Winter 2006 Essay Question (60 minutes estimated). Frank Farmer owned a large
farm in the State of Confusion that consisted of two parcels, Westacre and Eastacre, as
shown on the drawing. In 1980 he erected a barn on Eastacre and installed a 240-volt
overhead electrical wire from the barn to the power lines owned by the local electric
company and running down West Road. The electricity was used to supply power to tools
Farmer used in the barn and to operate the blower on a propane furnace used to heat the
barn.
The power lines on West Road were not the only possible source of power for the
barn, but they were the most convenient. Other lines owned by the electric company
existed (and continue to exist) about a half mile north of Eastacre on East Road, but it
would have cost Farmer an additional $5,000 to connect to them because of the added
distance.
In 1984 Farmer sold Eastacre to Tom Thomas by a valid deed containing all
covenants of title. The deed made no reference to the electrical line, and the parties did not
discuss it. Nevertheless, Thomas continued to use the barn and the electrical service much
in the same way that Farmer had done. Shortly after the purchase, Thomas asked Farmer
if it was OK for him to continue to use the electrical line, and Farmer replied, "I guess you
have a legal right to it."
In 1993 Farmer sold Westacre to Jenny Jones, giving her a valid deed containing all
covenants of title. Jones obtained a mortgage loan from Big Bank to buy Westacre; the
mortgage was promptly recorded. She obtained a title examination and purchased title
insurance policies for both herself and Big Bank, but neither the parties, the deed, nor the
title insurance policies made any reference to the electrical line running across Westacre.
In
1995 Thomas decided to discontinue his farming operation and convert
the barn
into a machine shop. (This was permitted under the local zoning
ordinance.) The machine
shop had many heavy-duty machines and required a great deal of
additional electricity, so
Thomas replaced the original electrical line across Westacre with a new
23,000-volt three-phase line. He removed the ten original 25-foot wood
poles and replaced them with five 50-foot steel towers. This work with
done without Jones' permission or knowledge while she
was out of town on business. When she returned she saw the new poles,
but did not make
any objection to them.
In early 2006 Jenny Jones defaulted on the payments due on her mortgage loan to
Big Bank, and the bank foreclosed the mortgage, making all of the individuals mentioned
above parties to the foreclosure proceeding. Big Bank itself was the successful bidder at the
foreclosure sale and now owns Westacre.
You have just been contacted by Big Bank, which wishes to subdivide Westacre into
residential lots. However, the bank feels, especially because of the recent controversy over
the alleged cancer-inducing properties of high-voltage electrical lines, that the existence of
the electrical line running over Westacre will make it difficult or impossible to market the
lots. In order of preference, the bank would like to obtain the following remedies: (1) It
would like to compel Thomas to remove the line entirely. (2) If that is impossible, the bank
would like to require Thomas to move the line to the south boundary of Westacre and
return to 240-volt service with 25-foot wood poles, which would be much less obtrusive and
objectionable to lot purchasers. (3) If neither of these remedies is available to Jones, the
bank would like to recover damages for the reduction in value of Westacre resulting from
the existence of the power line. (4) The bank would like to make a claim on its title
insurance policy.
Please write Big Bank a letter advising it of its legal rights in this matter. Discuss
all relevant legal theories. Do not permit your conclusion with respect to one issue to
foreclose your discussion of other relevant issues. The statute of limitations for adverse
possession in the State of Confusion is ten years.