My decision to briefly write about this case is borne of the fact that my own personal feelings and opinions largely mirror the debate that played out in the Tracey case itself.  I am a dog lover, a dog owner, and I have mixed feelings about pit bulls.  I believe that any dog raised to fight will eventually become a vicious animal.  The issue with pit bulls, in my view, is twofold:  first, certain individuals are drawn to pit bulls precisely because they have been labeled as tough, aggressive, fighting animals.  They acquire pit bulls for that reason, treat them with the belief that pits are vicious, and have a goal of fostering a mean animal.  The Michael Vicks of the world who are drawn to dog fighting favor pits largely because of the reputation of the pit.  The second issue that sets pit bulls, as a breed, apart from other animals is that they are physically strong.  When a small dog attacks, there is only so much damage it can do.  Certainly a small dog can maim an infant or can cause serious injury to an adult, but a grown person can certainly act to restrain a small dog attacking a child or other person.  Pit bulls, in contrast, tend to cause more extensive injury when they do attack.  In other words, even if they don’t have a greater propensity to attack people, the consequences that ensue when they do attack are far more grave than with other breeds.

In its opinion, the Tracey Court’s legal holding was as follows:

We hold that upon a plaintiff’s sufficient proof that a dog involved in an attack is a pit bull or a pit bull mix, and that the owner, or other person(s) who has the right to control the pit bull’s presence on the subject premises (including a landlord who has the right and/or opportunity to prohibit such dogs on leased premises as in this case) knows, or has reason to know, that the dog is a pit bull or cross-bred pit bull mix, that person is strictly liable for the damages caused to a plaintiff who is attacked by the dog on or from the owner’s [or landlord’s] premises.

The dissenting judge (Judge Greene) opinion took issue with the majority’s decision to change the common law — rather than allow the legislature to do so; Judge Greene also disagreed with the notion of labeling an entire breed as inherently dangerous (without respect to the characteristics of the particular dog involved in a specific case).

Because this case is now in the news, and on the assumption that you may share my ambivalence about pit bulls, I wanted to make the court opinion itself available to you.

Tracey v. Solesky (https://docs.google.com/open?id=0Bz_5K5g5u93pOWFzNFp4dTgwOUU)

Judge’s Opinion

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The Clean Water Act prohibits “the discharge of any pollutant by any person” without a permit, into “navigable waters.” Upon determining that a violation has occurred, the Environmental Protection Agency (EPA) may either issue a compliance order or initiate a civil enforcement action. The resulting civil penalty may not exceed [$37,500] per day for each violation. The Government’s attorneys argued in the Sackett case that the amount doubles to $75,000 when the EPA prevails against a person who has been issued a compliance order but has failed to comply.

Michael and Chantelle Sackett, the petitioners in the Supreme Court, received a compliance order from the EPA, which stated that their residential lot contained navigable waters and that their construction project violated the Act. The Sacketts sought declarative and injunctive relief in the Federal Dis­trict Court, contending that the compliance order was “arbitrary [and] capricious” under the Administrative Procedure Act (APA), and that it deprived them of due process in viola­tion of the Fifth Amendment. The District Court dismissed the claims, finding that it lacked jurisdiction to hear the subject matter of the Sacketts’ claim. The Ninth Circuit af­firmed, concluding that the Clean Water Act precluded judicial review of compliance orders unless and until the EPA sought to enforce such Order, and that such pre­clusion did not violate due process.

The Supreme Court’s holding was modest in its scope, and provided only that the Sacketts may bring a civil action under the APA to challenge the issuance of the EPA’s order.

In reaching its conclusion, the Supreme Court held that the APA provides for judicial review of “final agency action for which there is no other adequate remedy in a court.”

The Supreme Court looked to prior cases which considered when an agency action is a “final agency action” of the sort which could then be subject to judicial review under the APA; if the Compliance Order was “final agency action,” then the Order was subject to judicial review.  Otherwise, if the Order was merely a step in the agency’s decision-making process, judicial review under the APA would be inappropriate.

