Justia Real Estate & Property Law Opinion Summaries

Articles Posted in December, 2011
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Homeowners sued Contractor for, inter alia, breach of contract, negligence, fraud, and fraudulent concealment, claiming that Contractor negligently failed to perform contractually required work. The district court granted summary judgment in Contractor's favor on all claims. As to the negligence allegations of interest in this appeal, the district court held (1) the economic loss doctrine prevented Homeowners from bringing a tort action under circumstances governed by contract, and (2) the economic loss doctrine supplied an additional bar to Homeonwers' fraud claims. The court of appeals affirmed. The Supreme Court accepted the appeal to decide whether the economic loss doctrine barred any negligence claims. The Court reversed, holding that the doctrine should not apply in this case where (1) existing caselaw establishes that homeowners' claims against residential contractors may be asserted in tort, contract, or both, depending on the nature of the duty giving rise to each claim; and (2) rationales upholding the economic loss doctrine do not support its adoption for disputes between homeowners and their contractors. Remanded.

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Sellers hired Agent to list their ranch for sale. Buyers purchased the ranch after Agent represented that the well on the ranch would produce as much water as they would need for their farming and ranching operation. Later, Buyers sued Sellers and Agent for negligent misrepresentation, maintaining that they were misled about the condition of the well and its potential to meet their farming and ranching needs. Buyers sought $513,000 in damages, which was the estimated cost of installing a new well. The circuit court (1) granted Sellers' motion to prohibit evidence of the cost of a new well as a measure of damages, and (2) prohibited Buyers from testifying on the cost of the well as a means of proving the devaluation of their property. The Supreme Court affirmed, holding (1) the Restatement (Second) of Torts sets forth the proper measure of damages in South Dakota for negligent misrepresentation; (2) plaintiffs asserting misrepresentation claims may recover reliance damages but not expectation damages, and therefore, Buyers' evidence of the estimated cost for a new well was properly excluded; and (3) the circuit court properly precluded Buyers from testifying on their land's value.

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The City of Red Wing enacted an ordinance requiring inspections of rental property before landlords could obtain operating licenses and allowing the City to conduct inspections by application for and judicial approval of an administrative warrant in the absence of landlord or tenant consent. Appellants in this case were nine landlords and two tenants who refused to consent to inspections of their properties and successfully challenged three separate applications for administrative warrants. At the same time Appellants opposed the City's application, they filed a separate declaratory judgment action seeking to have the rental inspection ordinance declared unconstitutional. The court of appeals affirmed the district court's dismissal of the declaratory judgment action for lack of standing, concluding that Appellants had not alleged an injury that was actual or imminent. The Supreme Court reversed, concluding that the challenge to the constitutionality of the rental inspection ordinance presented a justiciable controversy. Remanded.

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Plaintiffs appealed from the district court's dismissal of their complaint against government officials and a group of telecommunications companies. Plaintiffs challenged section 802 of the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. 1885a, as an unconstitutional taking under the Fifth Amendment. Section 802 allowed the U.S. Attorney General to certify that a telecommunications company provided assistance at the behest of the government in connection with investigation of terrorism, thereby triggering immunity on the theory that application of section 802 required dismissal of plaintiffs' case and negated the cause of action under various federal statutes. The court held that the district court correctly dismissed plaintiffs' complaint for lack of jurisdiction where plaintiffs demanded no monetary damages. Consequently, the court need not reach the merits of the Takings Clause claim.

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Plaintiff sued defendant, a general improvement district, arguing that defendant's policy of only allowing people who own or rent real property within defendant's 1968 boundaries to access beaches that it owned and operated was unconstitutional under the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. The district court granted defendant's motion for summary judgment. The court held that the beaches were not a traditional public forum, and that plaintiff's exclusion from beaches did not violate either his First Amendment or Fourteenth Amendment rights. Accordingly, the court affirmed the judgment of the district court.

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Plaintiff-Appellant Allen Russell appealed a district court's order that denied his "Motion to Vacate the Judgment Pursuant to Rule 60(b)(4)(6) (FRCP), and Motion for Appointment of Counsel Pursuant to 28 U.S.C. 1915(d), and, or, Alternatively, Second Motion for Leave to Amend the Complaint." Plaintiff filed his pro se civil rights complaint against "a plethora" of business, attorney and judicial defendants arising out of the foreclosure of real property he held in Colorado. The district court dismissed the complaint, finding that his claims were repetitive of claims previously asserted in two cases that had been resolved against him. Finding that Plaintiff did not raise a reasoned, nonfrivolous argument on law or facts in support of the issues he raised on appeal, the Tenth Circuit dismissed Plaintiff's case.

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Plaintiff Commonwealth Property Advocates, LLC, acquired title to three pieces of real property in Utah from three defaulting borrowers. Plaintiff then filed three suits in diversity against various Defendants which held interests in the property, seeking to prevent foreclosure. Plaintiff argued Defendants had no authority to foreclose because the notes in each case had been securitized and sold on the open market. Because the security followed the debt, Plaintiff argued once Defendants sold the security they could not foreclose absent authorization from every investor who had purchased an interest in the securitized note. Defendants in all three cases filed motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), and the district court granted those motions. Upon review, the Tenth Circuit found that Plaintiff's diversity jurisdiction claims had no legal basis under Utah law, and as such, the district court properly dismissed all three complaints.

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Aequitas Enterprises and Interstate Investment Group entered into a real estate contract for the sale of 388 properties, all located outside the state. Aequitas subsequently sued Interstate Investment for breach of contract. To protect its interest in the properties, Aequitas also filed a motion requesting an extraterritorial prejudgment writ of attachment on all the properties. The district court granted Aequitas's motion for prejudgment writ of attachment and entered an order vesting title to all the properties in Aequitas. The Supreme Court reversed the district court and vacated its order, holding that the state's rules of civil procedure did not authorize a district court to enter an order directly affecting interests in real property located in other states.

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Lester Dean was the sole and managing member of Glacier Development Company, LLC, which owned property that the Kansas DOT (KDOT) took for highway purposes. KDOT's eminent domain petition did not individually name Dean as a defendant or allege that he personally owned any of the property, but certain attorneys filed an entry of appearance declaring the defendants to be Glacier and Dean. After court-appointed appraisers awarded Glacier $2.19 million for the property, a jury verdict concluded that the property's value was $800,000. The district court ordered that judgment was awarded "against the Defendants." Dean filed a motion requesting his name be removed from the judgment because he did not own the subject property in his personal capacity. The district court denied the motion. At issue on appeal was whether the district court had the authority to adjudge Dean personally liable to KDOT for the amount of the appraisers' award paid out to Glacier that exceeded the compensation finally awarded on appeal. The Supreme Court found that it did not and reversed, holding that the district court did not have jurisdiction to make the findings necessary to hold Dean personally liable for an LLC debt.

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The Church appealed the adverse grant of summary judgment on its claim that the County enforced a land use regulation in violation of the Church's constitutional and statutory rights under 42 U.S.C. 1983 and the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), 42 U.S.C. 2000cc. The court agreed with the district court that the Church failed to establish that its RLUIPA claims were ripe absent a final determination from the County on its Use Permit application and held that the Church failed to make a sufficient showing of the ripeness of any of its constitutional claims. Accordingly, the district court's judgment was affirmed.