Professional Documents
Culture Documents
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 hand
- There 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
B. Occupancy Theory
i. In general
i. 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
ii. Richard Epstein - Possession as the Root of Title - the common and civil law alike adopted the preposition that taking possession of unowned things is the only possible way to acquire ownership of them; the universal principle is original possession
iii. 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
ii. GHEN v. RICH (MA 1881)
i. 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
ii. 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
iii. 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?
1) 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
iii. Custom
Outline Page 1
iii. Custom
i. 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
ii. 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
1) 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
iv. Instrumental arguments
i. Will the decision enhance certainty and peace?
ii. Look at the instrumental effect the decision will have on the industry (Pierson, Ghen)
iii. Rule should maximize social utility (Keeble)
v. Doctrinal rules
i. Need to mortally wound or trap to establish possession (Pierson, Ghen)
1) Exceptions:
a) Malicious interference (Keeble) - find in favor of person interfered with
b) 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
c) Custom (Ghen, Swift)
vi. JOHNSON v. M'INTOSH (Sup Ct US 1823)
i. 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
ii. After that sale, the US government paid money to the Piankeshaws and granted land to the M'Intosh's
iii. 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
iv. Two different rights that end up being divided
1) Right to occupy in the present (Indians)
2) Right to transfer the title in fee simple (US government)
v. Johnson does not actually own anything after the case is settled
vi. 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 it
vii. 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
viii. 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
1) Legal formalism - this is how the country has been established - this is the way it is
ix. Legal formalist
1) Committed to a process which pre-ordained the outcome of things - very formulistic in nature - don't take on instrumental
arguments
x. Legal realist
1) Takes into account policy matters - we should be explicit about that, otherwise we are hiding behind formulism
xi. What does this case say about property rights/ownership?
1) 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)
2) Theories often help us decide what ownership rules exist - underlie ethical/moral ideas about property
3) With certain limitations, the state has vast power to decide what the property rules are
vii. Acquisition by discovery
i. 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
viii. Acquisition by conquest
i. The taking of possession of enemy territory through force, followed by formal annexation of the defeated territory by the conqueror
ii. Neither of these two modes of territorial acquisition have much relevance today
ix. Hugo Grotius - the evolution of private property
i. 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
ii. Private ownership was imagined to have developed according to agreements, explicit ones or those implied by occupation
C. Demsetz Article
i. Toward a Theory of Property Rights - Utilitarian account of property
ii. Thesis is somewhat contested, but we still have to face the problem of what to do with externalities
iii. Externality - Cost or benefit (much more concerned with cost) that a resource user is not forced to take into account when using the resour ce
i. Most externalities occur when one private property owner imposes harm upon another
ii. 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
iv. Ways of dealing with externalities
i. Nuisance laws
ii. Zoning so that externalities don't exist to begin with - don't allow incompatible land uses next to each other
iii. Setback requirements - require some buffer between incompatible land uses
v. 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
i. A primary function of property rights is that of guiding incentives to achieve a greater internalization of externalities
ii. 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
1) 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)
vi. Common property v. Private property in reducing externalities
i. 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
Outline Page 2
D. Theories of Property
i. First in time/First occupancy
i. Taking possession of an unknown thing is the way to acquire ownership
ii. Pierson, Ghen, Johnson v. M'Intosh
ii. Labor theory
i. When an individual labors over an unknown product and creates something useful of it, he acquires a property right to it - John Locke
ii. 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"
iii. INS v. AP
iii. Reliance interest
i. 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
ii. Kunto, dissent in Van Valkenburgh, Local 1330 (but court doesn't know what to do with it), Singer article
iv. Utilitarian
i. Create a property rule that allows for the greatest wealth - most efficient
ii. 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
iii. Cheney Brothers, Keeble, Smith v. Chanel
v. Personality theory
i. Should choose a property rule to recognize a distinct property right when the objects of the property define the owner's person
ii. Similar to reliance - but also the way in which the property has defined someone's life
vi. 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
vii. Joseph Singer, The Reliance Interest in Property
i. 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
1) When owners grant rights of access to their property to others, they are not unconditionally free to revoke such access - non-
Outline Page 3
B. In General
i. Method to acquire title to property by possessing the property for a certain period of time as long as you have met certain c onditions
ii. Time period is akin to a statute of limitations - adverse possession tends to engender more outrage than a standard statute of limitations
iii. 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
iv. Claims usually heard in two ways
i. Claims by the actual owner - trying to eject the adverse possessor
ii. Claim by the adverse possessor - trying to quiet title and settle the claim of adverse possession
v. 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 claim
under color of title or not
Outline Page 4
I. Boundary Disputes
i. In general
i. Doctrines have developed that are for the most part favorable/sympathetic to the encroacher depending upon the factual circumstances
ii. Boundary dispute analysis
i. Where do you start? Elements of adverse possession:
1) Is there actual and exclusive use?
2) Is it open and notorious?
a) Need to look at the requirements of the jurisdiction
b) Need to look at when individuals purchased the land
c) What the lot looks like - what size? If it's a small lot owner probably should have been on notice
3) Is the possession adverse? State of mind
Outline Page 5
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
c) What the lot looks like - what size? If it's a small lot owner probably should have been on notice
3) Is the possession adverse? State of mind
4) Continuity - has the possession been continuous?
MANNILLO v. GORSKI (SUP CT NJ 1969)
i. 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
ii. 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
iii. Discussion of Maine doctrine v. CT doctrine - court ultimately rejects Maine doctrine
1) 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
a) Court says that this favors intentional wrongdoers and not innocent encroachers
2) 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
3) Court seems to be saying they won't be looking at state of mind of adverse possessor from now on
Remedies with boundary disputes - property v. liability rule
i. 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
ii. 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
Doctrine of agreed boundaries
i. Exists when parties agree on a boundary and take action - thereafter the true owner may be estopped from upholding the true boundary
ii. 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
iii. Result depends on the circumstances - hard to predict with any certainty
Doctrine of long acquiescence
i. 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
ii. Parties can acquiesce without knowledge - very passive
Doctrine of estoppel
i. 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.
ii. 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.
Mistaken improvers
i. Remedy depends on the size of the encroachment
ii. If the inconvenience caused by an innocent encroachment is so minor as to be trivial, relief might be denied altogether
iii. 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
iv. Courts usually apply a balancing test between the parties
1) 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
2) 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
Tacking - stringing together successive possession in order to meet the statutory time frame for adverse possession
i. If the evidence shows that the deed was intended by the parties to convey not only the described land but also the adverselypossessed
strip, buyer is allowed to "tack" that strip onto the land described in the deed (Buchanan v. Cassell)
Privity - rightful owner transferring property to someone else but actually passing more than the deed requires
i. Some jurisdictions require a written instrument for privity
ii. Usually includes some sort of legal relationship between the parties
iii. Question of how technical this has to be - do we require a written deed or just successive possession?
HOWARD v. KUNTO (CT APP WASHINGTON 1970)
i. 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 for
ii. 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
iii. 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
iv. WA is worried about rewarding squatters/intentional trespassers, which is not the case here
v. Policy reasons in favor of Kunto - otherwise you are going to require people to invest a lot of money in surveys, etc.
vi. 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
L. Personal property
Outline Page 6
L. Personal property
i. 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
ii. Discovery rule
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
ii. Obvious question is what constitutes due diligence - reporting theft to police, registering the theft, etc.
iii. O'KEEFFE v. SNYDER (Sup. Ct. NJ 1980)
i. 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
ii. In 1975 discovers the paintings in a gallery owned by Snyder - transaction at some point where paintings were sold to Snyder
iii. 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
1) Must bring suit within 6 years of discovery and exercise of reasonable diligence - can't wait around not knowing where the
paintings are
iv. Statute of limitations generally begins at the time of the wrongful taking
v. Two competing standards
1) Adverse possession - burden is on the possessor to make the possession open and notorious - personal property (as opposed to
land) is harder to publicize
2) Statute of limitations with discovery rule - puts more of a burden on the true owner
a) Don't want to make the true owner take too many steps to protect themselves - efficiency/fairness issues
b) Court thinks that this might result in less art theft - could lead to second order things happening, like the establishment of an
art registry
iv. Title insurance keeps this from happening with real estate
i. With personal property, the chances of having a problem with the personal property is small in relation to its value.
