Justia Real Estate & Property Law Opinion Summaries

Several development groups entered into a public improvement contract with a Texas city, purchasing over 60 acres of land, much of it in a flood zone. The developers received a variance from the city, exempting them from obtaining a federal floodplain permit (CLOMR), and invested significant funds in developing the property, including constructing a bridge. In 2018, the parties executed updated agreements, including a Master Development Agreement (MDA), which required certain conditions to be met within five years or the contract would automatically terminate, ending the city’s reimbursement obligations. As the deadline approached, the city informed the developers that they would now need to obtain the previously waived CLOMR, citing a later-enacted ordinance. Unable to comply in time, the developers sought an extension, which the city council denied, resulting in termination of the MDA.The developers sued in Texas state court, alleging the city’s actions constituted an unconstitutional taking under federal and state law, and also brought claims for breach of contract and violations of the Texas Vested Rights Statute. The city removed the case to the United States District Court for the Northern District of Texas and moved to dismiss. The district court dismissed the federal takings and declaratory judgment claims, finding the developers had not sufficiently alleged that the city acted in its sovereign rather than commercial capacity, and remanded the remaining state-law claims to state court.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed. The court held that the developers’ allegations arose from a contractual dispute, not a sovereign act by the city, and thus did not state a plausible takings claim under the Fifth Amendment. The court also found no abuse of discretion in the district court’s decision to dismiss the declaratory judgment claim, as the core issues would be resolved in the remanded state court action. View "Mesquite Asset Recovery Grp v. City of Mesquite" on Justia Law

A business operating a strip club featuring nude dancing and alcohol sales entered into a settlement agreement with DeKalb County, Georgia, in 2001, which was later amended in 2007. The amended agreement granted the club non-conforming status, allowing it to continue its business model for fifteen years, with the possibility of renewal, and required annual licensing fees. In 2013, the City of Chamblee annexed the area containing the club and subsequently adopted ordinances restricting adult entertainment establishments, including bans on alcohol sales, stricter food sales requirements for alcohol licenses, and earlier closing times. The City initially issued alcohol licenses to the club but later denied renewal, citing failure to meet new requirements and the club’s status as an adult establishment.The United States District Court for the Northern District of Georgia dismissed some of the club’s claims for lack of standing and granted summary judgment to the City on the remaining claims. The district court found that the club lacked standing to challenge certain ordinances as it was not an alcohol licensee, and that the City’s ordinances regulating adult entertainment and alcohol sales were constitutional under the secondary-effects doctrine, applying intermediate scrutiny. The court also determined there was no valid contract between the club and the City, rejecting the Contract Clause claims, and found no equal protection violation, as the club failed to identify a similarly situated comparator.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings. The Eleventh Circuit held that the club lacked standing for equitable relief due to its permanent closure, but had standing for damages for a limited period. The court upheld the application of intermediate scrutiny to the ordinances, found no impairment of contract, and agreed that the club failed to establish an equal protection violation. The district court’s judgment in favor of the City was affirmed. View "WBY, Inc. v. City of Chamblee, Georgia" on Justia Law

A lender initiated a foreclosure action against a homeowner after the homeowner defaulted on a mortgage loan originally obtained in 2007. The mortgage was assigned several times before the foreclosure action began, and the lender’s predecessor filed suit in 2015. After a trial in 2018, the Vermont Superior Court, Civil Division, found in favor of the lender, concluding that the lender held the original note and mortgage at the time of filing and at trial, and that the homeowner had defaulted. The court issued a judgment of foreclosure by judicial sale, setting a redemption period for the homeowner.Following the expiration of the redemption period, the case was temporarily dismissed due to the homeowner’s bankruptcy. After the bankruptcy discharge, the lender successfully moved to reopen the case. The parties attempted mediation, which was unsuccessful. The lender then sought to substitute a new party as plaintiff due to post-judgment assignments of the mortgage, but later withdrew this request after issues arose regarding the validity of the assignments and the status of the note. The court vacated the substitution and ordered the lender to prove who the real party in interest was, warning that failure to do so would result in dismissal for lack of prosecution. After a hearing, the court found the lender failed to establish the real party in interest, dismissed the case with prejudice, and vacated the foreclosure judgment.On appeal, the Vermont Supreme Court held that the trial court abused its discretion by dismissing the case with prejudice for want of prosecution. The Supreme Court found no evidence of undue delay or failure to pursue the case by the lender, and concluded that the action could continue in the name of the original plaintiff under the applicable rules. The Supreme Court reversed the dismissal, reinstated the foreclosure judgment, and remanded for further proceedings. View "Ditech Financial LLC v. Brisson" on Justia Law

