Justia Real Estate & Property Law Opinion Summaries

In April 2010, the State Senate expressly rejected Duane Kanuha's nomination for a second term as a commissioner on the State Land Use Commission (LUC). Following the Senate's rejection, Kanuha continued to serve on the board and to participate in the LUC's consideration of a development project involving the reclassification of agricultural land for urban use. Sierra Club filed an action to disqualify Kanuha from serving on the LUC and to invalidate the actions Kanuha had taken with regard to the development project. The LUC denied the action. That same day, LUC voted to approve the development project. Without Kanuha's vote, the LUC lacked the requisite number of votes to approve the reclassification. The circuit court reversed the LUC's decision and order. The ICA reversed, determining that Kanuha continued to serve as a valid holdover member of the LUC after the Senate's rejection of his nomination for a second term. The Supreme Court reversed, holding (1) Kanuha was not a valid holdover when he voted on the reclassification; (2) Kanuha did not qualify as a de facto member of the LUC; and (3) therefore, Kanuha's actions taken with respect to the reclassification petition were invalid. View "Sierra Club v. Castle & Cooke Homes Haw., Inc. " on Justia Law

Menzies, an air cargo handling business, leased CenterPoint’s 185,280-square-foot warehouse near O’Hare Airport. Another tenant used the building to store airplane parts until 2006. Under the lease, Menzies is responsible for repairing the “floor,” while CenterPoint is responsible for repairing the “foundation.” CenterPoint constructed improvements costing $1.4 million, at Menzies’ request, including increasing the number of dock doors from two to 38 and installing 45,000‐pound dock levelers. When Menzies began moving its operations into the building in November 2007, the six‐inch concrete slab did not exhibit any visible damage. By January 2009, the slab had begun to deteriorate. The damage was not consistent with typical wear and tear. The slab could not support Menzies’ equipment. CenterPoint paid $92,000 for repairs, then stopped doing so and did not submit an insurance claim. The slab is so damaged that it must be replaced, at an estimated cost of $966,000 to $1.23 million. Menzies sued CenterPoint for breach and CenterPoint counterclaimed. The district court held that neither party was entitled to recover because the slab had a “dual nature as both floor and foundation,” but “the damage at issue was related to the slab’s function as a floor.” The Seventh Circuit affirmed. View "Aeroground, Inc. v. CenterPoint Props. Trust" on Justia Law

The debtors borrowed money secured by mortgages on real estate. The mortgages were recorded by the lenders to ensure the priority of their liens. The recorded mortgages did not state the maturity date of the secured debt or the interest rate. Those terms were included in the promissory notes, which were incorporated by reference in the mortgages. The debtors filed for bankruptcy. The trustees filed adversary complaints under 11 U.S.C. 544(a)(3), seeking to avoid the mortgages because they did not state the maturity dates or interest rates. In one case, the bankruptcy court granted summary judgment in favor of the trustee, but the district court reversed and granted judgment for the lender. In the other case, the bankruptcy court granted summary judgment in favor of the lender. The Seventh Circuit held that the trustee’s so-called “strong-arm” power to “avoid … any obligation incurred by the debtor that is voidable by—a bona fide purchaser of real property … from the debtor” could not be used to avoid the mortgages under a 2013 amendment to the Illinois statute on the form for recorded mortgage, 765 Ill. Comp. Stat. 5/11. View "Bruegge v. Farmer State Bank of Hoffman" on Justia Law

The Seventh Circuit considered appeals by Illinois and Illinois counties and a Wisconsin county of district court holdings that those governmental bodies cannot levy a tax on sales of real property by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Although both are now private corporations, the relevant statutes provide that they are “exempt from all taxation now or hereafter imposed by any State … or local taxing authority, except that any real property of the corporation shall be subject to State … or local taxation to the same extent as other real property,” 12 U.S.C. 1723a(c)(2), 12 U.S.C. 1452(e). The Seventh Circuit affirmed. A transfer tax is not a tax on realty. After 2008 Fannie Mae owned an immense inventory of defaulted and overvalued subprime mortgages and is under conservatorship by the Federal Housing Finance Agency. The states essentially requested the court to “pierce the veil,” in recognition of the fact that if the tax is paid, it will be paid from assets or income of Fannie Mae or Freddie Mac, but their conservator is the United States, and the assets and income are those of entities charged with a federal duty. View "Milwaukee Cnty v. Fed. Nat'l Mortg. Ass'n" on Justia Law

The Fillers planned to demolish an unused Chattanooga factory. They knew the site contained asbestos, a hazardous pollutant under the Clean Air Act. Environmental Protection Agency regulations require removal of all asbestos before any demolition. Asbestos materials must be wetted, lowered to the ground, not dropped, labeled, and disposed of at an authorized site. Fillers hired AA, a certified asbestos surveying company, which estimated that it would cost $214,650 to remove the material safely. Fillers hired Mathis to demolish the factory in exchange for salvageable materials. Mathis was required to use a certified asbestos contractor. Mathis applied for an EPA demolition permit, showing an estimated amount of asbestos far less than in the AA survey. The agency’s asbestos coordinator contacted Fillers to verify the amount of asbestos. Fillers did not send the survey, but provided a revised estimate, far less than the survey’s estimate. After the permit issued, the asbestos contractor removed “[m]aybe, like, 1/100th” of the asbestos listed in the AA survey. Temporary laborers were hired, not equipped with protective gear or trained to remove asbestos. Fillers supervised. The work dispersed dust throughout the neighborhood. An employee of a daycare facility testified that the children were unable to play outside. Eventually, the EPA sent out an emergency response coordinator and declared the site an imminent threat. Mathis and Fillers were convicted of conspiracy, 18 U.S.C. 371, and violations of the Clean Air Act, 42 U.S.C. 7413(c). Fillers was also convicted of making a false statement, 18 U.S.C. 1001(a)(2), and obstruction of justice, 18 U.S.C.1519. The district court sentenced Mathis to 18 months’ imprisonment and Fillers to 44 months. The Seventh Circuit affirmed. View "United States v. Mathis" on Justia Law

