Justia Real Estate & Property Law Opinion Summaries

Two corporations organized as multiple housing cooperatives appealed the classification of their real estate as commercial for property tax purposes to the Jasper County Board of Review. The board did not alter the classification of the properties, and the cooperatives appealed. The district court affirmed the board's determination, concluding that the cooperative was actually operating as a standard rental property. After granting the cooperatives' combined motion for amendment and enlargement of findings and for a new trial, the district court concluded the cooperatives had followed all proper corporate formalities and were set up exactly as prescribed by Iowa law. Accordingly, the court reversed its prior ruling and concluded the real estate should properly be classified as residential. The court of appeals affirmed. On review, the Supreme Court affirmed, holding (1) Iowa law requires property owned by residential cooperatives, properly organized under chapter Iowa Code chapter 499A, to be classified as residential and taxed at residential property rates; and (2) because the cooperatives were operating on a nonprofit basis, there was no basis for penetrating the corporate veil.

Plaintiffs Lisa and Thomas Ketchum as trustees for the Saddlebrook Farm and North Farm Trusts appealed the Town of Dorset's decision to reclassify a town road from a class 3 to a class 4 highway.  Plaintiffs argued that the court erred in reviewing the selectboard's reclassification using a deferential standard instead of a de novo procedure involving appointment of a panel of commissioners.  In the alternative, Plaintiffs contended that, even under a deferential standard, the court's decision was erroneous because the findings were not supported by the evidence and they were denied an opportunity to supplement the record on appeal.  Plaintiffs own property that is serviced by a town highway known as Upper Kirby Hollow Road.  There is one residence on the road, and the remaining properties are undeveloped.  Some of the property is under a conservation easement and open to the public for recreational activities.  In October 2008, the Town provided notice that it intended to consider altering the classification of certain town highways, including a 0.55 mile section of Kirby Hollow Road.  The selectboard made a site visit to the property.  The Town also held a public meeting and heard from interested parties.  Plaintiffs attended and spoke against reclassification.  Other members of the public also opposed reclassification and questioned whether it would have an impact on the public's ability to use the conserved property.  The Town road foreman supported reclassification and testified that the road is dangerous to maintain and snow plow because it is narrow and steep.  In December 2008, the Town issued a written decision, finding, among other things, that: the road's width is too narrow to allow two vehicles to safely pass one another or for access for emergency vehicles; Town snow removal vehicles have slid off the road causing danger to the vehicles and impairing snow removal of other roads; and the cost to improve the road is prohibitive.  The Town also found that the road services only one seasonal residence with limited winter usage.  The Town concluded that continuing summer maintenance and winter plowing did not serve the public good of the Town and reclassified the road. The trial court concluded that there was no statutory authority providing for review of the reclassification and therefore the only jurisdiction for the appeal was pursuant to Rule 75 in the nature of certiorari.  Upon review, the Supreme Court found that while Plaintiffs argued that their opinions and evidence should have been weighed more heavily, the selectboard did not err in resolving the competing considerations in the manner that it did.  The decision was within the Town's authority and not erroneous. The Court affirmed the lower court's decisions.

The personal representative of an estate sold real property that had been specifically devised to several heirs. The Supreme Court ruled in a previous appeal that the personal representative lacked the authority to sell the property and remanded the case to allow the buyers of the real property to intervene to protect their interests. After remand, the buyers filed suit against the estate. The heirs who objected to the sale intervened. The trial court granted summary judgment in favor of the buyers, finding that the buyers were good faith purchasers for value of specifically devised land and thus were protected by S.D. Codified Laws 29A-3-714 as a matter of law. The intervening heirs appealed. The Supreme Court affirmed but on narrower grounds, holding that based on lack of notice of the heirs' interest in the land or the law at issue, the buyers were good faith purchasers for value, and as such, were protected by the statute.

Respondents Harold and Jane Elyea, owners of Frog Mountain Pet Care (Frog Mountain) applied to Jefferson County (County) for a conditional use permit and variance to expand their dog and cat boarding facility. Petitioner Martin Mellish, owner of an adjoining property, opposed the application, arguing that the proposed expansion would increase noise from the facility. A County hearing examiner granted Frog Mountain's application. Petitioner moved for reconsideration, but did not notify Frog Mountain that he had filed the motion. The hearing examiner denied Petitioner's motion and mailed notice of that denial to all interested parties including Frog Mountain. Petitioner then filed a land use petition at superior court. This filing occurred twenty days after the County mailed notice of the denial of the motion for reconsideration, and fifty days after entry of the hearing examiner's decision that granted Frog Mountain's application. Frog Mountain moved to dismiss the land use petition as untimely, asserting that the 21-day time limit on filing the petition ran from the date of the hearing examiner's original decision. Petitioner and the County, on opposite sides of the underlying lawsuit, opposed Frog Mountain's motion, contending that the time limit for filing the lawsuit ran from the date of Petitioner's motion for reconsideration was denied. The superior court agreed with Petitioner and the County, and denied Frog Mountain's motion to dismiss. The court then reached the merits of Petitioner's land use petition and reversed the County's decision to grant the permit. The Court of Appeals reversed the trial court, holding that the hearing examiner's original decision was the "final determination" that triggered the time limit for filing the land use petition. Upon review, the Supreme Court reversed the Court of Appeals, holding that the motion for reconsideration Petitioner filed with the hearing examiner tolled the finality of the hearing examiner's initial decision.

