient

a)If this is such a decisive issue - it should be left up to the people/legislature to decide1)

This is a really important liberty issue - it is the court's responsibility to decide on these issues a)On the other hand…2)

Court says that they "owe great deference to the Legislature to decide social and policy issues, but it is the traditional an d settled role of courts to decide constitutional issues"

3)

Is this the right institutional forum in which to make this change? Institutional confidence question3)

Under the defense of marriage act, this has changed1)MA has also been limiting the right to marry to people who live in MA2)

Typically states have recognized a marriage in one state as a marriage in another4)

GOODRIDGE v. DEPARTMENT OF PUBLIC HEALTH (Sup. Ct. MA 2003)ii.

Rights of domestic partnersG.

Outline Page 23

MA has also been limiting the right to marry to people who live in MA2)Also a question about recognizing marriages of people in other countries3)

Joint interest tax filing, tenancy in the entirety, homestead crediting, elective share, intestate succession, equitable divi sion upon divorce, medical benefits of the spouse, social security benefits (federal benefit)

1)Benefits:1)

Equitable division upon divorce, alimony1)Possible downsides2)

Federal benefits are not conferred, even in states where gay marriage is recognized3)

Benefits/responsibilities of marriageiii.

Theoretically, if a foreign gay couple moves to the US it should be valid1)The traditional conflict of laws rule is that if a marriage is valid where contracted, it is valid everywhereiv.

LANDLORD TENANT LAWIX.

Term of years - definitive times, parties can't terminate early, no notice has to be given1)Periodic tenancy - same but renews automatically2)Tenancy at will - largely disfavored, terminates at will3)

Different types of leasesi.

Can't waste1)

Pestana - Lessor can object to an assignment only with a reasonable basis - question of fact as to what constitutes a reasonable basis - Reasonable doesn't include just wanting to get higher rent

a)Sublease/assignment - some responsibility on the part of tenants/some on the part of landlords2)

Tenant's duties1)

Includes rights and responsibilitiesa)Traditional view - eliminating nuisances, complying with contractual provisionsb)Important for commercial real estate purposes - many jurisdictions do not extend implied warranty of habitability to commercial

c)

Covenant of Quiet enjoyment1)

Illegal lease 2)

Hilder v. St. Petera)Building codes are a starting point but not definitive b)

Implied warranty of habitability3)

Majority viewi)Sommera)

Complicated questions about whether the duty has been met, whether the landlord has done enough, etc.b)

Can't use self-help for defaulting tenants - use summary eviction proceedingsi)Berg v. Wileyc)

Duty to mitigate4)

Protected groups-

Advertising-

Starrett City-

Exemptionsi)FHA a)

Civil Rights Act of 1866b)

Statutory responsibilities in the selection of tenants5)

Landlord's duties2)

Duties ii.

OutlineA.

Not dissimilar from estates, except parties are not co-ownersi.

Estate that lasts for some fixed period of time or 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

1)

In some states statutes limit the duration of terms of years2)Must be for a fixed period, but can be terminable earlier upon the happening of some event or condition3)Because it states from the outset when it will terminate, no notice of termination is necessary to bring the estate to and en d4)

Term of Years1)

A lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives n otice of termination - if notice is not given the period is automatically extended for another period

1)

For any periodic tenancy of less than a year, notice of termination must be given equal to the length of the period, but not to exceed 6 months

a)

Notice must terminate the tenancy on the final day of the period, not in the middle of the tenancyb)In many states, statutes have shortened the length of notice required to terminate periodic tenancies and have permitted a month-to-month tenancy to be terminated at any time following 30 days' notice

c)

Under common law rules, half a year's notice is required to terminate a year-to-year tenancy2)

Periodic Tenancy2)

Tenancy of no fixed period that endues so long as both landlord and tenant desire1)If the lease provides that it can be terminated by one party, it is necessarily at the will of the other as well if a tenancy at will has been created - However, a unilateral power to terminate a lease can be engrafted on a term of years or a periodic tenancy

2)

Tenancy at will ends, among other ways, when one of the parties terminates it (or upon death of one party)3)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 a tenancy at will

4)

Tenancy at will3)

Differences between the three mainly have to do with notice4)

3 types of leasehold estatesii.

In GeneralB.

Outline Page 24

Differences between the three mainly have to do with notice4)If the lease is silent but calls for monthly rental payments, most courts would consider this a periodic tenancy5)

Matters primarily whether or not an arrangement amounts to a lease because leases give rise to the landlord -tenant relationshipi.

Lease transfers a possessory interest in land, so it is a conveyance that creates property rights1)Leases also usually contain a number of promises (or covenants) so the lease is a contract to, thus creating contract rights2)

Leases are both conveyances and contracts ii.

Modern trend has been to reform the property law of landlord and tenant by importing into it much of the modern law of contra ctsiii.

Tenants are usually less well off as a group, and there is an assumption of lack of available housing in some urban areas1)

Rise in contract law has to some degree been offset by a belief that the parties in a landlord -tenant relationship are not in an equal bargaining position (particularly in residential situations)

iv.

Lots of landlords use form leases - less room for negotiation, but also a lot easier for the landlordv.

Might make a difference in right to terminate, whether you can assign your interest to someone else1)

Courts come out in both directions - look at what language was used/does the tenant have a right of exclusive possession/how much control does the tenant have/what difference does it make if it's a license v. a lease

1)Sometimes confusion about what constitutes a leasevi.

Anything less than assigning the entire interest the tenant possesses is a sublet1)An assignment transfers the entire interest in the lease2)

Subletting v. assignmentsvii.

Perlitches assign their interest to Pestana1)Prior to assigning their interest to Pestana, Perlitches enter into a 25-year sublease with Bixler2)Bixler tries to sell with existing lease to Kendell and O'Hara - needed Pestana's consent - Pestana declines consent3)

First contract is between the Perlitches and the City of San Jose1)

Pestana can only withhold consent for good reason1)Kendell and O'Hara want Pestana to be subject to a contract doctrine of good faith and fair dealing2)

Courts don't want to restrict alienability - withholding consent for an assignment for no apparent reason does not encourage alienability3)

An increase in the value of the property during the term of the lease does not count - lessor is free to build periodic rent increases into the lease - other than that, has to wait until the end of the lease term to realize benefits

1)

New legal rule - where a commercial lease provides for assignment only with the prior consent of the lessor, such consent may be withheld only where the lessor has a commercially reasonably objection to the assignee or the proposed use

4)

The reasonableness requirement is a standard (as opposed to a rule) - there are a series of cases that follow this case that raise questions about what constitutes reasonableness

5)

KENDALL v. ERNEST PESTANA, INC. (Sup Ct CA 1985)viii.

In the commercial context - the response is typically that if you are explicit about the consent provision in the contract, we will assume the contract has been created with equal bargaining power

1)

Seems like landlord should have more say about who lives in their building1)There are lots of subjective reasons that landlords would not want a certain class of tenants in their building2)No state court has acted to create a reasonableness requirement in a case involving only a residential lease - courts are not persuaded that there is "such a necessity of reasonable alienation of residential building space that they ought to impose onresidential landlords a reasonableness requirement to which they have not agreed."

3)

In the residential context - we can probably assume that tenants have less bargaining power2)

Bargaining Powerix.

LeasesC.

Under common law rule, a tenant who is evicted by his landlord may recover damages for wrongful eviction where the landlord e ither had no right to possession or where the means used to remove the tenant were forcible, or both

i.

Berg rents from Wiley a commercial building that is used as a restaurant1)Lease requires that tenant must bear the cost of remodeling, must notify the landlord of any changes to the building structure before they are made, and has to operate the restaurant lawfully

2)

Berg's problems - violations of the health code, Wiley asked Berg to make remodeling changes, she waits until the last minute - there is a conflict about whether she abandoned or was just doing what he asked her to do

3)

Wiley comes to the restaurant and changes the locks when Berg isn't there - claiming that she abandoned the property - there is a year and a half left on the lease at this time

4)

Landlord needs to prove they have the right to possession because of tenant breacha)Landlord needs to prove they used no more force than reasonably necessary - were peacefulb)

Under common law, to establish as a landlord that you have appropriately engaged in self help:5)

Assume that the relationship between the parties has deteriorated - this is probably true in any case like thisa)

There are a number of jurisdictions who have not gone as far as Berg to abolish self-help - but almost always find that the methods used are not peaceable

i)In some ways he is the model of restraint - waits until she is not there/brings a cop just in caseb)

Court said that bringing a cop to the restaurant and changing the locks was not peaceable1)Court looks to whether the way Wiley changed the locks was "peaceable"6)

There are alternative judicial processes that work just as well - summary proceedings allowed in most jurisdictions1)Courts have essentially abolished the idea of self help7)

Trial court found that even if Berg had violated the lease, this could not excuse Wiley's non-peaceable reentry8)After this case, the only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord's claim of breach of a written lease is by resort to judicial process

9)

BERG v. WILEY (Sup Ct Minnesota 1978)ii.

One reason - homes seem essentially to us - can't deprive someone of a home1)A flat prohibition of self help is the trend in property law, but not the rule iii.

Meant to be a quick and efficient means by which to recover possession after termination of a tenancy1)Typical statute requires only a few days' notice to the tenant prior to bringing an eviction action2)

Summary proceedings have developed as an alternative to self helpiv.

Also seems logical to permit a tenant to raise the condition of the premises as a defense to a summary eviction action brough t for nonpayment of rent - many states, though not all, so provide

v.

Tenants duties - Defaulting tenant in possessionD.

SOMMER v. KRIDEL (Sup Ct NJ 1977)i.

Tenants duties - Defaulting tenant who has abandoned possessionE.

Outline Page 25

Kridel entered into a two year lease but never took possession of the property - just sent a letter to the landlord explaining the dissolution of his engagement

1)

Sommer never responds to the letter, but refuses to show the apartment on the grounds that it's already been rented2)

SOMMER v. KRIDEL (Sup Ct NJ 1977)i.

