University of California s11

BOSTON COLLEGE LAW SCHOOL

FINAL EXAMINATION: PROPERTY LAW (COURSE NO. LL70903)

PROFESSOR JOSEPH P. LIU

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FALL SEMESTER 2009

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3 QUESTIONS IN-CLASS EXAMINATION

TOTAL TIME: 4 Hours

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DATE: FRIDAY, DECEMBER 11, 2009

INSTRUCTIONS: READ CAREFULLY

GENERAL INSTRUCTIONS. The exam has 3 questions. The questions are weighted according to the percentages set forth below, so please allocate your time and effort accordingly. Please read each question carefully before answering, paying particular attention to the type of answer that each question is asking for. Please also spend adequate time planning your responses prior to writing your answers. Clear organization and analysis will do wonders for your answer.

RESOURCES. This is an unlimited open book exam. This means that you may consult the casebook, any outlines or notes, any commercial or third-party outlines, any other books or articles that you have purchased or borrowed. You may not, however, share any copies of such resources with other students during the course of the exam.

QUESTIONS. The questions in this exam will be given the following weights for purposes of grading. Please allocate your time accordingly:

WEIGHT SUGGESTED TIME* QUESTION 1: 40% 90 MINUTES QUESTION 2: 30% 70 MINUTES QUESTION 3: 30% 70 MINUTES

*Note that the suggested times leave you with an extra 10 minutes to review your answers.

1 JURISDICTION. The jurisdiction for the questions below has been kept intentionally ambiguous. For certain legal issues, jurisdictions may differ as to the applicable rule. If this is the case, and if the question itself does not tell you to adopt a particular rule, note that the jurisdictions differ and apply the majority rule, to the extent there is one. You will get extra points if you also note the results under the alternative rules.

CASE CITATIONS. You needn’t refer to any cases by name in any of your answers, unless the question specifically warrants such. A perfectly excellent answer can be turned in without mentioning a single case by name. However, if you do wish to refer to any cases (whether for support, as an example, or as a short-hand for a particular legal rule), simply write the case name or a recognizable abbreviation.

Good luck!

2 QUESTION 1 (40%):

You are a junior associate at a small law firm. One evening, just as you are preparing to leave the office, your phone rings. A partner is on the other end of the line. She says that a client of hers will be coming into the office tomorrow morning. The client needs some advice concerning a number of potential legal issues. Unfortunately, the partner is going to be out of town tomorrow morning and will be unable to meet with the client. However, she would like you to meet with the client and find out the nature of the legal issues facing the client. She would also like you to draft a short memo for her, outlining any legal claims that the client could possibly have against other parties or that other parties could possibly bring against the client, along with your preliminary assessment of the likelihood of success of any of these claims.

The next morning, you meet with the client and find out the following information:

The client, John Carmody, owns a house in the town of Greenville. The house, located at 100 Main Street, has been in Carmody’s family for over eighty years. It is a lovely, three-storey Victorian house, originally constructed in 1920 and, since then, lovingly maintained and restored. The house is located in a neighborhood of Greenville called “the Heights.” The neighborhood was initially developed in the 1920s by a developer who built approximately 100 houses, all similar to Carmody’s house. The neighborhood was, for many years, a very desirable and exclusive one.

During the 1970s, however, the town of Greenville suffered from a depressed economy. Unemployment skyrocketed as many industries closed down and left. The Heights neighborhood was not insulated from the effects of the economy. Many of the houses in the neighborhood were abandoned or fell into disrepair. As a result, the neighborhood became less desirable as a place to live.

In the 1990s, the economy in Greenville began to rebound. Real estate developers began to buy up some of the abandoned and decrepit houses in the Heights. In some cases, the developers renovated the houses and sold them as private homes. In other cases, developers adapted the houses for retail use (i.e. boutique stores, small restaurants). In still other cases, developers tore down some of the houses and built small commercial buildings. Of the original 100 lots in the subdivision, approximately 30 have been put to some commercial use. As a result, the Heights neighborhood was transformed from a depressed, purely residential neighborhood into a thriving neighborhood with an attractive mixture of Victorian homes, residential uses, retail shops, and restaurants. Indeed, the Heights has since become one of the most desirable and trendy neighborhoods in the town of Greenville.