ii. Personal property is much less permanent
v. GUGGENHEIM FOUND. v. LUBELL (NY 1991)
i. Creates NY rule - NY is home to many of the art galleries in the US
ii. 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
iii. Until demand is made, possession of the stolen property by a good-faith purchaser for value is not considered wrongful
iv. 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
v. 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
1) Basic rule - if you're the thief you can't raise any of these defenses
vi. 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
vii. LOCAL 1330 STEEL WORKERS v. UNITED STEEL CORPORATION (6th Circuit Ct Appeals 1980)
i. 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
1) Workers claimed they detrimentally relied on the promises for the factory to remain open
ii. Illustration of the way our conceptions of property vary depending on the era in which we live
iii. When case was filed it seemed potentially winnable - sense there was something the workers had earned to give them a property right
iv. 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
v. Promissory estoppel - workers relied on an oral promise given to them
vi. Court ultimately says that there is no authority on which to base the workers' claims
viii. Singer article
i. Says that a number of doctrinal areas would provide more support for the plaintiffs than the court even acknowledged
1) 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
ii. 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
iii. 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
iv. Hohfeldian terminology
1) Property rights are relational
2) Right - I can prevent someone else from doing something
3) Privilege - I can do something and no one else can stop me from doing it
4) Notion of ownership means different things, depending on the rights and privileges associated with it
5) 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
6) 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
7) 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
8) 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
9) 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
v. 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
vi. Sometimes the courts are creative in creating remedies for adverse possession cases - here, really what shifted the ownership was that
Outline Page 7
do with the two parties involved in litigation than who actually owns the property
vi. Sometimes 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
vii. 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
viii. 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
ix. Courts frequently have concerns that they are institutionally incompetent to make these decisions and that they would better be left to
Congress
1) Congress
a) Theoretically more accountable to the people
b) Have better means to conduct research and make important findings
c) Plurality (more representative, more ideas)
d) Have the ability to weigh all the issues and consequences - not just limited to a single case
2) Judges
a) Purity argument (somewhat immune to political pressure/elections)
b) Expertise can be available
c) Reasoned decisions (legislature might ignore certain groups)
d) More efficient process
e) Narrow case can be limited to a particular case
f) Implementation is not a judicial strength
x. 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
1) Property role that comports with market notions of the freedom to do what you want with your property
xi. 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
Outline Page 8
ix. Need to look at various tensions running through IP cases - recent cases have tended to favor the original creator
x. 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
B. Patents
i.
ii.
iii.
iv.
v.
vi.
C. Copyright
i.
ii.
iii.
iv.
v.
D. Trademarks
i. Provide very limited protection for works/designs that then get associated with a particular product
ii. Unlimited in duration with a few exceptions
iii. Others can't use the trademark in a way that would create consumer confusion
i. You infringe on a trademark if you are trying to make consumers think that you are selling a trademarked product
iv. Product may lose its trademark if the general product becomes so familiarly associated with the name that it is indistinguish able - asprin,
kleenex, etc.
v. WHITE v. SAMSUNG ELECTRONICS AMERICA, INC. (9th Cir. 1993)
i. 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
ii. Appellate court found for White based on the Lanham act, a federal statute concerned with false representations in advertising
iii. 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
1) Said that the majority is creating a new and much broader property right, rather than just protecting White's existing rights
2) Also said that intellectual property rights aren't free, but are imposed at the expense of future creators and of the public at large
Outline Page 9
patient, since the fiduciary duty and informed consent theories protect these interests directly by requiring full disclosure
viii. Also - 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
ix. Question of institutional competence - court seems to be saying that it should be up to the legislature to create new property rights
1) 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
2) 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
x. 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
xi. Law of accession also comes into question - who contributed the principal materials?
1) UC could argue that the cells weren't valuable by themselves - what's really valuable here is the labor
xii. Fiduciary duty question
1) 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
2) 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?
ii. The Bundle of Rights
i. Akin to the idea that property is about relationships/the law creates property rights
ii. The abstraction we call property is multi- not monolithic - it consists of a number of disparate rights, a bundle of them:
1) The right to possess
2) The right to use - nuisance clearly limits the right to use, as does zoning - can also contractually limit
3) The right to exclude - enforced through trespass
4) The right to include - right to sell/transfer/give away - include someone else in the ownership of your property
a) Right to share/give away can be limited
b) Can be forced to share your property in certain instances - easements
5) The right to transfer - while property may usually be transferred by sale or by gift, this is not always the case
6) The right to dispose of - can include the right to destroy
iii. Idea is that we can limit all of these things but we don't eliminate the rights to property
V. NUISANCE
A. Analyzing a Nuisance case
i. Is this a substantial interference with the use or enjoyment of land?
ii. Public or private nuisance?
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?
ii. Spur
iii. Is there a nuisance per-se (is there a statute on point)?
iv. Can you characterize this as a trespass?
i. Is it a physical invasion of the property (smoke, particulate matter, etc.)? If so, could be strict liability.
ii. Some jurisdictions are starting to apply a balancing test to trespasses that look like nuisance.
v. Intentionality - usually a given - Morgan
i. 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
1) If intentional, is it unreasonable, therefore constituting a nuisance?
a) Threshold test
i) Morgan, Jost, Estancias, Boomer
ii) Is this a harm which a normal person would reasonably be expected to endure? Look at zoning, coming to nuisance,
use
iii) First find liability (is there a nuisance?), then decide on the remedy - balance the equities
iv) If there is a nuisance, balance the equities using restatement-like factors - Estancias (says explicitly to balance the
equities)
b) Restatement test
i) 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 preventing
harm)
Outline Page 10
harm)
ii) If defendant's social utility outweighs - no injunction
iii) If gravity of the harm outweighs - injunction
iv) Plaintiff might get damages if defendant can pay damages without going out of business - harm must be serious
- 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)
c) 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
ii. 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?
1) Unintentional cases are rare
vi. Remedies
i. Injunction for plaintiff - Estancias
ii. No injunction, but the defendant pays (potentially permanent) damages - Boomer
iii. No injunction, no damages - no liability for defendant under either jurisdiction - defendant gets to continue
iv. Damages for defendant combined with injunction for plaintiff - Spur
v. Mandatory injunctions - tell the defendant how to behave
vii. Somewhere in the mix - is there a coming to the nuisance defense?
i. Absolute defense seems to be limited to circumstances that Spur spelled out
1) Developer with foreseeability brings a number of people to the area - either agricultural or industrial - and it is not natural growth
of the city
a) Foreseeability - could foresee that the people living there would experience harms
B. In General
i. 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
ii. Nuisance law is a means by which common law judges resolve conflicting land uses
iii. 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
iv. As long as you know that your behavior is going to cause harm, or reasonably should know, there does not have to be malicious intent
i. Need to look at whether harm is intentional or unintentional
1) Intentional - must be unreasonable
a) Court could find land use to be unreasonable even if you are operating a pig sty, for example, in a reasonable manner
b) 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
c) In Morgan court finds unreasonable use even though defendant is operating business appropriately
d) Need to look at what is normal for a neighbor to have to put up with - plaintiff-centric view
v. MORGAN v. HIGH PENN OIL CO (Sup Ct North Carolina 1953)
i. 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
ii. Court upholds damages and injunction on behavior
vi. ESTANCIAS DALLAS CORP. v. SCHULTZ (Ct App TX 1973)
i. 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
ii. 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
iii. Even if the apartment building is legally allowed to produce the noise - just because something is legal doesn't mean it's normal
Outline Page 11
damages
iii. Which view dominates is not clear, though it can be said that relatively few courts have followed the Restatement explicitly
iv. 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
v. Typically, an intentional tort results in liability without regard to the amount of harm or the reasonableness of the activity causing it
i. Trespass - involving a physical invasion of land, is a case in point
ii. 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
1) Someone is trying to gain something from your land when they trespass
2) In a nuisance claim, your purpose is not to use someone else's land - you are using your land and they are using theirs
a) When analyzing a nuisance claim, always look to see if you can claim trespass - easier to prove - strict liability
b) 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
D. Remedies
i. Injunction
i. 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
ii. 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.
iii. 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
iv. Injunctive relief isn't limited to stopping defendant's behavior - can limit hours of operation, prohibit use on windy days, etc.
ii. Damages
i. If cost of abatement would be higher than damages, damages may be appropriate
iii. Coasing out
i. 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
ii. If there are multiple parties, you can assume that the transaction costs will be high
iii. Sometimes transaction costs of litigation/lawyers fees/uneven information prevents us from achieving an efficient outcome
iv. Balancing of equities - as in Boomer
i. 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
v. No simple answer about remedies - have to explore all possibilities
vi. BOOMER v. ATLANTIC CEMENT (Ct App NY 1970)
i. Atlantic Cement is operating in Albany - neighbors alleging injury to property from dirt, smoke, and vibration emanating from the plant
ii. Cost to Atlantic in shutting down the plant far exceeds plaintiff's damages
iii. Court uses threshold test - grants an injunction conditioned on the payment of permanent damages to plaintiffs
1) Can't grant a temporary injunction to wait for advances in technology - advances might not happen
2) 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
3) This relief might also spur development in technology - other factory owners would want to avoid damages
4) "It has been said that permanent damages are allowed where the loss recoverable would obviously be small as compared with the
cost of removal of the nuisance"
vii. SPUR INDUSTRIES, INC. v. DEL E. WEBB DEVELOPMENT CO. (Sup Ct AZ 1972)
i. Public nuisance case - idea that the conditions are dangerous to the public health
1) In a public nuisance case can complain about environmental harms - harms that might not even be specific to them
2) Makes sure that all the harms inflicted on a community are taken into account
ii. Court does not analyze under threshold/restatement because there is a statute on point - makes it a nuisance per-se
1) 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
2) Court takes coming to the nuisance into account in the remedy stage
iii. Coming to the nuisance
1) 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?
