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Waste Land F and S share the remaining 2/3s of T’s separate property, or 1/3 each. Because this commits all of T’s estate, A takes nothing under the will. Mike had a 30-year master lease on a downtown office building and had sublet to others the individual office suites for five-year terms. At the conclusion of the 30-year term, Olive, the building’s owner, did not renew Mike’s master lease. When Olive resumed control of the building, she learned that Mike had failed to comply with the terms in the 30-year lease that required him to renew an easement for weekday parking on a lot between the building and a theatre. The theatre, which, in the past, had always renewed the easement, used the lot for its own customers on evenings and weekends. Olive also learned that a week before the end of the 30-year lease Mike had renewed for another five years the sublease of one tenant, Toby, at a rate much below market. Toby ran an art gallery, which Mike thought was “classy.” Upon signing the renewal, Toby purchased and installed expensive custom lighting and wall treatments to enhance the showing of the art in his gallery. Because of Mike’s failure to renew the parking easement, the theatre granted it to another landowner. As a result, Olive had to request a variance from the town ordinance requiring off-street parking. The Board of Zoning Appeals (BZA) denied the request because a nearby parking-lot operator objected. The off-street parking requirement, combined with the loss of the parking easement, meant that several offices in Olive’s building would have to be left vacant. The BZA had recently granted a parking variance for a nearby building under very similar circumstances. Olive commences the following actions: 1. A suit against Mike to recover damages for waste resulting from Mike’s failing to renew the parking easement. 2. An action for ejectment against Toby and to require him to leave the lighting and wall treatments when he vacates the premises. 3. An appeal of BZA’s denial of Olive’s variance request. What is the likelihood that Olive will prevail in each action? Discuss.
Answer 3 This answer provided by Emerson’s Tutorial Bar Review, www.emersonstutorialbarreview.com I. OLIVER V. MIKE FOR WASTE The doctrine of waste provides that where the present occupier of land substantially reduces the value of the future interest, by conduct which was unreasonable under the circumstances, the holder of the future interest has a cause of action for waste. Waste usually includes reducing the value of the physical structure by damage, destruction or replacement of the structure. This includes affirmative waste such as actively changing the structure, and permissive waste such as allowing the property to fall into severe disrepair. Waste does not normally include a reduction in the rental or sale value of the property due to loss of intangible benefits such as loss of contract rights, zoning changes, etc. On the other hand, allowing the property to be sold for non-payment of taxes is waste. Here, Mike did not commit affirmative injury to Oliver’s reversion. However, Mike did fail to renew the easement for parking. This ultimately reduced the value of Oliver’s reversion because without off-street parking, several offices of the downtown office building had to be left vacant, resulting in a loss of income from the reversion. Loss of the easement for parking is not physical damage to the land, and may not support a cause of action for waste. On the other hand, allowing the land to be sold for non-payment of taxes is not physical harm to the structure, yet this harm is treated as waste. The court will probably not expand the doctrine of waste to include this type of injury to the reversion. The analogy to the sale of land for non-payment of taxes is probably faulty. In that case, the owner of the future interest has no other recognized cause of action. Here, Oliver has an action for breach of contract or for negligence. A. OLIVER’S SUIT MAY SOUND IN CONTRACT Oliver’s suit may be dismissed because the claim may sound in contract rather than as waste. Here, Mike failed to renew the lease for the parking easement. Mike had a contract obligation to do so. Mike breached this contract. Oliver now seeks to treat this breach of contract as waste. The action for waste requires conduct which not only caused injury to the future interest, but conduct which was unreasonable under the circumstances. Can the Oliver focus on the unreasonable conduct (failure to renew the parking easement) and sue for a tort, or is the plaintiff limited to breach of contract? B. WHEN CAN A BREACH OF CONTRACT BE TREATED AS A TORT? This problem arises frequently with security services. The company contracts to provide security services, yet the house is burglarized. Is this breach of contract or negligence? Some courts have treated breach of security services contracts as