FINAL EXAMINATION IN PROPERTY

SPRING 2009

PROFESSOR PERRITT

MODEL ANSER

QUESTION I

A.     Dozier is going to have a hard time recovering for copyright infringement. To have any chance at all, he must register his copyright with the U.S. Copyright Office. Only then will a federal court have subject matter jurisdiction. For a copyright to exist, Dozier’s humming must be “original,” his expression must be “fixed,” he must be able to establish a prima facie case of infringement, and Newpup must have no valid privileges. Originality is problematic because all Dozier did was hum a pedestrian melody, with only the three notes of a rudimental tonic triad. It’s not clear there was enough creative effort in this to represent the mere idea of the key of C, and the tonic triadic chord, which surely are not copyrightable. But the level of creativity involved to satisfy the originality requirement is minimal, and his humming, especially while he was smoking and drinking, probably has enough unique qualities of rhythm, timbre, and dynamics to satisfy the originality requirement.

A tougher problem is satisfying the fixation requirement. If Dozier had done what Newpup did—record the humming himself, that clearly would establish fixation. But he did not do it, and did not know that Newpup was doing it. So fixation could hardly be said to have occurred “by or under the authority of the author,” as 17 U.S.C. § 101 requires.

If he has a copyright, Dozier will have little trouble establishing prima facie infringement. Newpup violated his reproduction right, his public distribution right, reserved exclusively to the copyright owner under 17 U.S.C.§ 106. She also may have violated his derivative work right if her contribution had sufficient originality to qualify as a derivative work, as it might have if she did something special in the way she recorded the sound of the humming.

But Newpup has non-trial claims that what she did was privileged by the fair-use doctrine. Her recording and posting was for the purpose of embarrassing Boxer, not economic exploitation. This is analogous to satire, which tilts in her favor under the first factor of fair use. The second and third elements, nature of the copyrighted work, and amount and substantiality of the portion copied, tilt in Boxer’s favor: the humming was “creative” rather than factual, and she posted the whole “song.” The fourth factor however may tilt in her favor. It is unlikely that any market would have existed for the “song,” but for her YouTube posting, which resulted in unexpected popularity. Dozier will argue that he was entitled to exploit this inherent popularity, and now is prevented from doing so by the free posting. The fourth, market-impact, factor thus can run in either Newpup’s or Boxer’s favor, depending on who is the most persuasive.

B.     Burke has a fairly strong case against Boxer for waste—for diminishing the value of her future interest—a revision after his estate pur autre vie ends with her death. Even though she won’t be alive to take possession then, this is a reversion in fee simple absolute and she is entitled to protect its value to her heirs against waste. The problem is whether Dozier’s conduct constituted waste. His leasing of the room to Dozier surely did not. Boxer has a possessory estate and nothing in the grant restricts his power to alienate it in whole or in part. There is no trigger that would extinguish it before Burke’s death. So the only question is whether his conduct has diminished the value of the future interest. Burke has two related arguments. First, she can argue that the meth lab will cause both a reputational and a physical injury to the premises that will be manifest when the future interest becomes possessory. The market value of a condo unit used for meth production presumably is less than that of a unit which does not have such a sordid history. Also the chemicals involved in meth production may leach into the structure and be difficulty to remove, similarly diminishing the value. Also she can argue that Boxer caused the damage done by the Blackwater people because a raid by someone—the police or the DEA, if not by Blackwater—was substantially certain to occur when Boxer permitted Dozier to set up the lab in the bedroom. Thus he legally intended these consequences. If Burke can prevail in this causation argument, the damage making the unit “uninhabitable” surely qualifies as waste.

The problem, of course, is that she was the direct cause of the Blackwater raid, not Boxer or Dozier. The most probable outcome is that her waste argument will rise or fall based on the degree of harm to the future interest occurring from the meth lab before the raid occurred.

She has no action for nuisance because she has no possessory interest in the unit.

C.     Boxer has a strong case against Burke for trespass and for breach of the covenant of quiet enjoyment embodied in her general warranty deed to him. Burke has no possessory interest, and thus her sending her Blackwater agents to enter the premises is a classic common-law trespass to land. Damages are not an element. The tort was complete as soon as they entered without Boxer’s permission. But Burke is liable for all the resulting damage, which is substantial. She also is liable for trespass to chattel or conversion for any damage to personal property caused by Blackwater.

