Justia Real Estate & Property Law Opinion Summaries

The case centers on a bakery and deli operator, Bagelmania Holdings, LLC, which leased property from Somerset Property, LLC. Together, they renovated the building for Bagelmania’s restaurant, hiring RDH Interests, Inc. as architect, JEM Associates West, Inc. as contractor, and Turpin & Rattan Engineering, Inc. for HVAC mechanical engineering. Following the renovation, Bagelmania and Somerset alleged construction defects and sued these entities for breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence, with both plaintiffs represented by the same attorney.Prior attempts to initiate litigation were dismissed for failing to comply with Nevada’s NRS 11.258 requirements, which mandate an attorney affidavit of merit and supporting expert reports in nonresidential construction defect cases. The plaintiffs then filed a joint complaint supported by one affidavit and a set of expert reports. The defendants argued that each plaintiff was required to file separate affidavits and expert reports, and the Eighth Judicial District Court, Clark County, agreed, dismissing the case with prejudice for failure to comply with NRS 11.258, also awarding attorney fees, costs, and interest to the defendants.On appeal, the Supreme Court of the State of Nevada considered whether a single affidavit and set of expert reports sufficed under NRS 11.258 when coplaintiffs, represented by the same attorney, jointly brought identical claims arising from the same alleged defects. The Supreme Court held that, under such circumstances, separate affidavits and expert reports are not required. The Court found that the plaintiffs complied with the statute’s plain language and purpose and that the affidavit and reports met the statutory requirements. The Supreme Court reversed the district court’s dismissal, vacated the post-judgment award of fees, costs, and interest, and remanded for further proceedings. View "Bagelmania Holdings, LLC v. RDH Interests, Inc." on Justia Law

A dispute arose from the design and installation of cabinetry in a luxury home in Charleston, South Carolina. Design Gaps, Inc., owned by David and Eva Glover, had a longstanding business relationship with Shelter, LLC, a general contractor operated by Ryan and Jenny Butler. After being dissatisfied with Design Gaps’ performance, the homeowners, Dr. Jason and Kacie Highsmith, and Shelter terminated their contract with Design Gaps and hired Distinctive Design & Construction LLC, owned by Bryan and Wendy Reiss, to complete the work. The Highsmiths and Shelter initiated arbitration against Design Gaps, which led to the arbitrator ruling in favor of the homeowners and Shelter on their claims, and against Design Gaps on its counterclaims, including those for copyright infringement, tortious interference, and unfair trade practices.After the arbitration, Design Gaps sought to vacate the arbitration award in the United States District Court for the District of South Carolina, but the court instead confirmed the award. Concurrently, Design Gaps filed a separate federal lawsuit against several parties, including some who were not part of the arbitration. The defendants moved to dismiss, arguing that res judicata and collateral estoppel barred the new claims, or alternatively, that the claims failed on other grounds such as the statute of limitations and laches. The district court agreed, dismissing most claims based on preclusion or other legal bars, and granted summary judgment on the remaining claims.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s decisions. The court held that res judicata and collateral estoppel applied to bar most of Design Gaps’ claims, even against parties not directly involved in the arbitration but in privity with those who were. For the remaining claims, the court found they were properly dismissed on grounds such as the statute of limitations, waiver, or laches. The Fourth Circuit affirmed the district court’s judgment in full. View "Design Gaps, Inc. v. Distinctive Design & Construction LLC" on Justia Law

