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Easements: Part Performance of an Oral Contract is NOT the Same Thing as Parol Agreement

There are many legitimate mechanisms that may create or extinguish an easement. Courts have recognized servitudes created by grant, reservation, implication, dedication, estoppel, prescription, common scheme and custom. The variations of these mechanisms alone are sufficient to create a formidable body of common law precedent.

One lesser-known mechanism for transferring incorporeal rights is part performance. While case law describing transfer of fee title by part performance is relatively widespread, only a few rulings consider the effect of the doctrine on easements.

Carpenter v. Stapleton: 169 Va. 22; 192 S.E. 792 (1937) is a Virginia decision that describes the creation of an easement based on nothing more than a conversation between the parties. The three owners assured a prospective buyer that he would have legal access and the buyer paid the purchase price and took possession of his chosen parcel: “…if the transaction be one which, if it were under seal, would create an easement, it being classed as a license merely because it is oral, upon a part performance thereof by the licensee by the expenditure of money or otherwise, a court of equity may regard it as an equitable easement, and therefore irrevocable in equity.”

In Gracie Square v. Choice Realty: 305 N.Y. 271; 113 N.E.2d 416 (1953), the New York court provides additional guidance on the requirements that must be met before an easement by part performance is recognized: “In accordance with the general rules as to the part performance of oral contracts, an oral easement or license is ordinarily sufficiently partly performed, so that it may be specifically enforced by the grantee or licensee, by the construction of works or the making of valuable improvements on the faith of the grant or agreement, together with user, or by payment of the consideration and user…”

The judge observes that possession alone has been considered sufficient to prove part performance in easement disputes in some jurisdictions, but declines to adopt that lenient interpretation in New York.

This concept is by no means limited to eastern states. An early Wisconsin decision awarded an easement for a mill raceway based on the verbal promise of a deed and the subsequent construction of the mill and associated structures. Hazelton v. Putnam: 3 Pin. 107 (1850) quotes previous New York and Pennsylvania decisions to demonstrate the tricky balancing act that courts must perform in cases where rejection of a parol agreement would result in gross injustice: “An agreement for an easement is in equity taken out of the statute of frauds by a part performance, upon the same principle that a parol license executed is taken out of the statute.

The ground upon which the court interposes in such cases is “not simply that there is proof of the existence of a parol agreement, but that there is fraud in resisting the completion of an agreement partly performed.”

This case emphasizes that in doubtful situations, easements will not be enforced under this principle. The proof of the oral contract must be “clear, definite, and unequivocal.” There also must be a sufficiency of evidence to demonstrate the specific terms that were agreed by the parties.

Party Walls

An early decision from the state of Washington considers part performance and adds a new dimension to the already convoluted issues relating to party walls between buildings. Horr v. Hollis: 20 Wash. 424; 55 P. 565 (1898) emphasizes the importance of the statute of frauds, but also recognizes that exceptions exist where parties perform unequivocal actions indicating the existence of an oral contract. The construction of a common supporting wall between buildings could certainly be considered “unequivocal.”

In this case, the strict application of the statute of frauds was rejected: “Another contention is that the agreement to make the wall a party wall is within the statute of frauds and consequently void. Conceding, as a general rule, that an interest in land can only be created by deed, an exception exists in the case of a party wall agreement which has been executed, or when there has been such a part performance of the agreement as will estop the parties from denying the existence of the easement.”

Not every party wall is evidence of a verbal contract. Each situation must be considered in the light of jurisdiction and relevant circumstances. In one instance, the District of Columbia court concluded that construction of a wall along an existing boundary line was not sufficient evidence of part performance. Hutchins v. Munn: 22 App. D.C. 88 (1903) describes a scenario where a landowner added small structures and attached them to an existing wall previously built by the adjoining landowner.

While conceding the legitimacy of part performance in appropriate circumstances, the claimant failed to prove the existence of a parol contract. No consideration was paid and the wall was not built with the intent of supporting a structure on the adjoining parcel. It is interesting to note that this claimant appears to have extended his construction across the record boundary line by virtue of party wall rules promulgated by George Washington in 1791.

In rejecting the claim of part performance, Judge Shepard observes: “The mere erection of this wall, partly upon Windom’s lot, was clearly not in part performance of the alleged agreement by which the latter surrendered his right to erect any structure upon the remaining portion of his own lot. If the complainant had had no right to erect the wall partly over the line of Windom’s lot, then the consent of the latter thereto, or even his acquiescence, with full knowledge, might be sufficient to estop him and his grantees to demand its removal.”

