Justia Real Estate & Property Law Opinion Summaries

Articles Posted in March, 2014
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Debtor, a New York City tenant, filed for Chapter 7 bankruptcy and listed the value of her apartment lease on Schedule B as personal property exempt from the bankruptcy estate as a "local public assistance benefit." At issue was whether the value inherent in debtor's rent-stabilized lease as a consequence of the protections afforded by New York's Rent Stabilization Code, N.Y. Comp. Code R. & Regs. tit. 9, 2520.1 et seq., made the lease, or some portion of its value, exempt from debtor's bankruptcy estate as a "local public assistance benefit" within the meaning of New York Debtor and Creditor Law 282(2). The court certified this unsettled issue to the New York Court of Appeals. View "Santiago-Monteverde v. Pereira" on Justia Law

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This case stemmed from a dispute between property owners on a small island in Southeast Alaska. After moving to the island with his family, Todd Shumway engaged in activities that Betty Black, the largest landowner, claimed were in violation of the island's protective covenants. The superior court found in favor of Black and awarded injunctive and monetary relief to her and another landowner, Dale Lockwood. When Black attempted to collect on her judgment by executing on Shumway's island property, Shumway, who was incarcerated in Arizona on charges unrelated to this case, claimed a homestead exemption. The superior court denied the exemption. Shumway appealed the denial. Finding no reversible error, the Supreme Court affirmed. View "Shumway v. Betty Black Living Trust" on Justia Law

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Rodehorst Brothers, a partnership, applied for several building permits for its apartment building. A building inspector granted the first two permits but denied the third, concluding that Rodehorst had forfeited its right to continue its nonconforming use of a fourplex in an area zoned R-2 for one- and two-family use. On appeal, the city’s Board of Adjustment determined (1) Rodehorst had forfeited its right to continue its nonconforming use by not having more than two apartments occupied for more than one year, and (2) the Board lacked authority to grant a use variance to otherwise allow the use to continue. The district court affirmed, concluding that the Board did not err in its judgment and that the Board’s ruling was not an unconstitutional taking. The Supreme Court affirmed, holding (1) because the record showed that Rodehorst discontinued the noncomforming use for one year, it forfeited its right to continue the use; (2) the Board lacked authority to grant a use variance; and (3) there was no taking of Rodehorst’s property. View "Rodehorst Bros. v. City of Norfolk Bd. of Adjustment" on Justia Law

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Elmer Gaede, who owned a 120-acre farm together with his wife, died testate on February 2005. Elmer’s daughter, Diean, was named executor under the will. Diean designated Ivan Ackerman to render legal services in the administration of the estate. During the pendency of the probate proceedings, Elmer’s son James and his wife, who were leasing the farm, exercised the option under the lease agreement to purchase the farm. Diean later filed this legal malpractice lawsuit against Ackerman, alleging that Ackerman failed to adequately protect her personal interests relating to the enforceability of the option. The district court granted summary judgment for Ackerman, determining that Ackerman did not have a duty to protect Diean’s personal interests. The court of appeals reversed, holding that a factual dispute existed over the question of whether Diean had a reasonable expectation that Ackerman was representing her personal interests. The Supreme Court vacated the decision of the court of appeals and affirmed the judgment of the district court, holding that insufficient facts supported Diean’s claim that Ackerman reasonably understood that Diean expected him to protect her personal interests in challenging the option. View "Sabin v. Ackerman" on Justia Law

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As a mortgage broker, Chandler was able to falsify documents, close fraudulent loans, and judge what a house would appraise for after cosmetic work. In 2005, Causey and Rainey founded a construction company to make minimal changes to houses. They recruited real estate novices to buy houses. Chandler would fill out a mortgage application, falsifying income, down payments and other information to make the buyer a viable loan candidate. She would order appraisals, title work and pre‐approval from the lender. A “trainee” appraiser reported a greatly inflated price. Chandler gave false information to the lenders on HUD‐1 statements. Chandler made up false construction invoices for the remainder of the loan after expenses were paid. Before the participants were arrested, they had executed the mortgage scheme 25 times. Causey, the only co‐conspirator who did not plead guilty, was convicted. The Seventh Circuit affirmed, rejecting arguments that the court improperly admitted prejudicial photographs taken of the houses around the time of trial rather than at the time of the sale and evidence of a fraudulent sale that took place outside of the conspiracy. A defense witness’s testimony was properly excluded as undisclosed expert testimony. The court also upheld admission of testimony by a co-conspirator and a two‐level sentencing enhancement for being an “organizer, leader, manager, or supervisor.”View "United States v. Causey" on Justia Law

