Property 130 – Outline

1) What is Property?........................................................22) How do you acquire property?..............................................23) Adverse Possession......................................................34) Additional Property Rights: Publicity, Copyright, Trademark, Patent.................65) Property rights in Human Tissue............................................96) Estates in Land and Future Interests........................................107) Future Interests:........................................................158) Rule Against Perpetuities (aka the rule against perpetizzle).......................169) Concurrent Ownership...................................................1710) The Recording System.................................................2111) Nuisance............................................................2412) Servitudes: Easements.................................................2513) Servitudes: Real Covenants & Equitable Servitudes...........................3114) Protection against Discrimination in Housing................................4015) Eminent Domain......................................................4016) Regulatory Takings....................................................44

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1) What is Property? a) A property interest is a right which the law will protect against infringement by others.

i) We usually aren’t talking about the actual physical property; we’re talking about the rights to that property (that overlay the actual property).

b) Real property (land), personal property (chattels), and intangible property (e.g. intellectual property)c) Bundle of Sticks (Rights); Property rights include the:

i) Right to Exclude others (1) Basis for Trespass (exclude people/things) and Nuisance claims (exclude noise, fumes, intangible things)(2) Jacques v. Steenberg Homes (p.4) – Trespasser ordered to pay punitive damages (even though no

actual damages were suffered). Right to exclude is so fundamental that it merits an award of punitive damages. The damage is to the right itself (not to the actual property).

(3) Intel Corp. v. Hamidi (p. 20) – Hamidi sent several unsolicited emails to 20,000 Intel employees using Intel’s private serversBecause Hamidi’s emails didn’t actually harm Intel’s servers, no trespass to chattels occurred.(a) Summary: Trespass to Chattels must involve actual harm to physical object OR dispossessing the

owner of the object for a period of time. Harm to right itself (w/o damages) is not actionable, unlike trespass to land. Historically land has been viewed as more important (was means of production, and viewed as symbol of power/prestige). Dissent: Availability of “self-help” is basis for this rule; In this case no self help was available.

(4) Exceptions to Right to Exclude: (a) Emergency or Necessity (e.g. burning boat pulling up to your dock)(b) Retaking stolen chattel, if in “fresh pursuit”(c) State v. Shack (p.12) – Farmer did not have right to exclude charity workers for migrant farmers from

his property (therefore aid workers did not trespass)The well being of the workers on the property was more important than the farmer’s right to exclude.

ii) Right to Possess itiii) Right to Use itiv) Right to Transfer

(1) Give it as a Gift(2) Sell it (alienable)(3) Pass on to children (inheritable)

d) A property owner may have some, but not all, of these rightse) All of these rights are subject to limits imposed by society

2) How do you acquire property? i) Possession: First in Time

(a) What constitutes Possession?(i) Possession requires:

1. Physical control of the item, ANDa. Where complete physical control isn’t practical (e.g. whaling, diving for sunken treasure),

industry customs can be taken into account when determining if possession.2. Intent to possess

(ii) Wild Animals 1. Pierson v. Post (p.34) – Post was hunting a fox; Pierson intervened at the last minute and

killed the foxFirst in Time principle (First person to establish possession owns a wild animal). In order to establish ownership of a wild animal you must either physically take possession of it OR mortally wound it, secure it with nets, or otherwise deprive it of its natural liberty and render escape impossible.

2. Keeble v. Hickeringill (p.40) – Neighbor fired his gun to scare off ducks in P’s decoy pondD was maliciously interfering with P’s “trade” of duck hunting; if he scared off the ducks by engaging in the same trade (e.g. built his own duck pond), he would not be liable.

3. Landowner has superior rights to animals on his own land: ratione soli4. If an animal escapes and returns to its natural state, then possessor’s ownership rights are

extinguished

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(iii) Popov v. Hayashi (p.46) – Popov tried to catch Bonds’ 73rd home run ball but was attacked by a mob, after which Hayashi got the ball. Ct. ruled that Popov never had possession, but in order not to “encourage” mob behavior, they ordered that the proceeds be split.

(iv) Anderson v. Beech Aircraft Corp. (p.55) – Beech bought gas and injected it in underground reservoir partially beneath Anderson’s property; Anderson’s lessee began produce gas from the reservoirCt. used Law of Capture: Gas is part of the Real Estate until it is actually produced; Like a wild animal, once Beech injected the gas back into the ground, they lost ownership (same with water).1. Not universally applied – Gas is different from wild animals; processed gas is actually

different in composition than natural gas, and gas doesn’t ‘escape’, it is moved about mechanically

2. Policy Against Doctrine : Both parties encouraged to produce gas as quickly as possible – Bad result for societySome cts. have instead imposed a ‘fair share’ doctrine.

ii) Discovery/Conquest (1) Johnson v. Macintosh (p.116) – Johnson bought land from Indians; Macintosh later bought the land from

the US govt. Land awarded to Macintosh. “Conquest gives a title which the courts of the conqueror cannot deny”. Johnson would have had a claim in Indian courts, but not in US courts. Indians had possession of land, but not title in it.

3) Adverse Possession

Sample Definition“An action to recover the title to or possession of real property shall be brought within twenty one years after the cause of action accrued, but if a person entitled to bring the action is, at the time the cause of action accrues, within the age of minority or of unsound mind, the person, after the expiration of twenty one years from the time the cause of action accrues, may bring the action within ten years after the disability is removed.”

Definitions: Color of title – You have a written document (although invalid) upon which you’re founding your claim. Claim of title/ownership – You have an intention to own (NOT necessarily a written document).

The following conditions must be met:a) Actual and exclusive possession

i) AP must possess a reasonable percentage of the land. AP only acquires the portion of the land that they actually physically occupy (e.g. Nome v. Fagerstrom they only acquired North end, not South end).(1) Exception: if you have color of title, you can get the entire area described by the instrument (if it’s a

contiguous unit)b) Adverse or “hostile” possession – Possessor’s occupation must NOT be permissive (e.g. can’t be a tenant).

Objective, not subjective, standard.c) Claim of right (various meanings by State)

i) Objective Standard: Possessor must be acting as owner of property (not as a trespasser would act), ORii) Good-faith Standard (Minority): Good-faith belief that possessor owns the property

(1) Color of title (e.g. invalid deed) can satisfy this; other jurisdictions might require color of title AND good faith.

iii) Bad-faith Standard aka Aggressive Trespass Standard (Small minority of states, if any): Possessor intentionally acting to acquire property he doesn’t own

d) Open and Notorious – Possessor must “fly his flag” so that owner has opportunity to see that someone is acting as owner.i) Must act as a ‘typical owner’ of a similar property would act (one frame of reference: focusing on AP’s

actions).ii) Actions should be such that a reasonably diligent owner would be expected to know that someone is on their

land (other frame of reference, focusing on what the owner should be expected to notice).(1) Nature of land taken into account when determining what constitutes open and notorious(2) A fence/enclosure would satisfy this requirement (although it’s NOT required – especially in a city).

(a) Physical improvements to land are NOT required (Nome v. Fagerstrom: Alaska).(3) Community view of whether AP acted as an ‘owner’ is taken into account

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(4) Paying taxes is evidence of this, and is required in CA(5) Owner’s lack of knowledge of its interest in the property is NOT a defense against Adverse Possession

(Lawrence v. Town of Concord) As long as AP’s use is Open & Notorious, it doesn’t matter if the owner actually knows about it; in

fact, AP probably wants to hide it from owner to some degree (Lawrence v. Town of Concord) and that’s okay.

e) Continuous – Must be maintained for the statutory period. i) Seasonal use or intermittent use may be sufficient (if it’s what ordinary owner would do)ii) Re-entry by owners breaks the chain (even if it’s brief), so does acquisition of title by govt.; Break by 3rd party

intrusion doesn’t break continuityf) For the statutory period

You cannot adversely possess against government land except in specific situationso Policy for govt. exception to AP

The monitoring costs to the public would likely be too high. Impossible to monitor public parks, etc. – maybe there should be an exception for certain types of

public propertyo Policy against govt. exception to AP

‘Nuisance properties’: Vacant properties where the city is paying money to clean them up periodically. If govt. is going to ignore this land, maybe society would be better off if there were squatters

Govt. shouldn’t get preferential treatment over private property owners. If we think that property is the means of production (maybe not still valid…) if govt. doesn’t use it productively, then we should allow AP

Society is better off if poorly used land in the commons (govt.) is put into effective use in private lands

Tacking o Adverse possessor may transfer his interest in the property to another (so that you can add the 2 AP’s

time periods together to meet the statute of limitations. There must be an agreement to transfer, and the time periods must be consecutive.

o Owner can NOT tack – If O1 conveys property to O2, the statute of limitations doesn’t restart for AP (unless it’s a life tenant/remainder situation).

The ‘cause of action’ accrues when all of the adverse possession elements begin to be satisfied (person openly and notoriously occupies land, with hostile intent, etc.) This is not necessarily when they first set foot on the land.

Type of Adverse Possession is determined by the Owner (person with possessory interest) at the time cause of action accrues. Since the AP is only using the possession stick to get the land, they can only AP against the person with possessory rights to the land (NOT future interest holders):

o If Owner has fee simple absolute, at point of entry, then you AP against full title (even if he later conveys property to a life tenant or someone else).

o If Owner is life tenant, you can only acquire life tenant’s possessory interest (Once he dies, you must start all over again and Adversely Possess against the owner of the Remainder).

o In a landlord/tenant situation, you can only AP against the tenant (for their possessory interest for the length of their lease) b/c landlord can’t bring trespass action (only person w/ possessory interest can bring trespass action).

Minor/disability statutes only apply to condition that exists at the point the cause of action accrues. o You can’t tack disabilities. Only disability of owner at time of entry qualifies.o See Sample AP exercises in separate word doc.o Policy: We keep these exceptions because we’re dealing with ‘Black Acre’; if the owner somehow loses

the property through no fault of their own, we want to protect the Black Acre (not just their $$ interest in the property).

Policy Criticism: Statute could run for an extremely long time Landlord/tenant – Tenant can only AP against landlord if he repudiates the lease first Mistaken boundary – Most courts hold that a boundary mistake (large enough to be visible to the naked eye) CAN

constitute valid AP (e.g. if neighbor builds a fence 15 yards into other property, AP will begin). Rights of Adverse Possessor:

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o AP can bring an action for trespass against 3rd parties while they are adversely possessing (but not against true owner)

o After statutory period, AP is subject to any benefits/ burdens (e.g. easements) that were on the property.

Policy Reasons for Adverse Possession:i) We value the labor that AP has put into the propertyii) We want land to be used productively; not abandoned/ignorediii) MOST IMPORTANT USE: Quieting title/Perfecting title Makes land more marketable, which benefits

society economically

Policy Against Adverse Possession:i) Rights of owner being harmed; he didn’t do anything wrongii) Reduces incentive to own/purchase propertyiii) Makes property ownership more expensive (b/c of monitoring costs)iv) Method of redistributing wealth from rich to poor; taxation and social programs a more effective way of doing

thisv) Complicated and expensive process figuring out who actually owns propertyDoes it really achieve its goal

of making property transactions more efficient?

Adverse Possession Cases o Ewing v. Burnet (p.128): Ewing originally had valid deed to property. Burnet (AP) dug sand and gravel

from the lot, gave permission for others to do the same (and refused permission to others), he leased the property, brought trespass actions, and paid taxes. Witnesses testified that he was in possession of the propertySuccessful; AP acquired right to land.

o Nome v. Fagerstrom (p.131): Native Alaskans successfully adversely possessed Northern portion of land. They used land seasonally, they built a picnic area, placed a camper on the property, built an outhouse and fish rack, planted some non-indigenous trees, a reindeer shelter. Community testified that their use was that of a typical owner. They allowed others to fish on the land (construed as act of hospitable landowner; did NOT violate exclusive requirement). In the southern end of the lot, their only activity was hiking on the trails and picking up litter. The 4 cornerposts they placed on each corner of the lot don’t provide notice. Therefore, they don’t get title to this portion of the land.

o Lawrence v. Town of Concord (p.138): Town didn’t know (and didn’t have a very good way of knowing) that they owned the propertydidn’t matter; it is town’s responsibility (not AP’s) that they know of their ownership right. Town also didn’t know about AP (husband who moved into the house his wife had left to the city)As long as AP was open and notorious, this doesn’t matter. AP got title. This was before statute preventing AP against the city. AP Evidence: Lawrence paid tax bills for a period of time; he rented out the property; his name appeared on the town’s “street lists” for most of the time. He was nervous that the town would find out that he really didn’t own the propertydidn’t matter; they used the objective standard for claim of right (actions, not state of mind, are what matter).

o Mannillo v. Gorski (p.145 note): Minor encroachment along the property border was deemed NOT open and notorious. It was not apparent to the naked eye, and would have required an on-site survey.

o Foot v. Bauman (p.145 note): Neighbor’s underground sewer that ran under P’s property WAS deemed open & notorious. There were 3 manhole covers on the P’s land between the house and the town sewer.

o Kiowa Creek Land & Cattle Co. v. Nazarian (p.149) : Person tried to AP 1) against someone leasing from the govt. for 2) a prescriptive easement. Rule against AP against the govt. also applies to easements, didn’t get easement.

o Dieterich International Truck Sales, Inc. v. J.S. & J. Services, Inc. (p.152): AP sought easement against landlord and their lessee. General Rule: AP can only Adversely Possess against person with possessory interest in the property (Lessee in this case)All that he can get is the right to the lease. Landlord cannot bring an action for trespass against AP b/c he doesn’t have possessory interest. Landlord can only take action if harm is being done to the owner’s inheritance (under the waste doctrine). Ct. ruling: Adverse Possession is NOT a harm to the “future inheritance”; Landlord could NOT take action against AP; therefore it was tenant’s failure not to eject APLandlord can NOT lose title to AP.

AP only acquires tenant’s possessory interest in the property.

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4) Additional Property Rights: Publicity, Copyright, Trademark, Patent

a) Right of Publicity – Is a property right. Protects a person’s interest in the commercial exploitation of their name, likeness, and identity.i) Ironically, roots in the right to privacy (as well as trademark, unfair competition, and copyright)ii) Applies to everyone; not just celebritiesiii) Source of right:

(1) Statutory Law(2) Common Law (broader protection, at least in Cheers case)

(a) Conflict w/ Federal Law – Which would protect copyright owner in the Cheers Caseiv) Wendt v. Host International, Inc . (p.193): D owns Cheers airport bars. D purchased a license from Paramount

to use Cheers characters for their bars. They set up animatronic robots that vaguely resembled Norm and Cliff (Wendt & Ratzenberger), complete with taglines from the show. Wendt & Ratzenberger sued D. (1) Ct. ruled for Wendt & Ratzenberger. Anything that evokes the person can constitute “likeness”

(manner, quips, dress, etc.), and could therefore violate their right of publicity.(2) Policy: Why protect actors’ rights?

(a) PRO – Companies shouldn’t be allowed to use actors’ likeness w/o their consent. E.g. People would think actor supported product, even if they didn’t.

(b) CON – Stifle creativity (tougher to create spin-offs if you can’t use characters). Expensive for owners of copyright to figure out who they have to pay to use characters. It’s impossible to portray a character without evoking the image of the actor who played the character

v) Zacchini v. Scripps-Howard Broadcasting Co . (p.201): Zacchini performs a human cannonball act. He told a reporter not to tape his act, but the reporter did so anyways. They showed the entire act on the news. Zacchini sued for $ damages (he couldn’t get injunctive relief; they had already shown the act).(1) Ct. rules for Zacchini. Zacchini has right of publicity (protectable property interest). The press has

1st/14th amendment protection, but they did not need to show the ENTIRE show in order to cover it as news. E.g. they could have commented on the act and shown a picture.

(2) Policy: Zacchini: (a) How far is right to exclude? Should other human cannonball performers pay a licensing fee?

(i) How truly unique and original is it to shoot yourself out of a cannon?(ii) From the other side, how different would the other performer have to change the act in order to

protect himself from potential litigation?

b) Property Rights in Writings, Recordings, and Product Designs i) Copyright Law

(1) History :(a) Originally copyright only applied to physical copy (not the concept/idea)(b) Then they extended this concept to protect the work itself, not just the physical copy(c) The Fair Use doctrine has evolved as an important exception to the rights granted by a copyright

(2) Purpose : To encourage the creation of new and creative works of art and literature. Provides an economic incentive for authors to publish books and disseminate ideas to the public. This promotes learning. By limiting the length of the copyright, we allow the work eventually to enter the public domain.

(3) Lifetime + 70 years protection(a) In the Gone With the Wind Case, they brought copyright infringement based on the sequels, not the

original (Sneaky way to get another 70 years)(b) The length of copyright protection is being extended, while at the same time the Fair Use Doctrine is

being expanded. Because the copyright “protectors” are typically big business (and people using the Fair Use Doctrine are less likely to be so), this essentially hands control over to big business.

(4) Protects “original…literary, dramatic, musical, artistic, intellectual works”(5) published & unpublished

Work must be original – e.g. you can’t copyright databases if they’re only compilations (like the telephone book).