The dispute centers on an option agreement for the lease of approximately 598 acres of land owned by one party and sought by another for use in a biomass power plant operation. The option agreement granted the potential lessee an irrevocable one-year option to lease the property, with a proposed lease attached that included some terms, such as base rent amounts, but omitted others, including the effective date and certain pricing details for a percentage rent provision. After the lessee attempted to exercise the option, the lessor sent a lease largely in the form of the proposed lease, but with key terms still blank. The lessee never signed this lease, and the parties disagreed about whether a binding lease had been formed.The owner filed suit in the Circuit Court of the Fifth Circuit, seeking breach of contract and specific performance. After a bench trial, the circuit court found that the proposed lease was missing essential terms and that the parties did not intend to be bound by it when executing the option agreement. The court granted the lessee’s motion for directed verdict, awarded attorneys’ fees and costs, and entered final judgment. On appeal, the Intermediate Court of Appeals (ICA) vacated the circuit court’s judgment, holding that the proposed lease was sufficiently definite and enforceable, and that the parties were bound by its terms upon exercise of the option.The Supreme Court of Hawai‘i reviewed the ICA’s decision. It held that the proposed lease lacked sufficiently definite terms, specifically regarding the effective date and percentage rent provision, and that the parties did not intend to be bound by the proposed lease without further negotiation. The Supreme Court reversed the ICA’s judgment and affirmed the circuit court’s directed verdict, fee award, and final judgment in favor of the lessee. View "Moloaa Farms LLC v. Green Energy Team LLC" on Justia Law

Three landowners in Roberts County, South Dakota, own agricultural properties encumbered by perpetual federal wetlands reserve easements, which severely restrict agricultural and other uses of the land. After the previous owner’s death, the properties were appraised at $897 per acre in 2017 but ultimately sold to the current landowners for about $128 per acre in 2019. In 2023, the county’s Director of Equalization assessed the properties using a statutory productivity-based method, resulting in values of $2,255.54 and $1,678.77 per acre, far exceeding the purchase price and prior appraisal. The landowners did not dispute the statutory method’s application but argued that the resulting assessments exceeded the properties’ actual value, violating the South Dakota Constitution.The landowners appealed the assessments through the local and county boards of equalization, both of which affirmed the Director’s valuations. They then appealed to the Office of Hearing Examiners (OHE), where an administrative law judge (ALJ) found the landowners’ witnesses—two real estate brokers—credible in their testimony that the easements significantly reduced the properties’ market value. However, the ALJ concluded she lacked authority to decide the constitutional issue and affirmed the assessments, finding the landowners had not rebutted the presumption of correct statutory procedure. The Circuit Court of the Fifth Judicial Circuit affirmed, holding that only a certified appraiser’s opinion could rebut the presumption of correctness and that the brokers’ opinions and the 2017 appraisal were insufficient.The Supreme Court of the State of South Dakota reversed and remanded. It held that neither the South Dakota Constitution nor state law requires a certified appraiser’s opinion to establish actual value for tax purposes; credible testimony from any qualified witness suffices. The Court further held that the landowners presented sufficient credible evidence that the assessments exceeded actual value. The case was remanded for a factual finding of actual value based on the existing record. View "Pallansch v. Roberts County" on Justia Law

