Real Cases in Real Estate By Andrea Lee Negroni, Esq. - July 5th Update

REAL CASES IN REAL ESTATE

By Andrea Lee Negroni, Esq.

BuckleySandler LLP

alnegroni@buckleysandler.com

Minnesota Neighbors' Boundary Dispute Results in Grant of Adverse Possession and Redrawing of Boundary By Practical Location.

      Minnesota's Court of Appeals resolved a boundary dispute between neighbors, granting land to one of them through adverse possession. Holz-Kinney v. Thaler illustrates the concept of "boundary by practical location" and reminds real estate lawyers of the term "disseizor" (also spelled disseisor).

      James Thaler bought land in 1973, cleared it, and planted trees along the east border. Over time, the tree line became thicker. Thaler deeded part of his land to the neighbor on the east to permit the neighbor to build a driveway. While he intended to convey the land only east of the tree line, he actually conveyed part of the property west of the line. After the conveyance, he maintained the property all the way to the tree line.

      The adjacent property to the east was sold in 2000 to Nancy Holz Kinney. Thaler told Nancy's husband that the tree line was the property boundary. However, Nancy's husband removed trees from the tree line and built a garage near the tree line. Thaler confronted his neighbor and called the sheriff, who ordered the tree-cutting stopped. Holz Kinney then obtained a survey which showed the trees were more than six feet onto her property. With this knowledge, she sued Thaler for trespass; he responded by claiming ownership of the disputed area by adverse possession and boundary by practical location.

      Boundary by practical location is a principle that can result in the legal redrawing of property boundaries if adjacent landowners treat a line as the boundary for a specific period of time. The line in this case was a tree line, but a line could also be a river or some other type of line. Adverse possession, of course, means "actual, open, hostile, exclusive and continuous possession" of property for a period of time defined by law, which in Minnesota is 15 years.

      The Minnesota Appeals Court held Thaler's possession of the disputed land dated from 1977 when he conveyed land to his former neighbor. Since then, he had maintained the land to the tree line in an open and exclusive manner, warning away the new neighbors, who treated the tree line as the actual boundary. Thaler thus satisfied the criteria for adverse possession. The criteria for boundary by practical location are (1) acquiescence; (2) agreement, and (3) estoppel. Because Thaler marked the property line with trees, his eastern neighbors agreed to the line for the 15 years required for adverse possession, and he maintained the property to the tree line, the Court held that he owned it. The adverse possession requirement would have been satisfied by 1992, eight years before Nancy Holz Kinney bought her land.

      Thaler's role is that of a disseizor - according to Black's Law Dictionary, one who wrongfully deprives another of his freehold property. Of course, in light of this opinion, the word "wrongfully" would not appear accurate.

      Another Minnesota case established boundaries by practical location on farmland, where "plow lines" between farms established the practical boundaries. Both cases are unpublished.  Holz-Kinney v. Thaler, A09-874, 2010 Minn. App. Unpub. (Minn. Ct. App. Nov. 24, 2009), online at the Minnesota State Law Library at http://www.lawlibrary.state.mn.us/archive/ctapun/0911/opa090874-1124.pdf; Roehrs v. Rasmussen, A09-1354, 2010 Minn. App. Unpub. LEXIS 424 (Minn. Ct. App. May 11, 2010).

Lexis.com subscribers can view the enhanced version of Holz-Kinney v. Thaler, 2009 Minn. App. Unpub. LEXIS 1241 (Minn. Ct. App. Nov. 24, 2009)

Lexis.com subscribers can view the enhanced version of Roehrs v. Rasmussen, 2010 Minn. App. Unpub. LEXIS 424 (Minn. Ct. App. May 11, 2010)

Non-subscribers can access State Case Law, Codes, Full Jurisdictional Shepard's® Citations and more using lexisOne's Research Value Package.


Mechanic's Lien is Strictly Limited to the Amount the Property Owner Agrees to Pay for the Work.

      The (unpublished) decision in Accurate Mechanical v. Summer Glen Estates applies Connecticut's mechanic's lien statute to limit the amount of a lien in a situation where the contractor filed a lien for more than $148,000 which was reduced by the court to $19,786. It also serves as a reminder to those who expend labor and materials to improve a property that they must get the owner's advance agreement for the improvements budget.

      Brian Whitford agreed to buy a new home for $537,000 from a builder, but Whitford wanted a geothermal heating system not offered by the builder. Whitford, also a contractor, made a deal with the builder to install his specialty heating system himself, in exchange for a closing cost credit of $10,000. The builder allowed Whitford to make other improvements too, with total closing credits agreed to be $19,786.

      Whitford's heating system ended up costing almost $50,000, and when he could not reach agreement with the builder about additional closing credits, he stopped work on the house and filed a mechanic's lien for $148,781. When he tried to foreclose his lien, the builder successfully sought reduction of the lien to $19,786, the amount originally agreed to be a closing cost credit.

      As the decision states, a mechanic's lien is "a very powerful but very limited, statutory pre-judgment remedy." The Connecticut mechanic's lien law allows the lien to be filed by one who furnishes materials or services for construction or improvement of real estate by agreement with or consent of the land owner. Consent of the land owner was the missing link in Whitford's case, because the closing cost credits were agreed in writing to be $19,786, not $148,781. The rule of the case is this: "A mechanic's lien may not attach to any real estate in an amount greater than the price that the owner has agreed to pay the contractor for the improvements to the real estate."

      Whitford tried to meet the "consent of the owner" test, arguing that as contract buyer of the home, he should be considered the owner. This argument failed because his purchase contract contained an express waiver of any equitable ownership rights. Whitford also claimed that if the lien was reduced, the builder would be unjustly enriched by the Whitford's improvements, but the court noted that in Connecticut, a mechanic's lien claim may not be based on unjust enrichment by the owner; it is strictly a statutory remedy and is limited by the land owner's agreement to pay for improvements.

Accurate Mechanical LLC v. Summer Glen Estates, Inc. (unpublished), No. HHBCV095012275S (Ct. Sup. Ct., Judicial Dist. of New Britain), Oct. 5, 2009.

Lexis.com subscribers can view the enhanced version of Accurate Mech., LLC v. Summer Glen Estates, Inc., 2009 Conn. Super. LEXIS 3138 (Conn. Super. Ct. Oct. 5, 2009)

Non-subscribers can use lexisOne's Free Case Law search to view the free, un-enhanced version of Accurate Mech., LLC v. Summer Glen Estates, Inc., 2009 Conn. Super. LEXIS 3138 (Conn. Super. Ct. Oct. 5, 2009) 

 

Real Cases in Real Estate is a weekly update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.

Followers of Real Cases in Real Estate will learn and be entertained by lawsuits involving nuisance, trespass, zoning violations, deed restrictions, title insurance, public utilities, mechanics liens, construction defects, adverse possession, foreclosure and eviction, divorce and marital property rights, tenants' rights, and more. Real Cases in Real Estate uncovers the unpredictable, amusing, and sometimes outrageous disputes between next-door neighbors, contractors and homeowners, condo boards and residents, real estate brokers and homebuyers, and zoning administrators and developers.

Each fully cited case summary highlights the essential law of the case and explains the principal legal theories and concepts relevant to the outcome. Plain language treatment makes Real Cases in Real Estate accessible to lawyers and laymen alike.

Whether you follow real estate law professionally or as a hobby, you'll find something new and useful every week in Real Cases in Real Estate.