Answers to Questions 1 and 2, Property 2013 final exam
Question 1:
To determine the property rights involved here, we
need to go back to a point in time where known property
rights existed. Lisa was the true owner of the disk 15
years ago, and she did not intentionally give up ownership
when Bart stole the disk, because she did not form an
intention to relinquish ownership or to allow the first
finder to acquire ownership rights. Once Bart took the
disk, however, he had actual possession, which gives him
a superior claim to the disk above all others except the
true owner or one to whom the true owner has given the
right to possession. Property rights are relative and the
true owners’ are superior to the possessor’s. Whether
Bart successfully met the elements of adverse possession,
in order to defeat Lisa’s claim to return of the disk,
depends on the law of Springfield. The elements of
adverse possession are continuous (met b/c Bart had
control over the disk for 15 years), open (it was known to
Lisa, although no one else knew), notorious (known to
Lisa that Bart had it and others would have assumed Bart
had stolen it given his character), exclusive (met b/c Lisa
was excluded from possession), and adverse (clearly
possession was hostile to the true owner), for 15 years.
Depending on the time period for the running of the S/L,
one could determine that A/P was met and Bart would
now own the disk, or that it wasn’t met because the open
and notorious elements are sketchy. A/P is used to settle
expectations and protect possessors against those who
sleep on their rights. In that respect, Lisa may lose title.
However, A/P is usually not available for those with
unclean hands and courts often interpret the elements
strictly so as not to allow a thief to acquire title. The
majority rule looks to objective aspects of the possessor’s
actions and not his state of mind, but a minority of
jurisdictions will consider if Bart’s actions were in good
faith, or in bad faith. Bart would lose in a good faith
state, and would win in a bad faith state, but in an
objective state, the issue is open to the court’s
interpretation of Bart’s actions.
Assuming Bart is deemed to own the disk, the bigger
question is whether he is entitled to the papers on the disk.
As in INS, courts give quasi-property protections to
intellectual property that is not copyrighted (as these
papers are not) when public policy demands it and when
labor is expended to create it. Lisa certainly expended
labor in writing her papers, but it is questionable whether
the expression of her ideas should be elevated to the status
of property. Because the educational value of writing
term papers is in the process of writing, and not the
finished product, public policy may dictate that no
property right attaches, especially if doing so would allow
Lisa to prevent others from writing similar term papers.
OTOH, the plagiarism and unjust enrichment that has
occurred here suggests that some form of property right
should exist in Lisa to prohibit Bart’s exploitation. Few
people, however, plan to market their term papers, which
suggests that no rule should be created, and we should
instead look to equity doctrines like unjust enrichment to
solve this dispute. These papers have value because Bart
has expended his own labor and investment in modifying
the papers and creating a market for them. If this is a
valuable market, the law should encourage it by
recognizing property rights through accession of value.
Although Lisa is the only one (not surprisingly a lawyer)
claiming a property right in the paper itself, it is likely
that more writers will do so if a market exists and
property rights are recognized.
Principal Skinner’s claim to the papers is weak.
Likely, whatever physical copies of the papers were
turned in were abandoned by the students, but they may
have retained their intellectual property rights (as stated
above). Possession of the papers themselves was then
relinquished by Skinner when he licensed Bart to remove
and destroy them. However, Skinner likely did not intend
for Bart to recycle the papers or take ownership rights in
them. As with burial artifacts, the papers held private
information about students that could be used in
damaging ways and therefore the intention of Skinner to
destroy the papers should be protected. Pilfering papers
and allowing them to go viral is against Skinner’s
intentions and public policies. Although Bart held a profit
to remove the papers, he breached the contract by
retaining them and potentially defrauded Skinner by
exceeding the scope of his permission regarding access to
the papers.
Lizzy cannot claim that she is a bona fide purchaser
of the papers under the common law b/c Bart was a thief
and she bought them directly from him. If his website is
considered a merchant under the UCC, her rights to
possession might be protected, since Lisa could pursue a
remedy from Bart the merchant. However, there isn’t a
fully developed market in recycled term papers which
suggests that Bart is not the kind of merchant the UCC
intends to protect, and public policy would suggest that
this kind of protection should not be offered. Moreover,
Lizzy is not a good faith purchaser, knowing that the
paper was not her own intellectual property.
