PROPERTY – Nunziato – Spring 2010
-Real Property and Intellectual Property
-What rights do I enjoy when I own property?
1) The right to exclude
2) The right to use and enjoy property (also improve/destroy)
3) The right to alienate property (sale, transfer, etc.)
4) The right to maintain ownership of property
-Justifications for our system of property rights
1) Promoting free market economy and economic growth
2) Privacy/Autonomy
3) Avoid conflicts and controversy about use
4) Labor theory (contribution of labor lends itself to ownership of property)
-With respect to an individual’s home:
-the right to exclude is pretty absolute
-the right to alienate (i.e. rent/sale) is limited by fair housing laws
-the right to use and enjoy is limited by nuisance laws, H.O. Ass’ns, Bldg/Zoning codes
-the right to maintain ownership can be cut off by the state (eminent domain/Takings law)
-With respect to a shop
-the right to exclude is limited by anti-discrimination and public accommodation statutes
I. PROPERTY RIGHTS
A. Trespass Law – The Right to Exclude
State v. Shack – volunteers for farm workers organization sought access to farmer’s property
-What options do we have to challenge the criminal trespass statute?
Social policy / Balancing of harms considerations
Necessity
Tenant rights to receive visitors (migrant workers as tenants)
Supremacy Clause argument b/c the alleged trespassers worked for government orgs
General maxim that you cannot use your property to cause harm to someone else
First Amendment argument (from Marsh v. Alabama; court distinguishes this case tho)
-The court construes the NJ criminal law statute with consideration to common law trespass
-The Shack privilege: in circumstances similar to the Shack case, individuals have a privilege to enter
private land to transact with individuals living on/in that property
Desnick v. American Broadcasting Companies, Inc. – ABC runs investigative report on optometrist
-When is express consent procured by fraud valid (no trespass)?
i.e. Restaurant critic posing as a regular customer
-When is express consent procured by fraud invalid (trespass)?
i.e. Meter-reader impersonator that gains access to a home
-There is a distinction between mere entrance through implied consent, and doing things beyond the
initial entrance (i.e. videotaping like in Food Lion case)
Places of public accommodation
-CL Majority rule provides right of reasonable access only to inns/hotels and common carriers
(all others, like amusement venues, have an absolute right of arbitrary exclusion)
-CL Minority rule provides right of reasonable access to all places held open to the public
-The more property owner opens up property to the public, the more curtailed its right to exclude
Uston v. Resorts International
-Uston sought an elimination of the absolute right of exclusion for places of amusement (like casinos)
when he was barred from entry to A.C. casinos because of his card-counting skills
-The NJ court agreed with Uston and extended right of reasonable access where property owners open
their premises to the public in the pursuit of their own property interests (minority rule)
Madden v. Queens County Jockey Club, Inc.
-Jockey club sought absolute right to exclude; the NY court agreed (majority rule)
Right to Exclude
-Limited by:
Necessity
Free speech (Marsh v. Alabama, State v. Schmid)
Supremacy Clause
Consent (implied consent and express consent, even if procured by fraud)
Shack privilege (access to a property of another for govt. officials providing services)
Entry privileged on public policy grounds
-Common law majority rule:
Right of reasonable access only to inns and common carriers
-Common law minority rule:
Extended to all places “open to the public” (Uston – “reasonable reliance on open”)
-Statutory law covers discrimination based on religion, race, sex, national origin, etc.
Federal Civil Rights statutes
State human rights/civil rights/anti-discrimination statutes
Civil Rights Act of 1964
-What are the elements of a claim that the Act has been violated?
1) discrimination or segregation
2) on grounds of race, color, religion, nat’l origin
2) must occur in a place of public accommodation (listed in the Act)
3) cannot be in a private establishment or one not open to the public
Civil Rights Act of 1866
-§1981: All persons shall have the same right to make and enforce contracts…and to the full and
equal benefit of all laws for security of property as is enjoyed by white citizens
-§1982: All citizens shall have the same right as white citizens to purchase, lease, and hold real
and personal property
-protects against discrimination on the basis of race only
Dale v. BSA – BSA refuses membership to Dale b/c he is gay
-Places of public accommodation in NJ prohibited from discrimination on the basis of sexual orientation
-The issue is whether the discrimination against Dale violates the NJ statute
-The NJ court says (1) a membership organization like BSA may be a place because place may be
construed beyond a geographic location, (2) BSA is a place of public accommodation because it solicits
the public for membership and maintains relationships with other recognized bodies of public
accommodation, and (3) is not “distinctly private” because it does not actively employ a selective process
or limit its membership
-The Supreme Court (5-4) reverses the NJ SC’s decision on grounds that prohibiting the BSA from
excluding gay Scouts violated the First Amendment’s freedom of association
Right of expressive association (as opposed to intimate association)
“State laws can limit 1st Amend. association rights only if they serve compelling state interests”
-The dissent argues that the BSA did not have a well-publicized stance on exclusion of gays
-There is a right of free speech in private property open to the public (i.e. shopping malls)
Lloyd Corp. v. Tanner – individuals distributing handbills asked to leave the mall
-Court looks at Marsh and Logan Valley
Marsh dealt with Jehovah’s Witnesses distributing literature in a company town in AL
Logan Valley involved a protest outside a small shopping center
-Lloyd claims that the First and Fourteenth Amendments only apply to state action, not to their private
action, and that they are being deprived of use of property without due process
-The Supreme Court does an about face from the earlier decisions and finds for Lloyd Corp., going to
great lengths to distinguish the case from Marsh and Logan Valley (5-4 decision)
-Dissent emphasizes the two precedents, and the balance between freedom of speech and of private prop.
- Hudgens v. NLRB – the SC expressly overrules Logan Valley (leaving just Marsh)
-In NJ Coalition Against War in the Middle East v. JMB Realty Corp., the NJ Supreme Court held that
free speech rights must be balanced against property rights and distributing leaflets would not interfere
with the normal uses of the property, so the balance favors free speech
-In PruneYard Shopping Center v. Robins, the SC held that no constitutionally protected property rights
were violated by the California state constitutional provision that granted right of access for free speech
purposes to shopping centers.