A company sought approval to construct a 500 kW solar-energy project in Randolph, Vermont. The proposed project required a certificate of public good (CPG) from the Vermont Public Utility Commission (PUC). A portion of the project's infrastructure, such as its access road and interconnection line, would be located on land with slopes exceeding 25%. Local and regional planning commissions, as well as the Town of Randolph Selectboard, initially supported the project and jointly requested the site be designated as a “preferred site.” After neighbors raised concerns that some panels would be located on steep slopes in conflict with the Town Plan, the applicant agreed to revise the project so that no panels would be built on slopes over 25%. The Town conditioned its continued support on this revision and on receiving the final site plan.The PUC’s hearing officer initially recommended denying the CPG due to uncertainty about whether the Town’s conditions regarding slope measurement had been met. The PUC rejected this recommendation, refocusing on whether the Town itself was satisfied with the conditions. The applicant subsequently provided a letter from the Town confirming its support and satisfaction with the conditions. The PUC found the project's compliance with soil-erosion control measures sufficient, particularly in light of a stormwater permit issued by the Agency of Natural Resources (ANR), and ruled that the project would not unduly interfere with the region’s orderly development. The PUC granted the CPG; the neighbors’ motion for reconsideration was denied, and they appealed.The Vermont Supreme Court reviewed the case, giving deference to the PUC’s expertise and factual findings. The Court affirmed the PUC’s grant of the CPG, holding that the PUC correctly applied the legal standards under 30 V.S.A. § 248, properly considered the Town Plan’s land-conservation measures, reasonably relied on the Town’s assurances and ANR’s permit, and did not misapply its own rules regarding “preferred site” status. View "In re Petition of Randolph Davis Solar LLC" on Justia Law

Villa Zinfandel, LLC purchased real property in Napa County from a party that acquired it at a foreclosure sale. Christopher Bearman was occupying the property at the time. Villa Zinfandel filed an unlawful detainer complaint against Bearman as a limited civil action, seeking possession and holdover damages, as required by law after purchasing foreclosed property. Meanwhile, a third party, Edward Sanchez, filed a separate unlimited civil action to set aside the trustee’s deed upon sale, alleging violations in the foreclosure process. Bearman moved to consolidate the two actions, arguing that the issues overlapped. The trial court ultimately consolidated both cases for all purposes.Following consolidation, the trial court granted summary adjudication against Sanchez on his claim to unwind the foreclosure, while Villa Zinfandel’s unlawful detainer claim proceeded to trial. At trial, Villa Zinfandel introduced recorded foreclosure documents and the trustee’s deed upon sale. Bearman objected to the admission of these documents, arguing lack of foundation and hearsay, and contended that Villa Zinfandel needed to prove the truth of the recorded statements, not just their existence. The trial court overruled these objections, took judicial notice of the documents’ existence (but not their truth), and found in favor of Villa Zinfandel, awarding damages exceeding the then-applicable $35,000 cap for limited civil actions.On appeal, Bearman argued to the California Court of Appeal, First Appellate District, Division One, that the trial court erred by admitting the recorded documents and by awarding damages above the jurisdictional limit. The appellate court held that the trial court properly took judicial notice of the existence and facial contents of the recorded foreclosure documents and correctly applied legal presumptions regarding the regularity of the trustee’s sale. The court also held that, after consolidation for all purposes with an unlimited civil action, the case was no longer subject to the damages cap for limited civil actions. The judgment in favor of Villa Zinfandel was affirmed. View "Villa Zinfandel v. Bearman" on Justia Law

Jerome and Shaun Cohen operated a Ponzi scheme through their companies, EquityBuild, Inc. and EquityBuild Finance, LLC, from 2010 to 2018. They solicited funds from individual investors and institutional lenders, promising high returns secured by real estate, primarily in Chicago. In reality, the Cohens used new investors’ funds to pay earlier investors and overvalued properties to retain excess capital. By 2018, the scheme collapsed, leaving over $75 million in unpaid obligations. The Securities and Exchange Commission intervened, obtaining a temporary restraining order and having a receiver appointed to liquidate assets and distribute proceeds to victims.The United States District Court for the Northern District of Illinois oversaw the receivership and determined how proceeds from the sale of two properties—7749 South Yates and 5450 South Indiana—should be distributed. Both a group of individual investors and Shatar Capital Partners claimed priority to the proceeds, with Shatar arguing its mortgages were recorded before those of the individual investors. The district court found that Shatar was on inquiry notice of the individual investors’ preexisting interests and thus not entitled to priority, limiting all claimants’ recoveries to their contributed principal, minus any amounts previously received.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s distribution order. The appellate court affirmed, holding that under Illinois law, Shatar was on inquiry notice of the individual investors’ interests in both properties at the time it invested, given multiple red flags about the properties’ financing and EquityBuild’s business model. As a result, the individual investors were entitled to priority in the distribution of proceeds. The court also found Shatar’s challenge to the distribution plan moot, as there were insufficient funds to benefit Shatar after satisfying the investors’ claims. View "Securities and Exchange Commission v. Duff" on Justia Law

