ST. THOMAS UNIVERSITY SCHOOL OF LAW

EXAMINATION NO.

PROPERTY II

FALL 1993

FINAL EXAMINATION PROFESSOR RONNER TIME LIMIT: 3 HOURS

 

 

IN TAKING THIS EXAMINATION, YOU ARE REQUIRED TO COMPLY WITH THE SCHOOL OF LAW RULES AND PROCEDURES FOR FINAL EXAMINATIONS. YOU ARE REMINDED TO PLACE YOUR EXAMINATION NUMBER (YOUR ANONYMOUS GRADING NUMBER), ALONG WITH THE INSTRUCTOR'S NAME AND TITLE OF COURSE, ON EACH EXAMINATION BOOK, SECURE ALL BOOKS AND YOUR EXAM WITH A PAPER CLIP, CHECK OFF YOUR EXAM NUMBER AND NOTE THE TIME IN THE "SIGNOUT" BOOK PROVIDED IN THE DESIGNATED CLASSROOM, AND LEAVE YOUR EXAM IN THE DESIGNATED BOX.

 

 

INSTRUCTIONS

 

1. This is a CLOSED BOOK exam. No notes or books are permitted in the examination room.

 

2. Complete Problems I, II and III.

 

 

PROBLEM ONE

Worth 25 Points

TURMOIL INC. IN TROUBLE TOWN

The Rental Property

 

Ms. Tense is the president and major shareholder of Turmoil, Inc., which owns rental property in Trouble Town. The Housing Regulations of Trouble Town provide:

 

Section A: Use and Occupancy. No owner, licensee, or tenant shall occupy or permit the occupancy of any habitation in violation of these regulations.

 

Section B: Interior Walls and Ceilings. Each interior wall or ceiling shall be structurally sound and free of loose plaster or other loose structural surfacing material. Each interior wall or ceiling shall be free of holes and wide cracks.

 

Section C: Lead Paint. The owner of a residential building shall maintain the interior surfaces of the building free of lead or lead in its compounds in any quantity of more than one milligram per square centimeter or in any quantity sufficient to constitute a hazard to the health of any inhabitant of or visitor to the building.

 

Silas Marner is a single father with a two year old daughter, Eppie. Marner lives in one of the Turmoil Inc. units, has a twoyear lease and pays rent in the amount of $92.00 a month. The lease, however, does not affirmatively place the burdens of repairs, other than those caused by the tenant's negligence, on either party.

 

One day, Mr. Marner noticed that the paint was chipping in several places along the wall in the dining room, which was Eppie's favorite place to play. He immediately reported the defect to Ms. Tension, who simply ignored the complaint. Mr. Marner, however, continued to allow Eppie to play in that area.

 

Unfortunately, one day Eppie put some of the paint chippings in her mouth and became seriously ill and landed in the hospital. Eppie's diagnosis was lead poisoning. Mr. Marner again called Ms. Tension and this time demanded that she make the necessary repairs and compensate him for his child's medical expenses. Ms. Tension again simply ignored Marner's demands.

 

Mr. Marner, enraged, called the housing inspectors, who found numerous violations of the Housing Regulations of Troubletown. Specifically, they found a lead content in the paint in excess of one milligram per square centimeter. Mr. Marner, armed with the housing inspectors' report, stopped paying rent.

 

In response to Marner's withholding of rent, Ms. Tension sent him a letter, which stated:

 

I am giving you your thirty days notice to quit the premises pursuant to clause x of your lease because you have stopped paying your rent.

 

We want you to know that we will not be making any repairs to your apartment because we plan to take the unit off the market. We have decided that the particular unit in which you dwell is simply not profitable and that our other units elsewhere in Trouble Town, which incidentally do not have troublesome tenants, are much more profitable.

 

After the lapse of about thirty days, Mr. Marner has not moved out and has not paid any rent.