B. Adverse Possession & Prescriptive Easements
Adverse possession – a doctrine under which a trespasser becomes the owner of the property
Elements of adverse possession:
1) Actual possession, that is
2) Open and notorious (giving constructive notice)
3) Exclusive
4) Continuous
5) Adverse/hostile
-The controversy must also have been brought within the statutory period of limitations
- Nome 2000 v. Fagerstrom – family built on and used land owned by Nome 2000 company for years
-“tacking” permits adding together time period that successive APers claim the property if the tackers are
in privity of title
-Objective test for AP: “non-permissiveness” use of the property
-Subjective test for AP: intentional trespass with the intent of adversely possessing the property
-In rural areas, a lesser level of dominion and control may suffice
-When does statutory period start running for personal property?
1) Conversion rule – when property was taken
2) Discovery rule – when true owner should have discovered where property was located
3) Demand rule – when true owner unsuccessfully demands that property be returned
-An easement is a limited right to use (or control use of) the property of another
Affirmative easement – right to do something on someone else’s property
-May be acquired by prescription
Negative easement – right to prevent someone else from doing something on your property
-May not be acquired by prescription
Prescriptive easements give limited use rights
-Requirements (similar to AP, but doesn’t need to be exclusive):
1) Limited use, that is
2) Open and notorious
3) In which owner Acquiesced
4) Continuous
5) Adverse/hostile
-The controversy must also have been brought within the statutory period of limitations
-The “acquiescence” requirement is similar to the open and notorious constructive notice
But some courts say that acquiescence means actual notice (not just constructive notice)
- Community Feed Store v. Northeastern Culvert Corp. – dispute over use of gravel lot on border of prop.
-Most states presume that use by a non-owner of one’s land is nonpermissive
-Improving trespassers – what happens when a person builds a structure that encroaches on someone
else’s property that improves the value of the property? (the traditional remedy is injunctive relief)
-When encroachment is innocent, result depends upon circumstances and on the view of the judge
-When the encroachment is in bad faith, courts will almost always not get involved
- Somerville v. Jacobs – mistake in conveyance of land led to building being built on other’s land
-Court gives owner of land option of (1) purchasing the building, (2) selling the property, or (3) requiring
the plaintiff to remove the building
-When a builder mistakenly constructs an entire structure on land belonging to another, courts generally
rule that the landowner becomes the owner of the structure
-Some courts (like Somerville) hold that an innocent improving trespasser has a right to fair compensation
C. Nuisance
Nuisance – substantial and unreasonable interference with a person’s use and enjoyment of their property
- substantiality requirement focuses on plaintiff’s rights
- reasonability requirement focuses on balance of utilities for π’s conduct & Δ’s conduct
- Pendoley v. Ferreira – the piggery case (the smell was a nuisance)
- Page County Appliance Center v. Honeywell, Inc.
-The court gives factors for reasonableness (from Bates v. Quality Ready Mix Co.):
1) Manner in which defendant’s business is conducted
2) Where defendant’s business is conducted
3) Circumstances under which defendant operates
Also: Priority of location, Character of the neighborhood, Nature of the alleged wrong
-The “character and gravity of the resulting injury is a major factor in determining reasonableness”
-Jost v. Dairyland Power Cooperative – all about plaintiffs’ rights
-Boomer v. Atlantic Cement Co. – all about balancing of utilities
-“substantial and unreasonable” factors for nuisance: look to Restatement (2d) of Torts on Nuisance:
If Δ has invaded the use and enjoyment of π’s land, then ask:
-Is the harm severe and greater than π should be required to bear w/o compensation?
-Is the harm serious and could Δ still feasibly afford to continue the activity after compensation?
-Does the gravity of the harm outweigh the utility of the actor’s conduct?
If you can answer no to all of the above questions, there is no nuisance liability
If you can answer yes to any of the above questions, Δ is liable for the nuisance
-For gravity/seriousness/serverity, look to §827 factors
1) Extent/character of harm,
2) Social value and suitability to locality of π’s use
3) Burden on π of avoiding harm
-For utility of conduct, look to §828 factors
1) Social value and suitability to locality of Δ’s conduct
2) Δ’s ability to prevent invasion
-In determining remedy, look to §941 (injuction vs. damages)
Consider “relative hardship on the parties” and “balancing of the equities”
Possibilities for nuisance:
-Complaint dismissed -Damages
-Injunction
-Purchased injunction (π must pay for Δ)
-A public nuisance is “an unreasonable interference with a right common to the general public.”
Public health, public safety, public morals, public comfort, public convenience
-The modern rule is that anyone of the public who has suffered from the public nuisance has standing to
bring a lawsuit (but a special representative may be more effective)
- Spur v. Del Webb – AZ development expands toward cattle farm; developer sues for injunctive relief
- Fontainbleau Hotel Corp. v. Forty-Five Twenty-Five – Miami hotel blocking sun from other hotel pool
- Prah v. Maretti – π claimed that Δ’s house blocked the sun onto his solar house
-The majority rule is that interference with light and air cannot constitute nuisance
D. Zoning Law
-Use zoning: type of use for property (cumulative, so upper levels also include lesser ones)
Residential
Commercial
Agricultural
Industrial
-Area zoning: size and height restrictions on property
-When do zoning regulations constitute a taking?
5th amend: Private property shall be taken for public use without just compensation
14th amend: Nor shall any State deprive any person of…property without due process
5th Amend: Private property shall not be “taken for public use without just compensation”
-The issue of whether or not regulation/taking is compensable
-Neither federal nor state governments can “take” private property unless it’s for public use and they pay
-Under 10th amend, states retain/enjoy police power to regulate property to promote general public health,
welfare, safety, etc.
