Real Property Law

Easement Recorded Outside Chain of Title Nevertheless Binding If Servient Owner Had Actual Notice

Farrell v. Sitaras

NYLJ 10/17/05, p. 31, col. 6

AppDiv, Second Dept

(memorandum opinion)

In landowner's action for a judgment declaring that landowner has an easement over neighbor's land, both parties appealed from a Supreme Court order dismissing the causes of action predicated on an express easement of which neighbor had record notice, and denying neighbor's motion for summary judgment quieting title in her name. The Appellate Division affirmed, holding that because the easement was recorded in a deed outside neighbor's chain of title, neighbor was not on record notice of the easement, but questions of fact remained about whether neighbor was on actual notice of the easement.

Landowner's parcel and neighbor's parcel were held in common ownership until 1947, when the common grantor conveyed landowner's parcel to one of landowner's predecessors. The deed granted landowner's predecessor an easement over an existing footpath on the remaining lot. This easement was reflected in subsequent deeds to landowner's parcel. Common grantor sold his retained land to one of neighbor's predecessors in 1995. The deed made no mention of any easement, nor did any subsequent deed to neighbor's parcel. Landowner brought this action to establish the existence of an easement.

The Appellate Division started by noting that a purchaser is ordinarily charged with record notice of an easement only when the easement appears in the purchaser's chain of title. Although courts have recognized an exception to this rule in counties where a block and lot indexing system is used, Kings County did not have a block and lot system until 1964, after the subject easement was created. The system required the block indexes to include the names of the parties to every deed, but not the lot numbers. Although Kings County did provide for indexing by block number even before 1964, the court held that the exception did not apply because a searcher examining the block index would have no easy way to find instruments relating to any particular lot on the block. As a result, one would expect the title searcher to search only by names of the parties as in a grantor-grantee indexing system. Hence, neighbor was not chargeable with record notice of instruments recorded under the pre-1964 block indexing system.

The court then concluded that the remaining inquiry was whether neighbor had actual notice of the easement before or at the time of purchase. The Appellate Division held that Supreme Court had properly found triable issues of fact precluding summary judgment on that issue.

COMMENT

Real Property Law ' 291 provides that an unrecorded conveyance is void against a subsequent good faith, or “bona fide” purchaser (BFP). A purchaser will not be considered a BFP if, as the Farrell court recognized, the purchaser had actual notice of the unrecorded easement. But courts also deny purchasers BFP status if the purchaser has a duty to inquire about, or actual notice of, an unrecorded easement. A purchaser has a duty to inquire, if at the time of purchase, he had facts that would cause a reasonable person to make additional inquiries. In Webster v. Ragona, 7 A.D.3d 850, the court gave effect to an easement that was not recorded in the plaintiff's chain of title because the plaintiff was not deemed to be a BFP. Before plaintiff purchased commercial property, he observed that the defendant used the driveway on plaintiff's land for ingress and egress. The court held that since the plaintiff observed the defendant using the driveway, he was charged with the duty to inquire about the status of defendant's right to use that driveway. Because plaintiff failed to make such inquiries, he was not a BFP and could not seek protection under ' 291.

A neighbor's physical use of the parcel landowner intends to purchase does not impose a duty to inquire if that physical use would not be readily apparent to an ordinary purchaser. Thus, in Covey v. Niagara, Lockport & Ontario Power Co., 286 A.D. 341, the court held that an electric power line at the back of landowner's 80-acre parcel did not create a duty to inquire. When landowner purchased a farmhouse and 80 acres, the power company had constructed an electric line at the back of the property, and they had an unrecorded easement to continue to build the line. The court held that landowner had no duty to inquire, and was therefore protected against the easement as a BFP. The court noted landowner's contention that when standing at the farm a person could not see the electric lines, and that he did not discover them until a year after purchase.

Because physical inspection will rarely suggest the existence of a negative easement, facts rarely exist that would impose on a landowner the duty to inquire about the existence of a negative easement. Thus, in Witter v. Taggart, 78 N.Y.2d 234, the Court of Appeals held that landowner was not bound by an unrecorded negative easement. Neighbor's unrecorded scenic easement over landowner's land was designed to prevent landowner from obstructing his view of a creek. Landowner, unaware of the easement, obstructed neighbor's scenic view by building a dock and fence on his property. The court held that the landowner did not have a duty to inquire because the nature of this negative easement concealed any facts that could have placed him on notice.