Question 2:
Bart purchased the outbuilding for his skate shop
from Apu subject to numerous restrictions and it is
unclear whether Bart obtained an FSCS with a RRE in
Apu, or an FSA with an option to purchase in Apu. The
provision stating that the land would be forfeited upon
payment of the purchase price by either Apu or a neighbor
is not a standard estate because it purports to give both the
grantor and third parties a future interest. However, the
SPEIs given to the neighbors are void under the RAP
because the violation of a restriction could occur and a
neighbor would exercise the power after the perpetuities
period has run. Thus, the rule against the creation of no
new estates and the RAP would void the future interests
in the neighbors (especially since they are not in privity
with the parties). Courts prefer to interpret ambiguous
conditions (which is an event the occurrence of which
causes transfer of ownership) to be covenants or, in this
case, an option to purchase in order to protect the value of
the fee in the grantee and protect against unreasonable
restraints on alienation. If this is interpreted to be an
option to purchase, it may be subject to the RAP as well,
if doing so promotes the removal of dead hand control. In
this case, because the option entails payment of the
purchase price only, and does not account for increases in
value or improvements by the grantee, it violates many of
the elements of reasonableness that is required of
restrictions and conditions. This would suggest that the
RAP should be used to terminate the option in APU as
well. However, the language and intent of the grant
seems clear that what is created is an FSCS with a RRE,
which is not subject to the RAP. However, all conditions
and restrictions must be reasonable to be enforced,
although what constitutes reasonable elements differs
between charitable gifts and purchases, or between
residential and commercial properties. As stated above,
the requirement that only the purchase price be paid
argues against the reasonableness of this condition. Thus,
in keeping with the presumptions against forfeitures, that
the grantor conveyed all of his interests unless clearly
retained, and against unreasonable restraints on alienation,
it would be reasonable to strike the repurchase language
making the interest in Bart an FSA with covenants
enforceable through an injunction or damages rather than
forfeiture.
The covenant against competition must be
reasonable. In the commercial context validity rests on
the duration of the covenant, and the area and activities
constrained, and it must promote orderly and harmonious
development. Here the sale of food in competition with
the KEM imposes a small disadvantage on Bart’s skate
shop but provides a large benefit to Apu. The price of the
building probably also accounted for the constraint, and
certainly the area is small (just Bart’s store, not all of
Bart’s potential properties anywhere in Springfield). The
50-year duration is not unusual given the average lifespan
of a commercial establishment. If enforceable, Bart can
be enjoined from selling Gatorade or power bars, and
licensing the food vendors as well.
The grantor consent clause is a restraint on alienation
that must be reasonable as well. In the context of a grant
of FSA, courts often strike direct restraints because they
are repugnant to the fee. Although the grantor binds
himself to act reasonably, the restraint is only partial, but
this kind of restraint is more common in cases where the
grantor/grantee have comingled property interests (as with
co-ops or condos). Since Apu and Bart share a parking
lot and are very close neighbors, this restraint is more
likely to be reasonable than if the properties were simply
adjacent. The inter-dependence of the properties makes
protecting the grantor more reasonable, although
enforcement of the covenant against competition may
vitiate the need for the grantor consent clause, arguing
against its enforceability.
The provision stating the use of the property as a
skate shop may be seen as precatory. As in Wood, courts
do not find a FSD where a grant only states the purpose of
the grant, and does not provide triggering events and giftover language. Only if the language is excruciatingly
clear that the grant is premised on the limitation of
purpose will a FSCS or FSD be found. The restrictions
not to interfere with neighboring uses is enforceable in
nuisance law anyway and therefore is part of all grants,
and is generally not sufficient to knock an FSA down to
something less.
The parking lot is another problem. Assuming the
outbuilding is landlocked, Bart and his customers must
have access to the building. This can be through the
parking lot or through a sidewalk from the public street,
and will be implied by necessity. Because there is unity
of title, severance, and necessity, the access should be
granted regardless of the silence of the deed. Whether the
access means Bart or his customers can park in the lot is a
different matter. It is possible that the parking lot was
used to provide parking for suppliers who delivered to the
outbuilding and that an easement by prior use could be
implied. The fact that the parking lot visibly served both
buildings and is reasonably convenient for the
outbuilding, and there was unity of title and severance,
would suggest that an easement by prior use existed and
passed to Bart. The easement would be appurtenant
because it is an ingress/egress easement and thus binds
both successors to Bart and Apu. Although a skate shop
would logically entail skating customers and not driving
customers, the expectations of the parties is that some
customers will drive and park to access Bart’s shop.
