Justia Real Estate & Property Law Opinion Summaries

A railroad company operates lines throughout Indiana, holding various property interests in its corridors, such as easements and fee simple ownership. A telecommunications utility installed fiber optic cables above and below some of these railroad tracks without the railroad’s permission, safety review, or payment of licensing fees required by the railroad. The railroad claimed that under Indiana law, its easements gave it exclusive rights to the airspace and subsurface, including the right to exclude third parties and charge for installations.In the United States District Court for the Southern District of Indiana, the railroad asserted claims including trespass, theft, and unjust enrichment. The district court dismissed all claims related to Illinois sites for lack of personal jurisdiction. For the Indiana properties where the railroad held only easements, the district court ruled that the railroad lacked standing to assert trespass and rent claims, finding that its easements did not necessarily include the right to exclude others from the air or subsurface where there was no interference with railroad operations. The court also held that claims based on older installations were time-barred, determining these did not constitute continuing trespasses under Indiana law.Before the United States Court of Appeals for the Seventh Circuit, the railroad argued its easements included exclusion and licensing rights, and that the installations were continuing trespasses. The Seventh Circuit held that, under Indiana law, railroad easements do not necessarily include the right to exclude third parties from the air or ground below the tracks, nor the right to charge licensing fees for such installations unless the railroad’s operations are disturbed. The court also affirmed that these installations are not continuing trespasses and that claims outside the applicable statute of limitations are barred. The Seventh Circuit affirmed the judgment of the district court. View "CSX Transportation, Inc. v Zayo Group, LLC" on Justia Law

A company operates a pipeline transporting oil and natural gas liquids between the United States and Canada. A portion of this pipeline crosses twelve miles of land within a Native American reservation in northern Wisconsin. In 2013, the company’s rights-of-way over certain parcels of reservation land expired. During the intervening years, the tribal band acquired ownership interests in a number of these parcels. The company continued to operate the pipeline without securing the tribal band’s renewed consent for the necessary easements. Following a breakdown in negotiations, the tribal band filed suit, alleging trespass and public nuisance. The band also pointed to the risk of a pipeline rupture near a river bend where erosion threatened pipeline safety.The United States District Court for the Western District of Wisconsin granted summary judgment for the tribal band on its trespass and unjust enrichment claims, and against the company on its breach-of-contract counterclaim. After a bench trial, the district court awarded the band restitution for past trespass, ordered future disgorgement of profits, and issued an injunction requiring the company to cease operations across the affected parcels within three years and to implement a monitoring and shutdown protocol to abate the alleged nuisance. Both parties appealed; the district court stayed the shutdown portion of the injunction while the appeal was pending.The United States Court of Appeals for the Seventh Circuit affirmed the finding that the company was trespassing on the parcels at issue and that restitution and injunctive relief are appropriate remedies. However, the court vacated the district court’s restitution calculation and the three-year shutdown deadline, remanding for a new determination of remedies that accounts for the public interest and ongoing pipeline reroute efforts. The court also held that federal statutory law displaced the band’s federal common law nuisance claim and vacated the related injunction. View "Bad River Band of the Lake Superior Tribe of Chippewa v Enbridge Energy Company, Inc." on Justia Law

