Exam Guide 1 I. Right to Exclude v. Rights of Access 3


III. Immunity from Loss v. Power to Acquire



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III. Immunity from Loss v. Power to Acquire


1. Adverse Possession:

A. TITLE VERSUS POSSESSION



Basic Requirements for Adverse possession: forces transfer of title from title holder (“true” or “record” owner) to adverse possessor following unprivileged entry on property of another when following requirements are met:

  1. Actual possession

  2. Open and notorious” (visible)

  3. Possession has been exclusive

  4. Continuous possession

  5. Adverse and hostile” (without owner’s permission)

  6. For the statutory period


Brown v. Gobble, W.Va. (1996)

  • Facts: Plaintiffs claim adverse possession of two-foot tract of land forming boundary with defendant’s property.

  • Rule: Burden of proof is on party claiming adverse possession to prove by a clear and convincing standard of evidence all elements essential to title

  • Holding: Reversed and remanded


Romero v. Garcia, N.M. (1976)

  • Facts: Plaintiff and her deceased husband, son of defendants, purchased land from defendants, entered into possession, built a home on the land, recorded the deed, and lived in the home for 15 years until death of husband, when plaintiff moved to Colorado and remarried.

  • Rule: Deed is sufficient for purpose of color of title even though deed is void for lack of signature of member of community

  • Rule: Deed is not void for want of proper description if, with the deed and extrinsic evidence on the ground, a surveyor can ascertain the boundaries

  • Holding: Affirmed


Nome 2000 v. Fagerstrom, Alaska (1990)

  • Facts: Adverse possession claim in rural area suitable for homesites and recreational activities in warmer seasons. Defendants used cornerposts to stake off parcel, built a picnic area, placed a camper trailer, built an outhouse and fish rack, planted trees not indigenous to area, built a reindeer shelter, visited the parcel every other weekend, and walked along various paths on the land.

  • Rule: Establishment of continuous, notorious, and exclusive elements does not necessarily depend on existence of significant improvements, substantial activity, or absolute exclusivity, only that land be used for statutory period as an average owner of similar property would use it

  • Rule: Hostility is determined by application of objective test asking whether possessor “acted towards land as he owned it,” without permission of one with legal authority to give possession

  • Rule: Absent color of title, only property actually possessed may be acquired by adverse possession

  • Holding: Reversed and remanded


Jurisdiction-specific (non-standard) elements of adverse possession: some states require other things like: (1) color of title, (2) paid property taxes, (9) occupation in “good faith,” or (1) “act “under a claim of right”
Actual possession: absent a fence, one must demonstrate actual possession by engaging in significant activities on land such as: (1) building on the land and/or living on the land, (2) farming, (3) clearing the land, or (4) planting shrubs
Open and notorious: possessory acts must be sufficiently visible and obvious to put a reasonable owner on notice that their property is being occupied by a non-owner – sufficient acts include: (1) enclosing land by fence or wall, (2) building a structure, (3) clearing the land, (4) laying down a driveway, (5) mowing grass, (6) using strip for parking, storage, garbage removal, and picnics, (7) planting and harvesting crops

  • Adverse possessor need not demonstrate that “true owner” actually observed or knew


Exclusive possession: use is of a type that would be expected of a true owner of the land in question; occasional entry by the true owner may not defeat adverse possession claim
Continuous possession (tacking doctrine): requisite possession requires such possession and dominion “as ordinarily marks the conduct of owners in general in holding, managing, and caring for property of like nature and condition”; in event of sale, succeeding periods of possession by different persons may be added together (“tacking”) if they are in privity with one another (original adverse possessor meant to transfer title to property to successor)
Adverse or hostile: use is non-permissive; any showing that true owner has permitted use will defeat the claim
Adverse Possessor’s state of mind: 4 approaches

  1. Objective test based on possession, meaning the state of mind is irrelevant (majority rule)

  2. Claim of right: adverse possessor must allege “claim of right” generally requires just treating the land as an average owner would

  3. Intentional dispossession: adverse possessor must be aware that he is occupying property owned by someone else and must intend to oust or dispossess the true owner. This may be phrased as a “claim of right”

  4. Good faith: only those who mistakenly occupy property owned by someone else can acquire ownership by adverse possession.


Defenses to (combating) adverse possession

  1. Knock down fence or offending intrusion (self-help)

  2. Grant permission/license (preferably in writing)

  3. Bring lawsuit for trespass seeking injunctive relief

B. JUSTIFICATIONS FOR ADVERSE POSSESSION

Arguments for Adverse Possession:

  1. Providing a degree of certainty of ownership to possessors of land by eliminating the possibility of stale claims to land title

  2. Encouraging maximum utilization of land

  3. Protect the expectations of the adverse possessor


Arguments against Adverse Possession:

  1. Possessor could be given a prescriptive easement rather than pursue adverse possession

2. Prescriptive Easements, Encroaching Structures, Border Doctrines, and Economic Analysis

A. PRESCRIPTIVE EASEMENTS



Community Feed Store, Inc. v. Northeastern Culvert Corp., Vt. (1989)

  • Facts: Dispute over use of shared gravel area between retail store and business. Vehicles entering plaintiff’s loading area would use the gravel area for turning and backing. Defendant purchased land in 1956, but a new survey in 1984 conclusively established bulk of gravel area used by plaintiff’s vehicles actually belonged to defendant. Defendant then erected barrier to prevent use of the area.

