Source: http://www.pmrlegal.com/category/practice-areas/real-estate/
Timestamp: 2019-06-16 17:14:53
Document Index: 513270946

Matched Legal Cases: ['§ 7125', '§ 2750', '§ 3600', '§ 3706', '§ 3708', '§17985', '§12340']

Peterson, Martin & Reynolds LLP | Real Estate
Second District Court of Appeal Holds that Easement by Necessity Need Not Be over Previously Established Route, or the Most Accessible One
Maria Tanzillo2017-06-05June 5, 20175:04 pmComments Off on Second District Court of Appeal Holds that Easement by Necessity Need Not Be over Previously Established Route, or the Most Accessible One
By: , Posted:
By M. Henry Walker
This case involves the appeal of a trial court’s judgment granting an equitable easement over rural property in Ventura County. Plaintiff Hinrichs originally owned two large parcels which he inherited from his mother. He grew up in a home located on the southern parcel but hadn’t lived there since moving to Alaska in the 1980s. He sold the southern parcel to a third party based on the belief that he still had access to the only public road servicing the area via an historic trail which first appeared on a federal survey map in 1868 and which traversed several neighboring parcels. He was wrong in this regard; the owners of the neighboring parcels denied him access over the historic trail meaning his northern parcel was actually landlocked.
Hinrichs sued several neighbors, claiming he had an easement which was appurtenant to the original land patent, that he had acquired a prescriptive easement, and that he was entitled to an equitable easement by necessity. The trial court rejected the first two theories but entered judgment in favor of Hinrichs on the third, creating an equitable easement by necessity. The location of the created easement, however, was not over the historical trail area previously used for ingress and egress but rather over a new indirect route which was less accessible due to the terrain. While portions of the newly created easement had existing driveways, in order for Hinrichs to use the judicially created easement he would be required to grade two new roadways to connect to the existing portions. The trial court applied the “balancing of hardships” test and determined this to be the best location because this location would only minimally interfere with the servient parcels.
Hinrichs appealed, arguing the trial court erred in denying him an easement over the historic trail. The other parties appealed as well, claiming among other things that the trial court erred in creating a new easement where none had ever existed. The appellate court focused on the issue of whether a court can create an equitable easement by necessity where the party claiming the easement has made no prior use of the easement. On the latter issue, the appellate court affirmed the trial court’s judgment, holding that “the court may grant an equitable easement without there being a preexisting use by the landowner seeking the easement.” The appellate court reasoned that despite the holdings of several cases which recognize the imposition of an easement by necessity in the case of a “long-standing encroachment,” such an encroachment is not an absolute requirement for an equitable easement. Moreover, the court found no evidence that Hinrichs was negligent in creating the landlocked parcel because he had a reasonable belief that he had a right of way over the trail.
This case serves as a reminder that while the law recognizes a strong interest in preventing land-locked parcels, a trial court sitting in equity must balance the rights of all parties rather than focus solely on the rights of the party claiming the equitable easement. In other words, Hinrichs got his easement but can’t be heard to complain that the location was not over the best access route. Perhaps that’s why it’s called an easement by necessity rather than an easement by convenience.
Hinrichs v. Melton (2017) 17 C.D.O.S. 4217.
Maria Tanzillo2017-04-20April 20, 20178:45 pmComments Off on Broker Denied Commission Is Allowed to Proceed With Case Against Non-Signing Owners
Maria Tanzillo2017-04-208:42 pmComments Off on Where Broker Acts as Dual Agent, Listing Agent Owes Equivalent Fiduciary Duty to Buyer
Maria Tanzillo2015-12-09December 9, 201512:05 amComments Off on Homeowners Were Not Liable, This Time, for Injury Sustained by Employee of Their Unlicensed, Uninsured Contractor
Vebr v. Culp serves as a cautionary tale for any homeowner considering hiring a contractor to perform work on their home.
The Culps contracted with OC Wide Painting to paint the interior of their home. The contract specified that OC Wide had workers’ compensation insurance, or would acquire it. Culp confirmed online that OC Wide had a valid license and also checked OC Wide Painting’s references. Before signing the contract, Culp reviewed the California Contractors State License Board’s detail for OC Wide which stated: “This License is exempt from workers compensation insurance; they certified that they have no employees at this time.”
