Justia Real Estate & Property Law Opinion Summaries

Two companies each owned a one-half undivided interest in the subsurface estate (specifically, sand, gravel, and clay) of a small parcel of land, while one of them also owned the entire surface estate. The surface owner developed the parcel by excavating soil and using it as fill on the same parcel to achieve the desired grade and density for construction. The subsurface co-owner sued, alleging that the surface owner had removed and transferred soil off-site without compensation, and also claimed entitlement to compensation for the on-site use of the soil, arguing that such use interfered with its rights.The Fourth District Court reviewed the case after discovery. The surface owner moved for summary judgment, presenting evidence that no soil was removed from the parcel and that all excavated soil was used on-site. The subsurface co-owner conceded it had no evidence that soil was exported off-site but argued that a jury could infer such removal due to the surface owner’s exclusive control of relevant information. The district court found no genuine dispute of material fact regarding off-site removal and held that, under Utah law and persuasive Washington precedent, a surface owner is entitled to use soil for on-site development without compensating the subsurface owner, unless the soil is exported. The court granted summary judgment and dismissed all claims.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s decision. The Court held that the subsurface co-owner failed to provide evidence supporting its claim of off-site removal, and that the surface owner’s on-site use of soil did not constitute actionable interference with the subsurface rights. The Court clarified that, absent an agreement to the contrary, a surface owner may use subsurface materials for on-site development without owing compensation to a subsurface co-owner, provided there is no interference with the latter’s right to remove those materials. The summary judgment in favor of the surface owner was affirmed. View "State v. Wilcox" on Justia Law

Talisker Finance, LLC and its affiliates defaulted on a $150 million loan secured by real property, which they had borrowed to develop parcels in Utah. After several loan modifications and assignments, the lenders—Wells Fargo Bank, N.A. and Midtown Acquisitions L.P.—foreclosed on the collateral and purchased it at two sheriff’s sales, where they were the only bidders. The sale proceeds did not satisfy the debt, and the lenders continued to pursue the deficiency. Later, Talisker discovered information suggesting that the lenders, in coordination with a court-appointed receiver, may have taken actions to depress the sale price, including deterring potential bidders and bundling properties in a way that made them less attractive.Talisker filed suit in the Third District Court, Summit County, seeking equitable relief from the deficiency judgments, alleging that the lenders’ conduct during the foreclosure process violated Utah Rule of Civil Procedure 69B(d) and constituted fraud or grossly inequitable conduct. The lenders moved to dismiss, arguing that Talisker had broadly waived any rights or defenses related to the foreclosure process in the loan documents. The district court accepted Talisker’s factual allegations as true for purposes of the motion but concluded that the waivers were enforceable and covered the rights Talisker sought to assert, including those under Rule 69B(d). The court found no unlawful irregularity in the sales and dismissed the complaint.On direct appeal, the Supreme Court of the State of Utah affirmed the district court’s dismissal. The court held that Talisker’s broad and explicit waivers in the loan documents encompassed all rights and defenses related to the foreclosure sales, including the right to challenge the method of sale or seek equitable relief based on alleged unfairness or irregularities. The court concluded that, regardless of the alleged conduct, Talisker had contractually relinquished any basis for relief. View "TALISKER PARTNERSHIP v. MIDTOWN ACQUISITIONS" on Justia Law

Two companies, HBKY and Elk River, each claimed rights to thousands of acres of timber in Kentucky based on their respective contracts with a third party, Kingdom Energy Resources. Kingdom had entered into a timber sales contract with Elk River, allowing Elk River to cut and remove timber from certain land. Separately, Kingdom obtained a $22 million loan from a group of lenders, with HBKY acting as their agent, and mortgaged several properties—including the timber in question—as collateral for the loan. Kingdom later breached both agreements: it ousted Elk River from the land, violating the timber contract, and defaulted on the loan, leaving both HBKY and Elk River with competing claims to the timber.After HBKY secured a judgment in a New York federal court declaring Kingdom in default, it registered the judgment in the United States District Court for the Eastern District of Kentucky and initiated foreclosure proceedings on the collateral, including the timber. Elk River and its president, Robin Wilson, were joined as defendants due to their claimed interest. The district court granted summary judgment to HBKY, finding that Elk River did not obtain title to the timber under its contracts, did not have a superior interest, and was not a buyer in the ordinary course of business under Kentucky law.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the loan documents did not authorize a sale of the timber free of HBKY’s security interest, as the mortgage explicitly stated that the security interest would survive any sale. The court also found that Elk River failed to provide sufficient evidence to establish its status as a buyer in the ordinary course of business. Accordingly, the Sixth Circuit affirmed the district court’s grant of summary judgment in favor of HBKY. View "HBKY, LLC v. Elk River Export, LLC" on Justia Law