 

 

The Real Estate Sales' Transaction

 

Ms. Tension also owns certain undeveloped lots elsewhere in Trouble Town. Originally she planned to construct low-cost rental housing on these lots. After her problems with Marner, however, she has decided that being a landlord is not really a good business. Consequently, she has decided to sell the lots to the Disputations. The contract provided that the title was to be "good and merchantable." It was also to be "free of liens and encumbrances except . . . publicly recorded easements for public utilities and other easements which may be observed by inspection of property." Pursuant to the contract, Ms. Tension conveyed the lots to the Disputations using a special warranty deed.

At the time Ms. Tension and the Disputations entered into the contract and right up until the time of closing, there was heavy and tall growth on the lots. This seeming "jungle" made it impossible to inspect the boundaries of the land or to measure the lots without undertaking costly or time-consuming work to cut down portions of the growth.

After closing, the Disputations discovered that there was a road which encroached on two of the lots and deprived it of less than 1% of its square footage. According to the Disputations, however, this encroachment made it much more difficult to build on and develop the lots. Consequently, the Disputations sued Ms. Tension to recover damages due to the encroachment on the purchased

 

 

Your Job

 

You are an attorney at the firm of Wisdom and Sagacious, P.A. and Ms. Tension has come to you as a client. She wants you to bring a suit to evict Marner and to defend the action that the Disputations have brought against her.

 

 

You research both issues throughouly and discover that the only precedent are the cases that you read in Professor Ronner's Property II Class. Ms. Tension wants you to write her an in-depth memo in which you explain:

 

 

1. All of the arguments that you can raise on her behalf in her suit against Marner and all of the defenses that Marner will assert against her. She wants you to tell her whether you think she can prevail and why.

 

 

2. All of the arguments that the Disputations will raise against Ms. Tension and all of the defenses that she can assert against the Disputations. She wants you to tell her whether you think she can prevail and why.

 

 

PROBLEM TWO

APOPLEXY IN REGULATIONVILLE

 

Worth Sixty (60) Points

 

The Snootsville Matter

 

The Powerlust Corporation ("Powerlust") developed Snootsville, which is a residential subdivision in Regulationville. Before Powerlust sold any lots in Snootsville, Powerlust filed in the Deed Records certain restrictive covenants applicable to Snootsville which were to "run with the land." Paragraph A provides:

 

No structure shall be located or erected on any lot nearer to the front plot line than twenty-five (25) feet, nor nearer than five (5) feet to any side plot line except that the total combined setback from both sides shall in no event be less than fifteen (15) feet to the rear plot line.

 

Paragraph B provides:

 

Powerlust Corporation shall appoint three representatives to serve on the Architectural Control Committee. These three representatives must own lots in Snootsville and reside in Snootsville. Powerlust Corporation reserves the right to discharge any or all such representatives if, in its judgment, the ends or purposes of Snootsville would be better served. In the event Powerlust Corporation believes that a decision issued by the Architectural Control Committee is erroneous and is not in the best interest of the residents of Snootsville, it may, at its discretion, request the Architectural Control Committee to reconsider the matter.

 

 

Paragraph C provides:

 

No building shall be erected, placed or altered on any lot until the construction plans and specifications and a plan showing the location of the structure shall have been approved by the Architectural Control Committee.

 

Mr. Nay Negativo, who was a Vice President of Powerlust, was one of the first residents in Snootsville. Before becoming involved with Powerlust, Mr. Negativo had owned an advertising agency and for this reason, decided to head up Powerlust's sale's campaign with respect to the Snootsville lots. As part of the sales' campaign, Negativo posted the following advertisements in the Regulationville Post:

 

 

Yes. Those who refuse to conform are dangerous, subversive creatures who undermine decent values. It is time to buy a home free of such nonconformist parasites. Snootsville is the place. Snootsville is a quiet, residential neighborhood without nonconformists. There are no flamboyant and garish and different folks here. In Snootsville, all houses will be the same and everyone will have the same dogs and the same goldfish and the same cars and eventually we will all have the same Snootsville look. Buy a lot in Snootsville.