An hour into working in the Culps’ home, OC Wide’s employee, Plaintiff Tomas Vebr, fell from an extension ladder provided by OC Wide resulting in serious injury. The ladder was supported by two helpers employed by OC Wide. OC Wide never did acquire workers’ compensation insurance as promised in the contract and the Culps did not halt the project despite the fact that other individuals were working in their home.
California Business and Professions Code § 7125.2(a)(2) provides that a contractor’s license is automatically suspended by operation of law as of the date the contractor is required to obtain workers’ compensation insurance but fails to do so. Labor Code § 2750.5 provides that a worker who performs services for which a license is required but lacks such a license is rebuttably presumed to be an employee, not an independent contractor.
Vebr sought to hold the Culps liable in tort under the theory of respondeat superior as Vebr’s statutory employer in light of OC Wide’s unlicensed and uninsured status. The Culps moved for summary judgment on the grounds there were no facts to show that they were liable for Vebr’s injuries, that they breached any duty owed to Vebr, that the premises were dangerous or defective, or that the Culps’ actions were the legal or proximate cause of Vebr’s injuries. The trial court agreed and granted the motion for summary judgment. Vebr appealed, and the Court of Appeal, Fourth Appellate District, affirmed the decision of the Orange County Superior Court.
Ordinarily, when an employee sustains a worksite injury, the exclusive remedy is provided by the workers’ compensation law, and the employer is immune from a lawsuit. (Lab. C. §§ 3600, 3601, 3602.) But if the employer has not secured workers’ compensation coverage, an injured employee may bring a civil suit against his employer. (Lab. C. § 3706.) If the employee establishes that he was injured in the course and scope of his employment, a rebuttable presumption is created that an uninsured employer was negligent and the employer is precluded from claiming comparative fault or assumption of risk as a defense. (Lab. C. § 3708; Huang v. L.A. Haute (2003) 106 Cal.App.4th 284, 289–291.)
When an employee of a contractor is injured, and the contractor is unlicensed and uninsured at the time of injury, the injured employee’s recourse may be against not only the contractor, but also against the landowner who hired the contractor, as an additional employer. (Heiman v. Workers’ Comp. Appeals Bd. (2007) 149 Cal.App.4th 724, 734.) The injured employee may have the landowner deemed a “statutory” employer and seek workers’ compensation benefits through the landowner’s general liability or homeowners’ insurance policy. In this case, the Culps were insured under a homeowners’ policy but Vebr did not qualify as a “residence employee” under that coverage. This meant that if the Culps were found liable, they would have to pay out of pocket for Vebr’s injuries.
The potential scope of a homeowner’s tort liability to an injured employee of an unlicensed contractor whom the homeowner hired has not yet been resolved by the California Supreme Court. (See Cortez v. Abich (2011) 51 Cal.4th 285, 291 [“Whether unlicensed contractors or their workers may or must be deemed the homeowners’ employees under section 2750.5 … are difficult and unsettled questions.]; Ramirez v. Nelson (2008) 44 Cal.4th 908, 916 [same].
The Court ruled that it did not need to decide whether the Culps were the statutory employer of Vebr because no triable issue of material fact existed regarding such liability. The court concluded: “Here, the undisputed facts show the cause of Vebr’s fall is a mystery. There is no evidence showing what had occurred or that Vebr was free from negligence himself. There is no evidence, for example, that at the time of the fall, he was holding on the ladder with two hands and did not cause the fall himself by losing his balance. On this record, there is no reasonable and logical inference that…anyone…present in the residence at the time of the accident, was negligent. Someone might have been negligent, but we do not and likely never will know whether that was the case.”
Don’t count on being as lucky as the Culps. If you are considering hiring a contractor to perform work in your home, review their license and insurance status. If the license deems the contractor exempt from carrying workers’ compensation insurance because there are no employees, make sure no one other than the contractor himself performs work at the property. Otherwise, immediately halt the work and demand written proof of workers’ compensation insurance. Doing so will reduce the possibility of being deemed a statutory employer and possibly held liable for injuries sustained by workers on your property.
