Justia Real Estate & Property Law Opinion Summaries

Fred and Nancy Eagerton petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to enter a judgment as a matter of law in their favor and against SE Property Holdings, LLC, consistent with the Court's mandate in "Eagerton v. Vision Bank," (99 So. 3d 299 (Ala. 2012)). SE Property Holdings, LLC, is the successor by merger to Vision Bank. The underlying suit arose from a loan that the Eagertons personally guaranteed, secured by a mortgage on property within the Rock Creek Tennis Club in Fairhope. The bank declared the original and second loans in default and accelerated balances due under both. The bank sued the primary obligor, and the Eagertons as person guarantors on one of the original loans. The primary obligor declared Chapter 11 bankruptcy. The reorganization plan consolidated the two loans. The obligor eventually defaulted on the terms of the reorganization plan. The bankruptcy was dismissed, the property foreclosed, and the money obtained in the foreclosure sale was applied to the consolidated loan. The Eagertons argued that the Chapter 11 reorganization of the debts of primary obligor (the consolidation of the original loan with the second loan), created a new indebtedness not encompassed by their guaranty contracts. The Eagertons therefore argued that the creation of this new indebtedness, without their knowledge or consent, operated to discharge them from any further obligations under their guaranty contracts. The bank, on the other hand, argued, among other things, that the consolidated loan was a replacement note contemplated by the guaranty contracts and that the Eagertons had waived the material-modification defense. The Supreme Court in "Eagerton v. Vision Bank" concluded that the Eagertons' guaranty contracts were unambiguous; that based on the language in the guaranty contracts the Eagertons did not intend to guarantee any indebtedness other than that indebtedness arising out of the original loan and any extensions, renewals, or replacements thereof; and that, once the Eagertons' original loan was modified pursuant to the Chapter 11 reorganization of Dotson 10s, the Eagertons were at that point discharged from any further obligations under their guaranty contracts. Because the circuit court did not follow the mandate in the Court's prior decision in "Vision Bank," the Supreme Court granted the Eagertons' petition and issued the writ. View "SE Property Holdings, LLC v. Eagerton" on Justia Law

Appellant purchased a home and fell behind on her mortgage payments. Despite the bank having agreed to postpone a foreclosure sale, it proceeded with the sale. After she threatened suit, the bank re-purchased the home and entered into settlement negotiations with appellant; the bank promised to re-convey the property to appellant so that she could proceed with a sale to a third party. The bank subsequently refused to perform and appellant sued both the bank and the bank's counsel for breach of the settlement agreement and fraudulent inducement. The superior court granted partial summary judgment to the woman on her breach of contract claim, finding that a binding settlement contract had been formed between appellant and the bank. Appellant then filed for bankruptcy. The bankruptcy trustee sold the property and the bankruptcy estate abandoned the present state court claim, placing the remaining balance from the sale of the property into the superior court registry. The superior court held a bench trial on the remaining fraud claim and on the parties' respective damages. At the conclusion of appellant's case, the court granted a directed verdict to the bank and the bank's counsel on the fraud claim. The superior court awarded the bank the unpaid loan balance as well as the fair rental value of the property for appellant's post-foreclosure occupancy of the property, and awarded the woman lost sale damages. The superior court also awarded the parties prejudgment interest, and later awarded the bank and its counsel attorney's fees. Appellant appealed the superior court's final judgment. Upon review, the Supreme Court concluded that the bank abandoned its claim for rental damages at trial. Accordingly, the Court reversed the superior court's award of rental damages and any accompanying award of prejudgment interest. Because any right to recover fees for work performed on behalf of the dismissed defendants was waived, because it was error to award attorney's fees to the bank's counsel in responding to the bankruptcy petition, and because the superior court did not properly calculate attorney's fees under Alaska Civil Rule 68, the case was remanded to recalculate attorney's fees. The superior court was affirmed in all other respects. View "Taylor v. Wells Fargo Home Mortgage" on Justia Law

Debtors filed a Chapter 7 bankruptcy petition and sought to discharge their unsecured debt, strip down liens on their primary residence and a rental property, and obtain a loan modification to address mortgage arrears on the properties. The Trustee subsequently challenged confirmation orders entered by the bankruptcy court and affirmed by the district court, stripping off junior liens against debtors' residences. The Trustee argued that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 created a per se rule barring lien-stripping in so-called "Chapter 20" cases. The Act, however, dd not bar the orders entered by the bankruptcy court, and the stripping off of valueless liens - liens secured by collateral without a single penny of value to support it - was otherwise consistent with the Bankruptcy Code. Accordingly, the court affirmed the judgment. View "Branigan v. Davis" on Justia Law

Debtor filed for leave to appeal the bankruptcy court's interlocutory judgment in the district court. While the motion was pending, the bankruptcy court, sua sponte, certified its judgment for direct appeal to this court, pursuant to 28 U.S.C. 158(d)(2)(A)(i) and (iii). The court agreed with the bankruptcy court's ruling on cross-motions for partial summary judgment in favor of FGB that the Multiple Indebtedness Mortgage that FGB recorded was valid and that the property underlying that mortgage, the Deluxe Motel, secured both the loan FGB made to debtor and the loan FGB made to a second entity. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Hari Aum, L.L.C. v. First Guaranty Bank" on Justia Law

