Legal Case Studies – March 2018

This month’s legal case studies include the Illinois Farm Nuisance Act, nondisclosure of potential water contamination and tenant rights regarding support animals.

Lisa Harms HartzlerResearch and analysis by Lisa Harms Hartzler,
Sorling Northrup Attorneys

Farm Nuisance Suit Act preempted local ordinances

In Village of Chadwick v. Nelson, 2017 IL App (2d) 170064, a small village in rural Carroll County issued a citation to a property owner operating a farm within the village corporate limits for violating a recently-passed ordinance. The owner had for some time allowed a neighbor to plant and harvest hay on a portion of the small farm and more recently shifted to a commercial calf nursing operation. When the village adopted an ordinance prohibiting such use and sought to enforce it, the farm owner claimed the Illinois Farm Nuisance Suit Act (740 ILCS 70/0.01 et seq.) prevented enforcement in this case.

farm calf

The Illinois statute provides that no farm “shall become a private or public nuisance because of any changed conditions in the surrounding area occurring after the farm has been in operation for more than one year, when such farm was not a nuisance at the time it began operation.” A farm is defined as “any parcel of land used for growing and harvesting of crops; for the feeding, breeding and management of livestock; for dairying or for any other agricultural or horticultural use or combination thereof.”

The village argued that the property owner changed the use of the farm from growing hay to raising cattle within one year prior to the enactment of the ordinance. The court, however, said the statute should be interpreted broadly. It defined “farm” using all combinations of activity and did not restrict its applicability when uses within that definition changed. “The only requirement appears to be that the land’s use remain agricultural.” The farm’s use in this case remained agricultural from one year prior to the ordinance.

A non-home rule municipality’s ordinance may not infringe upon a state statute. Absent negligent operation (and none was alleged), the village could not restrict the defendant farmer’s ongoing agricultural activity.

Maryland listing broker sanctioned for nondisclosure of potential water contamination

In Maryland Real Estate Commission v. Garceau, 234 Md. App. 324 (2017), the buyers of residential property filed a complaint with the Maryland Real Estate Commission (MREC) against the listing agent for failing to disclose material facts. MREC held that the listing agent violated state law by failing to disclose the existence of a homeowner’s association governing the property and potential well water contamination from a nearby ExxonMobil gas leak. The listing agent was suspended for 14 days and fined $5,000.

On appeal, the court found that a declaration of covenants governing the subdivision had expired and was no longer valid and that the organization purporting to act as a homeowner’s association had not been validly formed and recorded. Consequently, the failure to disclose a non-existent homeowner’s association could not equal the failure to disclose a “material fact.” Indeed, incorrect disclosure to the buyers that a homeowner’s association did exist could have amounted to a misrepresentation of a material fact. The court held that MREC’s decision on this count was in error.

The court did find, however, that the listing agent failed to disclose a material fact by not mentioning potential ground water contamination from a gas leak at a nearby ExxonMobil plant. The court explained that a fact is material if (a) a reasonable person would attach importance to its existence or non-existence in determining whether to buy property; or (b) the maker of the representation knows or has reason to know that the buyer regards or is likely to regard the matter as important in making a decision, even if a reasonable person would not so regard it. In this case, the court determined that non-disclosure of potential water contamination was material to the transaction. It also found that the listing agent was aware of the potential contamination because she lived within a mile of the property and that a class action lawsuit filed against ExxonMobil alleging well contamination as a result of the gas leak was common knowledge in the neighborhood. Since the listing agent was aware of a material fact, her failure to disclose it violated the real estate licensing law.

MREC was justified in imposing sanctions against the listing agent for the failure to disclose potential water contamination, but because MREC incorrectly determined that the listing agent failed to disclose a non-existent homeowner’s association, the case was returned to MREC for a reduction in sanctions.

Broker denied commission under terms of listing agreement

In Donawald Realty, Inc. v. Chang, Sup. Ct. New York, No. 513058/15, January 5, 2018, the seller of a cooperative apartment in Brooklyn entered into an exclusive listing agreement with the plaintiff. The initial asking price was $799,000, on which the listing broker would earn a 3% commission. The seller agreed to lower the asking price to $750,000, whereupon the plaintiff obtained a buyer who offered the full amount. In an email exchange, the seller said, “Okay. Let’s do it!” She thereafter tried to negotiate a higher price, but the buyers refused. After the exclusive listing agreement with the plaintiff expired, the seller engaged a different broker and ultimately sold the apartment to different buyers for $785,000.

Although in the absence of an agreement, a real estate broker will be deemed to have earned his commission when a buyer is produced who is ready, willing, and able to purchase at the terms set by the seller, that right to a commission can be varied by agreement. In this case, the listing contract provided that if the purchase price was not paid or if shares for the cooperative unit were not transferred for any cause or reason whatsoever, including but not limited to the failure or inability to perform by the seller or purchaser, other than seller’s willful default, the broker’s commission would not be considered earned and would not be due and payable.