(6) What you get: (a) Exclusive right to use the work

(i) You do NOT get a right to the ideas contained in the work(b) The right to create derivative works

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(c) Right to distribute & sell copies of the work – You can exploit the commercial value of the work itself (but NOT the idea)

(d) Right to display the work publiclyLimitations:

(7) Idea/Expression : Copyright cannot protect an idea, only the expression of that idea. Other may build freely upon the ideas and information conveyed by the work.

(8) Fair Use Doctrine is an exception to these rights:(a) …the fair use of a copyrighted work…for purposes such as criticism, comment, news reporting,

teaching, scholarship…or research, is not an infringement of copyright.(i) 4 factors must be considered:

1. Purpose and character of the use (of new work)a. Is it for commercial or nonprofit purposes?

i. TWDG = Commercial (She’s selling the work for profit)b. Is the work ‘transformative’ or is it very similar to the original?

i. TWDG was transformative – it took the facts of GWTW and changed key elements enough to be a creative, different work. As a parody, TWDG had to use a lot of protected material in order to evoke the original sufficiently to be able to transform it.

ii. The fact that the Suntrust Bank refuses to grant licenses for this type of transformative work seems important to the concurrent opinion…if the ct. doesn’t do anything, works of this type will be completely stopped by Suntrust.

2. Nature of the copyrighted work (i.e. Gone With the Wind)a. Greater protection is given to original, creative works [As a society, we are concerned

with encouraging new, creative works]. GWTW is given the highest degree of protection.3. Amount and substantiality of the portion used

a. In this case, how much detail is necessary to evoke GWTW, and how much is more than is necessary? Difficult question that the court wrestles with.

4. Effect on the Market Value of the Originala. For a parody, the key question is Will the new work act as a market substitute?

i. P hasn’t done much to prove the likelihood of actual harm. It seems that Suntrust is not really trying to protect $$ interests; they’re trying to protect their image.

Case: Suntrust Bank v. Houghton Mifflin Company (The Wind Done Gone, p.207): Randall wrote The Wind Done Gone, a parody/commentary of Gone With the Wind. [See analysis above]

ii) Trademark (protected by the Lanham act) (1) Purpose : Allow consumers to easily identify products from a certain manufacturer (based on its

look/design); Primarily a consumer protection purpose – avoid consumer confusion; It allows companies with “good” products to reap the benefits of consumer loyalty. Protecting companies’ interests is secondary.

(2) Perpetual protection (No set time limit)(a) you have the right to renew licenses/registrations

(3) “Certification marks” (Identify a product – Good Housekeeping), and “Service marks” (Identify a service – Fedex)(a) Limitation: “Animal Care Certified” eggs certification mark is misleading, and (acc. to the FTC should

NOT be protected)(4) What you get (If you’re registered):

(a) Exclusive right to use the certification mark. Note: Unless it is a “famous” mark, you can only enforce this right when consumer confusion is likely to occur (i.e. against competitors in the same industry).

(b) If you’re registered, you have the legal presumption that YOU (not another company) has the right to use the mark

(c) Ability to bring suit in federal ct.(d) Ability to get the US Customs Service to prevent importation of infringing foreign goods(e) Can prevent dilution of the brand (even if it’s not a direct copy); e.g. McSleep hotel chain was shut

down by McDonaldsOnly applies to famous brands, b/c only in this case will consumers likely be confused (“McDonalds got into the hotel business?)

(5) Issues with Trademark cases from textbook:

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(a) You haven’t created a trademark through registration, but something that you use in your product has acquired a “secondary meaning” that should entitle you to get trademark protection.

(b) You can NOT trademark something that provides unique functionality (can’t use trademark to circumvent the patent protection).

(6) You can NOT trademark: (a) Anything that is FUNCTIONAL.

(i) From Qualitex : In general terms, a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article. That is, if exclusive use of the feature would put competitors at a significant non reputation-related disadvantage, it is Functional.

(b) A generic label: When a mark becomes so commonly associated with a product that it is a generic label, it loses protection (e.g. aspirin, cellophane, and shredded wheat are all trademarks that became so widespread that they “committed genericide.”)

(c) Anything immoral, deceptive, or scandalous.(d) Things for public safety (e.g. a red light)

(7) Trademark Dilution – If you have a “famous” trademark (e.g. McDonalds), you can keep companies in other industries from using your trademark (e.g. McSleep hotel chain).

(8) Trademark v. Trade Dress (a) Trade Dress is the packaging or labeling of a product, and has been extended to the total image of

the product, and may include features like size, shape, color, textures, or graphics. Trade Dress rules provides some protection, but not as much as a trademark. Trademark is typically registered, and provides additional protections. Registration is important; it provides notice to the world.

Qualitex Co. v. Jacobson Products Co. (p.249): Qualitex has been selling dry cleaning pads of a unique green-gold color since the 1950’s. Jacobson, a competitor, began selling pads of this color in 1989. Qualitex got a trademark for the color in 1991 and brought suit.

o Ct. rules for Qualitex; that a color can be trademarked. Color fits definitional requirement of trademark (it can identify and distinguish a co.’s goods); it doesn’t go against TM objectives (of making it easier for consumers to identify goods); it is not functional (if we ever run out of colors, as D suggests, then it WILL become functional).

o Question – Are we encouraging ‘sloppy’ consumerism – they should be reading the label!

Traffix Devices, Inc. v. Marketing Displays, Inc. (p.254): P Marketing Displays, Inc. had a patent on a dual spring design for a sign holder. When the patent expired, a competitor, D Traffix, reverse engineered the product and began selling copies. P brought suit for trademark infringement (based on the similar names of the products), trade dress infringement (based on copied design), and unfair competition.

o Supreme Ct. rules for D; Design cannot get trade dress protection. LEGAL DEFINITION OF FUNCTIONALITY: When a product feature does something that puts competitors at a significant non reputation-related disadvantage, it is Functional and cannot receive trade dress (or trademark) protection. Company requesting trade dress protection has the burden of proof (must prove that it is NOT functional). A prior patent is very strong evidence that a feature is functional.

o From Qualitex : In general terms, a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article. That is, if exclusive use of the feature would put competitors at a significant non reputation-related disadvantage.

iii) Patent Law (1) Purpose : To encourage creativity and new scientific advances. Provides an economic incentive for new

scientific discoveries. (2) What you get : Right to exclude others from making, using, or selling the invention in the US, and from

importing the invention from abroad.(a) NOT saying that YOU have the right to make; e.g. I have patent from new type of firework, and I

could be prevented from making the firework by other safety laws. “If anyone gets to make it, it’s you.”

(b) Patent office doesn’t decide whether invention is in society’s best interest (policy decision for legislators); it only decides if it should be patentable.

(3) 20 years of protection

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(a) Because the exclusivity granted by a patent is powerful, however, we do restrict patents more than trademarks, e.g. shorter time period.

(b) During the 20 years; the manufacturer will try to modify the invention enough to make it different than the original invention, in order to get a new 20 years.

(4) Can’t get a patent for:(a) Certain things can NOT be patented: laws of nature, naturally occurring things, physical phenomena,

and abstract ideas…”manifestations of nature, free to all men and reserved exclusively to none.”(i) Can’t get a patent for salt; Can get a patent for a specific process of refining the salt.

Diamond v. Charkrabarty. (p.262) : o Chakrabarty filed a patent application in 1972 for a new human-made, genetically engineered bacterium.

Ct. ruled that the patent was valid. Congress wanted to give patents a wide scope and intended a broad interpretation of patent laws. The bacterium was man-made, so it shouldn’t be excluded as a “naturally occurring” substance.

iv) What do Copyright, Trademark, & Patent they have in common:(1) They deal w/ incentives to create intangible things (inventions, literature, etc.)(2) They do this by protecting the tangible assets (sellable products) associated w/ the intangible things(3) Want to incentivize Creativity, NOT just pure Labor

(a) Public Health & Safety concerns (can’t patent a ‘red’ light)(b) Want to allow criticism of creative works (e.g. The Wind Done Gone)(c) Allow humorous uses (not quite parody)?(d) Civil Rights – Entertainment industry specifically hires 40 yr. old white male. Should they be allowed

to ‘discriminate’ like this?(i) This puts 1st amendment directly against the Civil Rights laws

Balancing Act – How long is too long?: o If you give too much protection, the monopoly that is created could stifle economic activity.o On the other hand, some protection is required in order to provide the incentive to develop new concepts,

ideas, etc.

5) Property rights in Human Tissue a) Moore v. Regents of the University of California (p.266): John Moore went to D doctors for treatment for leukemia.

Without telling Moore, the doctors used his cells in their research and created a valuable cell line.(1) Ct. ruled that D had breached a duty to Moore; either a fiduciary duty to disclose facts or the performance of

medical procedures without the patient’s informed consent(2) However, CA courts have not found that people have a property interest in their cells/tissue. Also, CA laws

severely limit rights to excised cells by regulating how they must be disposed (safety statutes). So many rights are eliminated that what is left can’t be considered property rights. Cell line is patented, so it can’t belong to Moore.

(3) Implications of Decision : (a) Fair balancing of relevant policy interests Shouldn’t extend tort of Conversion

(i) Chill public research1. Expensive to pay patients for tissue2. Downstream liability (to other doctors who use the cells)3. Less new cells (if people wouldn’t sign forms)

(ii) Patients’ right to make autonomous medical decisions (already taken care of by the Right of Disclosure)

(iii) Not brought up in case: Govt. has right to take property of citizens for the public good. If organs become property, could the govt. take them in a Eminent Domain maneuver?

(iv) Commodification of the body – If it’s property, then you can buy and sell body parts.1. Person sells spleen for $; Then when their other kidney goes bad, we will have to pay $ to take

care of them.(b) Problems in this are better suited to legislative solution; not the courts(c) Tort on conversion is not necessary to protect patient’s rights

(4) Question: When are there property rights in the body?

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(a) After death, next of kin DO have property interest in the body, and have right to exclude.(b) When you go to the doctor, you do NOT have property rights in the cells that they remove.

b) Case: Newman v. Sathyavaglswaran (p.284): CA Statute authorized the coroner to “…remove and release or authorize the removal and release of corneal eye tissue from a body within the coroner’s custody” without any effort to obtain the consent of next of kin “if…the coroner has no knowledge of objection to the removal.” Coroner took corneas from P’s son. P brought action alleging the taking of their property without due process of law. Inverse Condemnation: Govt. acts and you characterize it as a taking of property in order to get compensation.(1) Ct. rules that Parents do have property rights in the corneas of their dead son.

(a) Common law bestowed certain property rights of next of kin to a body(b) CA law imposes a duty on next of kin to dispose of a body – 1899 case, the ct. held that this duty required

the recognition of exclusive rights of possession, control and disposition; therefore, the next of kin have property rights in the body

(c) After that, CA started calling them “quasi property” rights(d) 1968: Uniform Anatomical Gift Act (UAGA) grants next of kin the right to transfer parts of bodies in their

possessionSort of property right(e) CA statute recognizes the rights of parents to transfer or refuse to allow the transfer of child’s organs;

These are an important part of property rights (including the Right to Exclude)Therefore, parents have property rights.

c) Case: US v. Willow River Power Co. (Note p.295): Power company sued the US for damage done to its electric generation capacity when the govt. raised the water level of a river 3 feet above its ordinary level. This reduced the amount of energy generating capacity of the plant. Ct. ruled that P did NOT have property rights in the level of water. Seems more like an eminent domain/inverse condemnation case.

6) Estates in Land and Future Interests a) Types of Conveyances:

i) To A (Anderson) and his heirs: (signify fee simple absolute)(1) “To A”Words of purchase: Tell you who the grantee is(2) “and his heirs” Words of limitation: define the type of estate that the owner has

(a) In this case, A’s heirs aren’t given any rights; they may eventually inherit the property but have no rights at this point.

ii) Fee Simple Absolute: To A and her heirs(1) Fee simple absolute; could be created in 3 ways:

(a) To A(b) To A and his heirs(c) To A in fee simple absolute

iii) Fee Simple Determinable: To A and her heirs so long as an observation tower is maintained on the property, and if not then the property reverts to the Grantor, his heirs and assigns.(1) Words to Create:

(a) Make it clear that the estate will automatically end upon the occurrence of a specific event: so long as, until, during.

(b) Provision that when the even occurs, the property will revert to the grantor(2) If A (or his heirs) stops maintaining the tower, title immediately shifts back to GrantorTherefore, A CAN

Adversely Possess against Grantor.iv) Fee Simple subject to Condition Subsequent: To A and her heirs, but if an observation tower is not

maintained then Grantor, his heirs or assigns shall have the right to enter and take ownership of the property.(1) Words to Create:

(a) Words of condition: if, upon condition that, provided that, (b) Provision that if condition occurs, grantor has the right to re-enter the property

(i) Without a re-entry clause, court likely to treat as a covenant (only get $ damages; not equity)(2) If A (or his heirs) stops maintaining the tower, A retains title, but Grantor may optionally decide to take the

property backTherefore, A CANNOT Adversely Possess against Grantor (because A still has title)v) Fee Simple subject to Executory Limitation: To A and her heirs so long as an observation tower is

maintained on the property, and if not then the property goes to C, his heirs and assigns.(1) Like a Fee Simple Determinable, (except that property goes to C, not Grantor):(2) If A (or his heirs) stops maintaining the tower, title immediately goes to CTherefore, A CAN Adversely

Possess against C.

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vi) Life Estate: To A for life, then to B.

**Note: Law does not allow you to create a new form of inheritance. They have to be fit into one of these existing boxes.

Present Interest Words to CreateFuture Interest

(Grantor)Future Interest

(3rd Person) Adverse PossessionFee Simple Absolute “To A (and his heirs)”Fee Simple Determinable

“so long as”; “while”; “during”; “unless”

Possibility of reverter YES (Against Grantor)***

Fee Simple subject to Condition Subsequent

“”but if”; “provided that”; “on condition”

“Right of entry” OR“Power of termination”

NO

Fee Simple subject to Executory Interest/ Limitation

“until (or unless), …then to…”“but if…. then to…”

Executory Interest

YES (Against holder of executory interest)***

Life Estate “for life” Reversion RemainderNOTE: Without specific forfeiture language, ct. will likely interpret as a covenant and NOT a conditional grant (b/c conditional grants allow forfeiture, which cts. really don’t like)

*** Adverse Possession Note: In this case (and this case only), you do NOT have to be Open and Notorious about breaking the condition.

b) Policy view of Grantor’s Future Interest i) Bad: Ties up property so that it won’t be used as efficiently as possibleii) Good: Want to give owners incentive to amass property. Giving grantor control does this.

a) Hierarchy of Presumptions: i) Fee Simple Absoluteii) Fee Simple Determinableiii) Fee Simple subject to Condition Subsequent

b) Modern Legal Presumption : i) If the language is unclear, you are assumed to have given the largest grant possible (e.g. a fee simple

absolute, if you have the right to do so).(1) Possibility of reverter – Burden on Grantor to clearly establish this.(2) If the court determines that there is a condition, they will assume it’s a Fee Simple Determinable (and not

a Fee Simple subject to Condition Subsequent), unless it’s very clearly specified(3) This hierarchy of presumptions is NOT the same in different jurisdictions.

(a) E.g. in CA they legislatively did away with Fee Simple Determinable, but kept the Fee Simple subject to Condition Subsequent (b/c it’s “not fair” that there’s no open and notorious requirement for AP against the fee simple determinable).

ii) In addition, if there is any ambiguity, ct. is NOT likely to rule that a condition has been violated if it means forfeiture (b/c forfeiture is very extreme).

c) Policy Reasons to support fee simple absolute i) Forfeiture is very severe – burden put on grantor to clearly ii) Consequences – What will give us the most freely marketable land? Removing conditions from

land does this.(1) Counter-concern: If the courts consistently interpret these types of grants as fee simple absolutes, will this

impact charitable giving (people less likely to give property, if they can’t enforce the restriction)?

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d) Case: Station Associates, Inc. v. Dare County (p.326): Ct. ruled that the deed conveyed a Fee Simple Absolute, NOT a Fee Simple Determinable. In order for court to recognize reversionary interest, the Deed must contain “express and unambiguous language of reversion or termination upon a condition broken”. This deed doesn’t have language of reversion or termination, so it conveyed a fee simple absolute.i) Deed Language : “Indenture” – Typically used for a Grant (A Conveyance of land, which could possibly have a

condition on it); Could also be used to establish a landlord-tenant relationship.(1) What language supports a fee simple determinable interpretation?

(a) Language that specifies “use” of the landUse Restriction(b) Right to erect/remove buildingsWouldn’t need to specify this use for a fee simple absolute(c) “terms of this covenant”(d) Rights to go across Grantor’s land Specifically for use as a lifesaving station(e) $200 – Fair price for a fee simple absolute??? (f) “possession” of the land – “right to use and occupy”; not ownership of the land

(2) Language supporting a fee simple absolute? (a) No possibility of reverter languageKey distinction(b) $200 – Fair price for a fee simple absolute???

e) Case: Red Hill Outing Club v. Hammond (p.333). Ct. ruled that, although the deed did convey a fee simple subject to condition subsequent, the condition was NOT violated.i) “Problem” with Deed Language: Did not clearly specify what would violate the condition. Not 100% clear if

they broke the requirement that the land “…shall be maintained and made available to residents…as a ski slope in accordance with its now existing by-laws…”(1) If there is any ambiguity, courts will typically decide against forfeiture, especially in a Fee Simple subject

to Condition Subsequent. The burden is on the grantor to make it perfectly clear what he wants.

c) Restraints on Alienation and Unenforceable Conditions (p.335) i) Condition must 1) Have a Reasonable objective, and 2) Be for a reasonable period of time.

