QUESTION ONE (Suggested Time: One Hour)
In 1982, Ginger was looking for property on which to open a business to be called Ginger's Accounting and Tax Preparation Service. Ginger's elderly mother, Mary Ann, owned a piece of land, Redacre, in the southern suburbs of New Smith City. Ginger thought Redacre would be perfect for her business, and she asked her brother Gilligan to talk Mary Ann into selling Redacre to her.
Mary Ann lived on a farm in the country 50 miles east of New Smith City, with her son Gilligan. Gilligan took care of Mary Ann; while she was of sound mind, she was confined to her bed by various physical ailments. Despite Ginger's request, Gilligan did not mention anything about Redacre to Mary Ann, as Gilligan knew that Mary Ann had not spoken to Ginger since 1966, when Ginger decided to have a child out of wedlock. Mary Ann had then thrown Ginger out of the house, and pronounced to the entire family that she had "disowned" Ginger, saying that her actions were "unforgivable."
Gilligan had always thought that Mary Ann's opinion of Ginger was petty and small-minded. In fact, Gilligan was so disgusted with his mother's behavior that he was constantly making up for it. Every year, Gilligan always sent Ginger a birthday gift using Mary Ann's money, and always marked the package, "Love, Mary Ann." This time, Gilligan took an even bolder step. On March 1, 1982, Gilligan told Ginger that he had spoken with Mary Ann and that Mary Ann had agreed to give Redacre to Ginger, as a birthday gift. The next day, Gilligan gave Ginger a deed to Redacre on which he had forged Mary Ann's signature. Ginger did not know that Gilligan had lied to her or that Mary Ann's signature had been forged. Likewise, since Mary Ann was confined to bed and knew nothing other than what Gilligan told her, Mary Ann never knew what Gilligan had done. Ginger attempted several times to contact Mary Ann to thank her for this gift, but Mary Ann (who was still bitter about the illegitimate child) refused to speak to Ginger or meet with her.
On November 1, 1982, Ginger began building a small office building (about 2,000 square feet of space) on Redacre. She opened her practice there on January 1, 1983, and has continued to operate successfully at that location ever since. On May 1, 1983, Mary Ann died of natural causes. Her will, which was valid, left all of Redacre to Gilligan.
On December 15, 1991, Gilligan came to Ginger's office at Redacre. He noticed a model building in Ginger's waiting room, and pointing to the model, asked "What's this?" Ginger responded, "That's the architect's model of my new building. I'm getting ready to add another 5,000 square feet of office space. Construction will start as soon as I can get the financing, which I hope will be next month. So, Gilligan, what brings you here?"
Gilligan then confessed to Ginger that he had forged the deed he gave her back in 1982, and he told her that in fact Mary Ann had left Redacre to him in her will. Ginger was stunned, and immediately responded "Look. You gave me that deed. So it was forged, but so what? If you own it now, you can just give me a new deed." Gilligan said, "Mom didn't leave me with much else, and I need money, so if you want me to sign a new deed, I'll need you to pay me $50,000 for the land." Ginger refused and asked Gilligan to leave. Gilligan said, "Okay, sis, but get ready to get sued, because you're on my land."
Gilligan did not immediately file a lawsuit to evict Ginger. Construction began on Ginger's expansion on Redacre on February 1, 1992 and was completed on June 1, 1992. On July 1, 1992, Gilligan filed a lawsuit seeking a declaration that he was owner of Redacre and that he was entitled to evict Ginger.
The following statute applies to actions to recover possession of land in the state in which New Smith City is located:
§ 245. Limitations Period for Recovery of Land in Possession of Another. No action for the recovery of real property or the possession thereof can be maintained unless it appear that the plaintiff, or the plaintiff's ancestor, predecessor, or grantor, was seized or possessed of the property in question, within the time period required as set forth below. In an action for the recovery of real property or the possession thereof, a person who establishes legal title to the land is presumed to have been possessed of the land within the time period required as set forth below. The occupation of such land by another person is deemed to have been subordinate to the legal title, unless the occupant can show that the occupation was in good faith and that the land has been held and possessed adversely to the legal title for 10 years before the commencement of the action, or for 7 years before the commencement of the action in the event that the occupant claims title to the land in question under color of title by or through some deed made upon the sale of the premises.
Identify the possible claims that Ginger can make against Gilligan with respect to Redacre, and explain how the court should resolve these claims (and why). In answering the question, if there are additional facts or information that you believe you need in order to formulate an answer, indicate what additional information you would need to know, and how it would affect your analysis and conclusions.