Vebr v. Culp (2015) 14 C.D.O.S. 11845
Maria Tanzillo2015-12-0912:05 amComments Off on Physical Division of Property Does Not Necessarily Equate to Division Under the Subdivision Map Act
Courts May Not Consider Prejudice to Liable Party in Granting Rescission of Purchase Contract
Maria Tanzillo2015-12-0912:04 amComments Off on Courts May Not Consider Prejudice to Liable Party in Granting Rescission of Purchase Contract
After the Wongs bought a $2.35 million home, they discovered that they and 12 of their neighbors were connected to a private sewer system rather than the city of San Carlos’s public system. The Wongs had remodeled the home, expending about $300,000. They sued the sellers (Wong v. Stoler) for non-disclosure, seeking, among other things, rescission. They also sued the real estate agents involved, and settled with them for $200,000. The trial court found the sellers recklessly misrepresented that the house was connected to a public sewer system, but it declined to effectuate the rescission, which would have returned the home to sellers and refunded the purchase amount to the Wongs. The court reasoned that doing so would place an undue burden on the sellers, who had already used the sales proceeds to purchase a new home and finance improvements, and that it would be too complicated to unwind the deal. Instead, the court ordered the sellers to pay the Wongs for sewer maintenance and repair costs beyond the $200,000 settlement until 10 years had passed or the Wongs sold the house, whichever came first.
Rescission extinguishes the contract and restores the parties to their former positions, or as near as possible to their positions before entering into the contract. If the court agrees there are grounds for rescission, the rescinding party is entitled to recover “complete relief,” including damages and the return of benefits provided. In real estate cases, this means the seller must refund the purchase price to the buyer in exchange for return of the property. If the court finds the contract has not been rescinded, it may grant other relief appropriate under the circumstances.
Here, the Court of Appeal, First Appellate District, reversed the San Mateo County Superior Court, finding that the contract was rescinded and the court improperly considered prejudice to the sellers. In refusing to effectuate rescission, the remedy fashioned by the trial court was not “complete.” The trial court also improperly relied upon the hardship rescission would cause to the sellers, who had just been found liable for negligent misrepresentation, a species of fraud. The need for rescission was effectively the fault of sellers, who as a result of their failure to disclose “must sustain the necessary inconveniences thereby entailed.” Moreover, although untangling the sale might not be easy, there were not insurmountable obstacles to doing so. Thus, the case was remanded to effectuate the rescission and award any other consequential damages (such as real estate commissions, escrow payments, interest on sums paid to the other party, and costs of improvements) needed to return the Wongs to the status quo. The court was also directed to determine whether the Wongs were entitled to attorney’s fees as part of their complete relief.
Wong v. Stoler (2015) 14 C.D.O.S. 6633
Court Liens Away From Coverage in Title Insurance Case
Maria Tanzillo2015-06-26June 26, 20151:06 amComments Off on Court Liens Away From Coverage in Title Insurance Case
Most real estate investors, and real property attorneys for that matter, think they know a lien when they see one. In a late December decision which was recently certified for publication (so it can now be cited as precedent in California), the California Court of Appeal for the Third Appellate District reminded one and all that the determination of whether a recorded document constitutes a defect, lien or encumbrance against title may require deeper analysis.
In Stockton Mortgage v. Tope, the Court reviewed the San Joaquin County trial court’s granting of First American Title Insurance Company’s summary judgment motion. First American had been sued by Stockton Mortgage under various theories for refusal to defend and indemnify Stockton Mortgage in a lawsuit brought by real estate investors. Stockton Mortgage contended that a “Notice of Abatement Action” recorded against the property by the County Environmental Health Department in 2004 pursuant to Health & Safety Code §17985 was covered by First American’s 2005 title insurance policy. The Notice at issue addressed the property’s substandard physical conditions, including 26 separate structural, mechanical, electrical and plumbing violations.
Alliance Title, acting as escrow for the transaction, attempted to resolve the issue, paying the County’s then current enforcement costs of $2,005. The County refused to issue a release because the underlying violations had yet to be cleared but escrow closed anyway.