(1) Absolute restraint on alienation – Not enforceable (A sells to B, and won’t let B sell the property)(a) Use Restrictions (e.g. property has to be used as a Railroad Headquarters)

(i) Falls City v. Missouri Pacific Railway – City gave RR land to use only as a HQ building. Court ruled that this condition was VOID.

(2) Partial Restraints on Alienation – Sometimes enforceable (reasonableness test)(a) Can’t sell for 100 years – Not enforceable

(i) Cast v. National Bank of Commerce (p.336) – Condition that the devisee had to live in property for 25 years was VOID.

(b) Can’t sell house until children are the age of majority – Probably enforceable(3) Spite – Not Enforceable(4) Divorce/autonomy as to marriage – Not Enforceable(5) Illegal condition – Not enforceable (Not always obvious; like the building is too high)

ii) Policy Reason (1) Good for the public to free up property and make it marketable. Therefore, we don’t want to allow

conditions that tie up property without a good reason.(2) Charitable donations – Tend to be favored by the Courts, b/c it serves a public good. Ultimately, we have

other means of quieting title (e.g. AP).iii) If condition is ruled void, grantee typically gets Fee Simple Absolute:

(1) He is currently living on land; easier to let him keep it(2) Ct. seems to be against forfeiture; wouldn’t want to force Grantee to ‘forfeit’ property back to Grantor

because of a mistake in the conveyance(3) Burden is on Grantor to use clear language, legitimate conditions, etc.

d) Case: City of Palm Springs v. Living Desert Reserve (p.337): i) Conveyance : From Pearl McManus to the City of Palm Springs, if the site is used as a desert preserve; if not

then to the Living Desert Reserve.(1) Fee simple subject to executory limitation.

(a) City holds present possessory interest

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(b) Living Desert Reserve holds the executory interest (in a fee simple absolute)ii) After 3 years, the city decided it wanted to build a golf course. Living Desert Reserve refused to sell out. City

filed to take the Living Desert’s future interest through eminent domain. General rule is that owner of a future interest is not entitled to compensation from condemnation. However, if violation of the use restriction is “reasonably imminent”, then future holder can get compensation. BUT “reasonably imminent” is not supposed to take into account activity after condemnation. Because the govt. is the present interest holder AND the condemner, an exception should be made (b/c this rule exists to help the ‘innocent’ present interest holder from unfair forfeiture). Ct. rules that govt. must pay fair value for the land = 100% of the fee simple absolute value.

e) Eminent Domain – where the Just Compensation should be paid:i) General rule: $$ goes to present interest holder (if no breach, and a breach is not imminent), ORii) Future interest holder, OR

(1) there is a breach/imminent breach, or(2) condemning party = present possessory interest holder

iii) Split $$ between present and future interest holders(1) Tough to be fair: Wherever you start, you always end up favoring the remainder, because:

$ Present Possessory Interest + $Future Interest < $$$Fee Simple Absolute(a) Market value of land ($200,000)

- Value of restricted fee ($50)Rest to Future Interest Holder ($199,950)

(b) Market value of land ($200,000)Value of future interest ($50,000)Rest to Present Interest Holder ($150,000)

f) How are defeasible fees terminated? i) Adverse Possession – Note: Adverse Possession in this case does NOT have to be open and notorious (only

time that this is true)ii) Rule Against Perpetuitiesiii) Release of future interestiv) Buyout/Merger (future interest holder buys out present interest holder)v) Eminent Domainvi) Other Legislative Restrictions:

(1) Requirement to rerecord/register the future interest(2) Statutory limitation on future interest

g) Case: Nelson v. Parker (p.345) i) Deed :

(1) Russell Nelson conveys property to himself during his lifetime,(2) Then to Daniel Nelson,(3) “Subject to…life estate in Irene Parker”Troublesome part of deed!

ii) Ct. held that Irene Parker’s life estate was valid. Common law rule is that you can’t create a “reservation” in a 3rd party (which would invalidate the life estate to Irene Parker). However, this rule serves no useful purpose, and would clearly frustrate the grantor’s intent. Therefore, the rule is ignored.

iii) Note: Different way to draft the deed to avoid this problem: (1) 2 Step Transaction:

(a) To Russell Nelson a life estate, Remainder to Irene Parker in a life estate (Reversion in fee simple absolute)

(b) Then convey reversion to Daniel: I want Daniel to have my reversion; Daniel gets a reversion (not subject to rule against perpetuities)

(2) 1 Step Transaction (This is how ct. interprets the deed): (a) To Russell Nelson a life estate,

(i) Remainder to Irene Parker in a life estate,1. Remainder to Daniel in Fee Simple Absolute; Daniel gets Remainder

iv) Policy for enforcing strict rules terminology (e.g. can’t create a reservation in a 3rd person):

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(1) To avoid ambiguity and problems interpreting the true intent of the creator of the willCertainty is important in property law.

(2) Cheaper to pay a lawyer to ‘do it right’ than to end up in court(3) People don’t realize that when they set up a life estate, certain problems are likely to arise (e.g. taxes

being paid, upkeep of property, etc.); In the process of getting the information related to the correct language, you will get useful information about other potential issues with a life estate

h) Case: In Re Estate of Kinert v. Penn Dept. of Revenue (p.349) : i) Deed : Deed gives grantor’s 2 sons right to continue to reside in grantor’s property for the rest of their lives or

until both of them have vacated for 60 days. “I give, devise, and bequeath…this terminable life estate would terminate and the real estate and personal property would be liquidated…” and given to the First Assembly of God Church of Harrisburg.

ii) Is this a license or a life estate? Unlike a life estate, they can’t leave the property for 60 days. They can’t sell their life estate or rent out the property. According to the deed, the interest is essentially inalienable (which the courts typically won’t allow). If alienability is a critical component of a life estate, then this is not a life estate. Ct. rules that this creates a life estate and the sons, therefore, have to pay taxes on the property.(1) License (Definition) : Right to go on someone’s property for a limited purpose/time (by common law, the

license is revocable by grantor; although at some point, you can’t revoke it any more).(a) The modern view is that a license is an interest in property (and taxable)

i) Waste Doctrine i) Law of waste provides the default rules governing the life tenant’s responsibilities for care of the property.

(1) Obligated to preserve the land and structures in a reasonable state of repair(2) No duty to make extraordinary repairs or to rebuild structures damaged or destroyed without his fault.

(a) Types of Waste (i) Voluntary – ‘Trashing’ the place; decreasing the value of the property

Future interest holder can get injunction AND $ damages1. Ameliorative – Increasing the value of the property (e.g. building a new, better house).

a. Argument – Don’t allow: Future Interest holder has right to get property in the same condition as life tenant did

b. Argument – Allow: We want to encourage life tenant to improve the propertyFuture interest holder can get an injunction, but NOT $ damages

(ii) Involuntary/Permissive – Failure to properly maintain property (e.g. not painting or fixing small leaks

(b) Remedies :(i) Waste is an equitable doctrine: Ct’s can fashion remedies that are fair and equitable to all parties

involved1. Damages (generally used if future interest sure to vest) = reduction in value of the future

interest2. Injunction (generally used if future interest NOT sure to vest)3. Punitive damages (used to be able to force forfeiture)4. Forced sale (but not if it would harm future interest holder’s value)

j) Case: In Re Estate of Jackson (p.353) i) Mary Jackson conveyed a life estate to herself, with the remainder to Iola Miller:

Mary Jackson(Life Estate) Iola Miller|-----------------------------------|---------------------------------------------------

| |V V

Hail Damage $ from insurance company comes inii) Ct. rules that Life Tenant should get insurance money, BUT the damage occurred when Life Tenant had an

obligation to repair the roof (otherwise would be waste). Therefore, the $ has to be used to repair the roof. (1) Note: How well does Life Tenant have to repair?

(a) Option 1: Leave property in the same shape they got it(b) Option 2: (Bryant) Life Tenant can make repairs that only last for her lifetime (e.g. do a shoddy job)

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Grantor should specify the extent to which repairs will need to be made by the life tenant

k) Case: Hausmann v. Hausmann (p.355) : George has the Life Estate, and Charles has the Remainder. George didn’t pay property taxes (apparently in order to remove Charles’ future interest from the property). Ct. holds that Failure to pay taxes is waste. However, injunction is not granted. Punitive damages awarded. Failure to pay property taxes = extension of basic waste doctrine.

7) Future Interests:

Note: State the title by reference to when the conveyance took effect. Will – when grantor dies (and his children become a set class). Inter vivos transfer – some time before grantor dies (children not a set

class).

a) Absolutely Vested: i) Future interest holder must be an ascertained person, ANDii) No condition precedent to taking the interest (except, of course, that the person w/ the life estate dies!)

(1) To A for life, remainder to B. OR To A for life.(a) B has an absolutely vested remainder in fee simple absolute. OR Grantr had a vested reversion in

FSA.b) Vested Subject to Complete Divestment:

i) Remainder – condition subsequent attached to remainder(1) To A for life, remainder to B; but if B declares bankruptcy, to C.

(a) B has a vested remainder subject to complete divestment. C has a shifting executory interest in fee simple absolute.

ii) Reversion – condition triggers another person’s contingent interest to vest(1) To A for life, remainder to B if he survives A.

(a) Grantor has a vested reversion subject to complete divestment (if B survives A). Daniel has a contingent remainder in fee simple absolute.

c) Contingent Future Interests i) Not an ascertained person, AND/ORii) A condition precedent to taking the interest

(1) To A for life, remainder to B if he survives A.(a) B has a contingent remainder in fee simple absolute.

(2) To A for life, remainder to B’s children who reach 21.(a) B’s children have a contingent remainder (unless B has a 21+ year-old child)

(3) To A for life, remainder to B; but if B declares bankruptcy, to C.(a) C has a contingent executory interest.

Subject to RULE AGAINST PERPETUITIES (If not held by Grantor)d) Vested Remainders Subject to Partial Divestment

i) Also called Vested Subject to Openii) Group of people may increase in size between time gift is made and time the interest becomes possessory

(1) To A for life, remainder to A’s children.(a) A’s children have vested remainders subject to partial divestment (if more children are born)

subject to RULE AGAINST PERPETUITIES (If not held by Grantor)e) Executory Interests

i) Shifting – from 3rd party ii) Springing – from grantor

f) Alienability of Future Interests i) Possibility of Reverter and Right of Entry – Common law: NOT alienable or devisable, but are descendibleii) Reversion – Alienable, devisable, and descendible

(1) Descendability – Capable of being passed through intestacy statutes (can’t convey in a will)(2) Devisability – Can convey in a will(3) Alienability – Can convey inter vivos (while you’re alive)

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g) Case: Long v. Long (p.366) : i) Deed : Henry Long granted a property to each of his 3 children: “To Jesse S. Long, and the children of his

body begotten, and their heirs and assigns forever.” ii) This created a Fee Tail Estate, which as been abolished in just about every jurisdiction:

(1) Converted into fee simple absolute, OR(2) Converted into a life estate for grantee, w/remainder to grantee’s issue living at his death, OR(3) Present tenant of fee tail has right to convey a fee simple absolute (effectively destroys fee tail), OR(4) Fee tail abolished, but result left to the judges

iii) Ct. ruled that Grantor held a reversion. Therefore, it was inherited upon his death by all children living at that time.(1) ReversionCertainty of future possessionPassed on to Henry Long’s children at the time of his death

(1932)Reversion could also be conveyed by quit-claim deed(2) If it had been a Possibility of reverterOnly have a possibility of future possession; Do not actually have a

property interest until the condition actually occurs (1974)Passed on to living descendants when interest vests (1974)

8) Rule Against Perpetuities (aka the rule against perpetizzle)

What we should know: Common Law Rule Against Perpetuities

o Wait and See Rule Uniform Statutory Rule Against Perpetuities

RULE AGAINST PERPETUITIES (Common Law)No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest.Rule only applies to Contingent Future Interests and Vested Subject to Open.

a) Only affects unvested interests; will NOT affect:i) Present possessory interestsii) Vested future interests, unless it is vested subject to openiii) Future interests held by grantor (Reversion, possibility of reverter, or right of entry)

b) R.A.P. DOES affect:i) Executory interestsii) Contingent remaindersiii) Vested subject to open

c) Vesting doesn’t mean you have to have actual physical possession, it must be legally vested. This means:i) Ascertained personii) No condition precedent to taking

d) Interest does NOT actually have to vest; we just have to know if it will or won’t.e) Life in being has to be a human life. If no one is identified, it must be someone alive at the time of the

conveyance, who can affect the vesting.

Trick to see if RAP is violated:

|Conveyance|----------|----------|----------------------------------------------------------------|----------------------------------------

|Assume everyone alive has a child (afterborns) |21 yrs. later, do we know if the |All non-afterborns die |interest is vested or not?

f) Common Law RAP Rules: i) FERTILE OCTOGENARIAN: Children can be born at any time of your life (Even if you’re 80).ii) UNBORN WIDOW: “A’s widow”: A can divorce his current wife and remarry someone NOT alive at the time of

the conveyance.Whenever possible, use people’s name (Instead of A’s widow, say ‘Jennifer’).

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iii) Conditions can be met at any time, e.g. probate can take over 21 years: “To A for life, then following the probating of A’s estate and the payment of all taxes due thereon, the balance to B and his heirs.”Violates RAP

iv) The “then living” problem: “To A for life, [then to A’s best friend from college for life], then to O’s grandchildren then living”(1) If A’s best friend is known (ascertained) – Vested Remainder

(a) We will know which grandchildren are alive when A’s best friend dies (We can use A’s best friend as a life in being)Passes RAP

(2) A hasn’t gone to college yet: A’s best friend is not ascertained – he might not be a life in being at the time of the conveyance.(a) A’s best friend is a contingent remainder. We will know when A dies who this is; this element

passes the RAP.(i) O’s grandchildren then living – Have to use A as life in being. A could die, and then >21 years his

friend dies, and only then do we know which grandchild is aliveDoes NOT pass RAP. Get rid of offending clause.

(ii) Conveyance becomes “To A for life, then to A’s best friend from college for life.” (Reversion in Grantor)

g) Case: In Re Estate of Anderson (p.381)i) Conveyance : To trustee for the education of descendants of F.A. Anderson, Sr. for 25 years, then to Howard

Davies, and in the event that he is not alive, then to the heirs of his body.”

Trustee (O) FA Anderson’s descendants Howard Davis, OR if he’s dead(for education for 25 yrs.) Heirs of his body

|--------------------|---------------------|-------------------------------------------|---------------------------------Will admittedto probate(actually 9 days)

ii) Howard contends 3 violations against RAP (1) Educational benefits for 25 years – Someone could qualify for educational benefits >21 years after death

of live in being (e.g. afterborn qualifies in year 22)(a) Trustee takes over, then Howard Davis and all other lives in being die, then another descendant is

born, then after 24 yrs., trustee gives afterborn educational benefitsViolates RAP(2) Interest created in heirs of Howard Davis’ body also violates RAP. “Then alive” may take place >21

yrs. after death of life in being(a) Davies has an afterborn, then he and all lives in being die, then the 25 year educational benefits run,

then afterborn’s interest would vestViolates RAP.(3) Terms are vague, ambiguous or indefinite. If probate took >21 years, RAP could be violated.

(a) Some cts: Statutes exist guaranteeing a speedy probate process; therefore, must be <21 years and RAP not violated

(b) Some cts: Regardless, it may take >21 years; therefore it MAY violate RAPiii) Ct. takes Wait & See approach. Therefore, there is not violation of the RAP.

h) Uniform Statutory Rule Against Perpetuities (USRAP) i) Wait and see approachii) Irrebuttable presumption that a widow is a life in beingiii) Reformation (ct. can add a “savings clause” to keep conveyance from violating RAP)iv) Alternative 90 year vesting period: “The interest either vests or terminates within 90 years after its creation”

i) Wait and see approach i) Common Law: Actually wait until all lives in being at the time of the conveyance die in order to see if anyone

could vest >21 years laterThis could take a VERY long time. If it has already become apparent (by the time you’re in court) that the conveyance will survive the RAP, then the ct. will declare it valid. Otherwise, they’ll just wait.

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9) Concurrent Ownership

Concurrent Estates Available To: Devise? Inter Vivos Transfer?Tenancy in Common Anyone Y YJoint Tenancy with right of survivorship

N (joint tenant assumes full ownership)

Y* (BUT it severs the joint tenancy and makes it a tenancy in common)

Tenancy by the entirety Married people or domestic partners

N N (except together)Community Property Y N (except together)

*** Every cotenant has the right to possess the ENTIRE PROPERTY (every molecule of dirt).

a) Joint Tenancy with Right of Survivorship: 4 Unities Required: i) Time – Must vest at the same time

(1) This is why in Downing v. Downing (p.570), Helen had to convey the land to a straw man before she could get it back as a joint tenancy.(a) Why do this? It’s expensive, but Joint tenancy is more complicated than tenancy in common.

