Tuesday, June 29, 2010

The Difference Between a License and an Easement: Station #2, LLC v. Lynch

In Station #2, LLC v. Michael Lynch, et al. (June 10, 2010), the Supreme Court of Virginia distinguishes between the applicability of the Statute of Frauds to easements and its non-applicability to licenses.

You can link to the full-text of Justice Mims's opinion in Station #2 (which also addresses claims of fraudulent inducement to contract and statutory conspiracy) here.


The plaintiff in Station #2 -- the tenant of the first floor of a multi-use building in Norfolk -- alleged that its upstairs neighbors breached an oral agreement permitting Station #2 to enter the building's upper floor for the purpose of installing soundproofing material (yes, reading this decision immediately put us in mind of the long-running Charlottesville controversy regarding the sound emanating from certain establishments located in Belmont).


The upstairs neighbors countered that the breach of contract claim was barred by the Statute of Frauds -- namely, Code of Virginia §11-2(6), which provides that "any contract for the sale of real estate, or for the lease thereof for more than a year" must be in writing in order to be enforceable.

Rejecting this contention (and reversing the Circuit Court), the Supreme Court determined that permission to install the soundproofing constituted a license ("permission merely to enter the real property of another without ... continuing use") rather than an easement (which "concerns the continuing use of real property") and therefore was outside the ambit of the Statute of Frauds.  As such, the oral grant of the license was enforceable.


The practice lesson here: always consider the specific nature of the property right you are getting or giving when applying a Statute of Frauds analysis (then, if you are the fretful type, put the agreement in writing either way!)

Turn down that infernal noise!!!