Justia Real Estate & Property Law Opinion Summaries

A hotel in the Town of Newburgh, New York, agreed to provide long-term housing to asylum seekers as part of a program initiated by New York City. In response, the Town alleged that the hotel’s actions violated local zoning and occupancy ordinances, which limited hotel stays to transient guests for no more than 30 days. The Town inspected the hotel, found modifications suggesting long-term use, and filed suit in the Supreme Court of the State of New York, Orange County, seeking to enjoin the hotel from housing asylum seekers for extended periods. The state court issued a temporary restraining order, but allowed the asylum seekers already present to remain pending further orders.The hotel removed the case to the United States District Court for the Southern District of New York, arguing that the Town’s enforcement was racially motivated and violated Title II of the Civil Rights Act of 1964, thus justifying removal under 28 U.S.C. § 1443(1). The district court found that removal was improper because the hotel had not sufficiently pleaded grounds for removal under § 1443(1), and remanded the case to state court.While the hotel’s appeal of the remand order was pending before the United States Court of Appeals for the Second Circuit, the underlying state court action was discontinued with prejudice after the asylum seekers left and the City ended its program. The Second Circuit determined that, because the state court case was permanently terminated, there was no longer a live controversy regarding removal. The court held the appeal was moot and, following standard practice when mootness occurs through no fault of the appellant, vacated the district court’s remand order and dismissed the appeal. View "Town of Newburgh v. Newburgh EOM LLC" on Justia Law

Wildlife Preserves, Inc., a non-profit conservation organization, conveyed land comprising most of the Sunken Forest Preserve—a rare maritime holly forest on Fire Island, New York—to the United States government in the 1950s and 1960s. The deeds included restrictions requiring the land to be maintained in its natural state and operated as a preserve for wildlife, prohibiting activities such as hunting, trapping, and any actions that might adversely affect the environment or animal population. Over time, the National Park Service managed the property as part of the Fire Island National Seashore. In response to a significant increase in white-tailed deer, which threatened local flora and fauna, the government adopted a 2016 management plan involving exclusion fencing and deer population reduction within the Sunken Forest.Wildlife Preserves filed suit in the United States District Court for the Eastern District of New York, arguing that the 2016 plan violated the deed restrictions and triggered a reversionary interest in the property under New York law. The district court denied Wildlife Preserves’ motion for summary judgment and granted the government’s cross-motion, holding that the suit was time-barred under the Quiet Title Act’s statute of limitations due to a prior fence constructed in 1967.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s decision de novo. The Second Circuit affirmed the district court’s judgment, but on alternative grounds. The court held that, under New York law, the 2016 management plan did not violate the deed restrictions. The court reasoned that the plan’s fencing and deer reduction measures were consistent with the requirement to maintain the land in its natural state and operate it as a wildlife preserve, and that the restrictions must be strictly construed against the grantor. Thus, summary judgment for the government was affirmed. View "Wildlife Preserves v. Romero" on Justia Law

A construction worker employed by a subcontractor was injured when a scaffold collapsed at a Manhattan worksite. The worker sued the property owner and general contractor in New York Supreme Court, alleging negligence and violations of state labor laws. The owner’s insurer, Liberty Insurance Corporation, sought a declaration in federal court that the subcontractor’s insurer, Hudson Excess Insurance Company, was obligated to defend and indemnify the owner as an additional insured under the subcontractor’s commercial general liability policy. The subcontract between the general contractor and the subcontractor required the latter to provide insurance coverage for the owner and general contractor.In the New York Supreme Court, summary judgment was granted to the injured worker on some claims, while other claims remained pending. The court denied summary judgment to the owner on its contractual indemnification claim against the subcontractor, finding factual questions about the scope of the subcontractor’s work. Later, after the federal district court’s decision, the state court dismissed all third-party claims against the subcontractor, finding the indemnity provision in the subcontract invalid due to lack of a meeting of the minds.The United States Court of Appeals for the Second Circuit reviewed the case. It affirmed the district court’s finding, after a bench trial on stipulated facts, that the subcontractor’s actions proximately caused the worker’s injuries and that Hudson owed a duty to indemnify the owner under the policy. The Second Circuit held that the later state court decision did not alter this result. However, the Second Circuit reversed the district court’s award of attorney’s fees to Liberty, holding that Hudson was entitled to a statutory safe harbor under New York Insurance Law, and thus was not required to pay Liberty’s attorney’s fees for the federal action. View "Liberty Insurance Corp. v. Hudson Excess Insurance Co." on Justia Law