Tenant enters into a 2-year lease but vacates after only about a year1)Court says that landlord must make a reasonable effort to mitigate the damages2)

Tenant has a property interest in the apartment - a lease-hold - it's not the landlord's to deal with1)Estate law would favor the alienability of the interest - plays a role in the fact that landlord historically had no duty to mitigate2)

If this is a property interest, what's the argument that the landlord has no duty to mitigate?3)

In contracts, have the duty to mitigate even if someone breaches - similarly, the landlord has the duty to try to find a new tenant/mitigate the damages

1)Now, we are moving to contractual conceptions of landlord-tenant law4)

Economic efficiency argument - doesn’t make sense to let property sit idle when there are other willing tenants5)Fairness argument - seems unfair to Kridel that people are asking to come view the apartment and Sommer is saying it's already been rented

6)

If the case is based in contract law, landlord generally does not have the ability to include a clause waiving the duty to mitigate - can't override with a contractual provision

7)

Prove that you have shown the property to other people1)May need to advertise in papers, put a sign out2)If the tenant brings someone to you, and it looks like the person is a reasonable substitute, probably have to take that pers on3)Duty to mitigate overrides a landlord's ability to withhold consent - landlord pretty much has to take someone - not clear that they can withhold consent in this case

4)

Burden shifts to the landlord to prove that he has taken reasonable steps to mitigate8)

Landlord has to take steps to rent Kridel's apartment so the landlord isn't gaining at the tenant's expense1)What happens if the landlord has more than one vacant apartment?9)

Theoretically, restatement suggests that the tenant should get the extra value because there is a lease1)

In this case, you are protecting yourself if you are in a rising rental market - won't be liable to tenant in any situation if rent goes up

a)

One option is that you can actually terminate the lease - if a tenant writes a letter like Kridel did, you can accept this and vacate the premises

2)

What happens if the rent goes up when the landlord re-rents?10)

One of the reasons jurisdictions were hesitant to require mitigation was that this was proof that you had accepted the tenant's abandonment, and therefore tenant was not liable for unpaid rent - not really the case any more

11)

Theoretically, landlords can get the difference of what the tenant was supposed to pay, and what they are actually getting byletting it12)

RIVERVIEW REALTY CO v. PEROSIO (1977 - joined with Sommer for decision)ii.

42 states and DC now hold that landlords have a duty to mitigate - but not all apply it across the boardiii.

Based on the current trends, should probably try to re-let - Today, it is risky to follow the old common law1)Write a letter to tenant saying that mitigation in no way should be seen as accepting tenant's surrender, but try to re-let the apartment2)

If you live in a jurisdiction with no duty to mitigate, and a landlord comes to you with facts similar to kridel, what do you advise the landlord?iv.

Might just be able to post ad online, put signs up, etc.1)For mitigation, need to look at the reasonable norms according to the individual circumstancesv.

Early common law - absent some clause in the lease providing otherwise, the tenant took the premises "as is," and landlords were under no obligation to warrant their fitness

i.

The tenant might wish to vacate, or to stay but pay less (or no) rent1)The tenant (or an invitee of the tenant) might be injured by allegedly defective premises and claim damages against the landlord in tort2)

Disputes between landlord and tenant regarding the condition of the premises arise in essentially two waysii.

Ordinarily implied in the lease1)Covenant of quiet enjoyment - permitted tenant to terminate the lease and stop paying rent as if they had been evictediii.

Constructive eviction - landlord has done something that effectively makes it impossible to enjoy the rental of the premisesiv.

What constitutes a reasonable time depends upon the circumstances of each case1)Courts must be sympathetic to a tenant's plight - vacation of the premises is a dramatic course and must be taken at his peril2)

Tenant's right to claim a constructive eviction will be lost if he does not vacate the premises within a reasonable time afte r the right comes into existence

v.

Plaintiff lessor sued defendant lessee to recover rent allegedly due under a written lease - based on a charge that defendant had unlawfully abandoned the premises before the termination of the lease

1)

Water was leaking into the building - previous lessor immediately fixed the problem whenever it happens and made steps to remedy the problem long term - after he died, no one responded to defendant's complaints

2)

Plaintiff notified lessor of her intention to leave after one particularly bad flood, and subsequently left3)Landlord claimed water was not a permanent interference, and also that lessee had examined the premises and accepted them as-is before she signed the lease

4)

Court held that the covenant of quiet enjoyment was there whether or not it was explicit in the contract 5)

If this happened, tenant could vacate the property or stop paying renta)

Breached when the landlord's conduct had the result of depriving the leasee of the beneficial use of the premises, whether bypositive acts of interference or by withholding something essential to the full enjoyment of the premises, or by explicit pro mise in the lease

1)

Landlord had the duty to expose latent defects2)Landlord had duty to conduct promised repairs with care3)Landlord had to maintain common areas and abate nuisances in common areas4)

Covenant is much more expansive than the court makes clear6)

RESTE REALTY CORP v. COOPER (Sup Ct NJ 1969)vi.

Independent covenant - ??vii.Dependant covenant - mutually dependant on each other - if the covenant is breached you are relieved of obligation to pay rentviii.If there is an actual eviction, even though from a part of the premises only, the tenant is relieved of all liability for ren t notwithstanding continued occupation of the balance - the landlord may not apportion his wrong

ix.

An eviction, actual or constructive, is not necessary to constitute a breach of the covenant - the tenant should be, and usually is, able to stay in possession and sue for damages equal to the difference between the value of the property with and without the breach

x.

Landlord's Duties - Covenant of Quiet EnjoymentF.

Outline Page 26

possession and sue for damages equal to the difference between the value of the property with and without the breachx.

DC court of appeals is fairly active in this judicial movement1)Argument is that the lease that has been entered into is illegal and tenant shouldn't have to pay rent2)

Landlord has to know about the violations1)Landlord is entitled to reasonable rent2)

Held to apply to substantial housing code violations, which have to be in effect at the time the lease is entered into3)

Tenant can withhold rent, and can also vacate and not be held liable for future rent4)Abandoning an apartment is often not a very favorable option for many tenants5)

Illegal Lease Doctrinexi.

Tenant is entitled to housing that is safe, clean, and fit for habitability - whether or not it is expressly set out in the contract1)Can't waive the warranty2)Covers latent and patent defects, and common areas3)

What is an implied warranty of habitability?i.

Knowledge doesn't waive the warranty - can't bargain away your right to habitable premises1)Few jurisdictions will say that if there is evidence of equal bargaining power than maybe - otherwise no2)

What if tenant knows of defect and accepts property anyway?ii.

Starting point is the housing code - most municipalities have housing codes - just a starting place, not the ending place1)If there is no housing code (or no violation of the housing code), the court will still look to the safety of the dwelling2)Breach occurs when the premises are uninhabitable in the eyes of a reasonable person3)

Substantial breach1)

Basic question - Is there a substantial violation of the warranty such that a tenant's health or safety might be in jeopardy?2)

What constitutes a breach of the warranty? What's covered?iii.

No breach1)Landlord is not responsible for defects created by tenant2)

What if tenant causes the defect?iv.

Court wants to focus on the health and safety of the tenant, and therefore makes the standard more flexible1)Minor housing code violations will not necessarily lead to a breach of the implied warranty2)

Standard, not a rule - a lot more flexibility as to whether the landlord is violating the warrantyv.

Before filing a claim, tenant first has to tell the landlord that there is a problem, and only if landlord fails to correct i s there a breachvi.

Tenants aren't as likely to be able to repair on their own1)Ability-based - makes sense to shift burden to landlord to maintain the premises1)

Land doesn't matter so much any more - it's the building on the land that matters - tenants want an inhabitable apartment2)

Why does it make sense to imply a warranty of habitability instead of requiring a tenant to take the apartment as -is?vii.

Can rescind contract1)Can reform contract - for example, to include different rent2)

Contract damages are available 1)

Measure damages by what the fair market value is, compared to what the value of the actual premises are ( Hilder)1)Other jurisdictions - difference between the agreed rent and the fair rental value of the premises as they were during their occupancy in the unsafe, unsanitary, or unfit condition

2)

Or - agreed rent is reduced by a percentage equal to the percentage of lease -value lost by the tenant in consequence of the landlord's breach

3)

How do you measure damages?2)

In some situations damages might be 0, but courts can't do this without voiding IWoH1)Damages are really hard to measure where tenant isn't paying much for the property3)

Run the risk of losing - being on the hook for rent even if you've moved outa)Might sue the landlord, move out, and try to get relocation costs from the landlord1)

In some jurisdictions might be required to put withheld rent in an escrow accounti)In many instances, this is done affirmatively a)

Even if they have been delinquent on rent for other reasonsi)Landlords hate this - think that this is simply a subterfuge to avoid eviction for non-payment of rentii)Landlords succeed most of the time anyway - judges will often throw out this defense even if the tenant has good evidence (anecdotal)

iii)

Must more likely to be successful if used as an affirmative defense, rather than a last minute stop -gap defense for tenants who have otherwise had problems paying rent

iv)

IWoH is more likely to be successful in really serious slum-like conditionsv)

In most cases, tenants withhold rent, are sued for eviction, get legal help, and find out they have a claim for IWoHb)

Withhold rent, then have the landlord sue you2)

Other remedies4)

Remedies viii.

Hilder is basically renting a slum apartment and repeatedly complains to the landlord but he does nothing1)

He's suggesting there has been a breach of the covenant of quiet enjoyment, which under some circumstances required the tenant to vacate

1)Landlord argues that she has not abandoned the apartment and therefore should not get her rent back2)

Under common law doctrine, landlord was not required to make any promises to tenant - caveat leasee1)Grounded in property rights as opposed to contract rights2)

Hilder is arguing that Vermont should follow other states in adopting an implied warranty of habitability3)

For remedies - court says it is the value of the dwelling as warranted v. value of the dwelling in its defective condition4)

Have to measure damages in some other way than saying that she was paying the decreased rent because the place was a dump to avoid voiding the whole doctrine

a)

To give some teeth to the IWoH - have to allow some damagesb)

This argument would essentially eviscerate the implied warranty of habitability doctrine. 1)

Plaintiff would argue that this isn't an appropriate measure of damages - by entering into a contract with plaintiff, landlord is 2)

Defendant's argument - Hilder rented as-is - she knew it was a dump - if it had been in good condition, she would have had to pay a lot more, therefore no damages are appropriate

5)

HILDER v. ST. PETER (Sup. Ct. VT 1984)ix.

Landlord's Duties - Implied Warranty of HabitablityG.

Outline Page 27

Plaintiff would argue that this isn't an appropriate measure of damages - by entering into a contract with plaintiff, landlord is promising a habitable apartment, and isn't living up to the promise

2)

Hilder gets all her rent back - court essentially says that the apartment was valueless6)Court also says that 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 as to make appropriate the award of exemplary damages

7)

We don't make these same assumptions in the commercial context - we assume that there is equal bargaining power1)

Theory of IWoH is largely grounded on the fact that the landlord/tenant do not have equal bargaining power, and tenants are n ot as capable of making repairs

x.

Set aside certain units in a building for low-income tenants, and allow market prices for the rest of the building - shift costs to those who can afford it

1)

Section 8 housing vouchers - government is paying the rent - give tenants enough money to buy housing that is affordable2)Government might need to subsidize housing in markets where there is an inadequate amount of affordable housing3)

Putting aside IWoH, how can we ensure that a tenant has decent housing without shifting all the costs onto the landlord?xi.

Not every alteration made by a tenant amounts to waste1)

Waste - duty not to commit waste is breached if a tenant makes such a change as to affect a vital and substantial portion of the prem ises; as would change its characteristic 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 expenditure

i.

Tenant has an implied warranty at common law to make minor repairs, a duty which arose out of waste - doesn't make sense todayii.

