Justia Real Estate & Property Law Opinion SummariesArticles Posted in Tennessee Supreme Court
Shaw v. Metropolitan Government of Nashville
The Supreme Court vacated the judgments of the lower courts in this appeal addressing mootness when a law challenged in the trial court is altered or amended after the trial court issued its final judgment and while the appeal is pending, holding that remand was required in this case.Plaintiffs filed a lawsuit against Metropolitan Government of Nashville and Davidson County (Metro) challenging an ordinance prohibiting them from having clients in their home-based businesses. The trial court granted summary judgment in favor of Metro. While Plaintiffs' appeal was pending, Metro repealed the ordinance at issue and enacted a new ordinance allowing limited client visits to home-based businesses. The court of appeals determined that Plaintiffs' case was moot. The Supreme Court vacated the judgments below and remanded the case to give the parties an opportunity to amend their pleadings to address any claims asserted under the new ordinance, holding that, based on the current record, it could not be determined whether Plaintiffs would suffer ongoing harm from the new ordinance, how the change could affect their claims, and whether they retained a residual claim under the new ordinance. View "Shaw v. Metropolitan Government of Nashville" on Justia Law
Phillips v. Hatfield
The Supreme Court reversed the decision of the court of appeals affirming the decision of the trial court enjoining Defendant's proposal to build a structure for the operation of a retail business, holding that restrictive covenants executed and recorded by the developers of a subdivision after they had sold the parties' lots did not apply to Defendant's property.The developers in this case platted a subdivision and sold the majority of lots with time-limited restrictions against non-residential use stated in the deeds that conveyed the lots. The developers then recorded a declaration of non-time-limited restrictive covenants, including a restriction against non-residential use, purporting to apply to all lots in the subdivision. Years later, Defendant purchased lots and proposed a commercial use of the property. Plaintiffs brought a declaratory judgment action seeking to enforce the restriction against non-residential use. The trial court enjoined Defendant from constructing any retail business or commercial enterprise on his property. The Supreme Court reversed, holding (1) the developers lacked the authority to impose the declaration's restrictions as a servitude upon Defendant's property because they did not own the property when they executed and recorded those restrictive covenants; and (2) the developers' re-acquisition and re-sale of some of Defendant's lots after the recording of the declaration did not retroactively restrict Defendant's property through the declaration. View "Phillips v. Hatfield" on Justia Law
Trent v. Mountain Commerce Bank
The Supreme Court affirmed the judgments of the trial court and the court of appeals denying reformation of a quitclaim deed, holding that equitable reformation was not available when reformation would benefit parties with constructive notice of a title defect but harm the rights of creditors with recorded judgment liens.A husband and wife quitclaimed parcels of real property. The wife, who owned the property with her husband as tenants by the entirety, was omitted as grantor on one of the quitclaim deeds. Later, two banks obtained judgments against the husband and wife. When the property was sold, the purchasers discovered that the property was subject to the wife's retained ownership interest and the banks' recorded judgment liens. The wife signed a quitclaim deed of correction. The purchasers then filed a declaratory judgment action asking to the trial court to hold, based on mutual mistake, that the corrected quitclaim deed reformed the original quitclaim deed. The court denied reformation. The Supreme Court affirmed, holding that because reforming the quitclaim deed would deprive the banks of their recorded judgment liens and benefit the purchasers and their lender, who acquired the property with constructive notice of the banks' recorded judgment liens and the wife's remaining interest in the property, the purchasers were not entitled to reformation. View "Trent v. Mountain Commerce Bank" on Justia Law
Dialysis Clinic, Inc. v. Medley
The Supreme Court affirmed the ruling of the trial court that documents containing communications between a corporation’s legal counsel and a property management property were protected under the attorney-client privilege, holding that the attorney-client privilege applied to the documents in this case.After acquiring commercial properties, the corporation filed unlawful detainer actions against the properties’ tenants. The tenants sought documents from the property management company that managed the corporation’s properties, but the corporation and property management company objected to producing the documents. The trial court concluded that the property management was an agent of the corporation, and therefore, the attorney-client privilege applied. The Supreme Court affirmed on different grounds, holding (1) the attorney-client privilege extends to communications between an entity’s legal counsel and a third-party non employee of the entity if the non employee is the functional equivalent of the entity’s employee; (2) the property management company in this case was the functional equivalent of the corporation’s employee; and (3) the communications related to the subject matter of counsel’s representation of the corporation and were made with the intention that they would be kept confidential. View "Dialysis Clinic, Inc. v. Medley" on Justia Law
Embraer Aircraft Maintenance Services, Inc. v. Aerocentury Corp.