Statutory Claim Against Neighbor Who Cuts Down Trees

Zablow v. Disavino

NYLJ 11/7/05, p. 30, col. 5

AppDiv, Second Dept

(memorandum opinion)

In an action by landowner against a neighbor for damages suffered when neighbor allegedly cut down trees on landowner's land, landowner appealed from the Supreme Court's dismissal of landowner's cause of action pursuant to RPAPL Section 861. The Appellate Division reversed and reinstated the cause of action, holding that a jury should have been permitted to review the evidence.

Trees and underbrush on landowner's property were cut down. Landowner then brought this action, seeking treble damages, against neighbor and neighbor's gardener. No one witnessed the cutting, but the cutting occurred in the same area where, ten years earlier, neighbor had removed a tree from landowner's land, with landowner's permission, because the tree interfered with landowner's view. At trial, there was conflicting testimony about whether neighbor had admitted to cutting the trees and whether he had directed the landscaper to do so. Landowner requested that the jury be charged on her cause of actions pursuant to RPAPL section 861, which gives landowner a claim against a person who cuts trees without permission. The Supreme Court granted neighbor's motion for summary judgment dismissing the action.

In reversing, the Appellate Division held that the evidence at trial was sufficient to permit a jury to infer that neighbor or his gardener had cut down the trees. As a result, the court remanded for a new trial.

COMMENT

RPAPL ' 861 authorizes a landowner to bring a private action for treble damages against a trespasser who injures trees on his property. In 2003, the legislature amended ' 861 to give the landowner three options: 1) to maintain an action for treble the stumpage value of the tree, 2) to recover $250 per tree, or 3) to have the land physically restored to their condition immediately before the trespass. Although the prior statute provided for the treble damage, it did not provide the three options. One reason for the new statute was a growing concern to protect the environmental benefits that come from properly managed forests and the economics of forestry. See Governor's Mem. Approving L 2003, ch. 602, 2003 McKinney's Session Laws of NY, at 2038.

The statute provides for treble damages unless the injury was ”casual and involuntary” or committed by a defendant who ”had probable cause to believe that the land was his own,” in which case remedies are limited to single damages. When a trespasser is told that he is cutting down trees on a neighbor's land, the trespasser has an obligation to inquiry into his ownership before cutting down the trees, and is subject to treble damages if he does not do so. Thus, in Axtell v. Kurey 222 A.D.2d 804 (3d Dep't 1995), a defendant who subsequently sold trees after he was told that he did not own the trees, was held to have engaged in conduct that was not involuntary. Because defendant was put on notice and 95% of the trees were in fact on the plaintiff's property, the defendant in Axtell was subject to treble damages. By contrast, in Hollenbeck v. Genung, 198 A.D.2d 677 (3d Dep't, 1993), the court held that the defendants had come forward with enough evidence that the trespass was the result of good-faith negligence, and as a result plaintiff was not entitled to treble damages. In Hollenbeck, defendants intentionally cut twelve trees in an effort to clean up the area near boundary lines, but they mistakenly believed that all the trees were on their property because the fence that marked the property line had fallen down in areas or pieces of the fence were missing. The court limited recovery to single damages because the defendants were not put on notice that the trees were not theirs to cut.

New York Law does not authorize treble damages when destruction is to physical property other than a tree. Although former N.Y. Penal Law ' 1433 provided for treble damages for the intentional physical destruction of or damage to the tangible property of another, this statute was ultimately repealed and recodifed in ' 145 to exclude any provision for treble damages. See Add, L 1965, ch 1030, ' 1 (codified as amended at N.Y. Penal Law ' 145 (2005)).

Guarantor and Insurer Not Indispensable Parties in Foreclosure Action

NC Venture LLP v. Complete Analysis, Inc.

NYLJ 10/17/05, AppDiv,

Second Dept

(memorandum opinion)

In a foreclosure action, mortgagee appealed from the Supreme Court's denial of its summary judgment motion on its claim against borrowers on their obligation under the note, and from the Supreme Court's dismissal of the complaint for failure to join necessary parties. The Appellate Division reversed and granted the summary judgment motion, holding that the allegedly necessary parties had no interest in the foreclosed property, and that the borrower had failed to come forward with proof that borrowers had been released from their obligation.