Depends considerably on the language of the agreement in question1)Explicit covenants to repair regularly except, in addition to fair wear and tear, damage by fire or other casualty - even with regard to fire damage brought on by tenant's negligence

2)

Commercial tenant's duty to repair may be altered by a covenant in the leaseiii.

Under common law - usually yes, unless the lease provided otherwise - on the theory that the interest in the soil remains to support the lease

1)

If the lease only covers a part of the building, an exception is made to the general rule2)Greenfield - contract theory of frustration of purpose - when the building is destroyed it becomes impossible for the landlord to furnish the agreed consideration - obvious that the purpose of the lease with respect to the tenant was frustrated

3)

Does the tenant have a duty to pay rent after the leased premises have been destroyed?iv.

Tenant's dutiesH.

DISCRIMINATIONX.

376-378pp.Covers more than just racei.Covers advertising for housingii.

Not exempt from advertising provisions1)Only exempt if the house is sold or rented without the use in any manner of sale or rental facilities or sales or rental services of any real estate broker, agent, or salesman, and without the publication, posting or mailing, after notice, of any advertisement or written notice in violation of section 3604(c)

2)

Does not cover single family houses, unless the owner owns more than three such housesiii.

Sale or rental1)Inclusion of discriminatory terms, conditions, or privileges of sale2)Printing, publishing of an advertisement/statement/notice that indicates any preference for the above categories plus handicap3)Representing to any person because of the above categories that a dwelling is not available4)

3604(a) - prohibits discrimination on the basis of race, color, religion, sex, familial status, or national origin foriv.

3604(f)(3)(A) - refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises, except t hat, in the case of a rental, the landlord may where it is reasonable to do so condition permission for a modification on the renter agreeing to restore the interior of the premises to the condition that existed before the modification

v.

Other enforcement measures include conference and conciliation proceedings, suits by the US attorney general, and criminal penalties1)Anyone injured by a discriminatory practice may commence a civil suit for injunctive relief and damages (including punitive d amages)vi.

Discriminatory motive need not be proved in order to make out a prima facie case under the FHA - proof of discriminatory effect is sufficient

1)

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

2)

Alternatively, when a single plaintiff claims a housing denial without regard to a policy or pattern, the plaintiff establishes a prima facie case by proof of disparate treatment

3)

Or, in the case of private defendants, one taken pursuant to a rational and necessary business purpose1)

Once the plaintiff establishes either disparate impact or disparate treatment, the defendant must the justify the action as one taken in pursuit of a bona fide, compelling governmental purpose, with no less discriminatory alternative available to achieve the goal

4)

Should a defendant demonstrate a valid justification, the burden, at least in the private sector, would shift back to the plaintiff to show that the business necessity was a pretext for engaging in discrimination

5)

Pursuing a claim under the FHAvii.

However, can't discriminate against children when the occupancy limitations would otherwise allow them1)

Numerical occupancy limitations are generally ok, even if they have a disparate impact on families with children, because they could be justified on the group of maintaining the economic value of the property

1)

Refusal to rent to unmarried couples not covered by the act unless it can be demonstrated to have a disproportionate racial, ethnic, religious, or gender-based impact

2)

Act does not prohibit sexual-preference discrimination 3)

Discrimination based on family status/sexviii.

Defined by 3602(h) of the FHA as "a physical or mental impairment which substantially limits one or more of the person's major life activities, a record of having such an impairment, or being regarded as having such an impairment, but such term does not include

1)Handicapsix.

Fair Housing ActA.

Outline Page 28

current, illegal use of or addiction to a controlled substance"People with AIDS have a handicap for purposes of the act2)Dwellings need not be made available to people whose condition would create a direct threat to the health and safety of others or result in substantial damage to the property, but landlords must try to make reasonable accommodations

3)

No pets policy prevails only if there were no reasonable way to accommodate the type of pet or if the tenant did not actuallyneed the pet

4)

FHS provides for the award of reasonable attorneys' fees to successful aggrieved parties from losing landlords1)Award of fees to defendants who prevail is permitted only if the complaint is frivolous or in bad faith2)

Attorney's feesx.

Housing developer in Brooklyn is concerned about white flight, so wants to enact racial quotas to maintain the current racial balance1)Wants to avoid the "tipping point - " theory is that there is some point at which if you reach a certain percentage of minorities in an apartment building, you will create while flight

2)

This is intentional discrimination - not just actions that result in discriminatory effects - they are purposely discriminating on the basis of race because of what they think is a good policy

3)

Only problem is, the plain language of the FHA doesn't seem to allow for this kind of discrimination1)

Starrett City's argument is that the discrimination was for a legitimate end - trying to accomplish housing integration, which was the purpose of the Fair Housing Act)

4)

The impact of Starrett City's quotas fall squarely on minorities1)

The court holds that Title VIII does not allow appellants to use rigid racial quotas of indefinite duration to maintain a fixed level of integration at Starrett City by restricting minority access to scarce and desirable rental accommodations otherwise availableto them

5)

US v. STARRETT CITY (1982)xi.

If there is public housing involved, the equal protection clause protects from discrimination (state action)i.Prohibits only state action, but Shelley effectively eliminated at least some private discrimination as wellii.

Court held that state courts could not enforce racially restrictive land use agreements1)SHELLEY v. KRAEMER (US Sup Ct 1948)iii.

14th AmendmentB.

All citizens of the US shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to in herit, purchase, sell, hold, and convey real and personal property

i.

Court held that the 1866 provision bars all racial discrimination, private and public, in the sale or rental of property1)JONES v. ALFRED H MAYER (US Sup Ct 1968)ii.

1866 law is narrower than the FHA in that it reaches only racial discrimination, does not deal with discrimination in the 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

iii.

In contrast to the FHA, claims under the CRA probably do not require proof of intentional or purposeful discriminationiv.

Civil Rights Act of 1866C.

REAL ESTATEXI.

Brokers have a fiduciary duty to the parties they represent1)Lacardi v. Blackwelderi.

What constitutes marketable title when there is still a sale pending1)Existence of a covenant where there is not an exception in the contract allows a buyer to rescind, as does a violation of a covenant2)Mere existence of a zoning ordinance does not constitute an encumbrance - does not effect whether the title is marketable3)Violation of a zoning ordinance does allow the purchaser to back out of the contract because the title is not marketable4)

Lohmeyerii.

Minority rule - no - embodied by state of NY - Stambovsky - exception for poltergeist1)

Latent material defects must be exposed - Johnson v. Davis1)Majority rule in the other direction 2)

Does the seller have a duty to disclose defects?iii.

Lempke1)

Can a subsequent purchaser enforce an implied warranty of quality against a contractor who is in privity with the seller but not the subsequent purchaser?

iv.

Jones also has punitive damages - not typical1)

Jones v. Lee - measures damages by the difference between the price at the time of purchase and the market value at the time of breach + additional compensatory costs (mortgage payments, etc.)

1)

General/majority rule - yes, even if the deposit exceeds the damages of the seller1)This court says no - if the deposit is going to unjustly enrich the seller2)

Kutzin - can you keep the deposit if the buyer breaches?2)

Specific performance - require the seller or buyer to go through with the sale3)

What damages or remedies flow from the breach of a sales contract?v.

OutlineA.

In CA, typical to have no lawyers involved and use standardized formsi.Both buyer and seller are typically represented by a brokerii.

Typically contingent upon the buyer obtaining financing and an inspection by the buyer1)

Real estate contracts are almost always executory - the title is not transferred immediately upon signing the agreement, because both buyers and seller must do certain things during ht time between the contract and closing

iii.

Title company will insure the title1)Once the contract is actually signed, there is a title search by the title company - looking for defects in titleiv.

CA - is covered by a 3rd party escrow agent1)In many states (NY) - transfer of the deed takes place with all parties physically present2)

Deed transfer/closingv.

Every piece of property has a record that the county records office maintains of every transaction on that property1)Lexis - can search by property and see all the transactions that have occurred2)

Title company records the deed and the mortgage - there is a recording systemvi.

Real estate transactionsB.

Outline Page 29

Every piece of property has a record that the county records office maintains of every transaction on that property1)Lexis - can search by property and see all the transactions that have occurred2)

Deed - recorded - you hold the deed, usually subject to the mortgagevii.

For practical purposes, not a huge difference between deeds and titles1)Title - simply tells you who owns the title, and whether there are encumbrances - want a clear title when you own a houseviii.

Real estate contract - pp. 454-462ix.

Buyers and sellers tend not to enter into these transactions often and because the value of each transaction is so high, it makes economic sense to have specialists develop information

1)Brokers exist because there is a scarcity of information in the market for real propertyi.

Often hired by sellers of property to attract prospective buyers and facilitate real estate transactionsii.Residential brokers are licensed by the state and typically receive a commission, usually ranging from 6 to 8 percent iii.

Licaris hired Schwartz, Schwartz consulted with defendants Blackwelder and Opert1)Children are trying to sell their parents' house - 3 brokers involved1)

Broker Blackwelder bought the house themselves for $115k, then sold to a 2nd buyer - 2nd buyer pays $160k for the house2)

Prohibits broker from misrepresenting facts, withholding facts, etc.1)Broker must exercise fidelity and good faith, and cannot put himself in a position antagonistic to his principal's interest2)Failure to do so renders the broker liable to the principal for whatever loss the latter may suffer as a consequence thereof and precludes recovery of a commission for his services

3)

Court says that the broker has a fiduciary duty toward their client - to operate in the best interest of the person they are representing3)

LICARI v. BLACKWELDER (App Ct CT 1988)iv.

By entering into a listing contract with the listing broker, the seller empowers the broker to serve as the seller's agent inselling the property

1)Listing brokers - contract with the seller to sell the propertyv.

Have a more indirect relationship with the seller, and receive their commission by splitting the listing broker's commission1)Commonly a prospective buyer initiates the relationship with a selling broker, who then introduces the buyer to sellers and listing brokers

2)

Selling brokers often work with prospective buyers over long periods of time and develop personal relationships with them - 3/4 of buyers believed tat the selling broker they had been working with was representing them and not the seller

3)

Selling brokers - introduce the buyer to the seller's propertyvi.

While brokers have to deal fairly with both buyers and sellers, they must work entirely on behalf of their principals (in this case sellers)1)Selling brokers even have the duty to report to the seller any information that the buyer shares with the selling broker2)

In traditional brokerage relationships, a listing broker's sole duties owe to the seller, and so too for a selling broker, wh ose legal relationship is that of a subagent

vii.

Owe fiduciary duties to prospective purchasers1)Typically share the commission earned by the listing agent when the property is purchased - however, since buyers' brokers are not in privity with the listing broker or the seller, listing agents are not compelled to share their commissions with buyer's brokers

2)

Buyer's brokers - a relatively recent but increasingly common practice in residential real estate transactions is for prospective buyers to hir e their own agents to help conduct their search for real estate

viii.