Jumping through these hoops is proof to the courts that they wanted a joint tenancy, not a tenancy in common.

ii) Title – Must acquire their interests by the same instrumentiii) Interest – Must have estates of the same type and duration

(1) You can create a joint tenancy in something less than a fee simple absolute. (e.g. a fee simple subject to 3rd party farming rights).

(2) Unity of possession’ may exist even though by express agreement between the joint tenants one of them retains the exclusive right to the possession of, and/or income from, the jointly owned property.”

iv) Must have undivided interests in the whole

b) Does a unilateral mortgage by one joint tenant sever the joint tenancy (varies by jurisdiction)?i) Title Theory: Some jurisdictions interpret a loan as borrower giving title to the bank in return for money. If

borrower defaults, bank gets ENTIRE property. Severs joint tenancyii) Lien Theory: Borrower gives bank the promise to pay, with the property as collateral. Because this doesn’t

involve a change in title of blackacre, there is no effect on the unity of title/interest. Does NOT sever joint tenancy

c) What actions will sever joint tenancy (e.g. what if a tenant leases out the property)?i) Unity Standard – Strict interpretationii) Intent Standard – Majority of jurisdictions look at whether or not the parties intended to sever the joint

tenancy.

d) Joint Tenancy – Multiple Joint Tenants A (A intervivos to X) X (SEVERS: X is tenant in common with B and C) X = 1/3 (T.I.C.)

B B (joint tenant with C; T.I.C. with X) B diesC C (joint tenant with B; T.I.C. with X) C = 2/3 (T.I.C.)

e) Tenancy by the entirety/Community Property i) Parties cannot individually transfer their interest in the property.

(1) This means that creditors can’t get to the property UNLESS both A and B owe them money.(a) Financial Creditors – Makes sense; they can check ahead of time(b) Tort Creditors – More difficult proposition; they can’t foresee this issue

f) Policy Considerations: i) Difficult form of ownership (A lot of potential for problems), but it’s very common. B/c of difficulty, ct. may

choose to partition the property and stop the concurrent ownership.ii) Policy For: It gives us more opportunity to buy/sell property.

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(1) More people can become homeowners. (2) Sellers have a larger market to sell to.

g) Majority Rules for cotenancy: i) Rent – 3 rd party : Each cotenant is due their share of rent collected from 3rd parties (minus maintenance and

other appropriate expenses).ii) Rent : Occupying cotenants are NOT required to pay rent to non-occupying tenants, unless there has been an

ouster (or an agreement to pay).(1) HOWEVER; Many courts make this exception: If occupier makes a claim for carrying costs from non-

occupier, then non-occupier can make counterclaim to deduct the fair market value of the rent of the property occupied by the occupier.(a) If the rent owed is greater than the expenses due, this will be zeroed out (and occupying cotenant

doesn’t owe non-occ cotenant anything)(2) Some courts say no rent is owed, period.

(a) Justification: occupying tenant owns every molecule of the property; he shouldn’t have to pay rent for property that he owns

(b) Non-occupying tenant has equal right to possess property; he can’t demand rent, but he can demand the cotenant share the property. If not, it’s an ouster…

iii) Expenses : Occupying cotenant has to pay ongoing maintenance, either in total, or in proportion to the amount of the property that they occupy.

(a) Policy Against: It’s sometimes difficult to separate out these expenses.(b) Policy For: It encourages development of the property (e.g. putting on a better roof or swimming pool)

iv) Improvements : Cotenants are NOT required to pay for improvements made to the property. However, on partition, the improving cotenant is entitled to the increase in value of the property due to the improvement.

v) Ouster :(1) Once an ouster occurs:

(a) AP begins(b) Ousted cotenant is due rent(c) However, ousted cotenant still owes his share of the maintenance costs (since he still has ownership

interest in the property)(2) Sample definition : Ouster occurs when a cotenant obtains sole possession of the land that is adverse to

the other cotenants, where the cotenant repudiates or disavows the relation of the cotenancy or where the tenant without possession is aware of actions by the tenant in possession that signify his or her intention to hold, occupy, and enjoy the premises exclusively.(a) Difficulties with unclear definition of ouster:

(i) It must be clear that you’ve ousted the cotenant.1. Ousted cotenant’s perspective: If you may have been ousted, to protect against AP you need

to demand rent. However, this can make things work with a presumably unhappy cotenant…(b) Ousting cotenant’s perspective: What do you have to do in order to clearly oust cotenant without

crossing the line and telling him that you’re going to take his daughter’s arms off…?(3) What Constitutes an Ouster? It typically has to be absolutely clear that you’ve been ousted.

(a) Telling them you’d prefer they not come by – NOT ouster(b) Changing locks – MAYBE ouster(c) Telling them “You’ve been ousted” – YES ouster

(i) Problem w/ a high standard of ouster is that you encourage self-help (e.g. trying to throw the ousting party out of the house).

(ii) Safest thing to do after ouster is to demand rent, to see if they really wanted to oust you.(4) Note: Majority Rule is that if you exclude them from a portion of the property, this can constitute an ouster.

vi) Partition – 2 Options (1) Partition In Kind (actual physical partition of the property) is preferred.

(a) Owelty – Usually when the property is physically divided, there is a payment from one cotenant to another in order to make it financially fair.

(b) Partition – Don’t just give occupying tenant the portion of the property that they’re living on. This may be taken into account as a factor, but it is NOT dispositive.

(2) Partition by Sale – NOT preferred (b/c you don’t want to take blackacre away from someone!). However, this is usually what happens)

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(a) person requesting partition by sale has burden of proof to show that partition in kind is not feasible:(i) Physical attributes of the land are such that a partition in kind is impracticable or inequitable, AND(ii) The interests of ALL owners would better be promoted by a partition by sale

vii) Value of improvements made only by occupying cotenants – How to assess? (1) Option 1 : Sell the house and split the proceeds, completely ignoring these improvements

(a) Policy: Easy, clean, simple, and inexpensive to enforce.(b) Policy: non-occ. had right to possess but chose otherwise; he voluntarily assumed that risk.

(2) Option 2 : Occupier will be given value of improvements (minus) the negative value of the harm they’ve done to the property(a) Policy: If you have improved the property, it seems fair that you should reap the benefits (flip-side, if

you’ve screwed it up, non-occupier should not have to bear that loss with you)(b) Policy: Provide incentive to improve property (and not to screw up property)

(3) Majority Rule – occupying tenant bears the entire risk of downside from ‘improvements’, but all cotenants will share in the investment upside from ‘improvements’. This only applies to change in market value from these ‘improvements’. This incents a cautious approach

A lot of these things don’t get worked out until partition. Reason: We don’t want to have to deal with the day-to-day disputes of cotenants. If they can’t work it out themselves, they’ll have to partition and turn their rights into sole ownership.

h) Case: Martin v. Martin (p.557) : i) Garis and Peggy Martin (1/8) are tenants in common with Charles and Mary Martin (7/8 in life estate;

remainder to Garis and Peggy). Charles and Mary developed the 4 lot mobile home property. Garis and Peggy live in one of the lots; they didn’t pay for the improvement done by Charles and Mary.

ii) Garis and Peggy Martin seek an accounting of their claimed 1/8 portion of the net rent received by Charles and Mary from the lots.

iii) Ct Ruling:(1) Garis and Peggy Martin are due their share of the rent collected from 3rd parties (minus maintenance and

other appropriate expenses)(2) However, Garis and Peggy Martin are NOT required to pay rent to Charles and Mary, absent an ouster or

agreement to pay(a) Occupying 1 of 4 lots does NOT constitute an ouster in this case.

i) Case: Yakavonis v. Tilton (p.559) : Yakavonis and Tilton were tenants in common. They broke up. Tilton lived in the co-owned house. 1992 Yakavonis filed for partition. Ct. originally gave both properties to Tilton. In 1995, the ct. ruled that Yakavonis retained ½ interest in the property. Ct. ruled that date of ouster for accounting purposes was April 1, 1994.i) Issues/Yakavonis’ claims:

(1) Date of ouster wrong – it should have been the 1992 ct. ruling that he didn’t own property.Ruled for Yakavonis.

(2) In accounting, the court should offset expenses owed by non-occupier (Yakavonis) with rental value owed by the occupying tenant (Tilton) PRIOR to Ouster:

Expenses owed by non-occ(Minus) Fair Rental value owed by occ= Net expenses due from the non-occ (Zeroed out if rent is greater than expenses)

Some cts. make this exception, but ct. ruled against Yakavonisj) Case: Delfino v. Vealencis (p.563) : P & D tenants in common. D had 45/144 interest, and P has an 99/144

interest. D occupies a dwelling on the property and a portion of the land from which she runs a garbage removal business. P wants to partition property by sale. Ct. rules for partition in kind. 1) Partition in kind is physically possible, and 2) the interests of all owners will better be promoted by a partition in kind.

k) Case: Downing v. Downing (p.570) : John Sr. died and left his farm to his widow Helen. Using a straw man, she created a joint tenancy with her and her son John, jr.i) Bonnie (Helen’s daughter) claims that H and J, Jr. actually had a Tenancy in Common. 3 arguments:1. In the deed, it says “joint tenants”, without the words “right of survivorship”.

a. Ct. rules that “joint tenants” is enough to create a joint tenancy (In some jurisdictions, this could create a tenancy in common).

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2. H and J, jr. took out a mortgage on the housea. Ct. rules that since they took out the mortgage together, this doesn’t violate the joint tenancy. (In

some jurisdictions, taking out a mortgage unilaterally will sever the joint tenancy and create a tenancy in common).

3. Helen had “encumbered” property with the agreement to allow Myers to grow crops, so she did not have unity of interest with J, jr. (she had a different interest in the land).

a. Ct. rules that you can create a joint tenancy in something less than a fee simple absolute. (Straw man actually conveyed a fee simple subject to JM’s farming rights).

b. Ct: “’Unity of possession’ may exist even though by express agreement between the joint tenants one of them retains the exclusive right to the possession of, and/or income from, the jointly owned property.”

l) Case: People v. Nogarr (p.574): 1950: Elaine and Calvert married; in 1950 they acquired property as joint tenants; 7/1954: Elaine and Calvert separated; 10/1954: Calvert unilaterally executes a mortgage to his parents for $6,440; 6/1955: Calvert dies; 5/1956 CA condemns property (and will therefore pay fair value to someone).i) Elaine claims full ownership of property as surviving joint tenants. C’s parents are asking for $6,440 – they

want the terms of the mortgage satisfied from the ‘just compensation’ii) Holding : Unilateral mortgage did NOT sever the joint tenancy (this varies by jurisdiction). Therefore, Elaine’s

right of survivorship entitles her to the entire property.(1) Note: While C was alive and in default, creditor could have severed the joint tenancy. In that case, the

Creditor would get $6,440 worth of ownership in the property BUT ONLY FROM CALVERT’S PORTION OF THE PROPERTY (They could NOT get to Elaine’s portion of the property).

m) Case: Smolen v. Smolen (p.578) : 1970 – Roslyn and Martin married (Community Property); 1990 – Martin diagnosed w/ disease; 2/1994 – Roslyn and Martin divorced divorce decree “the…property…shall remain in joint tenancy”; 12/1994 – M put in group home by Roslyn; 4/1995 – M got nephew’s help and was declared competent; 5/1995 – M conveys his interest in property to a trust, with his nephew Jason as sole beneficiary; 10/1995 – M dies.i) Roslyn’s argument: The deed to the trust violated the court order, which said the property “shall remain in joint

tenancy.”ii) Ct. ruled that the divorce decree created a joint tenancy. M’s conveyance to his nephew severed the joint

tenancy.(1) Note: In a divorce, the property usually goes to a tenancy in common. In this case, the intent is different

so the result is different.

10) The Recording System

a) Typically must search grantor-grantee index (by name, by date); may also have tract index (by property lot), or a combination of the two.

b) Also should check probate records, tax records, etc. (whatever is required in your jurisdiction)c) General Policy : Purpose of Recording acts was primarily to reign in double-dealers. As long as 1st grantee

records, it will work. If they don’t record, then they haven’t done their part to prevent double-dealing; therefore, subsequent good faith purchasers get blackacre.

d) Types of Statutes: A subsequent purchaser for value (NOT including donees!) is protected if:i) Notice jurisdiction

(1) No notice (actual or recorded) at time of purchase(a) Last bona fide purchaser is protected (but if he doesn’t record, the next purchaser will get blackacre).(b) Policy : A (who didn’t record) could have prevented harm to B by recording. Therefore, A seems more

at fault than B. B did everything he could when he bought the property. ii) Race-Notice jurisdiction

(1) No notice (actual or recorded)(2) He Recorded first

iii) Race jurisdiction (1) He Recorded first

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(a) Policy : Seems unfair to give it to B even if he had actual notice of the deed to A. This basically says that it’s completely A’s fault for not recording, and the court wants to keep it simple, so A should bear the loss.

iv) Period-of-grace – Gives you extra time to record.e) Types of Notice

i) Actual Notice – You actually know of the conveyanceii) Record Notice – If you look at the index you should see the prior conveyance within the chain of titleiii) Inquiry Notice – You need to inspect the property and make the inquiries that a reasonable person would

make (e.g. about power lines running across your property)(1) Note: Good faith/Notice – only look at when the actual transaction takes place; not any time later.

f) With multiple parties there are 2+ ways to look at title:

p.750 Problem 6: OA, no record OB, Notice of O-A B records BC, no notice of O-A A records C records

***Key question: Who could have prevented this whole mess? ATherefore you’ll favor C (who is a good guy, since he didn’t have notice) over A (who’s a bad guy).

i) Directly compare to parties (C-A) : Question is “who was the last good faith purchaser?”(1) Notice jurisdictions – Majority follow this approach

(a) Policy: If you followed pedigree, A would get blackacre, even though C did nothing wrong, and A could have prevented the problem by recordingThis wouldn’t seem fair.

(2) C had no notice of OA; Therefore, C gets blackacreii) Pedigree :

(1) Race jurisdictions – Majority follow this approach.(a) Policy : If they didn’t follow this approach, A would get 2 chances to record, which doesn’t seem fair.

(2) B-A; B’s claim is superior (B subsequent purchaser who recorded first)(3) Therefore B-C was valid and since C has recorded, C gets blackacre. (A has no claim as a prior

purchaser in this case)iii) Race-Notice would also favor C (seems most fair)

(1) Directly compare C-A : Mechanical position doesn’t seem to support this BUT you could argue that A didn’t really record “first”. B recorded before A, so that knocks out the legitimacy of A’s recordation

“Sheltering” Example (Notice Jurisdiction): OA, no record OB, No Notice of O-A B records BC, Notice of O-A

i) Directly compare to parties (C-A) : Comparing A to C, you would be tempted to give blackacre to A (since C had notice), BUT doing this would hurt B (who is a good guy – he had no notice and recorded). So you give blackacre to C in order not to hurt B. B’s good faith purchase is “sheltering” C. In effect, you would choose the pedigree approach in this case:

ii) Pedigree : B has superior claim vs. A. Therefore, C is buying from a legitimate owner of the property. Property goes to C.

b) What constitutes a reasonable title search? i) You only have to search within the legally recognized chain of title. You do NOT have to search before

grantor was given the property, and you don’t have to search after Grantor’s first conveyance of property to someone else.

ii) “Wild document” = document outside the legally recognized chain of title.

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(1) Policy : We can’t burden the title search by requiring people to search outside the chain of title. It would be too expensive, and the people that are potentially harmed by this could have prevented it by recording correctly/promptly.

c) Additional Information: i) Good faith/bona fide purchaser = paid valuable consideration AND did not have noticeii) 1st in time purchaser does not need to use the recording acts; 2nd in time purchaser does. In some

circumstances, however, 1st purchaser can prevent the 2nd in time purchaser from using the Recording Acts protection by recording first.

iii) Note: Conveyances are indexed according to the date that they were recorded, NOT the date that the transaction actually took place. Reordering them by date of conveyance would solve a lot of these problems.

Key Conclusion (Bryant): Look at protecting the equities of the people involved. What is fair? Courts usually do NOT like to give the property to A (who didn’t record and started the whole mess to begin with).

d) Case: Patience v. Snyder (Handout): Derrick and Patience were joint tenants in a property. Derrick - Quitclaim deed to his girlfriend Snyder’s mother: Georgie Wilson 3/21/1995. Derrick died 11:55am on 3/29/1995. The quitclaim deed was stamped at 12:54 pm on 3/29/1995. Even though they had given the deed to a clerk before 11:55am, ct. ruled that this did not constitute a deposit. Therefore, since deed had to be stamped before Derrick’s death, it was invalid.i) Purpose of this recording requirement: To avoid a ‘secret severance’, where you create a deed conveying

your interest, and then you rip it up if your partner dies first; but if you die first, it gives your portion of the property to someone else.

e) Case: Ryczkowski v. Chelsea Title & Guaranty Co. (p.751): Cleary gave easement to Sierra Pacific Power 3 years before he got the title to the property. Subsequent owners were NOT required to find this easement in their title search, because it was outside the chain of title (before owner got title). To prevent this, Sierra Pacific should have re-recorded after Cleary actually got title. However, the company’s power lines may have given them inquiry notice of the easement, in which case they’re screwed.

f) Case: Morse v. Curtis (p.752): Hall mortgaged land to Demandant. Then Hall mortgaged land to Clark. Then Clark recorded. Then Demandant recorded (late!). Then Clark assigned mortgage to tenant, who had no notice of Demandant. Ct. held that Tenant got title. You don’t have to search outside chain of title (after then owner’s first conveyance of the land).

g) Case: Buffalo Academy of the Sacred Heart v. Boehm Bros. (p.754) : P agreed to give D marketable title to certain property in pay off a debt. D claims that the land is not marketable because 1) Uniform plan restricted property to Residences only, and 2) Deed to Kendall Refining Company prohibits gas stations except for on their lot. i) Ct. ruled that

(1) No uniform plan. Some lots were restricted; some were not. Some deeds had “savings clauses” specifically providing that grantee had no rights in other lots, and

(2) No restriction by Kendall deed. The agreement between the “party of the first part” (grantor) and the gas station owner only applied personally to the grantor. It does NOT run with the land. Covenants are construed strictly against those seeking to enforce them (b/c they are burdens on the land).(a) Also, this covenant does not appear in the direct chain of title, so there was no constructive notice to

purchasers of other lots.(i) Note: Other jurisdictions might require you to find this restriction outside the direct chain of title.

ii) Additional Information – How should Uniform Plan be created ?(1) Developer can file a master plan to indicate that they want a master plan (Best option - CA requires this).(2) Could give enforcement rights to subsequent purchasers (in every single deed), which implies a master

plan. Each purchaser has right to enforce policy on each other AND obligation to follow the policy. (Second best option – puts notice directly in the chain of title).

