Keeping Current-Property

• Pages: 22-27
• Date: 01 May 2021
• Subject Matter: Derecho Público y Administrativo

May/June 2021

22

Published in Probate & Property, Volume 35, No 3 © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be

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KEEPING CURRENT

PROPERTY

Keeping Current—Property Editor: Prof.

Shelby D. Green, Elisabeth Haub School of

Law at Pace University, White Plains, NY

10603, sgreen@law.pace.edu. Contributors:

Prof. Darryl C. Wilson and Jacob Stillwell.

CASES

COTENANTS: Creditor may reach

insurance proceeds from property

held in tenancy by the entirety. Terr y

and Cathy Phillips owned their mari-

tal residence as tenants by the entirety

until 2010 when they retitled the prop-

erty in the names of separate revocable

trusts as tenants in common. Cathy’s

trust held a 99 percent undivided inter-

est in the property, and Terry’s trust

held 1 percent. In 2018, a f‌ire severely

damaged the house. A casualty insur-

ance policy named only Terry as the

policyholder and provided that, at his

death, the proceeds would be payable

to his spouse or legal representative. A

party holding a civil judgment against

Terry sought to garnish the insurance

payment. Terry and Cathy defended

the garnishment, relying on Va. Code

Ann. § 55.1-136(C), which protects

“proceeds of the sale or disposition of

property formerly held as tenancy by

the entirety, then conveyed to separate

revocable or irrevocable trusts.” They

also asserted that their contract rights

to insurance payments were intangi-

ble personal property held in tenancy

by the entirety and as such immune

from the claims of the creditors of one

spouse. The trial court quashed the

garnishment proceeding based on the

statute but did not address the com-

mon-law tenancy by the entirety issue.

The supreme court reversed. First, the

payment of insurance proceeds is not a

disposition of the property within the

meaning of the statute, which contem-

plates a transfer of some interest in the

property. The couple did not sell or oth-

erwise dispose of the property, nor did

for more than ten years and that the

use was open, notorious, and continu-

ous. The only issue at trial was whether

the residents’ use was adverse or per-

missive. The trial court found for the

residents, applying the presumption

of adversity that arises when a claim-

ant has demonstrated open, visible,

continuous, and unmolested use of

land for at least ten years. The appel-

late court reversed, holding that the

nature of the crossing was such that its

use by the residents did not put the rail-

road or its predecessor on notice that

the residents’ use was adverse because

the railroad and its predecessors mis-

takenly believed that the crossing was

public from 1953 until the railroad f‌iled

suit. The supreme court reversed, hold-

ing that the presumption of adversity is

not defeated by the subjective mistaken

understanding of the property owner.

That result would “f‌ly in the face of the

basic rules of prescriptive rights,” the

“principal justif‌ication” for which is that

“established patterns of land possession

and use should be protected and that a

diligent occupant should be rewarded

at the expense of a careless owner.”

Here, the residents and their predeces-

sors diligently used the private railroad

crossing to access their properties since

1942. It did not matter that beginning

around 1953 the railroad and its pre-

decessors mistakenly believed that the

use was permissive. Without evidence

that the residents’ use was actually per-

missive, the railroad could not defeat

the presumption of adversity. Albany &

Eastern R.R. Co. v. Martell, 469 P.3d 748

(Or. 2020).

EASEMENT: Easement for access

arises over discontinued public high-

way. Shearer purchased a parcel that

lacked frontage on a public highway

but abutted a formerly public high-

way known as Bowker Road. Originally

laid out in 1766, it was discontinued

the insurer acquire an ownership inter-

est in the f‌ire-damaged house. Second,

although personal property can be held

as tenancy by the entirety, a long series

of legislative enactments have super-

seded the common-law presumption of

a tenancy by the entirety in a married

couple. Instead, Va. Code Ann. §§ 55.1-

135 and 55.1-136(A) require a clear

intent and the use of specif‌ic language

to create this type of ownership. Noth-

ing in the insurance contract contained

language of survivorship. (It did not say

that upon the named insured’s death,

payments would be made exclusively to

the surviving spouse.) Rather, the lan-

guage in the insurance contract merely

armed that contract rights would

continue aer the death of the named

insured. Jones v. Phillips,850 S.E.2d 646

(Va. 2020).

EASEMENTS: Landowner’s mistaken

belief that use is permissive does

not defeat presumption of adversity

for prescriptive easement. Residents

of a subdivision used a private rail-

road crossing to access their homes

since 1942. Soon aer purchasing the

railroad and the land underlying the

crossing, the Albany & Eastern Rail-

road f‌iled a quiet title action and sought

damages for trespass against the resi-

dents for their use of the crossing. The

residents counterclaimed that they

acquired a prescriptive easement over

the crossing. The parties agreed that

the residents had used the crossing

Keeping Current—Property

oers a look at selected recent

cases, literature, and legislation.

The editors of Probate &

Property welcome suggestions

and contributions from readers.