A group of homeowners, all over the age of 65, entered into contracts for energy efficiency improvements to their homes under California's Property Assessed Clean Energy (PACE) program. This program allows local governments to offer financing for such improvements, with repayment made through voluntary special assessments added to the homeowners’ property tax bills. Most local governments contracted private companies to administer these PACE loans. The homeowners alleged that these private administrators failed to comply with consumer protection and lending laws applicable to consumer lenders, such as providing required warnings and avoiding prohibited security interests. They filed suit under the Unfair Competition Law, seeking injunctive relief and restitution, including the return of assessment monies paid and prohibitions on future collection of delinquent assessments unless the assessments were removed from their properties.The San Diego County Superior Court sustained the defendants’ demurrers, concluding that the plaintiffs were required to exhaust administrative tax remedies before pursuing their claims in court. The California Court of Appeal affirmed, reasoning that because PACE assessments are collected as part of property taxes and the relief sought would invalidate those assessments, plaintiffs first needed to pay the assessments and seek administrative relief through the established tax refund procedures.The Supreme Court of California reviewed the case to determine whether plaintiffs were required to follow statutory procedures for challenging taxes. The court held that when plaintiffs’ claims effectively seek to invalidate PACE assessments or prevent their future collection, they must first pay the assessments and pursue administrative tax remedies. However, the court also held that plaintiffs are not required to use tax challenge procedures for claims that do not directly or indirectly challenge a tax, such as those solely addressing the administration of the PACE program. The judgment was affirmed in part, reversed in part, and the case remanded to consider whether plaintiffs should be allowed to amend their complaints to state only non-tax-related claims. View "Morgan v. Ygrene Energy Fund, Inc." on Justia Law

Zakaria Allaf and Stephanie Crosby rented an apartment from Robb Crawford and later from Shoreline Holdings Five, LLC, with the lease requiring a $1,795 security deposit. The tenants experienced a persistent cockroach infestation and, after unsuccessful remediation attempts, agreed with Crawford to terminate the lease early in January 2022. Upon moving out, Allaf and Crosby were assured by Crawford’s agent that the security deposit would be addressed within thirty days, but no response was received. Eventually, Crawford’s attorney informed Crosby that the deposit was being withheld because Crawford did not consider the lease terminated.Allaf and Crosby filed a small claims action in the Maine District Court (Portland), alleging wrongful retention of the security deposit and breach of the implied warranty of habitability. After a trial, the District Court found in their favor, awarding $6,000 in damages (including double damages for the security deposit and damages for breach of habitability), plus attorney fees and costs. Shoreline appealed to the Cumberland County Superior Court, which affirmed the judgment. Shoreline then appealed to the Maine Supreme Judicial Court, challenging the sufficiency of the evidence supporting liability for wrongful retention and arguing that attorney fees should not be awarded in addition to the $6,000 statutory monetary limit for small claims actions.The Maine Supreme Judicial Court affirmed the judgment. It held that sufficient evidence supported the lower court’s finding that the lease had been terminated by agreement and that Shoreline failed to return the security deposit or provide a written explanation. The Court also held that attorney fees awarded under a fee-shifting statute such as 14 M.R.S. § 6034(2) are considered “costs” and are not included within the $6,000 small claims cap set by 14 M.R.S. § 7482. Thus, the award of attorney fees in addition to $6,000 in damages was proper. Judgment was affirmed. View "Allaf v. Shoreline Holdings Five, LLC" on Justia Law