Economic theory would predict that the shift from seller's agency to buyer's agency would enhance buyer's bargaining power and possibly improve efficiency because buyers would reveal more information to their brokers than would otherwise be the case

1)

Evidence showed that after passage of the law, prices generally fell, as did the average time needed to sell a house2)

Recent GA law eliminated automatic subagency and required agents to disclose to prospective purchasers the full scope of dive rse agency relationships available to them - including buyer's agency

ix.

Broker can not be exclusively loyal to any one party1)

Brokers' duties become complicated if both the buyer and seller in a transaction hire the same person - a broker in this situation is referred to as a dual agent and owes both the buyer and the seller the same duty of loyalty and good faith

1)

Many states permit dual agency as long as the dual agent reveals her dual agency to both parties2)

Dual agentsx.

Law in some states requires brokers to disclose to buyers, in writing, that they are the seller's agent and not the buyer's1)In many states, brokers must also disclose to the buyer any material defects known by the broker and unknown to the buyer2)

Disclosure requirementsxi.

Someone who expresses a desire to buy the property by making an offer for the specified asking price and has sufficient asset s to proceed with the successful purchase of the property

1)Traditional rule is that a broker earns a commission upon bringing to the seller a buyer who is ready, willing, and able1)

Broker is entitled to earn a commission even if the sale fails to close2)Owner can circumvent the dangers of the traditional rule through contract3)Custom in the industry is that brokers are not actually paid their commissions until closing - most brokers decline to pursue a commission when the transaction fails to close

4)

When a commission is duexii.

BrokersC.

Listing agreement is an employment contract between a real estate broker and a seller - usually in writingi.If the broker satisfies the obligations set forth, the seller pays the broker a commissionii.

Least protective listing that a broker can secure1)Seller retains the right to sell the property herself or use a different broker without paying the open listing broker a commission2)

Open listingiii.

Permits only one broker, the exclusive agent, to sell the property for a specified period of time1)Exclusive agent earns a commission for the sale of the property if she secures a buyer, or even if a separate broker secures a buyer2)Brokers do not have to compete with other brokers during the period of the exclusive listing, and owners can avoid paying theexclusive agent a commission if the owner directly sells the property herself

3)

Exclusive-agency listingiv.

The most protective listing a broker can secure1)Owner must pay that broker if any buyer purchases the property during the specified duration of the listing, no matter who found the purchaser

2)

Vast majority of listing agreements for residential properties3)

Exclusive-right-to-sell listingv.

Types of listingsD.

Marketable titleE.

Outline Page 30

Implied condition of a contract of sale is that the seller must convey to the buyer a marketable titlei.If the seller cannot convey a marketable title, the buyer is entitled to rescind the contractii.Marketable title - a title not subject to such reasonable doubt as would create a just apprehension of its validity in the mind of a reasonable,prudent and intelligent person, one of which such persons, guided by competent legal advice, would be willing to take and for which they would be willing to pay fair value

iii.

Only 2-story house allowed on lot - restrictive covenant1)House must be more than three feet away from the property boundary - zoning ordinance2)

Plaintiff enters into a contract to buy a house and discovers problems:1)

Covenant is considered to be an encumbrance, and unless there is contractual language that the buyer accepts the property w/ encumbrances - renders the title to the land unmerchantable (p. 481)

1)

Title is unmarketable if it exposes the party holding it to the hazard of litigation 2)

If the property is subject to restrictive covenant, even if property meets that covenant, is the title marketable? 2)

If the property meets the ordinances title is still marketable1)If property is subject to zoning ordinance, even if property meets requirements, is the title marketable?3)

Even if the defendant changed the house to comply with the ordinances - any changes in the house would compel the purchaser to take something that he did not contract to buy

4)

Still no good marketable title when a covenant is violated1)Need language in the contract to say the buyer takes it subject to restrictions/covenants/etc.5)

Plaintiff here didn't realize he was taking on some risk while he was getting into the contract1)

Trying to avoid buyers getting themselves into a situation where they are buying something and could put themselves into a situation where they could be sued

6)

Easier for a buyer to figure out what the zoning ordinances are 1)Seller ought to know what restricts his own property with regard to covenants - but with zoning ordinances, seller and buyer have access to the same knowledge

2)

We allow a buyer to get out if there's a covenant on the property, but don't allow them to get out in the case of a zoning ordinance7)

LOHMEYER v. BOWER (Sup Ct Kansas 1951)iv.

Court might say that it's good enough1)In 90% of circumstances, yes, but conceivable that you might get yourself into a situation where the next transaction falls apart2)

Does title insurance = marketable title?v.

Title is generally marketable if the seller has a fee simple, the title is free from any encumbrances, and the buyer is entit led to possessionvi.

Marketable titleE.

Both purchasers and sellers of real property are normally entitled to specific performance as a remedy for the other's breach of contracti.

The buyer is viewed in equity as the owner from the date of the contract 1)Seller has a claim for money secured by a vendor's lien on the land - seller is also said to hold the legal title as trustee for buyer2)

Doctrine of equitable conversion - if there is a specifically enforceable contract for the sale of land, equity regards as done that which ought to be done

ii.

Some states hold that from the time of the contract of sale of real estate the burden of fortuitous loss is on the purchaser,even though the seller retains possession - supposedly based on equitable conversion

1)

Some courts have declined to apply equitable conversion and have held that the loss is on the seller until legal title is conveyed2)Other states put the risk of loss on the party in possession3)If the purchaser has the risk of loss, and the seller has insurance, in most states the seller holds the insurance proceeds as a trustee for the buyer

4)

Risk of lossiii.

Equitable conversionF.

Concern that people might be attracted to this house, might come and take pictures, come by the house at all hours, etc.1)Has already inspected the house and contracted to purchase2)

Plaintiff discovers that he had entered into a contract to purchase a house that was known to be haunted1)

"…mere nondisclosure does not constitute actionable misrepresentation"1)Caveat emptor - minority rule - take the property as-is in the absence of any affirmative misrepresentation by the seller2)

Background law of NY for seller to disclose defects2)

Defects that are undiscoverable during the inspection process are beyond the realm of NY's caveat emptor law1)As-is clause only applies to defects that are reasonably discoverable and where fraud exists2)Distinguishing on the facts - as-is clause applies only to physical defects3)

Court establishes an exception where there is really no way a buyer could discover a defect3)

STAMBOVSKY v. ACKLEY (NY Sup Ct 1991)i.

Even in NY, Davis' could get out of the contract - affirmative misrepresentation1)Johnsons knew the roof leaked, but did not disclose to Davis' - Davis' want to get out of the contract1)

What constitutes knowledge of a condition?1)What constitutes disclosure? Probably want to put it in writing2)What constitutes something that materially effects the value of the property?3)

For example - underground plumbing? Readily observable to buyer, or buyer's inspector, etc.?a)What does it mean to be "readily observable?"4)

New standard here is that when a seller knows of facts that materially effect the value of the property that are not readily observable -they are under a duty to disclose to the buyer

2)

Lots of litigation over these questions - CA in particular has lots of litigation over these questions3)

JOHNSON v. DAVIS (Sup Ct Florida 1985)ii.

In most states statutes have been enacted requiring the seller to deliver to prospective buyers a written statement disclosin g facts about the property

iii.

An objective test of whether a reasonable person would attach importance to it in deciding to buy1)A subjective test of whether the defect affects the value or desirability of the property to the buyer2)

In each jurisdiction requiring disclosure, the defect must be material to be actionable. One of two tests are appliediv.

In CA sellers must disclose, among other things, neighborhood noise problems v.Duty to disclose statutes have partially been promoted by brokers, who were being held liable for nondisclosures vi.Generally, an as-is clause will be upheld if the defects are reasonably discoverable and there is no fraudvii.

Duty to disclose defectsG.

Outline Page 31

Generally, an as-is clause will be upheld if the defects are reasonably discoverable and there is no fraudvii.

Suits on the warranty can arise only after the closing has taken place and the plaintiff has accepted the deedi.

Issue - whether a subsequent purchaser of real property may sue the builder/contractor on the theory of implied warranty of workmanlike quality for latent defects which cause economic loss, absent privity of contract

1)

Court holds that privity of contract is not necessary for a subsequent purchaser to sue a builder/contractor under an impliedwarranty theory for latent defects which manifest themselves within a reasonable time after the purchase and cause econ harm

2)

Latent defects in a house will not manifest themselves for a considerable period of time1)We are an increasingly mobile people - a house might be resold after building within a short period of time2)Ordinary buyer is not in a position to discover hidden defects3)Builder/contractor will not be unduly burdened - they should be producing a quality product anyway4)Mitigation of risk - builder-vendor is better positioned to guard against risk5)

Reasoning 3)

Court also says that economic recovery is allowed in implied warranty for subsequent purchasers4)Reasonable period of time should be controlled by standard of reasonableness and not an arbitrary time limit5)

Must have performed in a workmanlike manner and in accordance with accepted standards - customary standard of skill and care1)Plaintiff must show that the defect was caused by the defendant's workmanship6)

LEMPKE v. DAGENAIS (Sup Ct NH 1988)ii.

Suits against a person who sells his home to another ordinarily must be based on fraud, misrepresentation, or failure to disclose1)Warranty of quality is not normally applied where the seller is not a merchant of housingiii.

Implied warranty of qualityH.

Damages1)Retention of the deposit (sellers) or restitution of the deposit (buyers)2)Specific performance of the contract3)

In the event that the contract for sale is breached, three remedies are available to the non -defaulting partyi.

Generally the winner may elect which remedy he or she prefersii.

Lees are the buyers - they enter into a contract to buy the Jones' house for $610k - give the Jones a $6k deposit1)Buyers subsequently tell the Jones' that they don't want to buy the house due to financial reasons - willing to give the Jones' the deposit2)

Typically going to be close to $0 - market value probably doesn't change very much in the relatively short period of time between the contract and the buyer backing out

1)

This benefits buyers - makes it pretty easy to back out of the contract2)

Court awards the sellers $70k in damages - measure of damages is the difference between the market prices and the sales price when the breach occurs

3)

Why do the buyers lie about the reason? Probably don't know the rule - they actually had a pretty good case for small damage - instead, buyers get stuck with punitive damages because they behaved badly

4)

Sellers want the measure of damages to be the market value at the time they could resell ($70k)5)

Lawyer for the sellers stipulated that the market value at the time of the breach was $610k - probably a stupid thing to do1)Problem with NM rule is that it somewhat turns into a game of "he said, she said"6)

JONES v. LEE (Ct App NM 1998)iii.