QUESTION TWO (Suggested Time: 45 minutes)
Trump rented a furnished apartment in Trump Towers to Sue, a law student, for two years, beginning on August 1. When Sue arrived at the apartment that day to move in, she discovered Lance, the prior tenant, was still there. Sue complained to Trump, and Trump finally got Lance out of the premises on August 15. Sue took possession of the apartment the next day.
One week later, debris from an explosion at a construction site across the street shattered one of Sue's windows. Sue demanded that Trump replace the window, but Trump did nothing. As a result, rain coming through the window began to damage the living room floor, which started to warp.
The apartment above Sue's was occupied by Charles, a member of an aspiring musical group. In October, the group began rehearsing every day in Charles' apartment, four hours per day. The rehearsals interfered with Sue's studying to the point that she complained to Trump, but again Trump did nothing. These rehearsals continued for about six weeks, when Charles and other members of the band were arrested for possession of drugs. After their arrests, the rehearsals stopped.
On November 15, Sue returned from class to discover that the stove in her apartment no longer worked. Disgusted with this and the previous indignities she had suffered, Sue stormed to Trump's office, slammed the key on his desk, and said "I've had it. I'm out of here. This place is a joke." Trump took the key without saying a word.
Trump now wants to know whether he can recover from Sue for unpaid rent (Sue has not paid rent since October) and for rent that accrues in the future. What advice would you give to Trump? What additional information, if any, would you need to discover and how would it influence your analysis?
QUESTION THREE (Suggested time: 40 minutes)
In 1996, Denise Green and Roger Brown became engaged and planned to be married on February 1, 1997. In anticipation of establishing a new home together, Denise and Roger decided to purchase a home at 1313 Mockingbird Lane in Newville, East Virginia. Denise and Roger completed the purchase on December 1, 1996, and the seller delivered a deed conveying the home "to Denise Green and Roger Brown as tenants by the entireties." Denise and Roger moved into the home immediately.
Two months later, on February 1, 1997, Denise and Roger were married as scheduled.
After two years of marriage, Denise decided to divorce Roger because he had been physically abusive and because she discovered that he had been having an affair. She moved out of the Mockingbird Lane house and filed for divorce on February 1, 1999. [Note: East Virginia is a "no-fault" divorce state. This means that after a husband and wife have been separated for one year, the court may enter an order dissolving the marriage. Thus, when one party files for divorce, the court does not question whether there are legitimate grounds for the divorce. Instead, once a party files for divorce, the only question is whether the parties have been separated for one year. After the one-year period elapses, the court enters an order dissolving the marriage if the petition for divorce has not been withdrawn. The court cannot enter an order of divorce before the end of the one-year separation period.] Although East Virginia is a no-fault divorce state, Denise's divorce complaint did allege that Roger was physically abusive; further, Denise had told her parents, her brother Frank, and several friends about Roger's behavior.
Two weeks later, on February 15, 1999, Denise died in a work-related accident. Her will stated, among other provisions, that "It is my will that my land shall go to my brother Frank." [Assume that the will satisfies all applicable statutory will requirements.]
On April 1, 1999, Frank filed an action against Roger seeking a partition sale of the Mockingbird Lane home. In his answer and counterclaim, Roger alleged that Frank had no valid interest in the home and asked the court to quiet title to the home in Roger.
How should the court rule, and why? If you believe that additional information is needed in order to evaluate the problem fully, please indicate what additional information is needed and how it would influence your analysis.
In addition, the next two questions are two essay questions from the past two Property take-home final exams. [These last two questions address issues that we will talk about in the upcoming chapter with regard to easements, licenses, and covenants, and that we haven't discussed in class yet, so don't freak out if you look at the questions now and think "We didn't talk about any of this!" We will, soon.]
ESSAY QUESTION ONE. David Thompson is a builder and land developer in the community of Smithville. In 1990, Thompson obtained the necessary approvals to subdivide a 150-acre parcel of land that he owned in Smithville into a 50-lot subdivision which he designated as Red Wolf Acres. At the time of subdividing the land in 1990, Thompson recorded a declaration in the county land records which contained the following covenants, conditions, and restrictions (CCRs):
1. All covenants affecting lots within Red Wolf Acres shall bind the owners of each lot and their heirs, successors, and assigns.
2. Unless Declarant David Thompson ("Thompson") shall be dead, no longer in the business of providing construction services, or shall have waived this covenant, Thompson shall have the right to serve as the general contractor for the original dwelling constructed on each lot within Red Wolf Acres.
