ENCROACHMENTS, ENCROACHMENT EASEMENTS AND THE STATUTE OF LIMITATIONS DECODED

I. INTRODUCTION

Real estate lawyers in California frequently encounter encroachment issues. In doing so they inevitably perceive that the law in California regarding encroachments is antiquated, confusing and often inconsistent. This article is an attempt to bring understanding to some of the issues regarding existing encroachment law as well as some relatively recent developments in that law.

An "encroachment" is generally defined as an interference with or an intrusion onto another person's property. [1] More specifically, in real property law the term includes buildings, walls or other structures extending over a property line; [2] driveways or portions of driveways on neighboring property; [3] and landscape features, [4] patios, decks, [5] yard areas or recreational amenities [6] located partly on adjoining property. The term also includes eaves, gutters, and even buildings extending into the airspace of adjacent property. [7] An encroachment can also be entirely underground. [8]

Disputes frequently disputes arise when one neighbor obtains a survey and discovers an encroachment, although in some cases the parties are actually aware of but ignore the encroachment for many years. Until resolved, encroachments create a cloud on title for both properties and affect their marketability. An encroachment can be addressed by property owners in at least three different ways. The most efficient and salutatory approach is a negotiated, recorded agreement, in which the parties decide on terms that fit the circumstances and generally benefit both neighbors.

Alternatively, parties sometimes resort to self-help, such as removing or destroying an encroachment or blocking access to the area in dispute. Self-help is strongly discouraged as a means of resolving property disputes in California. [9] As the California Supreme Court observed, self-help is in conflict with the very idea of social order, and subjects the weaker to the arbitrary will or mistaken belief of the stronger. [10]

The third alternative is litigation. Typically, the landowner affected by an encroachment files suit for trespass or nuisance, seeking a mandatory injunction to remove the encroachment and possibly also damages. The encroaching party may cross-complain to quiet title to the encroachment, or in some cases, may initiate suit in the first place. [11] The court has the power in equity if it chooses to award relief to the landowner, even if no cross-complaint is filed. [12] Litigation between neighbors is inherently stressful, and in the case of encroachments entails a high degree of unpredictability.as discussed below.

The sections which follow address three important and difficult aspects of California encroachment law: (i) the law of adverse possession/prescription as it relates to encroachments; (ii) the alternative approach to resolving encroachment issues by focusing on the equities; and (iii) the statute of limitations applicable to encroachment cases.

II. ADVERSE POSSESSION AND PRESCRIPTION

When an encroachment is discovered, the initial focus is often regarding the length of time that the encroachment has existed, to determine whether there are possible claims of adverse possession or prescription.

A party may acquire property by adverse possession by proving (i) possession under color of law or claim of right; (ii) actual, open and notorious occupation of the premises constituting reasonable notice to the true owner; (iii) possession which is adverse and hostile to the true owner; (iv) continuous possession for at least five years; and (v) payment of all property taxes assessed against that property during the five year period. [13] To establish a prescriptive easement, a party must prove use of the property for at least five years, which use has been (i) open and notorious; (ii) continuous and uninterrupted; and (iii) adverse to the true owner. [14] A prescriptive easement does not ordinarily require the payment of real property taxes.

Proof of adverse possession gives a successful claimant title to the property in question. A successive claimant to a prescriptive easement, in contrast, gains only a right to make a specific use of someone else's property. [15] This is consistent with the more general definition of an easement as the privilege to act on, or to the detriment of another's property. [16] It gives a nonpossessory and restricted right to a specific use or activity upon another's property, which must be less than the right of ownership. [17]

Both adverse possession and prescriptive easement law in California date back to the original California codes enacted in 1872 [18] , when the population of California was in the neighborhood of 600,000 [19] and the society was primarily a rural one. Today the law of prescription is justifiably described as "arcane," and its suitability to modern urban society is often questioned. [20] At times the rules applicable to adverse possession and prescription seem counterintuitive or even paradoxical. Appellate decisions, especially as to prescriptive easements, often beg more questions than they answer.