  • Rule: Elements of prescriptive easement: adverse use, which is open, notorious, hostile, and continuous for statutory period, and acquiescence in use or possession by person against whom claim is asserted (same as adverse possession, but involving “use”)

  • Rule: Extent of use must not be proved with absolute precision, but only as to general outlines consistent with the pattern of use throughout the prescriptive period

  • Rule: Open and notorious use presumed to be adverse

  • Holding: Reversed, plaintiff established sufficient evidence of prescriptive easement


Elements: same as for adverse possession, except claimant must show adverse “use” rather than adverse “possession”

  • Most courts drop the “exclusivity” requirement

  • Many courts require proof by clear and convincing evidence

  • Successful claims result in right to continue kind and amount of use that persisted during the statutory period


Claim of right: use is not permissive but is engaged in by the claimant regardless of wishes of the owner of the land

  • Generally superfluous with the non-permissive requirement

  • Some courts interpret to impose requirement regarding adverse user’s state of mind, defeating claim if user did not intend to trespass but believed they had landowner’s permission


Acquiescence: competing interpretations of “acquiescence” element

  • Merely means owner did not assert right to exclude by bringing a trespass action (renders the requirement duplicative and unnecessary)

  • Landowner must have known about the use and passively allowed it to continue without formally granting permission

  • Landowner would or should have known of use (duplicates “open and notorious” requirement)


Presumptions as to permission: most states presume use by a non-owner’s use of land is non-permissive

  • Minority of courts presume that use (unlike possession) is presumptively permissive

  • Some states protect owners from prescriptive easements over large bodies of unenclosed land under a “neighborhood accommodation exception”


Negative prescriptive easements: negative prescriptive easements cannot be acquired in the United States – justified on three grounds:

  • Owner claiming prescription must be trespassing or otherwise interfering with true owner’s rights

  • Lawful use of one’s own property does not place true owner on notice that they must bring a lawsuit to protect themselves against loss of rights

  • Would interfere too much with free development of land


Acquisition by public: strong trend of modern cases is to recognize public may acquire prescriptive easements, while also presuming public access to private land is permissive in absence of clear evidence to contrary, defeating claim for prescription

B. OTHER INFORMAL WAYS TO TRANSFER TITLE TO REAL PROPERTY


Informal transfer doctrines: unlike adverse possession, rules may apply even when non-owners have occupied property in question with the true owner’s permission
Encroaching structures: Majority of states adopt relative hardship doctrine, refusing to grant injunctive relief where: (1) encroachment is innocent, (2) harm is minimal, (3) interference in true owner’s property interests small, and (4) costs of removal substantial – instead order payment of damages or a forced sale of property from landowner to owner of encroaching structure

  • Minority of courts hold property owner has absolute right to an injunction ordering removal of encroaching structure, no matter cost involved or relative value of properties or extent of encroachment

  • Removal of encroaching structure ordinarily ordered if builder knowingly built on neighboring property, without regard to relative hardship


Informal transfer doctrines: unlike adverse possession, rules may apply even when non-owners have occupied property in question with the true owner’s permission
Somerville v. Jacobs, W.Va. (1969)

  • Facts: Plaintiffs thought they were building a coca-cola plant on their own property but built the factory on defendant’s lot, who were unaware of the construction. Defendant’s then claim ownership of building and its fixtures on theory of annexation.

  • Rule: An improver of land owned by another who through a reasonable mistake of fact and in good faith erects a building entirely upon the land of the owner, with reasonable belief that such land was owned by the improver, is entitled to recover the value of the improvements from the landowner and to a lien upon such a property which may be sold to enforce the payment of such lien

  • Rule: Alternatively, improver entitled to purchase land improved for value of the land less the improvements; if landowner refuses, must either pay improve the amount by which the value of his land has been improved or convey the land to the improver for the value of the land without improvements

  • Holding: Defendants stand to be unduly and unjustly enriched at expense of plaintiffs

  • Dissent: Nothing less than condemnation of private property for private use; he who made mistake must suffer hardship rather than he who was without fault; defendant should have option of purchasing building, selling property, or requiring plaintiff to remove the building from defendant’s property


Mistake: Courts generally rule that when builder mistakenly builds structure on land of another, landowner becomes owner of the structure built on their land

  • Some courts take the position in Somerville and say a good faith mistake entitles builder to compensation, other courts say that trespassers cannot have the advantage of any benefits they have made to the property


