Justia Real Estate & Property Law Opinion Summaries

The Ninth Circuit reversed the district court's grant of summary judgment in favor of the 732 Hardy Way trust, the denial of summary judgment to the Bank, and the dismissal of the Bank's claims against the HOA in a quiet title action brought by the Bank, concerning title to real property in Nevada that was subject to a HOA nonjudicial foreclosure sale. At issue is whether the Bank, as the first deed of trust lienholder, may set aside a completed superpriority lien foreclosure sale on the grounds that the sale occurred in violation of the automatic stay in bankruptcy proceedings.The panel concluded that the Bank may raise the HOA's violation of the automatic stay provision and that the Bank has superior title. The panel explained that the Bank has standing under Nevada's quiet title statute, Nevada Revised Statute 40.010, and established case authority confirms that any HOA foreclosure sale made in violation of the bankruptcy stay—like the foreclosure sale here—is void, not merely voidable, Schwartz v. United States, 954 F.2d 569, 571–72 (9th Cir. 1992). Therefore, the district court erred in holding that the Bank lacked standing to pursue its quiet title claim in federal court. The panel remanded for further proceedings. View "Bank of New York Mellon v. Enchantment at Sunset Bay Condominium Ass'n" on Justia Law

The First Circuit dismissed Plaintiffs' appeal for want of jurisdiction, holding that the Federal Rules of Bankruptcy Procedure (the bankruptcy rules), and not the Federal Rules of Civil Procedure (the civil rules), govern cases that have come within the federal district court's jurisdiction as cases "related to" a pending bankruptcy proceeding. 28 U.S.C. 1334(b).In this case arising from the derailment and explosion in Lac-Megantic, Canada, Plaintiffs brought thirty-nine separate suits against several defendants. The derailment occurred on the watch of Montreal, Maine and Atlantic Railway (MMA). MMA sought the protection of the bankruptcy court. Plaintiffs' suits were removed to federal district court. Plaintiffs subsequently joined Canadian Pacific Railway Company as an additional defendant. The suits were centralized in the District of Maine. The district court later granted Plaintiffs' request to dismiss their claims against all defendants except Canadian Pacific pursuant to a settlement agreement that was part of MMA's plan of liquidation. The district court entered judgment for Canadian Pacific. Plaintiffs moved for reconsideration of their motion to file an amended complaint. The district court denied the motion as untimely. The First Circuit dismissed Plaintiffs' appeal, holding that the Bankruptcy Rules governed the procedural aspects of this case, Plaintiffs' motion to reconsider was untimely, and the attempted appeal was untimely. View "Roy v. Canadian Pacific Railway Co." on Justia Law

Appellee Highpointe Energy filed a quiet title action in Oklahoma against appellants the Viersens, and others. The disputed property concerned mineral interests from two different chains of title: one chain stemmed from a bankruptcy proceeding, while the other chain arose from a mortgage foreclosure proceeding and subsequent sheriff's sale. The trial court determined that the chain resulting from the foreclosure/sheriff's sale was superior to the bankruptcy chain. The Viersens appealed. The Oklahoma Supreme Court held that because the bankruptcy purchasers could secure no greater rights in the disputed property than the bankruptcy trustee held, the purchasers from the mortgage foreclosure proceeding held the superior title. View "Highpointe Energy v. Viersen" on Justia Law

Venoco operated a drilling rig off the coast of Santa Barbara, transporting oil and gas to its Onshore Facility for processing. Venoco did not own the Offshore Facility but leased it from the California Lands Commission. Venoco owned the Onshore Facility with air permits to use it. Following a 2015 pipeline rupture, Venoco filed for Chapter 11 bankruptcy and abandoned its leases, relinquishing all rights in the Offshore Facility.Concerned about public safety and environmental risks, the Commission took over decommissioning the rig and plugging the wells, paying Venoco $1.1 million per month to continue operating the Offshore and Onshore Facilities. After a third-party contractor took over operations, the Commission agreed to pay for use of the Onshore Facility. The Commission, as Venoco’s creditor, filed a $130 million claim for reimbursement of plugging and decommissioning costs. Before the confirmation of the liquidation plan, Venoco and the Commission unsuccessfully negotiated a potential sale of the Onshore Facility to the Commission. The Commission stopped making payments, arguing it could continue using the Onshore Facility without payment under its police power.After the estates’ assets were transferred to a liquidation trust, the Trustee filed an adversary proceeding, claiming inverse condemnation, against California. The district court affirmed the bankruptcy court’s rejection of California's assertion of Eleventh Amendment sovereign immunity. The Third Circuit affirmed. By ratifying the Bankruptcy Clause of the U.S. Constitution, states waived their sovereign immunity defense in proceedings that further a bankruptcy court’s exercise of its jurisdiction over the debtor's and the estate's property. View "In re Venoco, LLC" on Justia Law