A property owner acquired a Chicago apartment building through foreclosure in February 2024, after the city’s ordinance requiring new owners of foreclosed rental properties to negotiate new 12-month leases with existing tenants and provide a $10,600 relocation fee to those who decline new leases went into effect. Upon acquisition, the owner notified more than 220 tenants of their rights, and at least five tenants declined to sign new leases, requesting the relocation assistance. The property owner filed suit against the City of Chicago, claiming that the ordinance’s relocation fee requirement constituted an unconstitutional taking under the Fifth Amendment.The United States District Court for the Northern District of Illinois reviewed the owner’s complaint, which sought to enjoin enforcement of the ordinance. The court dismissed the complaint, concluding that the ordinance did not violate the Constitution, and the owner declined to amend its pleading before appealing.The United States Court of Appeals for the Seventh Circuit considered whether the ordinance’s relocation assistance requirement amounted to a physical or regulatory taking, or imposed an unconstitutional condition. The court held that the ordinance, which regulates the landlord-tenant relationship and imposes financial obligations similar to permissible rent control schemes, is not a per se physical taking. Applying the Penn Central factors, the court found no regulatory taking, noting the property owner’s lack of allegations regarding economic infeasibility and that the acquisition occurred after the ordinance’s enactment. The court also determined that the unconstitutional conditions doctrine did not apply, as the ordinance directly mandates a fee rather than leveraging a permitting process. The Seventh Circuit affirmed the district court’s dismissal, holding that the ordinance does not violate the Takings Clause. View "BBLI Edison, LLC v. City of Chicago" on Justia Law

Romero owned a home in Chicago but failed to pay property taxes from 2018 to 2021, resulting in Cook County holding a lien on his property. Rather than foreclosing, the county conducted a tax sale, at which Corona Investments acquired a Certificate of Purchase for Romero’s property in November 2021. This certificate gave Corona the right to take title after a waiting period unless Romero redeemed the property by paying the outstanding taxes plus penalty interest. Romero had until October 2024 to redeem, but filed for Chapter 13 bankruptcy one week before the deadline, triggering an automatic stay and preventing Corona from seeking a tax deed.In the United States Bankruptcy Court for the Northern District of Illinois, the judge determined that Corona Investments held a secured claim of $26,134.95 in the bankruptcy proceeding. The bankruptcy court classified Corona's claim as a "tax claim" under 11 U.S.C. § 511(a), which meant that the interest rate on the claim would be governed by applicable nonbankruptcy law. The court found that the relevant rate was 18%, as provided by 35 ILCS 200/21-15 of the Illinois Property Tax Code. The court rejected arguments for applying a lower redemption rate or the rate determined by the "formula approach" from Till v. SCS Credit Corp.The United States Court of Appeals for the Seventh Circuit reviewed the bankruptcy court’s decision. The Seventh Circuit affirmed, holding that a tax sale purchaser’s secured claim qualifies as a “tax claim” under 11 U.S.C. § 511(a), and that the applicable nonbankruptcy law—the Illinois Property Tax Code—provides an 18% annual interest rate for such claims in Cook County. The court also declined to impose sanctions related to briefing errors, concluding they did not materially affect the appeal. View "Romero v Corona Investments, LLC" on Justia Law

Black & Veatch Construction, Inc. contracted The Boldt Company as a subcontractor for the assembly of a windfarm in Illinois. The project quickly encountered delays due to late delivery of turbine parts, unsuitable site conditions, and issues with equipment, for which Boldt provided several written notices to Black & Veatch. Despite these notices, Black & Veatch issued multiple default warnings and ultimately terminated Boldt for cause, taking over the remaining work. Boldt sued, claiming wrongful termination and seeking payment for completed work, while Black & Veatch counterclaimed that Boldt breached by failing to perform on time.The United States District Court for the Northern District of Illinois granted summary judgment in favor of Black & Veatch, ruling that Boldt defaulted by failing to perform on schedule and that Black & Veatch properly terminated the subcontract. At trial, the jury was tasked only with determining damages and awarded Black & Veatch nominal damages of $1. Both parties filed post-trial motions, which the district court denied.Upon appeal, the United States Court of Appeals for the Seventh Circuit affirmed the jury’s nominal damages verdict, finding no reversible error in the district court’s evidentiary rulings or jury instructions. The appellate court also affirmed the district court’s grant of summary judgment as to Boldt’s claims for payment for completed work and for Black & Veatch’s alleged failure to provide adequate construction works. However, the Seventh Circuit reversed the grant of summary judgment on the wrongful termination claim, finding the subcontract ambiguous about whether Boldt was responsible for delays absent specific notice and that material factual disputes remained. The case was remanded for further proceedings on the wrongful termination claim. View "Boldt Company v Black & Veatch Construction, Inc." on Justia Law