 

The sales' campaign was a success and Mr. Negativo even won various awards for the above advertisement. As such, almost all of the lots were sold. Although most of the homes constructed in Snootsville were modern ranch style or split level homes, none of them were the same. In fact, three or four homes did not comply with the set-back restrictions set forth in Paragraph A of the convenants.

 

Oscar Wilde Apoplexy, who was by nature a procrastinator, was one of the last people to buy a lot in Snootsville. Apoplexy planned to construct a geodesic dome with orange and purple spots all over it. He also wished to put a bright red carousel in the front of the structure and play loud rock music from 10:00 a.m. until 4:20 p.m. Apoplexy further indicated that he did not plan to use the structure as a residence, but instead as a studio for his various artistic endeavors. His plans undisputedly complied with all of the set-back restrictions enumerated in Paragraph A.

 

When Apoplexy submitted his plans to the Architectural Control Committee, there were three members: Ms. Affirmative, Mr. Yes and Dr. No. After they reviewed Apoplexy's plans, they voted two to one in favor of the new structure. Mr. Negativo, however, was quite upset because he owned the lot right next to Apoplexy and has always disliked geodesic domes. Consequently, Mr. Negativo successfully prompted Powerlust to require the Architectural Committee to reconsider the Apoplexy matter.

 

Powerlust responded by removing Mr. Yes and replacing him with Mr. Negativo and then required the Architectural Control Committee to reconsider the matter and vote again. Surprisingly enough, the new Committee voted two to one against Mr. Apoplexy's plans.

 

Despite the lack of Committee approval, Apoplexy began construction. Thereafter, Negativo, the Architectural Control Committee and Powerlust sued Apoplexy, seeking an injunction and an order directing Apoplexy to remove the partially built structure.

 

At trial, Mr. Yes testified that before the first vote, he had conducted a study and determined that Apoplexy's structure would not diminish the value of the other homes in Snootsville.

 

 

 

The Landmark Matter

 

Apoplexy also owns a small shopping center, The Apoplexy Center, in the Old Town of Regulationville. There are no public streets or public sidewalks within the Apoplexy Center.

 

Pursuant to the Regulationville Enabling Act, Regulationville adopted its Landmark Preservation Law and The Apoplexy Shopping Center was designated a landmark because the structure had been a favorite haunt of the "Art For Art's Sake Movement" and had a unique design. When Apoplexy purchased the shopping center, he knew of its status as a landmark.

 

Under the law, the Landmark Preservation Commission must "approve in advance any proposal to construct an eating establishment on the premises of a landmark when the owner of the landmark seeks to do this by altering the exterior features of the landmark or by constructing any exterior improvement on the landmark site." The law defines an "eating establishment" as "any area used for serving or selling food or beverages."

 

There is also an Ordinance, which gives the owners of landmark sites the ability to transfer eating establishment rights ("TEERs") to other parcels. Owners of TEERs may transfer such rights directly to a receiving lot or to an individual or organization for later disposition. There is also a TEER Bank. With respect to

this Bank, an owner of TEERs, however, may only exchange his or her TEERs for money if there is a purchaser ready and willing to acquire the TEERs. If there is no such purchaser, the owner may deposit the TEERs in the Bank and the Bank will perform the service of trying to obtain such a purchaser and complete the sale. The owner will not be paid for his or her TEERs until the Bank actually secures such a purchaser.

 

Oscar Wilde Apoplexy decided that he wished to construct a Soap Opera Cafe on top of one of the stores in his shopping center. Consequently, he entered into a renewable twenty (20) year lease agreement with Heartwrench Properties. Under the terms of the lease agreement, Heartwrench would construct the cafe and in return, pay Apoplexy $3 million annually during construction. After construction, Heartwrench would pay $7 million annually.