Bad faith: Courts agree that one who deliberately builds on someone else’s property will not be granted a right to compensation and ordinarily will be required to remove the encroaching structure if the landowner so wishes
Betterment statutes: Some states have “betterment statutes” that allow choice between the owner selling the property to the builder or paying for the value of the improvements
Boundary Settlement: courts may uphold oral agreements between neighbors establishing the boundary between their properties if: (1) both parties are uncertain where the true boundary is or there is a genuine dispute over its location, (2) parties can prove the existence of an agreement over the boundary, (3) parties take possession to the agreed line

  • Longstanding recognition of a boundary can be enforced even without oral agreement

  • Can also be established by estoppel is one owner erroneously represents to another owner the boundary line and the second builds improvements in reliance that encroach on the true boundary; some states may even find estoppels in owner’s silence in face of knowledge neighbor is building encroaching structure


Laches: equitable defense based on circumstances which render inequitable the granting of relief to plaintiff, where plaintiff’s delay in bringing an action is “unexcused or unexplained” and circumstances change so that granting plaintiff relief would be inequitable to defendant, Plaintiff may not be able to bring the claim even if within statute of limitations
Dedication: transfer of real property from a private owner to a government entity, requires (1) an offer by the owner and (2) an acceptance by the public.
Riparian property/owners

Accretion of land (slow buildup of land caused by deposits of silt or sand) on a border that is a body of water belongs to owner

  • Erosion of land shrinks owners rights

  • Avulsion of land (sudden changes caused by earthquakes, floods, and other natural events) do not change property borders


Adverse possession of personal property: three different rules

  1. Conversion rule: starts running of the statute of limitations when the property is wrongfully taken

  2. Discovery rule: statute of limitations would start to run only when the true owner discovered or reasonably should have discovered where the stolen property is located (O’Keeffe)

  3. Demand rule: until the demand is made and refused, possession of the stolen property by the good faith purchaser for value is not considered wrongful (Lubell); much more protective of the interests of the true owner)

C. ECONOMIC ANALYSIS OF LAW

Economic Analysis of law: Descriptive analysis explains the existing pattern of legal doctrine as a set of rules that promote efficiency. Prescriptive/normative analysis uses criterion of economic efficiency to help determine what the legal rules SHOULD be.

  • Market value determined by how much individuals are willing and able to pay for entitlements

  • Transactions include three elements: (1) initial distribution of property rights, (2) offer price by a non-owner, and (3) an asking price by an owner


Definitions of Efficiency

  • Pareto Superiority: if someone gains by the change and no one is injured or made worse off by it (voluntary exchanges)

  • Pareto Optimality: no further exchanges can be made that are Pareto superior, meaning no changes can be made without harming others or making them worse off

  • Wealth maximization (Kaldor-Hicks criterion): the benefits of the change outweigh the costs, meaning the winners from the change could fully compensate the losers and still be better off. (“potential Pareto superiority”) This one is the criterion most often used in the economic analysis.


Externalities: Costs imposed on third parties by legal actors that are not taken into account in the actor’s on revenue-cost determinations

  • Justice Brennan in Armstrong: those who profit from an activity should bear its costs – encompasses both a rights argument and a social utility argument

    • Rights argument: those who benefit from an activity should not impose costs on others

    • Social utility argument: economic actors should internalize their external costs to promote efficiency


Coase Theorem

  1. If there are no transaction costs, it does not matter which legal rule is chosen because any legal rule will produce an efficient result

  2. In the presence of transaction costs, the choice of entitlements by the courts may have an effect on efficiency. The courts may increase efficiency by assigning entitlements to the parties who would purchase them in the absence of transaction costs.


Criticisms of economic analysis

  • Efficiency is a function of the initial distribution of wealth

  • Offer/asking problem: result of transaction cost analysis dependent on which party is given entitlement initially and assumption that offer and asking prices are unlikely to differ much is arguably unwarranted

  • Different ways of measuring efficiency

    • Fair market value

    • Auction (looks at the willingness and ability to pay of the parties and focuses on the amount they would OFFER to get the entitlement)

    • Status quo (assign entitlement to the current owner and ask whether non-owners are willing and able to offer enough to get the owner to sell)

    • Redistribution (conclude that existing allocations of entitlement are unfair or presumptively inefficient and alter them)

    • Reverse auction (which party would ask the most to give up the entitlement; what is the asking price?)

    • Social welfare (decouple efficiency analysis from reliance on market measures (focus more on a combination of dollar amounts and subjective consideration of the magnitude, character, and distribution of benefits and burdens)

  • Difficulty of defining “voluntary exchange”: voluntary exchanges increase social wealth by making both parties better off in their own terms, while involuntary or coerced exchanges do not make both parties better off

  • Difficulty of identifying transaction costs: deciding what is and is not a transaction cost is not always obvious

  • Efficiency has a conservative bias because it gives greater weight to the interests of the wealthy and the large corporations that currently wield substantial economic power and also tends to privilege interests of property owners over those of non-owners

  • Commodification: certain kinds of valued resources should not be traded in the market or otherwise treated as if they were commodities for sale (e.g. workplace safety conditions and slavery)




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