Throughout all these changes, Carmody’s family continued to live in the house at 100 Main Street. Carmody and his sister, Sheila Carmody, both grew up in the house, living with their parents through the 1960s and 70s. The house at that time was owned by their father, Frank Carmody. Both John and Sheila moved out of the house in the 1980s,

3 when they went away to college. Their parents, however, continued to live in the house until 2001, when they both died in a tragic car accident.

Frank Carmody left the house in his will to his children, John and Sheila, as tenants in common. At the time, Sheila was living and working in Europe and had no intention to return to the U.S. John, however, was living in a nearby town with his wife and two children. John and his immediate family moved into the house at 100 Main Street in 2001.

In 2007, John determined that the house at 100 Main Street could more profitably be used as an inn or as a bed-and-breakfast. Given the popularity of the Heights as a trendy neighborhood, visitors from out of town often wanted to stay in the neighborhood. However, there were no hotels in the neighborhood. Accordingly, John felt that he would be able to profitably rent out rooms in the house if he converted it into a bed-and- breakfast. So in 2007, he moved his family out of the house at 100 Main Street. He then remodeled the house to adapt it for use as a bed-and-breakfast. In 2008, he opened the bed-and-breakfast for business. In all, the bed-and-breakfast has 12 rooms for rent. Since opening, the bed-and-breakfast has been extremely successful.

John made all of these decisions without consulting his sister Sheila, who is still living in Europe. Sheila recently learned of these changes and was very upset. Specifically, Sheila objected to this use of her family home. She stated that she wants John to stop using the house as a bed-and-breakfast and to restore the house to its original, single-family status. She also wants some compensation for past use of the house, reflecting her share of the house.

The bed-and-breakfast has also come under criticism from some of the neighbors. The neighbor to the immediate left of the house, Mary Lester, lives in a single family house. Lester’s house and the house at 100 Main Street share a driveway, located between the two properties. Half the width of the driveway rests on Lester’s lot and half rests on the 100 Main Street lot. For many years, both lots used the same driveway to access garages located behind their respective houses. Back in the 1940s, when the garages were first constructed, the then-owners of the two lots negotiated mutual easements, giving each owner the right to use the common driveway to reach the garages behind their respective houses. These easements were filed in the local registry of deeds.

Now that 100 Main Street is being used as a bed-and-breakfast, the traffic over the common driveway has increased dramatically as guests staying at the bed-and- breakfast often drive on the driveway in order to drop off their luggage behind the house. Instead of only 2 or 3 cars a day, the driveway now sees more than 10 cars per day. As a result, the driveway has become noticeably worn, and a number of deep potholes have developed. Lester has demanded that the guests of the bed-and-breakfast be barred from using the driveway.

Lester has also pointed to a provision in the deed to her own house, which states: “purchaser hereby promises and covenants to use the property solely for non-commercial

4 purposes. This covenant is intended to bind and inure to the benefit of all future owners.” A title search of the 100 Main Street lot reveals that there is no similar covenant in its chain of title. However, the original developer of the Heights neighborhood apparently placed a similar covenant in approximately 60 of the 100 lots in the Heights.

The bed-and-breakfast is also in a dispute with the neighbor to the immediate right. When John first decided to start the bed-and-breakfast in 2007, he was concerned that some of his neighbors might follow suit and compete with him. In particular, the house to the right was a large Victorian house that would have been perfect as a bed-and- breakfast. John contacted the then-owner of the house, Bob Russell. In exchange for a one-time payment, Russell promised never to operate his house as a bed-and-breakfast. John and Russell drew up and signed a document memorializing their agreement and filed it in the local registry of deeds. The language states: “I, John Russell, in exchange for a one-time payment of $5,000, hereby promise that [the property] shall not be used as a bed-and-breakfast.” In early 2009, however, Russell sold the house to a company, Victorian Properties, which plans to turn the house into a bed-and-breakfast.