Line in the contract says that "if this contract is voided by either party, the escrow monies shall be disbursed pursuant to the written direction of both parties"

1)Pirnie's contract to buy the Kutzin's house for $365k, and pay a $36k deposit1)

Kutzins actually sell their house for $352,500 - damages are actually $17,325, but Kutzins want to keep the entire deposit2)

Otherwise, they would be unjustly enriched1)Efficiency of breach - costs less to breach the contract than it would to go through with it2)Court here is saying that we don't want to discourage people from getting out of a deal that doesn't work for them - it's inefficient for them to have to pay more in damages than they should

3)

Court decides that Kutzins cannot keep entire deposit - NJ approach is the minority approach3)

If the rule is that you can keep any 10% deposit - much less litigation1)Most jurisdictions will allow for forfeiture of a deposit - mostly 10%, but sometimes larger4)

KUTZIN v. PIRNIE (Sup Ct NJ 1991)iv.

Judicial order that a breached contract be fulfilled as originally agreed - very common in the case of contract for the sale of land1)Behind the rule - each piece of real estate is unique, making damages an inadequate remedy2)Some courts have ruled the specific performance isn't a matter of absolute right but rather in discretion of the trial court - parties who want specific performance have to prove that money damages would be an inadequate remedy

3)

In the vast majority of cases, it is the seller who is seeking specific performance4)

Specific performancev.

Breach of the sales contractI.

Courts have generally held that grantor is still liable1)

Problems in cases of adverse possession - can the purchaser sue the seller for breach of the deed if they had been adversely possessed against - is it within the acts of the grantor, or acts of others?

1)Special warranty deed - warrants only against the grantor's own acts, not the acts of othersi.

General warranty deed - warrants title against all defects in title, whether they arose before or after the grantor took titleii.Quitclaim deed - contains no warranty of any kind - merely conveys whatever title the grantor hasiii.

Seller is not liable1)Forged deed - someone else signs the signature of the selleriv.

Deed procured by fraud is voidable between the grantor and the grantee - any subsequent purchaser is protected as long as they didn't know about the fraud

1)Fraud - when the seller has actually been duped in some way v.

Measure of damages for breach - return of all or a portion of the purchase price1)Covenant of seisin - granter warrants that he owns the estate that he purports to convey1)

Covenant of right to convey - basically the same thing - but you might have title and not be able to convey it2)

Make sure that buyer takes property subject to encumbrances1)

Covenant against encumbrances - warrant that no encumbrances exist, except those actually listed in the deed, encompassed in the title of record

3)

Present covenants - breached at the time the deed is conveyedvi.

The DeedJ.

Outline Page 32

Make sure that buyer takes property subject to encumbrances1)

If the encumbrance is easily removable, the measure of damages is the cost of removala)If the encumbrance is not easily removable, the measure of damages is the difference in value between the land with the encumbrance and without the encumbrance

b)

In all cases damages are limited by the total price received by the warrantorc)

Measure of damages for breach:2)

Covenant of general warranty - grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title

1)

Covenant of quiet enjoyment- similar to above2)Covenant of future assurances - grantor promises to execute any other documents required to perfect the title3)

Future covenants - breached at some future timevii.

Defendant's brother subdivides the land and later transfers it to his sister (defendant) by a quitclaim deed1)Sister transfers by general warranty deed to plaintiff2)

Problem with the property is that part of the house is on filled land in violation of the CT law1)Property is located right next to a marshland - defendant built a bulkhead - protection to keep the water out3)

Instead, plaintiff chooses to sue, saying that defendant breached warranty against encumbrances1)Seems like the application might have led to the court saying the encroachment was ok, or making minor modifications2)

CT informs the plaintiff of the violation - tell the plaintiff that she could have filed an application with the DEP4)

Does a latent violation of a land use statute that existed at the time of the conveyance constitute an encumbrance?5)Generally speaking, finding a zoning violation before the signing of the contract still gives you the ability to back out6)Court says that the problem of zoning violations can be handed quite easily by including protective language in the contract and insisting on appropriate provisions in the deed - we don't really want to keep a seller on the hook long after they sell

7)

FRIMBERGER v. ANZELLOTTI (Sup Ct CT 1991)viii.

Contractor never obtained a certificate of lawful completion nor a certificate of occupancy - sellers relied upon the contractor and later sold the property - court comes out in the opposite way

1)

If you see a circumstance with something that requires a certificate of completion or something along those lines that would be present in the title - you can hold the seller liable

2)

Any substantial violation of municipal ordinances is an encumbrance in violation of the deed covenants if the seller - either a builder or a subsequent owner - can determine from the municipal records that the property violates local zoning or building regulations

3)

BIANCHI v. LORENZ (Vt 1997 - notes after Frimberger)ix.

Mortgagors - party taking out the loani.Mortgagees - the lenderii.

What happens is that property owners can walk away from their mortgages because they aren't liable for the difference1)

During great depression - government stepped in to pass anti-deficiency statutes - if you're foreclosed upon, and the bank sells the property and the sales price is less than what you owe on the mortgage - prevents the bank from coming after you personally for the difference

1)Equitable rules have developed over time to protect homeowners iii.

This method of foreclosure is quicker and less costly than judicial foreclosure1)

Deed of trust - recognized in a majority of jurisdictions - borrower conveys title to the land to a person (usually a third person but may be the lender) to hold in trust to secure payment of the debt to the lender. In a deed of trust, the trustee is given the power to sell the land without going to court if the borrower defaults

iv.

A second mortgage is subject to the prior rights of the first mortgage - if the sum brought upon foreclosure sale is insufficient to pay off both the first and second mortgages, the first mortgage is paid off first

v.

If the foreclosure is through a judicial proceeding, the sale price is ordinarily not challengeable unless it shocks the conscience of the court

1)

When the foreclosure is a private sale, courts may scrutinize the sale more closely to assure that the mortgagee acted fairly, and may deny a deficiency judgment when there are sufficient grounds to set the sale aside

2)

Foreclosurevi.

Couple bought house in 1966, refinanced in 1980 - then husband loses job, Murphys fall 7 months behind on mortgage1)Murphys pay the 7 months they are in arrears, but the bank moves into foreclosure because they haven't paid costs2)

If they had gotten more than the $27k, the Murphys would have been able to recover the differencea)Murphys sue , claiming that bank didn't exercise good faith and due diligence in obtaining a fair price for the property1)

Lender ends up buying the property from $27k, which is just enough to recover the fees - Same day as the foreclosure sale, William Dube buys the property for $38k

3)

Issue is whether a reasonable man in the lender's place would have adjourned the sale1)

Whatever is customary for the locality and local market conditionsa)Not enough to simply put a legal notice in the newspaper b)

Need to use ordinary methods to make buyers aware as if you were an owner selling land2)

Seems like the court doesn't like that the Murphys are losing so much money3)

Court said that there was no due diligence here4)

MURPHY v. FIN. DEV. CORP. (Sup Ct NH 1985)vii.

Maybe need to show that they will set an "upset" price for at least part of the Murphy's investment1)Might not hold to the standard that a real estate broker would be held to in order to get the highest price possible2)

Fair price - dependant on a process that's going to ensure a decent price1)

Fair price and a fair market price is different 2)

Bank would probably have to pay for appraisal - probably have to know what the market would pay1)Set a reserve price - maybe a discount off the fair market value but still not far2)Fair price - probably less than fair market value, but enough to cover costs3)

What do you need to do as a lender to establish a fair price?3)

Difference between fair price and fair market valueviii.

The MortgageK.

An arrangement whereby the purchaser takes possession and the seller contract to convey title to the purchaser when the purch aser has paid the purchase price in regular installments over a fixed period of time

i.

Little functional difference from a mortgage - but the installment land sale contract, which provides financing by the seller, not by an institutional lender, is widely used in transfers of real estate, particularly low -cost housing and vacation lots

ii.

Includes a clause providing that the buyer forfeits the land and the payments if the buyer goes into default - sellers hope to avoid expensive iii.

Installment land sale contract/contract for deedL.

Outline Page 33

Includes a clause providing that the buyer forfeits the land and the payments if the buyer goes into default - sellers hope to avoid expensive and time-consuming judicial foreclosure

iii.

Borrowers have paid about 1/2 of the principal amount, when the principal breadwinner is injured the seller wants to keep all the money and the property

1)

Question is whether this is more like a mortgage or just a regular contract2)

Borrower has equitable title even if the contract says that the seller has legal title1)

In the case of the regular mortgage, would have to extinguish the title through foreclosurea)Same in this case - have to have proper proceedings - borrower is entitled to get things like equity backb)

Consequence - borrower has equitable ownership interest that needs to be extinguished before the sellers can take possession of the property

2)

Court says that they are going to think about this differently - contract says that the seller retains legal title, but the court doesn't like that

3)

For many Americans, home is the largest thing they own1)Provides someone's shelter - want to be careful in allowing someone to kick them out of their home and take all their money at the same time

2)

Why not treat this case as contract law?4)

Courts generally don't like to see forfeiture of property5)

BEAN v. WALKER (NY Sup Ct 1983)iv.

TITLEXII.

Before buying, a purchaser should search (or have a professional search) the public records office to discover the evidence o f title recorded in that office

i.

From the evidence of title in the records office, a professional will conclude who has the fee simple title to land, which ma y be encumbered with a mortgage or servitude - relying on the professional's opinion of title, party decides whether to purchase land

ii.

In a few localities, title registration is available - the state registers title and issues a title certificate to the owner, which is reissued to each new purchaser of the property

iii.

At common law, if someone conveyed a deed (O to A, subsequently to B) - A would prevail, B could only recover for fraudiv.

Various states change priority depending on what approach they take1)Notice jurisdiction - subsequent purchaser prevails only if B had no notice of the conveyance to A2)Raised notice jurisdiction (CA) - protects bona fide purchaser only if she had no notice and records first 3)

Recording statutes changed the common law priority - designed to put people on notice v.

In generalA.

In every American state, statutes provide for land title records to be maintained y the county recorder in each countyi.Recording acts do not affect the validity of a deed - a deed is good and valid without recordationii.Under the recording acts, a subsequent bona fide purchaser is protected against prior unrecorded interest iii.Documents that get recorded - deeds, mortgages, sometimes leases, sometimes options to sell, judgment or decree effecting title lis pendens, wills, liens (judgment, tax liens, etc.)

iv.

The recording systemB.

Tract index - indexes documents by a parcel identification number assigned to the particular tract - does not exist in most statesi.Grantor-grantee index - indexes are kept for grantors and grantees, indexed alphabetically and chronologically under grantor/grantee's surname

ii.

How to search title - pp. 561-565iii.

Judgment obtained by Orr against William Elliott - Orr's lawyer misspelled Elliot's name twice in recording the judgment (William Duane Elliot, William Duane Eliot)

1)

If the judgment was correctly recorded, Elliott would have had to pay off the judgment out of the proceeds of the sale2)Elliott proceeds to sell the property to Byers - if Byers knew there was a lien on the property, he presumably would have wanted Elliott to pay off the lien first

3)

Orr's lawyers are suing Byers to foreclose the lien - question is - does Byers have record notice of the lien?4)

Court rules that the burden is on the judgment creditor (Orr) to take appropriate action to ensure that the judgment lien wil l be satisfied - they are the ones who spelled the name wrong in the first place, and court isn't going to change the law

1)2 innocent parties here - Orr and Byers - they are both in a bad situation5)

If the record of a name spelled one way should directly suggest to the ordinary mind that it is also commonly spelled anotherway, the searcher should be charged with whatever the record showed in some other spelling under the same capital letter

a)

Green - it is common knowledge that proper names are spelled in a variety of ways, and everybody is presumed to have such knowledge

1)Many states find the other way in this case6)

ORR v. BYERS (Ct App CA 1988)iv.

