Justia Real Estate & Property Law Opinion Summaries

In this case, Steven and Mary Drummond, who resided in their 2017 Tiffin Allegro motor home, filed for Chapter 7 bankruptcy and claimed that their motor home was subject to the homestead exemption as a "mobile home" under Arizona law. The trustee objected, arguing that the Drummonds' motor home was not a mobile home under Arizona law. The United States Bankruptcy Court for the District of Arizona certified the question to the Supreme Court of the State of Arizona: “Whether a motor home in which a person over 18 years of age resides qualifies as a mobile home for the purpose of claiming an Arizona homestead exemption pursuant to A.R.S. § 33-1101(A)(3).” The Supreme Court of the State of Arizona held that a motor home does not qualify for an exemption under A.R.S. § 33-1101(A)(3). The court reasoned that the statutory context of A.R.S. § 33-1101(A)(3) suggests that a "mobile home" under the statute describes a dwelling that is not intended to be moved once placed and physically attached to property. Thus, a "motor home" is not a "mobile home" under the homestead statute because it is readily movable and not anchored to land. View "In re: DRUMMOND" on Justia Law

The Supreme Court reversed the judgment of the district court granting summary judgment by substituting other remedies in place of an equitable lien placed by the bankruptcy court on real property located at 10512 Loma Portal Avenue, holding that, based on the preclusive effect of prior court orders, an equitable lien was the only available remedy to satisfy Respondent's interest concerning the property.At issue before the Supreme Court was the preclusive effect of the multiple court orders in this case and the equitable remedies available under those orders. The Supreme Court remanded the case for further proceedings, holding (1) an equitable lien placed on property to satisfy a debt permits the lien holder to enforce the value of the equitable lien against the debtor's property even where that property has been subsequently transferred to a nondebtor spouse during divorce proceedings; (2) the district court erred by substituting other remedies in place of the equitable lien; and (3) genuine issues of material fact remained as to the value of the equitable lien placed on the property, as well as the value of the property itself. View "Holland v. Barney" on Justia Law

Plaintiff Breanne Martin alleged she was injured when a large metal gate fell on her while she was on a residential rental property located in Alpine, California. Martin initially filed claims for negligence and premises liability against the owners of the property. But upon learning that the owners had previously filed a bankruptcy petition, Martin amended her complaint to add the court-appointed bankruptcy trustee, Leslie Gladstone, as a defendant. Gladstone demurred to Martin’s complaint, asserting that application of federal statutory and common law demonstrated that Martin could not state a cause of action against her. The trial court rejected Gladstone’s argument regarding application of the "Barton" doctrine, but accepted her argument regarding the abandonment of the property at issue; the court sustained Gladstone’s demurrer on this ground and entered judgment in favor of Gladstone. On appeal, Martin contended the trial court erred in concluding that Gladstone’s abandonment of the relevant property after the accident prevented Gladstone from being held liable for Martin’s injuries. Martin further argued the trial court correctly determined it could not conclude as a matter of law that the Barton doctrine applied to divest the trial court of subject matter jurisdiction over Martin’s claims. The Court of Appeal agreed with Martin’s appellate contentions and reversed the trial court’s judgment. View "Martin v. Gladstone" on Justia Law

The United States District Court for the District of New Hampshire certified two questions of law for the New Hampshire Supreme Court's consideration. This case began in December 2021 when plaintiff Katherine Brady filed a Chapter 7 bankruptcy petition. At the time of the petition, plaintiff resided with her husband and children in a single-family residence. The property was titled only in plaintiff’s name. On Schedule C of the petition, plaintiff claimed a homestead exemption under RSA 480:1 for $120,000. Subsequently, plaintiff amended her petition to claim an additional $120,000 homestead exemption on behalf of her non-debtor, non-owner spouse. The Chapter 7 Bankruptcy Trustee filed an objection to the second claimed homestead exemption. In March 2022, plaintiff converted her case to one under Chapter 13. Subsequently, plaintiff amended Schedule D of her petition to add a second secured claim for her spouse for $120,000 based upon her spouse’s claimed homestead exemption. Defendant Lawrence Sumski, Chapter 13 Bankruptcy Trustee, asserted the same homestead exemption objection as the predecessor Chapter 7 Trustee. Following a hearing, the Bankruptcy Court concluded that to maintain a homestead right pursuant to RSA 480:1, a person had to demonstrate both occupancy and ownership interests in the homestead property. Because plaintiff’s husband was not an owner of the property, the court concluded that he was not entitled to a homestead exemption under RSA 480:1, and plaintiff could neither assert a homestead exemption on behalf of her husband, nor claim that he possesses a lien that secures his interest in the property. The New Hampshire Supreme Court concluded RSA 480:1 included an ownership requirement that applied to all real property occupied as a homestead and a non-owning occupying spouse of another who held a homestead right, pursuant to the statute, did not hold a present, non-contingent homestead right of his or her own. With respect to the district court’s second question, the Supreme Court exercised its discretion and declined to answer because a response to that question was not “determinative of the cause then pending in the certifying court.” View "Brady v. Sumski" on Justia Law

