ENVIRONMENTAL REGULATION OF REAL ESTATE 
                                         PROFESSOR FOX

Final Examination                                                              Three Hours     
December 18, 2002                                                        1:00 PM - 4:00 PM
OPEN BOOK

INSTRUCTIONS

Your grade will be based upon your demonstration of your ability to recognize and resolve the various legal problems presented by the examination. Demonstrate an ability to think, rather than simply a rote memory. In other words, do not state conclusions without giving reasons for them.

If you believe it is necessary to assume any facts not given in order to answer any question, or part of a question, state those facts in your answer and indicate they are your assumptions. Be careful not to assume a problem out of existence.

You may use the initial letter in the name of each of the various parties in your answer, rather than the full name.

Jurisdiction: All of the events described in the problems took place in the State of Westsylvania, unless otherwise stated. Westsylvania is a newly created state with no prior adjudications adopting "majority," "minority," or "peculiarity" rules of law. The Supreme Court of Westsylvania is constitutionally mandated to adopt that position or rule which a majority of its members believe will give the fairest result in the case before it and in similar cases. Authority from other courts may be persuasive, but it can never be controlling.

Of course, jurisdiction for many of the actions you may consider will lie in federal court rather than Westsylvania’s courts.

1.

About a year ago, a lightning strike started a fire on Able’s undeveloped land. The area of the fire is actually a peat bog. Peat is a product of certain decaying vegetation. It is used as fuel in many countries and is an excellent organic fertilizer. This bog is approximately 50 feet thick and covers 30 acres of Able’s 200 acres. It is home to a variety of plants and animals, including the federally endangered Spotted Frog, federally threatened Spotted Salamander and Spotted Thrush, as well as the federally endangered Spotted Water Lily.

The fire has worked its way deep into the pit. Although millions of gallons of water have been applied to the fire, it is still burning. Actually, it is smoldering and producing large amounts of smoke. At times the smoke is so thick that a nearby major state highway must be closed for lack of visibility. There have been seven closures in the last two months.

The Governor of Westsylvania formed a Joint Task Force (JTF) of the Department of Environmental Protection (WDEP) and Department of Transportation (WDOT) to find a solution to the highway problem presented by this fire. The JTF has developed a Plan of Action (Plan). It will excavate all of the peat in the entire 30 acres and remove it from Able’s property. Following removal of the peat, the JTF will replace the excavated material with clean rock fill and cover it with 8 inches of good topsoil. The JTF will seed the area with grasses native to the area and maintain the site until a permanent vegetative cover has been established.

As the owner of the property, the JTF proposes that Able pay 50% of the cost of implementing the Plan. If Able does not agree, the JTF has indicated that it may sue for the full cost of abating this public nuisance.

The Nature Club, Inc. has asked Able to refuse to cooperate with the JTF and to deny it any further access to the property. The Club offered to pay Able’s legal fees in any action by the JTF. If necessary, the Club will file suit to enjoin implementation of the Plan as in violation of various federal environmental statutes. To date, the JTF has not applied for a permit from any state or federal agency in connection with the Plan.

As an Assistant Attorney general of Westsylvania, you have been assigned to work with the JTF on this matter. After learning all of the facts set forth above, your first task is to prepare a memorandum to the JTF outlining the most probable legal claims the Club may assert in it action to enjoin implementation of the plan and suggest the most efficient and effective means of countering them. EXPLAIN the basis of you advice to the JTF.

2.

Your client, Three, Inc., purchased its plant site from Second, LLC, in 2000. The site is located on the outskirts of Herringtown, Westsylvania. Second had used the building to store and sell rugs imported from various Near Eastern countries. Second had purchased the property from Primus Corp. in 1989. Primus has operated a small shopping center on the property for twenty years before selling to Second. Each deed and contract of sale for the property was silent as to any environmental conditions of the property.

The shopping center was a single long concrete block building divided into stores. This building, with its large parking area, was an ideal showroom and warehouse. Three found it equally adaptable to its light manufacturing work. Because Three does not need all of the space, it has leased a portion of the space to Armor for a book warehouse. Under the lease, Armor agrees to indemnify Three for any liabilities resulting from Armstrong’s occupancy of the property.

Both Second and Three had Phase I environmental inspections performed by professional environmental consulting firms before purchasing the property. Three employed EC, Inc. for this work. EC’s Final Report, which you and the appropriate officers of Three reviewed before the closing, showed no evidence of hazardous substances on the site.

Last week, the President of Three received a letter from the federal EPA advising it that groundwater migrating from the property contains TCE, a solvent used by dry cleaning establishments. The plume of groundwater containing TCE is now located on Three’s property and an adjoining property owned by Norman. The EPA has traced the origin of the TCE to a dry cleaning store operated by a tenant of Primus in the 1970s. This tenant, Clean & Dry, still operates stores nationwide, including several in Herringtown.

Three did not know that Clean & Dry had ever occupied a store in Primus’ shopping center. There was no record of a lease or memorandum of lease in the Norden County land title records.

What options does Three have? If it does begin work to clean up the TCE, can Three recover all or part of its costs from any other Armour, Primus, Second, Clean & Dry? Why?/why not? EXPLAIN your conclusions.

3.

Marks recently purchased 125 acres in Norden County from North. The land had been a farm for over 200 years. It contains a building that was Charles Whiting Wooster’s home at the time of his death in 1848. Wooster, the son of a Brigadier General in Continental army, commanded the American privateer Saratoga against British shipping in the War of 1812 and later served as commander of Chilean naval forces, rising to the rank of Rear Admiral. He retired from Chilean service in 1835. Wooster encouraged many of his eastern friends to move to Norden County and was a man of considerable local influence at his death.

The Wooster house is a designated Norden County Historic Resource by the Norden County Historic Preservation Ordinance. The Westsylvania Historic Preservation Officer declined to nominate it, finding that Charles Whiting Wooster was not a person of national or local significance and the house was not a particularly good example of the architecture of its time. The Historical Society appealed and the Secretary overturned the WHPO’s determination. Marks knows that, because of its listing, he may qualify for advantageous federal income tax treatment for his remodeling and restoration costs.

Marks wants to develop the 125 acres for housing. The land is located between Central City and Herringtown, with easy access to a major highway connecting the two. The County is very supportive of the idea and has secured a tentative grant commitment from the Federal Rural Development Agency. That Agency will finance the installation of trunk sewer lines and an expansion of the County sewage plant to accept the increased sewage load from the development.

Marks plans to use the Wooster house as an upscale restaurant. To do so will require removing the formal gardens that Wooster himself designed and the North family faithfully maintained. The gardens are the only place where Marks can provide enough convenient parking to satisfy the County’s zoning ordinance.

Because the house is a Norden County Historic Resource, the Norden County Historic Review Commission must approve all alterations to the building and grounds. The Commission is well known for its opposition to any kind of alteration of County Historic Resources. It has been successful in many suits challenging its denial of alterations permits for Resource properties. The active and well-financed Norden County Historical Society has supported the Commission in its efforts.

What if any concerns does proposed federal grant create for Marks? How will you present Marks’ case to Norden County Historic Preservation Commission? EXPLAIN the reasoning behind your strategy. What, if any, alternative courses of action would you recommend if the Commission refuses to allow these modifications.

Top of This Page
Professor Cyril A. Fox / University of Pittsburgh School of Law / fox@law.pitt.edu / 2002