John has also recently received a letter from a cousin, Carter Smith. Smith claims that he is the proper owner of the property at 100 Main Street. In support of this claim, Smith points to the fact that John’s father, Frank Carmody, received the property as a gift from Frank’s father (John’s grandfather) George Carmody in 1950. The deed from George Carmody to Frank Carmody contained the following language: “I hereby grant this property to Frank Carmody for use as a family home. Should the property ever be occupied by non-family members, the property shall then go to my daughter Dolores Carmody.” Carter Smith says that he is the son of Dolores Carmody and has inherited all of Dolores’s estate.

John has also recently entered into a dispute with one of the guests at the bed-and- breakfast, Peter Robinson. Most of the guests at the bed-and-breakfast stay for a few nights, and at most a week. Robinson, however, is an exception. Robinson is a computer programmer, whose permanent residence is in a different state. However, for the past year, Robinson has been working on a project in the town of Greenville. Rather than stay in a sterile business hotel, Robinson prefers to stay in cozy inns and bed-and-breakfasts. When Robinson first discovered the bed-and-breakfast at 100 Main Street, he stayed there initially for one week. However, he was so pleased with the place that he decided that he wanted to stay at the bed-and-breakfast for the entire year.

Because Robinson wanted to stay in the bed-and-breakfast for an entire year, he negotiated a discounted rate for his stay. Memorializing this agreement, John and Robinson both signed a document titled “License,” which stated that Robinson would be renting a specific room in the bed-and-breakfast for the entire 2009 calendar year. In exchange, Robinson would pay a set monthly fee. The document also stated that John could terminate the license for any reason upon one week’s notice.

In September of 2009, one of Robinson’s co-workers, Anita Johnson, expressed an interest in Robinson’s setup. Like Robinson, Johnson, an African-American woman,

5 was stationed in Greenville on the same project and had, until recently, been staying at an impersonal business hotel. Once she learned about Robinson’s setup, she contacted John and asked for a similar arrangement, with a similar discounted fee. John refused, saying that he did not want too many of his rooms to be locked up in long-term arrangements. Johnson was very upset that she was unable to secure an arrangement similar to Robinson’s.

As a result of John’s refusal to provide a similar arrangement for his co-worker and friend Johnson, Robinson, who is white, has stopped paying the monthly fee. John has given Robinson notice that he must vacate his room. However, Robinson has refused.

Draft a memo for your partner, analyzing any potential claims that John Carmody may be able to bring or that others may be able to bring against Carmody, along with your preliminary assessment of the strengths and weaknesses of such claims. If there is any additional specific information that you will need in order to make your assessment, identify that information in your analysis and indicate how it would affect this analysis. (You can assume that the partner will already be familiar with the above facts, after reading your detailed notes of the interview, so there is no need to include a separate section summarizing the above facts.)

6 QUESTION 2 (30%):

You are a judge on the U.S. Court of Appeals. You have before you a case with the following undisputed facts, as presented to the trial court below:

The plaintiff, Waste Disposal, Inc. (WDI), operates a number of waste disposal and treatment facilities in the town of Greenville. WDI provides a valuable and important service, insofar as various companies in Greenville generate significant amounts of chemical waste, which must be safely processed and stored. WDI has operated a number of such facilities in the town of Greenville for the past several decades. WDI’s safety record has been perfect. There has never been a documented case of leakage or contamination from any of WDI’s facilities.

Despite WDI’s excellent safety record, some of its facilities have drawn local controversy. In particular, one of WDI’s facilities is located in an area of Greenville called Science Park. This area is zoned for industrial uses, and WDI’s facility meets all of the applicable zoning requirements. WDI’s facility, however, is located near the edge of Science Park. Two blocks away from WDI’s facility lies an area zoned for residential uses, called Parklawn.

Until recently, WDI’s Science Park facility received little attention because the nearby residential neighborhood of Parklawn was largely undeveloped. However, as the population of Greenville has increased over the years, more and more of Parklawn has been developed. Today, nearly all of the lots in Parklawn have been developed for residential use, and many are occupied by families with children.