The Supreme Court answered a question certified to it by a federal court regarding whether a repairman’s lien arising under Tenn. Code Ann. 66-19-101 may be enforced by a method other than attachment of the lien-subject property itself. Here, the lien-subject property was sold to a purchaser and was no longer available for attachment during the pendency of the federal court action, so the lien holder sought to reach the proceeds from the sale of the lien-subject property. The Supreme Court answered by holding that Tenn. Code Ann. 66-21-101, which addresses enforcement of a statutory lien by original attachment where the lien statute does not specify a method to enforce the lien, is not a statutory vehicle for the lien holder to reach the proceeds from the sale of the lien-subject property and neither provides for nor excludes other remedies that may be available to the lien holder to reach the proceeds from the sale of the lien-subject property. View "Embraer Aircraft Maintenance Services, Inc. v. Aerocentury Corp." on Justia Law
Cracker Barrel Old Country Store, Inc., et al. v. Epperson, et al.
Cracker Barrel Old Country Store, Inc., and Cracker Barrel Associates, LLC, (collectively “Plaintiffs”) owned certain real property on Sidco Drive in Davidson County. Richard Epperson and Timothy Causey (collectively “Defendants”) owned adjoining property. Both parcels were subject to a Declaration of Reciprocal Rights and Easements and Restrictive Covenants (“Declaration”), created by the original developer of these two parcels and several others in the same development. In April 2005, Defendants submitted to the Nashville/Davidson County Metropolitan Council a proposal to expand the building on their property. Upon learning of the plan, Plaintiffs notified Defendants that they believed the new construction would violate covenants 1(a), 2, and 3 of the Declaration, granting mutual vehicular easements to the adjoining owners and prohibiting obstruction to traffic flow. Defendants disagreed and persisted in seeking approval for their plan. In August, Plaintiffs filed suit to try and stop Defendants' building plans. The trial court ultimately granted Plaintiffs’ motion for temporary injunctive relief. On October 21, 2005, Plaintiffs filed a Motion for Costs and Expenses, seeking almost $62,000 in attorney fees to that point. The ultimately resolved the substantive issues of the lawsuit and on January 30, 2006, the trial court entered an Agreed Judgment and Permanent Injunction, which permanently enjoined Defendants from expanding the building on their property. With regard to fees, the parties agreed that they would submit the fee matter to non-binding mediation. After the parties failed to reach an agreement, Plaintiffs renewed their motion for costs and expenses, requesting $3,913.75 in costs and expenses and a total of $117,334.50 in attorney fees. In their response to Plaintiffs’ motion, Defendants again asserted that Plaintiffs were not entitled to recover attorney fees because the Declaration did not expressly provide for their recovery. The trial court ultimately denied Plaintiffs’ request for attorney fees, explaining that no authority presented supported a finding that the contractual language of Paragraph 9 of the Declaration created a right to recover attorney fees. On appeal, the Court of Appeals affirmed the trial court’s denial of attorney fees. The Tennessee Supreme Court granted Plaintiffs’ application for review to clarify the application of the American rule regarding attorney fees to the language in the Declaration, and affirmed the Court of Appeals. View "Cracker Barrel Old Country Store, Inc., et al. v. Epperson, et al." on Justia Law
Mortgage Elec. Registration Sys., Inc. v. Ditto
Mortgage Electronic Registration Systems, Inc. (MERS) brought this action to set aside a tax sale of real property, arguing that the county’s failure to provide it with notice of the sale violated his right to due process. The purchaser of the real property (Defendant) moved for judgment on the pleadings, asserting that MERS did not tender payment of the sale price plus the accrued taxes before bringing suit, as is statutorily required in a suit challenging the validity of a tax sale, and that MERS did not have a protected interest in the subject property. The trial court granted Defendant’s motion, concluding that MERS did not have an interest in the property. The Court of Appeals on the grounds that MERS lacked standing to file suit. The Supreme Court affirmed on different grounds, holding (1) MERS was not required to tender payment before filing this lawsuit; and (2) MERS acquired no protected interest in the subject property, and therefore, its due process rights were not violated by the county’s failure to notify it of the tax foreclosure proceedings or the tax sale. View "Mortgage Elec. Registration Sys., Inc. v. Ditto" on Justia Law