The Court found that the compliance order in the Sacketts’ case had all the hallmarks of APA finality. Through it, the EPA “determined” “rights or obligations,” in that it required the Sacketts to restore their property according to an agency-approved plan and to give the EPA access to the property. Also, the court observed that “legal consequences flow from the order, which, according to the Government’s argument in the case, exposed the Sacketts to double penalties in future enforcement proceedings. The order also severely limited the Sacketts’ ability to obtain a permit for their fill from the Army Corps of Engineers. Further, the order’s issuance marked the “consummation” of the agency’s decisionmaking process, for the EPA’s findings in the compliance order were not subject to further agency review. The Sacketts also had “no other adequate remedy in a court.”   A civil action brought by the EPA ordinarily provides judicial review in such cases, but the Sacketts had no way to initiate that process. And each day went by, the Sacketts could accrue additional potential liability. Applying to the Corps of Engineers for a permit and then filing suit under the APA if that permit is denied did not provide an adequate remedy for the EPA’s action.

Finally, the Court observed that the Sacketts might not be entitled to judicial review of the EPA’s compliance order if the statutory scheme set forth in the Clean Water Act itself indicated that judicial review was not available to review such actions.  The Court discussed several of its cases which held that the APA generally creates a “presumption favoring judicial review of administrative action.”  The Court concluded that while the presumption can be overcome by express statutory language, it can also be overcome by inferences of intent drawn from the statutory scheme as a whole.  The government, however, failed to persuade the Court that such an inference could be drawn.

The other scheme, RCW 4.84.250-.300, encourages parties to settle before going to court in cases where the amount in controversy is $10,000 or less.  It does so in part by allowing a plaintiff to recover attorney fees if the plaintiff makes an offer of settlement at least 10 days before the initial trial, the offer is rejected, and the plaintiff recovers more than was offered.  The recipient of the settlement offer (whether that is the Plaintiff or the Defendant – either can make an offer) must be confident that they can do better at the arbitration before rejecting the offer.

The question in the Williams case arose because the Plaintiffs invoked the second statutory scheme for the first time, 10 days before a trial de novo, only after they recovered nothing at the mandatory arbitration (from which they had sought a trial de novo).

After succeeding in their trial de novo, the plaintiffs applied for and received prevailing party attorney fees under RCW 4.84.250.  The Plaintiffs, Harris and Williams, argued that although they offered to settle for under $10,000 only after the mandatory arbitration, RCW 4.84.250-.300 allowed them to recover attorney fees as long as they made their offers 10 days before the trial de novo.  The Supreme Court disagreed, and affirmed the appellate court’s holding that RCW 4.84.250-.300, which is designed to encourage prompt settlement of small claims, applies only to a plaintiff that seeks recovery of $10,000 or less and makes an offer of settlement 10 days before the initial hearing — whether that initial hearing is a trial or an arbitration.

The Supreme Court explained that in cases subject to mandatory arbitration, the arbitration hearing is tantamount to “the trial,” and a trial de novo was essentially an appeal.

The basic rule thus established in the unanimous decision in Williams v. Tilaye is that in order to invoke the attorney fees scheme under RCW 4.84.250-.300, a plaintiff must make an offer of settlement 10 days before the initial hearing whether it is a trial or an arbitration.  Because the Plaintiffs in the Williams case did not make an offer at least10 days before the mandatory arbitration, they were not entitled to attorney fees under RCW 4.84.250-.300.

What is Adverse Possession?

In its most basic sense, “adverse possession” is a legal doctrine that allows a person to acquire legal ownership of property that he treats as his own, if he does so for a long enough period of time, even though the property is not his own.  In other words, a person who uses another person’s property, without permission, for a long enough period of time, can acquire legal ownership of that property.  As an  example,  if  a fence  separates two properties — Parcel A and Parcel B — but  does not run along the actual property line,  a portion of Parcel B might be  located on Parcel A’s side of the fence.