1887-1917: regulations of land uses upheld even though they deprived owners of value of land
Mulger (1887) – regulations cannot be taking if they’re designed to protect public
Powell (1888) – regulations cannot be taking if they’re designed for public health/safety
Hadacheck (1915) – ordinance prohibiting brickyard was not taking
Penn Coal (1922 – p916-17) – held that prohibition of digging was a taking
-Holmes: Taking = when regulation is designed to prevent damage not common to the public
When a regulation goes too far, it constitutes a taking
If it’s a regulation of public safety, health, welfare then no taking
-Brandeis (dissent): The regulation doesn’t cease to be public just b/c a private owner benefits
He sees the regulation as protecting against a public harm
No taking b/c it is a regulation to prevent public harm with incidental private harm
A regulation of an obnoxious use would not be compensable (no taking)
When evaluating diminution of value, consider value of whole property, not just subpart
- Euclid v. Ambler Realty
-Use zoning is valid unless it is arbitrary and unreasonable, with no substantial relation to public health,
safety, morals, or general welfare (state’s police power)
- Stone v. City of Wilton
-Court looks to Paaske for standard of vested rights: depends upon type of project, its location, ultimate
cost, and principally the amount accomplished under conformity (found it reasonable)
- Miller v. Schoene
-Court holds that when a state has to choose between destruction of property to save other property that is
of greater value to the public, it may destroy the private property
-Comparison of values for takings analysis
E. Takings Law
Modern Takings jurisprudence: “per se” takings
-Two types (if it’s either, it’s a per se taking):
1) permanent physical invasions of property (mandated by government)
2) regulations that completely deprive an owner of all economically viable uses of his property
If not a “per se” taking, then look to ad hoc analysis of justice and fairness (p970):
1) character of the government action
2) economic impact
3) interference w/ reasonable investment-backed expectations
Penn Central Transportation Co. v. New York City
-Grand Central Station labeled a landmark under the NYC Landmarks Preservation Law; pursuant to that
law NYC has prohibited Penn Central from building on top of the terminal
-No per se takings (permanent phys. invasion is weak); so we need to look to the ad hoc factors
Is this a harm preventing regulation or a benefit conferring regulation?
Pruneyard Shopping Center v. Robins
-The determination whether a state law unlawfully infringes a landowner’s property requires an
examination of whether the restriction on private property “forces some people alone to bear public
burdens which, in all fairness and justice, should be borne by the public as a whole”
-CA Supreme Court concluded that CA Constitution protected students’ right of free speech
No similar 1st Amendment right b/c of Lloyd Corp. v. Tanner
-Causby as precedent; Court distinguishes Kaiser Aetna (substantial investment in the marina)
-Not really a permanent physical invasion, nor full deprivation of economic value
-Blackmun’s concur: disputes Rehnquist’s assertion that the Court cannot define property
-Marshall’s concur: questions whether definitions of property are limited to state law
-Powell’s concur: prop. owner may have right to exclude speakers personally repugnant to him/his beliefs
Three ways to resolve free/speech property claims of Lloyd Corp. and Pruneyard
1) The 1st Amendment grants citizens right of access to public shopping centers for free speech
purposes (rejected in Lloyd)
2) No right of access is created by the federal constitution and any right of access created by state
law would be an unlawful taking w/o compensation (rejected in Pruneyard)
3) Free speech access is neither required by the 1st Amend nor prohibited by the 14th Amend
(holding in Pruneyard)
- Loretto v. Teleprompter Manhattan CATV Corp. – tiny cable box and wires is a permanent invasion
Lucas v. South Carolina Coastal Council – coastal development regulation prevents Lucas from building
-Court (Scalia) looks to per se taking: complete deprivation of all economically viable use
-Court generally agrees with contention that all economically viable uses are deprived (so it’s a taking)
Compensation unless it already would be considered a prohibited use or nuisance
-Where the State seeks to sustain regulation that deprives land of all economically beneficial use, it may
resist compensation only if the proscribed uses were not part of owner’s title to begin with
-Kennedy’s concur: Scalia’s rule is too narrow; need to consider interference w/ reasonable investmentbacked expectations
-Scalia says regulations that completely deprive an owner of all economically viable use for land is a
taking unless the proscribed use constitutes a nuisance
-Kennedy is concerned that Scalia’s standard is too limited and that it shackles the legislature; thinks it
should include when proscribed use is consistent w/ reasonable investment-backed expectations
-Blackmun says any “reasonable proscribed use” that harms the public justifies taking w/o compensation
Palazzolo v. Rhode Island – wetlands preservation prevents Palazzolo from developing some of his land
-RI Supreme Court rejects Palazzolo’s claim for 3 reasons:
1) Ripeness
2) Does not satisfy Lucas test (b/c he had not been deprived of all economic value)
3) Law regulating coastal zoning was already in place when he purchased property
-Palazzolo argues that although he can develop the upland portion of the property, the ban on wetlands
development essentially took 100% of that portion of his property
-What is the “minimum denominator”?
-Is it the smallest developable portion? Or sections? Or the entire property as a whole?