iv. Emphasizes the relational nature of property - really matters who your neighbors are
v. Court issues a purchased injunction
1) Court grants injunction, but Webb has to pay Spur for costs
2) 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
3) Happens when developer buys in a traditionally agricultural area where what wasn't a nuisance turns into one
4) 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
E. Public Nuisance
i. Where an act constitutes an unreasonable interference with a right common to the general public
ii. Public nuisance protects public rights; private nuisance protects rights in the use and enjoyment of land
iii. 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
Outline Page 12
iii.
even less able to devise and oversee an ongoing program of technological controls
iii. Problems might be overcome by
i. Class actions
ii. Provision of attorney's fees to plaintiffs bringing suit in the public interest
iii. Special environmental courts
iv. The general conclusion is that nuisance litigation is ill-suited to other than small-scale, incidental, localized, scientifically uncomplicated
pollution problems
v. Alternative to judicial resolution of pollution problems is legislative and administrative intervention
i. 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
ii. Incentive systems stand in sharp contrast - rather than command, they induce
1) 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
2) Much more decentralized than regulation
VI. TAKINGS
A. Analyzing Takings
i. Eminent Domain
i. Public use
1) Traditional public use and public ownership tend to be less problematic
2) Private property can go to another private interest if there is a public use ( Kelo)
a) Need a well thought out plan for economic development or other purposes
i) Highly deferential to legislature (Kelo)
3) Blight is OK
4) Breaking up land ownership
a) 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
5) Open question about purely private to private transfer
6) Some states may be more stringent
a) CA statute requires blight
b) May be heightened standard of review - questioning of what means are required to reach the ends (means-ends test)
ii. Just Compensation
1) Determined at market value
ii. Regulatory Takings/Inverse Condemnation
i. Is there a permanent physical occupation?
1) If yes - taking (Loretto)
ii. Lucas test
1) 100% diminution in economic value, except:
a) Nuisance/restatement
b) Background law of property - Palazzo doesn't bar post-enactment claims
2) If not 100% diminution - go back to Penn Central
3) Can you make a conceptual severance argument?
a) Can use this argument here, or in the economic impact section of Penn Central(harder to win there in any event)
b) Penn Coal - taking, Lucas - says something , not entirely clear
c) TRPA - severance regarding time didn't seem to work, at least in that case
i) Favorably cites the idea to use the whole parcel - less favorable to property owners
iii. If no - if it's a temporary physical occupation - apply Penn Centralfactors
1) Economic impact on owner
a) Court is willing to sustain large economic impact (as in Penn Central, Pallazolo)
2) Distinct investment-backed expectations
a) Penn Central
b) 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
c) More sophisticated the transaction, the higher standard you hold the property owner to
3) Character of government harm
a) Most important in the "bundle -" the right to exclude
b) Public program adjusting benefits/burdens - not likely a taking
i) Average reciprocity of advantage
c) Idea that some regulations may unfairly single out the property owner
i) 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
iv. Exactions
1) Exaction is a condition of granting the permit
2) If it is a facial constitutional challenge, not in the world of exactions
3) Analysis
a) Is exaction, on its own, a taking?
b) 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?
c) Is there an essential nexus between the anticipated harm of the proposed development and the purpose of the exaction
(Nollan)
i) Court says state could have banned the development all together - not that important
d) Is there a rough proportionality between the extent and nature of the harm and the exaction? (Dolan)
i) Make individualized determinations based on the particular property
B. In General
Outline Page 13
B. In General
i. "Nor shall private property be taken for public use without just compensation"
i. "Public use" is the most disputed and litigated portion of the clause
ii. Just compensation = market value
ii. Historically, Takings Clause was only applied to acts of eminent domain by federal government
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
iii. Takings Clause extended in 1922- Pennsylvania Coal v. Mahon - if a regulation goes too far, it results in an unauthorized taking
i. Property can be considered taken, under the 5th amendment, even if it is not physically appropriated
ii. Main question- "Under what circumstances does a regulation go too far, and disproportionately burden property owners?"
iii. In some cases, if a regulation is found to effect a 'taking', then the court would simply invalidate the law
iv. 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
v. Practically impossible for government to compensate for every diminution in value that occurs as a result of regulations
iv. KELO v. CITY OF NEW LONDON (Sup Ct US 2005)
i. City created a redevelopment plan to revitalize New London, and in the process wants to use eminent domain to acquire property from
unwilling owners
1) Private properties would not be able to do anything about the holdouts, but municipalities can use eminent domain and purchas e
for market value
ii. 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
iii. 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)
1) Dissent says that deferring to legislature results in big business/majority overpowering small, powerless individual defendants
iv. 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
1) Just because private parties are benefitted doesn't mean it's not a public purpose
v. Other possibilities for resolution
i. 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)
ii. No eminent domain allowed when transfer is between two private parties
iii. CA rule - no economic development eminent domain unless area is deemed "blighted" - tends to be serious slum conditions
iv. Some state courts have found that transfer of property by eminent domain between private individuals violate state constitutions
v. Federal standard is very deferential - unlikely to lead to any eminent domain being invalidated
vi. Public use - ends test
i. 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
ii. Can result in a very sweeping taking power
vii. Public use - means test
i. Idea here is to ask whether the power of eminent domain is really necessary to accomplish whatever aim the government has in mind
viii. POLETOWN
i. 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
ii. 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
iii. Court upheld decision to give property to GM, but in a later case established a much more stringent standard
C. Just Compensation
i. 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
ii. 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 taking
iii. Using liability rules instead of property rules to deal with eminent domain
i. Compensation at fair market value would be used (as at present) in the case of takings for classic public uses
ii. 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
iv. 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
i. However - the less powerful you are, the less power you have to retain a lawyer - less power to negotiate
D. Physical Occupation
i. LORETTO v. TELEPROMPTER MANHATTAN CATV CORP (Sup Ct US 1982)
i. Loretto is complaining about the physical invasion of a cable on her property - plus the screws, etc. required to attach it
ii. If there is a permanent physical occupation, regardless of damage, it is a taking - court characterizes as a per-se rule
iii. Statute in place says that apartment owners are required to allow cable companies to attach wires to their property, for just
compensation of $1
1) Person suing is the property owner - alleging that government activity is so severe it is as if the government physically appropriated
the property
iv. Language in this case is pretty strong on the right to exclude - character of the harm matters a lot
v. Court doesn't address the issue of damages - that's where usefulness, etc. will be taken into account
vi. Cities can require landlords to install all kinds of things (smoke detectors, etc.) on their property
1) 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
vii. This case represents the Supreme Court endorsement of a rule of long standing - PPO = taking
ii. Permanent v. temporary physical occupation
i. Permanent physical occupation - if yes, inquiry is over, don't look to purpose, etc.
ii. Temporary physical occupation - out of the realm of a per-se rule - need to balance
1) Character of government action/harm
Outline Page 14
2) Economic impact of the regulation, especially the degree of interference with investment - backed expectations
a) Bigger the economic impact on the property owner, the worse it is
b) 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 the
government, this is an important factor to consider in determine whether the government is taking the property
3) Rights implicated
a) Right to exclude - right to dispose, right to use
Outline Page 15
vii.
rarely find this condition to exist
ii. 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
iii. PALAZZOLO v. RHODE ISLAND (Sup Ct US 2001)
i. 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
ii. Huge ripeness issue here - whether Palazzolo has exhausted his remedies - all of his applications have been haphazard
iii. Take out of this case some hesitancy to apply the conceptual severance - Lucas is pretty limited in its application unless you can
conceptually sever
iv. "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
v. 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
1) "State may not evade the duty to compensate on the premise that the landowner is left with a token interest"
iv. TAHOE-SIERRA PRESERVATION COUNCIL, INC. v. TAHOE REGIONAL PLANNING AGENCY (US Sup Ct 2002)
i. Issue - does the 32 months moratorium on development constitute a temporary taking?
ii. 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
iii. Lucas doesn't apply because this isn't permanent
iv. 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.
1) 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
v. FIRST ENGLISH v. COUNTY OF LOS ANGELES (US Sup Ct 1987)
i. 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
ii. 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
vi. FYI - California Coastal Commission
i. Passed by voter initiative in the 70's, has extensive land use authority on land within the coastal zone
ii. 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
iii. Members of the commission are appointed - recently a lot of the appointments have been democrats
G. Exactions
i. Typically local governments (sometimes states), in exchange for the right to develop, ask the property owners to give somethi ng back in return
ii. Common example of historic use of exactions - developer building a development has to give up land for public streets/sewer lines/etc.
iii. 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.
i. Local governments increasingly begin to rely on exactions - asking developers to donate land/amenities that the government can't afford
in response to permits
iv. NOLLAN v. CALIFORNIA COASTAL COMMISSION (1987)
i. 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
ii. 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
iii. 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?
1) 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
v. DOLAN v. CITY OF TIGARD (Sup Ct US 1994)
i. Dolan wanted to expand a commercial development - city wants her to put in a bike path/walkway and greenway - both public
easements
ii. Overall, city has a right to do this - but still might constitute a taking as applied to an individual property owner
iii. Is there is a nexus between the development requested by Dolan and the exaction requested by the city?