If the owner of Parcel A mows and tends to all areas of his property right up to the fence (and is therefore maintaining parts of Parcel B), and does so for the requisite length of time, the owner of Parcel A might be able to acquire legal title to that portion of Parcel B that he has maintained.

Most people are familiar with statutes of limitation.  A statute of limitation sets forth a time period within which one must sue to enforce a right, failing which the person loses the right to sue.  The statute of limitation for a trespass action in Washington is ten (10) years.     If an owner allows another person to continue trespassing on his property and does nothing about it for ten years, the trespasser can acquire legal title to the complacent owner’s land.  Thus, adverse possession is nothing more than a statute of limitation for bringing a trespass action.  After ten years of trespassing, the trespasser can go to court to seek a declaration that the owner has allowed the statute of limitation to pass, and that the claimant   has therefore acquired title to that property.

The Elements of Adverse Possession

A person claiming title to land by adverse possession (I shall refer to such a person as the “claimant”) must prove four basic elements.  The claimant must show that she or he used property belonging to another in a way that was (1) open and notorious, (2) actual and uninterrupted, (3) exclusive, and (4) hostile.[1]

Possession (i.e. use)  of the property that includes  each of the necessary elements must exist for ten years,[2] following which the claimant can go to court and acquire legal title to the property.  As stated above, adverse possession is merely a statute of limitation for trespass.  Thus,  if the title owner of land has knowledge that another person is using his land openly and without his permission, he can sue that person for trespass.  However, if the title owner allows the trespass to continue for ten years, he loses his right  to sue the claimant.  Each of the four elements stated above exists to protect the diligent owner, and also to reward those who productively use land.

Sneaking onto another’s property in the dead of night and ‘using the property’ until the break of dawn is not “open and notorious,” because the true owner would not reasonably be aware of the clandestine use of his property.  For this reason, such surreptitious use of another’s land will never ripen into an adverse possession claim no matter how long it goes on.

Likewise, using another’s property openly and exclusively for one year, but then vacating for some period of time, then occupying it for another year, then vacating (and so on) is not “actual and uninterrupted.”  Thus, even if such intermittent use continues over the course of fifty years such that cumulatively the land has been used and occupied for ten years, such use would not give rise to an adverse possession claim, since the claimant would be unable to establish  an uninterrupted use.

The requirement that the claimant use the land “exclusively” protects a title owner of land who decides to let everyone use his property.

Finally, the “hostile” element does not have the normal definition of ‘hostile;’ it does not mean enmity or ill will.  Rather, ‘hostile’ in the adverse possession context merely means ‘without the owner’s permission.’  Thus, a landowner can explicitly give his permission to allow another to use his land for 100 years and not be subject to a claim of adverse possession.  Think of a landlord who rents to a tenant for more than ten years:  the tenant is there pursuant to an agreement with the owner, and does not adversely possess the property.

Common Defenses

Like all legal doctrines, there are exceptions to the general rules regarding adverse possession, as well as several defenses.  For example, public land can never be adversely possessed.  Open, continuous, exclusive and non-permissive use of land, where the land is owned by the city, county or state, cannot form the basis of an adverse possession claim.

Most “defenses” to an adverse possession claim involve simply proving the non-existence of one or more of the required elements.  The word ‘defense’ in the preceding sentence is put in quotation marks because asserting that  a statute of limitation bars the action, or that another element necessary to an adverse possession claim is absent,  is itself generally considered a defense. Since adverse possession is itself essentially the assertion of a statute of limitation defense to a trespass action, labeling efforts to resist such an assertion a “defense” seemingly puts the terms “claim” and “defense” on their heads.