Plaintiffs, on behalf of a putative class, sued defendant under the Missouri Second Mortgage Loan Act (MSMLA), Mo. Rev. Stat. 408.231-408.241, alleging that defendant charged them unauthorized interest and fees in violation of section 408.233.1 of the MSMLA. At issue was whether defendants violated the MSMLA by charging plaintiffs a loan discount, settlement/closing fee, document processing/delivery fee, and prepaid interest. The court held that plaintiffs did suffer a loss of money when defendant charged the loan discount, although plaintiffs received the loan discount amount two days later as part of a loan disbursement. The court also held that it could not decide whether the loan discount and the settlement/closing fee violated the MSMLA and remanded for further proceedings. The court further held that the document processing/delivery fee was not included in section 408.233's exclusive list of authorized charges and violated the MSMLA. The court finally held that because the processing/delivery free violated the MSMLA, the prepaid interest was an additional violation of the statute. Therefore, the court reversed and remanded to the district court for further proceedings.

In 1994 the township denied a special permit for construction of a church and related structures, consisting of 220,000 square feet of building area, more than 1,350 parking spaces, and a seating capacity of 4,000 people in the main auditorium/worship center on a 55.8-acre plot zoned for agricultural use. The parties later entered a consent judgment, permitting the church with a number of limitations. Because of growth and a desire to add services, the church moved to reopen the case in 2008 to set aside the consent judgment. The trial court denied the motion. The Sixth Circuit affirmed. After rejecting an argument that the judgment was void under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc, the court noted that the changed circumstances on which the church based its Fed. R. Civ. P. 60(b)(5) argument were voluntary and within the church's control. The fact that case law has clarified the law under RLUIPA does not justify reopening the case.

BAC Home Loans Servicing, LP (formerly known as Countrywide Home Loans Servicing, LP); Countrywide Home Loans of Texas, Incorporated; and Countrywide Home Loans, Incorporated appealed an order for remand where the district court dismissed the lone federal claim under the Truth in Lending Act (TILA), 15 U.S.C. 1601-1667f, and declined to exercise supplemental jurisdiction over the remaining state law claims. Defendants argued that this was an abuse of discretion because Countrywide Home Loans of Texas was improperly joined and thus the district court had diversity jurisdiction over the state law claims. Plaintiffs argued that there was no improper joinder and that defendants waived any right to argue improper joinder or the existence of diversity jurisdiction when they failed to remove the action to federal court within 30 days of service of the original complaint that listed Countrywide Home Loans of Texas. The court held that defendants carried their burden of proving improper joinder; the district court had jurisdiction over the state law claims at the time of remand; and the exercise of that jurisdiction was mandatory. Accordingly, the court reversed the district court's decision to remand the state law claims to Texas state court and remanded for further proceedings.

Landlord Downtown Barre Development appealed a trial court's denial of its request for declaratory relief. Landlord argued that Tenant GU Markets of Barre, LLC established a corporate structure that entitled it to terminate the parties' commercial lease.  Landlord claimed the trial court erred by not considering Tenant's conduct when deciding whether tenancy under the terms of their agreement could be terminated.  Upon review of the lease and the applicable legal authority, the Supreme Court concluded that the essence of Landlord's claim was for "anticipatory repudiation." Even assuming Landlord could rely on this common law principle, Tenant had not indicated to Landlord an intent to breach, nor did Tenant commit an act to render it "unable to perform." Accordingly, because the language of the lease was clear and unambiguous and Tenant's conduct did not constitute notice as required by the plain language of the lease, the Court affirmed the trial court's ruling that landlord was not entitled to terminate the agreement on this ground.

In one of Plaintiff Leprino Foods Company's warehouses, flavoring compounds derived from nearby-stored fruit products contaminated a large quantity of cheese. Leprino's "all-risk" insurance policy with Defendant Factory Mutual Insurance Company excluded contamination unless with was caused by "other physical damage." When Factory Mutual refused coverage on the basis of the contamination exclusion, Leprino sued. A jury determined that the contamination was caused by other physical damage and therefore was covered by the Factory Mutual insurance policy. On appeal, Factory Mutual contended the verdict was not supported by the evidence presented at trial. Specifically, Factory mutual argued that: (1) expert testimony was not presented to prove causation; (2) the jury instructions pertaining to Leprino's cold-storage guidelines were given in error; and (3) Leprino's damages should have been reduced by its settlement with the warehouse. Upon review of the trial record and applicable legal authority, the Tenth Circuit found that Leprino presented sufficient evidence with regard to expert testimony to prove causation. The Court did not find jury instructions to be erroneous. The Court did agree that Leprino's damages should be reduced by the amount of the settlement received from the warehouse. The Court therefore affirmed part and reversed part of the lower court's decisions and remanded the case for recalculation of damages.

The Railroad Revitalization and Regulatory Reform Act prevents states and their subdivisions from imposing discriminatory taxes against railroads. 49 U.S.C. 11501. In 2008, the drainage district, a subdivision of Illinois, changed its method for calculating assessments. All other owners are assessed on a per-acre formula, but railroad, pipeline, and utility land were to be assessed on the basis of "benefit," apparently based on the difference in value between land within the district and land outside the levees; annual crop rentals being paid; and agricultural production of lands within the district. Two rail carriers brought suit under a section of the Act, which prevents imposition of "another tax that discriminates against a rail carrier." The district court held that the assessment was prohibited by the Act, but concluded that it was powerless to enjoin the tax. The Seventh Circuit reversed, holding that the court has authority to enjoin the tax, but, under principles of comity, should eliminate only the discriminatory aspects, not the entire scheme. The assessment is a tax that, raises general revenues; its ultimate use is for the whole district. It imposes a proportionately heavier tax on railroading than other activities.