An industrial facility in Richmond, Indiana, owned by both private parties and the City of Richmond, caught fire in April 2023 and burned for more than a week. The fire caused the evacuation of nearby residents and allegedly released hazardous substances that damaged hundreds of properties and caused various injuries. Plaintiffs—both individuals and businesses—claimed that the private property owners’ failure to maintain the site and the City’s failure to remediate hazardous conditions after acquiring part of the property led to the fire. The lawsuit sought compensatory and punitive damages under several tort theories, including negligence, nuisance, trespass, and emotional distress.The plaintiffs initially filed their suit in the Wayne County, Indiana Circuit Court, but the defendants removed the action to the United States District Court for the Southern District of Indiana, arguing it qualified as a “mass action” under the Class Action Fairness Act (CAFA), and thus belonged in federal court. The district court, after briefing on whether the action fell within the CAFA “local event or occurrence” exception, concluded that the exception applied. The court found that all claims arose from the single fire event, which occurred in Indiana, and remanded the case to state court for lack of federal subject matter jurisdiction.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s remand order. The court held that the local event or occurrence exception in CAFA is jurisdictional, meaning it can be raised at any time and by the court sua sponte. The appellate court determined that all claims indeed arose from the single fire event and that the exception applied. Therefore, federal jurisdiction was lacking under CAFA. The Seventh Circuit affirmed the district court’s order remanding the case to state court. View "Craig v City of Richmond" on Justia Law

Aberdeen Developers, LLC obtained a $41 million loan secured by a mixed-use building in Chicago. The loan was governed by two agreements: a Loan Agreement and a Cash Management Agreement (CMA). During the COVID-19 pandemic, a major tenant filed for bankruptcy, which under the CMA allowed the loan servicer, LNR Partners, LLC, to trigger a Cash Sweep Event Period. As a result, building income was redirected to a special account controlled by LNR Partners. The dispute arose over how long LNR Partners could retain the excess revenue (Excess Cash Flow) in this account: Aberdeen Developers argued for monthly disbursement, while LNR Partners asserted that it could hold the funds until a specific cure event occurred, which had not and might never happen.The case was initially filed by Aberdeen Developers in Illinois state court, alleging breach of contract. The defendants removed the case to the United States District Court for the Northern District of Illinois. The district court concluded that the relevant agreements unambiguously allowed LNR Partners to retain the Excess Cash Flow until the end of the contract term and dismissed the complaint under Rule 12(b)(6).Upon appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s dismissal de novo. The Seventh Circuit determined that the language in the Loan Agreement and CMA was ambiguous because both parties’ interpretations were reasonable. The court held that ambiguity in the contract meant the case could not be resolved on a motion to dismiss and factual development was required to determine the parties’ intent. The Seventh Circuit therefore reversed the district court’s dismissal and remanded the case for further proceedings. View "Aberdeen Developers, LLC v Wells Fargo Bank, N.A." on Justia Law