One fairly recent development with respect to prescription is a line of cases holding that generally a prescriptive easement cannot be exclusive because an exclusive easement is equivalent to ownership of the burdened property, and it therefore requires proof of all the elements of adverse possession, including payment of property taxes. [21]

Many, if not most, encroachments by their nature entail exclusive use of a neighbor's property. Whether a party claiming a right to an encroachment can prove payment of taxes on the area in question is often problematic. A county assessor will typically testify that the normal practice is to appraise property based on legal descriptions and assessor's parcel maps, without actually performing a survey. [22] On the other hand, there are several earlier cases suggesting the opposite, i.e. that with respect to encroachments, the county assessor normally values the land and improvements as visibly occupied by the parties. [23]

Currently there is a statutory presumption that the "full cash value" for property tax purposes is the purchase price of the property, assuming an arms-length transaction. [24] If an encroachment is unknown to the parties at the time of purchase, the negotiated price and thus the full cash value for tax purposes would presumably reflect the value of the land and improvements as actually perceived by the parties at the time. If the encroachment is known, the price and full cash value would reflect a reduction in price for the encroachment and the cloud on title resulting from the encroachment.

The foregoing principles reflect no clear, predictable answer to the question of payment of taxes in the case of an encroachment. Thus, if one of the modern justifications for adverse possession and prescription law is to reduce litigation, [25] the complexity and uncertainty of proving payment of taxes on the disputed area of property in encroachment cases does not further that purpose.

Another important issue in encroachment cases is the availability of compensation in the form of damages as an alternative to requiring removal of the encroachment. Although antithetical to common sense and basic fairness, the current the law in California is that a claimant who successfully establishes a prescriptive easement cannot be ordered to compensate the property owner for the value of the easement. The claimant in effect obtains property rights, exercising what amounts to a private right of eminent domain, without paying anything. As inappropriate as this seems, the issue has been settled since 1984, when the California Supreme Court concluded in a split decision that "the statutes which define and validate prescriptive easements neither authorize nor contemplate an award to the underlying property owner for compensation for the reasonable value of the easement". [26] In the majority opinion, Justice Richardson questioned whether the concept of adverse possession squares with modern ideals in a sophisticated, congested, peaceful society at all. However, the court determined that requiring the payment of compensation clearly would be a matter for the legislature, [27] and as it stands, "this method of obtaining land remains on the books, and if a party proves all five of the [requisite] elements [citation], he can claim title to another's land." [28]

Justice Grodin, concurring in the conclusion that any change was a matter for the legislature, made the following observation: "How, in today's urban society, litigation is reduced or the peace is preserved by allowing persons situated as are these plaintiffs to acquire rights in what is concededly the land of another without a cent of payment is beyond my comprehension". [29] Justice Reynosa, in dissent, went further to question the fundamental fairness of taking property rights from an innocent property owner by private eminent domain and giving them to a trespasser. His solution was not to wait for the legislature to require that the defendant pay fair compensation. [30] Now some 32 years later the Supreme Court's invitation to the legislature has still not been accepted, leaving California law regarding prescriptive easements in a condition that almost no one considers reasonable or just in the context of modern society.

For those prescriptive easement claims which do not involve exclusive use, often the contested issue is whether the usage has been adverse, as opposed to permissive or a matter of neighborly accommodation. [31]

Because a judgment awarding a prescriptive easement requires one party to transfer valuable property rights to another without consideration, the standard of proof imposed on the plaintiff to establish a prescriptive easement is one of clear and convincing evidence. [32] This standard, together with the other difficult issues discussed above regarding prescription and adverse possession as applied to encroachments, have led our courts to the development of an alternative approach to resolving encroachment disputes, based on balancing the equities.

III. BALANCING THE EQUITIES

In the 1936 case, Ukhtomski v. Tioga Mutual Water Company, [33] the trial court refused plaintiffs' request for an injunction restraining defendants from using a reservoir and pipelines that were encroaching on plaintiffs' property on equitable grounds, relying on a series of "encroachment cases" involving structures extending slightly onto neighboring property. The appellate court affirmed the ruling, in which plaintiffs were compensated for the encroachment and defendants were granted an easement to continue using the reservoir and pipes.

Ukhtomski was followed in 1951 by Christensen v. Tucker, [34] which remains today the leading case on balancing the equities in encroachment matters. Acknowledging a split of authority on the issue, the Christensen appellate court concluded:

It is our view that the better reason cases hold that in encroachment cases the trier of the fact possesses some discretion in determining whether to grant or to deny the mandatory injunction. In exercising that discretion, and in weighing the relative hardships, the court should consider various factors. It starts with the premise that defendant is a wrongdoer, and that plaintiffs' property has been occupied. Thus, doubtful cases should be decided in favor of the plaintiff. In order to deny the injunction, certain factors must be present: 1. Defendant must be innocent - the encroachment must not be the result of defendant's willful act, and perhaps not the result of defendant's negligence. In this same connection the court should weight plaintiff's conduct to ascertain if he is in any way responsible for the situation. 2. If plaintiff will suffer irreparable injury by the encroachment, the injunction should be granted regardless of the injury to defendant, except, perhaps, where the rights of the public will be adversely affected. 3. The hardship to defendant by the granting of the injunction must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant. But where these factors exist, the injunction should be denied, otherwise, the court would lend itself to what practically amounts to extortion.

