In Tariwala v. Mack, No. B311232, (Cal. App. 2022), the California Second District Court of Appeal considered whether an easement is extinguished when a single owner takes ownership of both the servient and dominant properties.
The case involved two adjoining properties, one of which was landlocked. There was an easement over the servient property that allowed users of the landlocked dominant property to access the nearby road. The appellant obtained ownership of both the dominant and servient properties. The appellant later lost ownership of the dominant property when he defaulted on a secured loan. The property was purchased by the respondents from the foreclosing lender. After the respondents took ownership of the dominant property, the appellant blocked access to the easement that benefited the dominant property, leaving the respondents without access to their property from the road.
The appellant claimed that the doctrine of merger had extinguished the easement as a matter of law. The trial court found that the easement was valid and enforceable and rejected the appellant's position that his common ownership of the two properties had extinguished the easement through the doctrine of merger of title.
On appeal, the appellant argued that the trial court erred when it declined to apply the merger doctrine under these circumstances.
The California Second District Court of Appeal ruled that the easement had not been extinguished.
The California Second District Court of Appeal explained that, per Cal. Civ. Code § 811,
a servitude is extinguished by the vesting of the right to the servitude and the right to the servient tenement in the same person. Similarly, per Cal. Civ. Code § 805, a servitude cannot be held by the owner of the servient tenement. The Court explained that the purpose of these statutes is to avoid nonsensical easements - where they are without doubt unnecessary because the owner owns the estate (at 4).
However, the application of the merger doctrine is not automatic. Application of the merger doctrine requires a unity of title. Both title and ownership of the dominant and servient tenements must be coextensive and equal in validity, quality, right to possession, and all other characteristics. Merger will not extinguish an easement if the result would be inequitable or would result in an injustice, injury, or prejudice to a third person (at 4-5).
The California Second District Court of Appeal affirmed the lower court’s refusal to apply the merger doctrine. The Court noted that the appellant had encumbered the dominant property with a secured loan immediately after acquiring ownership of the property such that there was never a unity of interests in the two properties (at 5-6).
Further, the Court explained that even if the appellant had established a unity of interest, under principles of equity, the easement should not be extinguished. The existence of the easement was crucial to the lender’s decision to fund the appellant's loan since the existence of the easement allowed the lender to foreclose on marketable collateral in the event of default. Applying the doctrine would render the lender's security interest essentially worthless by eliminating the dominant property's only access to the road. In addition, the lender's successors in interest (the respondents) would have suffered profound prejudice if the merger doctrine were applied and they were left with no means to lawfully access their house (at 6).