The covenant of quiet enjoyment warrants against interference by or on behalf of the grantor with the grantee’s possessory interest. The invasion by Blackwater and the resulting uninhabitability caused by the damage they did surely constitutes an interference with Boxer’s possessory interest. And the Blackwater raid surely occurred on behalf of Burke. The only problem for Boxer in establishing liability on this theory is that the traditional interpretation of the covenant of quiet enjoyment in the conveyance context, as opposed to the landlord tenant context, is that it protects only against assertions of superior title resulting from conduct by the grantor. Neither Burke nor Blackwater asserted superior title, so we will have to establish that Burke’s covenant of quiet enjoyment should be interpreted as broadly as a landlord’s—extending to any substantial interference with possession. The strength of this argument should be evaluated with further research.

Burke will likely argue that Boxer could have no possessory interest in the meth production and the beer sales because they were illegal. Thus that aspect of possession was never part his of his bundle of rights and thus the law provides no remedy for interference with them. Boxer’s answer is that Burke not only interfered with the meth production and beer sales; her agents made the place uninhabitable, and living there certainly was part of Boxer’s bundle.

D.     As a co-tenant, Dozier has an undivided interest (presumably half) in the entire unit. The facts do not support a tenancy by the entireties because Boxer and Dozier presumably are not married, and there are no facts suggesting a right of survival and the unity of time is not satisfied. But it does not matter, because the respective rights of the concurrent owners are the same regardless of which type of tenancy it is. Dozier’s interest permits him to do whatever he wants in the premises, as long as he does not commit waste or interfere with Boxer’s concurrent possessory interests. Boxer would argue that Dozier has committed waste because of the meth lab, under the same factual arguments developed in the answer to subquestion (B). In support of his waste argument, he will argument that some kind of raid, resulting in permanent damage, was substantially certain to occur and therefore that Dozer is liable for the damages caused by Blackwater as well as for the damages caused by the meth lab itself.

Boxer also will argue that he has been ousted, because no one in his right mind would continue to occupy a premises used for a meth lab. The problem is that he seems to have contented to—indeed, invited—Dozier’s conduct, so he will have a tough time arguing that the conduct is so offensive that he has been constructively deprived of his possessory interest.

Unless he can establish an ouster, Boxer is not entitled to share the revenue resulting from the meth production and beer sales. Dozier did not rent the premises to a third party; he just used it to produce a profit for himself and has no obligation to share in the profits unless they result from more than normal extraction of non-renewable resources, which they do not.

Boxer also may have an argument that Dozier must pay his fair share of the cost of the internet connection used for his business.

To be sure public policy may prevent a judgment in favor of Boxer’s getting a share of the proceeds from illegal activity, but that is separate from the property-law analysis of the respective rights of co-tenants.

It is not altogether clear that co-tenants can maintain a nuisance action against either other. I would have to research that question. In any event, establishing a nuisance by Boxer would essentially merge into supporting his claim for waste.

E.      This analysis is similar to that in subquestion D, except that the positions of the parties is reversed. Dozier now claims ouster and waste by Boxer. He would argue that Boxer committed waste by not having the Blackwater damage repaired and thus leaving the premises uninhabitable. He would argue ouster resulting from Boxer’s leasing the entire premises to the rehabilitation service for the entire remaining term of their co-tenancy. Also in a jurisdiction requiring a co-tent to share rental proceeds from a third party even without establishing an ouster, Dozier would be entitled to a share of the rent even if he cannot establish waste or an ouster. But he has a pretty good shot at establishing an ouster. The facts suggest that the entire premises were leased to the rehab service without any reservation of occupancy rights for Dozier. It would thus be a trespass against the rehab service’s leasehold if he tried to exercise his possessory interests. That he is in prison and thus not in the position to exercise these possessory interests right now, personally, does not matter. He may get out of prison before the estate expires, and even if he doesn’t he is entitled to possession, and is entitled to alienate his entitlement to possession.

Boxer will argue that Dozier cannot establish ouster without demanding possession, and he cannot do that until he is out of prison, but the lease to the rehab service so clearly is inconsistent with Dozier’s undivided interest that it would be a needless formality to insist on a demand.

F.      Dozier’s legal theories change significantly if he is still a tenant instead of a tenant-in-common. Now he has no claim for waste or for a share of the rent from the rehab service. But he does have claims for breach of Boxer’s covenant of quiet enjoyment and warranty of habitability. Boxer, as Dozier’s landlord, impliedly covenanted not to interfere with Dozier’s quiet enjoyment of Dozier his tenancy, i.e. not to interfere with his possession. By leasing to someone else, Boxer interfered with Dozier’s possession. Boxer may argue that can’t possess because he is in prison, but tenants do not surrender their rights by not occupying the leasehold, and, at common-law, Dozier could have sub-let or assigned his tenancy while he was in prison, and Boxer is interfering with that.

