Justia Real Estate & Property Law Opinion Summaries

The Fifth Circuit vacated the district court's grant of summary judgment in an action brought by a landowner against the City over the City's use of his residential property to drain and filter storm-sewer runoff. The court held that there were disputed factual issues as to whether the City had an easement over the landowner's land and he was entitled to a declaratory judgment and monetary damages. The court also held that, even if the City has an easement, there was a disputed factual issue regarding whether the City must accommodate the landowner's use of his property by installing subsurface drain pipes as it has done elsewhere in the City. The court held that the landowner's Fifth Amendment takings claim was time-barred and affirmed the district court's judgment as to this claim. View "Redburn v. City of Victoria" on Justia Law

In 2006, plaintiffs purchased a 400-acre Barrington horse farm with Amcore financing. In 2009, Amcore filed for foreclosure in Illinois state court. Amcore failed and the FDIC became its receiver. BMO bought Amcore’s loan assets at a discount from the FDIC and took over the foreclosure action. To cut its losses on the loan, BMO assigned the note to the Forest Preserve for $14 million. The Forest Preserve made the (winning) credit bid of about $14.5 million at the foreclosure sale. The foreclosure court entered a deficiency judgment of $6 million. The Illinois Appellate Court later reversed the foreclosure judgments. There is apparently no current judgment in that action. The original owners have filed five lawsuits, in addition to raising affirmative defenses and counterclaims in the foreclosure action. The Seventh Circuit affirmed the dismissal of their suit that alleged unconstitutional takings, fraud, and derivative claims for conspiracy and aiding and abetting. The court rejected arguments that the Forest Preserve violated the takings clause by passing an ordinance converting the estate into a forest preserve; by buying the mortgage and taking over the foreclosure action; and by physically entering the estate and installing Forest Preserve signs at the estate entrances. Derivative conspiracy and aiding-and-abetting claims fall with the three theories. View "Squires-Cannon v. Forest Preserve District of Cook County" on Justia Law

A Pennsylvania municipal lien is automatic; it is perfected by filing with the local court, without notice or a hearing, where it is publicly docketed. Until filed, a municipal lien may not be enforced through a judicial sale. Municipalities can delay filing a lien indefinitely, but it is not enforceable against subsequent purchasers until filed. A municipality can petition the court for a sale. Property owners may request a hearing on the legality of a lien at any time by paying the underlying claim into the court with a petition. PGW, a public utility owned by the city, scans its billing database, identifies delinquent accounts, then sends a pre-filing letter. If full payment is not made, the system automatically files the lien and sends another notice. Landlords are not normally apprised of tenants' growing arrearages. An exception is entered if the name/address associated with an account does not match the property tax records. PGW frequently enters “exceptions,” which do not prevent arrearages from continuing to grow nor do they interrupt service but prevent the lien from being filed. Landlords who learned of thousands of dollars of liens against their properties, due to nonpayment by tenants, filed suit. The court certified a class and held that the City had violated the landlords’ due process rights. The Third Circuit reversed. Whether the lien procedures comport with due process depends on three factors: the private interest that will be affected; the risk of an erroneous deprivation and the value of other procedural safeguards in avoiding errors; and the governmental interest. Although the filing of a lien is “significant” enough to trigger due process protections, it is a relatively limited interference with the landlords’ property. None of the plaintiffs have suffered injury to their credit. Nor have the liens interfered with their ability to maintain their properties or collect rents. Risks associated with an erroneous lien are mitigated by the statute's post-deprivation remedies. View "Augustin v. City of Philadelphia" on Justia Law

The Inholders own patented mining and homestead claims within the Santa Fe National Forest. The 2011 Las Conchas Fire caused widespread destruction of vegetation within the forest. Forest Roads 89 and 268, which the Inholders had used to access their properties, were severely damaged by subsequent flooding. The Forest Service notified them that the roads were “impassible” and that it would provide them with limited access: “a combination of driving and hiking over specific routes and under specific weather conditions.” Later, the Service sent a letter stating that “public safety would be highly threatened by use of” the roads; that it would close the roads to public access for the foreseeable future; that because of continuing terrain instability, any reconstruction would likely be destroyed by future flooding; and, even if reconstruction were possible, the Service could not justify expending public funds when there is no general public need. The Service suggested that the Inholders work “collectively” to reconstruct the roads. The Inholders claimed that they held statutorily-granted easements. The USDA disagreed, citing 90 Stat. 2743, but acknowledged that the Inholders had a right to access their properties, “subject to reasonable regulations.” The Inholders claimed a compensable taking. The Federal Circuit affirmed the Claims Court’s dismissal, finding that the Inholders had not adequately pled a physical taking and that any regulatory taking claim was not ripe because the Inholders had not applied for a permit to reconstruct the roads. View "Martin v. United States" on Justia Law

