Justia Real Estate & Property Law Opinion Summaries

Articles Posted in California Courts of Appeal
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The Antelope Valley Groundwater Cases (AVGC) proceeding litigated whether the water supply from natural and imported sources was inadequate to meet the competing annual demands of water producers, thereby creating an overdraft condition. One of the competing parties, Appellant Tapia, individually and as trustee of a trust, claimed that he owned land overlying the aquifer. Settlement discussions ultimately produced an agreement among the vast majority of parties in which they settled their competing groundwater rights claims and agreed to support the contours of a proposed plan designed to bring the Antelope Valley Adjudication Area (AVAA) basin into hydrological balance. Tapia was not among the settling parties. Accordingly, before considering whether to approve the Physical Solution for the AVAA basin, the trial court conducted a separate trial on Tapia's unsettled claims and defenses.The Court of Appeal concluded that the Physical Solution's allocation of the "native safe yield" (NSY) does not violate California's water priorities; the allocations to correlative rights holders accord with California law; the Physical Solution's allocation of the NSY does not violate California's principles promoting the reasonable and beneficial use of water; and substantial evidence supports the judgment as to Tapia, and the Physical Solution is consistent with California law governing water priorities and the constitutional reasonable and beneficial use requirement. View "Los Angeles County Waterworks District No. 40 v. Tapia" on Justia Law

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The Court of Appeal concluded that substantial evidence supported the Commission's decision to issue the cease and desist order requiring plaintiffs to remove structures that were built over a public accessway over the easement area. The court also concluded that the Commission did not violate plaintiffs' due process rights by imposing a $4,185,000 penalty, even though its staff recommended a smaller penalty, because the Commission had previously advised plaintiffs it could impose a penalty of up to $11,250 per day and the Commission staff specifically advised plaintiffs that the Commission could impose a penalty of up to $8,370,000. Accordingly, the court reversed the trial court's judgment remanding the matter to the Commission. The court also concluded that plaintiffs failed to show that Public Resources Code section 30821 is unconstitutional, either on its face or as applied to them. Furthermore, the penalty does not violate the constitutional prohibition on excessive fines. Therefore, the court reversed the superior court's judgment and affirmed the Commission's order. View "Lent v. California Coastal Commission" on Justia Law

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The Court of Appeal held that California's Quiet Title Act, Code of Civil Procedure 760.010 et seq., insulates a third party from the effect of a subsequent invalidation of an earlier quiet title judgment only if the third party has no actual or constructive knowledge of any defects or irregularities in that judgment.The court concluded that the trial court properly granted summary judgment against the third party in its current quiet title action to assert lien priority. The court explained that the recorded chain of title revealed that the earlier quiet title judgment had been prosecuted and obtained against a party that no longer held interest in a deed of trust and the third party whose lien priority rested on that judgment actually knew of facts warranting further inquiry into the validity of the judgment. Therefore, the third party had constructive knowledge of a defect or irregularity in the judgment. In this case, U.S. Bank is entitled to summary judgment due to the inapplicability of section 764.060 and the inapplicability of the alternative grounds offered by Tsasu. View "Tsasu LLC v. U.S. Bank Trust, N.A." on Justia Law

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Before seeking damages for a governmental taking of property through inverse condemnation, the property owner must generally submit more than one proposal to the permitting authority seeking zoning variances or reducing environmental impacts to the extent necessary to allow at least some economically beneficial or productive use of the property. In this case, the Court of Appeal held that multiple applications are not required where the permit denial makes clear that no development of the property would be allowed under any circumstance.The court affirmed the trial court's judgment and fee award in this inverse condemnation action. In this case, the trustee submitted plans to build an ocean-front residential property, but the planning commission rejected the development permit. The court concluded that substantial evidence established that the city would not permit any development below the 127-foot elevation, and that the limited area above that elevation was unbuildable. Therefore, submission of an additional application would have been futile. Furthermore, substantial evidence establishes that it would have been futile to submit modified plans because the agency's decision was certain to be adverse. Finally, the court rejected the city's contention that the trustee failed to litigate his writ petition to conclusion because he did not argue the Public Resources Code section 30010 claim in those proceedings. View "Felkay v. City of Santa Barbara" on Justia Law

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Appellants filed an unlawful detainer action against the tenants, seeking to evict them under a provision of San Francisco's rent control ordinance that allows a "landlord" to evict renters from a unit to make the unit available for a close relative of the landlord (the family move-in provision), Rent Ordinance, section 37.9(a)(8)(ii).The Court of Appeal concluded that, in sustaining the demurrer, the trial court correctly ruled that a trust is not a "natural person." However, the trial court was mistaken in assuming that appellants' trust is the landlord. The court explained that, as a matter of law, only trustees—not trusts—can hold legal title to property. The court held that natural persons who are acting as trustees of a revocable living trust and are also the trust's settlors and beneficiaries qualify as a "landlord" under the family move-in provision. Therefore, the court reversed the trial court's judgment in favor of the tenants, because appellants are not barred from seeking to evict the tenants under that provision. The court remanded with directions to enter a new order overruling the demurrer. View "Boshernitsan v. Bach" on Justia Law