The implied warranty of habitability obligates landlords to maintain residential rental premises in a condition fit for human habitation. Boxer has not repaired the Blackwater damages, which the question says renders the premises “uninhabitable.” So this seems like a slamdunk argument for Dozier. Boxer obviously has notice of the condition already.

Boxer would argue that Dozer has abandoned his leasehold, thus terminating the lease, and that Boxer’s lease to the rehab service is only mitigating the damages that Dozier otherwise would be liable for. That seems like a pretty good argument for Boxer unless Dozier had taken some steps to sublease or assign his interests, or unless his sentence might expire before the life estate is terminated.

Dozier’s claim of eviction would be weakened if the facts show that the rehab service would let him use the bedroom and bathroom, but this seems unlikely, especially if he were going to resume the operation of the meth lab.

QUESTION II

A.     The Club should sue Brunwald for trespass. Success depends on establishing (a) that the Club has a property interest, and (b) that Brunwald does not have a property interest.

The Club can establish a property interest vis-à-vis White is several ways. First, it may argue that it has an express easement by grant. There are several problems with this argument. First, there is no indication that White granted permission for the polo races in writing. Easements are property interests that, under the Statute of Frauds, must be in writing in order to be valid. Second, the language is ambiguous and could be interpreted as a license, legally revocable at the will of the grantor, rather than an easement. Third, the ATV races are outside the scope of a grant to conduct polo races, and thus beyond the boundaries of any property interest created by the license or easement.

Second, the Club should argue that any license ripened into an easement by estoppels, because the Club invested $10,000 (suggesting a real bargain on the polo ponies and the stables) in reliance on the license. This investment would have been obvious to White and anyone else. This theory does not avoid, however, the problem that the ATV races are beyond the scope of the easement. Moreover, it probably would estop only White from interfering with the Club’s property claim, and the putative trespasser is Brunwald—a third party to the license.

Third, the Club can argue that it has an easement by prescription. This is a better argument than the express-easement or easement-by estoppel arguments because it would be good against Brunwald as well as against White. A prescriptive easement arises under requirements similar to those for adverse possession:, (1) actual entry and (for adverse possession only) exclusive use, (2) obvious and notorious, (3) hostile to the owner of the servient estate, and (4) continuous use for at least the statutory limitations period. The Club engaged in continuous use—polo for 11 years and then ATV races for 10 years. If these two uses can be tacked, this exceeds the limitations period in Maryland of 20 years. Both polo games and ATV races are obvious to anyone and would appear to be conduct of an owner of the property, so the open and notorious requirement is not a problem. Hostility would be a problem as against White, because he gave permission for the polo games. That would result in, at most, only 10 years of hostile use—for the ATV races. That would not satisfy the 20 year period. But Brunwald did not give permission, and the Club wants to establish a prescriptive easement over any property SHE has in Eastern Shore Acre. The only remaining question vis a vis Brunwald is whether the polo and the ATVs can be tacked. The Club should argue that the hostile use is something like “recreation not involving walking,” which could involve polo or ATV races or stock car races, thus eliminating any need to tack apparently different uses.

An alternative argument against Brunwald is adverse possession—stronger against her than against White, because the Club’s use of the property was exclusive as against Brunwald, and may not have been as against White. The adverse possession theory should avoid any tacking problem because any use consistent with that of an owner can satisfy the use requirement of adverse possession, unlike easements, which are limited to particular uses.

Moreover, White clearly can establish adverse possession against Brunwald. If he owns the property, his license—even if it is no more than that—to the Club gives the Club a property interest sufficient to give the Club standing to sue Brunwald.

A final argument establishing a fee-simple absolute estate in White and thus validating his license to the Club, is that he is a bona fide purchaser for value without notice, thus extinguishing adverse claims arising earlier in his chain of title. The quitclaim deed from Claiborne to Rebecca English was not recorded and there is no conceivable way White could have known about it, unless someone told him about it, and there is nothing in the facts to suggest that this happened.

So the Club has an embarrassment of riches in establishing its property interest sufficient to support an action for trespass against Brunwald.

