Justia Real Estate & Property Law Opinion Summaries

Debtor lived in a rent-stabilized apartment for over forty years. Debtor filed for Chapter 7 bankruptcy and listed the value of her unexpired rent-stabilized lease as personal property exempt from the bankruptcy estate under N.Y. Debt. & Cred. Law 282(2) as a “local public assistance benefit.” The bankruptcy court struck the claimed exemption, concluding that the value of the lease did not qualify as an exempt local public assistance benefit. The district court affirmed. Debtor appealed, arguing that the value of her lease was a local public assistance benefit that was exempted from her bankruptcy estate. The Second Circuit certified a question to the New York Court of Appeals regarding the issue. The Court of Appeals answered that section 282(2) exempts a debtor-tenant’s interest in a rent-stabilized lease.View "Matter of Santiago-Monteverde" on Justia Law

Holt and TAUG, subcontractors of the bankrupt Seiber, appealed the district court's affirmance of a prior bankruptcy court order, holding that the funds of an interpleader action, filed by EnCana, were property of the bankruptcy estate of Seiber, not EnCana, because the interpleader action extinguished the earlier construction liens of Holt and TAUG. The court upheld the validity of TAUG's chapter 56 lien where TAUG had a valid mineral lien against EnCana's property at the time EnCana was discharged from further liability to Seiber; as to Holt, the district court did not err in holding EnCana's interpleader and its deposited funds automatically satisfied its liability to Seiber, thus transferring legal possession of the funds to Seiber and the bankruptcy estate; the district court and bankruptcy courts erred in failing to draw the distinction between the act of depositing funds into the district court registry and the judicial act of discharging the depositor of any further liability; simply depositing interpleader funds does not automatically mean that the funds have been legally accepted, ownership thereof transferred, and the interpleader relieved of further duty to the court or further obligation to the parties of the dispute; the court need not address whether chapter 56 allows the liens to extend to the funds because the bankruptcy court entered an order, separate from this appeal, ruling on the interpleader and discharging EnCana; and, therefore, the court vacated and remanded for further proceedings.View "Holt Texas, Ltd., et al. v. Zayler" on Justia Law

Respondent obtained a home mortgage loan from Lender. Lender obtained a mortgage lender bond from Petitioner and later filed for bankruptcy under Chapter 11 of the United States Code. Respondent subsequently filed a complaint naming Petitioner as defendant solely as surety for Lender. At the time this suit was filed, Lender was bankrupt and judgment proof. Petitioner filed a motion to dismiss, arguing that the bond conditions had not been satisfied because Respondent had not obtained a judgment against the bond principal, Lender. The circuit court certified a question of law to the Supreme Court, which answered that the bond at issue was a judgment bond and that the unambiguous bond language requires an aggrieved party to obtain a judgment against the principal before maintaining an action against the surety of the bond.View "Fidelity & Deposit Co. of Md. v. James" on Justia Law

The issue this appeal presented for the New Jersey Supreme Court's review centered on an agreement for the sale of a residential property and a subsequent lease and repurchase agreement, specifically whether the transactions collectively gave rise to an equitable mortgage, violated consumer protection statutes, or contravened its decision in "In re Opinion No. 26 of the Committee on the Unauthorized Practice of Law," (139 N.J. 323 (1995)). In 2007, defendant Barbara Felton faced foreclosure proceedings with respect to her unfinished, uninhabitable home and the land on which it was situated. Felton and plaintiff Tahir Zaman, a licensed real estate agent, entered into a written contract for the sale of the property. A week later, at a closing in which neither party was represented by counsel, Felton and Zaman entered into two separate agreements: a lease agreement under which Felton became the lessee of the property, and an agreement that gave her the option to repurchase the property from Zaman at a substantially higher price than the price for which she sold it. For more than a year, Felton remained on the property, paying no rent. She did not exercise her right to repurchase. Zaman filed suit, claiming that he was the purchaser in an enforceable land sale agreement, and that he therefore was entitled to exclusive possession of the property and to damages. Felton asserted numerous counterclaims, alleging fraud, slander of title, violations of the Consumer Fraud Act (CFA), and violations of other federal and state consumer protection statutes. She claimed that the parties’ transactions collectively comprised an equitable mortgage and constituted a foreclosure scam, entitling her to relief under several theories. She further contended that the transactions were voidable by virtue of an alleged violation of "In re Opinion No. 26." A jury rendered a verdict in Zaman’s favor with respect to the question of whether Felton knowingly sold her property to him. The trial court subsequently conducted a bench trial and rejected Felton’s remaining claims, including her contention that the transactions gave rise to an equitable mortgage and her allegation premised upon In re Opinion No. 26. An Appellate Division panel affirmed the trial court’s judgment. The Supreme Court affirmed in part and reversed in part the Appellate Division’s determination. The Court affirmed the jury’s determination that Felton knowingly sold her property to Zaman. Furthermore, the Court affirmed the trial court and Appellate Division's decisions that Felton had no claim under the CFA, that this case did not implicate "In re Opinion No. 26," and that Felton’s remaining claims were properly dismissed. The Court reversed, however, the portion of the Appellate Division’s opinion that affirmed the trial court’s dismissal of Felton’s claim that the parties’ agreements constituted a single transaction that gave rise to an equitable mortgage, adopting an eight-factor standard for the determination of an equitable mortgage set forth by the United States Bankruptcy Court in "O’Brien v. Cleveland," (423 B.R. 477 (Bankr. D.N.J. 2010)). The case was remanded to the trial court for application of that standard to this case, and, in the event that the trial court concludes that an equitable mortgage was created by the parties, for the adjudication of two of Felton’s statutory claims based on alleged violations of consumer lending laws, as well as several other claims not adjudicated by the trial court. View "Zaman v. Felton" on Justia Law

