>
>Daily
Development=20
for Tuesday, July 15, 2008
>by:
Patrick A.=20
Randolph, Jr.
>Elmer F. Pierson
Professor of=20
Law
>UMKC School of
Law=20
>Of Counsel: Husch Blackwell
Sanders=20
>Kansas City, Missouri
>
>
>Hay v.
Baumgartner, 870 N.E.2d 568 (Ind. Ct. App. 2007). =20
>
>Hay=20
and Ronald and Baumgartners owned adjacent parcels of land and used a
shared=20
driveway along the western boundary of the Baumgartners=E2=80=99
property and the=20
eastern boundary of Hay=E2=80=99s property. The driveway was used
by both Hay and=20
the Baumgartners and their predecessors in interest for purposes of
ingress and=20
egress to East Eli Road, which fronted both properties. In 1980,
the=20
parties paved the driveway, which was originally a gravel path.
They split=20
the cost. At the time, Hay=E2=80=99s mother owned the Hay
property and=20
contributed towards the cost of labor and materials. She
also twice=20
thereafter shared the cost of sealing the driveway.
>The Baumgartners built a new driveway on their property=20 that linked their garage to East Eli Lilly Road, eliminating their need to use=20 the original shared driveway. They removed removed the portion of=20 the shared driveway that was located on their property. Hay sued for=20 injunction to protect his driveway usage. The trial court held in favor of=20 the Baumgartners and Hay appealed.
>
>On
appeal, Hay=20
argued that the license to use the driveway became irrevocable by the
act of=20
Ruby Hay sharing the expense of paving and sealing the driveway, and
that this=20
irrevocable license was granted to him as Ruby Hay=E2=80=99s successor
in=20
interest. The Court of Appeals found that, =E2=80=9Cin the context
of real estate,=20
a license merely confers a personal privilege on someone to do some act
or acts=20
on land without conveying an estate in land.=E2=80=9D 870 N.E.2d
at 571=E2=80=9372=20
(quoting One Dupont Centre, LLC v. Dupont Auburn, LLC, 819 N.E.2d 507,
513=E2=80=9314=20
(Ind. Ct. App. 2004)). While a license is revocable and not
assignable, an=20
irrevocable license is similar to an easement in that when it
=E2=80=9Chas been executed=20
by the licensee through the expenditure of money or labor in reliance
upon the=20
license being perpetual, or when a license has been given for a valuable
consideration paid, it cannot be revoked by the licensor=E2=80=9D
without remuneration=20
to the licensee. Id. at 572 (quoting Indus. Disposal Corp. of Am.=20
v. City of E. Chicago, 407 N.E.2d 1203, 1205
(Ind.Ct.App.=20
1980)).
>
>
>Comment 1: The=20
editor, frankly, was confused by the analysis here. If an license
is an=20
executed license, as described by the court, why shouldn=E2=80=99t it be
treated as an=20
easement, and be protected by an injunction? If the interest in
question=20
is not an irrevocable license, why should Hay be entitled to any
compensation=20
for the expenditures made by his mother on a revocable right? (The
court=20
suggested that Hay could be compensated if he could prove those=20
expenditures.)
>
>Search
for the=20
answer to these questions produced a very satisfying visit to the
editor=E2=80=99s copy=20
of Bruce and Ely, The Law of Easements and Licenses in Land, Sections=20
11.7-11.9.
>
>The
authors of=20
that treatise note that there is some authority that does require
compensation=20
when a licensor cancels a revocable licenses (not an executed license)
in which=20
the licensee has made some improvements benefitting the licensor.
There is=20
even an ALR annotation on the subject - 120 ALR 549, and the treatise
authors=20
include an Indiana Supreme Court decision as one of two cases they cite
for=20
authority (in addition to the ALR. The other state decision is
from=20
Maryland.
>
>Comment 2: In the=20
course of noodling, however, the editor read on to discover that the
treatise=20
authors are very skeptical of the vitality of the general rule of
executed=20
licenses, which the editor has always viewed as more or less commonly
accepted=20
in the common law. They point out that the concept is heavily
criticized=20
and not uniformly followed.
>
>The
argument=20
against the theory of =E2=80=9Cexecuted license=E2=80=9D is that if the
party making the=20
investment in fact understands it is receiving a revocable right, then
what=20
equities support rewarding such investment with something other than a
revocable=20
right. (Compensation for the investment, as noted, might be
allowed if the=20
investment benefits the licensor.)
>
>If, on
the other=20
hand, the licensee believes that it is receiving something more
permanent than a=20
revocable right, then the proper analysis might be to analyze whether
the=20
Statute of Frauds permits the licensee to assert that right. If
there is=20
no writing, then the doctrine of part performance may permit the
licensee to=20
prove up the agreement for a permanent right. But the fact remains
that=20
such an agreement must be proven. If the licensor never intended
or=20
represented that the licensee would have a permanent right, why should
the=20
licensee=E2=80=99s ill advised investment in a revocable interest be
rewarded as=20
equitable reliance?
>
>Items
reported=20
here and in the ABA publications
>are for=20
general information purposes only and
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all
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>
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>DIRT is a service
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>Patrick A. Randolph, Jr., Professor of Law,=20
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