A Michigan landlord who owns several rental properties in Oak Park challenged the city’s housing code, specifically its requirement that landlords consent to property inspections as a condition for obtaining a rental license. The city’s code mandates that landlords apply for a license and certificate of compliance, which involves an initial inspection and periodic re-inspections. The landlord refused to sign the consent form for inspections, resulting in the city withholding his license and issuing fines for renting without one. Despite these penalties, he continued to rent out his properties.The United States District Court for the Eastern District of Michigan granted summary judgment in favor of the city. The district court found that the landlord lacked standing to bring a Fourth Amendment claim because there had been no warrantless, nonconsensual inspection. It also ruled that the city’s licensing and inspection regime did not violate the Fourth Amendment or impose unconstitutional conditions, and that the landlord’s Equal Protection claim was without merit.On appeal, the United States Court of Appeals for the Sixth Circuit held that the landlord did have standing to challenge the licensing scheme under the unconstitutional-conditions doctrine, as the denial of a license for refusing to consent to inspections constituted a cognizable injury. However, the court concluded that the city’s requirement of consent to an initial inspection as a condition of licensing was reasonable and did not violate the Fourth Amendment, drawing on Supreme Court precedent distinguishing between reasonable conditions for public benefits and coercive mandates. The court also found that the city’s inspection requirements for one- and two-family rentals did not violate the Equal Protection Clause, as the classification was rationally related to legitimate public health and safety goals. The Sixth Circuit affirmed the district court’s judgment. View "Herschfus v. City of Oak Park" on Justia Law

The plaintiffs, former tenants of apartments owned and managed by the defendants, filed a putative class action alleging that the defendants violated Massachusetts General Laws Chapter 186, Section 15B (4) (iii) by deducting charges for "reasonable wear and tear" from tenants' security deposits. The plaintiffs also claimed that the defendants included lease provisions requiring tenants to have the premises professionally cleaned at the end of the lease, which they argued was a violation of the same statute.The case was initially filed in the Superior Court and later removed to the United States District Court for the District of Massachusetts. The plaintiffs moved for class certification, and both parties moved for summary judgment. The Federal judge denied these motions without prejudice and certified two questions to the Supreme Judicial Court of Massachusetts regarding the interpretation of the statute.The Supreme Judicial Court of Massachusetts held that a tenant's reasonable use of a property as a residence is expected to result in gradual deterioration, such as the need for painting, carpet repair, or similar refurbishment at the end of a lease. Deductions from a security deposit for such reasonable wear and tear violate the statute. Whether damage constitutes "reasonable wear and tear" is a fact-specific question depending on various circumstances, including the nature and cause of the damage, the condition of the property at the start of the lease, and the length of the occupancy.The court also held that a lease provision requiring a tenant to have the premises professionally cleaned at the end of the lease, on penalty of bearing the costs of repairs regardless of whether the damage is reasonable wear and tear, conflicts with the statute. Such a provision is void and unenforceable under Massachusetts General Laws Chapter 186, Section 15B (8). View "Peebles v. JRK Property Holdings, Inc." on Justia Law

A couple divorced, and the superior court awarded them joint legal custody of their minor child, with primary physical custody to the mother. The court also divided the couple’s marital estate. The father, representing himself, appealed, arguing that the division of the marital estate was inequitable. He claimed errors in the court’s determinations, including not crediting him for post-separation payments, not allowing him to apply for the child’s Permanent Fund Dividend (PFD), not allowing him to claim the child as a dependent for tax purposes, and its custody decision.The superior court held a one-day trial by videoconference, where both parties testified. The court issued a decree of divorce and findings of fact and conclusions of law, awarding joint legal custody to both parties and primary physical custody to the mother. The court divided the proceeds from the sale of the marital home, taking into account the father’s child support arrearage and an escrow shortage. The court also divided the couple’s vehicles and assigned debts based on testimony and the mother’s spreadsheet. The court ordered that the mother would be responsible for the child’s PFD and could claim the child as a dependent for tax purposes. The court ordered that the father’s 401(k) be divided equitably according to the mother’s spreadsheet.The Supreme Court of the State of Alaska reviewed the case. It vacated the superior court’s division of the marital estate, finding that the court’s treatment of the father’s 401(k) was unclear and lacked clarifying findings. It also found legal error in the court’s failure to address post-separation payments when dividing the marital estate. The court remanded for further proceedings on these issues. The Supreme Court otherwise affirmed the superior court’s decisions, including the custody award and the decisions regarding the child’s PFD and tax dependency. View "Wolffe v. Wolffe" on Justia Law

