STATE BY STATE ANALYSIS: CASE LAW ON COVENANTS "RUNNING WITH THE LAND"

• Jurisdiction: United States

Midstream Oil & Gas from the Upstream Perspective
(Apr 2018)
CHAPTER 2B
STATE BY STATE ANALYSIS: CASE LAW ON COVENANTS "RUNNING WITH THE LAND"
Bill Kroger
Partner
Baker Botts LLP
Houston, TX
Laura Shoemaker
Trial Associate
Baker Botts LLP
Houston, TX
David W. Ross
Shareholder
Babst Calland
Pittsburgh, PA
Erica Dausch
Associate
Babst Calland
Pittsburgh, PA

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BILL KROGER is a Partner with Baker Botts LLP in Houston, TX, and is co-chair of the firm's Energy Litigation Practice Group. He represents clients in litigation and regulatory proceedings involving oil and gas, natural resources, power, renewable energy and related industries. Mr. Kroger has represented clients in disputes involving most of the major U.S. on-shore shale plays, including the Eagle Ford (Texas), Wolfcamp (Texas), Permian (Texas), Uinta (Utah), Bakken (North Dakota), Utica (Ohio) and Marcellus (W. Virginia). Mr. Kroger also represents clients on Gulf of Mexico and other offshore oil and gas matters. Mr. Kroger has represented clients in state and federal courts and in arbitrations throughout the United States. He has also appeared before numerous state and federal energy regulatory agencies, and handled OSHA investigations involving energy industry accidents. His clients include Murphy Oil Corporation, Marathon Oil Corporation, Royal Dutch Shell, Courson Oil and Gas, the Texas Oil and Gas Association, Carlyle Group, Dominion Resources, EOG Resources, CenterPoint Energy, Jones Energy, Sasol North America, EQT, Rich Products, Golden Corral and Hines Interests Limited Partnership, among others.

DAVID ROSS is a Shareholder at Babst Calland in Pittsburgh, PA, and currently serves as chair of the Creditors Rights and Insolvency Practice group. He focuses his practice in the areas of creditors' rights, bankruptcy and insolvency matters, commercial and residential real estate, title insurance law and commercial litigation. Mr. Ross regularly represents financial institutions, consumer finance companies, title insurance companies, municipal entities and creditors in a wide range of creditors' rights, bankruptcy and real estate matters. He has represented banks and financial institutions, court appointed receivers and custodians, Chapter 7, 11 and 15 Debtors, Official Committees of Unsecured Creditors and unsecured creditors in bankruptcy proceedings throughout the United States. He has represented clients in many industries including: asbestos trust matters, energy, steel, coal, hospitality, health care, professional sports, golf, manufacturing, food, retail, construction, agricultural and local tax collection matters. Mr. Ross is also a licensed Title Agent in the Commonwealth of Pennsylvania and has represented numerous title insurance companies in title claim litigation in both state and federal court. Mr. Ross received his J.D. degree in 1991 from the University of Pittsburgh and graduated from the University of Notre Dame in 1988 with a B.A. in philosophy. Mr. Ross is admitted to practice before the Supreme Court of the Commonwealth of Pennsylvania, the Supreme Court of Ohio, the United States District Court for the Western District of Pennsylvania, the United States Court of Appeals for the Third, Fourth, and Ninth Circuits, and the United States Supreme Court. Mr. Ross is a member of the Allegheny County, Pennsylvania and American Bar Associations. Mr. Ross was recognized as one of Pennsylvania's Rising Stars and currently as a Pennsylvania Super Lawyer, according to an annual survey published in Philadelphia magazine.

California:

The California Civil Code codifies the law regarding real covenants. See generally Cal Civ. Code §§ 1457-71. For example, § 1462 states "[e]very covenant contained in a grant of an estate in real property, which is made for the direct benefit of the property, or some part of it then in existence, runs with the land." Cal. Civ. Code, § 1462. Further, to run with the land, a covenant must touch and concern the land, which means it must affect the parties as owners of the particular estates in land or relate to the use of land. See Self v. Sharafi (2013) 220 Cal. App. 4th 483, 488 [163 Cal. Rptr. 3d 71, 75] (citing Anthony v. Brea Glenbrook Club (1976) 58 Cal. App. 3d 506, 510, 130 Cal. Rptr. 32). "The primary characteristic of a covenant running with the land is that both liability upon it and enforceability of it pass with the transfer of the estate. The benefits or burdens pass by implication of law rather than under principles of contract." Id.

Previous versions of the California Civil Code discussing real covenants were interpreted narrowly, and a covenant that benefitted the property may have been determined to run with the land, but not one that burdened the property. See Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 353 [47 Cal. Rptr. 2d 898, 903, 906 P.2d 1314, 1319] (discussing Cal Civ. Code §§ 1468.). Further, real covenants were made by the owner of one piece of land with the owner of another piece of land, and not between a grantor and a grantee. See id. The...