Justia Real Estate & Property Law Opinion Summaries

Husband and wife Emmett and Debra Jackson appealed the grant of summary judgment in favor of Wells Fargo Bank, N.A. in their action against the bank and trustee. The Jacksons challenged a foreclosure sale of their property. The Jacksons refinanced an existing home loan; in so doing, they gave a mortgage on the property which was subsequently assigned to Wells Fargo. Although the mortgage was, in turn, assigned to the trustee, the bank continued to function as the "servicer" of the loan. By 2007, the Jacksons were in arrears on their mortgage payments. While the Jacksons and the bank were engaged in negotiations for forbearance, the Jacksons did not make certain scheduled payments. During the negotiations, a debt-collection representative of the trustee sent the Jacksons a "NOTICE OF ACCELERATION OF PROMISSORY NOTE AND MORTGAGE." The house was put up for sale, and a foreclosure deed was issued to a third party. The Jacksons then sued the bank, the trustee, and the purchaser of the property alleging negligent or wanton foreclosure and breach of contract. The bank and trustee moved for summary judgment, contending that the Jacksons lacked any basis from which to contest the foreclosure sale. Upon review, the Supreme Court found that the Jacksons presented no basis on which to reverse the summary judgment as to their claim of negligent or wanton foreclosure, however, the Court agreed that the acceleration letter was fundamentally flawed. The Court reversed the grant of summary judgment on the breach of contract claim, and remanded the case for further proceedings.

In 2009, the Secretary of Veterans Affairs sued Frank S. Smith, Jr. in the Jefferson Circuit Court, stating a claim of ejectment and sought possession of Mr. Smith's house in Bessemer. The mortgage to Mr. Smith's home was assigned to the Secretary, and the Secretary had sold the house at a foreclosure sale in 2007. The auctioneer who sold the house executed an auctioneer's deed conveying the house to the Secretary. The Secretary demanded that Mr. Smith vacate the house, but Mr. Smith failed to leave. The trial court granted summary judgment, asserting as a matter of law he was entitled to possession of the house. Mr. Smith opposed the summary-judgment motion by filing a pleading titled 'Defendant's Response to Plaintiff's Motion for Summary Judgment.' In his response, Mr. Smith argued, among other things, that the Secretary had failed to establish that he was entitled to possession of the house because, Frank said, the affidavit filed with the Secretary's motion did not comply with Rule 56(e), Ala. R. Civ. P. Mr. Smith appealed to the Court of Civil Appeals which reversed the summary judgment and remanded the action for further proceedings. Upon review, the Supreme Court found that Mr. Smith should have moved to strike the offending affidavit in the Secretary's summary judgment motion in his response: "an objection to the inadmissible evidence alone is not sufficient." The Court vacated the appellate court's decision and affirmed the trial court's decision.

Altaf Virani filed an action against 600, L.L.C. (the LLC), attempting to redeem real property the LLC purchased from the bank that had foreclosed on that property. After a bench trial, the circuit court entered a judgment establishing the amount Virani was required to pay to redeem the property. The LLC appealed, arguing that the amount the judgment required him to pay was incorrect. Because the trial court erred in setting the redemption price under 6-5-253(a), Ala. Code 1975, and in not including interest in the redemption price, the Supreme Court reversed the trial court's judgment and remanded the case for further proceedings.

Jim Walter Resources, Inc. (JWR) sought a petition for a writ of mandamus to direct the Tuscaloosa County Probate Court to record certain filings without the payment of a recording tax. Walter Energy, JWR's parent company, acquired Western Coal Corporation of Canada. As part of the acquisition, Walter entered into a credit agreement with Morgan Stanley, which required Walter's subsidiaries to execute contingent guaranties of Walter's financing debt in the event Walter defaulted. JWR secured its guaranty of Walter Energy's financing debt by executing mortgages on its real and leasehold properties. Also as part of the credit agreement, JWR was required to record the mortgages in the probate offices in the counties in which the properties were located. When JWR sought to record the mortgages and related UCC filings in Tuscaloosa, the Tuscaloosa County Probate Court refused to record the documents unless JWR paid the recordation tax. The probate judge maintained that there was no statutory requirement that under Alabama law that the debt being secured be the mortgagor's debt, and as such, because JWR was recording its financing statements for Walter's debt, JWR was still responsible for paying the tax. Upon review, the Supreme Court found that JWR's liability was contingent on Walter's default, and JWR's contingent guaranty did not constitute an unqualified promise to pay Walter's indebtedness under the credit agreement. The Court found the contingent guaranty was not within the scope of the applicable statute, and accordingly, the Court granted JWR's petition and issued the writ.

The Travelers Indemnity Company of Connecticut appealed a judgment in which it was ordered to pay $251,913.91 to Willie A. Miller. Smith House Movers, Inc. (Smith), was hired was hired to move houses located in the path of road construction to be performed. Miller entered into a contract with Smith to purchase one of the houses and to move it from Red Bay to Vina. The contract provided that Smith was to move the house, pour a foundation, and place the house on the new foundation. Smith cut the house into two pieces and delivered the first piece. However, the foundation was improperly poured and did not fit, and the house had been damaged in the move. Ultimately Miller had to hire another company to complete the move and repair the damage. Miller then sued Smith alleging breach of contract, negligence and wantonness. Smith did not answer or appear, and Miller moved to a default judgment against Smith. In an attempt to collect the amount of the default judgment, Miller sent a copy to Smith's general liability insurer, Travelers. As Miller tried to get Travelers to respond to its demand, Miller learned that Smith had declared bankruptcy. Two years following the default judgment, the bankruptcy trustee lifted its stay on Smith's affairs to allow him to collect on the default judgment to the extent that the insurance coverage would allow. Travelers subsequently denied the claim. Miller then sued Travelers for payment. Travelers moved for summary judgment to dismiss Miller's claim, arguing that the general liability policy did not provide coverage based on the terms in the policies. The trial court denied the motion, and eventually entered judgment against the company. Travelers then appealed to the Supreme Court. The issue before the Court was whether the notice of the original lawsuit was timely. The Court found that because Miller's knowledge of Smith's certificate of insurance from the underlying lawsuit put Miller on notice that he should have notified Travelers of the default judgment. As such, the Court concluded that Miller was barred from recovering under Smith's policies. The Court reversed the trial court and remanded the case for further proceedings.

