Justia Real Estate & Property Law Opinion Summaries

Boardwalk Apartments, L.C. sued State Auto Property and Casualty Insurance Co. for breach of an insurance policy, contending that State Auto had underpaid on the policy after one of Boardwalk’s eight apartment buildings (Building 1) was destroyed in a fire. In district court, State Auto contended that Boardwalk was underinsured under the policy’s coinsurance provision. Under this provision, Boardwalk’s insurance benefits were reduced if the value of the Boardwalk apartment complex exceeded the policy limit. Before trial, the district court issued two rulings: (1) for purposes of the policy’s coinsurance provision, the value of the apartment complex did not include the cost of complying with laws and ordinances regulating the construction and repair of buildings ("law-and-ordinance costs"); and (2) the district court excluded reference at trial to either the coinsurance provision or the possibility that Boardwalk was underinsured. At trial, the jury valued the Boardwalk complex below the policy limit. Based on this valuation, the district court concluded that Boardwalk was not underinsured under the coinsurance provision. In addition to valuing the apartment complex, the jury found that State Auto had underpaid for the loss of Building 1. As a result, the court awarded damages to Boardwalk. State Auto appealed. After review, the Tenth Circuit concluded: (1) the district court abused its discretion by excluding reference to the coinsurance provision; and (2) incorrectly construed the coinsurance provision. In light of these errors, the Court reversed and remanded for a new trial. View "Boardwalk Apartments v. State Auto Property" on Justia Law

Appellant/cross-appellee OXY USA Inc. appealed the grant of summary judgment to appellees/cross-appellants, a class of plaintiffs represented by David and Donna Schell, and Ron Oliver, on the question of whether their oil and gas leases required OXY to make "free gas" useable for domestic purposes. OXY also appealed: the district court’s certification of plaintiffs' class; the denial of a motion to decertify; and an order to quash the deposition of an absent class member. Plaintiffs cross-appealed the district court's: denial of their motion for attorneys' fees; denial of their motion for litigation expenses; and denial of an incentive award. Notably, plaintiffs also moved to dismiss the appeal as moot. OXY opposed dismissal for mootness, but argued that if the Tenth Circuit found mootness, the Court should vacate the district court’s decision. Appellees/cross-appellants were approximately 2,200 surface owners of Kansas land burdened by oil and gas leases held or operated by OXY, executed separately from approximately 1906 to 2007. The leases contained a "free gas" clause. The clauses weren't identical, but all, in substance, purported to grant the lessor access to free gas for domestic use. All of the plaintiffs who have used free gas obtain their gas from a tap connected directly to a wellhead line. In addition, some members of the plaintiff class (including about half of the current users of free gas) received royalty payments from OXY based on the production of gas on their land. In August 2007, OXY sent letters warning free gas users that their gas may become unsafe to use, either because of high hydrogen sulfide content or low pressure at the wellhead. These letters urged the lessors to convert their houses to an alternative energy source. On August 31, 2007, leaseholders David Schell, Donna Schell, Howard Pickens, and Ron Oliver filed this action on behalf of themselves and others similarly situated, seeking a permanent injunction, a declaratory judgment, and actual damages based on alleged breaches of mineral leases entered into with OXY for failure to supply free usable gas. After review of the matter, the Tenth Circuit held that that OXY’s sale of the oil and gas leases at issue here mooted its appeal; therefore, the Court granted plaintiffs’ motion to dismiss. Nevertheless, the Court concluded that the cross-appeal had not been mooted by this sale, and affirmed the district court’s judgment as to the denial of attorneys’ fees, litigation expenses, and an incentive award. View "Schell v. OXY USA" on Justia Law