Sunday, August 14, 2011

July 2011 California Bar Exam Question 5: the Terrible Trespasser

This is the sixth post in my series on the July 2011 California Bar Exam.  If you think that my answers are terrible, let me hear it in the comments.

Question five is a variation on the trespasser question that regularly appears on the California Bar Exam.  I score this question as a change up for two reasons 1) the rules tested are extremely obscure and a wrong turn can easily derail you 2) nothing happens.  Remember the bar exam question where two people owned something, a bunch of stuff happened and it didn't change the parties rights at all?  Well, they're rare, but this is one of them.

From the California State Bar (pdf):
Prior to 1975, Andy owned Blackacre in fee simple absolute. In 1975, Andy by written deed conveyed Blackacre to Beth and Chris “jointly with right of survivorship.” The deed provides: “If Blackacre, or any portion of Blackacre, is transferred to a third party, either individually or jointly, by Beth or Chris, Andy shall have the right to immediately re-enter and repossess Blackacre.” 
In 1976, without the knowledge of Chris, Beth conveyed her interest in Blackacre to Frank. 
In 1977, Beth and Frank died in a car accident. Frank did not leave a will and his only living relative at the time of his death was his cousin Mona. 
In 1978, Chris and Andy learned that Beth had conveyed her interest in Blackacre to Frank. When Mona approached Chris a day later to discuss her interest in Blackacre, Chris told her that he was the sole owner of Blackacre and she had no interest in Blackacre. Chris posted “No Trespassing” signs on Blackacre. He also paid all of the expenses, insurance, and taxes on Blackacre. Andy and Mona have never taken any action against Chris’ possession of Blackacre. 
1. What right, title, or interest in Blackacre, if any, did Andy initially convey to Beth,
Chris, and himself? Discuss. 
2. What right, title, or interest in Blackacre, if any, are held by Andy, Chris, and Mona?
Discuss.
I will discuss below the jump.



Joint tenancy subject to a condition subsequent

The issue is identifying the interest Andy initially conveyed to Beth, Chris and himself. A fee simple subject to a condition subsequent occurs when an owner in fee simple conveys an interest to a person with a condition, if the condition occurs then the original owner may re-enter the property and repossess it. A joint tenancy with right of survivorship exists where an owner in fee simple titles land to more than one person who all share in interest and possession. The right of reentry is not affected by the Rule Against Perpetuities because it will vest, if at all within the life of Beth or Chris since only their action enacts the right of reentry. Here, Andy conveyed Blackacre to “Beth and Chris ‘jointly with right of survivorship’” and retained for himself “the right to immediately re-enter and repossess Blackacre [if] any portion of Blackacre is conveyed to a third party.”

Andy conveyed a joint tenancy subject to a condition subsequent where Beth and Christ are joint tenants and Andy retains a right of re-entry.

Beth’s transfer to Frank

The issue is what affect Beth’s transfer to Frank had on the joint tenancy subject to a condition subsequent. A joint tenant severs the joint tenancy and creates a tenancy in common upon transferring the joint tenant’s interest. Here, Beth conveyed her interest to Frank. This created a tenancy in common between Chris and Frank and gave Andy a right of reentry.

Beth and Mona

The issue is whether Mona inherited Frank’s interest in Blackacre. A joint tenancy is defeasible and can be passed through probate. Here, Mona is Frank’s only living heir and inherits all of his property including his interest in land.

Also, at this point Andy’s right of reentry vests and he must act on it within the statute of limitations in the jurisdiction where Blackacre is located. While local laws vary, typical statutes of limitation periods range between one and three years. Under any theory it has now been 25 years since the date of vesting and Andy is barred from asserting his right to reentry under the statute of limitations.