-States are not insulated from takings claims merely because the property owner has acquired title after
the regulation has been enacted (regulation should not be protected from challenge)
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency
-Court finds that a temporary moratorium does not result in a per se taking; it emphasized that only a
100% diminution in value of the property triggers the Lucas rule
-it may be unconstitutional to impose a condition on obtaining a permit or other right if the government’s
purpose and the condition imposed are not sufficiently related (Nollan)
Dolan v. City of Tigard – floodplain & bike path requirements restrict Dolan’s use of his land
-The issue is whether there is a sufficiently essential nexus between the government intent/purpose and
the conditions imposed (city has two purposes: mitigating flooding issues and reducing traffic congestion)
-Majority (Rehnquist) says it’s not enough to show that the bicycle pathway COULD offset traffic, more
certitude is needed: “rough proportionality”
United States v. 564.54 Acres of Land – gvt. condemns land owned by Lutherans, gross dispute in value
-“loss to the owner of nontransferable values deriving from his unique need for property or idiosyncratic
attachment to it…is properly treated as part of the burden of citizenship”
Kelo v. City of New London
-In response to the city’s condition as a “distressed municipality”, the New London Development
Corporation initiated an economic development plan to bring a Pfizer research facility and other
community projects (Kelo’s house and others were condemned to open up the parcels)
-Court relies on Berman v. Parker and Hawaii Housing Authority v. Midkiff
Berman: Court upheld redevelopment plan targeting a blighted area of D.C. where an owner
whose store was not blighted opposed the condemnation
Midkiff: Court upheld fee title transfer from lessors to lessees to reduce the concentration of land
ownership (to eliminate land oligopoly)
-In Berman, 64% of property uninhabitable and redevelopment was used for streets, schools, and other
public facilities (however, much was going to be sold to private interests for construction)
-In Midkiff, 50% of land owned by 72 people; so objective was to reduce economic harm
-Four opinions:
Stevens: public use = public purpose, deferential to legislative purpose & mechanics,
Economic revitalization is a legit public purpose, comprehensive plan is key
Kennedy: economic development is ok, but there should be a heightened scrutiny if there is a
private beneficiary (“rational-basis review”)
O’Connor: economic development takings not constitutional; the pre-condemnation use has to be
harmful to society and the taking must remedy harm to be constitutional
Thomas: public use = public use, NOT public purpose (public and/or government must be
owner/user of property)
-After Kelo, there was a major backlash in the states – states can define their own takings and place their
own restrictions on the exercise of the takings power
II. SERVITUDES
Servitudes – agreements between property owners about the use of their land
Authorize a non-owner to enter your property for a specific purpose, OR
Embody property owner’s promise to do or not to do some act on his own property
Four types:
1) Licenses
2) Easements
3) Real covenants
4) Equitable servitudes
-Servitudes run with the land
-A license is generally revocable permission to enter someone else’s property
Licenses can be express or implied, and are generally not transferrable
-An easement is the limited right to use or control the use of someone else’s property
Easements are generally irrevocable
A. Easements
-Creations of easements where formalities are excused:
Prescriptive easements (like adverse possession)
Easements by estoppel (Holbrook)
Easements implied from prior use (Granite)
- Holbrook v Taylor – Holbrook let Taylor use old mine road to bring construction equip to build home
-licenses can be irrevocable when they are associated with some interest or reliance, not simply naked
licenses (sometimes courts will put a dollar figure on this right, sometimes it’s for free)
-Right to use of a roadway over another’s land may be established by estoppel (Lashley Telephone Co.)
- Granite Properties Limited v. Manns – trucks used gravel road to circle around back of shopping center
-Granite looks to create an easement implied from prior use:
1) common ownership
2) prior use (and use was apparent, continuous, and permanent)
3) reasonable necessity/convenience (easement must be reasonably necessary/convenient)
-Dominant estate is the property benefited by the servitude
-Servient estate is the property burdened by the servitude
-Statute of Frauds requires a writing for the transfer of all real property
-Some states have enacted statutes empowering the owner of a landlocked parcel to obtain an easement
over neighboring land for access to a public road by application to a public official and payment of
compensation to the landowner whose property is burdened by the easement
Methods of creating an easement:
-Express easements
-Nonexpress easements:
1) easements by estoppel (Holbrook)
2) prescriptive easements (Communtiy Feed Store)
3) easements implied by prior use (Granite)
4) easements by necessity (Finn)
- Finn v. Williams – Finns claim easement by way of necessity to transport crops over Williams property
-an easement by way of necessity exists when there is landlocked parcel w/ no other route to the hwy road
-appurtenant easements: easements attached to land ownership, owned by who owns dominant estate
-easement in gross: benefit of easement not attached to land ownership (not appurtenant)
- Cox v. Glenbrook Company – Glenbook Co. granted easement to Quill, Cox acquired land and easement
-In order for burden of express easement to run with the land:
-easement must be in writing
-original grantor must intend for future owners of servient estate to be bound by easement
-subsequent owners of servient estate must have notice of the easement
-In order for benefit of easement to run with the land:
-grantor must intend for the easement to run with the land
(If so, easement is appurtenant. If not, easement is in gross)
For appurtenant easements:
-Transferring benefit – when dominant estate is transferred, benefit of easement is transferred
-Sharing benefit – when dominant estate is subdivided, benefit of easement is shared
For easements in gross:
-Transferring benefit: more likely to be transferrable if commercial
-Sharing benefit/apportionability (See Henley v. Continental Cablevision)
-there are limits on negative easements and there are no affirmative easements to act on one’s own land
B. Covenants
Covenants are promises regarding use of land, that concern the use and operation of the land itself, that
can run with the land and are enforceable
-including affirmative obligation to do something on one’s own land
-including broad range of negative restricts regarding use of one’s own land
-covenants are incredibly powerful, because they last forever
-In order to burden land in perpetuity via a restrictive covenant (RC) or equitable servitude (ES), there
must be a countervailing benefit to other land; this countervailing benefit is present if original
covenanting parties are in relationship in which they have mutual interest in the land
-Requirements for a real covenant (p366):
1) Writing (must be in writing in the original docs)
2) Notice (party to be bound must have notice of the covenant)
3) Intent to Run (original parties must intend covenant to be binding on successors)
4) Touch and Concern (subject matter of covenant must “touch and concern” the land)
5) Privity of Estate (must be horizontal and vertical privity of estate)
-“Touch and Concern” involves two part analysis:
1) promise must have something to do with the use or enjoyment of the land, AND
2) promise must affect the market value of the land (increase benefited land value or decrease
burdened land value) or affect the “quality, value, or mode of enjoying” the land
-What does “privity of estate” mean? (parties in some sort of relationship with respect to land)
-Privity of estate requires both horizontal privity and vertical privity
-Horizontal privity (p385): relationship between original covenanting parties
(1) Must be in a certain type of relationship evidencing their mutual interest in the land
Seller/purchaser relationship,
Lessor/lessee relationship, or
Mutual appurtenant easements relationship
(2) Covenant must be contained in the documents creating those relationships
-Vertical privity (p386): relationship between original parties and their successive assignees
For strict vertical privity to exist, original owner must transfer her full and entire property right in
the burdened parcel to new owner and cannot retain future rights in the land
(so a sale satisfies, but not a lease or a life estate)
For the burden of a covenant to run with the land (on burden side)
-original covenanting parties must be in horizontal privity
-original covenanting party and successor to burdened parcel must be in vertical privity
For the benefit of a covenant to run with the land (on benefit side)
-original covenanting parties must be in horizontal privity
-original covenanting party and successor to benefited parcel must be in vertical privity
-Real covenants and equitable servitudes are similar, except for the remedy provided under each
RC: remedy for breach is damages; ES: remedy for breach is injunction
ES relaxes some of the more strict and formal requirements of RCs
-To enforce a covenant as an ES, you must show the first four requirements (all but privity)
- Whitinsville Plaza v. Kotseas – covenant not to compete as a pharmacy, Kotseas leases to a CVS
- Davidson Bros., Inc. v. D. Katz & Sons, Inc. – covenant not to compete as a grocery store in New Bruns.