Easement Recorded Outside Chain of Title Nevertheless Binding If Servient Owner Had Actual Notice

Farrell v. Sitaras

NYLJ 10/17/05, p. 31, col. 6

AppDiv, Second Dept

(memorandum opinion)

In landowner's action for a judgment declaring that landowner has an easement over neighbor's land, both parties appealed from a Supreme Court order dismissing the causes of action predicated on an express easement of which neighbor had record notice, and denying neighbor's motion for summary judgment quieting title in her name. The Appellate Division affirmed, holding that because the easement was recorded in a deed outside neighbor's chain of title, neighbor was not on record notice of the easement, but questions of fact remained about whether neighbor was on actual notice of the easement.

Landowner's parcel and neighbor's parcel were held in common ownership until 1947, when the common grantor conveyed landowner's parcel to one of landowner's predecessors. The deed granted landowner's predecessor an easement over an existing footpath on the remaining lot. This easement was reflected in subsequent deeds to landowner's parcel. Common grantor sold his retained land to one of neighbor's predecessors in 1995. The deed made no mention of any easement, nor did any subsequent deed to neighbor's parcel. Landowner brought this action to establish the existence of an easement.

The Appellate Division started by noting that a purchaser is ordinarily charged with record notice of an easement only when the easement appears in the purchaser's chain of title. Although courts have recognized an exception to this rule in counties where a block and lot indexing system is used, Kings County did not have a block and lot system until 1964, after the subject easement was created. The system required the block indexes to include the names of the parties to every deed, but not the lot numbers. Although Kings County did provide for indexing by block number even before 1964, the court held that the exception did not apply because a searcher examining the block index would have no easy way to find instruments relating to any particular lot on the block. As a result, one would expect the title searcher to search only by names of the parties as in a grantor-grantee indexing system. Hence, neighbor was not chargeable with record notice of instruments recorded under the pre-1964 block indexing system.

The court then concluded that the remaining inquiry was whether neighbor had actual notice of the easement before or at the time of purchase. The Appellate Division held that Supreme Court had properly found triable issues of fact precluding summary judgment on that issue.

COMMENT

Real Property Law ' 291 provides that an unrecorded conveyance is void against a subsequent good faith, or “bona fide” purchaser (BFP). A purchaser will not be considered a BFP if, as the Farrell court recognized, the purchaser had actual notice of the unrecorded easement. But courts also deny purchasers BFP status if the purchaser has a duty to inquire about, or actual notice of, an unrecorded easement. A purchaser has a duty to inquire, if at the time of purchase, he had facts that would cause a reasonable person to make additional inquiries. In Webster v. Ragona, 7 A.D.3d 850, the court gave effect to an easement that was not recorded in the plaintiff's chain of title because the plaintiff was not deemed to be a BFP. Before plaintiff purchased commercial property, he observed that the defendant used the driveway on plaintiff's land for ingress and egress. The court held that since the plaintiff observed the defendant using the driveway, he was charged with the duty to inquire about the status of defendant's right to use that driveway. Because plaintiff failed to make such inquiries, he was not a BFP and could not seek protection under ' 291.

A neighbor's physical use of the parcel landowner intends to purchase does not impose a duty to inquire if that physical use would not be readily apparent to an ordinary purchaser. Thus, in Covey v. Niagara, Lockport & Ontario Power Co., 286 A.D. 341, the court held that an electric power line at the back of landowner's 80-acre parcel did not create a duty to inquire. When landowner purchased a farmhouse and 80 acres, the power company had constructed an electric line at the back of the property, and they had an unrecorded easement to continue to build the line. The court held that landowner had no duty to inquire, and was therefore protected against the easement as a BFP. The court noted landowner's contention that when standing at the farm a person could not see the electric lines, and that he did not discover them until a year after purchase.

Because physical inspection will rarely suggest the existence of a negative easement, facts rarely exist that would impose on a landowner the duty to inquire about the existence of a negative easement. Thus, in Witter v. Taggart, 78 N.Y.2d 234, the Court of Appeals held that landowner was not bound by an unrecorded negative easement. Neighbor's unrecorded scenic easement over landowner's land was designed to prevent landowner from obstructing his view of a creek. Landowner, unaware of the easement, obstructed neighbor's scenic view by building a dock and fence on his property. The court held that the landowner did not have a duty to inquire because the nature of this negative easement concealed any facts that could have placed him on notice.