In one of the principal issues decided by the case, the Court of Appeal upheld the trial court’s granting of First American’s summary judgment on the basis that the Notice related to physical condition of the property, which related to the value of the property rather than the marketability of its title. In other words, the Notice was not a lien or encumbrance because the property could be transferred without doubt as to who owns or has an interest in it. The Court reminded that “one can hold perfect title to land that is valueless; one can have marketable title to land while the land itself is unmarketable.” The Court relied heavily on a 2002 case involving similar issues. (Elysian Inv. Group v. Stewart Title.)
Importantly, the Court also followed longstanding authority which holds that no liability exists for statements issued in a Preliminary Report as it is neither an insurance contract nor a representation of the title. (Ins. Code §12340.11.)
While this case did not change existing law, it is notable that the Court was able to distinguish the obligations, and perhaps the mistakes, of the escrow holder versus the title insurer.
Stockton Mortgage, Inc. v. Tope (2015) 233 Cal.App.4th 437
Maria Tanzillo2015-06-261:03 amComments Off on Damages for Wrongful Foreclosure Not Necessarily Limited to Lost Equity
Whether an Issue Is Arbitrable Is Determined Solely by Language in Arbitration Agreement
Maria Tanzillo2015-06-2612:59 amComments Off on Whether an Issue Is Arbitrable Is Determined Solely by Language in Arbitration Agreement
The Bunker Hill v. U.S. Bank case involved a rather dry, but nonetheless important issue which may have an impact on real-world situations: when arbitration may be compelled pursuant to an arbitration agreement between two parties, and more specifically, what kinds of issues may be arbitrated.
Landlord Bunker Hill owned land in Los Angeles County. It leased the land to U.S. Bank, who owns five low-rise buildings on the parcel. The parties are governed by a 99-year ground lease, which expires in 2077. When the lease is terminated (either in 2077 or at some point before then), the buildings and other improvements on the property become the property of Bunker Hill. The lease also allows U.S. Bank to sublet the property, which it did.
A dispute arose between the parties over the amount of rent, which was adjusted in April of 2013. They went to arbitration pursuant to an arbitration provision in the lease. During the arbitration, a related issue arose: whether, upon termination of the lease, the subleases would terminate or whether Bunker Hill would take title to them. That issue was not resolved during the arbitration, but the parties continued to correspond about it. After a while, U.S. Bank invoked the arbitration provision again and demanded arbitration to resolve the issue.
After a few months of conferring, U.S. Bank made several acknowledgements which, in its view, made arbitration on the sublease issue unnecessary. Bunker Hill pressed its position that arbitration was necessary to eliminate uncertainty which may arise when the lease ends. U.S. Bank responded that the issue was “purely hypothetical.”
Bunker Hill filed a petition to compel arbitration with the court, stating that there was presently a dispute between the parties regarding their respective rights and obligations under the ground lease. U.S. Bank opposed on the grounds that there was no justiciable controversy, and therefore, in essence, there was nothing to arbitrate. The trial court agreed with U.S. Bank and denied the motion. Bunker Hill appealed.
The appellate court held that the usual requirements of justifiability and ripeness, which are required before a court can hear a case, do not necessarily apply in arbitration. The language in the arbitration agreement or provision is what governs what can and cannot be arbitrated. Contracting parties are free to negotiate and restrict the powers of an arbitrator and the “universe of issues that he or she may resolve,” as the powers of the arbitrator are derived from and limited by the arbitration agreement. In this case, the provision broadly obligated the parties to arbitrate “any and all disputes, controversies or claims arising under or relating to the Ground Lease.” As the lease did not define these terms, the court interpreted them in their “ordinary and popular sense,” and concluded that the sublease issue was plainly included, as it was an “unresolved dispute which both arises under and relates to the ground lease.”
Bunker Hill Park Ltd. v. U.S. Bank, N.A. (2014) 231 Cal.App.4th 1315
Maria Tanzillo2015-06-2612:55 amComments Off on No Duty to Disclose Claim of Easement to Prospective Purchaser of Adjacent Property
Representative Matters by Practice