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The Willow property, south of the Apartments, contains a duplex, a concrete parking area, and a large undeveloped area in the rear. In 1964 the then-owners of both properties obtained a variance from Burlingame that allowed four off-site parking spaces for the Apartments to be located on the Willow property. They never expanded the Apartments as planned. The variance became void. The properties changed hands several times, remaining jointly owned. In 2005, both properties were acquired by Shiheiber, who allowed tenants of the Apartments to use the Willow property for access, parking, storage of garbage, and recreational purposes. In 2011, the properties ceased to be under common ownership. The Bank took title to the Apartments; Husain took title to Willow, aware that the Bank claimed a prescriptive easement. Tenants in the Apartments continued to use the Willow property.Husain sued the Bank to quiet title. The Bank cross-complained for a prescriptive easement. The trial court entered judgment for the Bank. The court of appeal affirmed, rejecting an argument that the use of the Willow property was permissive. The Bank never requested or received permission to use the Willow property, and simply used the property in a manner that was open, notorious, continuous, and hostile for more than five years. View "Husain v. California Pacific Bank" on Justia Law

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Plaintiff filed suit against Quicken, on behalf of himself and others similarly situated, alleging causes of action for breach of fiduciary duty and violations of Civil Code section 2954.8 and Business and Professions Code section 17200, contending that section 2954.8 requires a lender to pay interest on insurance proceeds held in escrow following the partial or total destruction of the insured's residence or other structure. In this case, plaintiff's home was destroyed by Ventura's Thomas Fire and his hazard insurance policy jointly paid him and his mortgage lender, Quicken, a total of $1,342,740. The Deed of Trust allowed Quicken to hold the insurance proceeds in escrow and to disburse the funds as repairs to the home were being made.The Court of Appeal affirmed the trial court's decision sustaining Quicken's demurrer to the complaint without leave to amend, concluding that neither section 2954.8 nor the parties' loan agreement required the payment of interest. Based upon the statutory and contractual language, the court agreed with Lippitt v. Nationstar Mortgage, LLC (C.D.Cal. Apr. 16, 2020, No. SA CV 19-1115-DOC-DFM) 2020 U.S. Dist. Lexis 122881, that section 2954.8 "applies to common escrows maintained to pay taxes, assessments, and insurance premiums -- not to the comparatively unique example of hazard insurance proceeds held by a lender pending property rebuilding." Therefore, the court concluded that the insurance proceeds held by Quicken pursuant to section 5 of the Deed of Trust fall outside the scope of section 2954.8. Furthermore, plaintiff's secondary reliance on the purported purposes of section 2954.8 does not and cannot circumvent the statute's plain language. View "Gray v. Quicken Loans, Inc." on Justia Law

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Ashford San Francisco owns the 2nd Street property. In 2013, a majority ownership interest in Ashford San Francisco was acquired by Ashford Hospitality. The transfer resulted in a change in ownership of the property, which the city determined triggered the imposition of the transfer tax. Ashford paid $3,348,025 in transfer taxes based upon the $133,920,700 self-reported value of the property, then filed an administrative claim for a refund. The transfer tax has five tiered (graduated) tax rates.When the city did not timely act, Ashford filed suit. seeking a refund, alleging that the transfer tax “imposes different tax rates on taxpayers for performing the same exact function” and arbitrarily classifies property transfer instruments for the imposition of a varying rate of taxation, solely by reference to the amount of the consideration in the transactions in violation of the Equal Protection Clause.The court of appeal affirmed a judgment in favor of the city. The city rationally chose to treat the sale or transfer of a higher-valued property differently from the sale of a lower-valued property; the transfer tax “taxes all transfers of the same consideration or value equally.” The court noted the city’s justifications: the owner’s ability to pay and that time and costs associated with the city’s audits for the self-reported transfer tax may increase depending on the value of the property. View "Ashford Hospitality v. City and County of San Francisco" on Justia Law

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San Rafael voters approved by a two-thirds vote a Paramedic Services Special Tax, imposing an annual special tax up to a maximum of 14 cents per square foot on all nonresidential structures in the city to fund paramedic services. In 2015-2016, the city determined that the Assessor had been inadvertently omitted certain properties from the Paramedic Tax assessment. City officials rectified this oversight prospectively and sought to collect a portion of the Tax that had gone unpaid. One property owner that received notice of the levy was Valley Baptist, a nonprofit religious organization that operates a church on property within city boundaries. The city requested payment of $13,644.Valley Baptist filed suit, challenging the constitutionality of the Tax as applied to a place of worship. Valley Baptist argued that it is exempted from payment of all property taxes under article XIII, section 3(f) of the California Constitution, including the Paramedic Tax. Reversing the trial court, the court of appeal held that the religious exemption does not extend to non-ad valorem special property taxes like the Paramedic Tax. The constitutional articles added by Propositions 13 and 218 do not evince an intent by the electorate to extend the scope of article XIII exemptions to special property taxes. View "Valley Baptist Church v. City of San Rafael" on Justia Law

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A subcontractor built a retaining wall that collapsed years later, causing damage to a nearby residential lot. The homeowner sued the subcontractor, obtained a default judgment, and then sued the subcontractor’s insurance company to enforce the default judgment. The insurance company moved for summary judgment, arguing the homeowner’s damages occurred long after the insurance policy had expired, and therefore the insurance company had no duty to cover the default judgment. The trial court agreed and granted the motion. On appeal, the homeowner alleged “continuous and progressive” damage began to occur shortly after the subcontractor built the retaining wall during the coverage period of the insurance policy. The insurance company disagreed. The Court of Appeal determined that was a triable issue of material fact, thus reversing the trial court’s grant of summary judgment. View "Guastello v. AIG Specialty Insurance Company" on Justia Law