P R O B A T E   &   P R O P E R T Y
September/October 2001
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Keeping Current Property

Keeping Current—Property offers a look at selected recent cases, rulings and regulations, literature and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.

CASES

BROKERS: License. An unlicensed broker recovered an unpaid commission, because the court held the brokered agreement for exclusive concession rights in an airport was merely a license to use the premises, not a lease granting exclusive possession. HEY Trust v. Popcorn Express Co., Inc., 35 S.W.3d 55 (Tex. Ct. App. 2000).

CONSTITUTIONAL LAW: Public forums. The court held a typical stand-alone supermarket containing a public bulletin board and taxi benches is not a public forum and, therefore, the state constitution does not require it to allow persons to gather petition signatures on the supermarket property. Young v. Raley’s, Inc., 107 Cal.Rptr.2d 172 (Cal. Ct. App. 2001).

EASEMENTS; Servient owner’s rights. The trial court acted within its discretion, the court held, in approving a servient owner’s placement of a second gate on a neighbor’s way of necessity. The gate was reasonably necessary to control the owner’s grazing livestock. The imposition of a speed limit was, however, held an abuse of discretion. Lowe v. Double L Properties, Inc., 2001 WL 379443, 2001 Wash. App. LEXIS 1268 (April 11, 2001).

EASEMENTS: Servient owner’s rights. A court held that although the easement deed was silent on whether a gate was permitted, the servient owner could place gates on both ends of the easement right of way, because the gates would reduce trespass, vandalism and wear and tear on the road. Additionally, the party seeking to prohibit the gates was unable to show a public road by prescription, because he had an express easement and any adverse use had occurred over a period of only three years. Standing Rock Homeowners Ass’n v. Misich, 23 P.3d 520 (Wash. Ct. App. 2001).

EASEMENTS: Way of necessity. Property owners intending to develop a residential subdivision on their allegedly landlocked parcel sought a way of necessity over their neighbor’s land. The court held the owners failed to prove their property did not already have an implied access easement from their grantor, the U.S. Forest Service, because they had not first pursued a quiet title action against the Forest Service. Tobias v. Dailey, 998 P.2d 1091 (Ariz. Ct. App. 2000).

EMINENT DOMAIN: Inverse condemnation. A platted subdivision access road was converted to use as a buffer zone for the expansion of an adjacent state highway. The court held the change in the character of use was an uncompensated taking as to the abutting landowners. Killinger v. Twin Falls Highway Dist., 17 P.3d 266 (Idaho 2001).

LANDLORD AND TENANT: Eviction. A landlord evicted a mobile home tenant for violation of maintenance and single-family occupancy requirements. Although the eviction notice violated the Utah Fair Housing Act with respect to familial status, the violation did not make the eviction wrongful, because the maintenance violations provided a separate valid basis for the eviction. Malibu Investment Co. v. Sparks, 996 P.2d 1043 (Utah 2000).

LANDLORD AND TENANT: Guaranty. After a tenant defaulted, the landlord brought suit against the guar-antors. The parties reached a settlement that was “in full satisfaction of the guarantee.” The tenant subsequently defaulted and the owner again brought suit. The court held the phrase “in full satisfaction of the guarantee” unambiguously terminated the guaranty. Mid Rivers Mall, LLC v. McManmon, 37 S.W.3d 253 (Mo. Ct. App. 2000).

LANDLORD AND TENANT: Parol evidence. The president of a business corporation signed a lease as “Joe Monaco, dba Office Furniture Liquidators.” In an action by the landlord to collect rent, Monaco sought to prove by extrinsic evidence he signed as the agent of a known principal, his corporation. The court held the signature to be unambiguously that of Joe Monaco as an individual tenant doing business as Office Furniture Liquidators and refused to admit any parol evidence to prove otherwise. City of Eugene v. Joe Monaco, 17 P.3d 544 (Or. 2000).

LANDLORD AND TENANT: Renewal. The lessee, who entered into a lease under its own name and allowed its licensee to operate out of the premises, brought suit against the lessor after the licensee allowed the lease to lapse and entered into its own separate lease. The court held the lessee did not have an implied right to renew and, because lessee never communicated to the lessor the existence of the license arrangement, there was no breach of good faith and fair dealing. The lessor acted consistently with the lessee’s justified expectations. Keith Jorgensen’s, Inc. v. Ogden City Mall Co., 2001 WL 409123, 2001 Utah App. LEXIS 33 (April 19, 2001).