(3) Grantor to restrict retained land: In A’s deed: A gets land for residential purposes, and I (grantor) am restricting all of my retained land for residential purposes only. (a) Problem: This would not necessarily appear in other subsequent purchasers’ chain of title

(4) Note: For a property to be considered marketable, a reasonable person must think that the property is reasonably free of encumbrances and that he would be able to buy/sell the land.

h) Case: Sanborn v. McLean (p.759): 53 of 91 lots in a subdivision were restricted. Everyone was obeying the restrictions. Mr. and Mrs. McLean started to erect a gasoline station on their lot. Their lot’s chain of title did NOT

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have any restrictions. Ct. held that the restriction (no gas stations) was valid for all lots. Given the uniform nature of the subdivision, the purchaser was effectively put on “Inquiry Notice” as to this restriction.

i) Manufacturers & Traders Trust Co. v. First National Bank (p.763): Drewry had an outstanding loan to debtor that was due. In exchange for 60 days to pay off loan, debtor secured the loan with his property (2nd mortgage). Because debtor got something of value (an extension of the loan for a finite period of time), this transaction qualified Drewry as a purchaser for value, and he was therefore protected by the recording acts.

11) Nuisance

a) “The law of nuisance affords no rigid rule to be applied in all instances. It is elastic. It undertakes to require only that which is fair and reasonable under all the circumstances.” (p.861)

b) What constitutes a Nuisance? i) Subjective: Property owner’s subjective sense of invasionii) Objective: Would a reasonable person be bothered?

(1) Factors associated w/ interfering entity’s use (how useful is their activity?)(a) Suitability of the particular use or enjoyment invaded to the locality

(2) Factors associated w/ sensitive use entity(3) Factors associated w/ society’s interests

c) Remedies :i) Allow the “nuisance”Clark Caseii) Enjoin the nuisanceMitchell Caseiii) Allow the “nuisance”, if the nuisance causer pays the complainer (Forced transaction)Boomer Caseiv) Enjoin the nuisance, if the complainer pays the nuisance causerSpur Case

(1) Judges may think that if you grant an injunction, the parties involved are likely to bargain. The ct. has essentially given P bargaining power.(a) *** Note from casebook: Study of 20 nuisance cases: after injunction, no bargaining took place. At

this point, cts. are less inclined to grant the injunction, b/c the assumption that people will bargain doesn’t seem to be valid.

d) Public Nuisance –2 Requirements: i) You are legitimately speaking for the general publicStatutes are very often used to support this. Statutes

aren’t required, but they are very useful for this (Argument is that if someone is violating a statute, then they are clearly going against the public will).

ii) You are harmed in a special way (more than the general public), so you have the right to speak on behalf of the public

e) Cases: i) Case: Clark v. Wambold (p.841) : D maintains pig pens on his farm. P has a summer residence next door,

and brought a nuisance claim for the odor from the pigs. They are in farm country. The pens are filthy, but they were kept as clean was they reasonably could. The pig pens had been there when P bought his property. P knew about them when he bought the property. BUT D increased his pig production from 1911 to 1912. There are other areas on D’s property where he could house the pigs. For D; NOT a nuisance.

ii) Case: Mitchell v. Hines (p.842) : D runs a piggery. P’s live in residences nearby. Pigs were fed garbage, and sometimes dead animals were mixed with the garbage. Increase in pig production from 200 to 400; this is when the odor became extremely bad. Most P’s bought their properties before the increase, so the “coming to the nuisance” argument is weakened (at least for the P’s who bought homes before the increase). Piggery IS a nuisance. Injunction granted.

iii) Case: Boomer v. Atlantic Cement Co. (p.851) : P’s lived near a cement plant, which was releasing harmful dirt and smoke in the air. Plant IS Nuisance; NO injunction (Overruled doctrine (Whalen v. Union Bag & Paper Co.) that even with slight damages to P, an injunction was warranted); Permanent $$ damages awarded. Damage to P’s property is small compared to cost of closing plantlarge disparity of economic consequences ($185k v. $45MM). Social utility – Cement is important; 300 employees (so even P’s benefit to some degree as members of the public)(1) Policy : Why use permanent damages?

(a) Easy to show in this case: Primary cost = Loss in property value; this can be calculated and handled in a one-time payout.

(b) If the company isn’t using state-of-the-art technology, you might go for an injunction. If the company is using state-of-the-art technology, you might want to issue permanent damages. Theoretically,

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there could be an incentive for the company to continue to use good technology, b/c if not they could be subject to an injunction or more damages in the future.

iv) Case: Spur Industries, Inc. v. Del E. Webb Development Co. (p.858): D Spur Industries operates a cattle feedlot. P Del Webb Development Company developed land near D’s farm. Residents in Del Webb’s residences complained of flies and odor from the farm. Del Webb brought a public nuisance claim. Injunction; Complainer (Del Webb) must pay Spur for costs of injunction. Public Nuisance: Statute = “Any condition…in populous areas which constitutes a breeding place for flies…” BUT Dell Webb came to the nuisance, so Dell Webb has to pay relocation costs

v) Case: Prah v. Maretti (p.867) : P has solar panels on his roof. D bought the lot next door and began building his property. P told D that the home would interfere w/ his solar panels and asked him to change the design and move it over. P’s building and D’s proposed building were both within city regulations. Building blocking solar cells CAN constitute a nuisance. Definition of nuisance is very broad and evolves over time. Ct’s have already given some protection to sunlight (e.g. spite fences). Solar power has high social utility.

vi) Case: Mark v. State Dept. of Fish and Wildlife (p.879) : P purchased a property in 1990 after visiting the property and talking to the seller and the Oregon dept. of fish & wildlife about it. The property was next to a nude beach. In 1993 the Wildlife dept. in charge of the beach adopted a plan that designated the beach next to P’s property as a clothing optional beach, created a ~400 ft. buffer zone between property and beach, called for trees to block view from P’s property and vandal-proof signs to be installed. Trees wouldn’t grow and signs were vandalized. Private Nuisance; Injunction to successfully implement the original plan.

12) Servitudes: Easements

a) Evolution of Servitudes: i) Traditional

(1) Interests in Land (a) Easements/Profits

(i) Negative EasementsCan be created by implication(b) Real Covenants (Horizontal Privity)

(2) NOT Interest in Land (a) Equitable Servitude (No Horizontal Privity)

ii) Rest. 3 rd (1) Servitudes (1 umbrella category that includes the following):

(a) Easements/Profits(b) Covenants

(i) Negative Easements(ii) Real Covenants(iii) Equitable Servitudes

1. Remedies : $$ damages OR equitable relief (depending on what’s fair)b) Types of Servitudes

i) Profits – Right to take resources off of someone else’s land (gravel, timber, etc.)(1) Profits = Real property rights (not just a license)Treated like a type of easement (burden is associated

w/land, even though the benefits are not associated with land)ii) Easement – Right to use someone else’s landiii) Equitable Servitudesiv) Covenant – Governs what you can/cannot do on your own land (Does not include right to go on someone

else’s land)v) Negative Easement (treated as a covenant) – Limits what you can do on your own landvi) Irrevocable licenseRestatement/Majority: Functionally the same as an easement.

(1) Minority: Irrevocable license is a kind of license (unlike an easement, they can be taken away if conditions change and they are no longer necessary).

(2) Note: A license (which is revocable) is NOT a servitudec) Easement – Definitions:

i) Appurtenant (to both lots) = Easement runs with the land ii) In Gross = burden doesn’t run with the landiii) Servient tenement/ estate = Property that owns the land that the easement is oniv) Dominant tenement/estate = Property that gets the benefit of the easement on the servient estate

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(1) Policy : Because servitudes are encumbrances to land, you must be absolutely clear that you mean to create a servitude (not just a personal contract); ct’s will interpret these contracts in favor of NOT creating an easement

d) Creation of an easement: i) Written Deed : This should ALWAYS be the starting point. Must be clear; could be interpreted as a fee

simple absolute or as a license. Should outline purpose, location, duration, terms of maintenance, etc.(1) 3 rd Party : You can NOT create an easement in a 3rd party in the deed (Thomson v. Wade)(2) Statute of Frauds – Interests in lands must be in writing, and be purchased for more than a nominal sum.

Some jurisdictions will require a written deed except in extraordinary circumstances (e.g. there was fraud). Reasoning: Reliance without a written document is NEVER reasonable.(a) Specific exceptions to this rule are outlined below.

ii) Creation by Estoppel : Equitable defense to keep someone from enforcing their black letter rights. Consequence = you are stopped from doing something (or stopped from denying someone something). (1) Someone made a representation that they’re not going to stand on their black letter rights (e.g. go ahead

and use the right of way, I don’t need something in writing)(2) It was reasonable to rely on that statement(3) It was also reasonable to change their behavior based on what was promised(4) They did change their behavior based on the statement

Forcing them back to the black letter position would be an injustice. Therefore, a harm would be done.iii) Implied by Prior Use

(1) Creation :(a) Common grantor of land(b) Owner used one part of the property for the benefit of the other(c) Use was apparent to subsequent purchaser(d) Use was reasonably necessary

(i) Minority:1. Implied reservation (benefiting grantor)Absolute necessity required2. Implied grant (benefiting purchaser)Reasonable necessity required

(ii) Majority/Current View (Van Sandt)No distinction between implied reservation & grant (reasonable necessity)

(2) Unlimited duration(3) Policy : Typically this is granted based on the original intent of the parties involved (who may have thought

it so obvious that they didn’t put it in the deed). Necessity not the key.iv) Implied by Necessity (Extremely rare)

(1) Only used for landlocked land. (2) Creation :

(a) Common grantor(b) Grantor either retained easement or subdivided and simultaneously sold plots of land.

(i) Note: Last lot of land sold that caused the property to be landlocked is the lot burdened with the easement.

(3) Lasts only as long as necessity lasts.(4) Policy : Not really created to let landlocked owner out; created to fix mistake by original grantor (which is

why the original intent of the parties is important).(a) Private Right of Condemnation of Way – Some jurisdictions will allow ct. to force a transaction at a

“fair” price to provide a landlocked landowner access to his land. Policy: It helps society NOT to have useless, landlocked land.

v) Easement by Prescription (1) Same requirements as Adverse Possession (including open & notorious)

(a) Policy : Oral agreement (imperfect servitude) does NOT negate the ‘hostile use’ requirement. This allows courts to use easement by prescription to ”cure” a defect in the original creation of the easement.

(2) Unlimited durationvi) Dedication grant to the publicvii) Condemnation for public utilities, railroads, canals, etc.viii) Other Forced Sales

(1) (e.g. ct. refuses to enjoin continuing nuisances or encroachments)

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e) Scope of Easements and Profits i) Moving Easement

(1) Majority View – Can NOT move easement(a) Creates market uncertainty(b) Infringes on dominant estate’s property rights(c) Proliferate litigation(d) Economic windfall to servient owner

(2) Rest./Minority View : (General Rule that you can’t move an easement, but…) Owner of the servient estate is entitled to make reasonable changes in the location, at his expense, only if the changes do not:(a) Significantly lessen the utility of the easement(b) Increase the burdens on the owner of the easement in its use and enjoyment(c) Frustrate the purpose for which the easement was created

ii) Scope of Easements : (a) Obligation to maintain easement so it’s not a nuisance(b) Right to ‘reasonably use’ and develop the easement, as technology advances.

(i) Is what is being done close enough to the original easement grant and not too burdensome? 1. P.950 – Owner sold the Power company an easement. Power co. sold rights to a cable

company to lay cable in their easement space. Cable company won against original property owner!

2. Easement by Prescription – scope is generally more narrowly confined to the original use. i.e. dominant estate holder is more likely to be found to be misusing the easement.a. Policy : They got use because you allowed/ignored a specific use (walking over land); not

fair for them to change this use (start driving) b/c you would have noticed this initially, and they never would have gotten the easement in the first place.i. Express easement, granting right-of-way, easement by prior use/necessity: Driving

would be fine (as a technological advancement)3. Easement by NecessityNOT limited to SFR use (Morrell v. Rice p.911)4. Right-of-wayCouldn’t pave; can’t “disturb the soil upon the fee”; b/c paving could lead to

increase in traffic – problems w/scope of easement. I think that the paving isn’t really done as a result of technological advances (cars existed when they first granted the easement). Therefore, this is seen as an unreasonable increase in the use of the easement (and not simply taking advantage of new technology)

iii) Use of Easement for Non-Dominant Land : General Rule – An easement appurtenant to one parcel of land may NOT be extended by the owner of the dominant estate to other parcels owned by him.(1) But don’t necessarily have to enjoin use (Brown v. Voss)

iv) “Succession, Exclusivity, Assignability, and Divisibility” (1) Exclusivity : Background rule that easement is not exclusive, unless specified as exclusive (City of

Pasadena v. California-Michigan Land & Water Co. 944).(a) Policy : Encumbrances make land less marketable. Limiting the burden should alleviate this some.

(2) Interest in land (e.g. NOT in gross) Implies inheritability and assignability(3) Assignability/Divisibility of Profit/Easement

(a) Default = some assignability and some divisibility(i) Limitation: Writing; Reasonable useBased on the reading of the deed (i.e. parties’ INTENT)

[Central Oregon p.950]v) Historical Evolution of Easements in gross (Easements in which the benefit is in gross; not attached to land)

(1) Problem: Tough to find these people – they could be anywhere in the world!(a) 1) Historical rule: the “burden will not run” if the easements is in gross.

(i) Problem: Power companies were granted easements in gross…could these run?1. 2a) Commercial easement in gross can run; 2. 2b) Noncommercial “personal” easement – benefit will not run (=it is NOT

inheritable/assignable)a. Problem: Conservation easements (non-Commercial), but we want these to run.

i. 3) Rest. 3rdLook at the intent of the parties, and compare the costs and benefits of allowing the burden to run.

vi) Termination Doctrines: (1) Negotiated Agreement/buyout

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(2) Release of the easement to the servient tenement owner(3) Abandonment – Must be unequivocal (Central Oregon: Not hunting for years after land fenced off is not

enough)(4) Prescription – Must clearly establish hostile possession (Central Oregon: fencing off hunting land not

enough)(5) Condemnation – Govt. exercises eminent domain, and pays just compensation

(a) How do you value an easement? Difficult(6) Merger of the burdened and benefited properties into one owner.

