Opinion ID: 816180
Heading Depth: 3
Heading Rank: 1

Heading: Intangible Property

Text: We begin by addressing whether MCTA’s right to collect assessments is property. The district court, in its ruling, did not find that this right was not property, and the government has not argued to the contrary. Indeed, there is good reason to find that MCTA’s right to collect assessments is property. Louisiana law suggests that this right is called a building restriction. First, it is necessary to explain what “building restriction” means in the language of Louisiana’s civil law system. Under Louisiana law, building restrictions are “incorporeal immovables.” La. Civ. Code art. 777. “[I]ncorporeal immovables” are “[r]ights and actions that apply to immovable things”). La. Civ. Code art 470. “Immovables” simply means property that is not a “movable.” La. 2 The General Motors Court understood “just compensation” in ordinary cases to be the fair market value of the interest taken. 323 U.S. at 379 (“In the ordinary case, for want of a better standard, market value, so-called, is the criterion of that value.”). 10 Case: 11-31167 Document: 00512126858 Page: 11 Date Filed: 01/28/2013 No. 11-31167 Civ. Code art. 448 (“Things are divided into . . . movables and immovables.”). And “movables” are what the name suggests: “things . . . that normally move or can be moved from one place to another.” La. Civ. Code art. 471. Thus, “immovables” refers to a broad category of immovable property that includes tracts of land and their component parts. La. Civ. Code art. 462. The modifier “incorporeal” simply means “intangible.” See S. Cent. Bell Tel. Co. v. Barthelemy, 643 So. 2d 1240, 1244 (La. 1994) (“[T]he civilian concept of corporeal movable encompasses all things that make up the physical world; conversely, incorporeals, i.e., intangibles, encompass the non-physical world of legal rights.”); see also La. Civ. Code art. 461 (“Incorporeals are things that have no body, but are comprehended by the understanding such as . . . servitudes [and] obligations . . . .”). By logical inference from the definitions at hand, an intangible right that applies to a tract of land is an incorporeal immovable. In Tri-State Sand & Gravel, L.L.C. v. Cox, a Louisiana appeals court confirmed that under Louisiana law, one duty that building restrictions may impose on owners of real property is the affirmative duty to pay assessments. 871 So. 2d 1253, 1256 (La. Ct. App. 2004). Louisiana statutory law supports recognition of the affirmative duty to pay assessments as a building restriction. See La. Civ. Code art. 778 (“Building restrictions may impose on owners of immovables affirmative duties that are reasonable and necessary for the maintenance of the general plan.”); Oakbrook Civic Ass’n, Inc. v. Sonnier, 481 So.2d 1008, 1010 (La.1986) (same); see also 4 La. Civ. L. Treatise, Predial Servitudes § 195 (3d ed.) (“Provisions that each purchaser of a lot in a subdivision shall automatically become a member of a corporation formed to provide maintenance of the common grounds, and that each member shall be subject to an annual assessment, have been enforced as reasonable and necessary.”). Thus, the right to collect assessments is a building restriction under Louisiana law, and by extension, an intangible (incorporeal) right. 11 Case: 11-31167 Document: 00512126858 Page: 12 Date Filed: 01/28/2013 No. 11-31167 In common law terminology, building restrictions are real covenants.3 Louisiana caselaw recognizes prohibitive building restrictions as restrictive covenants. Nepveaux v. Linwood Realty Co., 435 So.2d 589, 593 (La. Ct. App. 1983), writ denied 441 So.2d 750 (La. 1983) (describing building restriction that restricted property usage to residential purposes only as a “restrictive covenant”). Restrictive covenants, by definition, are a type of real covenant.4 Because MCTA’s right to collect assessments is an affirmative building restriction, it seems inappropriate to cast it into the negative mold of a restrictive covenant. Rather, it follows that if negative building restrictions are restrictive covenants, then affirmative restrictions are affirmative covenants. Moreover, Louisiana caselaw recognizes the right to collect assessment fees as a covenant that runs with the land. Town S. Estates Homes Assoc., Inc. v. Walker, 332 So.2d 889 (La. Ct. App..1976). Thus, we find that MCTA’s right is best understood as a building restriction, but more generally may be viewed—in terms of its common law analogue—as a real covenant.