MORTGAGES: Evidence of debt. Admission of a promissory note copy was upheld as satisfying the best evidence rule. The alleged note maker testified he did not recall executing the $30,000 note over 20 years earlier and that the alleged holder attempted to bribe him into testifying to the existence of the loan. No payments had been made during the 20 years. The court held the copy was a sufficient basis to foreclose a recorded mortgage and awarded the beneficiary’s attorney fees and costs. Braut v. Tarabochia, 17 P.3d 1248 (Wash. Ct. App. 2001).

MORTGAGES: Foreclosure procedure. A mortgagor seeking reinstatement obtained a temporary restraining order preventing a foreclosure sale. California law allows mortgagors to cure their default at any time until five business days before the sale date and prevents the trustee from conducting the sale until seven business days after a restraining order is lifted. The court held the mortgagee could prevent the mortgagor from reinstating the loan by repetitive sale postponements for five or fewer business days. Hicks v. E.T. Legg, 108 Cal. Rptr. 2d 10 (Cal. Ct. App. 2001).

MORTGAGES: Foreclosure procedure. A trust deed beneficiary intended to open the foreclosure bidding at $100,000, but a clerical error by its agent caused the auctioneer to make a $10,000 opening bid on behalf of the beneficiary. The final bid was $10,000.01. The court held that although the clerical error may have resulted in an inadequate price, it was not a procedural irregularity that contributed to an inadequate sale price as re-quired to set the sale aside. 6 Angels, Inc v. Stuart-Wright Mortgage, Inc., 102 Cal.Rptr.2d 711 (Cal. Ct. App. 2001).

MORTGAGES. Priorities. Two lien holders agreed with the owner and the owner’s contractor that the contractor would receive part of any “lot sale proceeds.” The court upheld the junior lien holder’s right to surplus foreclosure proceeds from the lots as against the contractor, because a foreclosure sale is distinct from a sale in the ordinary course of business. The agreement was construed not to subordinate the junior lien holder’s interest in foreclosure sale proceeds. Jones v. Era Brokers Consol., 6 P.3d 1129 (Utah 2000).

SELLER AND BUYER: Representations. A seller rep-resented it was unaware of any undisclosed latent conditions adversely affecting the value of its property. It allegedly knew of an expensive county waste water system connection requirement. The court held proof of the allegation would support a claim for breach of the representation and reversed the dismissal of the buyer’s claim. RNK Family Ltd. Partnership v. Alexander-Mitchell Assocs., 2001 WL 256339, 2001 Fla. App. LEXIS 3366 (March 16, 2001).

ZONING AND PLANNING: Legal lots. The court held three separate parcels created by three patent deeds were consolidated by a subsequent single deed predating the applicable subdivision ordinance, because the deed described the property as a single parcel. Robbins v. County of Blaine, 996 P.2d 813 (Idaho 2000).

ZONING AND PLANNING: Accessory dwelling units. A zoning ordinance allowed a second housing unit on all lots in single-family residential zones, but only if the occupant of the second unit was a dependent or caretaker of the property owner. The court held the ordinance’s restriction on permissible occupants violated both privacy and equal protection rights guaranteed by the California Constitution. Coalition Advocating Legal Housing Options v. City of Santa Monica, 105 Cal.Rptr.2d 802 (Cal. Ct. App. 2001).

ZONING AND PLANNING: SLAPP suits; privileged information. In an action for defamation and other claims by a developer against a pair of citizens groups that had opposed the developer’s application, the court upheld an associational privilege against the developer’s demand to discover all documents related to the associations. The court held it was likely that disclosure would harm the associations’ first amendment rights. The developer failed to show the materiality of the information it sought or inability to otherwise obtain the information by reasonable efforts. Right-Price Recreation, L.L.C. v. Connells Prairie Community Council, 21 P.3d 1157 (Wash. Ct. App. 2001).

