cabar

(Just for fun.)

There's a $6M K for the sale of RP located in HI.  Buyer is from CA.  Some problems arise before closing, let's say . . . with the K element of formation & the RP issue of HI seller failing to convey marketable title ( . . . something like a tax lien for unpaid property taxes in the amount of . . . $4M.).  Buyer sues in CA.  Discuss.

K FOR CONVEYANCE OF RP

Does the RP K meet basic K law requirements?

            1/3: mutuality of consent

offer (manifestation of a present intent to a K with certain & definite terms [parties, subject of K identified, quantity], & communicated to an offeree)

acceptance (capacity; communication of; unequivocal [mirror image rule])

            2/3: consideration

bargained-for exchange, i.e. legal detriment &/or benefit; adequacy/value of RP (no pre-existing duty, not illusory promise, wasn't a gift)

            3/3: absence of defenses

capacity (see above)

public policy (illegality/unconscionability)

fraud/duress/mistake/undue influence 

writing (SOF, see below)

Does the K meet the special SOF requirements for Ks for the sale of land?

            1/3: writing             2/3: signed by the party against whom enforcement is sought             3/3: essential terms (parties to the K, description of property): see above

If RP K doesn't meet SOF requirements, the K can nevertheless be taken out of the SOF & receive specific enforcement if buyer has 

            possession + performance (i.e. payment) OR             possession + improvements 

REMEDIES (3 types: damages, restitution, injunction; injunction most likely remedy in sale of RP because of uniqueness element, so I'm just going to focus on that)

Injunction

            1/5: Definite & certain terms in the K the aggrieved party seeks to enforce             2/5: a breach by one of the parties to the K (refer to above discussion )             3/5: inadequate remedy at law (land's unique, damages insufficient)             4/5: feasibility of specific performance decree                   . . . jurisdiction issues!  

A court can fashion an enforceable decree if it has personal jurisdiction over the party ordered to perform.

            CIVIL PROCEDURE

                  In Personam Jurisdiction

                        BASIS

long-arm statute: either SPECIFIC ACT statute or COEXTENSIVE w/federal Constitution

            AND

traditional bases: consent, domicile, physical presence in the state when served

            OR

minimum contacts

            OR

cause of action arose out of D's contacts w/forum state AND exercise of jurisdiction over D doesn't offend traditional notions of fair play and substantial justice AND

D purposely availed herself of the benefits & protections of the forum state OR D could reasonably anticipate being compelled to litigate in the forum state.

                        NOTICE

personal service OR

substituted service—leave summons & complaint w/someone at work, or someone of suitable age at home OR

constructive service—send summons & complaint via registered mail to D's last known address, physically place a copy of it on the subject property, or publish notice in newspaper

(Even if the buyer cannot establish in personam jurisdiction, a court may nevertheless use in rem jurisdiction to issue a decree. Here, however, because the subject property is in HI and suit was brought in CA, this discussion is inapplicable.)

            5/5: mutuality of remedy

TRAD. CL rule re: mutuality was that the injured party could not get specific performance unless she could show that at the time the K was formed, the breaching party would have been entitled to specific performance had she herself been the breachor. 

MOD MAJ (Restatement) rule re: mutuality is that the aggrieved party must show that her performance to the breaching party either (1) has been substantially rendered OR (2) is satisfactorily assured of being rendered

Partial Performance by Seller with Abatement in Purchase Price

The CA buyer may waive HI seller's failure to fully perform (failure to convey marketable title) and compel specific performance (i.e. sale of the RP to buyer), with an abatement of a portion of the purchase price.  i.e. CA buyer should therefore be able to get this house for $2M.

Easement Termination can occur in 8 ways:

(1) stated conditions

the easement grant states the date or the conditions under which it will terminate 

(2) merger, aka unity of ownership

a person acquires ownership of (1) the easement + (2) the servient estate; in this case the dominant & servient estates merge & the easement is destroyed

(3) release

REQ: WRITING.  Easement's owner gives a deed of release to the servient tenement's owner. 

(4) abandonment

REQ: ACTION.  Easement holder demonstrates an intent to permanently abandon the easement through physical action.  Mere nonuse doesn't suffice to extinguish the easement.

(5) estoppel

the servient tenement owner changes her position by reasonably relying on representations or conduct of the easement holder

(6) prescription

adverse, continuous interruption of easement's use for a prescriptive period

(7) necessity

when the necessity ends, the easement ends

(8) condemnation & destruction

Easement Appurtenant

REQUIREMENTS: 2 tracts of land.

(1) dominant tenement: tract benefited by the easement

(2) servient tenement: tract burdened by/subject to the easement right

BENEFITS:

Easement in Gross

When an individual holds an easement in gross, she has a right to use the servient tenement independent of her possession of another land tract, i.e. the easement's benefits run with the holder, not the land.  

RE:  Mortgagor's Right to Possession Before Foreclosure

(1) Lien Theory

Mortgagee (i.e. lender, eg. BANK) is holder of security interest only.  Mortgagor (eg. HOMEOWNER) is considered the owner until foreclosure.  Mortgagee may not have possession before foreclosure.

(2) Title Theory

Mortgagee (i.e. lender, eg. BANK) is holder of legal title until mortgage has been satisfied or foreclosed.  Entitled to possession upon demand @ any time.

(3) Intermediate Theory