The court also noted that should defendants ever abandon the encroachment, the easement would automatically terminate.

Eleven years later, Christensen was cited by the California Supreme Court with approval in Dolske v. Gormley, [35] involving the encroachment of a porch pillar, roof eaves and other improvements. The Supreme Court emphasized that the issue of prescriptive rights had not been litigated in the trial court. The easement created was styled as "encroachment rights", which rights were not permanent, and would terminate upon removal of the existing home on the property.

In 1988, the Field-Escadon, [36] court applied Christensen v. Tucker to balance the equities in granting defendants an equitable easement for an underground sewer line, although they could not meet the requirements for a prescriptive easement.

As these cases demonstrate, the concept of balancing equities is generally a more practical and versatile approach to resolving encroachment disputes than the concepts of adverse possession or prescription. The equity balancing approach avoids difficult issues regarding exclusive use and payment of taxes, allows the court to compensate the landowner as appropriate, and gives the court flexibility as to the scope and the duration of the easement.

The 2001 decision in Hirshfield v. Schwartz [37] takes these policy considerations to a new level. In a bold and cogent opinion, the court upheld the refusal of the trial court to compel the removal of certain landscaping encroachments, and the application of Christensen v. Tucker to protect the encroachments for a limited period of time, subject to payment of damages for the fair market value of the area in question.

The appellate court emphasized that the interest created by the trial judge, although labeled an easement, was not in fact a prescriptive easement and therefore Mehidizadeh v. Mincer and similar cases prohibiting exclusive prescriptive easements were not applicable. [38] As the appellate court read the record, the trial court had relied on its equity power, not the law of prescriptive easements, in creating what the appellate court chose to label a "protective interest" in the disputed area. [39] Thus the court could properly order payment for that interest under its equity power, without violating Warsaw v. Chicago Metallic Ceilings, Inc.

The court explained the philosophical difference between an equitable resolution of an encroachment issue as compared to a prescriptive easement as follows:

The fundamental distinction between a protective interest in equity and a prescriptive easement is illustrated by the differing rationales behind these two theories. Adverse possession and prescriptive easements express a preference for use, rather than disuse, of land. They are designed not to reward the taker or punish the dispossessed, but to reduce litigation and preserve the peace by protecting long-standing possession. [40] Equity is manifestly different. When a court exercises its equity powers, its principal concern is to promote justice, acting through its conscience and good faith.

These two theories - adverse possession/prescriptive easements on the one hand, and equity on the other - are perhaps best distinguished by the role of a party's intent in the court's decision-making process. In the relative hardship analysis of Ukhtomski and Christensen, the encroaching party's innocent intent is paramount. If the party is willful, deliberate, or even negligent in his or her trespass, the court will enjoin the encroachment. The court may refuse to enjoin a negligent encroachment only if there is corresponding contributory negligence by the landowner. [41] In contrast, the grant of adverse possession or a prescriptive easement requires not innocent intent, but an intent to dispossess the owner of the disputed property, whether the encroacher is acting deliberately or negligently. [42] Indeed, an innocent intent may well preclude a finding of adverse possession or of a prescriptive easement. When the trespasser occupies another's land by mistake, with no intention to claim it as his or her own, and instead claims only to the true property line, then the occupier is not acting with the requisite claim of right.

The rights granted to the defendant, whether labeled an easement or a protective interest, reflect the flexibility available to the trial court, utilizing an equity balancing approach. Such rights were limited both in duration and scope, terminating when the defendants sold their property or ceased to reside in the home on the property. [43]

Whether an encroachment dispute is analyzed in the context of adverse possession/ prescription or by balancing the equities, typically the statute of limitations must also be addressed.