James and Tahnee Young executed a promissory note and mortgage on property in Fargo, North Dakota, in 2016, originally with The Mortgage Company, Inc., and naming Mortgage Electronic Registration Systems, Inc. as nominee. In July 2022, MidFirst Bank became the holder of the note. After the Youngs stopped making payments, with the last payment in February 2023, MidFirst initiated foreclosure proceedings. In response, the Youngs filed counterclaims alleging fraudulent misrepresentation (based on alleged “robo-signing” or forgery in the assignment of the mortgage), various federal statutory violations, unjust enrichment, coercive collection practices, and constructive fraud.The District Court of Cass County, East Central Judicial District, granted summary judgment in favor of MidFirst Bank and denied the Youngs’ motion for summary judgment. The court found that the Youngs lacked standing to challenge the mortgage assignment because they were not parties to the assignment contract and, therefore, could not claim injury from any alleged fraud in the assignment. The district court also ruled against the Youngs on their federal law claims, finding some barred by res judicata and others lacking proof of damages. Additionally, the court denied their request for audio recordings of hearings, stating the transcript was the official record.On appeal, the Supreme Court of North Dakota reviewed the grant of summary judgment de novo. The court agreed that the Youngs lacked standing to challenge the assignment of the mortgage and that MidFirst Bank, as holder of the note, was entitled to foreclose as a matter of law. The court found no evidence of judicial bias or error in the denial of audio recordings that would have affected the outcome. The Supreme Court affirmed the district court’s judgment, holding that any error in denying access to audio recordings was harmless and that summary judgment for MidFirst was proper. View "MidFirst Bank v. Young" on Justia Law

Four property-specific limited liability companies owned real estate in Wisconsin, which was leased to skilled nursing facilities operated by Kevin Breslin through his company, KBWB Operations, LLC. Breslin and his co-guarantors executed personal guaranties ensuring payment and performance under the leases. The nursing facility tenants defaulted on their rent obligations starting in 2018 and subsequently lost their operating licenses after a court-appointed receiver moved residents out. The tenants also failed to complete a purchase option for the properties, triggering a liquidated damages clause. Plaintiffs later sold the properties at a loss.The plaintiffs sued Breslin, his company, and co-guarantors in the United States District Court for the Northern District of Illinois to enforce the guaranties and recover damages. During the litigation, plaintiffs discovered that one co-guarantor was a California citizen, which destroyed complete diversity and thus federal jurisdiction. Plaintiffs moved to dismiss this non-diverse defendant, arguing he was not indispensable because the guaranties provided for joint and several liability. The district court agreed and dismissed him. Breslin did not oppose the dismissal. Plaintiffs then moved for summary judgment; Breslin, facing criminal charges, invoked the Fifth Amendment and presented no evidence on liability or damages. The district court granted summary judgment to plaintiffs and awarded nearly $22 million in damages across several categories.On appeal, the United States Court of Appeals for the Seventh Circuit held that jurisdiction was proper because the dismissed co-guarantor was not an indispensable party under Rule 19, given joint and several liability. The court affirmed the district court’s findings on most damages but vacated the awards for accelerated rent under one lease (pending further consideration of its enforceability as a liquidated damages clause) and for liquidated damages related to the purchase option (finding it unenforceable as a penalty). The case was remanded for recalculation of damages consistent with these holdings. In all other respects, the judgment was affirmed. View "CCP Golden/7470 LLC v. Breslin" on Justia Law

Several tenants of a subdivided property in Los Angeles, each with separate oral lease agreements for individual units, were forced out of their homes after the landlord obtained a default unlawful detainer judgment against the tenant of a different unit. The landlord did not inform these tenants of the proceedings or provide proper notice. Although only the tenant of unit seven was behind on rent, the landlord sought and obtained possession of the entire property. The sheriff’s deputies, acting on the writ of possession, evicted all the tenants, leaving them homeless and unable to retrieve most of their belongings.The tenants filed suit in the Superior Court of Los Angeles County, asserting claims such as wrongful eviction, breach of quiet enjoyment, intentional infliction of emotional distress, fraud, and violations of statutory and local ordinances. The landlord responded by filing a special motion to strike under California’s anti-SLAPP statute, arguing that the tenants’ claims arose from protected petitioning activity—the prosecution of the unlawful detainer action. The Superior Court granted the motion for ten of the eleven causes of action, concluding that the tenants’ claims were premised on the landlord’s protected activity in pursuing the unlawful detainer case.Upon review, the Court of Appeal of the State of California, Second Appellate District, Division Four, held that the tenants’ claims did not arise from protected activity under the anti-SLAPP statute. The appellate court found that the gravamen of the tenants’ complaint was the landlord’s improper termination of their tenancies without judicial process or notice—not the act of filing or prosecuting the unlawful detainer action against another tenant. Therefore, the Court of Appeal reversed the trial court’s order granting the anti-SLAPP motion and directed the lower court to deny the motion. View "Noon v. Fuentes" on Justia Law