Justia Real Estate & Property Law Opinion Summaries

Plaintiffs, Massachusetts residents, bought a three-dwelling in Massachusetts, financing the entire purchase price with two mortgage loans from Plaza Home Mortgage (Plaza). After the collapse of the housing market, Plaintiffs sued Plaza, alleging state common law and statutory violations in making the loans. The district court dismissed for failure to state a claim. The First Circuit Court of Appeals affirmed, holding (1) the district court correctly dismissed Plaintiffs' claim based on Plaza's alleged violation of the Massachusetts covenant of good faith and fair dealing; and (2) Plaintiffs' claim based on a violation of the Massachusetts consumer protection was correctly dismissed as time-barred. View "Latson v. Plaza Home Mortgage, Inc." on Justia Law

In 2006, Plaintiff refinanced the mortgage on her single-family home in Massachusetts. Plaintiff's promissory note was delivered to one party (the lender) and then transferred. The mortgage itself was granted to a different entity, Mortgage Electronic Registration Systems, Inc. (MERS), and later assigned to the foreclosing entity (Aurora). Three days before the rescheduled foreclosure, Plaintiff sued in state court seeking injunctive relief and monetary damages. Aurora removed the case to the federal district court. At issue before the court was how MERS's involvement in the chain of title impacted Aurora's authority to foreclose. The district court resolved this question in favor of Aurora, which then foreclosed on Plaintiff property. Plaintiff appealed. The First Circuit Court of Appeals held that the foreclosure here was not unlawful, as (1) in the circumstances of this case, Plaintiff had standing to contest the validity of the mortgage assignment made by MERS to Aurora; but (2) the MERS framework is faithful to the tenants of mortgage law in Massachusetts and was therefore not unlawful. View "Culhane v. Aurora Loan Servs. of Neb." on Justia Law

Plaintiff filed a pro se complaint against two entities she claimed illegally foreclosed her home once she defaulted on her mortgage payments. The district court dismissed the complaint for failure to state a claim. The court then addressed Plaintiff's request for leave to amend the complaint, finding that an amendment would be futile. The First Circuit Court of Appeals reversed and remanded, holding (1) the complaint stated plausible claims for relief, and therefore, the district court erred in dismissing the complaint in its entirety; and (2) the district court abused its discretion in deciding that it would be futile to allow an amendment to the complaint. View "Juarez v. Select Portfolio Servicing, Inc." on Justia Law

Plaintiffs filed a Chapter 7 bankruptcy petition and sought to surrender their home. When Plaintiffs' mortgage lenders (collectively, Beneficial) refused to foreclose or otherwise take title to the residence, Plaintiffs demanded that the mortgage lien be released. After Beneficial also refused to release the mortgage lien, Plaintiffs began an adversary proceeding claiming a discharge injunction violation. The bankruptcy court found Beneficial did not violate the discharge injunction. The bankruptcy appellate panel affirmed. Plaintiffs appealed, arguing that because the facts of this case so closely mirrored those in Pratt v. General Motors Acceptance Corp., the same result should follow. The First Circuit Court of Appeals affirmed the bankruptcy court's judgment, holding that the bankruptcy court's legal conclusions were correct and that the court did not err in its judgment. View "Canning v. Beneficial Me., Inc." on Justia Law

Taxpayer owned fifteen acres of land in Ludlow, Massachusetts. Taxpayer obtained a commitment from Bank to make a loan to fund development on the land. The commitment stipulated that the loan would be made to Taxpayer or "nominee" and that, if Taxpayer assigned the commitment to a nominee, he would be required to guarantee the loan personally. Taxpayer subsequently transferred title of the property to an LLC he formed. Later, the loan became delinquent, and Bank foreclosed on unsold lots in the development. After selling the lots at auction, Bank filed this interpleader action to determine who had the right to the surplus proceeds. The United States claimed an interest in the fund, as did the town of Ludlow. At issue was who was the "nominee" of Taxpayer for purposes of the federal tax lien that attached to Taxpayer's property. The district court held in favor of the United States, concluding that the LLC was Taxpayer's nominee. The First Circuit Court of Appeals affirmed, holding that the nature of the relationship between Taxpayer pointed to the fact that the LLC was a "legal fiction," and therefore, the district court did not err in concluding that the LLC was Taxpayer's nominee. View "Berkshire Bank v. Town of Ludlow, Mass." on Justia Law