1) 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
2) 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
3) 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?
iv. 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
1) No evidence that the bike/footpath will actually reduce traffic
v. This case is not deferential to local governments - court is suspicious of local governments in these circumstances
1) Local governments often have revenue problems
vi. David A. Dana - game-theoretic model
i. Development regulation consists of one-time games and repeat games
ii. 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
iii. 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
vii. Academic perspectives on takings
i. Michelman article??
ii. Epstein on takings
Outline Page 16
Outline Page 17
i. Jessie Lide dies leaving a handwritten will (no witnesses) appointing Perry as executrix and White to live in her home but not sell it
ii. Lide has two sisters who quitclaim any interest in the estate, and 12 nieces and nephews who are the ones suing
iii. This case shows what happens when you have ambiguities - what default positions will courts take when trying to interpret ambiguous
language?
iv. 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
v. Court concludes that Lide meant to pass a fee simple absolute to White - but declared the attempted restraint on alienation void
xvi. Rule against direct restraints on alienation
i. Such restraints make property unmarketable - particular land may be unavailable for its highest and best use
ii. 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
iii. Restraints discourage improvements on land - owner is unlikely to sink money into improvements on land that he cannot sell
iv. 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
v. It is sometimes said that a restraint on alienation is repugnant to a fee simple and void for that reason
vi. Classification of restraints on alienation
1) Disabling restraint - withholds from the grantee the power of transferring his interest ( White)
2) Forfeiture restraint - provides that if the grantee attempts to transfer his interest, it is forfeited to another person
3) 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.
vii. 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
B. Defeasible Estates
i. An estate upon the happening of another event
ii. Defeasible fee - The present interest that occurs upon the happening of some other event besides the death of the owner
i. Can go to original grantor or 3rd party
iii. Fee simple determinable
i. If the future interest goes automatically to the grantor upon the happening of the stated event
ii. Future interest is the possibility of reverter
iii. Fee simple determinable is of a durational nature - see language like "so long as, while used as, until, during the time that, while"
iv. Sometimes see the possibility of reverter actually spelled out
v. 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
iv. Fee simple subject to condition subsequent
i. 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
ii. Courts when in doubt like to assume that it was a fee simple subject to condition subsequent
iii. Future interest is called right to re-entry or power of termination
1) Unlike a possibility of reverter, the right of re -entry needs to be spelled out - we don't imply it
iv. Words you need to say are different from fee simple determinable - connote a condition
1) "provided that"
v. Reversion - amount left to owner if he transfers less than he actually owns
i. Fee simple absolute is unlimited in duration
ii. Reversionary interest may or may not be certain to become possessory
iii. Possibility of reverter (??)
vi. Big difference between Fee Simple Determinable and Fee Simple Subject To Condition Subsequent is how the statute of limitatio ns is applied
i. Fee Simple Determinable
1) SoL begins to run when the condition is broken - property should transfer automatically - original owner should do something to
make sure that happens
2) 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
3) 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
ii. Fee Simple Subject to Conditions Subsequent
1) SoL doesn't begin to run until you attempt to re -enter and are rebuffed
2) 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?
a) Might have a defense of latches - equitable defense - not really fair
b) You should have come forward and exercised your right, and therefore you're barred from bringing this action
iii. Reality is, the different between a FSStCS and a FSD is slighter than it appears
1) Different defense - not a defeat of the adverse possession claim, but just that original owner doesn't get to bring their action
vii. 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
i. Breach of a covenant leads to damages or an injunction
ii. Court prefers covenants
iii. "Provided that" "On the condition that"
viii. How to value defeasible estates
i. 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 forever
ii. More complicated if the gift has been to a public jurisdiction and they want to stop using the property for the reason it wasgiven
1) 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
a) Courts are reluctant to uphold that - they say there is still value when the condition has been violated
b) Value is probably what it would take for the city to acquire similar property for similar purposes - difficult to tell
ix. Devises that attempt to cut off support to spouses who remarry
i. 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
Outline Page 18
i.
ex-spouse has adequate support throughout their life
ii. Courts will, generally speaking, construe restraints on marriage as narrowly as possible
C. Remainders
i. Two types of remainders:
i. Vested Remainder(3 types)
1) Absolutely vested remainder - not subject to change, no question that the person who is supposed to get the remainder will get
the remainder
2) Vested remainder subject to open - vested remainder subject to partial divestment
a) If the remainder will be divided among people to be born in the future (typically children or grandchildren)
b) 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
c) 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)
3) 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
ii. Contingent Remainder
1) 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
2) Will also occur if it is to go to a person who cannot be ascertained at the time of the initial conveyance
3) Contingent remainder can become a vested remainder when the contingency is removed
4) Difference between a vested remainder subject to divestment and a contingent remainder is pretty small
a) 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"
i) B has a vested remainder subject to divestment - will be taken from him if he fails to graduate
b) Contingent remainder is the same idea, drafted differently - incorporates the condition into the gift
i) "To A for life, then to B if he graduates from law school, otherwise to C"
c) Two differences that are relevant
i) 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
- In above, B gets it, and if he never meets the condition it is divested from him upon death
ii) CR are subject to the rule against perpetuities - VRStD are not
- Exception - VR subject to open (class gifts) are subject to the rule
d) Courts prefer vested remainders
e) If it is clearly drafted as a contingent remainder it is a contingent remainder
D. Executory Interests
i. Any future interest in a grantee that is not a remainder is an executory interest
ii. If it cannot become a present interest at the natural end of prior interests created in the devise/conveyance, it is an execu tory interest
iii. 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
i. No legal different between swinging and switching executory interest
vi.
vii.
viii.
ix.
x.
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 interest
Rule is an attempt to limit dead hand control - the extent to which someone can control their property beyond their death
Only three interests are subject to the rule - contingent remainders, executory interests, and class gifts
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
Need to look for a validating life - someone who is alive at the time an interest is created
i. Will - at the time of the death of the testator
ii. Trust - at the time the trust is signed for a revocable trust
iii. Conveyance - at the time conveyance is created
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
Who can be a life in being?
i. Anyone named in the conveyance or the devise
ii. Intervening generations who were alive at the time the interest was created
1) O grants to A, but if A ceases to use the land for gambling purposes, to the grandchildren of B
2) 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
When does an interest vest?
i. Executory interest - the moment the contingency occurs - at exactly that moment the future interest becomes possessory
1) 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
ii. Contingent remainder - when the condition that makes it a contingent remainder disappears, even if it does not become possessory at
that moment
1) O grants to A for life, then to B provided that B finishes law school
2) Might not necessarily become possessory when B finishes law school if A is still alive
iii. Vested remainder subject to open - Vests when each class member's interest is fully vested
1) O to A for life, then A's children who reach the age of 21
2) Vested remainder subject to open is fully vested at the time the last child turns 21
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
i. If the future interest violates the rule, strike it out and see what's left - whatever's left must also comply with the rule
Frequently a problem with the rule against perpetuities - fee simple determinable followed by executory interest
Outline Page 19
Joint tenancy
Tenancy in common
Tenancy by the entirety
Community property
(keep in mind which carry rights to survivorship and which dont)
B. In General
i. Three types of concurrent interests - All involve co-ownership - owners own at the same time, not consecutively as estates are concerned with
i. Tenancies in common
1) Each person has a separate but undivided interest
2) Each person has the rights to the whole property, but owns a fraction
3) Parties do not have to own equal fractions of the land
4) Can be conveyed at different times, by grant or will
5) No right of survivorship - surviving tenants do not get the share of one who dies - passes by intestate succession
6) Can be reached by creditors before and after the tenants death
7) Favor for a tenancy in common, not joint tenancy (flips historical presumption)
8) Even if you qualify for tenancy in the entirety/joint tenancies, you can still just own as tenants in common
9) Example - to A for life, then to A's children - children are tenants in common
10) Most states will presume a tenancy in common over a joint tenancy
ii. Joint tenancies
1) Unities:
a) Time - tenants must take interest at the same time
b) Title - must acquire interest by the same instrument - can never arise by intestate succession or other act of law
c) Interest - must have equal undivided shares and identical interests measured by duration
i) Largely ignored today when it counts
d) 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
2) Most important fact - carries with it the right of survivorship - interest immediately transferred to joint tenant upon death
a) Estate continues in the survivors free from the interests of the decedent - decedent's rights are extinguished
3) Advantage - avoids probate
4) Joint tenancy can be destroyed by any of the tenants conveying to a 3rd party - in most jurisdictions, without notice to the other
tenant
a) 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
5) Joint tenancy cannot be conveyed by will - joint tenant's interests disappear upon death
Outline Page 20
5) Joint tenancy cannot be conveyed by will - joint tenant's interests disappear upon death
6) If a creditor acts during the lifetime of a joint tenant, can seize and sell the interest - severs the tenancy
a) If creditor waits until joint tenants death, they have nothing to go after
7) For estate tax purposes, the interest the survivor possesses is subject to estate tax (big marital deduction)
8) Right of survivorship in a joint tenancy is contingent upon surviving your joint tenant, and not getting screwed over by your joint
tenant
iii. Tenancy by the entirety
1) Same requirements as joint tenancies, plus marriage
2) Generally speaking can only be created in a husband and wife
3) Like joint tenancy, have right to survivorship
4) Can't sever without consent of the other party
5) Typically, tenancies by the entirety are severed by divorce or death
6) Community property title can also not be severed without consent of the spouse
7) Exists today in fewer than half the states
ii. RIDDLE v. HARMON (Ct App CA 1980)
i. 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
1) In the past, couldn't sever a joint tenancy by simply transferring a deed to yourself
2) 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
ii. Issue of notice to co-tenant - across the US notice is not required - even if the purpose is to mislead the other joint tenant
1) True even if the person against whom the severance is worked can't make plans for his/her disposition of the property
iii. CA has a rule that the severance will only be effective if you record the notice before the death of either tenant
iv. Most states require evidence that you clearly intended to sever
v. "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"
C. Partition
i. Judicial partition
i. 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
ii. 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
iii. Not available for tenants in the entirety