(a) Note: If you subdivide the properties again, the easement doesn’t necessarily reappear (has to come about by one of the other doctrines)

(7) Changed Conditions (or frustration of purpose/doctrine) : (a) Successful argument: Conditions have changed such that no one is claiming a continuing benefit

from the easement:(i) Easement owner has disappeared, you can’t locate him, and you want to sell the property

(without the burden)

f) Cases : i) “Deed: Fee Simple or Easement?” Case: Brown v. The Penn Central Corporation (p.894): RR had deed to

some land. RR abandoned the land and rented out part of it. 3rd party trying to quiet title in themselves. Deed to RR: “Right of Way…for Depot and Rail Road purposes.” Deed granted easement, which was abandoned and lost. 1) Form was prepared by the Railroad, so burden on Railroad; 2) Rule: “Right of Way” language interpreted as an easement; 3) Use limitation in deed; 4) No forfeiture/reversionary language; 5) Form was a Right of Way (limited use easement) form, and the ambiguous language is the only handwritten portion of the form

ii) “Deed: Easement or License?” Case: Stratis v. Doyle (p.897): Doyle granted his neighbor (P’s predecessor) Abbatiello a right-of-way across his land to build a driveway “…provided that Abbatiello agrees that he will construct and maintain such driveway upon the lands described above in a good…manner and will be completed by April 1, 1980.” P sued Doyle and Dennebaum for “interfering” with the easement. Ruled that 1) Deed created easement and not a license (word “grant” is used; specific words of inheritance are used; was created with a warranty deed (document used to grant an interest in land, not a license); 2) The condition in the deed is NOT a condition subsequent (NO forfeiture language); it is only a covenant and can only be protected with $$ damages, NOT forfeiture

iii) “Deed: Easement or License?” Case: Cooper v. Boise Church of Christ (p.899): Adams attempted to convey an “easement” to the church for a neon sign, but Adams didn’t really own the land yet. He only held an equitable interest (deed still in escrow; escrow didn’t close for 10 years). Deed created a revocable license. 1) Didn’t have right to grant easement (although couldn’t grant a license either…); Only paid $1 = Not sufficient for a permanent easement (there was no mention of duration in the deed); $1 could be sufficient for a license. 2) No easement by prescription – use of license w/o objection is not hostile; No equitable estoppel - Paid $958 for 11 years of advertising, so in essence they got their money’s worth. No unfairness in not granting them a permanent easement.(1) Statute of Frauds: Interest in property must be in writing, and there must be some real value

exchanged (e.g. $500).(2) Equitable Fee Simple = You’ve done everything necessary to get the fee simple absolute, but it’s still in

escrow. While the conveyance is still in process, you have an equitable fee simple.iv) “Creation by Estoppel” Case: Case: Mund v. English (p.903): P is the son of D. They have neighboring

properties. They all worked together to build a well on P’s land. Equipment and pipes were installed so that both P and D could use the well. Their attorney wasn’t sure what, if anything, they had agreed to. Ct. held that D granted an irrevocable license, not a (revocable) license. 1) Facts indicate there was an agreement (they shared installation/maintenance costs); 2) D made valuable improvements based on the agreement (built a house with no other water source); Therefore, P can NOT revoke the license. Irrevocable license = Easement (Rest. definition).

v) “Implied on the Basis of Prior Use” Case: Van Sandt v. Royster (p.906 ): Grantor used to own 3 lots. She built a private sewer line to the public sewer. Then she subdivided the lot and sold the other lots. Her lot was furthest from the sewer, so her sewer line crossed both properties (one owned by P). There was nothing in writing about the sewer. Ct. held that easement had been created (implied by prior use). Some ct’s differentiate between 1) implied reservation (grantor gets benefitstrict necessity required) and implied

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grants (purchaser gets benefitOnly reasonable necessity required). This court rejects distinction and treats them the same: 1) Grantor had a “Quasi easement” (quasi because you can’t have an easement in your own property), which became an easement when she sold lots. Necessity a factor, but NOT strictly required.

vi) “Easement implied by Necessity” Case: Morrell v. Rice (p.911) : Morrells owned a landlocked piece of property. They were replacing their SFR with a hotel. Their property and the Rice property were originally in common ownership. 1) Easement by necessity created; 2) Scope = NOT restricted to SFR use. Grantor can create easement by necessity by 1) Retaining the easement, or 2) Simultaneously conveying both plots of land (and one is landlocked by the other). In this case, the deeds were more or less simultaneous. Access by boat isn’t feasible: 1) Unclear if they could get permits; 2) Cost $300,000. As long as it doesn’t cause an “undue burden” on the Rice’s land, the easement can be used for more than just a SFR.

vii) “Easement by Prescription” Case: Paxson v. Glovits (p.917): In 1979 the Murphys and Baker orally agreed to an easement across their land. A subsequent purchaser Glovits started to build a wall over the easement. Subsequent purchaser of other lot Paxson brought action so stop him.Easement was created by prescription. General Rule: Oral agreement (imperfect servitude) does NOT negate the ‘hostile use’ requirement. Policy: This allows courts to use easement by prescription to ”cure” a defect in the original creation of the easement.

viii) “Easement by Forced Sale (Encroachment)” Case: Goulding v. Cook (p.921): Cook had a cesspool (which was partly under a neighbor’s land). Another neighbor installed a swimming pool, and their cesspool started leaking. The city demanded that they have a septic system and the only suitable site belonged to a disputed piece of property (that Cook and Goulding owned). Lower ct. rules that land belongs to Goulding, but Cook could install the septic system for a price to be determined later. Supreme ct. reverses and does NOT grant easement.

ix) “Easement for 3rd party” Case: Estate of Thomson v. Wade (p.925): Noble owned 2 plots of land. He conveys the riverfront plot to P’s predecessor in 1945 (no mention of easement). He then conveyed the other plot to D’s predecessor. In this deed, he excepted or reserved an easement over D’s lot.No Easement created. You cannot create an easement for a 3rd party in a deed with someone else. You have to take 2 steps: 1) Create an easement (in writing or establish circumstances where it’s implied by prior use); 2) Convey land with the easement in your first transaction (and refer to it in the 2nd conveyance of land). Policy: Recording acts. The easement (benefiting or burdening a property) needs to be in the chain of title.

x) “Moving Easement” Case: Davis v. Bruk (p.929): D Bruk and P Davis have neighboring parcels. P has a right-of-way on D’s property. D wants to move the easement (safety hazard b/c it runs close to their house). P wants to pave the easement (argue that it also helps D, b/c it will cut down on dust).(1) Easement can NOT be moved: General rule = can NOT move easement. Policy: a) Introduce uncertainty

into land ownership; b) Increase litigation; c) Dominant estate deprived of security of his property rights; d) Economic windfall on servient owner

(2) Easement can NOT be paved: You can’t “disturb the soil upon the fee” of the owner of the servient estate. Paving could cause an increase in trafficCould lead to problems with the “scope” of the easement (more potential litigation).(a) Policy :

(i) Why hard line stance? Ct.’s will often stand on the black letter rule when there seems to be a potential deal in the making that neither party has yet agreed to (like in this case). That way, there’s less of a hold out problem.

(ii) Not allowing easements to expand will likely cause 1) easements to disappear, and/or 2) more bargaining

xi) “Moving Easement” Case: Lewis v. Young (p.932): P has an express easement for a driveway (in their deed) on D Young’s land. D allegedly agreed with P’s deceased aunt (prior owner) that they could move the easement while renovating their property. D started construction in spring of 1993 and relocated the driveway in November. In December, P sent a letter saying that he would agree to the relocation of the driveway of the driveway in return for certain renovations. D agreed, but claimed that the renovations were delayed for various reasons (weather, husband died, law suit). Easement CAN be moved.(1) Original intention was for a right of way (not a physical grant of land – unlike the last ct, which viewed it as

more of a standard property right)(2) Okay to reasonably move the easement as long as the servient owner wants to move it (If dominant

estate wants to move the easement – Would add additional burden to servient estate’s land (who is already burdened by the easement!)(a) Increases (not decrease) value of land

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(b) Encourages (not discourages) owner to make improvements(c) Limited right – so won’t incite litigation

xii) “Use of easement for Non-Dominant Land” Case: Brown v. Voss (p.939) : Property B has an easement on A’s land. P bought property B and property C and began to build a house on both properties. D didn’t want him to use the easement for lot C, and they started blocking it with logs, etc. P was misusing the easement, BUT ct. only awarded $1 in damages and did NOT enjoin the use. Note: The clearly written deed in this case essentially required a ruling against P. (1) Washington statute allows ct. to condemn a right of wayThis would definitely require a payment from B

to A (Dissent says to do this).(2) Note: Ct. has said that P’s use is a trespass.

(a) D could get damages in the future(b) P can quiet title through prescription in the future

“Succession, Exclusivity, Assignability, and Divisibility”xiii) “Exclusivity” Case: City of Pasadena v. California-Michigan Land & Water Co. (p.944): Landowner granted 5

ft. wide easement “for the purpose of installing and maintaining water mains and connections thereto…five feet in width…” to City of Pasadena P. Landowner then granted another easement to a competitor of Pasadena (D). Easement is NOT exclusive; so D has the right to use their grant. Background rule that easement is not exclusive, unless specified as exclusive. Policy: Encumbrances make land less marketable. Limiting the burden should alleviate this some (I have this in my notes, but I’m not sure what this means!). No language in the deed about exclusivity, so grantor retains rights in the easement (specifying the 5 ft. width does NOT establish an exclusive easement for P); There were prior easements in the same landleads to a non-exclusive interpretation of easement; (1) Precedents – Surface right of way easements of a defined width give dominant estate the absolute right

to occupy the entire widthPrecedents applying to surface rights of way are not the same as this easement (pipes can be at different depths and are in a relatively fixed and permanent location; did grantor really grant the land all the way to the center of the earth?)

(2) However, if D’s pipes actually interfere with P’s use of the easement, then P’s rights are superior; So in the future, anyone else laying pipes in the easement are vulnerable.

(3) Granting an injunction would give P a “No-competition guarantee”(a) Ct. found no intent by the parties to prevent competition. The fact that they didn’t mention in

agreement indicated that they did NOT want to prevent it.(b) Ct. could have interpreted the silence the other way (Silence=assumed that they couldn’t grant

additional easements).xiv) “Exclusivity, Assignability” Case: Fairbrother v. Adams (p.947): Fairbrothers conveyed a part of their land to

Adams. The deed also conveyed hunting rights to the remainder of their land: “…the hunting and fishing rights on the other lands of the Fairbrother farm…” (1) Easement is appurtenant to the land (not personal/in gross)(2) Exclusive?Yes. Language = “THE hunting and fishing rights…”

(a) Also excludes the grantor, b/c the language will be construed against the grantor whose attorney drew up the deed.

(3) Assignable/Inheritable?Yes(a) Profit is an interest in landimplies inheritance and assignability(b) “Assigns & heirs” language in deedinheritability/assignability language

(i) Note: The rights can only be assigned as long as the person owns the land (b/c the easement is appurtenant to the land).

xv) Central Oregon Fabricators, inc. v. Hudspeth (p.950) : D Hudspeth and his family were given the right to hunt on P’s land by deed. P then fenced the land off and started charging for hunting tours. Years later, P told D not to hunt there. P then brought action to quiet title.(1) Termination Doctrines:

(a) Abandonment – No abandonment. Mere nonuse is not enough. Must be unequivocal: P “…must show both nonuse and “either a verbal expression of an intent to abandon or conduct inconsistent with an intention to make further use…conduct which is equivocal in character does not suffice.”

(b) Adverse Possession (used as umbrella term for easement by prescription) – No Adverse Possession. P fenced off property and told D that they didn’t want them hunting there (One of D’s was denied access to the property, but this isn’t enough to constitute hostile possession). Ct. ruled that creating a hunting park was actually in the best interest of P’s hunting easement.

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(2) Assignability/Divisibility of Profit, based on the reading of the deed (i.e. parties’ INTENT)(a) Language of the Deed:

(i) “heirs & assigns” – Can be assigned; and no language indicating that it can’t be assigned to more than 1 person1. BUT Obviously can’t burden the easement through use by too many people

(ii) “personal guests” – Only natural persons (not entities) may be assignees (can’t entities have guests)

(iii) “personal guests” – Nonpaying guests (not commercial guests)jbjhb

13) Servitudes: Real Covenants & Equitable Servitudes

Requirement

Historical View Rest. 3rd

Real Covenants Equitable ServitudeReal Covenants AND Equitable Servitudes

Intent (that burden and benefit run with land)

Required Required Required

Horizontal Privity RequiredNote: Enforcement rights can be created in a 3rd party.

NOT Required Not Required

Existence of General Plan

NOT Required (i.e. Don’t need subdivisions)

NOT Required Not Required

Writing Required Required; BUT Implied and Serv. by Estoppel

Required; BUT Implied and Serv. by Estoppel

Benefits in Gross Probably OK Not allowed, but exceptions (Policy disfavoring = difficulty of finding benefited person. 1) If easy to find individual, OK; 2) If the benefit to the area is great, we would want to see the benefit run.)

OK

Affirmative Burdens

OK (Originally seen as NOT touching land; disfavored). Policy against: More burdensome to make someone do something than to make someone do something. However, agreement NOT to let trees grow is actually an AFFIRMATIVE burden to trim the trees.

OK, but a few exceptions OK

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Requirement

Historical View Rest. 3rd

Real Covenants Equitable ServitudeReal Covenants AND Equitable Servitudes

Touch or Concern Land

Required Required Not required; Covenant OK unless illegal or against public policy.Servitude is invalid if: Illegal Unconstitutional Violates public policy :

1. arbitrary, spiteful, or capricious

2. unreasonably burdens a fundamental constitutional right

3. unreasonable restraint on alienation

4. unreasonable restraint on trade or competition

5. unconscionable

Unlike Touch & Concern, you do NOT cut off the covenant from the very beginning; you instead have TERMINATION DOCTRINES cut off the covenant only if/when they become a problem.

Vertical Privity 1) Required: Same estate for benefited and burdened side.2) THEN moved to SAME estate required on BURDENED side only (Not fair to relieve other person of burden just b/c I rented out my land).

Required (can be any estate)

Required for Affirmative Burdens only

Notice Required – Recording Acts (Note: Runyon Case/minority Actual Notice not sufficient; must be recorded)

Required – Recording Acts Required – Recording Acts

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Requirement

Historical View Rest. 3rd

Real Covenants Equitable ServitudeReal Covenants AND Equitable Servitudes

Termination Doctrine

Historical Doctrines1. ***Touch & Concern was used as a termination

doctrine (even though it technically wasn’t)2. Buy a release (difficult if there are many benefited

owners)3. Expiration date built into the original grant4. Merger – Owner of burdened lot buys the benefited

lot; can’t own land benefiting yourself; covenants disappear (You have to own ALL of the benefited/burdened lots)

5. Abandonment of the benefit – Requires something more than just not using itunequivocal statement or representation (like abandoning easements).

6. Estoppel – Holder of benefit led servient owner to believe that the benefit didn’t mean anything to them.

7. Adverse Possession – You behave in opposition to the restricted covenant for the statutory period (Note: Unlike AP of defeasible fee condition, AP must be Open & Notorious in this case).

8. Condemnation of the property – Govt. pays the burdened holder (who owns the land) AND the benefit holder (who owns the benefit) IF the govt. use will violate the restriction.

9. Changed Circumstances – Old Definition : Changed circumstances must take place within the benefited/burdened land. Strict interpretation.

Additional Doctrines1. Changed Circumstances

(New): Statutory Modification of Rights – “We won’t enforce a covenant if it unfairly burdens someone”: If burdened owner can make a compelling case; ct./ legislature may force a transaction.

2. Statutes that require a termination date for covenants, e.g. 30 years. Heavy burden to get everyone to sign off on a renewal.

3. Developers : More developers are retaining powers of modification/ termination, e.g. 75% of homeowners can vote to modify covenants.

Remedies Money Damages(Historically)Requirements on covenants were so strict b/c $ damages were NOT limited by the value of the property; you could be personally liable for an unlimited amount of damages.However, 1) plaintiffs wanted injunctive relief (not $$ damages), and 2) $$ damages were hard to prove and therefore not as worrisomeRest.3d allows both.

Injunction (NO $$ damages): NOT to do something To do something (possibly

according to a very detailed specification) – specific performance

***NOTE: Since a Real Covenant satisfies all of the requirements for an equitable servitude, you can also get Equitable relief (injunction) for a Real Covenant.

Money Damages AND Injunction/Specific performance

Policy Ct. is more likely to rule that a covenant is personal than it runs with the land.

In general, covenants (and equitable servitudes) looked upon as burdens on land, which made property less marketable. Goal was to knock as many out as possible.

Between Covenants and Equitable Servitudes, Equitable Servitudes were favored b/c they didn’t have the unlimited financial risk of covenants.

What is fair? What is the intent of the parties involved? Less focus on mechanical rules.

Covenants seen as GOOD things that can increase the value of property (esp. in planned developments)

a) Covenant Requirements:

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Absolutely MUST have it in writing, and:i) Intent

(1) To Bind successors (for burdened side AND benefited side)(a) Specify enforcement rights/class of people/property owners who can enforce the covenant (e.g.

Runyon was not specified, so he could not sue)ii) Notice

(1) Burdened Side: For burden to flow to a successor, they have to know about it(a) All Recording Act issues from before (since this should have been put in writing)

(2) Benefited Side: Obviously must know about it in order to sueiii) Touch & Concern Land

(1) Must be something that affects the land itself and/or the market value of the land (Covenant to sing happy birthday every year does NOT concern land, so it’s a PERSONAL contract that doesn’t run with the land).(a) Evolution of Touch & Concern:

(i) Old Rules – Covenants had to do with literal, tangible things with the property(ii) Then evolved into no competition clauses, behavior rules, etc.

1. Courts began using this clause for covenants that used to ‘touch and concern’ land but they didn’t anymore b/c circumstances changedOperated historically as a termination doctrine.a. Restatement didn’t like this, but they added termination doctrine (allow people to come

into ct. and claim that the covenant is no longer useful, it’s an unnecessary burden, and/or it’s unfair to owner of burdened land).