A dispute arose between neighbors in Illinois over a property line, with one party, Mr. Barker, seeking to quiet title to land upon which the Boettchers had built a garage. The Boettchers counterclaimed, asserting adverse possession and contesting the property’s boundaries. During this litigation, the Boettchers issued subpoenas to two employees of the United States Department of Agriculture for documents and testimony relating to farm acreage. The Department refused compliance, citing federal regulations, and when the Boettchers would not withdraw the subpoenas, the Department removed only the subpoena proceeding—not the entire case—to federal court under the federal officer removal statute.The Boettchers subsequently attempted to remove the entire state case to federal court, invoking both the general removal statute and federal question jurisdiction, arguing that federal law originally defined the disputed property lines. Mr. Barker moved to remand, arguing that the property dispute was governed by Illinois law. The United States District Court for the Central District of Illinois retained jurisdiction over the subpoena proceeding but remanded the property dispute to state court. The court later granted summary judgment to the Department of Agriculture, quashing the subpoenas.On appeal, the United States Court of Appeals for the Seventh Circuit held that it had jurisdiction to review the remand order under 28 U.S.C. § 1447(d), since federal officer jurisdiction was invoked. The court affirmed the district court’s decision, concluding that the Department’s removal of only the subpoena proceeding was proper under the statute, and that there was no independent federal jurisdiction over the property dispute. The court also held that the district court properly quashed the subpoenas, as neither the state nor federal court had jurisdiction to enforce them against federal employees under the circumstances. The judgment was affirmed. View "Barker v Boettcher" on Justia Law

Several landowners in Indiana, who acquired their properties subject to agreements made in 1959, sought to enroll their land in a federal conservation program. During the process, a title examination revealed that Trunkline Gas Company held easements over their properties, allowing it to construct and maintain pipelines. The landowners contended that Trunkline’s easement was limited to a fixed 66-foot corridor along the existing pipeline, which had been installed in 1960. Trunkline, however, asserted that the original agreements granted it rights to lay additional pipelines anywhere on the properties and to alter the route of the existing pipeline.The landowners filed suit in the United States District Court for the Northern District of Indiana, seeking a declaration that Trunkline’s easement was fixed and limited in scope. Trunkline counterclaimed, seeking confirmation of its broader, unexercised rights. The district court divided the litigation into two phases and, in both, granted partial summary judgment in Trunkline’s favor. The court concluded that the 1959 agreements created a floating or blanket easement, meaning the location for future pipelines was not fixed, and that Indiana law did not allow unexercised, future easement rights to be fixed to a defined location.On appeal, the landowners asked the United States Court of Appeals for the Seventh Circuit to certify a question to the Indiana Supreme Court regarding the fixity of floating easements, or, alternatively, to reverse the district court. The Seventh Circuit declined to certify, finding Indiana law sufficiently clear that unexercised, future rights under a floating easement are not fixed. The court affirmed the district court’s summary judgment, holding that Trunkline’s unexercised easement rights remain unfixed under Indiana law. View "Close Armstrong, LLC v Trunkline Gas Company, LLC" on Justia Law

Jerome and Shaun Cohen operated a Ponzi scheme through their companies, EquityBuild, Inc. and EquityBuild Finance, LLC, from 2010 to 2018. They solicited funds from individual investors and institutional lenders, promising high returns secured by real estate, primarily in Chicago. In reality, the Cohens used new investors’ funds to pay earlier investors and overvalued properties to retain excess capital. By 2018, the scheme collapsed, leaving over $75 million in unpaid obligations. The Securities and Exchange Commission intervened, obtaining a temporary restraining order and having a receiver appointed to liquidate assets and distribute proceeds to victims.The United States District Court for the Northern District of Illinois oversaw the receivership and determined how proceeds from the sale of two properties—7749 South Yates and 5450 South Indiana—should be distributed. Both a group of individual investors and Shatar Capital Partners claimed priority to the proceeds, with Shatar arguing its mortgages were recorded before those of the individual investors. The district court found that Shatar was on inquiry notice of the individual investors’ preexisting interests and thus not entitled to priority, limiting all claimants’ recoveries to their contributed principal, minus any amounts previously received.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s distribution order. The appellate court affirmed, holding that under Illinois law, Shatar was on inquiry notice of the individual investors’ interests in both properties at the time it invested, given multiple red flags about the properties’ financing and EquityBuild’s business model. As a result, the individual investors were entitled to priority in the distribution of proceeds. The court also found Shatar’s challenge to the distribution plan moot, as there were insufficient funds to benefit Shatar after satisfying the investors’ claims. View "Securities and Exchange Commission v. Duff" on Justia Law