Justia Real Estate & Property Law Opinion Summaries

For nearly twenty years, Plaintiff, Condominium Associations, and several IDC development entities disputed the ownership and use of certain property in Rhode Island. IDC Properties constructed and Defendant, IDC Clambakes, operated the Newport Regatta Club on the contested property after Plaintiff asserted that the rights of the IDC entities to own or develop the property had lapsed. The Rhode Island Supreme Court found in favor of Plaintiff. Defendant later declared bankruptcy. This case came to the First Circuit Court of Appeals from a bankruptcy court decision and concerned the question whether Defendant trespassed on Plaintiff's property or whether, through its actions during the pendency of the litigation, Plaintiff impliedly consented to operation of the Club by Defendant while title to the property was in dispute. The First Circuit affirmed the bankruptcy court's decision that Plaintiff impliedly consented to Defendant's operation of the Club, holding that the bankruptcy court's decision was fully reasoned and supported by the evidence. Remanded for a determination whether compensation was owed for Defendant's authorized use and occupancy. View "Goat Island S. Condo., Inc. v. IDC Clambakes, Inc." on Justia Law

These consolidated appeals concerned a home previously owned by debtor. On appeal, the Trustee challenged the bankruptcy court's order holding that he recover nothing from defendants on his action to avoid a transfer which occurred when defendants perfected their liens on estate property postpetition. GMAC challenged the part of the order holding that the automatic stay was not violated and that GMAC lacked standing in the matter. The bankruptcy appellate panel (BAP) concluded that GMAC did not have standing to appeal any violation of the stay because, if GMAC was aggrieved, it was either by a wrongful foreclosure by U.S. Bank or by its own failure to protect its interests, not by the registration of the judgments or the order. Therefore, the court dismissed GMAC's appeal. In regards to the Trustee's claim, the BAP affirmed the bankruptcy court's awarding of nothing to the Trustee where the estate's interest had no value in and of itself, and the loss of a right to use some sort of "leverage" to get money to which the estate was not entitled was not the basis for a cause of action. View "Seaver v. New Buffalo Auto Sales, LLC, et al." on Justia Law

In 1999, I-4 leased Florida land to Lazy Days, with an option to purchase, prohibiting assignment without written consent. In 2008, Lazy Days notified I-4 of its intention to file for Chapter 11 bankruptcy and assign the lease to LDRV. The parties negotiated a settlement agreement in 2009. I-4 consented to assignment. Lazy Days agreed not to “argue against the Bankruptcy Court abstaining from consideration of Lease interpretation issues ... except to the extent necessary in connection with the assumption and assignment of the Lease.” The agreement provided that “there is no intent to, nor is the Lease modified in any respect,” but did not state whether the purchase option survived. The Bankruptcy Court confirmed a reorganization plan incorporating the agreement and closed the case in 2010. In 2011, LDRV attempted to exercise the option. The parties each filed state court lawsuits and LDRV moved to reopen in Bankruptcy Court, which held that the anti-assignment provision was unenforceable and that refusal to honor the option violated the agreement. The district court vacated. The Third Circuit reversed, holding that the Bankruptcy Court properly exercised jurisdiction; the agreement’s exception applied because the proceeding was “in connection with ... assignment of the Lease.” The court rejected arguments that the parties agreed to waive application of 11 U.S.C. 365(f)(3) and that the Bankruptcy Court committed an unconstitutional taking and denied I-4 due process. View "In Re: Lazy Days' RV Ctr., Inc." on Justia Law

ROK Builders LLC (ROK) constructed a hotel for Moultonborough and had a mechanic's lien on the property. 2010-1 SFG Venture LLC (SFG) was the assignee of the construction lender and had a mortgage on the hotel. After Moultonborough filed for bankruptcy, SFG initiated an adversary proceeding against ROK in bankruptcy court, seeking a declaration that its mortgage was senior to ROK's lien to the extent the construction lender had disbursed loan funds to ROK. ROK, in turn, asserted that its lien was senior to SFG's mortgage. The New Hampshire bankruptcy court and district court entered judgment in favor of SFG. The First Circuit Court of Appeals affirmed, holding that the bankruptcy court did not err in concluding that N.H. Rev. Stat. Ann. 447:12-a established the seniority of SFG's mortgage over ROK's mechanic's lien to the extent of the amount of money the construction lender disbursed to ROK. View "ROK Builders, LLC v. 2010-1 SFG Venture, LLC" on Justia Law

The Palomars filed for bankruptcy under Chapter 7. The trustee reported that the estate contained nothing that could be sold to obtain money for unsecured creditors. A discharge of dischargeable debts was entered and the bankruptcy case was closed. The day before the trustee issued his report, the Palomars had filed an adversary action against the bank that held a second mortgage on their home. The balance on their first mortgage, but the house was valued at $165,000. The Palomars argued that the second mortgage should be dissolved under 11 U.S.C. 506(a). Deciding that the adversary action was meritless, the judge refused to reopen the bankruptcy proceeding. The district court and Seventh Circuit affirmed, noting that the only debts normally extinguished are those for which a claim was rejected. The bank made no claim; this was a no-asset bankruptcy. Failing to extinguish the lien only deprives the debtors of the chance to make money should the value of their home ever exceed the balance on the first mortgage. View "Palomar v. First Am. Bank" on Justia Law

