Law360

On Jan. 28, 2015, in Richardson v. Franc, 14 C.D.O.S 941 (2015), the California Court of Appeal for the First Appellate District ruled in favor of an easement holder by granting an irrevocable license permitting additional improvements and maintenance rights within an easement area beyond what was contemplated in the recorded easement.

Although prior cases generally confirmed the permissive use of an implied irrevocable license or an equitable easement under certain factual circumstances, this is the first case in more than 50 years in which a court effectively expanded the scope of an express written easement by granting a concurrent implied irrevocable license.

Implied Easements and Licenses
Typically, easements and licenses are granted or reserved pursuant to a written document allowing one party to use a certain portion of the land owned by another party for a given purpose such as access or utilities, or to perform certain acts within such property. Such agreements typically provide for a description of not only the area affected by such easement or license, but also the extent of the access or related rights granted thereunder.

In the case of such express agreement, a court will tend to limit the rights of the parties to the terms of such agreement using the general principles developed for interpretation of contracts. Implied easements or licenses, on the other hand, can be inferred by a court based on principles of equity, and are strictly based on the factual analysis of the specific use of such asserted easement or license based on the requisite legal elements.

The Richardson v. Franc Case

In late 2000, James Richardson and Lisa Donetti ("Richardsons") purchased their home located at 2513 Laguna Vista Drive in Novato, California. In order to access their home, they had to use a 150-foot road owned by their neighbors pursuant to an easement for "access and public utility" purposes. In 2004, Greg Franc purchased the neighboring home located at 2515 Laguna Vista Drive, the property subject to the easement.

Evidence presented at trial showed that when the Richardsons purchased their home, the 150-foot easement was already improved with lighting, trees, shrubs and irrigation, which they continued to maintain, repair and replace as needed. Apparently, the improvements were within the easement area since 1989 when the original owners of the Richardsons' home constructed the landscaping, irrigation and lighting improvements. Notwithstanding such use, the recorded express easement only authorized "access and public utility purposes," nothing more.

Sometime in 2010, Franc raised concerns about the landscaping and related improvements within the easement area for the first time in the six years since he purchased the home, and demanded that the Richardsons remove all of the landscaping and supporting systems from the easement area, stating that the recorded easement did not permit such improvements or the expanded use within the easement area. The Richardsons responded by filing a lawsuit.

At trial, the court granted the Richardsons an irrevocable license for their benefit and for the benefit of their successors-in-interest to maintain and improve landscaping, irrigation and lighting within the easement area. Franc appealed.

The Court of Appeal agreed with the trial court, finding that the Richardsons met the requirements for an irrevocable license based on (1) the substantial sums expended by them and prior owners to construct, maintain and repair the improvements within the easement area, (2) the fact that the landowner had full knowledge of the facts surrounding the use of the implied license (there was no question that the landowners knew the improvements were there and that the neighbors were maintaining them), (3) the fact that the landowner did not object to the expanded use and thereby provided permission for the same, and (4) the confirmation by the court that express agreements, whether an easement or license, are not precluded from being combined or layered along with an implied license or easement.

Important Lessons for Landowners

The assessment of the first two factors, including the substantial expenditures made by the Richardsons and Franc's knowledge of the facts pertaining to the implied license based on the actions of the parties within the easement area, is very fact-driven and specific to each case; however, the court's analysis of the last two factors presents interesting and mostly forgotten risk considerations for landowners. The last time a court addressed such a situation was in 1955 in the case Zellers v. Chowning, 134 Cal. App. 2d 270 (1955).

First, the Court of Appeal stated that "tacit permission or acquiescence in acts already done" is sufficient to establish whether Franc gave the Richardsons permission to keep and maintain such landscaping and related improvements. This may be alarming to some landowners, as simply doing nothing can lead to the creation of an implied easement or license.

Even more troubling is the fact that the Court of Appeal, in referencing the Zellers case, affirmed a situation where an irrevocable license was established merely with the landowner's failure to object to the alleged different or expanded use under a written license for only one year. Based on the implications of such a short time period and the impact on express or written agreements, landowners are advised to take action promptly upon finding evidence of expanded use of an easement or license or actions that either deviate from the terms of a written easement or license in order to avoid giving rise to new implied easement or license rights.

Second, although the trial court made a finding that the Richardsons "knew or should have known at the time of their purchase that the grant deed, on its face, describes the easement for access and utility purposes only," the Court of Appeal explained that such knowledge of the terms of the express easement is absolutely irrelevant to a court's grant of an implied license. This means that landowners operating under the terms of an express or written easement or license can no longer stand by and allow a use that deviates from the terms of such agreement for risk that such different use may result in an additional implied easement or license.

And even though the right of a court to grant such implied easements or licenses always existed, parties took comfort that the express terms of their written easement or license agreement would prevail. Landowners simply can no longer assume that a written agreement will limit the rights of the parties if the factual circumstances would otherwise establish new or additional implied rights.

While the outcome of the case was based on the specific facts and circumstances surrounding the use within the easement area, landowners subject to an express or written easement or a license cannot become complacent based on what they believe the parties agreed to, and must instead be alert as to any changes in circumstances that may give rise for the basis of a new implied easement or license.