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All Statutes of Frauds Are Not Created Equal

May 23, 2011
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We are often called upon to survey boundaries based on documents other than warranty deeds. These can include boundary line agreements, parol agreements, plats, wills, landowner affidavits and highway plans. Even more common are various documents presented to us purporting to create, move or extinguish easements.

All too often, landowners treat easements as if they were children’s building blocks that can be detached, moved and snapped into new positions based purely on the convenience of the moment. Our legal system frowns on such a cavalier attitude to boundary location issues and incorporates both statutory and common law principles that define the rules upon which the legitimacy of these various documents will be determined. Two of the most commonly applied are the Statute of Frauds and estoppel.

Section three of the English Statute of Frauds provided, in relevant part: “No Leases, Estates or Interests, either of Freehold, or Terms of Years, or any uncertain Interest, not being Copyhold or customary Interest, of, in, to or out of any Messuages, Manors, Lands, Tenements or Hereditaments, shall be assigned, granted or surrendered, unless it be by Deed or Note in Writing, signed by the Party so assigning, granting or surrendering the same.”1*

From its origins in English common law, elements of this statute have been incorporated into codes or statutes in all 50 states. The basic justification for this principle is to prevent either intentional land fraud or any incidental confusion that could result from indiscriminate and/or poorly documented verbal agreements.

How fortunate that we are provided with a single statute that applies equally to all easements and fee simple transfers of land! Or does it? An outstanding example of the many possible permutations occurred recently when the Virginia courts posed the question of whether the provisions of Code § 55-2, requiring that estates in lands be conveyed by a deed or will, apply to the conveyance of an easement.1 It would appear that to properly answer the question, it must be modified to include at least two additional queries: (1) In what jurisdiction is the question being raised, and (2) To what type of easement are we referring?

Numerous sources may be found that state, with minor variations, the extent to which the statute of frauds has been incorporated into our legal system; however, variations exist between individual state rulings regarding which documents contain sufficient information to conform to the statute. Letters, contracts, maps and even a canceled check have been upheld in various jurisdictions. The precise wording of the statute varies widely between states (as well as within individual states over time) regarding the minimum time beyond which the statute will be enforced. Various elements from the original may be incorporated into more than one modern statute, and the list of precisely which rights are included within the statute can make for some interesting surprises in individual state rulings. The Virginia opinion cited above states:

In relevant part, Code § 55-2 provides: “No estate of inheritance or freehold or for a term of more than five years in lands shall be conveyed unless by deed or will.” The provisions of Code § 55-2, by their plain terms, apply only to estates. ... If an easement is not an ownership interest in land, it is axiomatic that an easement is not an estate. This conclusion is consistent with authorities from numerous jurisdictions. ... An easement is not an estate in land and does not convey title to land or dispossess the owner of the land subject to the easement. Since an easement is not an estate, the provisions of Code § 55-2 do not control the conveyance of an easement.1

The discussion in the case goes on to point out the unusual fact that, although the original English statute specifically includes “Leases, Estates or interests,” Va. Code § 55-2 failed to include “interests” in land. The author has no knowledge of any other state where the courts have apparently exempted a class of express easements from the requirements of the Statute of Frauds.

The more prevalent opinion held by most states is exemplified by recent cases in Iowa and Wyoming, respectively.

Because an easement is an interest in real property, any express easement falls within the Statute of Frauds and must be in writing. See Iowa Code § 622.32 (2007).2

An easement is an interest in real property that is covered by the Statute of Frauds, meaning that, unless some exception to the statute of frauds applies, the easement must be in writing to be effective. [A] grant of an easement is to be construed in accordance with the rules applied to deeds and other written instruments.3

Note that Iowa specifically refers to an express easement; the Wyoming court, while stating a more general principle, does admit that exceptions to the rule exist.

While it would appear that the various jurisdictions are unanimous (or nearly so) in their opinion that prescriptive easements constitute an exception to the statute by their very method of creation, quite a few opinions regarding other types of quasi-easements have recently surfaced in various states.

Of those quasi-easements that may be validated by the court system, easement by estoppel is one of the commonly used principles by which the courts may circumvent the Statute of Frauds. When (a) the party against whom estoppel is asserted induces belief in another; (b) the second party expends effort or funds in reliance on the belief, and (c) some injury results from the reliance, this type of easement may be granted. An easement by estoppel was specifically viewed as an exception to the Statute of Frauds as seen in a recent Arkansas case:

The facts in this case reveal that [appellee] sought and received an agreement to allow him access to his property along the south boundary of the property owned by the cemetery association. That agreement was oral, but it also was memorialized in the minutes of the board meeting and in a separate writing dated two days after the meeting and signed by the president and secretary/treasurer of the board. In reliance on that agreement, [appellee] expended two months labor clearing trees in a 16- to 18-foot strip more than 700 feet long to prepare for laying a road bed. In further reliance on the agreement, he borrowed $ 6,500 to finance the roadway and mortgaged his land to secure repayment of the debt. It was only after [appellee] expended this time, effort and risk, some 1 1/2 years after the agreement to grant the easement, that the cemetery board attempted to repudiate the agreement to convey the easement. The particular facts of this case place the agreement to convey the easement outside the Statute of Frauds.4