The indexesC.

EASEMENTSXIII.

Arise out of interactions between parties that are not contractually basedi.In modern day, the majority of restrictions are governed by statutes & explicit documents setting forth what rights/responsib ilities are of property owners (neighborhoods use CCR's- covenants, conditions, and restrictions)

ii.

Revocable at any time1)License- permission to enter real property possessed by another1)

Example: timber or mineral rights1)Even with this right, you need an irrevocable license to go onto property to take items2)In some cases, a license can ripen into an easement3)

Profit- right to take something off of property of another2)

Types of servitudesiii.

In GeneralA.

Outline Page 34

Classified as real covenants and equitable servitudes1)

If it is violated, and the remedy sought is damages, then it is a real covenant; if the damages sought is an injunction, then it is an equitable servitude

i)Example: covenant to not use land for commercial purposesa)

However, recent work and trends have moved toward consolidating real covenants and equitable servitudes into one category: servitudes

b)

Historically, difference is only in the remedy sought (enforceable at law v. enforceable in equity)2)

Easement- permanent right to enter property possessed by another3)

Developers saw benefit in placing restrictions on property use and thereby increasing property values for homeowners1)Prior to zoning (1920s), this was the primary method of land use restriction- private owners could also form restrictions, but were less likely to get together and coordinate than developers

2)

In addition, covenants were historically used for other, less admirable purposes (racial restrictions)3)

Why have servitudes?iv.

Dominant estate - property that enjoys the use of the easement1)

If the dominant tenement and the servient tenement come into the same ownership, the easement is extinguished altogether1)Servient estate - property that is burdened by the easement2)

Ex.: I have the right to walk over my neighbors property - easement is attached to the fact that I live on the property next door1)Appurtenant - attaches to a particular piece of property3)

Ex.: Utility company easement over property to access electric wires - Easement attached to their company, not a piece of property1)Transferable when they are commercial in nature - If utility is sold, easements can be transferred to new entity2)However, personal in gross easements are not transferable - If I have the right to swim in your pool, I can't sell that right 3)

In gross - does not attach to a piece of property (based instead on user)4)

With some exceptions (estoppel, prescription)1)Generally speaking, easements need to be in writing and subject to Statute of Frauds5)

Easement holder cannot bring a possessory action against third parties - can't eject another person who is walking across property that you have the right to walk across

6)

Affirmative easement (most common) - Active use of someone else's land7)

Historically, negative easements were not recognized by courts, as they could not be ascertained by merely viewing the land1)

Negative easement (limited & rare) - Preventing someone else from making use of their land that they would otherwise be permitted to make

8)

Express - in writing, must comply with Statute of Frauds1)Estoppel - Holbrook2)Prescriptive - similar to adverse possession, have the right to use an easement after satisfying several doctrinal requirements3)By Necessity - come into existence due to landlocked property4)

Types of easements9)

Easement termsv.

Taylors have historically used road by permission of Holbrooks, build host on land at a cost of $25k1)In 1970, Holbrook wants written document that relieves him of any liability related to use of the road and $500 - Taylor refuses to pay - sues for right to use roadway

2)

Chronology is important, as there is no written document governing this easement1)

Under Coase, parties should conceivably be able to reach the efficient outcome and bargain; however, most likely due to hostility between families, they go to court

2)

Easement is appurtenant- it is attached to the fact that the Taylors live next door3)Not an easement by prescription-- since there seems to be permission, it cannot be characterized as hostile, and it is also not uninterrupted & continuous (between 1949 and 1964)

4)

Difficulty with showing prescriptive easement- owner must know of actual use, but not have given permission (unlikely if you are neighbors with someone)

5)

Normally, an easement is required to be in writing, so prior to this suit, Taylor only has a license6)

Acquiescence by servient property owner, and reliance on acquiescence by dominant property owner shown by expenditure of money on improvements or buildings

1)

As Taylor has satisfied this requirement, he has an easement by estoppel2)

Requirement for easement when no writing is present:7)

Award property rights to Holbrook1)Award property rights to Taylor2)Allow Taylor to use road but pay Holbrook for use of road (liability rule)3)Allow Taylor to use road, but no payments to Holbrook (court decision)4)

Other conclusions the court could have come to:8)

Easements by estoppel can be terminated if circumstances change significantly (i.e. if a house burns down, etc.)9)Usual rule is that easement can continue to be used for as long as a person is still realizing their expenditures10)

HOLBROOK v. TAYLOR (Sup. Ct. KY 1976)vi.

Restatement (Third) of Property - The expectations that create the servitude will also define its scope and terms - the relevant expectations are those that reasonable people in the position of the landowner and the person who relied on the grant of permission or represe ntation would have had under the circumstances

vii.

Implied grants - person who subdivides the property must grant easement to person who takes ownership of subdivided property in need of easement

1)

Often, person who requests easement has higher burden of showing necessity here, as they could have taken care to retain easement when they subdivided the property

1)Reserved - person subdivides the property but retains an easement for personal use 2)

Easement by necessity (Othen) - Prior to severance, one part of the parcel was apparently, continuously and permanently used as an easement

1)

Easement by prior use (Van Sandt) 2)

Types of implied easements3)

Courts will frequently imply easements in situations where property is subdivided, and some showing is made of necessity i.

Determination of easement can be based on theory of what original owner would have wanted, as well as for public policy reaso ns (original intentions)

ii.

Implied EasementsB.

Outline Page 35

intentions) ii.

Quasi-easement - when a property owner utilizes an easement on their own propertyiii.

Land has to have been owned by a single person1)Parcel has now been severed/subdivided2)Before the severance, one part of the parcel was apparently continuously and permanently used as an easement (actually a quasi-easement - you can't have easement on your own property)

3)

Easement is implied to protect the probable expectations of the grantor and grantee that the existing use will continue afterthe transfer4)

Doctrinal requirements to establish an easement implied by prior usei.

Late 1903/early 1904 - city of Chanute constructed a public sewer west of lot 19 - private lateral drain was constructed from the Bailey residence on lot 4 running in a westerly direction through and across lots 20 and 19 to the public sewer

1)

Lot 19 - Jones - has knowledge of sewer - eventually Van Sandt gets this lot1)Lot 20 - Murphy - has knowledge of sever - eventually conveys to Royster2)Lot 4 - Bailey - eventually conveys to Gray3)

1904 - subdivision2)

March, 1936 - Van Sandt discovers his basement flooded with sewage - claims that defendants have no right to run the sewage pipe across his land

3)

Bailey is the grantor - she created the subdivision4)

Easement by reservation (as opposed to by grant)1)Bailey was using sewage line as a quasi easement - there was prior use5)

Is there an alternative - another way to get to the sewer line?1)

Something less than strict necessity - court is looking at if it is reasonably necessarya)Court agreed that the easement was necessary here 2)

Is the easement necessary?6)

Court says that there should have been knowledge here - but this is a pretty expansive view of knowledge - apparent is stretched pretty far here

1)Apparentness of the easement is questionable here7)

Court holds that an easement by implication was created under the facts8)

VAN SANDT v. ROYSTER (Sup Ct Kansas 1938)ii.

Easement implied by prior useC.

Implied if the land was in common ownership1)Severed into separate lots by owner2)Severance creates the necessity for an easement - no requirement of prior use - Prior to severance, one part of the parcel was apparently, continuously and permanently used as an easement.

3)

Split of opinion over whether necessity is defined as strict necessity or reasonable necessity (majority)4)

Doctrinal requirements to establish easement by necessityi.

Implied easement can be harder to prove because you have to show prior use1)On the other hand, easements by necessity can be hard to prove in the jurisdictions that require strict necessity 2)

Easement by necessity v. implied easements ii.

Easement by necessity typically motivated by a public policy rationale - seems appropriate to apply because it must be what original grantee intended - why would they want a lot to be landlocked?

iii.

Easement by necessity only endures so long as it is necessary - if there is another way out from a landlocked parcel the easement ceases iv.

Pre-1896 - Hill owns everything - more expansive than the land eventually in question1)1896 - 100 acres is conveyed, ends up with Rosiers2)1897 - 60 acres are conveyed - ends up with Othen3)Same day in 1899 - 53 acres are conveyed - end up with Othen, 16 acres are conveyed - end up with Rosier4)

Owners of the 100 acres maintain the lane1)Othen sues for easement when land is flooded, muddy, and un-useable2)

Othen has been used fenced lane across the bottom of 100 acres, and a path across the 16 acres5)

This is the question - when Hill divided the parcel, did it create the necessity? Did it land lock the parcel at the time?1)

Witnesses at the time - but they may be old /deadi)Better research of deeds/mapsii)

How would he prove it?a)Problem for O is that it is possible the severance did not create the necessity - burden is on O to establish that it did2)

O is out of luck on easement by necessity, probably out of luck on prior use3)

Question of element - severance causes the necessity6)

Necessity not a convenience7)

From an efficiency standpoint, doesn't make sense to penalize Othen by making his land lockeda)Fairness argument - Othen relied pretty extensively on the easementb)

Argument that we should not stick by strict doctrinal rules (Singer article)1)Court here finds against Othen8)

Texas courts don't recognize easements by estoppel, but Othen would have had a pretty decent claim9)

OTHEN v. ROSIER (Sup Ct TX 1950)v.

Easements by necessityD.

Need to show actual use 1)Open and notorious2)Continuous use3)Needs to be under claim of right - hard to establish - frequently owner knows about the use4)For a statutory period - typically the same period of time as adverse possession (CA - 5 years)5)Can be some notion of exclusivity6)

Elementsi.

If you have an easement to walk over a path, doesn't mean you can drive over it1)Easement by prescription isn't for all purposes - only for reason that led to prescriptive rightii.

Very purpose of common law doctrines like adverse possession and prescription are - at some point we can say that enough time has passed that we shouldn't be litigating these claims

iii.

Prescriptive EasementsE.

Outline Page 36

What kinds of variations are permitted when times/circumstances change?i.When is the dominant owner misusing the easement by going beyond the scope of what the easement was granted for in the first instance -usually talking about express easements

ii.