Even if the elements of prior use are not strictly met,
it is plausible that Bart will have acquired an easement by
estoppel because Apu allowed Bart and his customers to
use the parking lot and stood by while Bart invested in the
shop and the half-pipe. If Apu were to revoke the license
to the parking lot, he would likely take ownership of the
half-pipe which is an expensive fixture invested on Apu’s
land.
However, the mere existence of an easement for
access to Bart’s shop does not give the dominant estate
holder the right to exceed the scope of the easement (by
using it for a farmer’s market or for skate-board
entertainment) or to unduly burden the easement (by
having too many skate-boarders or parkers). Easements
implied by law or by equity are limited to what is
reasonable and likely to have been intended by the parties
in contemplation of the uses to be made of the property.
Apu’s closing of the easement violated Bart’s rights to
ingress and egress, but was valid to the extent it prevented
the burdensome and unreasonable use of the servient
estate.
The farmer’s market vendors have licenses from Bart
to set up around his shop – although this may be on land
actually owned by Apu, Bart has an easement and may
subdivide his easement as he sees fit subject to limitations
of scope and burden. These are not likely to be leases as
they do not provide a particular space for each vendor or
provide a set amount of rent. As licenses, they are
revocable unless the vendors have reasonably relied on
them and made investments that would be unreasonably
harmed if the license is revoked.
Bart’s actions to annoy Apu would seem to be
unreasonable and substantial, thus violating the doctrine
of sic utere and entailing a nuisance that can be enjoined.
Malice alone is never a sufficient justification for
imposing harm on neighboring property. Thus, the
defaming signs have no justification. The farmer’s
market and jazz bands all serve to improve Bart’s
business, but they violate the covenant against
competition and overrun Apu’s parking lot with vendors
and customers, thus infringing on Apu’s property rights to
control his parking lot. The harm to Apu is substantial,
but whether or not it is unreasonable depends on a variety
of factors. Apu was there first, Apu’s use is quiet, the
consideration for the outbuilding depended on not
competing with Apu, Bart’s actions are in part motivated
by spite, and the public benefits could be reaped
elsewhere without imposing the harm. If a nuisance is
found, Apu would be entitled to an injunction or damages,
depending on the equities.
The same is true for Mr. Burns whose private
residence is being overrun with trespassers. His quiet
enjoyment of his home is jeopardized by the music and
picnickers, giving him a better claim of nuisance against
Bart than Apu has because he has a greater expectation of
quiet and privacy in a residential use, and he would have a
trespass action against any picnickers on his lawn who
intentionally invaded his right to exclude. Whether he
could sue Bart or Apu for the trespass is unlikely given
the fact that neither actually trespassed on his lawn.
However, under nuisance, damages could include all
reasonable damages incurred from the farmers market,
which would cover the rhododendrons and the trespassers.
If a court were to determine that the farmers market was
not a nuisance but that substantial harm was occurring to
neighboring residential properties, it could order damages
for the loss in market value ala Boomer.
Finally, it must be determined if Apu Jr. can step into
Apu’s shoes to enforce any of the covenants in the deed.
As owner of the KEM, Jr. can bring suit for undue burden
on the easement or nuisance. But he can only enforce
provisions of the deed to Bart if the covenants run with
the land. To run, you need writing (met), notice (met),
intent (Apu certainly would want the covenants to run to
his successors and against Bart’s successors so it can
reasonably be assumed). Privity is met horizontally
between Bart and Apu Sr., and vertically between Sr. and
Jr. who acquired all of Sr’s interest in the KEM by
inheritance. Although simultaneous horizontal privity
does not exist between Apu and Bart if Bart acquired an
FSA with covenants and not an FSCS, instantaneous
privity does exist, and most states have moved toward this
relaxed formal element. All covenants used to require
touch and concern for the covenant to run and noncompetes generally did not touch and concern. However,
the modern trend is to interpret non-competes as touching
because they affect the fair market value of the land, and
because the parties reasonably negotiated and intended
the benefit. If it promotes orderly and harmonious
development, non-competes are generally deemed to be
reasonable and courts have determined that it makes little
sense to impose formal easement-like requirements of
touching when modern commercial development is
different. Even if there is no privity, Jr. can enforce the
covenants through an injunction.
Finally, there is possible public accommodation issue
here – Apu cannot exclude members of the public on the
basis of illegal discriminatory categories. Depending on
whether age is a protected class, Apu might be unable to
exclude the skate-boarding kids on the parking lot if the
lot is open to the public.