Property I: Essays Questions, Fall 2002 (Prof. Whitman)

Essay Question 1 (60 minutes estimated time).

When Uncle Matt Damon wrote his valid will in 1995, he included the following clause:

“I leave my office building in the State of Grace to my niece and nephew, JLo and Ben, as cotenants, and to the survivor.”

Matt died in 2000 and his will was duly probated. Ben lived in the State of Grace, and was delighted to have inherited the office building. JLo, on the other hand, was an actress and lived in California. She was already wealthy and had no particular interest in the building Uncle Matt had left to her and Ben.

The office building had just one tenant, an internet startup called E-Way. Its lease had commenced in 1995 and it ran until the end of 2001. E-Way paid rent of $2,000 per month. This rent was “net” of all expenses; that is, E-Way also paid the taxes, insurance, utilities, and routine maintenance expenses of the building. Ben began collecting the rent as of July 1, 2000. He has never turned any rent over to JLo, and she has never asked for it until now.

In January 2001 E-Way called Ben and advised him that the roof of the building was leaking badly. Ben paid the cost of re-roofing, $10,000, from his own funds. This was only significant repair he ever made on the building.

When E-Way’s lease expired at the end of 2001, Ben advertised and located a new tenant, Frank’s EZ Loan Co. Frank’s needed to have the building remodeled, with a number of new internal partitions for offices, in order to make the building suitable for its use. Ben spent $20,000 doing so, and Frank’s moved in on February 1, 2001, paying the same rent ($2,000 per month) as E-Way had been paying. Ben collected this rent through December 1, 2002.

On December 5, 2002 (this month), Ben was killed in a tragic skiing accident. His will left all of his property to his good friend Bruce, who was also appointed executor of Ben’s estate. At about the same time, JLo’s acting career began to falter, and she now needs funds rather badly. She has announced her intent to partition the property and to demand all of the money to which she is entitled from Ben’s estate.

Bruce has consulted you and asked the following questions:

(1) Who owns the office building?

(2) Does JLo owe any money to Ben’s estate on account of the building?

(3) Does Ben’s estate owe any money to JLo on account of the building?

(4) Can JLo obtain an order of partition, and if so, what type of partition will be held and what will be its result?

Please write answers to these questions, considering all plausible arguments and legal theories that the parties might raise. The market value of the building at the time Ben and JLo inherited it was $200,000. Ben’s additional work for Frank’s EZ Loan increased the building’s value to $220,000.

Essay Question 2. (50 minutes estimated time)

Fred and Wilma Flint owned (as tenants in common) a large tract of vacant land in the State of Grace. In 1980 they gave it by deed, for no consideration, to the Grace Food Bank, a charity. (They took a large tax deduction that year!) The deed read as follows:

Grantors, Fred and Wilma Flint, hereby grant to Grantee, Grace Food Bank, the following described land. In the event that Grantee shall in the future convey this land to any other owner except a recognized charity, it shall revert to Grantors. [Land description and signatures followed.]

Grace Food Bank constructed a building on the land in 1981 and used it for their charitable work until 1990. In that year they concluded that the building was no longer large enough to house their activities, so they sold the land and building for $100,000 to Joe’s Auto Parts, Inc., which converted the building into a store. Joe’s began operating the store immediately. However, in 1995 Joe’s business dropped so severely that Joe’s closed and removed its inventory for about six months. During this period Joe’s business sign remained on the building and no one else occupied it. With the help of a bankruptcy proceeding, Joe’s satisfied its creditors and reopened; the store has been open without interruption ever since.

All of these events went unnoticed by Fred and Wilma, who were occupied by more serious concerns. In 1989 Fred was convicted of federal tax fraud and sentenced to 5 years in the federal penitentiary. Hence he was in prison when the Food Bank sold the building to Joe’s. Fred was released in 1994 after serving his full term.

Fred and Wilma have recently consulted you. They are unhappy that their building has been converted into an auto parts store, and would like to get it back if possible. Please write a brief analysis of their situation, discussing all relevant legal arguments and advising whether they are entitled to recover their former property. The statute of limitation for the filing of an action in ejectment in Grace is ten years.