Generally speaking, if the use doesn't increase the burden on the servient estate holder, and is fairly consistent with use p reviously agreed on, court will say yes

1)Whether the use itself is of a kind contemplated by the grantor1)

Court typically ask one of two questions - start by looking at the intent of the parties in entering into the express agreement to see if this kind of use is consistent with the intent (how much was paid for easement, what was the use at the time, etc.), or, j ust look at what's reasonable

1)

Generally, courts find that in the absence of an express agreement, some normal increase in the use of the easement is within the intent of the parties

2)

Increase of use in the easement (even for same purpose)2)

Can the three households now use the easement that crosses the servient estate?1)General rule - yes - can subdivide the easement subject to reasonableness2)Subdivision is common, so courts have generally been willing to allow the subdivision of easements3)

Whether the dominant estate gets subdivided3)

Rather than subdividing, you add to the parcel4)

Generally speaking, the scope questions come up in 4 different waysiii.

Owner of parcel B has an easement across parcel A - owner of parcel B then acquires parcel C with the intent to build a house straddling the property line between B and C

1)

Doesn't seem to make sensea)Rules v. standards argument - if the property laws are clear, we avoid disputesb)Might assume the burden would increase - for example, owner of B sells parcel C to someone else and they think that they can then use the easement

c)

Easement itself is express - this is what the parties clearly intended - the written agreement doesn't say any more than that d)

Textbook law - not allowed to use easement to access the extra parcel - in this case, wouldn't be allowed to use the easement to access parcel C

1)Owner of parcel A tries to get an injunction against the owner of parcel B from using the easement for both parcels B and C2)

Brown - access to easement for Ca)Voss - enjoin Brown's use of easement for Cb)

Property rule 1)

Brown - access to easement, has to pay damages to Vossa)Liability rule2)

Property rules v. liability rules3)

Court gives Brown access, makes him pay $1 in damages to Voss 4)

BROWN v. VOSS (Sup Ct WA 1986)iv.

Most courts will actually enjoin the use of an easement to get to an extra parcelv.

Old railway lines were being used for hiking paths1)

Railroad dug up lines, haven't made an attempt to put anything else there1)Question of whether railroad abandoned the easement - if they did, the easement expires2)

Judges seem sympathetic to Presaults and find that the use of the former rail tracks as trails constitutes a taking - no telling what the level of foot traffic is

3)

PRESAULT v. UNITED STATES (US Ct App Fed Cir 1996)vi.

Four Hills Village - community for 4 unrelated individuals living with AIDS1)Plaintiffs in the case live on the same street - restrictive covenant says that no house will be used for anything but single family residences for non-commercial use

2)

Defendant counterclaims, saying that covenant violates FHA3)

Traffic wasn't one of the covenant provisions so court doesn't really address it - the community had the chance to put in a traffic position and didn't

1)

Look at whether it is selectively enforceda)Look at possible violation of FHAb)

If there was a covenant provision2)

Lawyers for plaintiffs do establish that there is an increase in traffic4)

One reason - don't want traffic1)Maybe a little disingenuous on court's part to brush off the traffic issue like this2)

What's the purpose of single family restrictive covenants?5)

No question that having AIDS is a handicapa)Unlawful to discriminate in the sale/rental of housing or otherwise make it unavailable any denial because of a handicap1)

Discrimination includes a refusal to make reasonable accommodations in rules, policies, etc.2)

Could probably make a decent claim here - could probably show that selective enforcement of the covenant is motivated by ill will

i)Establish discriminatory intenta)

Focuses on whether a defendant treated handicapped individuals differently from other similarly situated individuals, and a disparate impact results

i)

Burden is on plaintiff who is claiming discriminatory intent to demonstrate it; burden then shifts to defendant to prove absence of discriminatory effect

ii)

Increased traffic and other factors would come into play in this discussion; defendant needs to show that there is a legitimate & justifiable reason for the disparate impact

iii)

Discriminatory effect claim (disparate impact)b)

Defendant must at least make reasonable attempts at accommodating handicapped individualsi)Analysis would include whether or not reasonable accommodations are feasible, and prior actions taken/not taken by ii)

Failure to provide reasonable accommodationsc)

3 ways to establish a claim:3)

FHA6)

HILL v. COMMUNITY OF DAMIEN OF MOLOKAI (Sup Ct NM 1996)vii.

Scope of EasementsF.

Outline Page 37

Defendant must at least make reasonable attempts at accommodating handicapped individualsi)Analysis would include whether or not reasonable accommodations are feasible, and prior actions taken/not taken by defendant

ii)

Most litigation under Fair Housing Act focuses on reasonable accommodationsiii)In this case, court finds that restrictive covenant has effect of denying housing access to handicapped residentsiv)

Court finds that community can keep operating the house7)

ZONINGXIV.

Remember to look at state action v. private action!i.Has an active role in controlling land useii.Could argue that zoning is about trying to control externalities - trying to get property owners to act in their best interest when they otherwise might not

iii.

Envisioned small towns, green belts, etc.1)

Idea that segregation of uses is desirable - different uses harm each othera)Do the assumptions result in unintended consequences?b)

Central tenants adopted across the country2)

Central goal is to provide for "wholesome housing" - setbacks, minimum lot size, etc. - Idea that single family housing brings with it small town values

3)

Open space is desirable for healthy living - should surround both cities and houses4)Idea that good planning protects against change and maintains the status quo5)Failed to anticipate the need for density6)Also - is homogeneity a good thing?7)

Social theory behind Euclidian zoning - has roots in garden city movement1)Euclidian zoning - separate land uses for conflicting usesiv.

Preservation of open space frequently gets undermined1)Zoning frequently doesn't cure the problems it sets out to curev.

Power to zone typically comes from police power - authority to enact or enforce regulations for health or safety1)

Zoning is typically left to a planning committee 1)Typically zoning power is regulated to different localities - very local function - zoning enabling acts2)

Use zoning - limits kind of uses within a particular zone - usually cumulative1)Area zoning - size of lots, heights of buildings, setback requirements, etc.2)

Generally speaking - two types of zoning3)

Provide some foresight for the future growth of a municipality1)Most states require that changes in the zoning ordinance be consistent with the general plan2)

Most states require municipalities to enact a general plan - vision of how municipalities are supposed to develop4)

CA tends to be lenient for allowing zoning changes5)

Fundamentals about how zoning typically worksvi.

Except in the cases of constitutional violations, violation of statutory authority1)Takings challenges - still tend to be deferential to zoning ordinances2)

In general courts are quite deferential to zoning ordinances - CA is fairly deferential to planning board decisionsvii.

Certain problems - having to drive from one area to another1)Euclidian zoning - separate uses1)

Cluster zoning - idea is that residential uses are clustered more closely than normally permitted - provide for more open space2)Plan unit zoning - allows for mixed uses where compatible3)

Types of zoningviii.

In GeneralA.

Sometimes approval required by city council - or appeal can go to the city council1)Basically administratively authorized departures from an ordinance2)

That there is exceptional and undue hardship in applying the ordinance to you without the variance (some courts - property is otherwise un-usable)

1)

That you have not imposed the hardship on yourself2)That the variance would not be detrimental to the surrounding area3)Some jurisdictions also require the permission of your neighbors4)

Usually have to show:3)

Can seek use variance or area variance4)

Planning commission has the power to grant a variance/exception to a zoning ordinancei.

Rather than seeking a variance, there is a procedure for some sort of unique/hardship that is statutorily recognized in advance1)Idea is that the use may be allowable, but if not watched properly it may become a problem2)

Some zoning ordinances provide for a set of exceptions - conditional usesii.

Realty group is holding a 68 acre tract of land 1)

Good chunk of the property remains zoned for commercial use - some is zoned so that Amber realty cannot use or sell the property for increased industrial use

1)In 1922 Euclid develops a zoning ordinance - turns out that areas of the parcel fall into different zones2)

Almost never see facial challenges to zoning ordinances - mostly see as-applied challenges1)Amber has not applied for any building permits, etc. - attacking the zoning ordinance on the basis that it is facially invalid3)

Substantive due process challenge - they are being deprived of liberty/property without due process1)

Could argue that this is about protecting the surrounding property rightsa)Does zoning interfere with property rights, or does it actually protect property rights?2)

What is the constitutional ground here?4)

Extremely deferential1)Only need to have a debatable reason for why you are engaging in the classification, and the legislative judgment must be uph eld -2)

Legal standard that court sets forth for future courts 5)

VILLAGE OF EUCLID v. AMBLER REALTY CO (Sup Ct US 1926)iii.

How to get out of zoning requirementsB.

Outline Page 38

reliance on the institutional competence of the legislature in making this decisionObservation that zoning can often help/protect private property6)

Generally speaking, substantial declines in value because of a zoning ordinance are not likely to be sustained1)No takings challenge here - today we might try this case under a different part of the constitution7)

Court upholds the zoning ordinance - implies that Ambler could later attack specific parts of the ordinance, but Court isn't going to make future determinations of legality

8)

Realtors were denied a permit to build an unusual house that was different from the surrounding area1)

To determine whether a plan conforms or not - p. 8741)Any architect would know what the ordinance was trying to do here - foreseeable that you would run into trouble trying to build a house like the one in question in this case

2)

Applicants have to apply to the architectural board, who decide whether the house will de-value the other properties in the area 2)

One ground in this it is arbitrary and vague - constitutional grounds1)Statute actually doesn't authorize aesthetic zoning - town is going beyond its statutory power2)City is exercising its police power - trying to protect health and safety of community - argument here is that the city is going too far in trying to restrict non-conventional buildings - exceeding the police power

3)

Statutory grounds that the Stotanoffs are objecting to 3)

Probably - court might have been uncomfortable if no decline in property value was showna)Sometimes courts want to see some tie between aesthetic zoning and a decline in property valueb)Evidence about property value decline seems pretty speculativec)Most realtors would say that unique architecture does not in fact reduce property valued)

Does it matter that the city was trying to protect property values?1)Court says this is not beyond the statutory power of the city4)

Underlying notion of conformity - want all houses to look the same1)1970's - anti-authoritarian youth movement v. a backlash of wanting to keep things traditional2)Similar to nuisance - what you do with your property can effect other people3)Where do we draw the line?4)Really what you're doing here is expressing yourself architecturally - perhaps the municipality should have a better reason then that they don't like how your house looks

5)

Should aesthetics be a proper aim of zoning?5)

Might be that damages don't really compensate here1)Could protect the neighbors with a damage remedy - let the house go up, but if there is property value decline- let the neighbors sue6)

STATE EX REL STOYANOFF v. BERKELEY (Sup Ct Missouri 1970)iv.

If a signage ordinance were to be content-based, then it is subject to strict scrutiny under the 1st Amendment - would need to be a compelling state interest, and there is no way of serving that compelling interest in a less speech -restrictive way

i.

Subject to intermediate scrutiny1)

Is there an important state interest? a)Is that interest served by the regulation and unrelated to the suppression of a particular message?b)Is the regulation narrowly tailored?c)Does the regulation leave open ample alternative means for communication?d)

Court generally asks:2)

Time/place/manner restrictions - the idea is that we're not going to allow anyone to speak at a certain time of day, or you need to get a permit to be in a parade, etc. - content neutral and the same for everyone

ii.