“Neighborly accommodation” is one of the most common defenses to an adverse possession claim when dealing with developed residential property.  Suppose two houses share a common boundary comprised of a lawn, with no fence separating the two properties.  Allowing your neighbor to walk on, use, or maintain portions of your property may merely be a neighborly accommodation on your part.  Obviously, it would make bad public policy to require neighbors to constantly insist upon asserting their property rights vis-à-vis their neighbor, and accordingly the “neighborly accommodation” defense arose to lessen the tension between encouraging the productive use of land, on the one hand, and avoiding neighbor-on-neighbor acrimony, on the other.

For example, suppose “Bill” and “John” own the neighboring properties described above (sharing a common boundary comprised of a lawn, with no fence separating the two parcels).  Suppose Bill routinely mows the front lawn, including portions of the lawn on John’s side of the property line.  Suppose also that throughout the year, Bill sits on lawn chairs placed in the vicinity of the boundary line, occasionally setting up his chair on John’s side of the line, and occasionally on his own side of the line.  The neighborly accommodation defense would protect John from losing part of his property were Bill to bring a claim for adverse possession.  Bill might be able to prove that he openly, continuously, and exclusively used portions of John’s property and never once sought or received permission from John.  John, however, could defend against such a claim by demonstrating that he was merely extending a neighborly accommodation by not protesting Bill’s use of the property or suing Bill for trespass.  The ‘neighborly accommodation’ defense has its limits, such as where Bill unilaterally decides to build a fence between the two properties, does not consult with John prior to erecting the fence, and it is later determined that the fence encroaches upon John’s property.   Generally, however, courts have stuck to the rule that true owners often do (and should) permit third persons to use their property on an occasional, transitory manner, and that not all use is adverse in this sense.

Some defenses, while common, apply only to certain types of land.  The so-called “vacant land doctrine” applies (as its name suggests) to open, vacant, undeveloped land.  The vacant land doctrine applies a presumption that the use of vacant, undeveloped land is done with the permission of the owner.  If that presumption applies, the claimant must then put forth evidence to rebut that presumption.  In such cases, use which might have been sufficient to establish adverse possession if done on developed property is insufficient when done on vacant land.

One of the most common circumstances giving rise to adverse possession claims occurs when the owner (who I shall call “Owner A”) of property obtains a survey (usually for some reason other than in connection with a boundary dispute), and the survey reveals a disparity between the legal/surveyed property line and a boundary fence.  Owner A realizes that the fence separating his property from his neighbor’s property — a fence that was present when Owner A bought the property and which Owner A always assumed marked the true legal boundary — is five feet closer to Owner A’s house than the true property line.  Owner A understandably asks: “Can I move the fence so that it coincides with the surveyed/legal property line, since that will give me five more feet of yard running the entire length of the fence?”  Unfortunately, the answer to that question is “It depends.”

Adverse possession cases often proceed to trial (rather than being resolved based on a summary judgment motion or other pre-trial disposition) precisely because the questions are so fact-specific.  Often, one or both of the parties has not personally owned the property  for the entire ten year period, in which case it is necessary to investigate how the prior owner(s) used the property, and whether there were any explicit agreements between the prior owners (generally, the prior owner’s use “counts” toward the current owner’s claim).

Conclusion

Adverse Possession is, quite literally, a doctrine that legalizes the theft of land under certain circumstances.  It is a very unintuitive rule in this sense.

However, the elements of adverse possession, as well as the most common defenses to it, along with the extraordinarily long period of time required to establish the claim, together operate to deprive an owner of his property only when the owner unreasonably sits on his rights for an extended period of time.

Hopefully the foregoing article explains the basics of this doctrine.

It has long been the law in Washington that a seller of real estate who knows of a material defect in the property he is selling but fails to disclose its existence on the Form 17 Seller Disclosure Statement is liable to a buyer for the tort of fraud.