The question remains whether Brunwald had any property interest sufficient to support her physical entry and interference with the ATV races. She claims under Andrew’s title, presumably arguing that Andrew’s shifting executory interest in fee simple absolute passed to her and then vested and became possessory when the Club brought polo horses onto the property. Several competing interpretations of the quitclaim deed inform the RAP analysis. If the trigger necessary to ripen Andrew’s interest is interpreted as being “pulled” whenever any owner of Eastern Shore Acre allowed horses on the property, it could be activated hundreds of years after the death of any lives in being. Even in a wait-and-see state, the polo horses apparently did not come on the property until more than 21 years after the death of all the members of Brunwald’s grandparents’ generation. So the grant of the executory interest to Andrew is invalid under RAP. Once one strikes his interest, what remains could be construed either as a fee simple absolute grant to Rebecca or as a fee simple determinable with a possibility of reverter in Claiborne. Either way, Brunwald has nothing. Nothing in the problem suggests that she is Claiborne’s heir or devisee.

An alternative interpretation of the quitclaim deed is that the condition was satisfied or not only if Rebecca personally allowed horses on the property. This would not violate RAP because she was a life in being. But she did not allow horses on the property during her lifetime and is incapable of doing do after her death. So the condition triggering Andrew’s possessory interest is incapable of occurring, and Brunwald has nothing.

So: Brunwald has no colorable claim to the property. By constructing the alligator refuge she has entered upon a property interest owned by the Club and thus committed a trespass.

B.     Brunwald should sue the Club for nuisance. Her argument is that the noise and rowdy behavior by the Club, as the owner of a property interest in Eastern Shore Acre, interferes with her enjoyment of her property interest in the adjacent parcel.

Whether this constitutes a nuisance depends, under the Restatement, on a balancing of the harm suffered by Brunwald against the utility of the Club’s activities. On the harm side, Brunwald must show that her uses interfered with are suitable to the location, among other things. If she claims that the noise and rowdiness interferes with her residential or routine recreational activities, these clearly are suitable for this rural/small-town part of Maryland. On the other hand, if she has constructed her alligator refuge on her own property now, such a use of her property is singularly inappropriate for this locale, as contrasted with, say Florida. In addition, she “moved to the nuisance.” While this is not outcome determinative, it is a factor to be assessed, at least in the equities pertinent to injunctive relief, if not in determining liability.

On the Club’s side of the balancing equation, the purpose of the activity is innocent—there is no suggestion that the ATV races are conducted only to spite Brunwald; they have been going on for ten years. There also is social utility to offering recreational outlets for the people who race ATVs. That leaves the appropriateness of the use to the locale, and the feasibility of relocating the use to another location. This is rural Maryland. Eastern Shore Acre is a big plot of land. There is no reason to believe that ATV races are unsuitable to this location—no suggestion for example, that land use patterns have shifted so that this is a heavily populated residential area. While it might be feasible to relocate the races somewhere else, there would surely be a cost of doing so. That cost would likely exceed the cost of Brunwald taking her own remedial action, such as erecting sound barriers so she could not hear the sound of the ATVs or rowdiness.

Overall, her nuisance claim is quite weak.

C.     The Club and White should challenge the ordinance and seek to enjoin its enforcement, or in the alternative, to seek damages to compensate them for the impact of its enforcement.

Their first argument is that the ordinance is ultra vires. The state enabling act says, “necessary to protect the health and welfare of its citizens.” The ordinance is aimed as protecting the “peace of mind of Maryland’s historic families.” This bears an attenuated relationship to health and welfare. Moreover the facts suggest that the real purpose was to satisfy campaign contributors and had nothing to do with health and welfare at all. The prospect of establishing that the ordinance was ultra vires is strong.

Even if the ordinance is not ultra vires, i.e. within the power granted the Planning Commission by the state legislature, it is void because it violates substantive due process or cannot be enforced without compensating White and the Club for a Taking.

To establish a violation of substantive due process, White and the Club must show that (a) the state (b) has deprived them of an interest in liberty or property (c) without due process of law. The Planning Commission clearly is an arm of the state exercising state power, so state action is no problem.

Deprivation might be trickier if Brunwald had a strong claim for nuisance. A nuisance is not part of the bundle of sticks constituting property. But the nuisance claim is weak, so establishing deprivation of a property interest should not be a huge obstacle. Deprivation of a liberty interest probably has not occurred, unless associational rights of the ATV racers (protected by the First Amendment) have been violated.

So that leaves the due process part of the equation. Euclid says that due process requires that the state action complained of must be backed up by a legitimate state interest (something within the police power of the state) and that the action must bear a reasonable relationship (nexus) to achievement of that state interest. White and the Club have two cartridges in their magazine here: first the argument that protecting Maryland’s historic families—or satisfying political contributors—is not a legitimate state interests; and second, that the nexus between this ordinance and those state interests is too attenuated to pass constitutional muster. While the pertinent rational-relationship standard for judicial review gives great deference to the judgments of state legislative bodies as to what constitutes a legitimate state interest and what means should be used to pursue such interests, the Maryland legislature has not embraced either the purpose of or the means used in this ordinance. The ultra-vires argument explained supra thus comes into play again at this state of the analysis.