ii. DELFINO v. VEALENCIS (Sup Ct CT 1980)
i. Angelo and William Delfino own 99/144 interest in the property, Helen Vealencis owns 45/144
ii. Plaintiffs want to create a residential subdivision - want a partition by sale (split the value of the land/purchase the land themselves)
iii. Defendant wants to partition the land in kind - basically just split the land
1) Defendant has run garbage disposal business on her land since the '20s, but no garbage is actually ever on the land - (no nuisance)
iv. Standard for deciding whether to divide the land in kind or partition by sale
1) Presumption is partition in kind - Courts say that they prefer partition in kind, but usually end up partitioning by sale
2) Partition by sale factors:
a) Physical attributes are such that partition in kind is impractical or inequitable (gives you more room to argue) - land isn't
easily divisible
i) Not the case here - it's a 20.5 acre rectangular plot
AND
b) Whether the interests of the owner would be promoted by sale
i) By definition, each party thinks they have different interests or they wouldn't be engaged in the partition argument
ii) Seems to be a completely meaningless standard in some ways
v. Court awards Vealencis three lots, but makes her pay Delfinos for the inconvenience of running her garbage business
iii. ARK LAND CO v. HARPER (W. Va. 2004)
i. 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
ii. 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
iii. 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
1) 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
iv. 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 other
Outline Page 21
vi. "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"
ii. Remedies available to co-tenants
i. Repairs
1) Some states hold that you cannot compel contributions from co-tenants for repairs
a) Logic is that a fee simple holder, by himself, is not required to make repairs, so should not be compelled to contribute
2) Other states hold that contributions must be made from co-tenants
3) In an accounting, the person who has paid for repairs receives a credit, and essentially receives a little more in an equitab le
proceeding
ii. Improvements
1) In most jurisdictions, the person who pays for the improvements is not entitled to contribution
2) 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
iii. Taxes/mortgages
1) A cotenant paying more than her share is entitled to contribution
1) Adverse possession
1) 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
2) Owelty
1) 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
iii. Summary of right/remedies of joint tenants
1) Rights
1) Right to sell, lease, give away, but a joint tenancy cannot be devised
2) Right to survivorship is destroyed by selling/giving away joint tenancy, but not by leasing
2) Remedies
1) Partition in kind or by sale
2) Accounting (to ascertain assets and liabilities, with improvements measured by value added to property, and repairs & rents f rom
leases included)
3) Ouster (only if there exists affirmative evidence that you have been excluded by cotenant)
a) Remedy can be either injunction (allows you to reenter property) or damages (equal to half of reasonable rental income)
E. Marital property
i. Two basic approaches
1) Community property
1) 8 states, including CA
2) Spouses are part of a community to which they contribute to equally - proceeds of community are owned 50% by each spouse
3) Earnings of either spouse during marriage, and items purchased with such earnings are community property
4) Property brought to the marriage or received by one spouse through gift or inheritance is separate property
5) If in doubt, presumption is that property is community property
6) Spouse can only convey interest/share with consent of other spouse
7) Community property cannot be changed into separate property merely by stating intention to do so
8) Upon divorce, presumption is that all property of the couple is community property unless it can be shown otherwise
a) Burden of proof is on party claiming that property is separate and not community
9) Differences from joint tenancy
a) Spouse can devise by will their half of community property
i) Example- couple owns house in Cali as joint tenants. Husband dies, and devises his portion of the house to his kids.
Who owns house?
- 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
10) Differences from tenancy in entirety
a) Same example as above, except that house is owned in tenancy in the entirety
i) Husband cannot devise property to children, as there is a right to survivorship
ii) Tenancy in the entirety can only be destroyed with consent of spouse or divorce
11) Once something is community property, it doesn't change without consent of both spouses - even if you move
a) CA recognizes quasi-community property - if you move from NY to CA, property acquired in NY is treated as quasi community
property
b) 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
c) Upon death, the laws of the decedent's domicile at death govern - law where land is located governs the disposition of land
12) The community property must be managed for the benefit of the community - each spouse must act in good faith in exercising
authority
2) Equitable distribution
1) 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
2) Differences occur in the way the states define what marital property is subject to equitable distribution
a) 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
3) 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
4) Recent trend toward equal division of property upon divorce
ii. Community property vs. equitable distribution-do women or men fare better in one or the other?
1) In both, women and children tend to have a lower standard of living following a divorce than men
1) Women are more likely to have custody of children
2) Alimony is more common now, but not nearly as common as it was prior to the institution of 'no fault' divorce in early 1970s
1) In equitable distribution states, women are more likely to get less than 50% of all assets
iii. Mixing separate and community property
Outline Page 22
1) In equitable distribution states, women are more likely to get less than 50% of all assets
iii. Mixing separate and community property
1) Suppose that H had taken out life insurance policy before marriage - $3K in premiums had been paid before marriage and $7K during.
1) Inception of rights state (Texas)
a) 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
b) Life insurance policy owned by him, community is entitled to contributions - $7K plus interest
2) Pro rata state (CA, WA)
a) Community payments "buy in" a pro rata share of the title
i) 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 son
3) Time of vesting rule
a) 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
iv. IN RE MARRIAGE OF GRAHAM (Sup Ct CO 1978)
1) Issue is whether an MBA can be counted as property upon dissolution of marriage
1) Anne Graham spent the whole duration of their marriage working, plus doing all of the housework
2) Dennis got both a bachelors and masters degree during the course of the marriage
3) Anne contributed 70% of the cost of living during the marriage
2) 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 dont have any assets to split
3) Court's arguments about why degree doesn't constitute property
1) Doesn't have exchange value, however...
a) Organs - you have the right to them, but can't sell them
b) Social security - can't sell it to someone else but it's yours
c) Pensions/causes of action have value but you can't sell to someone else
2) Not inheritable, however...
a) Life estate is not inheritable
b) Joint tenancy is not inheritable - just right to survivorship
3) Like the Moore case where the court assumes that property has to have certain attributes - can counter a lot of these assumptions
4) Court also says that a degree is a result of years of accumulated education and hard work
a) Labor theory drives this intuition - but there are other kinds of property that are all about labor - patent, copyright
4) Have to also take into account what's fair/what were the expectations of the parties
5) Court concludes that education can be a relevant factor in determining spousal support, but not property in and of itself
v. Rules in other jurisdictions
1) California rules:
1) Basically requires the community (the couple) to be reimbursed for community contributions to education or training that
substantially increases a party's earning capacity
2) She would be entitled to half of the contributions
3) If you are divorced 10 years or more after the contributions have been made -no reimbursement requirement
2) NJ required reimbursement alimony
3) NY is alone as defining a professional degree as a marital asset (O'Brien v. O'Brien)
vi. ELKUS v. ELKUS (Sup Ct NY 1991)
1) Couple got married while they are in school, Frederica had a career that was just beginning - by the end she is making $$$
2) 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
3) Best argument why this does not constitute property - it is an innate talent, not a degree
4) Celebrity goodwill and professional good will are things that most courts recognize - subject to equitable distribution
1) Future goodwill that the person has earned from their reputation/from their career
5) 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
Outline Page 23
2) MA has also been limiting the right to marry to people who live in MA
3) Also a question about recognizing marriages of people in other countries
iii. Benefits/responsibilities of marriage
1) Benefits:
1) 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)
2) Possible downsides
1) Equitable division upon divorce, alimony
3) Federal benefits are not conferred, even in states where gay marriage is recognized
iv. The traditional conflict of laws rule is that if a marriage is valid where contracted, it is valid everywhere
1) Theoretically, if a foreign gay couple moves to the US it should be valid
B. In General
i. Not dissimilar from estates, except parties are not co-owners
ii. 3 types of leasehold estates
1) Term of Years
1) 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
2) In some states statutes limit the duration of terms of years
3) Must be for a fixed period, but can be terminable earlier upon the happening of some event or condition
4) Because it states from the outset when it will terminate, no notice of termination is necessary to bring the estate to and en d
2) Periodic Tenancy
1) 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
2) Under common law rules, half a year's notice is required to terminate a year-to-year tenancy
a) 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
b) Notice must terminate the tenancy on the final day of the period, not in the middle of the tenancy
c) 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
3) Tenancy at will
1) Tenancy of no fixed period that endues so long as both landlord and tenant desire
2) 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
3) Tenancy at will ends, among other ways, when one of the parties terminates it (or upon death of one party)
4) 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) Differences between the three mainly have to do with notice
Outline Page 24
C. Leases
i. Matters primarily whether or not an arrangement amounts to a lease because leases give rise to the landlord -tenant relationship
ii. Leases are both conveyances and contracts
1) Lease transfers a possessory interest in land, so it is a conveyance that creates property rights
2) Leases also usually contain a number of promises (or covenants) so the lease is a contract to, thus creating contract rights
iii. Modern trend has been to reform the property law of landlord and tenant by importing into it much of the modern law of contra cts
iv. 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)
1) Tenants are usually less well off as a group, and there is an assumption of lack of available housing in some urban areas
v. Lots of landlords use form leases - less room for negotiation, but also a lot easier for the landlord
vi. Sometimes confusion about what constitutes a lease
1) 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) Might make a difference in right to terminate, whether you can assign your interest to someone else
vii. Subletting v. assignments
1) Anything less than assigning the entire interest the tenant possesses is a sublet
2) An assignment transfers the entire interest in the lease
viii. KENDALL v. ERNEST PESTANA, INC. (Sup Ct CA 1985)
1) First contract is between the Perlitches and the City of San Jose
1) Perlitches assign their interest to Pestana
2) Prior to assigning their interest to Pestana, Perlitches enter into a 25-year sublease with Bixler
3) Bixler tries to sell with existing lease to Kendell and O'Hara - needed Pestana's consent - Pestana declines consent
2) Kendell and O'Hara want Pestana to be subject to a contract doctrine of good faith and fair dealing
1) Pestana can only withhold consent for good reason
3) Courts don't want to restrict alienability - withholding consent for an assignment for no apparent reason does not encourage alienability
4) 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
1) 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
5) 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
ix. Bargaining Power
1) 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
2) In the residential context - we can probably assume that tenants have less bargaining power
1) Seems like landlord should have more say about who lives in their building
2) There are lots of subjective reasons that landlords would not want a certain class of tenants in their building
3) 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 on
residential landlords a reasonableness requirement to which they have not agreed."