Novus Utilities, Inc. sought a writ of mandamus from the Supreme Court to direct the Cullman Circuit Court to dismiss negligence and private-nuisance claims against it as time-barred. Eleven property owners residing in Cullman County sued Defendants the Hanceville Water Works & Sewer Board and Southwest Water Company, alleging that the defendants had allowed approximately two million gallons of untreated raw sewage from the sewage-treatment facility operated by the Board to be discharged into waterways in Cullman County. They alleged that on January 21, 30, and 31, 2008, the sewage treatment facility released the untreated raw sewage, and that release created a health hazard and damaged and devalued their property. Novus was added as a defendant to the suit as a subsidiary of Southwest. Novus moved to dismiss claims against it. After careful consideration, the Supreme Court concluded the trial court was correct in denying Novus' motion to dismiss, and denied its petition for a writ of mandamus to quash the trial court's judgment.

Defendant National Security Fire & Casualty Company appealed a circuit court order that certified a class for a class action lawsuit. Plaintiff Maurice DeWitt's mobile home was damaged by Hurricane Katrina, and at the time of his loss, Plaintiff was insured by National Security. In 2007, Plaintiff filed suit in circuit court against National Security and other insurance companies alleging that the Defendants breached his insurance policy when they did not include a 20% "general contractor overhead and profit" (GCOP) amount in its loss payment. Specifically, Plaintiff alleged the insurance companies did not take into account Plaintiff's loss and the need for additional general contractor services in rebuilding his home. Plaintiff sought to represent similarly situated policyholders whose claims were allegedly miscalculated in the same fashion. Upon review, the Supreme Court concluded that Plaintiff did not satisfy his burden of establishing the predominance and superiority requirements to certify his class action. Accordingly, the Court held that the trial court exceeded its discretion in cerfifying the class.

Defendants/Counterclaim Plaintiffs Charles Stephens and Stephens Properties, Inc. appealed a judgment entered on a jury verdict in favor of Fines Recycling, Inc. and its shareholders on claims stemming from a dispute over a commercial lease. Fines operated an scrap metal recycling business on Stephens' property. The State sent Fines a notice that it was illegally operating a solid waste dump on the property, and demanded the company cease operations until the waste was cleaned up. The shareholders pledged their stock to Stephens Properties as security for Fines' obligation to clean up the property. Following the completion of the cleanup, Stephens allegedly failed to return the stock certificates pledged by the Fines shareholders. The shareholders sued for the stocks' return; Stephens responded that the stock was subsequently used as a setoff for payment of back rent and other expenses relating to the cleanup. Upon review, the Supreme Court found that the trial court purported to certify its judgment as final, but that there were still pending counterclaims active in the case. The Court concluded that "the judgment on the jury verdict was not a final judgment, and, because of the nature of the pending issues, could not be transformed into a final judgment by a [final] certification." The Court reversed the trial court's certification and remanded the case for further proceedings.

McNeese Title, LLC, a Florida limited liability company owned and operated by Richard McNeese, and Richard McNeese and Peggy Owens petitioned the Supreme Court for a writ of mandamus to direct the circuit court to vacate its order denying their motions to dismiss the action filed against them by James Atchison, and to enter an order dismissing the action for lack of in personam jurisdiction. This dispute arose out of Atchison's purchase of two residential lots in the Villa Lago subdivision, which was originally a 14-acre tract of land in the Golf and Beach Resort of Sandestin, Florida. According to Atchison, purchase agreements were sent to him by the "developers," who, he says, "developed, marketed and sold the lots" in the subdivision. Mr. Atchison signed a "compliance agreement limited power of attorney," designating Richard McNeese or Ms. Owens as Atchison's "attorney in fact for [his] use and benefit, ... for the purpose of ... signing or initialing on [his] behalf, any and all documents affecting the closing or refinance of the [lots]." The closing was held in 2005, however, many of the other lots in the subdivision had not closed, contrary to the purchase agreements. Eventually, Atchison sued a number of individuals and entities, including C-D Jones, 331 Partners, McNeese, and Owens, alleging that he had suffered damage as a result of activities conducted by C-D Jones and 331 Partners after the closing. McNeese and Owens unsuccessfully moved to dismiss the action for lack of personal jurisdiction. Upon review, the Supreme Court concluded that the circuit court lacked jurisdiction over the McNeeses and Ms. Owens. Accordingly, the Court granted their petition and issued the writ.

The United States District Court for the Northern District of Alabama, Southern Division sent a certified question to the Supreme Court. While the Court initially accepted the certified question; however upon review, the Court declined to answer it. The Court noted that the certified question was framed in the abstract, with no reference to any specific language in the title-insurance policy at the heart of the case (i.e., as an evidentiary issue with broad application). "The parties, in their briefs to this Court, do not address the construction of the policy at issue and instead refer this Court to various authorities discussing how valuation may be determined in various title-insurance contexts. Additionally, it is not apparent from the materials before us that the district court has had the opportunity to address whether the specific language of the policy would control the determination of the value of the property. Therefore, we see no grounds under Rule 18 [of the Rules of Alabama Civil Procedure] that will allow this Court to answer the question."