A group of landlords and property owners in New York's Hudson Valley region challenged the constitutionality of the 2023 amendments to New York's rent stabilization law. These amendments, known as the Vacancy Provisions, allow municipalities to impose civil penalties on landlords who do not cooperate with vacancy surveys and to presume zero vacancies for nonresponsive landlords. The landlords argued that these provisions authorize warrantless searches of their records without an opportunity to challenge the searches' scope, violating the Fourth Amendment, and that they prevent landlords from contesting vacancy calculations, violating procedural due process under the Fourteenth Amendment.The United States District Court for the Northern District of New York denied the landlords' motion for a preliminary injunction and dismissed their complaint for failure to state a claim. The landlords appealed the decision.The United States Court of Appeals for the Second Circuit affirmed the district court's judgment. The court held that the Vacancy Provisions are facially valid under the Fourth Amendment because landlords have adequate pre-compliance review available under Article 78 of the New York Civil Practice Law and Rules. The court also found that the searches authorized by the Vacancy Provisions are not unreasonable in every situation, given the ample notice and minimal penalties involved. Additionally, the court held that the Vacancy Provisions do not violate procedural due process because landlords can contest vacancy calculations at public hearings before rent stabilization is adopted and through Article 78 after adoption. View "Hudson Shore v. State of New York" on Justia Law

Kenneth Michael Sikorsky purchased a property in Newburgh, New York, in 2006 but fell behind on his property taxes, leading to foreclosure by the City of Newburgh in 2012. Sikorsky and the City later agreed on a contract for Sikorsky to repurchase the property, but the sale fell through when Sikorsky failed to make the required payments. The City subsequently sold the property for $350,500, significantly more than the $92,786.24 Sikorsky owed in taxes, but did not return the surplus to Sikorsky.The United States District Court for the Southern District of New York dismissed Sikorsky's pro se complaint, which alleged a constitutional taking and violations of New York state laws. Sikorsky, now represented by counsel, appealed the dismissal, arguing that he had stated a valid claim under the Takings Clause of the Fifth Amendment and that he had a right to recover under new New York state laws enacted during the appeal.The United States Court of Appeals for the Second Circuit reviewed the case and concluded that Sikorsky had indeed stated a claim for a constitutional taking against the City of Newburgh and Jeremy Kaufman. The court found that the new New York laws did not provide Sikorsky with a remedy, as they only applied to properties sold on or after May 25, 2023, or to those with active proceedings under N.Y. CPLR § 7803(1) on the effective date of the act. Since Sikorsky's property was sold in June 2021 and he had not initiated an Article 78 proceeding, he lacked a local remedy.The Second Circuit vacated the District Court's dismissal of Sikorsky's constitutional taking claims against the City of Newburgh and Jeremy Kaufman and remanded the case for further proceedings consistent with its opinion. View "Sikorsky v. City of Newburgh" on Justia Law

In 2020, Article 13 LLC filed a quiet title action against LaSalle National Bank Association (now U.S. Bank) to discharge a mortgage as time-barred, arguing that the statute of limitations had expired since a foreclosure action was commenced in 2007. U.S. Bank contended that the statute of limitations had not expired because the 2007 foreclosure action was invalid to accelerate the mortgage debt. The district court found a disputed issue of material fact regarding the validity of the 2007 foreclosure action and denied both parties' motions for summary judgment.Following the district court's ruling, New York enacted the Foreclosure Abuse Prevention Act (FAPA), which bars the defense of the invalidity of prior accelerations of mortgages in quiet title actions. Article 13 LLC moved for reconsideration, and the district court applied FAPA retroactively, granting summary judgment in favor of Article 13 LLC. U.S. Bank appealed, arguing that FAPA should not be applied retroactively and that such retroactivity would be unconstitutional under both the New York and U.S. Constitutions.The United States Court of Appeals for the Second Circuit reviewed the case and determined that the questions of FAPA's retroactivity and its constitutionality under the New York Constitution were novel and essential to the resolution of the appeal. Consequently, the Second Circuit certified two questions to the New York Court of Appeals: whether Section 7 of FAPA applies to foreclosure actions commenced before the statute's enactment, and whether FAPA's retroactive application violates substantive and procedural due process under the New York Constitution. The Second Circuit deferred its resolution of the appeal pending the New York Court of Appeals' response. View "Article 13 LLC v. Lasalle Nat'l Bank Ass'n" on Justia Law