Thompson began selling lots within Red Wolf Acres in 1991. By 1992, he had sold all 50 lots, including the sale of Lot 46 to Allen and Marge Graves. Lot 46 is the only lot that remains unimproved; Allen and Marge Graves originally purchased it expecting to build a home on it, but they moved to Spain when Marge was transferred and subsequently decided to hold the lot as an investment. The other 49 lots contain homes that were constructed by Thompson pursuant to construction contracts entered into with the original purchaser of each lot.
On January 25, 2012, Allen and Marge Graves contracted to sell Lot 46 to Paul Litton for a price of $25,000. The sale closed on April 1, 2012, with Allen and Marge Graves delivering a deed conveying Lot 46 to Litton.
When Thompson (who is still alive and building homes in Smithville) learned of the sale, he contacted Litton to begin negotiating a construction contract. Litton responded "my brother-in-law has a fledgling construction business and I plan to have him build my house." Thompson then sent Litton an e-mail message and confirmatory letter in which he stated:
Under the declaration for Red Wolf Acres, I have the right to serve as contractor on the construction of the original dwelling built on your lot, unless I release that covenant. You will either use my construction services or pay me $15,000 to release my rights under the covenant.
Litton responded by filing a lawsuit seeking a declaration that Covenant 2 is not enforceable against him. Thompson has filed a counterclaim seeking an injunction to require Litton to use his contracting services or, alternatively, damages if Litton breaches the covenant. You are the judge before whom the lawsuit is pending. How will you decide Litton's complaint and Thompson's counterclaim? If you believe that you need additional information to reach a definitive conclusion, indicate what additional information you need to discover, and how it would influence your analysis.
ESSAY QUESTION TWO. Stan Cranky, a real estate developer, built a 12-story office building, Tiger Towers, on the outskirts of the growing metropolis of Gilroy. He leased the top 8 floors of the building to IBM under a 20-year lease beginning July 1, 2006, and IBM relocated its entire "Watson" research and development team to Tiger Towers. Under the lease, IBM paid $2 million per year in rent. IBM was particularly attracted to Tiger Towers because Tiger Towers had ample and convenient free parking adjacent to the building (by contrast to downtown office towers where parking for IBM employees would have been expensive and inconvenient).
By 2010, traffic congestion in Gilroy was becoming a substantial problem. Because Gilroy had no public transportation, an entrepreneur named Lambert sensed a market opportunity and decided to start a bus service for suburban commuters. Lambert wrote a letter to Cranky, stating:
I've noticed that Tiger Towers seems to have excess parking capacity. I'd like to use 100 spaces as a "park and ride" area for my new bus service. Customers would leave their cars at Tiger Towers during the day, and take my bus downtown. I'll pay you $26,000 per year for the right to use 100 spaces each weekday for the next three years, effective January 1, 2011. My check for $26,000 for the first year is enclosed, should you agree.
Cranky cashed the check and wrote back to Lambert: "Agreed." [You may assume that this exchange of letters is the only written evidence of the Lambert-Cranky agreement.]
Beginning January 1, 2011, Lambert began his bus service, but his ridership never met his ambitious projections due to competition from another new bus service, Doc & Norm Direct (which had cheaper prices). After six months of losses, Lambert ceased operations. Doc & Norm Direct paid Lambert $25,000 to acquire the assets of his business, including Lambert's buses and his rights to use spaces at Tiger Towers. Doc & Norm Direct began providing bus service from Tiger Towers on September 1, 2011, serving between 90 and 140 customers per workday. Very shortly thereafter, IBM employees started to complain to IBM management that Doc & Norm Direct customers were parking in the spaces immediately next to the building, requiring the employees to have to park farther from the building and walk a longer distance (100-200 yards) to reach the building. IBM management was already growing concerned because the rent to which IBM had agreed in 2006 was now substantially above market rental rates (due to the economic downturn). On October 1, 2011, IBM sent a letter to Cranky demanding that Cranky prevent Doc & Norm Direct customers from parking in the spaces adjacent to the main building entrance.
(a) For purposes of this subquestion, assume that Cranky does not respond to IBM and takes no action to address parking by Doc & Norm Direct customers. What remedies, if any, would IBM have against Cranky based upon this situation? Explain. If you need additional information, specify what additional information you would need to discover and how it would influence your analysis.
(b) List and evaluate the merit of each of the arguments Cranky might raise in seeking an injunction against Doc & Norm Direct with respect to customer parking at Tiger Towers. If you need additional information, specify what additional information you would need to discover and how it would influence your analysis.