Outline Page 25
Outline Page 26
x.
possession and sue for damages equal to the difference between the value of the property with and without the breach
xi. Illegal Lease Doctrine
1) DC court of appeals is fairly active in this judicial movement
2) Argument is that the lease that has been entered into is illegal and tenant shouldn't have to pay rent
3) Held to apply to substantial housing code violations, which have to be in effect at the time the lease is entered into
1) Landlord has to know about the violations
2) Landlord is entitled to reasonable rent
4) Tenant can withhold rent, and can also vacate and not be held liable for future rent
5) Abandoning an apartment is often not a very favorable option for many tenants
Outline Page 27
2) 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
6) Hilder gets all her rent back - court essentially says that the apartment was valueless
7) 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
x. 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
1) We don't make these same assumptions in the commercial context - we assume that there is equal bargaining power
xi. Putting aside IWoH, how can we ensure that a tenant has decent housing without shifting all the costs onto the landlord?
1) 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
2) Section 8 housing vouchers - government is paying the rent - give tenants enough money to buy housing that is affordable
3) Government might need to subsidize housing in markets where there is an inadequate amount of affordable housing
H. Tenant's duties
i. 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
1) Not every alteration made by a tenant amounts to waste
ii. Tenant has an implied warranty at common law to make minor repairs, a duty which arose out of waste - doesn't make sense today
iii. Commercial tenant's duty to repair may be altered by a covenant in the lease
1) Depends considerably on the language of the agreement in question
2) 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
iv. Does the tenant have a duty to pay rent after the leased premises have been destroyed?
1) Under common law - usually yes, unless the lease provided otherwise - on the theory that the interest in the soil remains to support the
lease
2) If the lease only covers a part of the building, an exception is made to the general rule
3) 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
X. DISCRIMINATION
A. Fair Housing Act
pp.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
376-378
Covers more than just race
Covers advertising for housing
Does not cover single family houses, unless the owner owns more than three such houses
1) Not exempt from advertising provisions
2) 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)
3604(a) - prohibits discrimination on the basis of race, color, religion, sex, familial status, or national origin for
1) Sale or rental
2) Inclusion of discriminatory terms, conditions, or privileges of sale
3) Printing, publishing of an advertisement/statement/notice that indicates any preference for the above categories plus handicap
4) Representing to any person because of the above categories that a dwelling is not available
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
Anyone injured by a discriminatory practice may commence a civil suit for injunctive relief and damages (including punitive d amages)
1) Other enforcement measures include conference and conciliation proceedings, suits by the US attorney general, and criminal penalties
Pursuing a claim under the FHA
1) Discriminatory motive need not be proved in order to make out a prima facie case under the FHA - proof of discriminatory effect is
sufficient
2) 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
3) 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
4) 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
1) Or, in the case of private defendants, one taken pursuant to a rational and necessary business purpose
5) 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
Discrimination based on family status/sex
1) 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) However, can't discriminate against children when the occupancy limitations would otherwise allow them
2) 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
3) Act does not prohibit sexual-preference discrimination
Handicaps
1) 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
Outline Page 28
B. 14th Amendment
i. If there is public housing involved, the equal protection clause protects from discrimination (state action)
ii. Prohibits only state action, but Shelley effectively eliminated at least some private discrimination as well
iii. SHELLEY v. KRAEMER (US Sup Ct 1948)
1) Court held that state courts could not enforce racially restrictive land use agreements
Outline Page 29
1) Every piece of property has a record that the county records office maintains of every transaction on that property
2) Lexis - can search by property and see all the transactions that have occurred
vii. Deed - recorded - you hold the deed, usually subject to the mortgage
viii. Title - simply tells you who owns the title, and whether there are encumbrances - want a clear title when you own a house
1) For practical purposes, not a huge difference between deeds and titles
ix. Real estate contract - pp. 454-462
C. Brokers
i. Brokers exist because there is a scarcity of information in the market for real property
1) 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
ii. Often hired by sellers of property to attract prospective buyers and facilitate real estate transactions
iii. Residential brokers are licensed by the state and typically receive a commission, usually ranging from 6 to 8 percent
iv. LICARI v. BLACKWELDER (App Ct CT 1988)
1) Children are trying to sell their parents' house - 3 brokers involved
1) Licaris hired Schwartz, Schwartz consulted with defendants Blackwelder and Opert
2) Broker Blackwelder bought the house themselves for $115k, then sold to a 2nd buyer - 2nd buyer pays $160k for the house
3) Court says that the broker has a fiduciary duty toward their client - to operate in the best interest of the person they are representing
1) Prohibits broker from misrepresenting facts, withholding facts, etc.
2) Broker must exercise fidelity and good faith, and cannot put himself in a position antagonistic to his principal's interest
3) 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
v. Listing brokers - contract with the seller to sell the property
1) 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
vi. Selling brokers - introduce the buyer to the seller's property
1) Have a more indirect relationship with the seller, and receive their commission by splitting the listing broker's commission
2) Commonly a prospective buyer initiates the relationship with a selling broker, who then introduces the buyer to sellers and listing
brokers
3) 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
vii. 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
1) While brokers have to deal fairly with both buyers and sellers, they must work entirely on behalf of their principals (in this case sellers)
2) Selling brokers even have the duty to report to the seller any information that the buyer shares with the selling broker
viii. 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
1) Owe fiduciary duties to prospective purchasers
2) 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
ix. 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
1) 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
2) Evidence showed that after passage of the law, prices generally fell, as did the average time needed to sell a house
x. Dual agents
1) 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) Broker can not be exclusively loyal to any one party
2) Many states permit dual agency as long as the dual agent reveals her dual agency to both parties
xi. Disclosure requirements
1) Law in some states requires brokers to disclose to buyers, in writing, that they are the seller's agent and not the buyer's
2) In many states, brokers must also disclose to the buyer any material defects known by the broker and unknown to the buyer
xii. When a commission is due
1) Traditional rule is that a broker earns a commission upon bringing to the seller a buyer who is ready, willing, and able
1) 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
2) Broker is entitled to earn a commission even if the sale fails to close
3) Owner can circumvent the dangers of the traditional rule through contract
4) 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
D. Types of listings
i. Listing agreement is an employment contract between a real estate broker and a seller - usually in writing
ii. If the broker satisfies the obligations set forth, the seller pays the broker a commission
iii. Open listing
1) Least protective listing that a broker can secure
2) Seller retains the right to sell the property herself or use a different broker without paying the open listing broker a commission
iv. Exclusive-agency listing
1) Permits only one broker, the exclusive agent, to sell the property for a specified period of time
2) Exclusive agent earns a commission for the sale of the property if she secures a buyer, or even if a separate broker secures a buyer
3) 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
v. Exclusive-right-to-sell listing
1) The most protective listing a broker can secure
2) Owner must pay that broker if any buyer purchases the property during the specified duration of the listing, no matter who found the
purchaser
3) Vast majority of listing agreements for residential properties
E. Marketable title
Outline Page 30
E. Marketable title
i. Implied condition of a contract of sale is that the seller must convey to the buyer a marketable title
ii. If the seller cannot convey a marketable title, the buyer is entitled to rescind the contract
iii. 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
iv. LOHMEYER v. BOWER (Sup Ct Kansas 1951)
1) Plaintiff enters into a contract to buy a house and discovers problems:
1) Only 2-story house allowed on lot - restrictive covenant
2) House must be more than three feet away from the property boundary - zoning ordinance
2) If the property is subject to restrictive covenant, even if property meets that covenant, is the title marketable?
