Real Estate and Water
EMPLOYER OF FARM WORKERS – FARMER OR LANDOWNER / MARKETER
Clear Responsibilities with “tight” agreements can protect an owner of growing fields from liability to employees of a grower who leased the fields. And that’s so even if the owner is also the marketer of the produce grown. The landowner and marketer (even if the same entity) do not become a “client employer” under state and federal laws. It all depends on who has “direct control or supervision of the worker (s) or the work performed”. Code of Federal Regulations, Title 29, Section S 500-20 (h)(5)(iv)(A). Both the California Supreme Court (Martinez v. Combs, 231 P2nd 259 (2010) and the Ninth Circuit Court of Appeals (Morales – Garcia v. Better Produces (2023) have now so held interpreting the Migrant and Seasonal Agricultural Worker Protection Act, United States Code, Title 29, Sections 1801 – 1872 and the California Labor Code, Section 2810.3.
The 2023 Morales-Garcia case involved strawberry pickers in Santa Barbara County, California. The actual farmers who employed the pickers were liable but went bankrupt. The two high courts in California have determined that the landowner and marketer, even though on either side of the farmer, were not liable even though they were the same entity. Wise choice by the marketer who owned the land to have subleased growing the produce, the strawberries. Significantly, the Ninth Circuit held that the marketer did not have significant control even if the berries had to be picked for the marketer’s consignment sales. Downstream liability of sales entities has thus been limited; the Ninth Circuit stated that such an extension of liability would cause supermarket liability and was not appropriate.
Clear responsibilities and clear leases/ agreements with an understanding of state and federal court determinations, are essential. Sloppy documents without clear assessment of who is controlling the employee (s) can lead to significant liability for the landowner or the marketer of the produce. Specifically,
Marketers and Retailers should make sure that their activities and agreements do not control agricultural workers and farmlands to avoid joint- employer or “client-employer” liability for wages.
Landowners should lease their property by clear leases that do not “direct, control or supervise the worker (s) or the work performed”. Morales – Garcia, supra
Growers are liable for their employees and compliance with California’s and federal wage in our laws.
All of this should be made clear by a comprehensive set of agreements, leases and other documents that do not contradict one another. “Extra” supervision or activities should not be undertaken. The controlling farmer alone should be liable for the working employees.
AVOIDING THE UNIFORM PARTITION OF HEIRS PROPERTY ACT IN CALIFORNIA TO GAIN THE FULL VALUE OF JOINTLY HELD REAL PROPERTY
To solve disputes among co-owners of real property who are relatives, California has enacted the Uniform Partition of Heirs Property Act. It broadly applies to real property in which a co-tenant acquires the property from a relative and there’s no agreement in a record binding all of the co-tenants concerning partition of that property.
The law was meant to keep property “within the family” but it is broadly written so that a relative co-owner who does not request a partition of the real property has an option to buy all of the interest of the other co-tenants. In other words, this law creates a right of first refusal for non-partitioning relative parties. If you wanted to gain full value for your co-owner interest and avoid substantial court proceedings, it is advisable to have an agreement concerning partitioning and sale of the jointly owned real property before one of the co-tenants passes by will or trust that interest to another relative. This way the owners of the property can determine the future of their home or other real property. It is best to avoid putting your family (and other partners) through a costly, divisive and acrimonious dispute and/or court proceeding that will undo your family for generations.
LIABILITY PROTECTIONS – WAIVERS AND INDEMNIFICATIONS
Your potential liability for negligent activities can be waived or you may be indemnified from damages by the other person(s) signing a contract.
Liability waivers, exculpatory clauses, and indemnity provisions must be clear, explicit, and unambiguous to be effective. This means if written correctly, that you can be relieved of your liability for your negligence toward the other contracting party or someone may be responsible for the damages caused by your activities.
Waivers and indemnity clauses should unequivocally apply to “active” and “passive” negligence; otherwise, they are usually interpreted to only apply to passive negligence. Further, if a waiver seeks to release personal injury claims, it must be drafted in a manner that clearly reflects that the intent of the document is to release personal injury claims caused by the negligence of the party seeking the release. For example, if you are a landlord contracting with a tenant through a lease, you can release yourself from liability claims related to COVID-19, provided it is clearly drafted, notifies the tenant of the potential risk of COVID-19 exposure, and that his/her rights are being waived.
There are two areas that such waivers, however, are unenforceable. Particularly,
•When liability waivers are contrary to public policy. Particularly California Civil Code, Section 1668 states, “All contracts which have as their object, directly or indirectly, to exempt anyone from responsibility for his own fraud or willful injury of the person or property of another or violation of law, whether willful or negligent, are against the policy of the law.
•Waivers for violations of law are particularly unenforceable. California case law has firmly established that waivers that exempt a party from violations of law are void and against public policy. If you place a broad exculpatory provision in a lease waiving claims against you for “any claim arising at any time”, the court is not going to enforce them if there is property damage caused by a fire sprinkler system, which was installed by a landlord in violation of municipal code.
As a landlord, protect yourself and your property through waiver and indemnification clauses to the maximum extent possible, recognizing the restrictions under Civil Code, Section 1668. Tenants should be careful and know what risk they are undertaking when leasing premises. Similarly, the parties to a contract or parties to a business venture have like positioning. When contracting, please read all the provisions and make sure that you are protected to the maximum extent possible and/or know the risks that you are taking. Always read and understand the fine print!
WATER RIGHTS, FOR YOU TO GUARD AND NOT LOSE!
Water … Water … Water – If you are a landowner, this is an important asset as you own the water under your land. Protect it so it is not lost & your land loses a portion of its value or becomes valueless for agriculture and other operations. Basin adjudications are occurring, mandated by the state, so if you snooze, you lose. You should have a straw (a well) in your basin and be pumping water.
Santa Barbara County is surrounded by water – the ocean, State Water, our reservoirs, streams, and aquifers. The water history of Santa Barbara, however, is one of feast & famine. We have always had too much & too little water. This history of water is chronicled by Michael F. Hoover, renowned local geologist, in Drought & Flood, which you can purchase at www.HooverGEO.com. So do not give away your valuation water asset or render your land useless. Do not count on expensive governmental water assistance when you have rights right under your feet.
We are regularly engaged to enforce water rights or provide water agreements and easements as well as form water system/sharing arrangements and entities. We look forward to helping you.