Blackman, Fall 2014
A) Statute of Limitation- limits the time in which one can bring a claim
1. Purpose: certainty and efficiency in land transfer and use
2. Law treats the adverse possessor as the actual owner after the SOL has run
1. Entry: often serves as “notice” and begins SOL
2. Open and notorious: use of the land must be made public, can be constructive
3. Continuous for statutory period: used in manner an average true owner would use it even if whole parcel is not utilized
4. Adverse and under claim of right (hostile)
a. “Claim of Title”- legitimate claim to land, ex: fraudulent deed
b. “State of Mind”- hostile vs. mistake
C) Van Valkenburgh v. Lutz
1. Foreclosure sale would have been invalid in the case of an actual adverse possession.
2. Lutz eventually conceded all but the right of way/easement, but went back to court claiming the entire lot via adverse possession
3. Majority: Lutz failed the continuous and adverse claim of right elements
a. Continuous: not substantially cultivated or improved b/c whole property was not utilized and uses were not an improvement (“actual occupation”)
b. Adverse Claim of Right: no claim of right because Lutz made an admission that Van Valkenburgh owned the land (bad argument b/c point of AP is that “someone owns it but I want it” and here they tried to obtain land regardless of ownership)
4. Dissent: Had adverse possession before first lawsuit so foreclosure was void from beginning. Took continuous element less literally.
D) Color of Title: documentation giving you a supposed claim to the land. Makes AP easier.
1. States of Mind (claim of right/title)
a. Objective- intent irrelevant
+ Connecticut Doctrine
b. Good Faith- (modern) inadvertent
c. Aggressive Trespasser- (Texas/common law) knowing
+ Maine Doctrine
E) Mannillo v. Gorski
1. Issue 1: Claim of right element
a. Majority: intent of trespasser is irrelevant (Objective Standard)
3. Issue 2: Open and notorious element
a. Majority: true owner must have actual knowledge
F) Howard v. Kunto
1. Lot C owned by Howard (purchased), but Kunto’s house is on C. AP decides ownership here.
2. Issue 1: Is AP defeated because of the exclusively summer occupancy? No. Only requires reasonable use under the circumstances.
3. Issue 2: Can tacking satisfy the statutory period? Yes.
4. Tacking- two parties combine occupancy periods to meet continuous statutory period. Requires privity, or an actual legal relationship with previous owner.
5. Issue 3: Is there a claim of right even though Kunto didn’t know he was squatting? Yes. Relied on good faith standard since they had successive deeds. (modern trend)
1. SOL stopped if disabilities are present. Must exist at time cause of action (entry) occurred. Clock begins once disability ends. If disability starts after the entry, clock is not stopped.
2. One legal disability cannot be tacked onto another to extend time. First one wins.
3. Types: minors, unsound mind, imprisoned
H) O’Keeffe v. Snyder
1. Issue: When does SOL begin?
2. Jersey SC wanted to create law for AP of chattels b/c they don’t fit well into real property constructs. Hard to know where stolen property ends up.
3. Discovery Rule: cause of action accrues when injured party discovers (objective), or by exercise of reasonable diligence and intelligence should have discovered (subjective), facts which form the basis of the cause of action. BOP on owner, rather than possessor as in AP.
4. Because its unlikely that a stolen chattel will be open and notorious, court replaces it with the discovery rule. Once it becomes open and notorious, the clock starts because the owner should then know its state.
Brokers and Home Buying
A) Home buying process
1. mortgage application
2. property search and offer
3. sign contract and perform title search/inspection
B) Home buying contract elements
1. purchase price (plus earnest deposit/money to take house off market between contract and closing)
2. description of property
3. good title (abstract of title)- seller actually owns it
4. warranty of title- restrictions on land use/maintenance
5. date of transfer (closing)- must be completed by this date or transaction terminates
C) Escrow- third party holds onto money until transaction is completed
D) Deeds and Title
1. “good and merchantable title”- (warranty of merchantability) good to sell
2. Title is not the same thing as a deed. Deed is the instrument or document evidencing title, title is the legal relationship between person and property.
E) Licari v. Blackwelder
1. P’s cause of action- broker breached duty by withholding information on true market value and misrepresenting buyer identities
2. Seller’s Broker- duty to act in best interest of seller. Not a duty of confidentiality.
a. fiduciary relationship to each party
b. receive commission from sale
3. Buyer’s Broker- fiduciary and confidential relationship to buyer only.
a. seller’s broker not obliged to pay buyer’s broker a cut b/c no privity exists
b. drive down prices
Statute of Frauds
A) Sale of land under SOF
2. signed by the parties to be bound
1. partial performance (paid price, took possession, or improved)
2. estoppel- based on fairness and detrimental reliance
C) Hickey v. Green
1. signed and endo
quality exists separately from contractual agreements, thus privity is not required. Merely doing the job puts you on the hook to any subsequent buyer for a reasonable time.
3. Merges tort, contract, and property law for the sake of fairness and restitution for harm.
4.Homeowner must show:
a. latent defect
b. caused by the contractor
c. which manifests itself within a reasonable time after purchase
d. which causes economic harm
5. Public policy rationales for not requiring privity:
a. latent defects do not manifest themselves immediately
b. ordinary buyer not in position to discover defect
c. subsequent purchaser has little opportunity to inspect
d. encourages sham first sales to insulate builders from liability otherwise
e. builder will not unduly be taken unaware by extension of warranty
f. economic policies
Remedies for Breach of the Sales Contract
A) Jones v. Lee
1. Market price: what someone would actually pay for the house.
2. Issue: what was the actual market value of the house? This will determine damages. 610k was the original purchase price, after the breach they sold it for 540k, so which price is the actual market value? Remanded to determine this fact.
3. Damages = market value – sales price
4. Punitive Damages: (tort concept) awarded to punish egregious conduct.
a. rare in property cases but appropriate here because of the buyer’s conduct
B) Kutzin v. Pirnie
1. Seller lost 12k on subsequent sale, but still had 36k deposit from first contract, so he is up 24k. Can he keep any of the deposit?
2. Efficient Breach: voluntary breach of contract and payment of damages by a party who concludes that they would incur greater economic loss by performing under the contract.
3. Rule: In order to prevent unjust enrichment, restitution cost must be offset by the deposit minus the amount of the injury. Thus, seller could only keep 12k of the deposit.
4. Policy: encourage home buying. Problem: people may make throw away deposits because they know they can get them back.
5. Liquidated Damages: part of contract that states “if you breach, you owe me this much.” Courts dislike these provisions because it dictates damages beforehand regardless of fairness.