In this appeal concerning the state's Emergency Mortgage Assistance Program (EMAP), Conn. Gen. Stat. 8-265cc through 8-265kk, which is designed to assist homeowners in avoiding foreclosure, the Supreme Court concluded that the EMAP notice requirement in section 8-265ee(a) is not jurisdictional in nature and that section 8-265ee(a) requires that a mortgagee provide an EMAP notice for each foreclosure action initiated.At issue on certified appeal were two questions relating to the requirement set forth in section 8-265ee(a) that mortgagees provide notice to homeowners to inform them of the resources available under EMAP. The Supreme Court concluded (1) an EMAP notice sent before the commencement of a prior foreclosure action by the predecessor mortgagee is not jurisdictional; and (2) an EMAP notice sent before the commencement of a prior foreclosure action by the predecessor mortgagee was not valid for a subsequent action initiated by the successor mortgagee. View "KeyBank, N.A. v. Yazar" on Justia Law

Gary and Jeanette Merritt own four residential properties in Marysville, Washington. Between 2005 and 2007, the Merritts opened five home equity lines of credit (HELOCs), executing five five promissory notes (notes or HELOC agreements) in favor of USAA Federal Savings Bank. The Merritts secured these loans by executing deeds of trust on the properties with USAA as the beneficiary. In November 2012, the Merritts filed for Chapter 7 bankruptcy. The Merritts stopped making their monthly payments on the USAA loans prior to the November 2012 bankruptcy filing. USAA never accelerated any of the loans or acted to foreclose on the properties. In 2020, the Merritts filed four quiet title complaints seeking to remove USAA’s liens on each of the properties. Relying on Edmundson v. Bank of America, NA, 378 P.3d 272 (2016), the Merritts argued that the six-year statute of limitations to enforce the deeds of trust expired six years after February 12, 2013, the day before their bankruptcy discharge. In October 2020, the Merritts moved for summary judgment in each case. In November 2020, the trial court denied each of these motions. In February 2021, USAA moved for summary judgment in each case. USAA argued that the plaintiffs were not entitled to quiet title because the statute of limitations to foreclose on the deeds of trust would not begin to run until the maturity date of each loan, the earliest of which will occur in 2025. The Court of Appeals affirmed the trial court, holding that the the six-year statute of limitations had not begun to run on enforcement of the deeds of trust since none of the loans had yet matured. The issue this case presented for the Washington Supreme Court's review was whether a bankruptcy discharge triggered the statute of limitations to enforce a deed of trust. The Court affirmed the Court of Appeals and the trial court and hold that bankruptcy discharge did not trigger the statute of limitations to enforce a deed of trust. View "Merritt v. USAA Federal Savings Bank" on Justia Law