Estoppel is often described as a mechanism of equity, intended to prevent the unrestricted use of the Statute of Frauds to perpetrate injustice. The Montana court commented that “this Court has repeatedly taken the position that we ‘will not allow the Statute of Frauds, the object of which is to prevent fraud, to be used to accomplish fraudulent purposes … it would be a fraud on the defendant to allow plaintiffs to admit to the contract, and then allow them to avoid its obligations by asserting the Statute of Frauds.’”5

Photo by Kristopher M. Kline, PLS

State courts are divided in their opinion as to what type of easement is created by this mechanism. Two recent Kentucky opinions assert that an easement by estoppel is an easement in gross; in Massachusetts and Ohio, the courts have ruled that a right of way created by estoppel was appurtenant to the land.

Estoppel can be proven from written documents, actions, or from the construction of buildings and other improvements. In the following example, two landowners jointly constructed a large building on both of their properties, with a central hallway aligned along the property line between the tracts. Since the hallway was intended for the use and benefit of both sides and was accessed by a single door at each end of the building, the court held that:

A purchaser of land, with notice of a right or interest in it existing only by agreement with his vendor, is bound to do that which his grantor had agreed to perform, because it would be unconscientious and inequitable for him to violate or disregard the valid agreements of the vendor in regard to the estate of which he had notice when he became the purchaser. … The Statute of Frauds does not apply. The equity arises regardless of any promise except, perhaps, that which is fairly implied by law.6

Simply put, (a) the evidence of common use was plain to see, and (b) the commitment was made before the present owner purchased the property, leaving no reasonable solution but to honor the agreement. The opinion goes on to state that an easement based on estoppel was determined to exist along the existing hallways.

A license--generally deemed to be revocable at any time--may be considered a legitimate solution by the courts when circumstances do not justify an easement. In an unusual ruling, the Oklahoma courts found that:

The trial court may have concluded that the acts and conduct of Stroud at the time he and Walkinshaw were joint owners in the land in controversy amounted to an executed contract for a perpetual easement over the said lands. We are of the opinion that such acts and conduct only amounted to a license, revocable at will, and we are opposed to the view of the trial court, for two reasons. First: Unless the evidence be clearly to the contrary, a court will presume that a parol agreement to impress real property with a servitude was made with a knowledge of the provisions of the statute of frauds, and was therefore intended as a license only and not at an easement ... An easement for a private way is an interest in lands, and cannot be created by a parol grant.7

In other words, while the trial court granted an easement by estoppel, the appeals court overruled the trial court to the extent of admitting the existence of only a license. This decision was based on several mitigating circumstances, including the fact that the former owner of the dominant tract (who was paid for a road agreement in a private transaction) was a minor at the time of the alleged agreement and died before reaching his majority. Since a claim of prescriptive rights against a minor is not generally allowed by the courts, the only remaining evidence heard by the appeals courts concerned a parol agreement with Stroud (the current owner of the dominant tract).7

The courts generally consider an irrevocable license to be synonymous with an easement. An excellent summary of this similarity is found in Indiana court records.

If an irrevocable license did exist in this case, it would be subject to the statute of frauds. As we mentioned above, the legal effect of an irrevocable license is no different than the legal effect of an easement. This court has explained that easements “are interests in land and ... contracts to grant or reserve easements are subject to the statute [of frauds’] requirements.”8

It is also becoming more common to see litigation regarding negative easements, restrictive covenants and common areas represented on various plats, as these documents (depending on circumstance) may create quasi-easements. The surveyor, when designating common areas, parks, open spaces and other tracts reserved in some way for common use, should be aware that the way in which the plat represents these tracts should not be a casual decision--that specific words used can have long-term repercussions for the developer. One recent Virginia case describes a situation in which purchasers of a lot in a subdivision paid a premium for a specific parcel based on expectations that a large neighboring tract within the subdivision would remain undeveloped--when the developer later decided to add an additional house on the “preserved land,” the purchasers won a negative easement by estoppel to block the proposed development.9

The Indiana case mentioned above, in dealing with a platted “common area” under different circumstances, reflects on the dilemma posed by a combination of oral representations made by the grantors, site plans and the Statute of Frauds.

The Statute of Frauds requires that “any contract which seeks to convey an interest in land is required to be in writing.” Cohen makes no assertion that he had a written contract with either the Hospital, the Foundation or Dupont Auburn as to the irrevocable license that the Pond Parcel would remain undeveloped. He points to oral representations made by Niezer and Sturges, Griffin, Trent & Co. that the Pond Parcel was a common area that would never be developed. To the extent that Cohen identifies a writing at all, he does not identify a contract; rather, he refers to the various site plans that label the Pond Parcel as a common area. In short, even were we to find that an irrevocable license was created in this case, the statute of frauds cannot be satisfied because there was no writing.10

While the majority of cases cited above indicate that the plaintiff sincerely believed that an easement existed, the surveyor should note that these easements were only validated after lengthy (and no doubt costly) litigation.