In 2007, the Washington Supreme Court issued its decision in Alejandre v. Bull, which concerned the types of remedies buyers could have against sellers who made misrepresentations on the Form 17. In response to the Alejandre decision, the MLS amended its Form 21 Purchase and Sale Agreement. Those amendments require that the parties to a purchase and sale agreement specify in the “Specific Terms” section of the agreement whether the seller will be liable for economic losses resulting from the seller’s negligent errors or omissions in the Form 17.

This newly created right — the ability of buyers to sue sellers for unintentional errors and omissions in the Form 17 — vastly expanded the situations in which sellers could be sued by buyers where previously they could not. Sellers need to be made aware that even innocent errors or inaccuracies are potentially actionable depending on how the MLS form is completed.

Section 9 of the Specific Terms in the MLS Purchase and Sale Agreement, reads:

Disclosures in Form 17: Buyer [ ] will [ ] will not have a remedy for Seller’s negligent errors, inaccuracies, or omissions in Form 17.

If the parties check the “will” box in Section 9 and execute the purchase and sale agreement, the buyers then have a contractual right to recover damages from the seller for errors that were merely negligent.

A “negligent error or omission” occurs when the seller fails to disclose a defect of which a reasonable person in the seller’s position would have known, even if the particular seller completing the form 17 is unaware of the defect. So checking the first box in the revised portion of the form vastly expands the situations in which a seller could be held liable for errors and inaccuracies in the form 17.

The significance of the revisions in the purchase and sale agreement form is amplified by the fact that the Form 17 itself has not been changed. In the Form 17 itself, the seller is repeatedly instructed to complete the form based on the seller’s actual knowledge. Likewise, the Form 17 repeatedly requires the buyer to acknowledge that the Form 17 is based only on the seller’s actual knowledge, and that there are conditions that might exist of which the seller is not aware, and that accordingly the buyer should get his or her own independent inspection of the property.

Example: A person lives in a house with a main level, some bedrooms upstairs, and a partially finished basement. There are three bathrooms in the home: one upstairs, one on the main level, and one in the basement. Suppose that the owner primarily uses the bathroom that is located upstairs, and occasionally uses the bathroom on the main floor, but rarely if ever uses the bathroom in the basement. Suppose further that there are significant problems with the plumbing in the basement bathroom, but the seller does not honestly know about those problems because he simply does not use the facilities in the basement. Finally, suppose that if the seller were to use the basement bathroom, the plumbing problems would be apparent. The owner lists the house for sale, and in connection with the listing, completes the Form 17 (as he would be required by law to do). The seller indicates that to the best of his knowledge, there are no plumbing problems. A buyer receives and reviews the Form 17, makes an offer, and ultimately purchases the house. Shortly after closing, the Buyer uses the restroom in the basement, and discovers the significant plumbing problems.

 

Prior to the amendment of the purchase and sale agreement form, the purchaser would have no basis to sue the seller unless there was evidence that the seller had actual knowledge of the plumbing problems which the seller failed to disclose.

In the revised purchase and sale agreement form, however, the result would be different if the parties agreed that the buyer would have a remedy for seller’s negligent errors, inaccuracies, or omissions in the Form 17. That is because the buyer in the example above could make a valid argument that even if the seller did not actually know of the plumbing problems, a reasonable person in the seller’s position would have known of the problems. Hence, in the Form 17, the seller denied that there were plumbing problems, even though it turned out that there were plumbing problems. The error or inaccuracy, while not intentional, was arguably negligent.

Unfortunately, the previous rule of thumb — that sellers completing a Form 17 are on safe ground as long as they complete the Form 17 to the best of their actual knowledge — no longer holds true.

If you are contemplating the purchase or sale of real estate, it is imperative that you consult with someone who has expertise in the area who can advise you how best to structure your agreement. Proper precautions on the front end of a transaction can save you significant expense (and grief) after the transaction is complete.

Look for upcoming articles by David Ruzumna on how best a seller should complete a Form 17, and what advice an agent should give when discussing the Form 17 with a seller.