Johnson v. Hopkins
Landlords brought an unlawful detainer action against Tenants to regain possession of the premises and recoup damages. The general sessions court later entered a default judgment granting Landlords possession of the property and a $42,500 judgment for past due rent and attorneys' fees. Tenants filed a notice of appeal and posted an appeal bond by depositing $250 cash with the clerk of court. Landlords filed a motion to dismiss, arguing that Tenants violated Tenn. Code Ann. 29-18-130(b)(2) by failing to post a bond equal to one year's rent. The circuit court denied the motion, concluding that a bond for one year's rent was unnecessary because Tenants had already surrendered possession of the property and vacated the premises. The Supreme Court affirmed the circuit court's denial of Landlords' motion to dismiss, holding that the circuit court did not err in determining that section 29-18-130(b)(2) does not require a tenant who has surrendered possession of the property to post a bond for one year's rent when appealing an adverse judgment of the general sessions court in an unlawful detainer action. View "Johnson v. Hopkins" on Justia Law
Hughes v. New Life Dev. Corp.
After the death of the president of the original corporate developer of a residential development, a successor developer purchased the property with the intent to continue to develop it. Homeowners filed suit, alleging the successor developer's new development plan violated restrictive covenants. The court of appeals remanded on the question of whether a general plan of development, or the plat for the subdivision, gave rise to certain implied restrictive covenants. Meanwhile, the homeowners' association amended its charter and the restrictive covenants, which the homeowners challenged. The trial court granted the successor developer summary judgment on all claims in both suits. The court of appeals remanded with directions to determine whether the amendments were reasonable and whether the plat supported the existence of implied restrictive covenants. The successor developer appealed, contending that Tennessee law did not support the court of appeals' reasonableness inquiry and that the plat provided no basis for the existence of implied restrictive covenants. The Supreme Court held that the amendments were properly adopted but found that there was no basis for implied restrictive covenants arising from a general plan of development or from the plat, thus vacating the portion of the court of appeals' judgment remanding the case. View "Hughes v. New Life Dev. Corp." on Justia Law
Ready Mix, USA, LLC v. Jefferson County
Jefferson County enacted a comprehensive zoning ordinance limiting the use of certain property, including Plaintiff's property, to agricultural purposes. Before the passage of the ordinance, Plaintiff undertook various activities designed to establish business operations for its property. When the County issued a stop work order, Plaintiff, without first receiving a decision from the County's board of zoning appeals, filed a declaratory judgment action arguing that the portion of the property not previously subject to zoning qualified as a pre-existing non-conforming use. The trial court (1) concluded Plaintiff was not required to exhaust its administrative remedies, and (2) ruled that the business activities on the property qualified for protection under Tenn. Code Ann. 31-7-208. The court of appeals set the judgment aside, holding that Plaintiff had failed to exhaust its administrative remedies. The Supreme Court reversed and reinstated the judgment of the trial court, holding (1) the trial court did not err by ruling that Plaintiff was not required to exhaust the administrative remedies; and (2) the evidence did not preponderate against the trial court's finding that Plaintiff had established operations sufficient to qualify for protection under section 13-7-208. View "Ready Mix, USA, LLC v. Jefferson County" on Justia Law