Daily Development for Friday, April 21, 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

LANDLORD/TENANT; CHARACTERIZATION AS A LEASE; PUBLIC RECREATIONAL LICENSE: Agreement for mobilehome space entered into between licensee of Federal recreational property and mobilehome operator is a license, and creates no property interest. Action by the licensee to alter to boundaries of the mobilehome space can lead to contract damages, but not a claim in trespass.

Qualls v Lake Berryessa Enters., 91 Cal. Rprt. 2d 143 (Cal. App. 1999)

The Putah Creek Resort operates on federal land under a concession agreement with the county, which has a management agreement with the Bureau of Reclamation of the Department of the Interior. The resort is subject to statemandated lot lines and minimum setbacks governing mobilehomes. The minimum setback line was three feet. Mobilehome owners rent lots from the resort for mobilehome space, to be used for recreational purposes only and not for permanent residence. The federal government does not recognize the Califonia Mobilehome Residency Law as applying to the resort.

Since 1979, mobilehome owners, the Qualls, had rented Lot 149. In 1992, the resort reestablished its lot lines to comply with state regulations. An existing marker (approximately three feet from the mobilehome on adjacent Lot 148), acknowledged by the Qualls as the boundary, was found and reestablished. In 1994, the Parks occupied Lot 148 under an agreement identical to the one between the Qualls and the resort. The Parks requested clarification of the lot lines and, because the markers set in 1992 could not be found, the resort manager informed both owners that the boundary lines between their respective lots were halfway between the existing mobilehomes.

The resort manager rescinded this statement, however, after the Qualls complained that the new lot line was closer to their mobilehome than the one set in 1992. After the Parks moved a new mobilehome which extended four feet over the newly established boundary line onto their lot, the resort again readjusted the lot line in accord with the state's three foot setback requirement. The Qualls brought suit for (1) breach of contract against the resort and (2) the torts of trespass and nuisance against the Parks. On the claim for breach of contract, the court ruled in favor of the Qualls, finding that the lot line in existence "prior to, during and subsequent to, 1992" was the lot line urged by the Qualls (four and onehalf feet from the mobilehome on Lot 148) and awarded the Qualls $5000. The court ruled against the Qualls on the tort claims.

The court of appeal affirmed. The court noted that the resort's rights regarding the land were derived from the concession agreement with the county and concession agreements are generally construed as creating licenses, not tenancies. The county did not purport to convey or transfer any title or possessory interest, but merely conferred the privilege of occupying the premises; and the resort could not transfer an interest in property greater than it possessed under its concession agreement. Thus, the license conferred a privilege to occupy the premises, as shown by a clear description of the allowable uses of space and the limited time for occupancy in accord with the recreational uses permitted.

The resort argued that the written agreement that provided for the Qualls' use of Lot 149 should be construed to refer only to the physical space occupied by the mobilehome, not the land on which the mobilehome sits or the lot lines. The court rejected this reading, holding that Lot 149 necessarily included enough land to satisfy minimum setback requirements. Moreover, "the most reasonable construction of the term 'Mobilehome Space No. 149' would be with reference to the lot lines so established," which was consistent with the Qualls' historical use of the space. Accordingly, the court declared that the Qualls possessed a license, enforceable by a breach of contract action for damages. The court also affirmed the trial court's ruling that the Parks' mobilehome could remain where it had been placed.

The court awarded the Qualls' $5000 in damages, but also awarded them attorney's fees.

Reporter's Comment: Question: When is a document that gives one party exclusive possession of land and is not terminable at will not a lease? Answer: When the granting party itself had only a license to use the land, as was the case here. Question: What difference does it make? Answer: As an aggrieved licensee, you can still get damages for breach of contract, but not for trespass or nuisance. So, if any of that might matter to you, you must review not only the "lease" tendered to your client, but also all of the enabling documents held by the client's putative landlord. Editor's Comment 1: The court states that, as a practical matter, it should not matter whether an interest is characterized as a lease or a license in order to give appropriate remedies. But then it permits the operator of the mobilehome park to remove four feet from the mobilehome space awarded to one customer and transfer it to another. If there was a right to be protected, and the court doesn't believe in characterizations, why isn't it enforcing owner A's right to its original lot line. If the action doesn't lie in trespass, then surely there is the possibility of specific performance of the agreement.

Editor's Comment 2: One answer to the question posed above, of course, is that characterization does matter, but that the interest the Qualls obtained ought to be characterized as an easement, rather than an exclusive possessory right. At another point in the opinion, the court says as much, and notes that the agreement provided for recreational pedestrian access by all users of the area across the Qualls' lot. Consequently, the Qualls' were always subject to some interference with exclusive possession. But this answer proves too much, because if all the Qualls' had was a nonexclusive easement, then they suffered no damages from the alteration of the lot lines.

Apparently, the court is construing the lot lines as some kind of implicit undertaking that the operator would not authorize another mobilehome operator to move its mobilehome within three feet of the other side of the established lot line. This was not a case of trespass, or breach of easement, but just a whole separate contractual undertaking.

Editor's Comment 3: There's obviously a lesson here for parties developing recreational facilities on federal licensed land. Make few representation and fewer promises. If one is acquiring an interest, expect little.

The Reporter for this item is Professor Roger Bernhardt of the Golden Gate Law School in San Francisco.

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

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