Saturday, November 18, 2017

Landowners Normally Have No Duty To Persons Crossing The Street

The Supreme Court, both state and the federal, is not usually unanimous, but in the recent California Supreme Court decision in Vasilenko v. Grace Family Church, the court unanimously ruled that a landowner does not have a duty to assist invitees in crossing a public street, when the landowner does no more than maintain a parking lot that requires invitees to cross the street to access the landowner's premises, so long as the street's dangers are not obscured or magnified by some condition of the landowner's premises or by some action taken by the landowner.

Plaintiff Vasilenko contended that the Church owed him a duty of care to assist him in safely crossing the public street, and that the Church was negligent in failing to do so,  causing him to be injured. The Church argued that it had no control over the public street, and therefore, did not owe Vasilenko a duty to prevent his injury under the principle that landowners have no duty to protect others from dangers on abutting streets unless the landowner created the dangers.

The Church did not control the public street, and it did not create the dangers on the street. But the Church, by locating its parking lot on the other side of the street and directing Vasilenko to park there, foreseeably increased the likelihood that Vasilenko would cross the street at that location and thereby encounter harm.

However, the Court concluded that a landowner does not have a duty to assist invitees in crossing a public street when the landowner does no more than site and maintain a parking lot that requires invitees to cross the street to access the landowner’s premises, so long as the street’s dangers are not obscured or magnified by some condition of the landowner’s premises or by some action taken by the landowner. Because Vasilenko did not allege that the Church did anything other than maintain a parking lot on the other side of that street, the Court found that the Church did not owe him a duty to prevent his injury.

A plaintiff in a negligence suit must demonstrate a legal duty to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.  California Civil Code section 1714(a), establishes the general duty of each person to exercise, in his or her activities, reasonable care for the safety of others. Courts invoke the concept of duty to limit the otherwise potentially infinite liability which would follow from every negligent act.

In determining whether policy considerations weigh in favor of finding a duty is owed, Courts have applied a complicated analysis of the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, the policy of preventing future harm, the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved. The issue is not whether these factors (the Rowland factors) support an exception to the general duty of reasonable care on the facts of the particular case, but whether carving out an entire category of cases from that general duty rule is justified by clear considerations of policy.

In Vasilenko, because the general duty to take ordinary care in the conduct of one’s activities applies to choosing the location of a parking lot for one’s invitees and to training one’s employees, the issue was stated as whether a categorical exception to that general rule should be made exempting those who own, possess, or control premises abutting a public street from liability to invitees for placing a parking lot in a location that requires invitees to cross the public street.

Two of the Rowland factors — foreseeability and certainty — weighed in favor of finding a duty, while four — closeness, preventing future harm, burden, and moral blame — weighed against duty, with the insurance factor weighing in neither direction. In assessing duty, the Courts do not merely count up the factors on either side. 

In Vasilenko, the policy of preventing future harm loomed particularly large. In light of the limited steps a landowner can take to reduce the risk to its invitees, especially when compared to the ability of invitees and drivers to prevent injury, and in light of the possibility that imposing any duty will discourage the landowner from designating options for parking, the Supreme Court held that a landowner who does no more than site and maintain a parking lot that requires invitees to cross a public street to reach the landowner’s premises does not owe a duty to protect those invitees from the obvious dangers of the public street.

This decision is a good illustration of the type of analysis that a Court will apply to determine if a legal duty exists, and whether the defendant breached the duty, and whether the breach was the proximate or legal cause of the resulting injury. 


Monday, November 6, 2017

Partition Sale Can Force Sale of Jointly Owned California Real Property

            Co-owning real estate by relatives, friends, or mutual investors can be a lucrative financial investment, as they can pool their credit and funds to buy real property, and hold it as joint tenants or probably more appropriately, as tenants in common. Eventually, one of the co-owners will decide that they need to sell the property, and the other may refuse, typically because they are living in the property. 

            In California, a co-owner of property has an absolute right to sue for partition (i.e., division of value of the property among owners by sale under specified terms), unless barred by a valid waiver.  This means that although one owner who lives in the property and may or may not be paying any portion of the mortgage opposes the other owner who wants to sell the property to avoid foreclosure or to liquidate the equity, the selling owner can file a legal action to obtain the Court's judgment for a sale.

            The judgment of partition will require the property to be sold to the highest offer under specified conditions.  Such conditions typically include the identity of the listing broker, escrow and title company, procedure for deciding amount of list price and acceptance of offers, and related decisions concerning price and terms of the sale.

            In a representative case, two brothers decide to purchase a single family residence, and jointly live there and share all expenses, including the mortgage.  They fail to prepare a written co-ownership agreement.  Thereafter, disagreements occur related to living conditions and one of the brothers stops paying his share because he was not sufficiently employed to bear his share of the costs.  The other brother moves out, but continues to pay all of the mortgage and property taxes to avoid a tax lien or foreclosure.  Eventually, the paying brother wants to sell the property so they can divide the equity of $300,000, and the brother residing at the house refuses because he will have to move and start paying rent somewhere else.

            The paying brother files a legal action for partition, to which there is seldom a good defense, or than to argue credits and debts to change the normal equal split.  The opposing brother soon realizes that not only is he paying his attorney to resist the action, but he may eventually be responsible for one-half of the attorney's fees for the paying brother.  So in effect, if he resists the partition action, he may increase the amount of the attorney's fees that may be paid out of the equity in the house, and he may end up paying 75% of the attorney's fees and costs.  Protracted litigation can potentially off-set the entire amount of the equity, leaving both brothers with no net gain from the sale.

            Reasonable people quickly realize after the lawsuit is filed that a settlement for either a buy-out or a sale is the best economic decision.   Settlement of a partition action can include interim stipulations (i.e., express written agreements, typically approved by the court), that provide for a continuance of the trial, and a specific procedure to list and sell the property and keep the net proceeds in an escrow.  Thereafter, the parties can proceed to trial of the claimed credits and debts.  However, after the funds are liquidated and on deposit in a trust account and available for distribution upon the court's approval and signing of the judgment, the parties often become more reasonable and motivated to make a deal that provides for them receiving distribution checks.       

            The settlement should include terms for resolution of the attorney's fees and costs incurred because a legal action was made necessary by the opposing party.  Unless there is an agreement, statutory costs are apportioned among the parties in proportion to their interests, or the court can make such other apportionment as it determines may be equitable.  Attorney's fees that were incurred for the common benefit in the action are required to be apportioned among the parties to the action under Civil Code § 874.010, et seq.
           
            Sometimes, a legal action for partition will provide the forum for a negotiated settlement that resolves the dispute.