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The developer (“Developer”) of a residential community hired a general contractor (“Contractor”) to construct homes in the community, and Contractor subcontracted with Subcontractor for construction services. Subcontractor performed services on several homes, including Appellant’s. Because Subcontractor was not fully paid, it recorded liens on properties within the community, including Appellant’s. Subcontractor filed a civil action against Developer, Contractor, Appellant, and other homeowners, seeking to foreclose on its liens. Appellant filed a cross-claim against Developer and Contractor for breach of contract and seeking to recover attorney fees as damages. The district court denied Appellant’s request to recover attorney fees, concluding that, under the standard set forth in Horgan v. Felton regarding the recovery of attorney fees in cloud-on-title cases, because the breach of contract in this case related to title of real property, and because Appellant failed to allege and prove slander of title, she could not recover the attorney fees that she sought as special damages. The Supreme Court reversed the district court’s judgment to the extent that it denied Appellant’s request for special damages, holding that Horgan did not apply to preclude such recovery in this case. View "Liu v. Christopher Homes, LLC" on Justia Law

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Appellants appealed a district court judgment in a real property contract action. Based on Appellants’ failure to file their opening brief and appendix by the deadline and failure to comply with court rules and directives, Appellants’ appeals were dismissed. Appellants sought the en banc Court’s reconsideration, arguing that the dismissal of their appeals were based on the missteps of their lead appellate attorney, and therefore, the dismissal was contrary to the Supreme Court’s precedent recognizing public policy favoring dispositions on the merits. The Supreme Court denied en banc reconsideration, holding that precedential uniformity did not provide a basis to reinstate these appeals, as the policy was not absolute and must be balanced against countervailing policy considerations such as the public’s interest in expeditious resolution of appeals and judicial administration concerns. View "Huckabay Props., Inc. v. NC Auto Parts, LLC" on Justia Law

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At issue in this case was the State Center Project, a $1.5 billion redevelopment project intended to revitalize property owned by the State in Baltimore. In 2005, the State issued a public request for qualifications to solicit a master developer for the project. The State Center, LLC was chosen as the master developer. The Maryland Department of General Services (“DGS”), the Maryland Department of Transportation (“MDOT”) and the State Center, LLC negotiated for the Project, entering a series of agreements between 2007 and 2010 to complete the Project in a timely manner. In 2010, Plaintiffs, property owners in downtown Baltimore and taxpayers, filed suit against the DGS, MDOT, and the State Center and its subsidiaries, seeking a declaratory judgment that the formative contracts for the Project were void and seeking an injunction to halt the Project. The trial court voided the formative contracts, concluding that they violated the State Procurement Law. The Court of Appeals vacated the judgment of the circuit court and remanded with directions to dismiss Plaintiffs’ complaint with prejudice, holding that Plaintiffs’ claims were barred by the doctrine of laches due to an unreasonable delay in bringing their claims, causing prejudice to the defendants. View "State Ctr., LLC v. Lexington Charles Ltd. P'ship" on Justia Law

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Heatherwood and FCB appealed the district court's affirmance of a final amended judgment entered by the bankruptcy court. The bankruptcy court determined that there was an implied restrictive covenant limiting the use of real property at issue to a golf course. As a preliminary matter, the court concluded that, because FCB satisfied the person-aggrieved doctrine, FCB also met Article III standing requirements. On the merits, the court concluded that the bankruptcy court did not err when it held that FCB and Heatherwood had actual, constructive and inquiry notice of the implied restrictive covenant; the bankruptcy court did not err in finding that most, if not all, of the homeowners within the Heatherwood subdivision bought their home with the expectation that the golf course property would remain a golf course; the bankruptcy court did not err in holding that the doctrine of estoppel by deed precluded the enforcement of the covenant; with respect to FCB and Heatherwood's argument that the doctrine of integration in the Agreement between HGC and Heatherwood served to destroy an implied covenant, the bankruptcy court did not err in finding integration did not apply under the facts of the case; in considering the doctrine of changed circumstances, the bankruptcy court relied on various factual findings in determining that the homeowners' benefit from the continued existence of the covenant outweighed the detriment borne by FCB and Heatherwood; and the court rejected FCB and Heatherwood's argument that HGC had no standing to enforce the implied restrictive covenant because HGC owned no property. Accordingly, the court affirmed the judgment of the district court. View "Heatherwood Holdings, LLC v. HGC, Inc." on Justia Law

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Plaintiff filed suit against the cities, alleging violations of the Fair Housing Act (FHA), 42 U.S.C. 3601 et seq., federal civil rights laws, and state laws stemming from the cities' demolition of his properties after declaring them nuisances. On remand, the district court concluded that plaintiff failed to state a claim under federal law and that the statute of limitations barred his FHA claims. The court concluded that the district court did not err by ordering the parties to brief the issue of whether plaintiff's complaints stated a claim under federal law; the district court properly considered the relevant evidence and did not err by excluding evidence plaintiff submitted; the district court did not err in concluding that the two-year statute of limitations barred plaintiff's FHA claims; the district court did not err in concluding that plaintiff's complaint, alleging 42 U.S.C. 1981-83 claims, failed to state a claim under federal law; and the district court did not abuse its discretion in denying motions to alter or amend. Accordingly, the court affirmed the judgment of the district court. View "Smithrud v. City of St. Paul, et al." on Justia Law