(2) Must touch & concern burdened AND benefited land (benefits in gross often knocked out with this)(3) Note1 : Touch & Concern should technically apply to the time when the agreement was INITIALLY made

(not the current situation).(4) Note2 : If a court rules that a covenant doesn’t touch and concern, this applies to the benefited AND

burdened side. (E.g. in Eagle Enterprises, after the decision that the covenant was invalid, Eagle could decide to stop servicing the rest of the homes in the community w/ water.

iv) Horizontal Privity – Required for Covenants only (1) Grantor/Grantee

(a) Grantor/Grantee: Outright conveyance (with no retained interest)(b) Subdivision(c) Lots next to each other

(i) Convey both lots to straw manStraw man conveys it back w/ the covenant in the deed(d) Landlord/Tenant relationship (tenant has possessory rights; landlord has ownership rights)

(2) Note: Enforcement rights can be created in a 3rd party. [ASK BRYANT ABOUT THIS…unless 3 rd party has property nearby, wouldn’t this violate touch & concern?]

v) Vertical privity (1) Relationship between original covenanters and their successors (e.g. A-D; B-C)

A B|| ||D C

(a) Traditional Common Law Rule: If the burden would run or the benefit would run, successors would have to have the Exact Same Interest as the originals (Fee Simple – Fee Simple, or Fee Simple Determinable-Fee Simple Determinable).(i) Why? If C is taking something less than B, B is still in a position to be sued, shouldn’t allow C to

also be sued.(ii) Rest 3 rd : Decision based on: Is it fair for the successor in interest to bear the burden?

1. Is it the type of covenant that it’s fair to enforce on C (e.g. paying rent) or not (e.g. tree trimming)a. Benefits : This was first side to relax; didn’t seem fair that a successor wouldn’t be able to

sue burdened land owner just b/c he had a slightly different estate.b. Burdened : Historically, vertical privity more strictly enforced here.

vi) Ct. should look at the covenant “both ways”; look at it as if P decided to break the covenant, as well as looking at the actual case, with D breaking the covenant.

b) Creation by Estoppel – Equitable Servitude Only (NOT Real Covenant) i) Estoppel Requirements (Review):

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(1) Someone made a representation that they’re not going to stand on their black letter rights (e.g. go ahead and use the right of way, I don’t need something in writing)

(2) It was reasonable to rely on that statement(3) It was also reasonable to change their behavior based on what was promised(4) They did change their behavior based on the statement

Forcing them back to the black letter position would be an injustice. Therefore, a harm would be done.ii) Shalimar Association v. D.O.C. Enterprises (p.986) – Promise to keep golf course open.

c) Remedies i) Common Law

(1) Covenants = Money Damages (Historically)(a) Why were the requirements on covenants are so strict? If you get $$ damages, the amount isn’t

limited by the value of the property, you would be personally liable for a theoretically unlimited amount of damages.

(2) Equitable Servitudes(a) Injunction (NO $$ damages):

(i) Injunction NOT to do something(ii) Injunction to do something (possibly according to a very detailed specification) – specific

performance ii) Rest 3 rd

(1) Money Damages AND Injunction/Specific performance for both covenants AND equitable servitudes

d) Negative Easements (p.959) i) Doesn’t require Horizontal Privity, etc. (a grant of an interest in land, not a covenant)

(1) How to Create: Interest in land: must be conveyed by a writing and recorded.(a) Can also be acquired by prescription; created by implication (prior use/necessity/estoppel)

(2) Bonus: Even without horizontal privity (required for a covenant), you can get $$ damages.(3) VERY limited – following 7 categories:

(a) Flow of water in an artificial stream(b) Flow of wind and air through a defined channel(c) Flow of light to windows(d) Support for a building from a building on the neighbor’s land

3 New Categories added in U.S.(e) View(f) Conservation Easements(g) Solar Easements

e) Housing Association Covenants : Options for determining if association covenant is valid – 2 kinds of inquiries:i) Covenant itself : Is the covenant something that will run w/ the land? (Traditional inquiry)ii) Enforcement/Interpretation of Covenant: Covenant is fair on its face, BUT the way in which it is applied is

unfairNote: Under the traditional covenants doctrine, you can’t really make this argument; only the validity of the covenant itself was looked at (not the behavior of the association)

3 Primary Options for determining if covenant is valid:iii) Extreme – Favorable to Association:

(1) “Best judgment rule” – Board’s conduct is presumed reasonable, unless you can prove:(a) conflict of interest, or (b) bad faith, or(c) arbitrary, capricious use of power

(2) Individual (not HOA) has burden of proofiv) Rest. 3 rd (middle ground):

(1) Board’s conduct must be ”reasonable” This is a lower hurdle than the “Best judgment rule” above(2) Individual (not HOA) has burden of proof

v) Extreme – Favorable to Individual Homeowner: (1) Same as Rest 3d, except that the reasonableness test should be applied to each specific situation (not

just as a general rule)(2) HOA has burden of proof

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(3) Policy : Heavy burden to take on; even if they’re incorporated the directors aren’t 100% shielded from personal liability; would require board members to be trained as to what is legally reasonable. Don’t want to disincentivize directors from serving on the board. Part of the reason why the reasonable standard (with the burden of proof on the association to prove it acted reasonably) is not popular. Too big a burden.(a) Also, if the board used the “reasonable” standard and didn’t enforce the restriction on one person,

then someone else could make a waiver claim.(b) Homeowners are paying for litigation costs associated with these lawsuitsWant to discourage

lawsuits.vi) Another option – Mixed:

(1) Covenants in master deed/original planPresumed reasonable, unless they violate a constitutional right, public policy, or are arbitrary

(2) Covenants added later/Board’s conductMust be reasonablevii) Waiver Claim : P could argue that she saw the covenant being broken (e.g. cats in a lot of the condos), mgmt.

hadn’t done anything about it; so they waived their right to enforce the covenant.f) Policy – Touch & Concern v. Rest. 3d : Rest 3d: Leave the covenant in place up front; then if it doesn’t work, at

some point we can cut it off w/ a termination doctrine. If it does work, then there won’t be a problem and we never need to terminate it.i) Touch & Concern knocks more things out up front. Rest 3rd is more flexible, and allows more things to run

(at least initially). HOWEVER, Touch & Concern is rarely used up front in a lawsuit; it is effectively used more as a termination doctrine anyways. Downside: The entire covenant is ruled invalid, not just the covenant to the specific Plaintiff in court, which could have bad consequences on other homeowners (e.g. they don’t get water from the well anymore).

g) Policy : The choices available to consumers will affect a court’s decision whether a covenant is valid. E.g. Condo association requires buyers to pay fees to the development’s health club facility.i) If buyers have choices where to liveMore likely to approve the covenant (saying it touches and concerns)ii) If buyers do not have much choice Less likely to find that it touches and concerns land

h) Note: CA has enacted legislation mandating that 1 pet is allowed (for new communities only). Other specific things have been prohibited (e.g. a prohibition against flying the flag has been banned, can’t prohibit someone from running a day care center in their home as long as its safe).

i) Cases: i) Case: Runyon v. Paley (p.962) :

(1) GRunyon(2) G(burdened w/use restrictions)BPaley(3) G(benefited)Williams.

(a) Can Runyon sue Paley? NO. Intent – No; neither property nor person mentioned in deed; Notice – No. No notice that Runyon could enforce. Touch & Concern – Theoretically yes? Horizontal Privity – No; not part of transaction (attempted “intended 3rd party beneficiary/end-and-aim” argument – failed); Vertical Privity – No; no connection w/ covenantors

(b) Can Williams sue Paley? YES. Intent – Yes; clearly written in deed that burden would run; Reasonably interpret that benefit would also run. Notice – Yes; properly recorded; Reasonable to infer that right to enforce remained w/ land retained by G. Touch & Concern – Limiting use to residential = clearly touch & concern burdened land; Benefited land close by, so touches benefited land too. Horizontal Privity – Yes; part of deed transferring land. Vertical Privity – Yes, P within chain of title.

ii) Case: Sonoma Development, Inc. v. Miller (p.976) : Schaers owned 2 adjacent lots. Their house (lot 38) encroached onto lot 39 (vacant) by a few inches. The Millers wanted to purchase lot 38, but wanted some protection allowing them to access the side of their house that extended onto lot 39. The Schaers created a covenant w/ several different documents: 6/30/1995 – Declaration of Restriction: Required no construction within 3 feet of the lot 38 property (No grantee specified). Recorded. 6/30/1995 – Declaration of Easement: Granted lot 39 access to Lot 38 to maintain the house (No grantee specified). Recorded. 6/30/1195 – SchaerMiller (Lot 39): Deed references “recorded conditions, restrictions and easement affecting the property”. Recorded. Then Schaer conveyed the remaining lot 38 to Sonoma.(1) Was there horizontal privity between Schaer and Miller (required in order to bind subsequent purchasers

of lot 38)YES. Technically, the covenant should be contained within the deed, but all of these documents were on the same date and part of the same transaction. Thus, horizontal privity existed.

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(a) Note – Best Method: Add everything to the primary document (the deed)This would clearly be binding (Could add a Grantee to the Declaration of Easement, but this wouldn’t work well for the restriction, b/c you would be restricting someone who didn’t own any property yet (since the property is actually conveyed after this declaration)).

(b) Policy Note : Notice to subsequent purchasers (Sonoma) is an important policy factor. In this case, there was plenty of notice.

iii) “Covenant by Estoppel” Case: Shalimar Association v. D.O.C. Enterprises, Ltd. (p.986): Shalimar Estates retains land for golf course and sells adjacent lots. Lots are restricted (in their recorded deeds). Shalimar represented that the golf course would be maintained until 2000, and then automatically renew for another 25 years. 1976: Shalimar (golf course)Hills (maintained course); 1979: HillsDOC Enterprises [$685,000 = price w/restriction (Fair price~$2MM w/o restriction)]. DOC didn’t want to maintain golf course.(1) DOC Arguments:

(a) NO WRITING! True, so would have to be created by estoppel.(b) Changed conditionsNO. Change must frustrate the original purpose of the restriction for the

covenant to be declared invalid. Economic conditions alone aren’t a persuasive argument.(c) Affirmative Covenants – Onerous; shouldn’t be enforcedBUT the majority of US jurisdictions allow

affirmative covenants to run w/ the land.(d) Covenant continues too longBUT Limited amount of time (until 2025; not forever)

(2) Covenant by Estoppel created. (a) Price reflected that the lot was restricted ($685k instead of $2MM)(b) DOC had Notice

(i) Inquiry Notice: DOC intentionally didn’t ask anyone; if they had inquired, they would have seen how important the benefit still was to the peopleIf the benefited side is still retaining a lot of the benefit

(ii) Actual Notice: Brochures; map showing the golf course filed (in the chain of title)(c) Homeowners purchased with the reasonable expectation that the promise to maintain the golf course

(made by Shalimar) would be carried out. They invested a lot of money based upon this promise, purchasing the house and maintaining their properties.

“Open-Ended Covenants to Pay Money”iv) Case: Neponsit v. Emigrant Industrial Savings bank (p.996) : Neponsit Realty developed a common interest

community w/covenant to pay dues to an owner’s association to be formed later. P Owners Association foreclosing a lien on D’s property for not paying dues.(1) Covenant is VALID.

(a) Vertical Privity : D argument: Grantor didn’t retain any land, so there was never really an actual transfer of land between the grantor and the owners associationCt – 2 arguments: 1) Members of the owners association actually own land, and in effect they had vertical privity from Neponsit Realty on the other side of the equation (on the burdened side); 2) Vertical privity doesn’t make sense in this case (Homeowners Association), so we’re not really going to worry about it.

(b) Touch & Concern – D argument: Because the payment of $$ is an affirmative covenant, it does NOT touch and concern land. Ct: Affirmative covenants are disfavored. BUT in this case, the $$ relates directly to maintenance of the land itself, so it’s okay.

v) Case: Eagle Enterprises Inc. v. Gross (p.1001) : Covenant that Orchard Hill would seasonably provide water to Baum, and Baum would pay $35/year. Orchard Hill(P) Eagle Enterprises; Baum(D) Gross. Gross builds his own well and doesn’t want to pay for the water anymore.(1) Covenant is NOT valid.

(a) Well agreement doesn’t ‘touch & concern’ land: (i) Affirmative Covenant (to pay $$)NOT valid unless criteria are met.

1. Covenant must “substantially alter” their property rights. This covenant doesn’t; Other water sources; only 6 months/year; other homeowners won’t be harmed (price won’t become prohibitive). a. Counter: Well definitely touches land, so aff. Covenant is allowed. Also, this will harm

other water users in the community (raise prices)b. Policy: This allowed homeowners to get a lower price, so it’s a good thing. Allowing them

out of the covenant gives them an unfair windfall.2. There is no end to agreement; it goes on in perpetuityseems to be an important factor3. Benefit seems to be in gross ; money is going to Orchard Hill

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a. Touch & Concern was often used to knock out benefits in gross (didn’t touch & concern at least one party)

vi) “Covenant Not to Sue”: Case: Lakeview Blvd. v. Apartment Sales Corp. (p.1005): CityDeveloper (Allowed developer to develop property w/ promise not to sue based on specific soil conditions); DP1; P1P2 (owners of condos whose homes were ruined when the soil gave way). P2 sues city; city claims the covenant not to sue runs w/ the land.(1) Touch & concern? Yes. The covenant not so sue is very strictly limited (only to risk from eroding soil), so

it is okay with this court.vii) “Restraints on Alienation” Case: Kerley v. Nu-West, Inc. (p.1009): Resorco(15 acres) Kerley for $40k up

front + promise to develop + promise to pay 10% of each sale price.(1) Covenant is Valid. DOES touch & concern.

(a) ‘quarter sales’ are invalid – Can’t have a fee simple and a “Fine” on alienation. They discourage sales because the owner doesn’t get full value of property. BUT this case is different; this is more of an installment plan. 10% is less than 25%, so it seems more reasonable. Also, the up front price was much lower because of this agreement.

(b) Resorco has retained land (which was the land benefited by the developed land), so he clearly has interest in land

(c) DurationUnlimited, BUT ct. imposes some limits on this; if Resorco doesn’t take action to make sure that the land is developed, then through the concept of laches he will lose his right to enforce the 10%. Difficult argument.

(d) Worthwhile purposePurpose of transaction was to get land developed and sold; opposite of quarter sales which would reduce the likelihood that land would be marketable.

viii) “Design Controls” Case: Rhue v. Cheyenne Homes, Inc. (p.1028): Subdivision has a covenant requiring the architectural committee to approve any changes to a lot in the subdivision. P didn’t submit their plans to the committee, and tried to build a Spanish style house on their lot. Architectural approval requirement is valid. As long as the committee’s refusal is in “good faith”, then it is enforceable. Note: Some ct.’s have held that without specific guidelines, this type of covenant would be unreasonable

ix) “Restrictions on Occupants and Personal Freedoms” Case: Nahrstedt v. Lakeside Village Condominium Ass’n, Inc. (p.1032): D condo association does not allow pets. This restriction was in the written declaration for the development. P had indoor cats and brought suit to prevent the condo ass’n from enforcing the restriction. Restriction is valid. Ct. uses “Best judgment rule” – Board’s conduct is presumed reasonable, unless you can prove: conflict of interest, bad faith, or arbitrary, capricious use of power. Individual (not HOA) has burden of proof.

x) Changed Conditions: Case: Rick v. West (p.1044): Developer creates an area w/restrictive covenants that it has to be used for residential use. D sells a lot to P (and very few other people!). D sells retained property to D2. D2 wants to sell to a hospital (in violation of covenant)For P. No changed circumstances.(1) P argument: Changed Circumstances. In the deed, it says that “special unforeseen conditions” may

require exceptions to the covenants. Neighborhood has changed – new zoning laws, commercial development around the property, gas transmission line making property unusable

(2) NO. All of the changes are OUTSIDE the subdivision involved; therefore, it does NOT qualify as changed conditions. Person making the change argument must have nothing to do with the changes that have occurred.

xi) “Amendment” Case: Evergreen Highlands Association v. West (1050): Subdivision w/63 lots had a large common area (parks, tennis courts, etc.). Original covenants did not require that people pay dues. There was a clause that by 75% vote they could change or modify the restrictions. The ass’n voted to require fees of $50/year. P doesn’t want to pay, although he uses the facilities. Ct. rules for ass’n. New covenant is valid. (1) No real difference between a new covenant and a modification to an existing covenant. (2) Implied Consent: There is an implied agreement to accept the proportionate costs for maintaining and

repairing common facilities that they use.xii) “Termination” Case: Westwood Homeowners Ass’n v. Lane County (p.1058): County acquired a property

through tax foreclosure. Statute said that liens “and encumbrances” would be extinguished by the foreclosure.(1) Does the foreclosure extinguish outstanding liens? Yes. Specified by statute.

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(2) Extinguish ongoing power to make assessments? No. The term ‘encumbrance’ is not defined in the statute. In another tax statute: “liens and encumbrances” read as one phrase = outstanding money obligations. Read this way, it does not include a covenant to pay assessments.(a) Policy : Allowing a tax foreclosure to terminate the covenant to pay assessments would wreak havoc

on community housing.

14) Protection against Discrimination in Housing a) Civil Rights Act of 1866: No discrimination based on race

i) Exemptions NO exemptions under the Civil Rights Actb) Federal Fair Housing Act : 1968 – More comprehensive than the Civil Rights Act:

i) I ncludes discrimination on other grounds (national origin, religion, etc.)ii) Can’t advertise in a way that indicates discriminationiii) Provides more enforcement mechanisms; allows damages to be awardediv) Family: Protects people w/ children, but not unmarried couplesv) Gender: Protects against gender discrimination, but not sexual orientation (but AIDs qualifies as a disability)vi) Alcoholism is a disability…

(1) You have to screen based on fact, not assumption . Tell them that they can’t drink/do drugs on the premises; if they can’t abide by that, then you can screen them out.