The United States Bankruptcy Court for the District of Nevada certified three questions of law to the Supreme Court regarding the mechanic’s lien priority law, specifically, the visible-commencement-of-construction aspect of the law, which states that a mechanic’s lien takes priority over other encumbrances on a property that are recorded after construction of a work of improvement visibly commences. The Supreme Court answered (1) the Court’s holding in J.E. Dunn Northwest, Inc. v. Corus Construction Venture, LLC does not preclude a trier of fact from finding that grading property for a work of improvement constitutes visible commencement of construction; (2) the contract dates and permit issuance dates are irrelevant to the visible-commencement-of-construction test, even in this case where dirt material was placed on a future project site before building permits were issued and the general contractor was hired; and (3) the Court declined to answer the third certified question because it asked the Court to make findings of fact that should be left to the bankruptcy court.View "Byrd Underground, LLC v. Angaur, LLC" on Justia Law

The New York State Legislature amended N.Y. C.P.L.R. 5206 in 2005, increasing the state's homestead exemption from $10,000 to $50,000. At issue was whether the 2005 Amendment's increased homestead exemption applied to judgment liens perfected prior to the amendment's effective date and, if so, whether application of the law to pre-enactment judgment liens violates the Takings Clause of the Fifth Amendment. The court held that the 2005 Amendment applies to all creditors and all obligations, including pre-existing obligations, regardless of whether the debt was reduced to a judgment lien prior to the statute's enactment; and (2) that retroactive application of the exemption does not constitute an uncompensated taking of pre-enactment judgment liens in violation of the Takings Clause. Accordingly, the court affirmed the judgment of the district court affirming the bankruptcy court's conclusion that there was been no taking of claimant's property. View "1256 Hertel Avenue Associates v. Calloway" on Justia Law

Circuit affirmed. When real estate taxes are not paid, a tax lien attaches to the property, annually, including interest, penalties, and fees accrued until paid, O.R.C. 323.11. Summit and other Ohio counties sell tax lien certificates that entitle the certificate holder to the first lien on the property. Property owners may redeem and remove the lien by paying the holder the purchase price plus interest, penalties, and costs, O.R.C. 5721.32. The certificate holder may initiate foreclosure proceedings after one year. Plymouth Park purchased Certificate 1, showing a purchase price of $4,083.73 with a negotiated interest rate of 0.25%, and Certificate 2, showing a purchase price of $2,045.44 with a negotiated interest rate of 18.00%. Summit County filed a foreclosure complaint following a request by Plymouth Park. The complaint stated that “as provided by Section 5721.38(b) of the Ohio Revised Code” the “redemption price” calculated was $10,585.82. A month later, the Debtors filed their Chapter 13 plan and petition; they did not file any notice to “redeem” their property during the bankruptcy action. The Chapter 13 payment plan (11 U.S.C. 1321) proposed to pay the interest rates listed on the certificates. , Plymouth Park filed a proof of claim based on both certificates for $10,521.46, including $2,120.00 in fees and the principal balance of $7,781.19 plus 18% interest. The Bankruptcy Court agreed that Plymouth Park’s claim was a tax claim under 11 U.S.C. 511 and that state law governed the interest rate, but rejected a claim that the 18% statutory rate, rather than the negotiated rate, should apply. The Bankruptcy Appellate Panel and Sixth View "Plymouth Park Tax Servs, LLC v. Bowers" on Justia Law