Three non-profit corporations, each formed by littoral homeowners in the Portlock neighborhood of East Honolulu, purchased narrow beachfront reserve lots that separated their homes from the ocean. In 2003, Hawai‘i enacted Act 73, which declared certain accreted lands—land gradually added to the shoreline by natural forces—to be public property, preventing private parties from registering or quieting title to such land. Shortly after purchasing the lots, the non-profits (the Ohanas) filed an inverse condemnation action, alleging that Act 73 resulted in an uncompensated taking of accreted land seaward of their lots, in violation of the Hawai‘i Constitution. The parties stipulated that, if a taking occurred, just compensation would be based on the fair market rental value of the accreted land.The Circuit Court of the First Circuit initially granted partial summary judgment to the Ohanas, and the Intermediate Court of Appeals (ICA) affirmed in part, holding that Act 73 effected a taking of existing accreted lands. On remand, after a bench trial with expert testimony, the circuit court found that the fair market rental value of the accreted land was zero dollars, based on credible evidence that the land’s use was highly restricted and had no market value. The court declined to award nominal damages or attorneys’ fees. The ICA affirmed, finding the circuit court’s factual determinations were supported by substantial evidence and that sovereign immunity barred attorneys’ fees.The Supreme Court of Hawai‘i affirmed the ICA’s judgment. It held that the circuit court did not err in awarding zero dollars as just compensation, nor in declining to award nominal damages, because the Ohanas suffered no compensable loss. The court further held that the just compensation clause of the Hawai‘i Constitution does not waive sovereign immunity for attorneys’ fees in inverse condemnation cases. View "Maunalua Bay Beach Ohana 28 v. State" on Justia Law

Two former employees of a large technology company, along with a real estate developer and related individuals and entities, were alleged to have engaged in a kickback scheme involving real estate transactions in Northern Virginia. The employees, responsible for managing real estate deals for the company, allegedly steered contracts to the developer’s firm in exchange for secret payments funneled through a network of trusts and entities. The scheme purportedly inflated the company’s costs for both leasing and purchasing properties, with millions of dollars in kickbacks distributed among the participants. The company discovered the scheme after a whistleblower report, conducted an internal investigation, and reported the matter to federal authorities.The United States District Court for the Eastern District of Virginia granted summary judgment in favor of the defendants on several claims, including those under the Racketeer Influenced and Corrupt Organizations (RICO) Act, fraud, unjust enrichment, and conversion, and partially on a civil conspiracy claim. The district court found that the company failed to establish the existence of a RICO enterprise, did not show injury to its business or property, and that equitable claims were precluded by the availability of legal remedies or the existence of contracts. The court also ruled that an attorney defendant could not be liable for conspiracy with his clients.The United States Court of Appeals for the Fourth Circuit reversed the district court’s summary judgment. The appellate court held that genuine disputes of material fact existed regarding the existence of a RICO enterprise, whether the company suffered financial harm, and the viability of the fraud, unjust enrichment, conversion, and civil conspiracy claims. The court clarified that the company was entitled to pursue legal and equitable remedies in the alternative and that the attorney’s potential liability for conspiracy could not be resolved on summary judgment. The case was remanded for further proceedings. View "Amazon.com, Inc. v. WDC Holdings LLC" on Justia Law

After the owners of a residential property in a common interest development defaulted on their homeowners association (HOA) assessments, the HOA, through its agent Delphi Law Group, LLP, initiated a nonjudicial foreclosure sale. Bird Rock Home Mortgage, LLC was the highest bidder at the initial auction and paid the bid amount. However, Delphi did not immediately transfer the deed, instead extending the bidding period under Civil Code section 2924m. During this extended period, Breaking Ground, LP submitted a higher bid and ultimately received the trustee’s deed to the property.The Superior Court of San Diego County presided over the dispute that followed. Bird Rock sued Breaking Ground, Microcredit Loan Fund, Inc., and Delphi, seeking declaratory relief and to quiet title, arguing that section 2924m did not apply to nonjudicial foreclosure sales enforcing liens for unpaid HOA assessments. Delphi filed a cross-complaint in interpleader regarding the rights to the property and sale proceeds. The case proceeded to a bench trial based on stipulated facts and briefs, with the central issue being whether section 2924m’s extended bidding period applied to this type of foreclosure sale.The California Court of Appeal, Fourth Appellate District, Division One, reviewed the trial court’s judgment de novo. The appellate court held that section 2924m does apply to nonjudicial foreclosure sales enforcing liens for unpaid HOA assessments when the governing declaration creates a contractual lien with a power of sale, qualifying as a “mortgage” under the relevant statutory scheme. The court affirmed the trial court’s judgment, upholding the validity of the sale and deed to Breaking Ground, denying Bird Rock’s claims, and ordering distribution of the sale proceeds. The judgment was affirmed, and costs were awarded to the respondents. View "Bird Rock Home Mortgage v. Breaking Ground" on Justia Law