IV. THE STATUTE OF LIMITATIONS

By definition, an encroachment involves unauthorized possession of the land of another. Relief against encroachments has been granted in actions of ejectment, and quiet title, to abate a nuisance and as a mandatory injunction. [44] The underlying theory, typically trespass or nuisance, is simple enough. [45] Nevertheless, the law as to the time for commencing such actions might be described as enigmatic at best.

The enigma begins with a series of statutes, Code of Civil Procedure §§315-328 which were part of the first California Codes enacted in California in 1872. These sections compose Chapter 2 of Title 2 of Part 1 of the Code of Civil Procedure, entitled "The Time of Commencing Actions for the Recovery of Real Property." Chapter 3 in turn and in contrast embodies statutes relative to "The Time for Commencing Actions Other Than for the Recovery of Real Property". The language and meaning of §§315-328 is in many respects obscure to modern lawyers. [46]

Section 318 is often cited in encroachment cases. It is entitled "Seizen Within Five Year, When Necessary in Action for Real Property", utilizing at the outset archaic concept of seizen derived from feudal law. The body of the section provides:

No action for the recovery of real property, or for the recovery of the possession thereof, can be maintained, unless it appears that the plaintiff, or his ancestor, predecessor, or grantor, was seized or possessed of the property in question within five years before the commencement of the action.

Section 318 reflects public policy going back as early as 1236, when statutes were enacted in England to bar real property actions in the absence of seizen prior to a given date. These laws were enacted to avoid stale claims to property and insure peaceable possession to continue undisturbed and safe. [47]

As to the California law, the Code Commissioner Notes explain that §§315-328 mimic the provisions of various uncodified statutes existing prior to 1872 regarding the time of commencing actions for the recovery of real property. The code sections were enacted primarily to address the confirmation of rights under titles derived from the Mexican or Spanish governments. [48] The notes to §318 cite a number of old cases referring to the earlier statutes, their application to Mexican land grants and United States patents, and the policy of benefitting those who are seeking lands for settlement and occupation in good faith. [49]

Whatever may have been its usage in the context of feudal fiefdoms, it turns out "seizen" as used in §318 does not mean actual possession of the property. The requirement of seizen is met by having legal title to the property prior to commencement of the action. [50] Seizen can only be destroyed by establishing that a title by adverse possession was acquired by the defendant. [51] In encroachment cases the property owner by definition always has legal title, and therefore logically the five-year statute of limitations of §318 cannot bar an action until that title has been lost by a judicial decree of ownership based on adverse possession.

As simple as it seems, the case law applying §318 to encroachments is incredibly confusing and inconsistent. The trouble arises because an encroachment constitutes either a trespass or a nuisance, or both, and there is a three-year statute of limitations "for trespass or injury to real property" [52] . Thus, when a landowner seeks to enjoin an encroachment on his or her property, is the action subject to the five-year statute of limitations for the recovery of real property or the three-year statute of limitations for trespass, as the underlying theory supporting the recovery claim?

Applying the three-year statute for trespass or nuisance begets further inquiry into whether the trespass or nuisance is continuing or permanent. This depends on whether the trespass or nuisance can be discontinued or abated. When a nuisance is permanent, the injured party must claim all current and future damages in one action within three-years. [53] Thus the encroachment of a building has been found to be a permanent trespass barred by the three-year statute of limitations. [54] However, a building encroaching into neighboring airspace has been found to be a continuing nuisance, allowing for successive actions thereby defeating the three-year statute of limitations. [55]

When a plaintiff seeks damages only for an encroachment, and does not seek recovery of the property, §318 does not apply, and the Section 338(2) three-year statute of limitations for trespass obviously applies. [56] However, even when recovery of the property is at issue in an encroachment case, many courts have applied the three-year statute for trespass, often without considering the possible application of the five-year statute for recovery of real property as provided in §318. [57] The same conclusion has been reached in cases involving other underlying theories of recovering property such as fraud or duress. [58]

There is, however, another line of cases involving recovery for real property where the statute of limitations governing the underlying theory of the case is trumped by the five-year statute of limitations applicable to the recovery of real property. As early as 1903 in Murphy v. Crowley [59] the Supreme Court applied §318 to an action to recover real property based on fraud, rather than the three-year statute of limitations for fraud. In Bradley Bros. v. Bradley [60] §318 was applied to an action to recover real property on a theory of constructive trust, as opposed to the four-year statute applicable to the underlying theory. These and similar cases theorize that §318 applies if a cause of action is considered one for the recovery of real property but not if it is considered a cause of action for fraud (or trespass). They do not, however, offer any bright line formula for making that determination.