-NJ S.Ct. articulates 8 “reasonableness” factors (p370) as a substitute test for enforceability
-Absent a change in condition or other specific circumstances, covenants can last forever
Circumstances that can nullify a covenant:
-Unclean hands: party seeking to enforce covenant has violated the covenant himself
-Abandonment: party seeking to enforce covenant has tolerated previous violations by owners of other
restricted parcels in neighborhood
-Acquiescence: party seeking to enforce covenant has tolerated previous violations by the owner of the
servient estate
- Shalimar Association v. D.O.C. Enterprise – change in economy made golf course operation not feasible
-A mere change in economic conditions rendering it unprofitable to continue the restrictive use is not
alone sufficient to justify abrogating the restrictive covenant
El Di v. Town of Bethany Beach
-El Di owns the “Holiday House” in Bethany Beach, on property that was subject to a covenant that
prohibited sale of alcoholic beverages (are they subject to restrictive covenant?)
-Are the requirements met? (writing, notice, intent to run, touch and concern, privity)
-Equitable arguments: abandonment and acquiescence
-Changed conditions defense: must prove that fundamental change has occurred in the character of the
neighborhood that renders the benefits underlying imposition of the restrictions incapable of enjoyment
-Relative hardship defense: El Di would have to prove that the harm caused by the enforcement will be
greater by a “considerable magnitude” than benefit to the owner of the dominant estate
Shelley v. Kraemer
-Issue is whether a covenant restricting nonwhites from purchasing the property is enforceable
-Who has standing to sue for injunctive relief (landowners in the vicinity who are intended beneficiaries
of the restriction, whether or not they derive their titles from a covenanting party)
-MO Supreme Court holds that the covenant is valid and effective (did not violated 14th amend)
-Court holds that restrictive agreements by themselves do not violate the EP clause (private action);
however, the enforcement of the covenant by the state court creates state action
-You need a court action so that it is the state that enforces the covenant to give rise to an EP violation
-Fair Housing Act (p817) prohibits discrimination in sale/rent on the basis of race (and other factors)
-State judicial action constitutes a violation of the EP clause (Shelley)
-Cy pres doctrine allows courts to reform a trust or will when it appears that the original intent of the
grantor is no longer practical or legal (can either reform or destroy)
Evans v. Abney – Sen. Bacon conveys land in his will for a park (but park is only for white people)
-GA Supreme Court must look to the will to see if it can apply the “cy pres” doctrine and reform the will;
it finds that the segregated character of the park was “an essential and inseparable part of the testator’s
plan” and so it could not reform the park
-Justice Black doesn’t buy the state action argument, he sees the discrimination as private
-Not a violation of the EP clause to refuse to apply the cy pres doctrine and reform the will
-The creation of a will is a different, more private undertaking than sale of property
C. Restraints on Alienation
Restraints on alienation:
(1) Direct restraints on transfer
(2) Servitudes requiring the consent of either the grantor or the association to transfer
(3) Rights of first refusal
(4) Leasing restrictions
(5) Restraints designed to keep housing affordable to low- and moderate-income families
Horse Pond Fish & Game Club v. Cormier – Covenant requires 100% member approval to transfer prop.
-When one member votes against transfer, the club tries to get the restraint on alienation invalidated
-A restraint in alienation (1) that is not imposed on a charity, (2) that is unlimited in time, and (3) that is
unreasonable is not likely to be upheld
-Northwest Real Estate Co. v. Serio – covenant attempted to condition sale/transfer on consent of grantor
-Restriction on alienation imposed on grantees repugnant to fee-simple title
-Riste v. Eastern Washington Bible Camp – EW Bible Camp attempted to condition all sale on its consent
-Restriction on living/land use imposed on grantees no good b/c title is outright fee
-Servitudes are used to control what is done with property in the future
-Future interests are used to control what is done and/or who will own property in the future
If restriction imposed, remedy for violation of restrictions is forfeiture of ownership
III. DIVIDING UP OWNERSHIP
A. Estates in Land/Future Interests
Fee simple absolute – right to possess land that extends indefinitely into the future
If a right to possess is of any lesser duration, it must either
1) End/potentially end at some time before the indefinite future
2) Start/potentially start at some time after the present (or both)
-Estates in land are distinguished from each other by the different times in which they end
-Future interests are distinguished from each other primarily by the different times at which they begin
(Grantor specifies circumstances under which property will shift to future interest holder)
-Future interests may be created in grantor or in third party
-Future interests exist from the moment they are created, but they don’t become possessory until the
happening of the event triggers shift of property to future interest holder
-The law has a presumption against future interests (and forfeitures)
-One problem: the “dead hand” (person controlling property after death through covenants)
-Another: creation of system of concentrated land ownership through inheritance (“fee tail”)
-Fee simple absolute: property ownership without an associated future interest (“To A”)
-Defeasible fees: interests that terminate at the happening of a specific event (“To A while…”)
Types (see p515):
1) Fee simple determinable
2) Fee simple subject to a condition subsequent
3) Fee simple subject to an executory limitation
-Created with “words of duration”
FS determinable: “O to A so long as used for residential purposes, if used for nonresidential
purpose, this property shall automatically revert to O”
FS subject to condition subsequent: “O to A on condition that property be used for residential
purpose, if used for nonresidential purpose, O shall have right of entry”
FS subject to executory limitation: “O to A so long as used for residential purposes, if used for
nonresidential purpose, then to B”
-What about statute of limitations in cases of defeasible fees?