Willard and Christi Pankonin owned real property in Logan County, which was mortgaged with Dakota Heritage Bank. The Bank brought a foreclosure action and a judgment was entered. Before the Pankonins' redemption period expired, Willard Pankonin filed for bankruptcy protection in federal court, his interest in the property was transferred to his bankruptcy estate and Michael Iaccone was appointed bankruptcy trustee. Pankonin and Iaccone (defendants), on behalf of Willard Pankonin's bankruptcy estate, moved for relief from the judgment. Attorney Timothy Lamb represented the defendants. The district court denied the motion for relief and awarded the Bank costs and disbursements without prejudice to any subsequent claim for attorney's fees. Christi Pankonin appealed award of attorney's fees to the Bank. Finding no abuse of the district court's discretion, the Supreme Court affirmed. View "Dakota Heritage Bank v. Pankonin" on Justia Law

The Diaz Defendants challenged the bankruptcy court's and district court's orders invalidating the transfer to them of a Mexican coastal villa owned by debtors and requiring them to convey the property to Kismet for the benefit of debtors' bankruptcy estate. The court concluded that, notwithstanding the local action doctrine, 28 U.S.C. 1334(e) granted the bankruptcy court exclusive in rem jurisdiction over the Villa interest; given the court's ruling that H&G was debtors' alter ego and its substantive consolidation of H&G with the bankruptcy estate, the Villa interest was property of the estate as of the petition date; the bankruptcy court properly declined to honor the forum selection clauses in the Mexican contracts and declined to abstain from ordering recovery of the property based on international comity; Mexico was not a necessary party and the bankruptcy court could enter judgment without Mexico; the bankruptcy court properly applied U.S. law rather than Mexican law; and the bankruptcy properly found that Martha Barba de la Torre purchased the property in bad faith. Accordingly, the court affirmed the bankruptcy court's judgment with respect to the postpetition transfer action; the fraudulent conveyance action is moot as a result; and the district court granted Kismet's and the Diaz Defendants' requests for judicial notice. View "In re: Icenhower" on Justia Law

In this case, the issue this case posed to the New Jersey Supreme Court was presented by the United States Court of Appeals for the Third Circuit: whether, under New Jersey law, a tax sale certificate purchaser holds a tax lien. In 1998, plaintiff Princeton Office Park, L.P. purchased a 220,000 square foot commercial building on thirty-seven acres of land in the Township of Lawrence. Princeton Office Park did not satisfy its real estate tax obligation to the Township of Lawrence. By 2005, Princeton Office Park owed the Township of Lawrence in back taxes and unpaid penalties. The Township conducted a public auction of municipal tax liens. Defendant Plymouth Park Tax Services, LLC bid on a tax sale certificate for Princeton Office Park’s property. As the owner of the tax sale certificate following the public auction, Plymouth Park paid municipal real estate taxes and charges for Princeton Office Park’s property through the second quarter of 2008. By operation of law, Plymouth Park’s additional payments were added to the sum required for Princeton Office Park to redeem the tax sale certificate owned by Plymouth Park. The redemption amount accrued interest at a rate of eighteen percent following the sale. In 2007, Plymouth Park filed a tax lien foreclosure action against Princeton Office Park seeking to enjoin Princeton Office Park from exercising any right of redemption of the certificate, and requesting a declaration that Plymouth Park was the owner in fee simple of the disputed property. The Chancery Division entered an order establishing a deadline by which Princeton Office Park could redeem the certificate. While Plymouth Park’s foreclosure action was pending in the Chancery Division, Princeton Office Park filed a voluntary Chapter 11 bankruptcy petition. Plymouth Park filed an initial proof of claim in the Bankruptcy Court, citing “taxes” as the basis for its claim. Plymouth Park then objected to Princeton Office Park’s Plan of Reorganization. The United States Bankruptcy Court ruled in favor of Princeton Office Park. The United States District Court for the District of New Jersey affirmed, substantially adopting the reasoning of the United States Bankruptcy Court. The District Court construed the Tax Sale Law to confer on the purchaser of a tax sale certificate a lien, but not a lien that would permit the holder of the certificate to collect unpaid taxes owed to the municipality. Plymouth Park appealed to the United States Court of Appeals for the Third Circuit. The New Jersey Supreme Court answered the Third Circuit's question in the affirmative: the purchaser of a tax sale certificate possesses a tax lien on the encumbered property. View "In re: Princeton Office Park v. Plymouth Park Tax Services, LLC" on Justia Law