LITERATURE

Eminent domain and public need. In her case note, Excess Condemnation – Must the Interest Condemned in Private Property be Proportional to the Public Use?, 23 Campbell L. Rev. 33 (2000), Kimberly A. Baxley suggests that state courts are too deferential to legislative decisions concerning the exercise of eminent domain power. She examines a case in which the North Carolina Supreme Court deferred to the city’s legislative determination whether it needed a fee simple or an easement. Baxley argues that courts should distinguish between public need and public convenience when reviewing such legislative decisions.

Free speech and property owners’ rights: Using a recent Minnesota case as her focal point, Jennifer Niles Coffin contends in The United Mall of America: Free Speech, State Constitutions, and the Growing Fortress of Private Property, 33 U. Mich. J.L. Reform 615 (2000), that courts should give greater weight to free speech rights when weighing the exercise of those rights against the private property rights of mall owners.

Land use; sustainable growth. Germaine Leahy provides a useful tool for anyone beginning research on the topic of sustainable growth with her article, A Selective Guide to Researching Sustainable Growth Issues, 7 Envtl. Law. 451 (2001).

Landlord and tenant; discrimination. In Outing the Madman: Fair Housing for the Mentally Handicapped and Their Right to Privacy Versus the Landlord’s Duty to Warn and Protect, 28 Fordham Urb. L.J. 783 (2001), Frederic White concludes that disclosure of a tenant’s mental handicap to other tenants would violate the handicapped tenant’s rights under privacy laws, the Fair Housing Act Amendments and general principles of property law.

Mortgage discrimination. Ronald K. Schuster argues that the apparently neutral underwriting policies of secondary lenders may be resulting in disparate impact discrimination against minority loan applicants in Lending Discrimination: Is the Secondary Market Helping to Make the “American Dream” a Reality?, 36 Gonz. L. Rev. 153 (2000/01).

LEGISLATION

Iowa declares electronic records an acceptable means of storing financial records. A printout of a note or other instrument existing in digital form with an electronic signature is deemed to be an original for purposes of presentment and any related judicial proceeding. Iowa Code §§ 524.221, 533.26, 533.28, 534.106.

Louisiana makes “blighting” of property a criminal offense. It is defined as an owner’s “intentional or criminally negligent permitting of the existence of a condition of deterioration. . . declared a public nuisance.” Offenders may be ordered to personally occupy the premises, perform community service on other blighted properties and pay fines up to $2,000 in addition to abating the nuisance conditions. La. Rev. Stat. § 14:107.3.

Maine adopts the Residential Property Disclosure Act. Sellers of realty with four or fewer dwellings, not using a licensed broker, must provide disclosure statements regarding water supply, sewer system, insulation, hazardous materials (radon, asbestos, lead paint, underground tanks) and any “known defects.” Disclosure is based on the “best information available to the seller,” and the seller is not obligated “to make any specific investigation.” Me. Rev. Stat. tit. 33, § 171.

Maryland requires initial sellers of condominium units to give purchasers plain language statements of the policy and procedures for collecting assessments and handling collection of delinquencies. They must also provide current history of the number of unit owners in arrears and the total amount of arrearage. Md. Code Ann., Real Prop. § 11-126. Initial sellers of condominium units may not exclude or diminish certain implied warranties as to basic serviceability of heating and cooling systems and construction of walls, floors and ceilings. Md. Code Ann., Real Prop. § 11-131.

Massachusetts adopts a regulatory scheme for professional home inspectors. Licensed inspectors must carry errors and omissions insurance of $250,000, are prohibited from attempting to contractually limit their liability for negligence or wrongdoing and are prohibited from advising on the market value of property or commenting on the advisability of purchasing inspected property. Mass. Gen. Laws ch. 13, § 96 et seq.

Michigan revises right to farm act. Localities may not enforce zoning ordinances or other regulations that prevent the use of “generally accepted agricultural practices” adopted by the agriculture commission. Farmers’ “manure management plans” are exempt from disclosure under the state’s freedom of information act. Mich. Comp. Laws § 286.474.

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Keeping Current—Property Editor: Eugene L. Grant, 1211 SW 5th Ave., Ste. 1600, Portland, OR 97204-3795, egrant@schwabe.com. Contributing editors: Robert Flores and Terry Frazier, tfrazier@mc.edu.

 

 

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