Case of the Day – Friday, April 14, 2017

DON’T SIT ON YOUR RIGHTS

burgerk150223Today’s case appears at first blush to be nothing more than a titanic conflict between a fast food purveyor and a strip mall, hardly the material that will get a tree or neighbor law fan’s blood pumping. But it illustrates a few worthwhile points.

A Burger King and a Long John Silver’s sat next to each other in Bay City, Michigan. The owners of the lots agreed to mutual easements so that patrons of each could use a common driveway while their arteries clanged shut from the cholesterol and trans fat. The easements were written without benefit of a legal description of the land subject to the easement (perhaps to save the $300 or so a surveyor would have cost). Sometime after that, the Burger King was dethroned, and the restaurant was torn down. The buyer of the land, the strip mall next door, tore down the BK and expanded the mall. In so doing, the developer built over where one of the access drive easements lay (although the actual common driveway had never been constructed).

The Long John Silver’s crew observed the construction, but the company didn’t complain until the construction was completed. Then, the fish folks sought an injunction in federal court to get the offending building torn down. The Court agreed that the mall developer had violated the easement, but the facts that the remedy was so drastic (tearing down the building) and the fact that Long John Silver’s sat on its complaint during the construction, and said nothing when the mall developer could have remedied the problem easily. That is called “laches,” and the law doesn’t think much of people who engage in it.

The case wasn’t resolved at that point, but Long John Silver’s was more likely to just win the difference in value of the real estate (about $35,000, or 1,591 8-piece family meals). But the lesson is that if you sit on your rights and permit the other party to really damage you, you may be severely limited in your remedies.

The lesson of laches - don't sit on your rights.

The lesson of laches – don’t sit on your rights.

BR Associates, Inc. v. LaFramboise, Slip Copy, 2007 WL 1840031 (E.D.Mich., June 26, 2007). BR operated a Long John Silver’s restaurant just west of a busy intersection in Bay City, Michigan. LR owned a commercial plaza east of the Long John Silver’s at the intersection itself. In 2004, a Burger King operated on the LR site, but it closed and the site was sold to LR. LR demolished the Burger King and added on to its existing plaza, making space for five new tenants. BR’s fish fryers were aware of the construction, and they informed BR’s corporate offices of the activity.

BR never complained during the construction. But after LR was done, BR claimed that the plaza blocked an easement arising out of a written agreement entered into by BR and the old Burger King owner, in which BR and the prior owner gave a mutual “perpetual, non-exclusive easement” for the customers of each other to use two driveways (the “North Access Drive” and the “South Access Drive”) on the easement areas, which were the boundaries of the two properties. Under the easement, the parties had the right “to relocate from time to time and in each party’s own discretion, those driving aisles and ingress and egress points located on their own Parcels … provided that such relocation does not adversely effect the other party’s right to use the Easement Area … [and] upon the mutual written agreement of the parties hereto.” Apparently, the contemplated South Access Drive was never constructed when the Burger King still operated. The easement agreement did not specify the width or the length of the access drives nor did it have a legal description of the areas. LR did not get BR’s permission to move the North Access Drive, nor did it have permission to completely block the South Access Drive, which it did as a result of the construction.

BR sued LR for trespass during the construction, but mostly for breach of the easement agreement, seeking an injunction to compel LR to honor the easement. BR contended that LR’s conduct violated the easement agreement and placed an increased burden on the easement. LR’s actions constituted a trespass, in BR’s view, and created additional wear and tear on BR’s parking lots. Finally, LR’s activities interfered with BR’s business. BR claimed that the easement agreement simply did not contemplate loading and unloading of vendor vehicles as well as parking or that LR would use BR’s property for uses beyond simple customer ingress and egress contemplated by the easement agreement.

LR argued that any recovery for breach of the easement agreement should be limited to $35,000, because BR’s appraiser valued its property with the easement at $650,000 and without the easement at $615,000. BR and LR both moved for summary judgment on all issues.

Imagine 1,591 of these monster meals - that's probably what the damages will buy.

Imagine 1,591 of these monster meals – that’s probably what the damages will buy.

Held: BR was entitled to summary judgment on some claims, and others would go to trial. The District Court noted that Michigan law defined an easement as the right to use the land of another for a specific purpose. In order to create an express easement, there must be language in the writing manifesting a clear intent to create a servitude. Any ambiguities are resolved in favor of use of the land free of easements. The plain unambiguous language of an agreement controls the determination of whether breach has occurred.

Here, the Court said, there could be no dispute the LR breached the express terms of the easement when it constructed the addition to the plaza. The easement agreement provided that an “access drive” could only be relocated upon the mutual written agreement of the parties. LR didn’t contend that it got BR’s consent. Instead, it claimed that the South Access Drive never came into existence at all. No curb cut was made, and the electrical installations otherwise blocking the south access drive preventing its use were never removed. The parties’ course of performance, LR argued, demonstrated that there never an intent to open the south access drive.

But the Court found that the parties’ mutual intent was clearly expressed in the plain language of the easement agreement, which granted BR a “perpetual, non-exclusive easement.” The fact that one of the access drives hadn’t been built, the Court said, provided no basis for the Court to depart from the language of the agreement. However, the Court said, requiring LR to remove the building blocking the south access drive was unjustified, because BR waited until construction was complete to seek any type of relief and it couldn’t identify the specific dimensions of the South Access Drive, because neither party required that level of precision in the easement agreement. It would be difficult if not impossible, the Court said, to fashion such injunctive relief to the extent of the breach. Finally, destroying the structure would necessarily be economic waste.

The Court refused summary judgment on BR’s remaining issues, denied summary judgment on all of LR’s issues, and set trial dates.

– Tom Root

TNLBGray

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