The property at issue in this case was a residential home that was purchased in 2007 by Shawn and Stephanie Kurtz. The house was located in a subdivision, which required property owners to pay homeowners association (HOA) assessments to petitioner Copper Creek (Marysville) Homeowners Association. If the assessments were not paid, then Copper Creek was entitled to foreclose on its lien. However, Copper Creek’s lien was “subordinate to any security interest perfected by a first deed of trust or mortgage granted in good faith and for fair value upon such Lot.” The Kurtzes stopped paying their HOA assessments and the home loan in varying times in 2010. The Kurtzes (in the process of divorcing) individually filed for bankruptcy. Neither returned to the house, nor did they make any further payments toward their home loan or their HOA assessments. However, there was no attempt to foreclose on the deed of trust. As a result, the house sat vacant for years and fell into disrepair. The Kurtzes remained the property owners of record and HOA assessments continued to accrue in their names. In 2018, Copper Creek recorded a notice of claim of lien for unpaid HOA assessments, fees, costs, and interest. In January 2019, Copper Creek filed a complaint against the Kurtzes seeking foreclosure on the lien and a custodial receiver for the property. The issue this case presented concerned the statute of limitations to foreclose on a deed of trust securing an installment loan after the borrower receives an order of discharge in bankruptcy. As detailed in Merritt v. USAA Federal Savings Bank, No. 100728-1 (Wash. July 20, 2023), the Washington Supreme Court held that a new foreclosure action on the deed of trust accrues with each missed installment payment, even after the borrower’s personal liability is discharged. Actions on written contracts are subject to a six-year statute of limitations. Therefore, the nonjudicial foreclosure action on the deed of trust in this case was timely commenced as to all unpaid installments within the preceding six years, regardless of the borrowers’ bankruptcy discharge orders. In addition, the Court held the trial court properly exercised its discretion to award fees as an equitable sanction for respondents’ litigation misconduct. View "Copper Creek (Marysville) Homeowners Ass'n v. Kurtz" on Justia Law

SR Construction held a lien on real property owned by RE Palm Springs II. The property owner is a corporate affiliate of Hall Palm Springs LLC, who had financed the original undertaking for a separate real estate developer. The latter requested leave of the bankruptcy court to submit a credit bid to purchase the property from its affiliate, which the bankruptcy court granted. The bankruptcy court later approved the sale and discharged all liens. The construction company appealed the bankruptcy court’s credit-bid and sale orders. Finding that the lender was a good faith purchaser, the district court affirmed the bankruptcy court and dismissed the appeal as moot under Bankruptcy Code Section 363(m).   The Fifth Circuit affirmed. The court explained that the pandemic dramatically changed not only the lender’s plans for the Property but it also severely impacted the affiliate’s ability to market and sell a hotel, particularly an unfinished one. In sum, these two factors must also be weighed in considering whether any of the actions or procedures, particularly with regard to pricing or timing issues, were performed in bad faith or as a result of sub-optimal external forces beyond the lender’s control. The court explained that the record facts, framed by the external context and circumstances, make plain that there is no error in the judgments of the able bankruptcy and district courts. Accordingly, the court held that the lender did not engage in fraud and was a “good faith purchaser.” View "SR Construction v. Hall Palm Springs" on Justia Law

The Supreme Court answered two questions of law certified by the United States Bankruptcy Court for the District of Hawai'i concerning a putative class action alleging wrongful foreclosure.Specifically, the Court answered (1) an action alleging a wrongful nonjudicial foreclosure of land court property that seeks only damages against the foreclosing lender is not barred by the entry of a transfer certificate of title to a buyer at a foreclosure sale; and (2) the pendency of a putative class action tolls the time during which a class member may commence an individual action, and the time for commencing an individual action is tolled until a clear denial of class certification. View "Yanagi v. Bank of America" on Justia Law

Appellee’s confirmed bankruptcy plan purported to modify the rights of Appellant Creditor Mortgage Corporation of the South’s (“MCS”) mortgage on Appellee’s residence. In fact, her plan purported to eradicate all remaining outstanding payments on her mortgage, beyond MCS’s claims for past-due arrearages. The bankruptcy court had confirmed Appellee’s Plan without objection and that 11 U.S.C. Section 1327 (the “finality” provision) renders confirmed plans final, the bankruptcy court granted Appellee’s motion, and the district court affirmed. On appeal, at issue was which provision wins— antimodification or finality—when the two clash in the scenario this case presents.   The Eleventh Circuit reversed and remanded the district court’s ruling holding that release of MCS’s lien before its loan had been repaid in full violates Section 1322(b)(2)’s antimodification clause. The court held that under Supreme Court and Eleventh Circuit precedent, it read the antimodification provision as an ironclad “do not touch” instruction for the rights of holders of homestead mortgages. So a bankruptcy plan cannot modify the rights of a mortgage lender whose claim is secured by the debtor’s principal residence by providing for release of the homestead-mortgagee’s lien before the mortgagee has recovered the full amount it is owed. View "Mortgage Corporation of the South v. Judith Lacy Bozeman" on Justia Law