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)
2) Title is unmarketable if it exposes the party holding it to the hazard of litigation
3) If property is subject to zoning ordinance, even if property meets requirements, is the title marketable?
1) If the property meets the ordinances title is still marketable
4) 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
5) Need language in the contract to say the buyer takes it subject to restrictions/covenants/etc.
1) Still no good marketable title when a covenant is violated
6) 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
1) Plaintiff here didn't realize he was taking on some risk while he was getting into the contract
7) 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 ordinance
1) Easier for a buyer to figure out what the zoning ordinances are
2) 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
v. Does title insurance = marketable title?
1) Court might say that it's good enough
2) In 90% of circumstances, yes, but conceivable that you might get yourself into a situation where the next transaction falls apart
vi. 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 possession
F. Equitable conversion
i. Both purchasers and sellers of real property are normally entitled to specific performance as a remedy for the other's breach of contract
ii. 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
1) The buyer is viewed in equity as the owner from the date of the contract
2) 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 buyer
iii. Risk of loss
1) 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
2) Some courts have declined to apply equitable conversion and have held that the loss is on the seller until legal title is conveyed
3) Other states put the risk of loss on the party in possession
4) 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
Outline Page 31
vii. Generally, an as-is clause will be upheld if the defects are reasonably discoverable and there is no fraud
J. The Deed
i. Special warranty deed - warrants only against the grantor's own acts, not the acts of others
1) 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) Courts have generally held that grantor is still liable
ii. General warranty deed - warrants title against all defects in title, whether they arose before or after the grantor took title
iii. Quitclaim deed - contains no warranty of any kind - merely conveys whatever title the grantor has
iv. Forged deed - someone else signs the signature of the seller
1) Seller is not liable
v. Fraud - when the seller has actually been duped in some way
1) 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
vi. Present covenants - breached at the time the deed is conveyed
1) Covenant of seisin - granter warrants that he owns the estate that he purports to convey
1) Measure of damages for breach - return of all or a portion of the purchase price
2) Covenant of right to convey - basically the same thing - but you might have title and not be able to convey it
3) Covenant against encumbrances - warrant that no encumbrances exist, except those actually listed in the deed, encompassed in the title
of record
1) Make sure that buyer takes property subject to encumbrances
Outline Page 32
K. The Mortgage
i. Mortgagors - party taking out the loan
ii. Mortgagees - the lender
iii. Equitable rules have developed over time to protect homeowners
1) 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) What happens is that property owners can walk away from their mortgages because they aren't liable for the difference
iv. 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
1) This method of foreclosure is quicker and less costly than judicial foreclosure
v. 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
vi. Foreclosure
1) If the foreclosure is through a judicial proceeding, the sale price is ordinarily not challengeable unless it shocks the conscience of the
court
2) 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
vii. MURPHY v. FIN. DEV. CORP. (Sup Ct NH 1985)
1) Couple bought house in 1966, refinanced in 1980 - then husband loses job, Murphys fall 7 months behind on mortgage
2) Murphys pay the 7 months they are in arrears, but the bank moves into foreclosure because they haven't paid costs
3) 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
1) Murphys sue , claiming that bank didn't exercise good faith and due diligence in obtaining a fair price for the property
a) If they had gotten more than the $27k, the Murphys would have been able to recover the difference
4) Court said that there was no due diligence here
1) Issue is whether a reasonable man in the lender's place would have adjourned the sale
2) Need to use ordinary methods to make buyers aware as if you were an owner selling land
a) Whatever is customary for the locality and local market conditions
b) Not enough to simply put a legal notice in the newspaper
3) Seems like the court doesn't like that the Murphys are losing so much money
viii. Difference between fair price and fair market value
1) Fair price - dependant on a process that's going to ensure a decent price
1) Maybe need to show that they will set an "upset" price for at least part of the Murphy's investment
2) Might not hold to the standard that a real estate broker would be held to in order to get the highest price possible
2) Fair price and a fair market price is different
3) What do you need to do as a lender to establish a fair price?
1) Bank would probably have to pay for appraisal - probably have to know what the market would pay
2) Set a reserve price - maybe a discount off the fair market value but still not far
3) Fair price - probably less than fair market value, but enough to cover costs
Outline Page 33
iii. 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
iv. BEAN v. WALKER (NY Sup Ct 1983)
1) 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
2) Question is whether this is more like a mortgage or just a regular contract
3) 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
1) Borrower has equitable title even if the contract says that the seller has legal title
2) Consequence - borrower has equitable ownership interest that needs to be extinguished before the sellers can take possession of
the property
a) In the case of the regular mortgage, would have to extinguish the title through foreclosure
b) Same in this case - have to have proper proceedings - borrower is entitled to get things like equity back
4) Why not treat this case as contract law?
1) For many Americans, home is the largest thing they own
2) 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
5) Courts generally don't like to see forfeiture of property
XII. TITLE
A. In general
i. 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
ii. 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
iii. 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
iv. At common law, if someone conveyed a deed (O to A, subsequently to B) - A would prevail, B could only recover for fraud
v. Recording statutes changed the common law priority - designed to put people on notice
1) Various states change priority depending on what approach they take
2) Notice jurisdiction - subsequent purchaser prevails only if B had no notice of the conveyance to A
3) Raised notice jurisdiction (CA) - protects bona fide purchaser only if she had no notice and records first
In every American state, statutes provide for land title records to be maintained y the county recorder in each county
Recording acts do not affect the validity of a deed - a deed is good and valid without recordation
Under the recording acts, a subsequent bona fide purchaser is protected against prior unrecorded interest
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.)
C. The indexes
i. Tract index - indexes documents by a parcel identification number assigned to the particular tract - does not exist in most states
ii. Grantor-grantee index - indexes are kept for grantors and grantees, indexed alphabetically and chronologically under grantor/grantee's
surname
iii. How to search title - pp. 561-565
iv. ORR v. BYERS (Ct App CA 1988)
1) 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)
2) If the judgment was correctly recorded, Elliott would have had to pay off the judgment out of the proceeds of the sale
3) 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
4) Orr's lawyers are suing Byers to foreclose the lien - question is - does Byers have record notice of the lien?
5) 2 innocent parties here - Orr and Byers - they are both in a bad situation
1) 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
6) Many states find the other way in this case
1) Green - it is common knowledge that proper names are spelled in a variety of ways, and everybody is presumed to have such
knowledge
a) If the record of a name spelled one way should directly suggest to the ordinary mind that it is also commonly spelled another
way, the searcher should be charged with whatever the record showed in some other spelling under the same capital letter
XIII. EASEMENTS
A. In General
i. Arise out of interactions between parties that are not contractually based
ii. 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)
iii. Types of servitudes
1) License- permission to enter real property possessed by another
1) Revocable at any time
2) Profit- right to take something off of property of another
1) Example: timber or mineral rights
2) Even with this right, you need an irrevocable license to go onto property to take items
3) In some cases, a license can ripen into an easement
Outline Page 34
iv.
v.
vi.
vii.
B. Implied Easements
i. Courts will frequently imply easements in situations where property is subdivided, and some showing is made of necessity
1) Implied grants - person who subdivides the property must grant easement to person who takes ownership of subdivided property in
need of easement
2) Reserved - person subdivides the property but retains an easement for personal use
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
3) Types of implied easements
1) Easement by necessity (Othen) - Prior to severance, one part of the parcel was apparently, continuously and permanently used as
an easement
2) Easement by prior use (Van Sandt)
ii. 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)
Outline Page 35
ii.
intentions)
iii. Quasi-easement - when a property owner utilizes an easement on their own property
D. Easements by necessity
i. Doctrinal requirements to establish easement by necessity
1) Implied if the land was in common ownership
2) Severed into separate lots by owner
3) 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.
4) Split of opinion over whether necessity is defined as strict necessity or reasonable necessity (majority)
ii. Easement by necessity v. implied easements
1) Implied easement can be harder to prove because you have to show prior use
2) On the other hand, easements by necessity can be hard to prove in the jurisdictions that require strict necessity
iii. 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?
iv. Easement by necessity only endures so long as it is necessary - if there is another way out from a landlocked parcel the easement ceases
v. OTHEN v. ROSIER (Sup Ct TX 1950)
1) Pre-1896 - Hill owns everything - more expansive than the land eventually in question
2) 1896 - 100 acres is conveyed, ends up with Rosiers
3) 1897 - 60 acres are conveyed - ends up with Othen
4) Same day in 1899 - 53 acres are conveyed - end up with Othen, 16 acres are conveyed - end up with Rosier
5) Othen has been used fenced lane across the bottom of 100 acres, and a path across the 16 acres
1) Owners of the 100 acres maintain the lane
2) Othen sues for easement when land is flooded, muddy, and un -useable
6) Question of element - severance causes the necessity
1) This is the question - when Hill divided the parcel, did it create the necessity? Did it land lock the parcel at the time?
