By Neil Kalin, Esq.
Gamerberg v 3000 E. 11th St.LLC, (2020) 44 Cal.App.5th 424257 Cal.Rptr.3d 652 (2nd District Court of Appeal)
In 1950, one property owner (grantor) agreed to allow a neighbor (the recipient) the right to use the grantor’s property for 8 parking spaces. The recipient needed the spaces to get a permit to build a warehouse on the recipient’s property. The grantor did not give the recipient an easement, but rather provided a license to the neighbor. And the license was not recorded but instead filed away, in the form of a notarized statement, with the city Building Department. There is no evidence the neighbor ever used the grantor’s land for parking. Indeed, the grantor’s own tenants used the spaces allocated to the neighbor. 40 years later, the grantor sold its property to the current defendant. Almost 20 years after that, the recipient sold the property to the current plaintiff. At the time of each sale, there was no mention of the license, nothing appeared in the recorded documents and an inspection of the property would not have revealed any use of the parking spaces by the recipient.
In 2013, 63 years after the license was granted, the recipient’s successor applied for a permit to expand the warehouse. The city agreed provided the recipient could get permission for 8 off-property parking spaces. When the current recipient asked the current owner for permission, the successor to the grantor refused. The recipient subsequently found a copy of the original affidavit in a Building Department file. The current recipient sued to enforce the license. The trial court, relying on a 1988 case originating out of a different division of the 2nd Appellate District (Noronha v. Stewart (1988) 199 Cal.App.3d 485, 245 Cal.Rptr. 94) held the original 1950 license was enforceable against the new neighbor. The grantor’s successor appealed.
Substantively, this case distinguishes between a license and an easement. (And, although not discussed here, equates an irrevocable license with the same recording requirements of an enforceable easement.) A license is a personal right to use the property of another, that applies only to that person, and that can be cancelled at any time by giving notice of cancellation. An easement, which as a matter of course is ordinarily recorded, is the right to use land of another that applies to the person to whom it was granted and anyone else acquiring title with actual or constructive notice of the easement. An exception to the rule that a license is cancellable at any time by the grantor applies if the recipient makes a substantial expenditure in reliance on the license. The trial court ruled that when the original recipient spent money to build the warehouse, the license became irrevocable, at least as between the original grantor and recipient. However, just because a license is irrevocable by the original grantor does not mean it becomes binding on a successor with no notice of the license.
Still, the trial court was compelled to follow the 1988 Noronha case that seemingly extended the irrevocability concept to a successor even without notice. The Gamerberg Appellate Court, however, was under no such limitation. It reversed, finding that the previous case was wrongly decided on that issue and not binding on this appellate court in any event.
It may be helpful here to point out how stare decisis works in California courts. (If you do not remember the rule from law school, you are not alone. Recently, I was monitoring a chat room for appellate lawyers and surprised how many either misunderstood or flat out did not know the rules or confused the California rule with that affecting federal courts.) A California Supreme Court decision is binding on all trial and appellate courts in the State for the proposition established by its decision. An appellate court decision, no matter where decided, is binding on all trial courts within the State, no matter where the trial court is located. But an appellate decision of one court is not binding on another appellate court. In the absence of relevant case law, one appellate court is likely to be persuaded by a published opinion of another but finding an opinion persuasive and being bound by precedent to follow that opinion are two different things. Furthermore, an appellate decision arising out of one division in an appellate district is not binding on another division in the same district. However, anecdotal evidence seems to indicate that courts of one division commonly give great deference to opinions from another division arising out of the same district. And just to be complete, opinions arising out of an appellate division of a Superior Court are only binding on trial courts in that same Superior Court jurisdiction.
Federal law is slightly different. Like the California rule, U.S. Supreme Court cases are binding on all lesser jurisdictions, be they Circuit Court of Appeals or District Courts. And like the California rule, Circuit Court opinions are persuasive but not binding on other Circuit courts. But unlike the California rule, a Circuit Court opinion is not binding on trial level (District) courts located in another federal jurisdiction.
The losing party in Gamerberg brought a Petition for Review to the California Supreme Court, presumably hoping the high court would be tempted to take the case to resolve the new apparent split in authority. The Supreme Court did not do so. Both the Gamerberg and Noronha are published, and still stand. Trial and appellate lawyers will therefore have to use their powers of persuasion, and ability to distinguish one set of facts from another, to convince future courts to favor one decision over another when similar issues arise in the future.
Neil Kalin, Esq. is Assistant General Counsel at the California Association of REALTORS®.