Justia Real Estate & Property Law Opinion Summaries

Plaintiff is a non-profit, member-owned, water company serving rural areas of Ross County, Ohio. To finance its system, plaintiff borrowed nearly $10.6 million from the USDA. The disputed area of the county includes properties served by the city and properties served by plaintiff. Each has objected to the other's extension of new lines to the area. The district court granted plaintiff summary judgment, finding that the company is protected under the Agriculture Act, 7 U.S.C. 1926(b)(2), based on its obligations under the USDA contract, had a legal right to serve the area under a contract with the county, and did not have unclean hands. The Sixth Circuit affirmed.

Debtor owned one parcel in Wisconsin and three in Michigan. Permanently disabled and unemployed, he obtained and defaulted on mortgages. The bank began foreclosure. Debtor sold one Michigan property and gave all proceeds to the bank, which continued its Wisconsin foreclosure. In the Michigan foreclosure, the bank bid the full amount of the loan (likely more than value) and obtained a deed. Debtor filed a chapter 13 petition before the Wisconsin foreclosure sale. The bank filed a proof of claim and motion for relief from the automatic stay to reverse foreclosure on the Michigan property and proceed with the Wisconsin sale. The bankruptcy court concluded that Debtor owed the bank nothing, so there was no reason to continue the Wisconsin foreclosure. The Sixth Circuit affirmed. The bank made a unilateral mistake by bidding the entire amount of the debt at the Michigan foreclosure sale. The sale may not be invalidated, absent fraud. The bank is required by Michigan law to pay, or credit, Debtor the full amount of its bid and has been paid in full. Pursuant to 11 U.S.C. 558, Debtor is entitled to offset the Michigan sale credit bid against the Wisconsin judgment, satisfying the Wisconsin judgment so that Debtor no longer owes the bank any money.

The debtor filed a voluntary petition under Chapter 11. Prior to expiration of the 120-day deadline to assume or reject nonresidential real property leases provided for under 11 U.S.C. 365, debtor obtained a 90-day extension of time to assume or reject leases, making August 30, 2010, the deadline. On August 13, 2010, the debtor filed a second motion for an extension. The landlord would not consent and, on August 27, the trustee filed a motion to assume the lease. The bankruptcy court held that the deadline set forth in 11 U.S.C. 365(d)(4) for assuming a nonresidential real property lease is satisfied upon the debtor filing a motion to assume the lease. The Sixth Circuit affirmed.

Defendant was convicted of bank fraud (18 U.S.C. 1344) and wire fraud (18 U.S.C. 1343), based a scheme to acquire a house for $1.4 million, intending to resell for a profit. The purchase involved recruiting a third-party with good financial credit to act as nominal purchaser. Defendant and her now-deceased husband provided the straw buyer with $30,000 that she deposited in her bank account, and falsified documents so that she appeared as president of defendants' sales group since 2003, earning a salary of $30,000-to-$40,000 per month. Within months of the purchase, the loan went into default. The lien holder foreclosed and resold the house, resulting in a net loss of $376,070.16. The straw buyer was not prosecuted, but testified without a nonprosecution agreement. The Sixth Circuit affirmed denial of a motion for a new trial. The prosecution's failure to disclose that the straw buyer was testifying without an agreement was not material, for purposes of a "Brady" violation or a claim of ineffective assistance.

A state court issued a judgment in forcible detainer and a notice of eviction, which was executed by defendants. Although the warrant did not mention personal property, the landlord and county attorney advised the officers that the landlord had the right to sell tenant's personal property. Tenant was threatened with arrest for his efforts to prevent removal of his personal property. Officers apparently assisted in removing the property to a truck and sent away state police officers called by the tenant. In tenant's suit under 42 U.S.C. 1983, the district court denied the officers' motion for judgment on qualified immunity grounds. The Sixth Circuit affirmed. The officers' participation amounted to an unconstitutional seizure of property in violation of a clearly established right; there was nothing extraordinary about the situation that entitled the officers to rely on advice given by the county attorney by phone.

Plaintiff filed a voluntary Chapter 13 bankruptcy petition and successfully sought to avoid a lien on her manufactured home held by defendant. The Bankruptcy Appellate Panel and Sixth Circuit affirmed. The mortgage did not originally cover the manufactured home, which was personal property until 2007,when a state court entered an in rem judgment and order of sale converting it to an improvement to real property. After that, the home was covered by the mortgage. The conversion, unlike the mortgage, was involuntary as to the plaintiff, so she had standing under 11 U.S.C. 522(h) to avoid the lien.

Plaintiff's claims against her landlord, on behalf of her children, alleged violations of the disclosure requirements contained in the Residential Lead-Based Paint Hazard Reduction Act of 1992, 42 U.S.C. 4851-4856. The district court dismissed. The Sixth Circuit affirmed. The statute does not provide the children with a cause of action to sue for the violations.

The owners bought property in 1995 and live there with their daughter. It is under the flight paths of runways of the Cleveland Hopkins International Airport. In 2002, the owners filed a class-action mandamus action, seeking to compel the city to initiate appropriation proceedings, claiming that the level and frequency of flights so interfered with their use and enjoyment that the property had been taken for public use without just compensation. The state court dismissed. They tried again in 2008, citing expansion projects. The city removed the case to federal district court, which dismissed with prejudice. The Sixth Circuit reversed and remanded. The district court erred in applying res judicata; the claims based upon the 2004 and 2007 expansions could not have been raised in the 2002 Action and are premised on a new transaction or occurrence distinct from the subject matter of the 2002 Action.

The debtor's property was subject to first and second mortgages with complex histories of assignment involving the defendants. The district court dismissed the chapter 7 trustee's action for declaratory judgment to determine the validity, extent, and priority of defendants' liens and vacated a default judgment entered against one defendant, Wilmington. The Sixth Circuit vacated and remanded in part and affirmed in part. Under 11 U.S.C. 544 and Ky. Rev. Stat. 355.9-102(1)(az)(3), operating together, the trustee's interest as a hypothetical judicial lien creditor is superior to those security interests which are unperfected as of the filing of the petition, so the trustee stated a claim against GMAC. The bankruptcy court must make further factual findings regarding Litton and Bank of New York as to the first mortgage, to determine which was the secured party on the date of the filing of the petition. The record established that Wilmington was not a proper party, having assigned its interest years earlier, and the bankruptcy court acted within its discretion in setting aside the default judgment.

In 1994 the township denied a special permit for construction of a church and related structures, consisting of 220,000 square feet of building area, more than 1,350 parking spaces, and a seating capacity of 4,000 people in the main auditorium/worship center on a 55.8-acre plot zoned for agricultural use. The parties later entered a consent judgment, permitting the church with a number of limitations. Because of growth and a desire to add services, the church moved to reopen the case in 2008 to set aside the consent judgment. The trial court denied the motion. The Sixth Circuit affirmed. After rejecting an argument that the judgment was void under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. 2000cc, the court noted that the changed circumstances on which the church based its Fed. R. Civ. P. 60(b)(5) argument were voluntary and within the church's control. The fact that case law has clarified the law under RLUIPA does not justify reopening the case.