 

 

Apoplexy then applied to the Landmark Preservation Commission for permission and after extensive hearings, the Commission denied the application. Apoplexy then sued in Regulationville Trial Court, seeking a declaratory judgment and injunctive relief barring Regulationville from using the Landmark Law to impede construction of the Soap Opera Cafe. At trial, Apoplexy demonstrated that his profits would be increased substantially if he could construct the Soap Opera Cafe. It was also shown at trial that there are cafes all over Regulationville -- but none in the Old Town.

 

 

The Apoplexy Center Matter

 

The Apoplexy Center had a policy, which they strictly

enforced, against the distribution of handbills on the Center premises. There were no exceptions whatsoever. The reason for this rule was that handbills were considered likely to annoy customers and create litter.

 

Mr. Negativo was the president of the Snootsville Conformist Club and he designed a handbill that stated:

 

Oscar Wilde Apoplexy is a threat to our goal of sameness. Let's stop him dead in his tracks. The Apoplexy Center is gaudy and vulgar and attracts many "artsy types." We need to plan a strategy to protest against Apoplexy's operation of the Apoplexy Center. Attend a meeting of the Snootsville Conformist Club next Sunday at noon at my home in Snootsville.

 

Mr. Negativo took many copies of his handbill and set up a desk right on the premises of the Apoplexy Center and began to distribute the handbills to customers. Two security guards in bright pink jump suits approached Mr. Negativo almost immediately and informed him that he was trespassing. They told Negativo that he would be arrested unless he ceased his handbilling activity. Mr. Negativo left and then sued Apoplexy and the Apoplexy Center seeking injunctive relief and a declaratory judgment deeming him entitled to distribute his handbills in the Apoplexy Center.

 

 

Your Job

You are presently clerking for the Honorable Linda Singer

Equity in the Regulationville Trial Court. Although Judge Singer Equity has presided over the trial in the Snootsville Matter, the Landmark Matter and the Apoplexy Center Matter, she has not yet issued her decisions. She has asked you to prepare three memoranda of law, one on each of three matters before her. In each memorandum, you must do the following:

 

 

1. Describe the arguments raised by both the plaintiff(s) and the defendant(s).

 

 

2. Suggest what decision she should reach and suggest the reasoning and analysis she should use in her opinion. Judge Singer Equity has instructed you that she is more interested in your reasoning and analysis than she is in the actual result.

 

 

After you do the research, you discover that the only authority on the issues are those cases you read in Professor Ronner's Property II Class.

 

 

PROBLEM I I I: RECORDING STATUTES

Worth Fifteen (15) Points

 

 

Determine how the following problems would be resolved in jurisdictions with a (a) race statute; (b) notice statute; (c) race-notice statute.

 

 

Provide the answer in your blue book

 

No credit given for more than one answer

 

No credit given for explanations

 

1. O to A (A does not record)

O to B (B has no notice of the earlier conveyance to A)

B records

A records

B sues A for title:

 

 

(a) race statute

 

 

 

(b) notice statute

 

 

 

(c) race-notice statute

 

 

 

2. 0 to A (A records)

O to B (B has no notice of the earlier conveyance to A) B records

B sues A for title:

 

 

(a) race statute

 

 

(b) notice statute

 

 

(c) race-notice statute

 

 

3. 0 to A (A does not record)

O to X (X has notice of conveyance from O to A)

X records

A records

X conveys to Z (Z has no notice of deed from O to A)

 

 

 

Who wins in a contest between A and Z?

 

 

 

(a) race statute

 

 

 

(b) notice statute

 

 

 

(c) race-notice statute

 

 

 

4. 0 to A (A does not record)

 

O to X (X has notice of conveyance from O to A)

 

 

A records

 

X records

 

X conveys to Z (Z has notice of deed from O to A)

 

 

Who wins in a contest between A and Z?

 

(a) race statue

 

(b) notice statue

 

(c) race notice statue

 

5. O to A (A does not record)

 

O to X (X has no notice of conveyance from O to A)

 

X records

 

A records

 

X conveys to C (C has notice of conveyance from O to A)

 

Who wins in a contest between A and C?

 

(a) race staue

 

(b) notice statue

 

(c) race-notice statue