Plaintiff owned a home on Grassy Pond Road in Hopkinton, Rhode Island. The Hopkinton Planning Board granted a developer's application to develop a residential subdivision on a tract adjacent to Plaintiff's land on the condition that Grassy Pond Road be reconfigured and reconstructed. The reconstruction required a permit from the Rhode Island Department of Environmental Management (DEM), which was issued. Plaintiff attempted to appeal the issuance of the permit. In the meantime, the developer sold its land, and the DEM permit expired. The subdivision proposal was subsequently abandoned, and Plaintiff's state-court appeal was dismissed as moot. Plaintiff, however, filed suit in federal district court against the State of Rhode Island, the DEM, the town of Hopkinton, the Board, the developer, and others, alleging various constitutional and pendent state-law claims, including a takings claim. The district court granted Defendants' motions to dismiss, holding, among other things, that it lacked jurisdiction to entertain Plaintiff's takings claim because Plaintiff failed to pursue available state procedures in an endeavor to secure just compensation. The First Circuit Court of affirmed for substantially the reasons limned in the district court's opinion. View "Marek v. State of Rhode Island" on Justia Law

Several years ago, Plaintiffs entered into a fifteen-year lease with Defendant's predecessor in interest (Miller). The lease included a purchase option. After Defendant refused to allow Plaintiffs to exercise the purchase option on the ground that they were in default on their obligations under the lease, Plaintiffs instituted this action, demanding specific performance or damages. The district court granted summary judgment in favor of Plaintiffs and ordered specific performance of the purchase option, determining that Miller had waived a provision which prohibited Plaintiffs from subleasing without prior written permission and that all alleged defaults were inconsequential and immaterial. The First Circuit Court of Appeals affirmed, holding that summary judgment for Plaintiffs was proper, where (1) the district court correctly found that Miller waived the requirement that Plaintiffs obtain written permission before subleasing any portion of the premises; and (2) the district court properly found that Defendant had failed to present evidence of how alleged violations the lease provision requiring them to comply with state and municipal laws harmed her or Miller. View "Bachorz v. Miller-Forslund" on Justia Law

Appellant was among a number of homeowners in multiple states claiming that their mortgage companies wrongfully demanded an increase in flood insurance coverage to levels beyond the amounts required by their mortgages. In this case, the First Circuit Court of Appeals concluded that the pertinent mortgage provision explicitly gave the lender discretion to prescribe the amount of flood insurance. However, the Court held that the district court dismissal of Appellant's complaint must be vacated, as (1) a supplemental document given to Appellant at her real estate closing entitled "Flood Insurance Notification" reasonably may be read to state that the mandatory amount of flood insurance imposed at that time would remain unchanged for the duration of the mortgage; and (2) given the ambiguity as to the Lender's authority to increase the coverage requirement, Appellant was entitled to proceed with her breach of contract and related claims. View "Lass v. Bank of America, N.A." on Justia Law

Plaintiffs purchased a flood insurance policy from Appellee, American Bankers Insurance Company of Florida. Their policy was issued pursuant to a federal program under which private insurers issue and administer standardized flood insurance policies (WYO companies), and all claims are paid by the government. After a flood damaged their home in Rhode Island, including the contents of their basement, Plaintiffs sought compensation. American Bankers disallowed much of the amount claimed, asserting that the contents of Plaintiffs' basement were not covered by their policy. Plaintiffs subsequently brought suit in federal court, arguing that the Declarations Page of their policy created an ambiguity as to the scope of coverage and that, under federal common law and general insurance law principles, this ambiguity should be resolved in their favor. The district court entered summary judgment in favor of American Bankers. The First Circuit Court of Appeals affirmed, holding that Plaintiffs' claim was not remotely a claim on which a WYO company may be required to pay damages. View "McGair v. Am. Bankers Ins. Co. of Fla." on Justia Law

McKenna and his wife, Suzette, refinanced with Wells Fargo, to help pay for his children's college education and granted a mortgage on their residence. On the same day, Wells Fargo provided the McKennas with a disclosure form stating the loan amount and terms. The mortgage was recorded. McKenna died; Suzette fell behind on payments. Under Massachusetts law, if a mortgage contains a "power of sale" (the McKenna mortgage did), the mortgagee may foreclose, without a judgment ordering sale, after a "limited judicial procedure" to establish that the mortgagor is not a member of the armed forces. Wells Fargo successfully brought such a proceeding and sent Suzette a notice of foreclosure sale. Suzette countered by asserting a right to rescind and filing suit to preclude the sale. She claimed that Wells Fargo had provided only one Truth in Lending disclosure statement at the time of the loan rather than two copies, and had understated the finance charge in its Truth in Lending statement by "more than $35.00." The district court dismissed. The First Circuit affirmed. The suit was not timely under the federal Truth in Lending Act, 15 U.S.C. 1635(a), and the complaint did not state claims under the equivalent state law.View "McKenna v. Wells Fargo Bank, N.A." on Justia Law