The court did not explicitly discuss whether the seller had willfully failed to perform the contract, but it did note that she testified regarding the email exchange she had with the listing broker. She asserted that, based on her past experience in the real estate process, it was her understanding that an offer of the listing price would simply be a “starting point of negotiation.” Consequently, she apparently believed that when she said, “Okay. Let’s do it!” she was not accepting the offer and was only agreeing to begin negotiations. The court surprisingly bought this explanation and enforced the “plain language” of the listing agreement. The sale did not close, so the broker was not entitled to a commission.

Tenant not entitled to specific emotional support dog

In Gill Terrace Retirement Apartments, Inc. v. Johnson, 2017 VT 88, the landlord of an apartment complex in Vermont sought to evict a tenant for violating a no-pets policy. The tenant requested an exception to the policy under the Fair Housing Act prohibiting discrimination against any person because of a handicap. Prohibited discrimination includes “a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling.” 42 U.S.C. § 3604(f)(3)(B). The tenant provided a doctor’s statement that she needed an emotional support animal, so the parties agreed that she was disabled and deserved reasonable accommodation. The question in this case was whether the landlord had to agree to the specific dog the tenant owned.

The court stated that under a HUD Office of Fair Housing & Equal Opportunity Notice (FHEO-2013-01), a specific service animal may be denied in two circumstances: “(1) the specific assistance animal in question poses a direct threat to the health or safety of others that cannot be reduced or eliminated by another reasonable accommodation, or (2) the specific assistance animal in question would cause substantial physical damage to the property of others that cannot be reduced or eliminated by another reasonable accommodation.” Whether either of these two circumstances exists is highly fact specific, but a determination may not be based on a dog’s breed or size, mere speculation or fear that the animal may harm someone or damage property, or evidence of damage caused by other animals.

In this case, the court found sufficient facts supporting the landlord’s refusal to grant the tenant’s request for an exception to the no-pets policy for her dog, Dutchess. There was creditable testimony that Dutchess regularly reared up on her back legs, lunged forward, and bared her teeth at people and other dogs when she was outside; that Dutchess was trained as a “guard dog” and was “people and dog aggressive;” that the tenant asked another resident to walk her dog at different times to avoid interactions with Dutchess; that some residents stayed indoors to avoid Dutchess; that other residents were afraid of Dutchess; and that the tenant was unable to control the dog. The court acknowledged the tenant’s attachment to her dog but concluded that Dutchess’s aggressive behavior affected the safety and wellbeing of the other residents and was not entitled to accommodation, particularly since the tenant could not control the dog.

Boy Scouts established easement over neighbor’s property

In Rainbow Council BSA v. Holm, 2018 IL App (3d) 160715, a Boy Scout Council operated a camp in Grundy County containing two parcels separated by a lake. A 10-foot wide dirt path traveled from the camp’s entrance and about 150 feet through the defendant’s adjacent property before traversing a dam to reach the back parcel. Apparently, Google and other search programs directed traffic to the defendant’s driveway instead of continuing on the path to the camp on the back parcel. Upon reaching the defendant’s driveway, drivers would enter it and turn around, much to the defendant’s irritation. To block use of the path, the defendant felled some trees on his property, causing the Boy Scout Council to file a petition in court asking for a permanent injunction against the defendant and a declaration of prescriptive easement.

An easement is a non-possessory interest in another person’s land. To establish an easement by prescription, the claimant must prove the use of the land for at least 20 years was adverse, exclusive, continuous, uninterrupted, and under a claim of right inconsistent with that of the true owner. Whether these elements have been proven is a question of fact. In this case, the court found that the Council had used the path consistently since 1988 and probably since the 1960’s under claim of right and without permission from the defendant. The use was exclusive, not because it was the only party to use the path, but because its claim of right did not depend on a like right of anyone else.

The defendant, however, did not really dispute the existence of the easement. He asserted that the easement was unnecessary because there was another entrance to the back portion of the scouts’ camp. While the existence of necessity was not relevant to finding a prescription easement, it was arguably relevant under a “balancing of the hardships” test. The court found that the easement was actually necessary because the other entrance was more than six miles away and there was no existing alternative access. Due to the topography of the property, requiring the Council to establish an alternative access would be an economic burden that did not weigh in favor of the defendant.

The defendant also asserted the “clean hands doctrine,” which bars equitable relief to a party who has been guilty of misconduct, fraud, or bad faith in connection with the dispute. He argued that the plaintiff had not warned its invitees to avoid trespassing on his driveway and failed to supervise the scouts and employees. The court found no support for this argument. Testimony revealed that the Council put up signs directing drivers to the camp site at the end of the path, had contacted Google and others to get the mapping applications changed but was unsuccessful, and had given maps to scouts and families traveling to the camp. Those efforts refuted the defendant’s claims. The appellate court affirmed the trial court’s decision in favor of the Council in declaring a prescriptive easement and enjoining the defendant from barring the path.

2018-02-26T10:51:42+00:00February 20th, 2018|DR Legal News|0 Comments

About the Author:

Lisa Harms Hartzler is Of Counsel at Sorling Northrup Attorneys in Springfield. She graduated from the American University Washington College of Law in 1978 and began her legal career in Chicago. She has provided legal support for the Illinois REALTORS’ local governmental affairs program since she joined Sorling in 2006 and focuses her practice on municipal law, general corporate issues, not-for-profit health care law, and litigation support.