2) Problem for O is that it is possible the severance did not create the necessity - burden is on O to establish that it did
a) How would he prove it?
i) Witnesses at the time - but they may be old /dead
ii) Better research of deeds/maps
3) O is out of luck on easement by necessity, probably out of luck on prior use
7) Necessity not a convenience
8) Court here finds against Othen
1) Argument that we should not stick by strict doctrinal rules (Singer article)
a) From an efficiency standpoint, doesn't make sense to penalize Othen by making his land locked
b) Fairness argument - Othen relied pretty extensively on the easement
9) Texas courts don't recognize easements by estoppel, but Othen would have had a pretty decent claim
E. Prescriptive Easements
i. Elements
1) Need to show actual use
2) Open and notorious
3) Continuous use
4) Needs to be under claim of right - hard to establish - frequently owner knows about the use
5) For a statutory period - typically the same period of time as adverse possession (CA - 5 years)
6) Can be some notion of exclusivity
ii. Easement by prescription isn't for all purposes - only for reason that led to prescriptive right
1) If you have an easement to walk over a path, doesn't mean you can drive over it
iii. 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
Outline Page 36
F. Scope of Easements
i. What kinds of variations are permitted when times/circumstances change?
ii. 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
iii. Generally speaking, the scope questions come up in 4 different ways
1) Whether the use itself is of a kind contemplated by the grantor
1) 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
2) Increase of use in the easement (even for same purpose)
1) 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
2) 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
3) Whether the dominant estate gets subdivided
1) Can the three households now use the easement that crosses the servient estate?
2) General rule - yes - can subdivide the easement subject to reasonableness
3) Subdivision is common, so courts have generally been willing to allow the subdivision of easements
4) Rather than subdividing, you add to the parcel
iv. BROWN v. VOSS (Sup Ct WA 1986)
1) 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
2) Owner of parcel A tries to get an injunction against the owner of parcel B from using the easement for both parcels B and C
1) 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
a) Doesn't seem to make sense
b) Rules v. standards argument - if the property laws are clear, we avoid disputes
c) 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
d) Easement itself is express - this is what the parties clearly intended - the written agreement doesn't say any more than that
3) Property rules v. liability rules
1) Property rule
a) Brown - access to easement for C
b) Voss - enjoin Brown's use of easement for C
2) Liability rule
a) Brown - access to easement, has to pay damages to Voss
4) Court gives Brown access, makes him pay $1 in damages to Voss
v. Most courts will actually enjoin the use of an easement to get to an extra parcel
vi. PRESAULT v. UNITED STATES (US Ct App Fed Cir 1996)
1) Old railway lines were being used for hiking paths
2) Question of whether railroad abandoned the easement - if they did, the easement expires
1) Railroad dug up lines, haven't made an attempt to put anything else there
3) 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
vii. HILL v. COMMUNITY OF DAMIEN OF MOLOKAI (Sup Ct NM 1996)
1) Four Hills Village - community for 4 unrelated individuals living with AIDS
2) 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
3) Defendant counterclaims, saying that covenant violates FHA
4) Lawyers for plaintiffs do establish that there is an increase in traffic
1) 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
2) If there was a covenant provision
a) Look at whether it is selectively enforced
b) Look at possible violation of FHA
5) What's the purpose of single family restrictive covenants?
1) One reason - don't want traffic
2) Maybe a little disingenuous on court's part to brush off the traffic issue like this
6) FHA
1) Unlawful to discriminate in the sale/rental of housing or otherwise make it unavailable any denial because of a handicap
a) No question that having AIDS is a handicap
2) Discrimination includes a refusal to make reasonable accommodations in rules, policies, etc.
3) 3 ways to establish a claim:
a) Establish discriminatory intent
i) Could probably make a decent claim here - could probably show that selective enforcement of the covenant is
motivated by ill will
b) Discriminatory effect claim (disparate impact)
i) Focuses on whether a defendant treated handicapped individuals differently from other similarly situated individuals,
and a disparate impact results
ii) Burden is on plaintiff who is claiming discriminatory intent to demonstrate it; burden then shifts to defendant to prove
absence of discriminatory effect
iii) 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
c) Failure to provide reasonable accommodations
i) Defendant must at least make reasonable attempts at accommodating handicapped individuals
ii) Analysis would include whether or not reasonable accommodations are feasible, and prior actions taken/not taken by
Outline Page 37
XIV. ZONING
A. In General
i. Remember to look at state action v. private action!
ii. Has an active role in controlling land use
iii. 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
iv. Euclidian zoning - separate land uses for conflicting uses
1) Social theory behind Euclidian zoning - has roots in garden city movement
1) Envisioned small towns, green belts, etc.
2) Central tenants adopted across the country
a) Idea that segregation of uses is desirable - different uses harm each other
b) Do the assumptions result in unintended consequences?
3) Central goal is to provide for "wholesome housing" - setbacks, minimum lot size, etc. - Idea that single family housing brings with it
small town values
4) Open space is desirable for healthy living - should surround both cities and houses
5) Idea that good planning protects against change and maintains the status quo
6) Failed to anticipate the need for density
7) Also - is homogeneity a good thing?
v. Zoning frequently doesn't cure the problems it sets out to cure
1) Preservation of open space frequently gets undermined
vi. Fundamentals about how zoning typically works
1) Power to zone typically comes from police power - authority to enact or enforce regulations for health or safety
2) Typically zoning power is regulated to different localities - very local function - zoning enabling acts
1) Zoning is typically left to a planning committee
3) Generally speaking - two types of zoning
1) Use zoning - limits kind of uses within a particular zone - usually cumulative
2) Area zoning - size of lots, heights of buildings, setback requirements, etc.
4) Most states require municipalities to enact a general plan - vision of how municipalities are supposed to develop
1) Provide some foresight for the future growth of a municipality
2) Most states require that changes in the zoning ordinance be consistent with the general plan
5) CA tends to be lenient for allowing zoning changes
vii. In general courts are quite deferential to zoning ordinances - CA is fairly deferential to planning board decisions
1) Except in the cases of constitutional violations, violation of statutory authority
2) Takings challenges - still tend to be deferential to zoning ordinances
viii. Types of zoning
1) Euclidian zoning - separate uses
1) Certain problems - having to drive from one area to another
2) Cluster zoning - idea is that residential uses are clustered more closely than normally permitted - provide for more open space
3) Plan unit zoning - allows for mixed uses where compatible
Outline Page 38
Outline Page 39
D. Exclusionary Zoning
i. SOUTHERN BURLINGTON COUNTY NAACP v. TOWNSHIP OF MOUNT LAUREL (Sup Ct NJ 1975)
1) Town is trying to cope with rapid growth that is expanding past Camden
2) Property taxes in NJ fund schools, fire departments, etc. - similar to how CA used to operate
3) What Mt. Laurel is doing is engaging in fiscal zoning - try to minimize services they have to pay for
4) Various zoning policies city has adopted
1) 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
2) Housing - Mostly zoned for single family use with large lot sizes
3) 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
a) City would have to show pretty strongly that the burdens created by the development are offset - Nollan,
Dolan
5) Plaintiffs challenge these provisions on both state and federal constitutional grounds - Court addresses on state
constitutional grounds
6) Constitutional challenges under federal law have been eroded here
7) Any fundamental rights at issue here?
1) Housing - rejected in 1972
2) Racial discrimination - at this time, need to show discriminatory intent (Arlington Heights)
8) This is mostly challenged on fiscal grounds
1) Is the town motivated by economic discrimination? Yes - quite clear in the town's argument to the court
2) NJ state constitution also has an equal protection clause
a) Court says that under the NJ constitution all categories of people need to be provided for
9) What is Mount Laurel required now to do?
1) 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
10) Mount Laurel litigation does not solve the NJ housing problems
1) If the plaintiff shows there is inadequate housing, burden shifts to municipality - fiscal reasons are not enough
2) One problem is that the court assumed that by eliminating zoning regulations, multifamily housing would
follow
a) Based on an economic assumption that may be wrong
b) Housing subsidies are actually a better idea
3) Just eliminating zoning barriers doesn't create the kind of housing the court hoped would happen
11) Mount Laurel II - municipality had to take affirmative action to put affordable housing on the ground
12) Court says Mount Laurel doesn't have to re-do their entire zoning ordinance, but have to comply with the spirit of
the opinion
13) Other states get uncomfortable when they see a lack of affordable housing
Outline Page 40
13) Other states get uncomfortable when they see a lack of affordable housing
Outline Page 41
Questions
Monday, April 21, 2008
4:15 PM
Outline Page 42
Review Session
Wednesday, April 23, 2008
2:26 PM
Outline Page 43
Outline Page 44