Even in situations where a signed survey and ample written documentation apparently exist, legal problems can easily arise. In a 2002 Michigan case, a legitimate deed for a tract of land existed; in addition, the grantee possessed a purchase agreement specifying that an easement would be included, a survey (provided by the grantor) showing the proposed easement, and a legal description of the easement on the surveyors letterhead. However, since the warranty deed made no mention of an easement, the court ruled:

An easement is an interest in land that is subject to the Statute of Frauds. 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. We believe, as a matter of law, that the documents that exist in the present case do not manifest a clear intent of the seller to create the easement claimed by the buyers. The warranty deed does not mention the transfer of an easement. The warranty deed does refer to an attached rider as constituting the description of the property being transferred, and the legal description of the fee simple being transferred refers to the deed; however, the fee description does not mention an easement. The document containing the legal description of the easement does not refer to the warranty deed or the fee simple description, nor does it contain the seller’s signature or any language indicating that the seller was transferring an easement to the buyers. The survey map contained no language granting an easement or a signature of the seller. Standing alone, the easement description is just that, an easement description.11

In similar fashion, a Montana case held that a plat showing a proposed easement and boundary line agreement did not fulfill the Statute of Frauds, although the easement was upheld based on the concept of part performance.12

Unsurprisingly, significant differences exist between various state courts when dealing with specific details of quasi-easements. For example, At least one Oklahoma case contains the statement that an easement by implication may be based purely on parol evidence.

Ordinarily an easement being an interest in land requires compliance with the Statute of Frauds. However, an easement implied from pre-existing use arises by inference of the intention of the parties at the time of the conveyance which may be established by parol. The inference is drawn from the circumstances under which the conveyance is made rather than from the language of the deed. The implication of an easement may always be prevented by language in the deed sufficiently explicit to negate it.13

Florida, by contrast, recently ruled that an easement implied by prior use must be supported by some written document.

We agree that if the Agreement were otherwise valid but contained ambiguous terms, this court could interpret its terms to give effect to the express intent of the parties. But invalidity, not ambiguity, is the issue. Both parties agree, and the trial court specifically found that the Agreement was intended to create the easement. With no other valid instrument from which to infer the intent of the parties, this court cannot create an easement by implication, notwithstanding the temptation to do so in view of the circumstances involved in this case.14

Many experts have commented on the proliferation of court cases in recent years regarding easements; unfortunately, the surveying profession and society as a whole are now paying the price for several centuries of handshake easements, informal agreements, vague or nonexistent descriptions, and minimal research and monumentation of all types of easements. We as professionals can no longer afford the luxury of treating easement surveys as if they were somehow insignificant. Our understanding of these and related issues may also help us to avoid becoming trapped in the problems of yesteryear.

* The original quote was written in old English script and has been modified by the editors for clarity.

References

1. Kelly Burdette V. Brush Mountain Estates, LLC: Record No. 082079; 2009 Montgomery Co., Va.

2. Gray v. Osborn - Supreme Court of Iowa 739 N.W.2d 855 (2007).

3. John G. Jenkins v. Gerry Miller - 2008 WY 45 180 P.3d 925 Case Number: S-07-0216.

4. Powhatan Cemetery Association v. Scotty Phillips - 90 Ark. App. 424; 206 S.W.3d 277 (2005).

5. Morton v. Lanier – 2002; 311 Mont. 301;55 P.3d 380.

6. Packard v. Smart 224 N.C. 480; 31 S.E.2d 517; 1944.

7. Thomas v. Morgan, 1925 OK 494, 113 Okla. 212, 240 p. 735.

8. Ronald Cohen, V. Dupont Auburn, LLC, Court Of Appeals Of Indiana 2004;819 N.E.2d 507.

9. Prospect Development Co.v. Bershader Record no. 981673 Va. 1999.

10. Ronald Cohen, V. Dupont Auburn, LLC, Court Of Appeals Of Indiana 819 N.E.2d 507; 2004.

11. Lakeside Oakland v. H & J Beef Co. 249 Mich. App. 517; 644 NW 2d. 765.

12. Morton v. Lanier 2002 MT 214 311 Mont. 301;55 P.3d 380.

13. Story v. Hefner 1975 OK 115 540 P.2d 562.

14. One Harbor v. Hynes; Fla. 2004 - 884 So. 2d 1039.



Neither the author nor POB intend this column to be a source of legal advice for surveyors or their clients. The law can change over time and differs in important respects for different jurisdictions. If you have a specific legal problem, the best source of advice is an attorney admitted to the bar in your jurisdiction.

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