Eight Black homeowners in New York City sued a lending institution and affiliated entities, alleging that the lender violated federal, state, and city antidiscrimination laws. They claimed the lender made mortgage refinancing loans with high default interest rates to Black and Latino individuals in poor neighborhoods who had no income, no assets, and low credit scores but high equity in their homes, and then foreclosed on the loans when the individuals defaulted. The United States District Court for the Eastern District of New York entered a final judgment awarding four homeowners $722,044 in compensatory damages and four others nominal damages.The lender appealed, arguing that the district court erred in three ways: by finding the homeowners' claims timely under the doctrine of equitable tolling and the discovery rule of accrual, in its instructions to the jury on disparate impact and disparate treatment theories of discrimination, and in holding that a release-of-claims provision in a loan modification agreement signed by two homeowners was unenforceable as a matter of law.The United States Court of Appeals for the Second Circuit reviewed the case. The court concluded that the district court did not abuse its discretion in holding that the homeowners' claims were timely under the doctrine of equitable tolling. The court also found no error in the district court's instructions to the jury on disparate impact and disparate treatment theories of discrimination. Finally, the court agreed that the release-of-claims provision in the loan modification agreement was unenforceable as a matter of law. Accordingly, the Second Circuit affirmed the judgment of the district court. View "Saint-Jean v. Emigrant Mortg. Co., Inc." on Justia Law

Plaintiff, individually and on behalf of others similarly situated, filed suit against defendant, alleging violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiff alleged that defendant failed to provide the "amount of the debt" within five days after an initial communication with a consumer in connection with the collection of a debt, as required by section 1692g. The court declined to hold that a mortgage foreclosure complaint was an initial communication with a consumer in connection with the collection debt. In this case, the court concluded that neither the Foreclosure Complaint nor the July Letter were initial communications giving rise to the requirements of section 1692g(a). The court held, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt. The Payoff Statement included a "Total Amount Due," but that amount may have included unspecified "fees, costs, additional payments, and/or escrow disbursements" that were not yet due at the time the statement was issued. The court explained that a statement was incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase. Accordingly, the court vacated and remanded for further proceedings. View "Carlin v. Davidson Fink LLP" on Justia Law

Claimants-Appellants appealed an award of summary judgment which forfeited to the United States various claimants’ interests in multiple properties, including a 36‐story office building located at 650 Fifth Avenue in Manhattan, real properties in Maryland, Texas, California, Virginia, and New York, and the contents of several bank accounts. Also at issue is the September 9, 2013 order denying a motion to suppress evidence seized from the Alavi Foundation’s and the 650 Fifth Avenue Company’s office. The court vacated the judgment as to Claimants Alavi Foundation and the 650 Fifth Ave. Co., of which Alavi is a 60% owner because there are material issues of fact as to whether the Alavi Foundation knew that Assa Corporation, its partner in the 650 Fifth Ave. Co. Partnership, continued after 1995, to be owned or controlled by Bank Melli Iran, which is itself owned or controlled by the Government of Iran, a designated threat to this nation’s national security; the district court erred in sua sponte considering and rejecting claimants’ possible statute of limitations defense without affording notice and a reasonable time to respond; in rejecting claimants’ motion to suppress evidence seized pursuant to a challenged warrant, the district court erred in ruling that claimants’ civil discovery obligations obviate the need for any Fourth Amendment analysis; and the district court erred in its alternative ruling that every item of unlawfully seized evidence would have been inevitably discovered. Accordingly, the court vacated and remanded for further proceedings. View "In re 650 Fifth Avenue and Related Properties" on Justia Law

This case stems from a dispute between the parties regarding the ownership of a 7.35 carat pear-shaped diamond. WGDC consigned the diamond to celebrity fashion stylist, Derek Khan. Khan, without WGDCʹs permission, subsequently sold the diamond to a third party. Through a series of transfers, the diamond ultimately came into the possession of the Zaretskys. The district court concluded that Khan had the power to transfer WGDCʹs rights to the diamond under NYUCC 2-403(2) solely because, by his occupation, he clearly held himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. Therefore, the district court found that Khan qualified as a merchant. Pursuant to section 2-403(2), Khan had the power to transfer all rights in a "good" given to him by an "entruster" if he was at the time a merchant who "deals in goods of that kind." However, the court concluded that, although the New York Court of Appeals has not explicitly defined ʺdeal[ing] in goods of that kind,ʺ persuasive authority from New York courts and elsewhere leads the court to conclude that the phrase means the regular sale of the kind of goods at issue in the case; applying that definition, the court concluded that the Zaretskys have not raised a triable issue of fact as to Khanʹs capacity to transfer title under section 2‐403(2) because there is no record evidence that he regularly sold diamonds or other high‐end jewelry; and the Zaretskysʹ remaining arguments - regarding the timeliness of this appeal, whether the consignment is a ʺtransaction of purchaseʺ under section 2‐403(1) of the NYUCC, and the defense of laches - are without merit. Therefore, the court directed the district court to enter summary judgment for WGDC on remand. View "Zaretsky v. William Goldberg Diamond Corp." on Justia Law