Earl Schwartz Company and the co-personal representatives of the Estate of Earl N. Schwartz (amongst others, together “ESCO”) and SunBehm Gas, Inc. appealed a judgment quieting title to oil and gas interests in Great Plains Royalty Corporation. Great Plains cross appealed, arguing the district court erred when it denied its claims for damages. Great Plains’ creditors filed an involuntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code in 1968. The case was converted to a Chapter 7 liquidation proceeding. The bankruptcy trustee prepared an inventory and published a notice of sale that listed various assets, including oil and gas interests. Earl Schwartz was the highest bidder. Schwartz entered into an agreement with SunBehm to sell certain interests described in the notice, and the district court order approved the transfer of those interests directly from the bankruptcy estate to SunBehm. The bankruptcy case was closed in 1974. Great Plains’ creditors were not initially paid in full; the bankruptcy case was reopened in 2013, Great Plains’ creditors were paid in full with interest, and adversary proceedings were brought to determine ownership of various oil and gas interests, to which ESCO was a party. ESCO argued the bankruptcy sale transferred all of the interests owned by Great Plains, regardless of whether they were listed in the notice of sale. The bankruptcy court rejected ESCO’s argument and determined title to various properties (not the subject of the present appeal). Then in 2016, Great Plains brought this quiet title action against ESCO and SunBehm; ESCO and SunBehm brought quiet title cross claims. The district court held a bench trial and found the bankruptcy trustee intended to sell “100%” of all of the oil and gas interests Great Plains owned at the time of the bankruptcy. But the North Dakota Supreme Court reversed, finding the district court erred when it determined the bankruptcy trustee intended to sell all of Great Plains’ interests, including those not listed in the notice of sale. On remand, ESCO and SunBehm claimed they held equitable title to oil and gas interests in various tracts identified in the notice of sale, interest which were confirmed by the bankruptcy court. The Supreme Court reversed the district court’s ruling on collateral estoppel as a misapplication of the law, and vacated the court’s title determination and its denial of Great Plains’ conversion claim. The case was remanded for the court to determine whether ownership of any interests in the tracts identified in the notice of sale passed to ESCO or SunBehm by virtue of the bankruptcy sale and confirmation order. View "Great Plains Royalty Corp. v. Earl Schwartz Co., et al." on Justia Law

The Court of Appeals answered a certified question of law by the United States Bankruptcy Court for the District of Maryland by holding that the Maryland Contract Lien Act (MCLA), Md. Code Ann. Real Prop. 14-201 - 206, does not permit liens that secure unpaid damages, costs, charges, and fees that accrue after the recordation of the lien.According to Appellant, if a lien complies with the procedural requirements for creation under the MCLA, the lien can secure unpaid damages arising after the recordation of the lien, and therefore, the MCLA permits continuing liens. Appellee, in turn, argued that continuing liens are prohibited by the plain language of the statute, its legislative history, and due process requirements. Specifically, Appellee argued that the MCLA prohibits any sum from being secured by a statutory lien before the property owner has the opportunity to contest the sum prior to attachment. The Court of Appeals held that the plain text, legislative history, and case law relevant to the MCLA collectively demonstrate the Legislature's intent to prohibit continuing liens. View "In re Walker" on Justia Law

The First Circuit affirmed the decision of the bankruptcy court declaring a foreclosure void and awarding Appellant damages but denying relief on her remaining claims, holding that Appellant's challenges on appeal were either waived or otherwise unavailing.After two attempts to foreclose the mortgage on a condominium that Appellant purchased she filed a six-count adversary complaint in the bankruptcy court naming five defendants, the financial institutions and law firms connected with the foreclosure. The bankruptcy court granted summary judgment as to one count in favor of Appellant, voiding one of the foreclosures, but denied the remaining claims. The First Circuit affirmed, holding that Appellant's challenges were either waived or baseless. View "Jackson v. ING Bank, FSB" on Justia Law

The Second Circuit affirmed the district court's judgment affirming the bankruptcy court's order granting debtor's motion to avoid a judicial lien. Debtor seeks, pursuant to 11 U.S.C. 522(d)(1) and (f)(1)(A), to exempt her interest in, and avoid a judicial lien upon, a property that her dependent son uses as a non-primary residence.The court held that the term "residence" in the so-called homestead exemption of section 522(d)(1) includes both primary and nonprimary residences. In this case, the ordinary meaning of the word "residence" does not exclude non-primary residences. Furthermore, Congress's deliberate choice of terminology, the text of the statute, and the legislative history weigh in favor of the court's conclusion. View "Donovan v. Maresca" on Justia Law

This case involved an investor, Elbar, that wired money to Defendant Todd Prins, a former attorney, after the owner of a foreclosed property had declared bankruptcy. In this case, United hired Prins to conduct a foreclosure sale; Elbar wired funds to Prins; Prins stole those funds and used them to reimburse other clients.The Fifth Circuit held that the bankruptcy court properly found that Elbar violated the automatic stay thrice, and twice willfully. Furthermore, the court agreed with the bankruptcy court that Elbar is an extremely knowledgeable and sophisticated litigant that understands perfectly that its actions were a direct violation of the Bankruptcy Code. Therefore, the bankruptcy court was correct to weigh those violations against Elbar in its decision. The court also agreed with the bankruptcy court that neither Elbar's claim for equitable subrogation nor its claim for fraud in a real estate transaction warrant relief. Finally, the court rejected Elbar's claims against TransWorld and Industry including money had and received, unjust enrichment, and conversion. Because the district court failed to explain the exceptional circumstances justifying its denial of prejudgment interest, the court remanded with instructions to explain the exceptional circumstances, if any, that justify denial of prejudgment interest or to order prejudgment interest. View "Elbar Investments, Inc. v. Prins" on Justia Law

After Slawson entered into an oil and gas exploration and production agreement with TPC, TPC's successor-in-interest filed for bankruptcy. Slawson then filed a proof of claim seeking payment, pursuant to the Promote Obligation, on all wells in which TPC's successor-in-interest elects to participate. The bankruptcy court confirmed the reorganization claim, but gave Slawson leave to commence litigation to determine whether the Promote Obligation runs with the land and is therefore not dischargeable in bankruptcy. Slawson then filed a declaratory action against Nine Point, TPC's successor-in-interest after the bankruptcy.The Eighth Circuit affirmed the district court's grant of summary judgment to Nine Point and held that the district court did not err in determining that the Promote Obligation is not a covenant running with the land because the obligation to make a payment did not directly benefit the land. The district court also did not err by determining that the obligation was not a real property interest or an equitable servitude under North Dakota law. View "Slawson Exploration Co., Inc. v. Nine Point Energy, LLC" on Justia Law