Especially damaging to the validity of this ordinance is its irrationality. It is dramatically underinclusive. If it is legitimate to look after the peace of mind of Maryland’s historic families, what about things other than nearby ATV races that may interfere: alligator refuges for example, or hot-air balloon races by rowdy passengers over their property, or firing ranges, or heavy metal rock concert arenas?

The ordinance is hugely vulnerable to a due process attack.

Even if it is not invalid as a violation of substantive due process, it violates the requirements of the Takings Clause of the Fifth Amendment, incorporated into the Fourteenth and thus applicable to Maryland. First the restrictions on White’s and the Club’s property interest are not for a public purpose, and thus violate the Supreme Court’s decision in Kelo. Unlike Kelo, there is no indication that the peace and mind of historic families will extend to any broad community uses or benefits.

Second, White’s and the Club’s property interests may be taken for a public use without just compensation, and none has been offered. That leaves the question of whether the ordinance “takes” any property interest from them. It does not if all that is being prohibited would be a nuisance, because nuisances are not part of their bundle of sticks. But the answer to sub-question B shows this the ATV races are not a nuisance.

On the other hand, the ordinance works no physical invasion, so it is not a Loretto taking.

Whether it might be a Lucas taking because it deprives White and the Club of all economically beneficial use of their property is an interesting possibility. White almost certainly has many economically beneficial uses of his fee simple absolute interest even if he cannot authorize the Club to engage in ATV races. He could establish an alligator preserve, for example. The Club, however, cannot, consistent with its easement or license, do other than ATV races. Polo games have been established by experience not to be economically beneficial. So the Club, but not White, has a pretty good Lucas taking argument.

Even without the Lucas argument, however, both White and the Club have strong Penn Central balancing arguments. They have investment-backed expectations representing by the Club’s investment in facilities—at least assuming that the polo facilities are useful in some way for the ATV races. The public purpose here is much weaker than the public purpose in Penn Central. The uses remaining to the Club (but not White) are much fewer than the uses remaining to Penn Central. So there is a good prospect for success under the Penn Central balancing analysis.

D.     White’s general warranty deed from Sue English contained six warranties or covenants, three present covenants: of seisin, against encumbrances, and of the power to convey; and three future covenants; of quiet enjoyment, of general warranties, and of further assurances. He should sue Sue for violation of all of these, based on the executory limitation that impairs the fee simple absolute interest she purported to convey to him. Action on the present covenants must occur within the limitation period after conveyance, but the statement of the problem suggests that he would sue well within the 20-year limitation period. The future covenants may be sued on whenever they are violated, which is whenever Brunwald surfaces with her claims.

If the executory limitation owned by Brunwald Is valid, the covenant of seisin is violated because English did not have seisin to a fee simple absolute, but only to a fee simple subject to an executory limitation. If it is valid, it constitutes an encumbrance on the property she conveyed to White. If is valid, it imposes a liability on her power to convey a fee simple absolute. When Brunwald enters to construct her alligator haven (but not before), she interferes with White’s quiet enjoyment of Eastern Shore Acre, and this constitutes a violation of the covenant of quiet enjoyment. The threat of her entry triggers English’s obligation to provide further assurances, as by obtaining a declaratory judgment that the executory interest is void. If White litigates against Brunwald, English is obligated by the covenant of general warranties to cover his litigation expenses.

English has two strong defenses to these claims by White, however. First, she would argue that the executory limitation is either void under RAP, extinguished by Rebecca English’s failure to allow horses, or not in Brunwald’s chain of title, as explained in the answer to subquestion A. This would not relieve her of the obligation to cover White’s litigation expenses under the covenant of general warranties and probably under the covenant of quiet enjoyment if Brunwald asserts the invalid interest.

Second, she can argue that White took the property subject to any executory limitation and thus waived any claims under the general warranty deed because he had record notice of the executory limitation because she recorded the Claiborne-to-Rebecca deed before the general warranty deed entered into force. It does not matter whether Maryland is a pure-race, pure-notice, or race-notice statute. The Claiborne deed was recorded before White’s deed and thus gave him record notice. But there is substantial authority that at least the covenant against encumbrances is not vitiated by the grantee’s record notice of an encumbrance. So this defense is not likely to be successful.