A bankruptcy court ordered that the Laurel Avenue house be vacated and authorized U.S. Marshals to physically remove plaintiff, the debtor's son, from the home. On appeal, plaintiff challenged the dismissal of his suit, which alleged, inter alia, that his constitutional rights were violated when the house, its contents, and his person were searched and seized. The court found no error in the dismissal of plaintiff's 42 U.S.C. 1983 claim against the federal defendants where he did not allege a Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics action in the amended complaint, nor did he seek to amend to add the claim; plaintiff's section 1983 claim failed against the city and the city's officers where plaintiff failed to set forth sufficient facts to show a direct causal link between the city's policy or custom and the alleged violation of his constitutional rights; the district court did not err in dismissing his tort claims against the trustees under the doctrine established in Barton v. Barbour, which established that an equity receiver could not be sued without leave of the court that appointed him; and because the dismissal of plaintiff's federal claims was proper, the court found no abuse of discretion in the district court's decision to decline supplemental jurisdiction over the remaining state law claims. Accordingly, the court affirmed the judgment. View "Alexander v. Hedback, et al." on Justia Law

The debtor worked Saylor’s nightclub and for another entity owned by Saylor, scouting for commercial properties. Debtor obtained loans ($1,018,350) to purchase four Michigan car washes. The loan closings were conducted by another company controlled by Saylor, acting as agent for the title company, which never released loan proceeds to complete the purchases. After the debtor defaulted, Bayview, assignee of the notes, discovered that he did not hold title to the properties securing the notes. Bayview filed claims under the title commitments. The title company claimed that the loan applications contained false statements and denied the claim for failure to exercise due diligence in approving the loans. Bayview sued and the parties settled; Bayview assigned an interest in the notes to the title company, which obtained a default judgment of $10,172,840 against Saylor. The debtor filed a Chapter 7 bankruptcy petition. The title company filed an adversary complaint claiming that the Bayview notes were undischargeable under 11 U.S.C. 523(a)(2)(B). The bankruptcy court rejected the argument, holding that under Michigan law, claims for fraud cannot be assigned and that the title company had the right to pursue Saylor, but not the debtor. The district court reversed. The Sixth Circuit affirmed, holding that the title company can seek nondischargeability under section 523(a)(2) View "Pazdzierz v. First Am. Title Ins. Co." on Justia Law

In 2009, Epling purchased a manufactured home, borrowing funds from Vanderbilt secured by a security interest in her manufactured home. Epling resided in Magoffin County, Kentucky. Vanderbilt filed an application for first title and an application for a title lien statement in Bell County, Kentucky and later filed the Certificate of Title for the manufactured home, which listed Vanderbilt’s lien, in Bell County. In 2010, Epling filed a voluntary Chapter 7 bankruptcy petition. The trustee initiated a strong-arm proceeding to avoid Vanderbilt’s lien on the manufactured home, under 11 U.S.C. 544, because the lien was not properly perfected under the Kentucky law. The bankruptcy court granted the trustee summary judgment, concluding that Vanderbilt had failed to perfect its lien because it had filed the required title lien statement in its county of residence, rather than in Epling’s county of residence. The district court and Sixth Circuit affirmed. View "Vanderbilt Mortg. & Fin., Inc. v. Westenhoefer" on Justia Law

This appeal arose from an action filed against the City of Lewiston by Tim Thompson, Janet Thompson, and Thompson's Auto Sales (collectively, Thompson). Thompson filed a claim under the Idaho Tort Claims Act (ITCA), alleging the City negligently designed and installed a storm water drain system on a city street adjacent to Thompson's property, which caused storm water runoff to flow onto Thompson's property and damage it. After suit was filed, Thompson entered bankruptcy proceedings and the bankruptcy trustee, C. Barry Zimmerman, was substituted as Plaintiff in the action. The City moved for summary judgment on the grounds of discretionary immunity and design immunity. The district court denied the motion as to design immunity, but granted the motion on the ground of discretionary immunity. Zimmerman appealed, arguing that the discretionary immunity exception to liability under the ITCA does not grant immunity from liability for damage caused by negligent design and, alternatively, that even if discretionary immunity was considered, it was inapplicable in this case because the City's actions were not discretionary within the meaning of the exception. Upon review, the Supreme Court reversed, finding that the City was not entitled to immunity from liability under any exception to the ITCA. View "Zimmerman v. City of Lewiston" on Justia Law

Peoples Bank loaned Debtors $214,044, secured by a mortgage recorded in 2004. In 2008, Debtors obtained a $296,000 construction loan from Banterra, secured with a second mortgage on the same property. Banterra was aware of the first mortgage, but did not know was that in 2007, Debtors obtained a second loan from Peoples, for $400,000, secured by another mortgage on a different piece of property. The 2004 Peoples mortgage contained a cross-collateralization provision, stating that “In addition to the Note, this Mortgage secures all obligations … of Grantor to Lender … now existing or hereafter arising,” and a provision that “At no time shall the principal amount of the Indebtedness secured by the Mortgage … exceed $214,044.26 … “Indebtedness” … includes all amounts that may be indirectly secured by the Cross-Collateralization provision.” In 2010 Debtors filed a Chapter 11 bankruptcy petition. The balance due on Peoples 2004 loan was then $115,044.26. Debtors received permission and sold the property for $388,500.00. Out of these proceeds, Peoples claimed the balance due on the 2004 loan plus partial payment of the 2007, up to the cap. The Bankruptcy Court found in favor of Peoples. The district court reversed. The Seventh Circuit reversed, upholding the “plain language” of the cross-collateralization agreement. View "Peoples Nat'l Bank v. Banterra Bank" on Justia Law