Alternately, Andy's right of reentry can fail as an invalid restraint on alienation.  Whether a restraint will be valid will depend on 1) the estate restrained 2) the kind of restraint and 3) the extent of the restraint.  With regard to the first factor, the estate restrained is a joint tenancy.  Restrictions limiting the power of a joint tenant or tenant in common to seek partition are usually upheld, this factor leans toward acceptance.  With regard to the second factor, the kind of restraint used is a forfeiture because the grantor may terminate the estate upon the occurance of the condition subsequent.  Forfeiture restraints are only invalid where there is a fee involved.  Here there is a fee simple involved, making the restraint automatically invalid.  Finally, the restraint is reasonable in time because the statute of limitations limits Andy's period of recover to three years as noted above. Since there is a forfeiture restraint of a fee simple the interest is invalid and cannot be enforced.

Mona is a tenant in common with Chris, and Andy has nothing.

Chris and Mona

The issue is whether Chris has obtained title to Blackacre by adverse possession. Adverse possession requires, the open, notorious, hostile, possession of another’s land continuously for the statutory period. Where a cotenant’s ouster is in issue the burden of proof is higher. Chris’s possession was open because he “paid all of the expenses, insurance and taxes” on Blackacre which shows an open possession. Possession was notorious because Chris asserted he “was the sole owner of Blackacre….” Possession was hostile because Chris told Mona to leave and posted “No Trespassing” signs across Blackacre. Jurisdictions range in the period necessary for adverse possession from 10-20 years. Under any of those theories Chris continuously occupied the land for the statutory period.

Alternately, a co-tenant always has a right of partition. Even if Chris has obtained title by adverse possession, he must quiet title in order to enforce his right, before he does this Mona maintains a right to partition the land and obtain a portion of the land or its value at sale.

Additionally, a tenant who ousts another tenant much share rents and profits less taxes paid.  Here it is unclear if Chris obtained any rents and profits while he did pay taxes.  Mona may or may not have a claim depending on Chris's use of Blackacre.

Since Chris has not acted to quiet title and Mona has not requested partition, they are still tenants in common until one of them acts. Andy, as noted above, has nothing.

7 comments:

  1. I pretty much agree- but furthermore: Since they are still tenants in common, shouldn't there also be a discussion on each tenants rights to contributions/reimbursements for things like insurance/property taxes/improvements/repairs/and rent collected from third parties? (If I remember correctly there were facts to warrant such a discussion)

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  2. Dear SK,

    Again, thank you for the comment. While the facts do support this discussion the very specific interrogatories do not the questions (shown above) ask what title was conveyed and who has title, any discussion about other remedies is not necessary.

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  3. What about the restraint on alienation? Also, isn't ouster the issue with regards to adverse possession and tenancies in common?

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  4. Hi Nicky,

    Thanks for commenting.

    Flush out your restraint on alienation argument a bit. It's hard to understand what you mean.

    I'm not sure how ouster relates to the second interrogatory beyond being a fact that relates to the element of hostility. I didn't use the word 'ouster' but I suppose it's fine if one did.

    The key issue with the second interrogatory is that neither party has yet acted on their rights, so ownership is up in the air.

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  5. I'm not Nicky but here is my take:

    There is a restraint on alienation for Beth and Chris because they are restricted from selling at all. These are generally void and the court will strike out the clause.

    In the case of Joint Tenancies, some reasonable restraints are allowed because of the JT nature (not forced to share with strangers). In this case, one could argue that the restraint is not reasonable because B and C could not sell the property jointly. Therefore, the entire right of re-entry is likely struck and B and C hold JT in fee simple absolute.

    Ouster would be applicable because an absent co-tenant cannot be adversely possessed unless the other tenant has ousted the absent co-tenant. Probably a quick line and equivalent to hostility as you note. But an ousted co-tenant has right to share in rents, etc, which (arguably) is a "right ... or interest in Blackacre."

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  6. Well argued counselor. Let me see if I follow you reasoning.

    I argued that Andy has nothing because the statute of limitations expired. You are arguing that he has nothing for the additional reason of the restraint on alienation being invalid. I agree, this is a good discussion, I will add it in.

    With regard to the second question you argue that the tenants have rights with regard to one another. I agree that this can be added, good point.

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