Statutory Claim Against Neighbor Who Cuts Down Trees

Zablow v. Disavino

NYLJ 11/7/05, p. 30, col. 5

AppDiv, Second Dept

(memorandum opinion)

In an action by landowner against a neighbor for damages suffered when neighbor allegedly cut down trees on landowner's land, landowner appealed from the Supreme Court's dismissal of landowner's cause of action pursuant to RPAPL Section 861. The Appellate Division reversed and reinstated the cause of action, holding that a jury should have been permitted to review the evidence.

Trees and underbrush on landowner's property were cut down. Landowner then brought this action, seeking treble damages, against neighbor and neighbor's gardener. No one witnessed the cutting, but the cutting occurred in the same area where, ten years earlier, neighbor had removed a tree from landowner's land, with landowner's permission, because the tree interfered with landowner's view. At trial, there was conflicting testimony about whether neighbor had admitted to cutting the trees and whether he had directed the landscaper to do so. Landowner requested that the jury be charged on her cause of actions pursuant to RPAPL section 861, which gives landowner a claim against a person who cuts trees without permission. The Supreme Court granted neighbor's motion for summary judgment dismissing the action.

In reversing, the Appellate Division held that the evidence at trial was sufficient to permit a jury to infer that neighbor or his gardener had cut down the trees. As a result, the court remanded for a new trial.

COMMENT

RPAPL ' 861 authorizes a landowner to bring a private action for treble damages against a trespasser who injures trees on his property. In 2003, the legislature amended ' 861 to give the landowner three options: 1) to maintain an action for treble the stumpage value of the tree, 2) to recover $250 per tree, or 3) to have the land physically restored to their condition immediately before the trespass. Although the prior statute provided for the treble damage, it did not provide the three options. One reason for the new statute was a growing concern to protect the environmental benefits that come from properly managed forests and the economics of forestry. See Governor's Mem. Approving L 2003, ch. 602, 2003 McKinney's Session Laws of NY, at 2038.

The statute provides for treble damages unless the injury was ”casual and involuntary” or committed by a defendant who ”had probable cause to believe that the land was his own,” in which case remedies are limited to single damages. When a trespasser is told that he is cutting down trees on a neighbor's land, the trespasser has an obligation to inquiry into his ownership before cutting down the trees, and is subject to treble damages if he does not do so. Thus, in Axtell v. Kurey 222 A.D.2d 804 (3d Dep't 1995), a defendant who subsequently sold trees after he was told that he did not own the trees, was held to have engaged in conduct that was not involuntary. Because defendant was put on notice and 95% of the trees were in fact on the plaintiff's property, the defendant in Axtell was subject to treble damages. By contrast, in Hollenbeck v. Genung, 198 A.D.2d 677 (3d Dep't, 1993), the court held that the defendants had come forward with enough evidence that the trespass was the result of good-faith negligence, and as a result plaintiff was not entitled to treble damages. In Hollenbeck, defendants intentionally cut twelve trees in an effort to clean up the area near boundary lines, but they mistakenly believed that all the trees were on their property because the fence that marked the property line had fallen down in areas or pieces of the fence were missing. The court limited recovery to single damages because the defendants were not put on notice that the trees were not theirs to cut.

New York Law does not authorize treble damages when destruction is to physical property other than a tree. Although former N.Y. Penal Law ' 1433 provided for treble damages for the intentional physical destruction of or damage to the tangible property of another, this statute was ultimately repealed and recodifed in ' 145 to exclude any provision for treble damages. See Add, L 1965, ch 1030, ' 1 (codified as amended at N.Y. Penal Law ' 145 (2005)).

Guarantor and Insurer Not Indispensable Parties in Foreclosure Action

NC Venture LLP v. Complete Analysis, Inc.

NYLJ 10/17/05, AppDiv,

Second Dept

(memorandum opinion)

In a foreclosure action, mortgagee appealed from the Supreme Court's denial of its summary judgment motion on its claim against borrowers on their obligation under the note, and from the Supreme Court's dismissal of the complaint for failure to join necessary parties. The Appellate Division reversed and granted the summary judgment motion, holding that the allegedly necessary parties had no interest in the foreclosed property, and that the borrower had failed to come forward with proof that borrowers had been released from their obligation.