only a breach of contract, while others have recognized a cause of action for negligence. Historically, the common law based the dichotomy on malfeasance vs. nonfeasance. Nonfeasance was the failure to perform a promise, and therefore a breach of contract, whereas, malfeasance was an act which created a tort cause of action, usually for negligence. If the court used this dichotomy, Mike merely failed to perform his contract duty to renew the easement and the cause of action sounds in contract, not tort. In this case, Oliver’s action for waste should be dismissed, although it could be re-filed as a breach of contract suit. Modernly, Prosser and others would look to Mike’s duty. If his duty arises only from a contract promise, Oliver must sue for breach of contract. On the other hand, if Mike owed Oliver a duty separate from his contract duty, then Oliver can sue in tort for breach of that duty. Here, Oliver will argue that Mike undertook the task of managing the office building, and must do so with due care. Oliver will claim the duty to act with due care applies to all conduct, whether the conduct is motivated by contract, or motivated otherwise. Failure to renew the easement for parking was, according to Oliver, unreasonable conduct which Mike should have known would result in injury to Oliver’s reversionary interest. However, notwithstanding Mike’s negligent conduct, Oliver’s suit for waste should be dismissed. Failure to renew the easement is not waste because Oliver’s injury is probably not waste. III. THE ACTION FOR EJECTMENT AGAINST TOBY The general rule is that one cannot convey rights which he or she does not own. According to the facts, Mike granted a five- year lease to Toby. However, Mike’s master lease ended a few weeks after the five-year lease was granted. Therefore, the latter part of the grant to Toby was void. Toby may contend that he or she is a bonafide purchaser for value without notice of Oliver’s reversion. However, if Oliver’s ownership was recorded, Toby was had record notice of Oliver’s interest. If Oliver’s ownership was not recorded, Toby had no actual, record, or inquiry notice of Oliver’s interest, and the five-year lease is valid. In this case, Toby cannot be ejected. The lease to Toby was below market price. However, the rule requires that Toby must pay value, not market price. A. MUST TOBY LEAVE THE LIGHTING AND WALL TREATMENTS? The lighting fixtures which are attached to the building are trade fixtures because they are used to enhance Toby’s art work, and therefore used in his trade. Trade fixtures can be removed by the occupant at the end of the lease, or even shortly thereafter. The tenant must repair the damage caused by the removal. On the other hand, the wall treatment is an improvement which probably belongs to Oliver. The courts look to the objective intent of the annexor. To determine this intent, courts look to the nature of the improvement, the manner of attachment and the amount of damage caused by its removal. Using objective standards, reasonable people usually intend for the treatment of a wall to become a part of the building. It has no value if removed. Therefore, Toby probably did not intend to remove the treatment. In fact, removing it would probably be spite. However, the restatement position is that a tenant can remove anything, before the lease expires, so long as she restores the premises. Here, Toby’s lease has expired. Toby did not remove the treatments before the end of the lease. The wall treatments remain. IV. BOARD OF ZONING APPEALS The BZA denied Oliver’s request for a variance. A use variance is permission to use land in a manner which is inconsistent with the zoning ordinance. The granting of a variance is discretionary. The variance is usually granted where there is unnecessary hardship to the owner which was, not caused by the owner, and granting the variance will not be inconsistent with the overall purpose of the ordinance. It is unclear whether or not Oliver meets these requirements. However, it is unimportant. The BZA is a government entity, and must not violate the Equal Protection clause of the U.S. Constitution. This clause directly applies to the states. Under this clause, those who are similarly situated must be treated equally. There are no exceptions or qualifications to this rule. Here, according to the facts, BZA recently granted a parking variance for a nearby building under very similar circumstances. BZA must grant the variance. Additionally, the government may not violate Due Process. Due Process requires that all state action must be a reasonable way to promote health, safety, welfare or morals of its citizens. Here, the BZA denied Oliver’s request because a nearby parking-lot operator objected. This act is not rationally related to the above-mentioned police power. It violated Due Process. The variance cannot be denied for this reason.

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