Defendant was assigned the serving rights to Plaintiff's mortgage on a piece of property. Plaintiff sued Defendant, claiming that Defendant attempted to collect more than was due on the loan. The parties settled. Plaintiff then filed this action against Defendant, alleging breach of the settlement agreement, defamation, and violations of the Maryland Consumer Debt Collection Act and the Maryland Consumer Protection Act. An order of default was later entered against Defendant. Defendant subsequently filed a motion for a new trial or to alter or amend the judgment, requesting that the default judgments be set aside because Plaintiff's claims were legally deficient. The trial court denied the motion. The court of special appeals affirmed. The Court of Appeals affirmed, holding that a defaulting party who does not file a motion to vacate the order of default after a default judgment has been entered cannot file a Maryland Rule 2-534 motion to alter or amend a judgment to contest liability, and the defaulting party cannot appeal that judgment in order to contest liability. View "Franklin Credit Mgmt. Corp. v. Nefflen" on Justia Law

Eugene and Charlene Guthmiller appealed a district court judgment finding an option agreement should have been honored, allowing Guthmiller Farms, LLP and Jeremy Guthmiller to each purchase by contract for deed an undivided one-half interest in specified lands. The Guthmillers argued on appeal: (1) that Guthmiller Farms did not have standing to pursue the action; (2) that consideration was invalid for the option contract; (3) that exercise of the option constituted a counteroffer; and (4) that the district court erred in considering evidence not disclosed prior to the hearing. Finding no error, the Supreme Court affirmed. View "Guthmiller Farms v. Guthmiller" on Justia Law

Charles Gower petitioned the Supreme Court to vacate an arbitration award in favor of Turquoise Properties Gulf, Inc., Caribe Realty, Inc., Larry Wireman, and Judy Ramsey Wireman(collectively, "Turquoise"). The underlying dispute arose from Gower's preconstruction agreement to purchase a condominium unit in a complex developed by Turquoise. The arbitrator's decision was based in large part on Turqoise's successfully raising a statute-of-limitations defense to Gower's claims. The Supreme Court found that Turquoise expressly argued, and then abandoned, one specific statute-of-limitations defense and then it never again urged the arbitrator to apply a statute of limitations to the various claims actually brought by the claimants. Through its arguments, Turquoise distilled the issues and arguments submitted to the arbitrator for consideration. Gower argued, and the Supreme Court agreed, that Turquoise "affirmatively chose to forgo any statute of limitations defense to the [c]laimants' ... claims and therefore did not submit [the] same to the Arbitrator for decision." Therefore, the Supreme Court concluded that because the issue of the applicability of a statute of limitations was not submitted to the arbitrator for decision, the arbitrator exceeded his powers in applying a statute of limitations to Gower's claims. The Court reversed the judgment entered on the arbitrator's award, and remanded the case for further proceedings. View "Gower v. Turquoise Properties Gulf, Inc., et al. " on Justia Law

Horsfall worked as a real estate agent for First Weber, 2001-2002, and was the listing agent on First Weber’s contract with Call, who was trying to sell property. The contract gave First Weber exclusive rights collect commissions for sale of the property during the listing period and an exclusive right to collect commissions from sales to defined “protected buyers” for one year after the listing expired. The Acostas made an offer on the property and became “protected buyers.” Call’s contract with First Weber ended in August and at the same time, Horsfall left First Weber to establish his own brokerage, Picket Fence. In October, the Acostas contacted Horsfall. Without involving First Weber, Horsfall resuscitated the transaction with Call. The Acostas and Call executed a sales contract for the Call property. Picket Fence received a $6,000 commission, inconsistent with Horsfall’s status as First Weber’s agent under the earlier contract and in violation of Wisconsin real estate practice rules. Six years later, First Weber sued Horsfall in state court, asserting r breach of contract, tortious interference, and unjust enrichment. The state court entered a judgment against Horsfall for $10,978.91. Horsfall filed for Chapter 7 bankruptcy, listing First Weber as a creditor. First Weber responded that its judgment was non‐dischargeable under 11 U.S.C. 523(a)(6), as involving “willful and malicious injury.” The bankruptcy court, district court, and Seventh Circuit found the debt dischargeable. View "First Weber Grp., Inc. v. Horsfall" on Justia Law

Landlords brought an unlawful detainer action against Tenants to regain possession of the premises and recoup damages. The general sessions court later entered a default judgment granting Landlords possession of the property and a $42,500 judgment for past due rent and attorneys' fees. Tenants filed a notice of appeal and posted an appeal bond by depositing $250 cash with the clerk of court. Landlords filed a motion to dismiss, arguing that Tenants violated Tenn. Code Ann. 29-18-130(b)(2) by failing to post a bond equal to one year's rent. The circuit court denied the motion, concluding that a bond for one year's rent was unnecessary because Tenants had already surrendered possession of the property and vacated the premises. The Supreme Court affirmed the circuit court's denial of Landlords' motion to dismiss, holding that the circuit court did not err in determining that section 29-18-130(b)(2) does not require a tenant who has surrendered possession of the property to post a bond for one year's rent when appealing an adverse judgment of the general sessions court in an unlawful detainer action. View "Johnson v. Hopkins" on Justia Law