(2) Fallback: You can use your eviction power if a tenant does cause a problem.vii) Exemptions : SFR, owner <3 houses, you’re living in the house, etc.

(1) Mrs. Murphy exemption – Can’t force someone to live next to people they don’t like(a) This small-scale activity won’t affect housing discrimination as much as large scale operations(b) Note: Mrs. Murphy exemption doesn’t apply to entire act. Can’t lie. E.g. can’t say place is not

available if it really is; would have to just say “No.”c) Federal Fair Housing Act – Additional Information:

i) Doesn’t say that all discrimination is bad, ii) It DOES say that some groups have been shut out so completely (“market closure”) that we as a society have

to do something about it.(1) Also “levels the playing field” by making everyone operate under the same rules (even if renting to a

protected class does, in fact, have negative economic consequences)iii) State/municipal laws can be stricter than the FFHA (e.g. CA has very strict guidelines; NY City doesn’t allow

discrimination based on profession). This is a floor.d) Cases:

i) Case: Shelley v. Kraemer 1948 (p.786) : Covenant for 50 years restricting the use of property as owners or tenants to white people.(1) Before this case, States couldn’t enact laws promoting segregation, but individuals could(2) Contract was legal (at the time) as a private contract.(3) BUT a court enforcing the private contract IS “state action”; The state cannot discriminate. This is not

legal.(a) Ct. took the ‘extraordinary’ step of declaring the ct. a state actor in order to deal w/ an

incredibly important issue.ii) Case: Jones v. Alfred H. Mayer Co. 1968 (p.795) : People refused to sell their home to a black person. For

P; illegal to discriminate based on race.(1) Civil Rights Act of 1866 – No discrimination based on race(2) Federal Fair Housing Act – More comprehensive than the Civil Rights Act; includes discrimination on

other grounds (national origin, religion, etc.); more inclusive: e.g. can’t advertise in a way that indicates discrimination; provides more enforcement mechanisms; allows damages to be awarded(a) Congressionally enacted legislation that regulated PRIVATE conduct. How is it constitutional for

congress to regulate private behavior? (i) 13th amendment – forbid slavery. This sets the constitutional groundwork for not allowing people

to discriminate based on race(3) This case confirms that these acts were constitutional

15) Eminent Domain a) Federal right to take land for public purposes with just compensationa) 3 types of Takings:

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i) Eminent Domain – Taking your land upfront.ii) Inverse Condemnation – Taking a property interest from you (e.g. flight space over your property)iii) Regulatory Takings – [Next Chapter] Govt. prevents you from doing certain things on your property (e.g. you

can run a factory, but you can’t pollute the river).b) Eminent Domain Overview

i) Federal : Grounded in 5th amendment (implied right: “no right can be taken without due process of law and just compensation”)

ii) State : 14th amendment – extending U.S. constitution to the states(1) State Constitutions – Can create additional requirements

iii) Traditional Use : Create highways, railroads, etc. States needed power as well.c) Primary Issues:

i) Is it property ? Does NOT have to be REAL property (e.g. Raiders, video of JFK assassination)ii) Public use ?Expanded to public “purpose” (Poletown/Hawaii: Does not necessarily have to actually be used

by the general public if it serves a public purpose). (1) Sufficiently important purpose to justify eminent domain?

iii) Court’s Standard of Review? ”Rational” standard of review – very low standard.(1) Policy: Should there be a higher standard of review than the ‘rational’ standard for property that isn’t Real

Property?(2) Policy : Eminent Domain is a Political process that is LATER subject to judicial review. You need to stop it

at the political level; during the brief judicial review, it’s usually too late.iv) What is Just Compensation?

(1) Just Compensation Includes: (a) Fair Market Value

(i) Timing: FMV once the condemnation proceeding is underway (NOT earlier, when it might be higher/Poletown) .

(b) AND Additional Elements :(i) Income from existing use (e.g. a business) – Not directly included; included indirectly through its

effect on fair market value1. Exception : If govt. takes a business (e.g. the Raiders), then they actually value the business.

a. Note: If govt. takes a businessMust pay value of the business. BUT if they just take the land (that the business is on)Do NOT have to pay for the value of the business (Ct. will prevent this type of end-around move).

(ii) Exceptional value of land (e.g. unique non-profit that benefits the community; CAN be taken into account)

(c) Does NOT equal/include: (i) Replacement value (if this were the standard, the govt. would be more careful. Also, instead of

just looking for the CHEAPEST land, the govt. would instead try to find the BEST land, e.g. a straight line for a highway).

(ii) Consequential damages – Cost of moving, interruption of business, loss of goodwill, etc. NOT included

(2) Policy : Many people think that the standard of review should be raised regarding Just Compensation to help balance out the low standard of review for the public use/purpose. NOT currently the case…?

d) Condemnation of Covenants i) Court is split:

(1) Arkansas case – Did NOT pay for violation of restrictive covenant(2) Palm Beach case – DID have to pay for violation of affirmative covenant to pay maintenance fees

(a) Policy Note : If you’re released from a burden, then you do NOT have to pay the govt. back – Bonus! Windfall!

ii) Key Policy Issue : If we treat these as property rights, then the govt. will not be able to take as much land. What is more important, preserving these rights or allowing the govt. to take land for the public good?

iii) Criteria that cts. seem to use: (1) Who is the benefited party; what type of benefit? (In gross=bad)(2) How many benefited people? (lots=complicated=bad)(3) Easy to calculate amount due? (complicated=bad)(4) What is P asking for? (asking for $$ = good; asking for injunction = bad)

iv) Possible “official” Justifications for Govt. not paying for covenant violations:

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(1) Real Covenants are NOT property rights; they are contract rights that happen to run with landCan be taken without due process. BUT how can they not be property rights when they have to be embedded in a deed?

(2) Whether or not they’re property rights; govt. is only responsible for the rights of the land that is directly taken. Looking at rights that are just connected land is like including consequential damages (which is NOT done)Traditional view of the courts.

(3) Real Covenants ARE property rights, but for purposes of eminent domain law, they are NOT property (at least for compensation).

(4) SOME covenants are property rights (e.g. affirmative covenants to pay), and some are not property rights (restrictive use covenants).(a) But this is the opposite of what we’ve learned…restrictive covenants WERE historically property

rights and affirmative covenants were NOT property rights! The only real reason for this is that affirmative covenants to pay are logistically so much easier to value.

(5) Covenants ARE property rights, but if the harm would have been the same with or without the covenant, then you will NOT be compensated.

e) Partial Takings i) Just compensation = FMV (before) – FMV (after)

(1) Result : Owners whose remaining property (that is not taken) increases in value because of the taking do NOT really get the full value of the property that the govt. takes (although they don’t really “lose” any value). BUT owners whose land value is increased by the taking get a windfall.

(2) E.g. Riverfront property example.f) Cases :

i) Case: Hawaii Housing Authority v. Midkiff (p.1066) : Small group of people owns a huge % of Hawaii property. Govt. decides that this has created a bad situation of “market closure”. Govt. passes legislation to allow a forced sale of land under certain circumstances from owners to the tenants of the land. Valid use of eminent domain.(1) Public Use/Purpose ?

(a) Argument Against : Forcing sale to private individuals is NOT a public benefit(b) Argument for :

(i) Tenant Side – Allow tenants to get access to land (However, there was a decent market for the properties on the land, so this is not a clear case)

(ii) Landlord Side – Breaks up oligopoly and removes a “landed gentry” 1. Is this a public purpose? Is it a sufficiently important public purpose to allow the govt. to take

this action?(2) Standard of Review = “Rational” : The eminent domain power must be “rationally related to a conceivable

public purpose”. (Ct. has narrow role in this process and should be deferential to the legislature;)(a) Why? Legislature is in a better position to determine what really is a ‘public purpose’. This will be

publicized, so the voters will vote them out if it’s a bad policy.(i) BUT the minority could suffer from a “tyranny” of the majority in this case.(ii) BUT if they get voted out, the decision has already been made (but officials have presumably

taken this into account beforehand)(iii) BUT if there is a problem (e.g. Poletown), the legislature is likely to act desperately and cave (to

G.M.). In this case, we need strict judicial review.(iv) If public use is expanded to public purpose, then the ‘rational’ standard of review can be

dangerous. The legislature is no longer strictly limited to public use…(b) Note: If something hasn’t worked before in one state, a different state could still ‘rationally’ try it. No

strict ‘post hoc’ review. E.g. Poletown failing doesn’t necessarily mean than CT can’t try something similar.

(3) Compensation : Very easy in this case. People being ‘displaced’ don’t live there; just investment owners. Market value of land.(a) Note: Always difficult to value land. This case, purpose was to reduce inflated market value, so how

to value ‘fair’ market value? Have hearings about it.ii) Case: Poletown : Eminent Domain used to force sale from private property owners to GM.

(1) Public Use? Yes. Economic development = Public purpose. (But transaction ONLY benefiting private enterprise, e.g. Donald Trump getting a casino in Atlantic City would be Private use).

(2) Standard of Review = ‘Rational Review’

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(3) Compensation = Market value AT THE TIME OF THE CONDEMNATION.(a) People who cashed out early got a bonus (justification: in order to avoid court costs); as time goes on,

there are more vacant houses from people selling, and market value decreasesiii) Case: City of Oakland v. Oakland Raiders (p.1075) : The Raiders were preparing to sell out and leave

Oakland. The city tried to condemn the Raiders through the use of Eminent Domain.(1) Is this property? Yes, It does NOT have to be Real Property.(2) Is this a public use/purpose? Yes (but city loses b/c it violates the Commerce clause. NFL team =

interstate commerce; state only has limited power to affect interstate commerce).(3) Just Compensation? Easy question – fair market value of the team.(4) Note: F*ck the Raiders.

Just Compensationiv) Case: United States v. Fuller (p.1084) : Farmer is using govt. lands adjacent to his property. The land is more

valuable because it is next to this land. Govt. does NOT have to include the fact that the land is adjacent to govt. property for just compensation. Since govt. can take away the farmer’s right to use the adjacent land, it shouldn’t have to pay anything additional for that right.

Inverse Condemnationv) Flyover Case: Griggs v. Allegheny County (p.1088) : P lived adjacent to a military airport. When taking off and

landing, planes came within 30 – 53 feet of P’s house. P brought an inverse condemnation claim. Valid claim of Inverse condemnation; govt. has to pay.(1) Use of land presupposes use of airspace above it. Precedent for overflights being a taking.(2) Flights are only intermittent, BUT this doesn’t matter (similar to Adverse Possession seasonal use, this

can constitute possession/use of land).(3) Note : Why not a nuisance? Govt. using state-of-the-art technology. Social utility of airport use is much

greater than P’s use of his houseProbably wouldn’t qualify as a nuisance.vi) Case: Phelps v. Board of Supervisors of Muscatine (p.1091) : Intermittent flooding of P’s land = Inverse

Condemnation. Even though there was some flooding before; there is MORE flooding now because of the govt. building a bridge over the river.

vii) Case: US v. 531.13 Acres of Land (p.1092) : Govt. forcing plant to stop polluting a creek is NOT a govt. taking. NO valid inverse condemnation claim.

Condemnation of a Servitudeviii) Case: Arkansas State Highway Commission v. McNeill (p.1095) : Govt. took P’s neighbor’s land for a freeway.

This broke a mutual covenant restricting use to residential purposes. P wanted compensation for violation of the covenant. NOT a taking; NO inverse condemnation.(1) Damage to P was not directly caused by the violation of the covenant. The damage was caused by the

particular use of the land (a freeway). If the govt. used it for a park, P would have actually gotten a windfall.

(2) If we allowed this, then people could create restrictive covenants once they heard their property was going to be condemned. Not convincingCt. could just say that only covenants in place before the announcement would be paid out.

(3) Would make eminent domain very expensive and unpredictable : 1) Difficult to value in this case; 2) Many homeowners could be paid in this caseThis seems to be the “real” reason for the ct.’s decision (even if they won’t admit it).

ix) Case: Palm Beach County v. Cove Club Investors, Ltd. (1097) : Govt. took land that had a covenant to pay maintenance fees for a recreation area. Govt. has to pay; Valid inverse condemnation claim.(1) This jurisdiction: restrictive covenants are not property rights, BUT affirmative covenants to pay $$ ARE

property rights.(2) Logistically easy to calculate and pay in this case (unlike Arkansas case above):

(a) Only 1 person due money(b) Very specific sum of money

(3) Only asking for $$; not asking for injunction (like Arkansas case). Govt. can still take land = more likely to rule in P’s favor.

x) Case : Power co. had easement to use land in order to service neighboring land. Govt. condemns land and does NOT pay the power co. Ct. rules that b/c benefit is in gross, it’s not a property right.

xi) Case : Building restrictions not to erect tall buildings. Govt. builds tall building, and does NOT compensate formerly benefited owner.

Partial Takings

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Issue : Land near river is more valuable than land away from river. How do you value the portion of the property that is actually being taken (the more valuable riverfront property), when the other land becomes more valuable as a direct result of the taking?

o Answer : Just compensation = FMV (before) – FMV (after)o Result : Owners whose remaining property increases in value because of the taking do NOT really get the

full value of the property taken (although they don’t really “lose” any value overall). BUT owners whose land value is increased by the taking get a windfall.

Owner A (whose more valuable riverfront property is taken) is arguably screwed. Owner C (whose less valuable property is turned into more valuable riverfront property) gets a windfall.

Old value = $75,000 ($25,000 + $50,000) Value = $50,000 Old value = $25,000

Owner A (50 acres) Owner A (50 acres)River

Owner B (50 acres) Owner C (50 acres)

New value = $50,000; Screwed by govt.

DAM (Taken by the Govt.) New value = $50,000 (Woo hoo! windfall!)

Govt. builds a dam that floods several properties: Downstream owners do NOT get any compensation. They did not LOSE land; they actually got more land (b/c

there was less water). NO compensation even if they use the water Cost of Land :

o By river (A/B) = $1,000/acreo Away from river (C) = $500/acre

Government Argument: Owner A: Total old value $75,000

Total new value ($50,000) Net Loss $25,000

Owner A argument: The 50 acres should be valued on its own $50,000 Owner C is allowed to keep the windfall.

Policy Note: Govt. could decide to take some of C’s land (at $500/acre) and then resell it at ($1,000/acre) to recoup some of the costsGovt. arbitrage opportunity.

Govt. predicting that flooding might go onto C’s land is RATIONAL, so it would pass judicial review.

16) Regulatory Takings a) Main Themes:

i) Must be for a public benefit (Private benefitgovt. has to pay)ii) If it’s a nuisancegovt. does NOT have to pay

(1) Protect public health & safetyGovt. does NOT have to payiii) If the govt. action denies a property owner “an owner economically viable use of his land.” More likely to

have to pay.b) Cases:

i) Case: Pennsylvania Coal Co. v. Mahon, 1922 (p.1109) : Legislature passed a bill prohibiting coal mining that would cause surface subsistence (which is a bad, bad thing). P was a single property owner that had a prior agreement with a coal company that allowed them to mine, even if it harmed their “support rights”. P wanted to stop company from mining. TakingGovt. has to pay.(1) Creates a private benefit for the property owner (who contracted away his support rights; he shouldn’t get

a windfall): “does not substantially advance legitimate state interests”(a) Note : At this time, govt. could NOT use eminent domain and give the land to another private person

(like Hawaii/Poletown)Seems to be an important reason for the ruling.(2) Made it impossible to mine coal: Denied “an owner economically viable use of his land.”

(a) Another Possible Approach : Could say it IS a legitimate public purpose, but govt. still has to pay.

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(b) Dissent (3 rd approach) : Protects public health & safety = Public purpose (removing a nuisance)should be protected(i) Precedent: Brewery sued during prohibitionCt: NOT a taking; controlling a “noxious use of

property” (nuisance)ii) Case: Keystone Butuminous Coal Ass’n v. De Benedictis (p.1142) : Legislature passes statute to regulate coal

mining. Coal company suing. NOT a TakingGovt. does NOT have to pay.(1) Distinction from Pennsylvania Coal Co. v. Mahon, 1922:

(a) More of a public benefit in this case(i) Procedural posture is different: individual owner is not suing; coal companies are suing. The

court is looking more broadly at the purpose of the legislation; not just the benefit for a private owner.

(b) Less of a taking (not 100% taking)Different view taken by the court (not taking 100% of specific pockets of coal; taking 2% of ALL available coal).(i) Coal miners can still mine most coal; estimated 2% of available coal will have to be left(ii) Issue: Is govt. taking 100% of a little bit of coal, or is govt. taking 2% of all of the coal?

iii) Case: Miller v. Schoene (p.1113) : Legislature passes legislation to prevent the spread of plant disease to valuable apple trees. People are not allowed to grow cedar trees within 2 miles of apple orchards (even if they’re NOT infected). NOT a Taking; Govt. does NOT have to pay.(1) Public Benefit : Public has an economic interest in the valuable apple industry (not just benefiting private)(2) Nuisance : Don’t have to payPotentially infected cedar trees are a Nuisance

(a) Legislature was ‘forced’ to choose between preventing cedar trees from being a nuisance (do nothing) and preventing apple trees from being a nuisance (pass legislation). In this case, govt. was justified in choosing the most valuable interest to protect.(i) Counter: Nuisance should ONLY be for health/public safety; should NOT be used to protect

purely economic interests.

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