-Modern law is to start running the statute of limitations immediately upon violation of condition,
whether interest is FS determinable OR FS subject to a condition subsequent
-Life estates: interest held for life of designated individual
Reversion: “To A for life (then back to O)”
Remainder: “To A for life, then to B”
Two types of remainder:
1) vested remainder: given to a presently existing person & not subject to a condition precedent
2) contingent remainder: given to unascertained person or made contingent upon a condition
-a life tenant can transfer property, but can only transfer a life estate for their own life
B. Interpretation of Ambiguous Conveyances
-There is a preference against future interests and against automatic forfeiture
Wood v. Board of County Commissioners of Fremont County
-Issue is whether the grant was a FSD, and thus whether cessation of hospital operation by sale of land to
private company violates the defeasible fee
-Court found that language was not sufficient to establish a condition; it was a fee simple absolute (use of
the word “memorial” fails to create a fee simple determinable)
Cathedral of the Incarnation v. Garden City Company
-“Stewart heirs” convey land to Cathedral restricting its use to religious and restraining alienation; they
also conveyed (sloppily) a future interest in the Cathedral’s land to Garden City
-Garden City claims that they have a fee simple determinable, or in the alternative that it created a fee
simple subject to condition subsequent; Court finds that no such interest existed
-When a deed states a charitable purpose for property or restricts its use to charitable purpose, courts have
attempted to achieve the charitable purpose by adopting a number of different interpretations – most hold
the language as precatory, applying presumption against forfeiture
-You need to use words of duration if you want to create a FSD
-You need to use words of condition if you want to create a FSSCS
-Possibilities of reverter and right of entry was traditionally not transferrable, but now most states now
hold that future interests are alienable as well and devisable and inheritable
-Some courts have interpreted the purpose language as an enforceable restrictive covenant
Hierarchy of interpretational preferences:
-FS absolute with mere “precatory” language (Wood)
-FS absolute with enforceable covenant
-FS subject to condition subsequent (Cathedral)
-FS determinable / FS subject to executory limitation
-Life estate
Edwards v. Bradley – the “bad daughter” case
-Lilliston bequeaths her farm to her daughter Margaret, but with the condition that if she attempts to
encumber or sell the farm, the interest passes to her children
-Margaret seeks to have her kids consent to her selling the farm (all but Beverly does)
-When Margaret dies, she leaves a will that gives Beverly $1 and directs that the farm proceeds be
divided among the five “good” children; Beverly sues and claims an interest in the farm
-Beverly says that Margaret got a life estate, with an equal remainder in the six children
-The other kids say that it’s a FSSEC (Margaret keeping it free of encumbrances)
-Court interprets it as Beverly sees it: Margaret had life estate, all kids had remainders, and restraint on
Margaret’s alienation is valid as imposed upon life estate
C. Regulatory Rules
-racial conditions imposed on property are unconstitutional (see Shelley v. Kramer)
-Barringer case: Court upheld racial limitation on use of park created from land deeded to Charlotte, NC
-Capitol Federal Savings & Loan Ass’n case: Court refused to enforce the racial condition
- Moore v. Phillips – grandmother’s estate asserts defenses against grandchildren’s claim of deterioration
-Court says that no such limitations are valid to prevent the suit, and the law should not require children
and grandchildren to sue their parents/grandparents during their lifetimes
-Court allows recovery for damages caused by deterioration and waste
IV. CO-OWNERSHIP OF PROPERTY CONCURRENTLY
A. Types of Co-Ownership
1) Tenancy in Common
-Each tenant in common has undivided interest and right to possess entire parcel
-Tenants in common can own different fractional interests in property, but that fractional amount is only
important for issues such as dividing up mortgage payments or proceeds
-Upon death of tenant in common, surviving tenant(s) in common do not inherit dying tenant’s share
(unlike joint tenant) – no right of survivorship
-“To A and B [as tenants in common]” (default is that each will take ½ interest in property)
However it is possible to create unequal interests (unlike JT)
2) Joint Tenancy
-Distinct from tenancy in common in several ways
-Joint tenants have right of survivorship (split equally among remaining JTs)
-“To A and B as joint tenants with right of survivorship” (must be expressly created)
-Requires unity of (1) time, (2) title, (3) interest, and (4) possession
-If JT transfers her property interest inter vivos to another party, survivorship is severed and destroys joint
tenancy with respect to that tenant only
-Is it possible to establish co-ownership like JT but with indestructible right of survivorship?
Yes: life estates with alternative contingent remainders
“To A and B as life tenants, with remainder in A if A survives B, and with remainder in B if B
survives A”
-What else can destroy a joint tenancy? Lease? Mortgage? (courts are divided)
3) Tenancy by the Entirety
-Form of co-ownership similar to JT but available only to married couples
-Like a JT+ (p575-76)
-One tenant by entirety’s interest cannot be sold, transferred, or encumbered w/o consent of other
-Tenant by entirety’s right of survivorship cannot be unilaterally destroyed
-Creditors generally cannot attach property to satisfy debt of one spouse
-Not subject to partition while marriage lasts
-Can same-sex couples create incidents of TbyE by contract?
Agreement not to partition? Agreement not to subject property to unilateral debts of one?
-ouster: act by which one co-owner wrongfully excludes other co-owner from property
-constructive ouster: when realities of the situation prevent co-owner from sharing occupancy
-Olivas case: has Carolina constructively ousted Sam?
-In Olivas, Sam sought market value rent because he was the one that left the house
-co-owners may sue for partition (court order that splits the property)
-co-owners may alternatively voluntarily agree to partition (as opposed to court physical divis.)
-partition is only a remedy for TiCs or JTs: TbyE not subject to partition during marriage
Carr v. Deking
-Father and son owned a farm as tenants in common; over son’s objection, father leases farm to Deking
for 10 years for crop-sharing agreement; son seeks to cancel the lease when dad dies
-Court says TiC(Dad) did not need consent of every other TiC: Joel (son) can either (1) receive benefit of
Deking lease and accept its terms, or (2) accept partition of the property
Tenhet v. Boswell
-Tenhet and Johnson were JTs, Johnson leases to Boswell w/o Tenhets knowledge
-Johnson dies; did the lease constitute a severance or can Tenhet exercise survivorship?