In Leeper v. Beltrami [61] the California Supreme Court acknowledged in 1959 that at least as to cases for recovery of real property based on fraud, the authorities were in confusion as to which statute of limitations applies. The court concluded that "the modern tendency is to look beyond the relief sought, and to view the matter from the basic cause of action giving rise to the plaintiff's right to relief." [62] As to encroachment actions, it necessarily follows from this reasoning that the 3-year statute of limitations for trespass would always govern. The Supreme Court did not explain how the purported "modern tendency" to focus beyond the relief sought squared with the express distinction in the Code of Civil Procedure between those statutes of limitations relating to "The Time of Commencing Actions for the Recovery of Real Property" and those sections in the following chapter entitled "The Time for Commencing Actions Other Than for the Recovery of Real Property", [63] and subsequent cases have continued to struggle to distinguish between cases where the claim of fraud or mistake is incidental to an action to quiet title or in ejectment, and cases where there is no attempt to recover property. [64]

In 2004 the Third District Court of Appeals in Harrison v. Welch [65] re-examined the statute of limitations as applied to encroachments Initially the court noted the dichotomy in the Code of Civil Procedure between actions for the recovery of real property (§§315-330) and actions other than for the recovery of real property (§335.1 et seq). The court then pointed out the correlation between the five-year statute for recovery of real property, section 318, and the five-year period of use and occupancy required to establish either title by adverse possession or a prescriptive easement, and concluded that "unless and until the encroacher's use of the property ripens into title by adverse possession or a valid prescriptive easement, the legal title holder's right to bring an action to recover his or her property from the encroacher never expires." [66]

The court sensibly declares, but without much in the way of supporting authority or explanation, that an action seeking to enjoin a permanent encroachment is properly characterized as an action for the recovery of real property subject to the five-year limitation period in §318 and §321 [67] , rather than being subject to the three-year limitation for trespass in §338(b). Recognizing the fairly extensive line of cases that had applied the three-year statute of limitations to an action to enjoin a permanent encroachment, the Court speculates that the error of those cases can be traced to a misunderstanding of the decision in Williams v. Southern Pacific R.R. Co [68] . In that 1907case, the plaintiff claimed that the railroad had laid track and was operating a railroad on land owned by plaintiff. The plaintiff sought damages and a permanent injunction preventing operation of the railroad, as opposed to removing the tracks. The Harrison Court sees that distinction as critical, making that action one for trespass, and not for recovery of real property. Where that analysis leaves the parties with regard to a set of extant railroad tracks that are owned but cannot be used by the railroad is unclear.

Historic theories aside, the conclusion in Harrison that an action to enjoin a permanent encroachment is governed by the five-year limitation period of §318 is a salutary one. It reconciles the statute of limitations for recovery of real property with the adverse possession statutes, and preserves the specific distinction in the code between actions for and actions not for the recovery of real property. As to damages for trespass, the three-year statute of limitations would still apply. The practical effect of this approach is that, because the landowner remains in title (seizen), encroachment actions will be decided by the trial court based on the substantive rights of the parties, including in many cases a balancing of the equities, rather than by the statute of limitations. At this point, however, as one treatise cautions, although the Harrison decision appears to be a correct and practical approach to the issues, it has not yet been adopted by all the district courts of appeal or the California Supreme Court, [69] and another popular treatise still maintains that an action for removal of a building encroaching on plaintiff's land is barred by the lapse of three years. [70] Thus the extent to which Harrison will clarify and transform the law with regard to encroachments and the statute of limitations remains to be seen.

V. CONCLUSION

Because California law regarding encroachments is antiquated and in many respects confusing or inconsistent, litigation as a means of resolving encroachment disputes is risky and unpredictable. Assuming the Harrison decision gains traction, encroachment cases seeking injunctive relief will not often be decided on statute of limitations grounds. If a dispute cannot be resolved by agreement, the encroaching party will normally seek to establish a prescriptive easement for the encroachment, and if successful will achieve a permanent right of use without compensation. The landowner will rely overtly on the rule against exclusive easements by prescription, and otherwise on the inherent unfairness of the result. Trial courts in such cases generally seek an equitable result, and therefore in most cases litigants should expect the outcome to reflect an equity balancing approach in which the encroaching party, depending on the circumstances, may acquire rights limited in their nature and duration, and will be required to compensate the landowner.

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