Blurring the Lines between Part Performance and Estoppel

A Tennessee dispute presents a challenge for the judge in part because of that states’ prior rejection of part performance for claims of fee title. Daugherty v. Toomey: 189 Tenn. 54; 222 S.W.2d 197 (1949) considers a party wall that was intended to be a dividing wall on the boundary line between the garages of Toomey and Daugherty. Due to a mistaken belief in the boundary location, the wall was erroneously built about fifteen inches from the record boundary line. Both original parties agreed to the location of the common wall and shared expenses during construction.

A few years later, a dispute erupted between Toomey and Daugherty. At this point, a survey revealed that the wall was entirely on the lands of Daugherty rather than straddling the boundary as originally intended.

Judge Tomlinson struggles with the indisputable fact that Tennessee courts have frowned on removing executed parol contracts from the influence of the statute of frauds and he clearly prefers the concept of estoppel. After several pages describing the resolution of similar disputes, he concludes that: “Where a party wall has been erected and paid for pursuant to a parol agreement between the parties, equity will enforce the agreement, thereby creating an easement in the wall between the adjoining landowners. A parol contract as to a party wall which has been partly executed has been enforced in some instances upon the theory that the parties are estopped to deny the easement thereby created.” This quotation from American Jurisprudence provides Tomlinson with the necessary justification to validate an easement created by parol contract.

A recent Alaska decision also blurs the line between part performance and estoppel. H.P. Limited v. Kenai River: 270 P.3d 719 (2012) describes many mechanisms that can create an easement. The parameters for easement by estoppel favored by this court are found in Tiffany’s Real Property: “In case there is an attempted oral grant of an easement, and the intended grantee makes improvements for the purpose of exercising the easement, equity will recognize and enforce the easement on the theory of what is ordinarily referred to as that of part performance but which is essentially the theory of estoppel.”

Extinguishing or Modifying Easements by Parol Contract

Part performance may also extinguish an existing record easement in certain circumstances. Davidson v. Kretz: 127 Minn. 313; 149 N.W. 652 (1914) is an early Minnesota decision that sets the stage for the development of this variation. At issue were several supports that were placed within the limits of a narrow alleyway, obstructing about 5 inches of the way. The piers were allowed by the dominant owner pursuant to a “very informal” verbal agreement that the alley would be widened by the same amount on the other side.

This court affirms the “well-settled” concept of part performance to extinguish an easement. Judge Hallam also considers the possibility that an easement may be modified in the same manner: “The consent of the parties to the substitution of one way for another may be implied from their acquiescence … The storage company agreed to this substitution and plaintiff acquiesced in it and both are bound thereby.”

The Connecticut decision Stueck v. G.C. Murphy Co.: 107 Conn. 656; 142 A. 301 (1928) is a benchmark decision for part performance as a way to extinguish or modify a record easement by parol contract. The right in dispute was access by an existing stairway and landing attached to the exterior of a building.

Judge Wheeler concluded that the facts of the case did not merit the application of part performance, but he notes: “It is established law that an easement may be extinguished or modified by a parol agreement made between the owners of the dominant and servient estates when the agreement has been executed by the servient estate.”

Quoting a previous Minnesota decision, Wheeler expands on the prerequisites for the application of the doctrine: “If the owner of an easement of way verbally agrees that the owner of the servient estate may erect thereon an obstruction of a permanent character and substitute another way, this agreement when executed extinguishes the right to the easement to the extent of the obstruction.”

The concepts described in Stueck were adapted by the Oregon court in Tusi v. Jacobsen: 134 Ore. 505; 293 P. 587 (1930). This dispute involved a 30-foot easement created by express grant in 1899. Years passed, and confusion arose because later purchasers of the dominant and servient tracts were unaware of the origins or the record dimensions of the original easement. When a dispute regarding brush-clearing and fencing developed between the landowners circa 1926, they negotiated between themselves and agreed that 15 feet was an acceptable width.

The parties then measured off a 15-foot area and shared responsibility for marking the lines, grading the road, removing stumps and building drainage ditches. Fences were also built defining the limits of the agreed easement area.

Judge Belt concludes that the original 30-foot record easement was modified by part performance. He emphasizes that parol statements alone generally may not affect vested property rights, but that those statements may be reinforced by execution of the parol contract: “It is elementary that oral testimony is not admissible to limit the legal effect of a deed, and that an easement cannot be extinguished or released by a mere unexecuted parol agreement. Nevertheless, the rule is well settled that a parol agreement between the owners of the dominant and servient tenements may operate to extinguish an easement whether created by grant or prescription, where such agreement has been executed by the owner of the servient tenement.”

It should be noted that, as is the case with adverse possession and estoppel, the application of part performance is not favored by the courts. Judges consistently require a clear and unambiguous link between the purported contract and the actions taken before this concept will be applied. The author also finds no indication that this concept is applicable to public ways.

Part performance represents yet another way that landowners can transfer title by actions on the ground, even in situations where there is a complete lack of any written documents.

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