IPS and MPES challenged the district court's final judgment, reversing and vacating the bankruptcy court's amended judgment, that their mechanics' liens on the property of debtor did not pertain to materials or labor supplied before the date on which Metrobank perfected its deed of trust lien, September 1, 2006. Hajoca and Crescent challenged the bankruptcy court's determination that their mechanics' liens also did not pertain to materials or labor supplied before September 1, 2006, which the district court upheld. The court concluded that the bankruptcy court clearly erred in determining that IPS and MPES had supplied materials or labor before September 1, 2006. The court also concluded that the bankruptcy court correctly determined that Hajoca and Crescent had not supplied materials or labor before September 1, 2006. Accordingly, the court affirmed the final judgment of the district court, which reversed and vacated the amended judgment of the bankruptcy court. View "First National Bank, et al v. Crescent Electrical Supply Co., et al" on Justia Law

FHFA, as conservator of Fannie Mae and Freddie Mac, sued UBS for fraud and misrepresentation in connection with the marketing and sale of mortgage-backed securities. The district court denied UBS's motion to dismiss and certified its decision for interlocutory appeal. The court held that the "extender statute" in section 4617(b)(12) of the Housing and Economic Recovery Act of 2008 (HERA), Pub. L. No. 110-289, 122 Stat. 2654, applied to this action, and thus concluded that the district court correctly denied UBS's motion to dismiss for untimeliness. The court further held that FHFA had standing to bring this action and the district court correctly denied UBS's motion to dismiss for lack of standing. View "Federal Housing Fin. Agency v. UBS Americas Inc." on Justia Law

Georgina Stephens and Andrew Alexander appealed from the district court's decision affirming an order of the bankruptcy court giving possession of disputed property to the trustees of the individual bankruptcy estates of Ms. Stephens and Larry Alexander. Ms. Stephens and Mr. Alexander were previously married, Andrew is their son. This case stemmed from the separate bankruptcy petitions that Ms. Stephens and Mr. Alexander filed during their marriage and concerned the ownership and possession of certain property. Because Andrew had not challenged the district court's determination that he lacked standing to appeal the bankruptcy court's decision, the court deemed the issue waived; the court had jurisdiction to evict Ms. Stephens; the court rejected Ms. Stephens' res judicata and collateral estoppel arguments; and the court court rejected Ms. Stephens' remaining claims. Accordingly, the court affirmed the judgment of the district court. View "Alexander, et al v. Jensen-Carter, et al" on Justia Law

Debtors filed a Chapter 13 petition and the Trustee objected to debtors proposed bankruptcy plan on the ground that it was not proposed in good faith because of the "miniscule" payments to unsecured claims while debtors were living in a $400,000 home, making payments on various luxury and unnecessary items, and failing to commit one hundred percent of their disposable income to the plan. The bankruptcy court overruled the objection and the bankruptcy appellate panel (BAP) affirmed. The court concluded that Congress's adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act, 11 U.S.C. 1325(a), foreclosed a court's consideration of a debtor's Social Security income or a debtor's payments to secured creditors as part of the inquiry into good faith under section 1325(a). Accordingly, the court affirmed the judgment of the BAP. View "In re: David Welsh, et al" on Justia Law

NABC appealed from the bankruptcy court's order granting summary judgment in favor of the Chapter 7 Trustee. The bankruptcy appellate panel (BAP) concluded that the bankruptcy court did not err in holding that NABC lost its possessory lien when it turned debtor's account funds over to the Trustee without first seeking adequate protection. Accordingly, the court affirmed the order. View "North American Banking Co. v. Leonard" on Justia Law

The Debtors, five single-asset limited partnerships holding apartment complexes developed under the Low-Income Housing Tax Credit Program, 26 U.S.C. 42, filed for relief under Chapter 11 in 2010. The properties were put into service in 2005 and 2006, and their tax credit recapture periods expire in 2019 and 2020. The bankruptcy court conducted a valuation hearing and concluded that, for purposes of determining the value of the secured portion of the (mortgage holder) Bank’s claims under 11 U.S.C. 506(a), a determination of the fair market value of the properties included consideration of the remaining federal low-income housing tax credits. The Bankruptcy Panel affirmed the bankruptcy court’s Valuation Order. The Debtors failed to amend their plan or disclosure statement to reflect the values set by the bankruptcy court until ordered to do so in 2012. The court ultimately dismissed the petitions, based on continuing loss to or diminution of the estate, coupled with absence of a reasonable likelihood of rehabilitation; the Debtors’ inability to effectuate a plan; and bad faith under 11 U.S.C. 1112(b). The Sixth Circuit Bankruptcy Appellate Panel affirmed. View "In re: Creekside Senior Apts." on Justia Law