-Court says it doesn’t constitute severance because lease doesn’t destroy any of the unities
-Court says the interest ends upon JT’s death, so lease expires upon JT’s death as well
B. Marital Property and Tenancy by the Entirety
-Before marriage, women had same rights to hold and manage property as men; once married as a
“femme covert”, husband possessed all the rights to the property (“coverture”)
-In mid to late 1800s, many states passed Married Women’s Property Acts, which:
1) Abolished institution of coverture
2) Allowed married women to exercise same rights as men
3) Granted married women sole rights over (some of) her own earnings
4) Provided that married women’s separate property was subject to their own control and could
not be seized by their husband’s creditors
-MWPA also amended intestacy statutes to allow widows to be heirs
-Do MWPA abolish tenancy by entirety? Does it gender-equalize it? Does it have no effect?
Sawada v. Endo
-Kokichi Endo and wife Ume own their home as TbyE; Kockichi injures Sawadas in car accident
-Sawadas prevail against Endos, ten days later Ume dies – Sawadas want to go after the house
-The Court outlines four different scenarios dealing with tenancy by entirety
1) Group 1: no change (wait for SC to rule)
2) Group 2: debtor spouse’s interest can be sold/attached for his separate debts, subject to other
spouse’s contingent remainder/right of survivorship
3) Group 3 (majority rule): No part of estate may be subject to separate debts of one spouse
4) Group 4: only contin. remainder/right of survivorship is separately alienable/attachable
-Sawada says that TbyE property should be subject to unilateral alienation/attachment by creditors; Endo
says TbyE property should not be subject to unilateral alienation/attachment
-HI Court adopts Group 3 – no part of estate may be subject to separate debts of one spouse
-Separate property – each spouse owns his or her property separately (majority rule, Group 3 above)
-You own whatever you owned before marriage and you own what you individually earn during marriage
-Community property – only property owned prior to marriage and gifted/inherited is separate property
-All other property (including property earned during marriage) is owned equally by both parties
V. RIGHTS/DUTIES OF LANDLORDS & TENANTS
A. Types of Tenancies
Four major types of tenancies:
1) Term of years – lasts for a specific amount of time (i.e. 1 year lease, 60 day lease, etc.)
2) Periodic tenancy – renews automatically periodically until either tenant or landlord terminates
3) Tenancy at will – like periodic tenancy but requires no notice to terminate
4) Tenancy at suffrage – tenant rightfully in possession who wrongfully stays after termination
-Most states require that leases of more than one year be in writing
B. Landlord’s Remedies
-“summary process” is an expedited court proceeding to allow for relatively quick evictions
-If tenant wrongfully stops paying rent or breaches other material lease terms and continues to occupy the
premises, the landlord may sue the tenant for back rent and for possession
-If tenant wrongfully holds over after the end of the lease term but continues to pay rent, the landlord may
either choose to accept a new tenancy relationship or sue for possession
Majority rule: If landlord accepts a rent check, a new month-to-month tenancy is established
Minority rule: If landlord accepts a rent check, a new term tenancy is established
-On the other hand, if tenant stops paying rent and leaves, the landlord has three options:
1) Accept tenant’s surrender
No future rent due and landlord free to re-let, but tenant may owe back rent
2) Refuse to accept surrender and re-let on tenant’s account
Landlord may sue tenant for difference between old rental price and new rent received
3) Wait until end of lease term and sue for all unpaid rent (no mitigation of damages)
Most states reject this option and require landlord to mitigate damages
- Sommer v. Kridel – landlord wouldn’t let tenant who never took possession out of lease, didn’t mitigate
-NJ SC found that landlord had duty to mitigate damages and failed to do so
C. Tenant’s Rights to Habitable Premises
-Implied warranty of habitability – landlord impliedly promises that residence will be habitable
-covenant of quiet enjoyment – landlord impliedly promises not to disturb tenant’s quiet enjoyment
-the general rule is that landlord is not responsible for one tenant causing annoyance to another
One exception is when there is specific language in the lease
Another exception is when there is clear notice and condition is N & P consequence
-concern about violation of the “covenant of quiet enjoyment”
-Blackett v. Olanoff – cocktail lounge below apartment “very substantially deprived” quiet enjoyment
-b/c condition was natural and probable consequence of the landlord’s permitting the lounge to operate
and b/c landlord could control the lounge, he is not entitled to collect rent for not habitable premises
Javins v. First National Realty Co. – disgusting D.C. apartment
-D.C. Cir. rejects the common law traditional view and adopts an implied warranty of habitability (when
landlord sued for rent, tenant asserted 1500 housing code violations)
-tenant self-help should be given primacy over landlord self-help (positive and efficient)
-Remedies for breach of implied warranty of habitability:
1) Rescission of lease
2) Rent withholding
3) Rent abatement
4) Repair yourself and deduct cost from next month’s rent
5) Injunctive relief
6) Administrative remedies
7) Criminal penalties
8) Compensatory damages
VI. INTELLECTUAL PROPERTY
-A trademark (or service mark) is a word, phrase, symbol, design, etc. used to identify and distinguish
one’s goods (or services) from those of others
-trademarks symbolize the goodwill associated the with trademark owner’s business and protect
consumers from product confusion
-you acquire a trademark by being the first to use it or by registering the trademark
-TMs are a type of property rights in words or symbols
Does free speech apply? Rights of access? Use after abandonment?
-TM owners have a responsibility to police if they want to retain their TM rights
-codified in the Lanham Act § 1125 (see IP packet p8)
1125(a) – TM infringment
1125(c) – TM dilution of famous mark
-the more “distinctive” the mark, the broader the scope of protection under trademark law
-if a mark is “famous” it is protected against dilution under 1125(c)
1) Arbitrary/Fanciful mark – no logical relationship to product (substantial protection)
2) Suggestive mark – evokes characteristic of underlying good (substantial protection)
3) Descriptive mark – directly describes characteristic of product (little protection)
Protected only if public primarily associates mark with particular product
4) Generic mark – i.e. “aspirin” or “thermos” (no protection b/c word has been adopted)
-trademark dilution is the lessening of the capacity of the mark to identify and distinguish
goods/services, regardless of likelihood of confusion
-Occurs either through:
a) “Blurring” – mark weakened by identification with noncompeting goods
b) “Tarnishment” – mark weakened through negative or unsavory association
Playboy Entertainment Inc. v. Netscape Communications Corp.
