Property II
Professor Barros
I. The Law of Nuisance
a. Introduction
i. The way you can use your land, tort law
ii. Common law – only use your land in a way that would not injure the use and enjoyment of other property
1. Ex: Tannery – give off smells and would interfere with other’s use around
iii. Concept of – Sic utere tuo ut alienum non laedas – one should use one’s own property in such a way as not to injure the property of another
b. Intentional tort?
i. Intent to do the act, not intent to do a tort (know or reason to know something will occur from the act but not necessarily a nuisance)
ii. Was the act reasonable? If yes then no liability, if no then liable
1. Does it stink?
a. Lead to physical illness or harm the health of another person (common law – sic utere)
2. Rest. 2nd Torts Basic – Harm v. Benefit
a. Nuisance if the harm caused is greater than the benefit
b. Reasonable if harm is less than benefit
3. Alternate Rest. 2nd Test (pg. 643)
a. Only works when remedy is damages
b. If a company can pay damages without going out of business then they should
i. Don’t want to shut it down but want people to recognize that harm is real
ii. Act will continue if pay compensation because benefit outweighs the harm
4. Example – Morgan v. High Penn
a. Invasion was intentional (intentionally operated a refinery)
i. Reasonable?
1. Stink? – Gave off noxious fumes
a. Probably nuisance
2. Rest. 2nd? – Need oil refinery – Look at benefit in monetary terms of refinery – then put $ value on the people (Oil co. benefit – $5 million, harm – $50,000)
a. No nuisance
3. Alt. Rest. 2nd? – Oil company pay people compensation for harm and society continues to get benefit of your use
a. Yes nuisance (but will continue)
5. Estancias v. Shultz
a. Air conditioning units, noise – decreased apt. building value, builder had 2 choices – one or multiple units – saved $40,000 and cost more to change now
b. Rest. Test – Benefit outweighs the harm ($40,000 to $15,000)
c. Alt. Rest. Test – maybe not shut down but effectively buy out
iii. If NO, then it was unintentional.
1. The actor will be liable for negligence, recklessness, and usually dangerous acts (strict liability)
c. Remedies
i. Injunction – property rule remedy
ii. Damages – liability rule remedy – best when there are lots of parties (transaction costs are higher)
1. Boomer v. Atlantic Cement
a. Injunction – neighbors could shut down cement plant – plant could always buy out the injunction
b. Damages – neighbor allows pollution as long as they are paid then they cant say no to the plant
i. Two approaches?
1. Temporary – Every year make a new award of damages for each year of the nuisance
2. Permanent – Figure out what the actual permanent damage is and put a dollar amount on it and get it done now (would have to take into account future market values)
c. Rest. Test – harm – peoples health/market value, benefit – 40 million investment/ many employees
i. Court probably didn’t want to put that many out of work – probably not a nuisance
d. Alt. Rest. Test – created because of Boomer – pay damages and still continue the use (needed because harm v. benefit would allow a harm w/o compensation)
i. If your creating substantial damage and you can afford to compensate the substantial damage then we will say it’s a nuisance award compensation (damages) but not issue injunction that would shut business down
ii. Standard remedy was an injunction – abating the nuisance (abatement) – recent development of damages for nuisance adds flexibility to nuisance law – injunctions are crude damages (all or nothing)
2. Why damages instead of injunction?
a. 40 P v. 1 D – if all 40 get injunction then D could settle with one and still be shut down because all 40 have the right to the injunction
b. Transaction costs make it more likely inefficient results will occur if we use a property rule – because not reach agreement and will shut down which is a loss for society
3. Damages more appropriate for Boomer – more plaintiffs and higher transaction costs
4. Damages don’t allow for bargaining – value is awarded by jury
iii. As matter of theory, liability rules (damages) are better in situations where there are more parties (typically more P’s but relevant for more D’s too).
1. When there are many P’s then damages may be a good idea, because of transaction costs (especially holdout problems). That is, transaction costs may prevent economically efficient bargaining.
d. Coming to the Nuisance
i. Person complaining of the nuisance came to the location fully aware
pany, person), benefit held by some 3rd party, no dominant tenement (not tied to ownership of land, not tied to parcel of property)
i. Ex: Power Line easement – company has easement to cross my property to put lines, company owns the easement
1. Company not dominant tenement – have to be land
e. Quasi easement – one person owns the whole property but is using one part for the benefit of the other
i. Relevant when one person splits the property but does not reserve an easement in himself
f. Can grantor reserve an easement in a third party? (Willard)
i. Common Law (Majority) – No
1. How to do it in jurisdiction that says no?
a. A grant easement to T and sell in fee to B
b. A grants blackacre to T, T grants blackacre to B reserving an easement
ii. Modern Rule (Minority) – Yes
g. Always be servient tenement with an easement
h. Appurtenant v. in gross – look to language of deed (person or parcel) – if unclear court favors appurtenant
i. Express
i. Grant
1. Somebody conveys an easement to another party by deed (written instrument required by SOF)
ii. Reservation
1. I own the property that I am selling you in fee simple but I am reserving an easement for myself (holding it back from what I am granting)
2. A is granting the property to B but is holding back from what is being conveyed an easement over the property (only seen when property is being conveyed)
a. Don’t just convey in fee because of zoning issues – if easement runs through middle of property could make the lot less than zoning requirements
j. Dominant – property benefitting from easement
k. Servient – property that is burdened by the easement
i. Both run with land
l. Prescription
i. Use it with some frequency
1. Could be seasonal, hunting access
2. Like adverse possession but for easements, owner could be using at same time
3. Ex: walking across someone’s property to get to beach over time could turn to prescriptive easement