In 2007, a number of residents of the Parklawn neighborhood began expressing concerns about the nearby WDI facility. They reported that the tap water in Parklawn tasted funny. Also, a number of children of families in the Parklawn neighborhood recently were diagnosed with leukemia. Rumors began to circulate that the funny-tasting water and reports of leukemia were caused by chemicals leaching from WDI’s Science Park facility.

In response to these concerns, WDI checked all of its procedures to ensure that there were no leaks or other problems. In addition, they commissioned a number of studies, analyzing both the Parklawn water and the incidence of childhood leukemia in Parklawn. These studies established that there were no abnormal chemicals in the Parklawn water and that the incidence of childhood leukemia in the neighborhood was no greater than it would have been in any neighborhood with similar demographics. WDI made these studies available to the Parklawn residents.

Despite these studies, the residents of Parklawn continued to express their concerns. In 2008, the residents of Parklawn petitioned the Greenville zoning board to rezone a two block section of Science Park that immediately bordered Parklawn. This section included only two lots: the WDI facility and one other undeveloped lot. The

7 zoning board granted the petition and rezoned this section to limit it to only commercial and residential uses. Industrial uses, such as WDI’s use, were expressly forbidden.

As a result of the re-zoning, WDI was no longer able to operate its waste disposal facility in Science Park. The market value of WDI’s waste disposal facility (both the land and the building), shortly before the rezoning, was approximately $10 million. After the rezoning, however, WDI can no longer operate its facility. Moreover, because of the specialized nature of the building, it cannot be used for any other purpose. The building could be torn down and the land used for commercial purposes. Even then, however, the market value would be significantly depressed due to the cost of tearing down the building and lingering concerns about its prior use as a waste disposal facility. An assessment of the current market value of the facility places it at roughly $100,000.

WDI filed suit in federal district court against the town of Greenville, alleging that the re-zoning resulted in an unconstitutional taking of its property without just compensation, within the meaning of the Fifth Amendment of the U.S. Constitution. On cross-motions for summary judgment, the district court held that the re-zoning resulted in a taking. That decision has now been appealed to the Court of Appeals. (Note: the only issue before the Court of Appeals is whether the re-zoning effected a “taking” of WDI’s property. Issues of “public use” and “just compensation” were not raised below and are not currently before you. Nor are any state law issues before you. For example, the issue of prior non-conforming use is not before you, as this jurisdiction has a very narrow doctrine that is inapplicable to this case.)

After reading the briefs, hearing oral argument, and conferring with the two other judges on your panel, you and one other judge have tentatively agreed on a resolution of the case. The third judge on the panel, however, disagrees with that resolution. You have been assigned the task of drafting the majority opinion. Draft that opinion. Because there is little case law in your circuit applying takings law to a case such as this, you feel the need to justify the result with a comprehensive opinion, carefully setting forth the various arguments in support of your conclusion. In addition, you expect that there will be a sharp dissent in this case, so you will need to anticipate its position and explain why the result adopted by the majority is superior to other possible alternatives, from both a doctrinal and policy perspective. (For now, you needn’t draft a separate section summarizing the above facts or the procedural posture of the case, since your law clerk will help you draft that later.).

8 QUESTION 3 (30%):

You are you (and not a junior associate or a judge) – a first year law student at Boston College Law School.

At the beginning of this course, we considered the problem of incompatible land use. We saw how the right of one property owner to use his or her property is often limited by the rights of other property owners to use and enjoy their property. We saw how the common law has developed various doctrines to address this problem, from more absolute rules (such as the “common enemy” rule with respect to surface water) to more flexible and contextual rules (such as the doctrine of nuisance). We also explored, in some detail, the many policy arguments and justifications (such as instrumental arguments, fairness arguments, administrability arguments, etc.) that can be used to support various results in these cases.

If you were a judge deciding an issue involving incompatible land uses, what kinds of policy arguments would you find most appealing and why? Specifically, what types of arguments and justifications do you find most helpful and persuasive in resolving the problem of incompatible uses of land? Least helpful? Why? What other considerations would affect how you decide these cases? In short, what kind of judge would you be?