Fletcher Properties, Inc. and other appellants own multi-tenant residential properties in Minneapolis. The City of Minneapolis enacted an ordinance prohibiting property owners from refusing to rent to individuals based on requirements of public assistance programs, including Section 8 housing vouchers. Fletcher challenged the ordinance, claiming it violated the Minnesota Constitution’s Takings Clause and was preempted by the Minnesota Human Rights Act (MHRA).The district court initially ruled in favor of Fletcher, finding the ordinance violated due process and equal protection clauses. The court of appeals reversed this decision, and the Minnesota Supreme Court affirmed, remanding the case to address the remaining claims. On remand, the district court granted summary judgment for the City, rejecting Fletcher’s takings and preemption claims. The court of appeals affirmed this decision, leading to the current appeal.The Minnesota Supreme Court reviewed the case and held that the ordinance does not constitute a physical or regulatory taking under the Minnesota Constitution. The court applied the Penn Central factors, concluding that the economic impact of the ordinance, interference with investment-backed expectations, and the character of the government action did not support a finding of a regulatory taking. The court also determined that the ordinance does not effect a physical taking as landlords voluntarily rent their properties and are not compelled to continue doing so.Additionally, the court held that the ordinance is not preempted by the MHRA. The court found no conflict between the ordinance and the MHRA, as the MHRA does not grant landlords an affirmative right to reject voucher holders. The court also concluded that the MHRA does not occupy the field of housing discrimination based on public assistance, allowing for local regulation.The Minnesota Supreme Court affirmed the decision of the court of appeals, upholding the ordinance. View "Fletcher Properties, Inc. vs. City of Minneapolis" on Justia Law

Chosen Consulting, LLC, doing business as Chosen Healthcare, and other related entities (collectively "Chosen") filed a lawsuit against the Town Council of Highland, Indiana, the Highland Municipal Plan Commission, and the Town of Highland, Indiana (collectively "the Town"). Chosen alleged that the Town discriminated against patients with addiction-related ailments by refusing to provide a letter stating that Chosen’s proposed use of its property complies with local zoning requirements. Chosen claimed this discrimination violated the Americans with Disabilities Act (ADA) and the Rehabilitation Act of 1973, seeking compensatory, injunctive, and declaratory relief.The United States District Court for the Northern District of Indiana granted summary judgment to the Town. The district court held that Chosen's claim for injunctive relief under the ADA and the Rehabilitation Act was not ripe for adjudication because Chosen had not obtained a final decision from the local zoning authorities. The court indicated that Chosen needed to pursue its request for zoning approval through the Board of Zoning Appeals (BZA) and, if necessary, appeal any final decision entered by the BZA to the state courts before seeking an injunction in federal court.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The Seventh Circuit held that Chosen's claim for injunctive relief was not ripe because Chosen had not satisfied the finality requirement set forth in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. The court emphasized that Chosen needed to follow the local zoning procedures, including applying for a use variance or seeking a declaratory judgment in state court, to obtain a final decision from the Town. Until Chosen completed these steps, the dispute was not ripe for federal court review. View "Chosen Consulting, LLC v Town Council of Highland" on Justia Law

Jeannette F. Tasey failed to pay property taxes starting in 2017. In 2018, she applied for an elderly/disabled tax credit program, believing she did not need to pay taxes until her application was decided. On August 1, 2018, the Yellowstone County Treasurer issued a tax lien on her property, which was later assigned to Guardian Tax MT, LLC. Tasey mailed a check for the full amount on July 30, 2021, with an expected delivery date of July 31. However, the Treasurer received and processed the check on August 3, one day after the redemption period expired. The Treasurer rejected the payment and issued a tax deed to Guardian Tax, which then sued to quiet title and declare Tasey a trespasser.The Thirteenth Judicial District Court, Yellowstone County, granted summary judgment in favor of Guardian Tax, finding no genuine issue of material fact. The court found Tasey's assertion that the check was received on July 31 to be speculative and unsupported by evidence. Tasey appealed the decision.The Supreme Court of the State of Montana reviewed the case de novo. The court held that Tasey substantially complied with the redemption statute by mailing the payment in good faith, believing it would arrive before the deadline. The court emphasized that redemption statutes should be liberally construed to allow property owners to pay their debts and save their property. The court found that Tasey's actions met the substantial compliance standard and that there was no prejudice to Guardian Tax or the Treasurer’s Office. The court reversed the District Court's summary judgment and remanded the case for further proceedings. View "Guardian Tax v. Tasey" on Justia Law

David Wolfe owned property in Columbia Falls, Montana. In 2000, he executed a will leaving the property to his daughter, Wendy Rae Wolfe. In 2018, David signed a beneficiary deed transferring the property to his brother, Philip M. Wolfe. David passed away in 2023, and Wendy began residing on the property, believing it was hers per the will. Philip, however, claimed ownership based on the 2018 deed and issued a notice for Wendy to vacate.Wendy filed a pro se quiet title action in December 2023, alleging that the will conveyed the property to her and that Philip obtained the deed fraudulently, either by forging David’s signature or through undue influence. Philip counterclaimed for declaratory judgment and filed a motion for summary judgment. The District Court of the Eleventh Judicial District, Flathead County, granted summary judgment in favor of Philip, concluding that Wendy failed to produce a legally meaningful challenge to the deed.The Supreme Court of the State of Montana reviewed the case. The court found that Wendy presented sufficient evidence to raise genuine issues of material fact regarding undue influence and the validity of David’s signature on the deed. The court noted that Wendy’s evidence, including affidavits and personal knowledge of David’s intentions, was enough to warrant a jury’s consideration. The court concluded that the District Court erred in granting summary judgment to Philip and reversed the decision, remanding the case for further proceedings. View "In re Estate of David Wolfe" on Justia Law