-Issue is whether use of “playboy” and “playmate” as keywords to trigger banner advertisements (that
were not PEI sites) infringed and/or diluted PEI’s trademarks
-PEI needs to establish:
1) PEI holds a trademark
2) Netscape used marks in commerce (courts apply a pretty deferential standard)
3) Use was such as to likely cause confusion (eight factor test)
Strength of mark,
Proximity of the goods,
Similarity of the marks,
Evidence of actual confusion,
Marketing channels used
Type of goods and degree of care likely to be exercised by purchaser
Defendant’s intent in selecting the mark
Likelihood of expansion of the product lines
-Court finds that PEI could at least make out a case, so reverses grant of summary judgment
-Concurrence worries about distinction between mere consumer distraction and infringement
For trademark infringement, you need to show that:
1) π owns the mark
2) Δ used the mark in commerce, and in connection w/ sale of goods or services
3) In a manner likely to cause confusion
(All the circuits have different 7 or 8 factor tests to judge likelihood of confusion)
PETA v. Doughney
-Issue is whether Doughney’s registration of peta.org infringes PETA’s trademark
-According to the Court’s language, the website need only prevent users from getting to PETA’s
legitimate site (“lost/misdirected eyeballs”)
-Court finds that the domain name is not a parody – because the two messages (it is the original and it is
not the original) must be conveyed simultaneously
Court says that Doughney did not successively convey both message simultaneously
Lamparello v. Falwell
-Issue is whether Lamparello’s website “fallwell.com” infringes Falwell’s trademark; the site criticized
Falwell’s Biblical interpretation, specifically his views on homosexuality
-Court distinguishes PETA by labeling that case as a parody and this case as criticism
-Falwell argued that there was an “initial interest confusion” but court says that it has never adopted that
test and that even if it had that the test didn’t apply (clearly won’t be confused)
-Fourth Circuit has given us no explanation as to why it looks at only domain name in parody context
(PETA) and domain name and content in criticism context (Lamparello)
Really, unspoken distinction is policy concerns regarding cybersquatters
-Trademark rights extend to marks (brand names, trade names, logos, etc.)
-Copyrights apply to creative works (books, music, movies)
-Article I, §8, clause 8 of the Constitution: “the IP clause” empowers Congress
“To promote the Progress of Science and useful arts, by securing for limited Times to Authors
and Inventors the exclusive right to their respective writings and discoveries”
-Copyright rights inhere automatically from moment a work is “fixed in a tangible medium of expression”
-Rights last from moment of fixation through life of author + 70 years
-Notice and registration not required
-Copyright inheres in the expression embodied in the original works of authorship, but does not extend to
the ideas or facts embodied in such works
-Copyright holder’s rights: §106
Subject to § 107, copyright owner enjoys exclusive right to:
1) Reproduce
2) Adapt/modify/prepare derivative works based on copyrighted worked
3) Distribute copies
4) Perform the copyrighted work publicly
5) Display the copyrighted work publicly
6) Perform the copyrighted work publicly by means of a digital audio transmission
-Fair use limitations on holder’s rights: § 107
Notwithstanding § 106, fair use of a copyrighted work…for purposes such as criticism, comment,
news reporting, teaching, scholarship, or research is NOT an infringement
-In determining whether the use made of a work in any particular case is a fair use, consider:
1) The purpose and character of the use, including whether such use is of a commercial nature or
is for nonprofit educational purposes
2) The nature of the copyrighted work
3) The amount & substantiality of portion used in relation to copyrighted work as a whole
4) The effect of the use upon the potential market for or value of the copyrighted work
Sony v. Universal
-Universal (and Disney) sues Sony for 3d party / contributory liability for copyright infringement
-SCOTUS characterizes the case as “identifying the circumstances in which it is just to hold one
individual accountable for the actions of another”
-Universal needs to show that there was a direct infringement, that Sony had knowledge of that
infringement, and that Sony substantially or materially contributed to that infringement
-Authorized uses vs. Unauthorized uses (Sports league commissioners & Mr. Rogers said ok)
-Sony’s defenses to unauthorized uses: Fair use (look to four factors!)
-Dissenters say that this test (“capable of infringing”) allowing use is too deferential to the tech
manufacturers; we should instead judge on whether it is actually substantially infringing
-“Time-shifting” and “Librarying” (Two types of uses Sony advertised the VCRs for)
-Sony defense: If Δ’s technology is “capable of substantial non-infringing uses”, then mere manufacture
or sale is not sufficient to constitute contributory infringement (even if tech used for infringing uses)
MGM v. Grokster
-Issue is whether a distributor of a product utilized by third parties for infringement purposes is liable for
the third party acts of infringement (similar to Sony)
-MGM needs to establish
(1) direct infringement by users, (2) Grokster’s actual or constructive knowledge of infringement,
and (3) material contribution to infringement
-9th Cir. found that b/c of decentralized architecture of the software, no actual/constructive know
-9th Cir. found that b/c users searched for and retrieved files themselves, no material contribution
-SC (Souter) says no way; he doesn’t analyze under traditional contributory copyright infringe
He instead looks at “inducement liability” (cites to a 1988 district court patent case)
-“One who distributes a device with the object of promoting its use to infringe – as shown by clear
expression or other affirmative steps taken to foster infringement – is liable for resulting acts of
infringement by third parties” (basically a bunch of BS)
-Court looks for “statements or actions directed to promoting infringement”
Advertisements to download music, analogous “–ster”, internal memos on subject
-Breyer says if there were no inducement, Sony would insulate Grokster from liability
-Ginsburg says that the Sony defense would actually implicate Grokster, and that if necessary the Sony
standard should be modified