Daily Development for Monday, April 10, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

EASEMENTS; TERMINATION; FORECLOSURE: Foreclosure of servient easement property does not terminate easement appurtenant to other properties.

Hearn v. Autumn Woods Office Park Property Ass'n, 1999 Miss. LEXIS 391 (Miss. 12/1/99)

The easement in question was a right of access and parking on certain parcel in an office park subdivision. It was set forth on the plat of the subdivision and was appurtenant to the other lots. An owner's association owned other common elements, but this property remained in title to the developer. The case is not clear as to the actual title of the parcel. The plat indicated that it would serve as a "common element," but there was no other deed.

Someone didn't pay the taxes on the parcel. Presumably this was the developer, who would be viewed as still in title. If the designation on the plat constituted a grant or dedication to the owner's association or to the lot owners in common, then they failed to pay the taxes. The court simply says the taxes were not paid, and does not indicate who had the responsibility to pay them.

When property taxes were not paid, it passed into a property tax foreclosure process, and Hearn acquired the parcel. After attempting unsuccessfully to sell the property to the owner's association, Hearn put up "no trespassing" signs. This got the attention of the neighbors, and a lawsuit was brought.

The Mississippi Supreme Court, following analysis in other jurisdictions, observed that when an easement appurtenant is fixed upon a given servient property, is will reduce the taxable value of that property and a corresponding benefit will accrue to appurtenant benefitted properties. Consequently, tax revenues will not be reduced by a rule establishing that such easements are not part of the tax parcel sold, but rather survive the tax sale. In fact, revenues may be enhanced if the net benefit of the easement to other lots exceeds the net reduction in the value of the servient tax lot.

Comment 1: What about easements in gross? Particularly power lines, telecommunications lines and other utilities? No benefitted property to add value to the tax base. Does the argument still work? (The editor acknowledges that the exemplar easements in gross are part of activities that are separately taxed, but this is not true of all of them.)

Comment 2: On the issue of whether tax sale foreclosures elminate these interests, one would think that the first question ought to be what the statutes say about the nature of the property sold at tax foreclosure, since this established Hearn's reasonable expectations. Several other cases cited for authority involved statutes that specifically excepted easements from the coverage of tax sales. The court does not discuss the Mississippi statute.

Comment 3: In any event, although the editor concurs that the reasoning in the case makes some sense, he believes that the question is essentially a legislative one, and the court should not step in and establish policy here unless it is very clear that the legislature has abdicated its responsibility.

Comment 4: Speaking of the court's common law function, the court discusses the easement rights created here in terms of covenants running with the land. It tests the promise for privity and for a "touch and concern" requirement. This normally is not necessary with easements, and there was no promise involved here other than an easement right. Is there some quirk in Mississippi law, or did some law clerk sleep through Property class and later wind up writing the judge's opinions?

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

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