A group of neighbors opposed the development of a public sports park on a 65-acre parcel in Maui. The State Department of Land and Natural Resources (DLNR) sought and received a special use permit from the County of Maui Planning Commission to build the park. Several future members of the neighbors’ group, Maui Lani Neighbors, Inc. (MLN), received notice of the permit hearing, attended, and some testified, but none formally intervened in the proceedings. After the permit was granted, one future MLN member filed an administrative appeal but later dismissed it. MLN was then incorporated and filed a lawsuit in the Circuit Court of the Second Circuit, challenging the permit on zoning, environmental, constitutional, and procedural grounds.The Circuit Court of the Second Circuit dismissed most of MLN’s claims, holding that they should have been brought as an administrative appeal of the Planning Commission’s decision under Hawai‘i Revised Statutes (HRS) § 91-14, and that MLN failed to exhaust administrative remedies. The Intermediate Court of Appeals (ICA) affirmed, but with different reasoning on some points. The ICA held that the administrative process provided an exclusive remedy for most claims, but allowed that some environmental claims under HRS chapter 343 (the Hawai‘i Environmental Policy Act, or HEPA) could proceed in circuit court if they did not seek to invalidate the permit.The Supreme Court of Hawai‘i affirmed the ICA’s judgment in most respects, but clarified that MLN’s claims under HRS chapter 343 were not subject to the exhaustion doctrine and could be brought directly in circuit court. The court held that, except for HEPA claims, MLN was required to challenge the permit through an administrative appeal, and that the declaratory judgment statute (HRS § 632-1) did not provide an alternative route. The court remanded the case to the circuit court to consider the HEPA-based claims. View "Maui Lani Neighbors v. State" on Justia Law

Several borrowers executed mortgage agreements with a lender, granting the lender a lien on their respective properties in Hawai‘i. Between 2008 and 2009, the borrowers defaulted on their mortgage loans, and the lender foreclosed on the properties through nonjudicial foreclosure sales. The lender was the winning bidder at each sale and subsequently conveyed the properties to third parties. In 2019, the borrowers filed suit, alleging wrongful foreclosure, unfair or deceptive acts and practices (UDAP), and sought quiet title and ejectment against the current titleholders. They requested both monetary damages and the return of title and possession of the properties.The Circuit Court of the Third Circuit granted summary judgment in favor of the lender and the titleholders. The court found that the borrowers could not establish compensatory damages because their outstanding mortgage debts at the time of foreclosure exceeded any damages they claimed, even when accounting for loss of use and other asserted losses. The court also determined that the borrowers’ quiet title and ejectment claims were barred by the statute of limitations and that the titleholders were bona fide purchasers. The borrowers appealed, and the Supreme Court of Hawai‘i accepted transfer of the case.The Supreme Court of Hawai‘i affirmed the circuit court’s summary judgment. The court held that, under its precedents, borrowers must establish compensatory damages after accounting for their mortgage debts to survive summary judgment on wrongful foreclosure and UDAP claims. Here, the borrowers’ debts exceeded their claimed damages. The court further held that claims for return of title and possession are subject to a six-year statute of limitations for wrongful foreclosure actions, which barred the borrowers’ claims. Additionally, the court concluded that the titleholders were bona fide purchasers, as the foreclosure affidavits did not provide constructive notice of any defects. View "McCullough v. Bank of America, N.A." on Justia Law