Substantially related to important government objective1)Intermediate scrutiny is applied to regulations that discriminate on the basis of gender, illegitimacy, and alienageiii.

Laws must be narrowly tailored to meet a compelling state interest 1)

If the burden on the protected right is too heavy, will be struck downa)Rights are implicitly (though not explicitly) guaranteed by the constitutionb)Encompasses substantive due processc)

Generally applies to - suspect classification, unequal distribution of a fundamental right (voting, procreation, travel)2)

Strict scrutiny - usually (but not always) fatal iv.

Files an action under §1983 - civil rights statute - often used whenever government violates a constitutional issue1)Problem is that signs/billboard are conveying speech - 1st amendment issue2)

Gilleo puts an anti-war sign in her yard - which violated a city ordinance1)

City retracts old ordinance and enacts another one - new ordinance eliminates variances and also adds a purpose section2)

Virtually all kinds of signs are banned - don’t care what the message is1)Purposes - property values, aesthetic values of community, prevents traffic hazards, etc. - Really about reducing visual clutter2)

How would city of Ladue portray this ordinance as content-neutral?3)

Both over/under-inclusive1)Under the ordinance, restricts too little speech - some signs are allowed while others aren't - under-inclusive2)City recognizes that in some instances the content of the signs is worth the clutter3)

Under either test the court would probably say that the ordinance is problematic4)

Court holds that "more temperate measures could in part satisfy Ladue's stated regulatory needs -" but this one violates 1st Amend5)

Need a state action to sue on constitutional grounds - some lower courts have found state actions in similar sorts of bans1)Not clear whether other courts would follow that lead - Shelley is largely restricted to claims under the 14th amendment2)

What if the homeowners association banned the signs?6)

Probably represents a rapidly fading view 7)

CITY OF LADUE v. GILLEO (Sup Ct US 1994)v.

Only allows 2 people living together but not related to constitute a family1)Euclid, Stoyanoff - typically defer to legislative judgment - except sometimes less deference to 1st amendment issues2)Involve questions about the degree to which courts are going to be deferential to the legislature or apply a higher level of scrutiny3)

Restriction on the number of people living together in a single family home1)

Density limitations are exempt from FHA2)

Rational basis - majority opinion1)What are the options the court has in invalidating the statute at issue?3)

VILLAGE OF BELLE TERRE v. BORAAS (Sup Ct US 1974)vi.

Constitutional issues in zoningC.

Outline Page 39

Rational basis - majority opinion1)Dissent looks at it as freedom of association/right to privacy - fundamental right2)

Once you are in the land of high deference, court will almost always uphold the ordinance4)

Quiet seclusion, clean air, burdens of high density, traffic, noise, etc. - family ambiance1)

Under-inclusive - not necessarily just people who are not related to each other who will cause these problemsa)Over-inclusive - not necessarily the case that 3 unrelated people will cause these problemsb)Rational basis doesn't care whether you are over or under-inclusivec)

Is this an over-inclusive way of regulating against these problems?2)

What does the city say that it is aiming at?5)

City could have density limitations - aimed at having too many people, rather than the composition of the family6)Court upholds the zoning restriction under rational basis7)

Women faces criminal penalty for violation of ordinance after living with a son and two grandsons who were not brothers1)Ordinance defines family to include no more than 1 set of grandchildren2)Court is NOT deferential to legislature3)Case is analyzed under substantive due process clause (right to freely choose associations)4)Court looks at how important government objective is5)Distinguishes this case from Belle Terre in that Belle Terre involved only unrelated individuals, while this case involves related individuals living together

6)

Overinclusive in that it includes individuals in ordinance who are not causing problems7)Underinclusive because it targets one particular family setup (you could conceivably have 14 brothers and sisters living in home without violating ordinance)

8)

Since heightened scrutiny is applied, the court finds that the statute is not narrowly tailored to fit goal of preventing overcrowding9)Could also challenge this ordinance as showing racial animus/discrimination10)Could argue that this ordinance disproportionately impacts minorities 11)

MOORE v. CITY OF EAST CLEVELAND (US Sup Ct 1977)vii.

Ordinance restricted single-family housing to any number of people related by blood, marriage, or adoption, or to two people not so related but both over the age of 62

1)

Court invalidated the ordinance because it infringed on the due process protections of the NY constitution2)Objectives of the ordinance - to preserve character, control density, reduce traffic and noise, etc. were acceptable, but the means were not - occupancy restrictions based on biological or legal relationships, the court said, had no reasonable tie to the city's objectives

3)

Court said that neither Belle Terre or Moore set out the definition of "family" minimally necessary under the Constitution4)

MCMINN v. TOWN OF OYSTER BAY (NY 1985)viii.

Town is trying to cope with rapid growth that is expanding past Camden1)Property taxes in NJ fund schools, fire departments, etc. - similar to how CA used to operate2)What Mt. Laurel is doing is engaging in fiscal zoning - try to minimize services they have to pay for3)

Industrial usages - 1/3 of the land in the town is set aside for industrial use, but only a small fraction of it is actually being used

1)

Housing - Mostly zoned for single family use with large lot sizes2)

City would have to show pretty strongly that the burdens created by the development are offset - Nollan, Dolan

a)

PUD projects - Does away with zoning regulations to create "mini towns," includes some multi -family housing that is obviously not designed for lower income families/families with children

3)

Various zoning policies city has adopted4)

Plaintiffs challenge these provisions on both state and federal constitutional grounds - Court addresses on state constitutional grounds

5)

Constitutional challenges under federal law have been eroded here6)

Housing - rejected in 19721)Racial discrimination - at this time, need to show discriminatory intent (Arlington Heights)2)

Any fundamental rights at issue here?7)

Is the town motivated by economic discrimination? Yes - quite clear in the town's argument to the court1)

Court says that under the NJ constitution all categories of people need to be provided fora)NJ state constitution also has an equal protection clause2)

This is mostly challenged on fiscal grounds8)

Have to allow for multifamily housing, small lots, etc., and provide for industrial zoning that is an equal match for what the city can expect to attract

1)What is Mount Laurel required now to do?9)

If the plaintiff shows there is inadequate housing, burden shifts to municipality - fiscal reasons are not enough1)

Based on an economic assumption that may be wronga)Housing subsidies are actually a better ideab)

One problem is that the court assumed that by eliminating zoning regulations, multifamily housing would follow

2)

Just eliminating zoning barriers doesn't create the kind of housing the court hoped would happen3)

Mount Laurel litigation does not solve the NJ housing problems10)

Mount Laurel II - municipality had to take affirmative action to put affordable housing on the ground11)Court says Mount Laurel doesn't have to re-do their entire zoning ordinance, but have to comply with the spirit of the opinion

12)

Other states get uncomfortable when they see a lack of affordable housing13)

SOUTHERN BURLINGTON COUNTY NAACP v. TOWNSHIP OF MOUNT LAUREL (Sup Ct NJ 1975)i.Exclusionary ZoningD.

Outline Page 40

Other states get uncomfortable when they see a lack of affordable housing13)

Outline Page 41

Penn Coal??? Keystone???History of feudalism/fee simple?

QuestionsMonday, April 21, 2008

4:15 PM

Outline Page 42

Issue spotter tips

In this exam, the way in which Ben sees the rats and how frequently he sees them is relevant to whether he has a duty to disclose - question of materiality

○

When you're reading - ask yourself - if you see facts, why are they there?-

IRAC - Issue / Rule / Analysis / Conclusion○

Need to think about whether a defect is latent/material

Duty to disclose○

Here's the issue, here's the rule, now I'm going to talk about it, here's my conclusion○

Discuss strength of your side of the case, strengths of the other side

Discuss majority/minority rules○

Always important to think about how you can organize to help you analyze the most effectively-

Have a little cheat sheet for every doctrinal area-

On this exam - break down each duty question by the issue - rat issue, window issue, etc.○

Organization clarity usually brings with it analytic depth○

How to organize?-

Going through the issue spotter

Durational language

Possibility of reverter

Fee simple determinable○

Conditional language

Right of re-entry

Court usually defaults to condition subsequent - they prefer to make someone actually do something to keep the property

Fee simple subject to condition subsequent○

What did Corney actually convey to Elston?-

Lack of living there for 2 years - you could say the condition was violated○

They are still living there - just because there are other rooms doesn't mean that they aren't using it for residential purposes

With the inn - could argue that this is a residential use○

Restaurant - commercial use○

Is the condition violated?-

Not enough time for adverse possession-

Typically ok to assert even if the statute of limitations hasn't expired

True owner could have stopped the parties from violating the covenant in the first place□

Idea is that you can still be within the time period to file your lawsuit, but you should have done it earlier - in the meantime the other parties did something to their detriment

Latches - idea is - why did someone wait so long?○

Fee Simple Subject to Conditions Subsequent - Corney is estopped from making a claim because he didn't exercise his right to re -entry-

Windows

Don't forget to go through all the doctrinal elements!□

Latent - might be able to argue that this was not a latent defect - it was obvious and should have been picked up in the inspection

Material defect - hard to say that this is immaterial

Duty to disclose○

May be an as-is clause, but if it's a latent material defect we don't care□

That's what the latency is about - if you don't know about the defect you don't know you're taking it as-is

NY - doesn't impose an affirmative duty to disclose

If you're in a caveat emptor jurisdiction - no duty to disclose

Modern trend is to impose a duty to disclose

Standard part of a real estate contract

As-is clause○

Can say you've already addressed this issue above and the same analysis applies□

Latency

Lempke - 6 months2 years has passed - is this reasonable?□

Reasonable time

Implied warranty of quality○

What can Peter and Linda recover for the problems?-

Review SessionWednesday, April 23, 2008

2:26 PM

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Lempke - 6 months

Might also want to mention that we would want to know what a normal warranty on windows is

2 years has passed - is this reasonable?

RatsBig question here about materiality○

Also the case that Ben says they only had the problem a couple times in the kitchen○

Zoning Issue

Some facts in Frimberger leave open some questions

Does warranty against encumbrances cover violation of a zoning ordinance?

In Frimberger there was a question whether there was even a violation

Frimberger - zoning violation does not constitute an encumbrance○

One thing to think about - if we have one case on point that establishes the doctrine, may want to question that case a little○

Part II

Most often the case that there is an "on one hand, on the other hand" quality to these questions○

If you agree with the question - are there other considerations to take into account? Are there opposing arguments?○

Generic tips-

Want to see nuance in these answers - recognize the weaknesses in your arguments-

Talk about pros/cons of using custom - and, is it ok to influence the outcome of the case1)

Want to mention something about how the relationship of INS to the public is different from the relationship between INS to A P2)

Part III

More about ideas, theories, etc.-

This is where the quality of writing matters the most - these are meant to get you to think more deeply about issues - think in way that is typically less doctrinal

-

Take some time before you start writing to think about what you want to say-

Better written answers are typically more thoughtful/thorough-

Virtually all involve some element of doctrinal knowledge-

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