In 2006 Conway contracted to sell land in Broadview to Donahue, who assigned the contract to Chicago Joe’s Tea Room, LLC. Chicago Joe’s sole manager applied for the required special-use permit. Broadview denied the application in 2007. The land sale contract never closed and the planned strip club never opened. The LLC and Conway filed suit in 2007 alleging that Broadview violated the First Amendment. Broadview amended its ordinances multiple times during the lawsuit. One amendment led District Judge Gottschall, to conclude that Broadview’s amendment to its adult-use setback ordinance was “aimed solely at Chicago Joe’s.” After the case was transferred to Judge Lee, the parties litigated renewed summary judgment motions. Judge Lee granted Broadview summary judgment on Chicago Joe’s declaratory judgment and injunction claims, but denied summary judgment on the damages claim. The Seventh Circuit concluded that the claim for injunctive relief that established interlocutory appellate jurisdiction is actually moot, and affirmed its dismissal. At every stage of the process, Chicago Joe’s has proposed a use of property prohibited by then-current local law, so it has no vested rights. Since 2007, Chicago Joe’s has proposed to use the property in a way prohibited by Illinois statute, without challenging that statute. View "Chicago Joe's Tea Room, LLC v. Village of Broadview" on Justia Law

The city owned land and a townhome in New Orleans after 1998; its previous owner, Jett, neglected to pay his taxes. Notwithstanding its recorded ownership, the city instituted Code Enforcement proceedings against Jett in 2012. The Garretts purchased the property on October 2, 2015, and recorded the conveyance on October 14. They claim that the building was structurally sound. The city continued to pursue Jett. An administrative judgment was entered on October 30, ordering Jett to pay fines and warning that the building could be demolished. A lien was recorded on December 7. The Garretts were not named and received no notice. On January 15, 2016, their realtor noticed a sign advising upcoming demolition of the property. They contacted the city, which canceled the lien. E-mail exchanges indicated that the Garretts intended to resolve all code issues. On January 27, the city demolished the townhouse. Denying the Garretts' request for compensation, the city sent a bill for the demolition costs. They did not appeal but filed suit alleging denial of due process and just compensation. The district court dismissed the claim as jurisdictionally unripe because they failed to seek compensation in state court. The Fifth Circuit vacated, finding the due process claim, predicated on lack of notice and a hearing, ripe, given the uncertainty of remedies in a state court inverse condemnation suit. The court concluded that the other claims were ripe or would be best resolved in the same suit. View "Archbold-Garrett v. New Orleans City" on Justia Law

In this appeal of a condemnation judgment the Supreme Court reversed the decision of the court of appeals holding the trial court’s evidentiary rulings were an abuse of discretion and reinstated the judgment of the trial court.The State planned to condemn a portion of a 33,000 square-foot property owned by Stephen and Kimberly Morale in the Town of Little Elm. The special commissioners awarded the Morales $49,804 in damages for the taking. The Morales objected to the award and demanded a jury trial. The jury awarded $1,064,335 to the Morales, and the trial court essentially rendered judgment on the verdict. The court of appeals reversed and remanded for a new trial, holding that the trial court erroneously admitted and excluded various evidence at trial, thereby probably resulting in the rendition of an improper judgment. The Supreme Court reversed, holding that the trial court’s challenged evidentiary rulings were not an abuse of discretion. View "Morale v. State" on Justia Law

A right to visibility of private property from a public road is not a cognizable right giving rise to a protected property interest.Adams Outdoor Advertising Limited Partnership brought a takings claim against the City of Madison, asserting that its property was taken when the City constructed a pedestrian bridge over the Beltline Highway that blocked the visibility from the highway of the west-facing side of Adams’ billboard. The court of appeals affirmed the circuit court’s grant of summary judgment in favor of the City, concluding that Adams failed to demonstrate a cognizable right underlying its asserted protected property interest. On appeal to the Supreme Court, Adams argued that a taking occurred because the City deprived it of all economically beneficial use of the west-facing side of its billboard. The Supreme Court disagreed, holding that Adams’ taking claim failed. View "Adams Outdoor Advertising Limited Partnership v. City of Madison" on Justia Law

The Surface and Transportation Board (STB) has regulatory authority over rail carriers, 49 U.S.C. 10501(b). A "discontinuance" allows a rail carrier to preserve a rail corridor for possible reactivation of service; "abandonment" removes the line from the system and terminates the railroad’s common carrier obligation. The 1983 Amendments to the National Trails System Act created an alternative process, “railbanking,” 16 U.S.C. 1241, which maintains STB jurisdiction over the dormant corridor, but allows a third party to assume responsibilities for the right-of-way, preserve the right-of-way for future rail use, and, in the interim, convert the corridor into a recreational trail. The railroad first initiates abandonment proceedings; a party interested in acquiring the corridor then requests an STB Notice of Interim Trail Use (NITU). If an agreement is reached, the STB suspends abandonment proceedings, preventing state law reversionary interests in the corridor from vesting. Property owners who believed they had a reversionary interest began claiming that railbanking constituted a taking: the threshold question is whether the claimant has a compensable property interest, which is often answered by analyzing the original deeds that conveyed the property to the railroad. In 2012, BNSF initiated proceedings to abandon a corridor. The Chicago Department of Transportation indicated interest in railbanking. The STB issued an NITU, giving BNSF until April 2014, to negotiate an agreement, after which the corridor would be abandoned. After numerous extensions, BNSF has neither reached an agreement nor abandoned the corridor. The Federal Circuit affirmed the Claims Court: the deeds between the predecessors-in-interest to the claimants and the original railroad conveyed the property to the railroad in fee simple rather than only an easement. There was no taking of any reversionary interest. View "Chicago Coating Co., LLC v. United States" on Justia Law

Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law