Justia Real Estate & Property Law Opinion Summaries

Articles Posted in US Court of Appeals for the Sixth Circuit
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RLR owns land on the Little Pigeon River. Tract 1 had a private resort and parking spaces. Tract 2 had a duplex building. The city decided to build a pedestrian walkway along the River, going through both tracts, and filed a petition for condemnation of a permanent easement. The easement would make some of the parking spaces on Tract 1 unusable. The petition also sought temporary construction easements, including one on which the city would construct Tract 2 parking spaces to replace those lost on Tract 1. RLR argued that the compensation for the loss of the spaces was too low and that the plan of building parking spaces on Tract 2 was a private, rather than public, purpose. The court ruled in favor of the city, which took possession of the land and built the walkway, but never built the parking spots. Before valuation proceedings, RLR filed suit in federal court, alleging an unlawful taking under the Fifth and Fourteenth Amendments and 42 U.S.C. 1983. The district court held that it lacked subject-matter jurisdiction under the Rooker-Feldman doctrine because the source of RLR’s injury was the state court’s order. The Sixth Circuit affirmed, rejecting an argument that the Supreme Court’s 2005 Exxon decision abrogated Sixth Circuit precedent applying Rooker-Feldman to interlocutory orders. The state-court order of possession counts as a judgment under Rooker-Feldman. View "RLR Investments, LLC v. City of Pigeon Forge" on Justia Law

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In 1998, Old Ben Coal Company conveyed its rights to the methane gas in various coal reserves to Illinois Methane. A “Delay Rental Obligation” required the owner of the coal estate to pay Methane rent while it mined coal in areas that Methane had not yet exploited. A deed, including the Delay Rental Obligation was recorded. A few years later, Old Ben filed for bankruptcy and purported to sell its coal interests “free and clear of any and all Encumbrances” to Alliance. Old Ben did not notify Methane before the bankruptcy sale but merely circulated notice by publication in several newspapers. Alliance later sought a permit to mine coal. Methane eventually sought to collect rent in Illinois state court. Alliance argued that Old Ben’s “free and clear” sale had extinguished Methane’s interest.The bankruptcy court held that Alliance was not entitled to an injunction. The district court and Sixth Circuit affirmed. The deed indicates that the Delay Rental Obligation runs with the land and binds successors; it “is not simply a personal financial obligation between” Old Ben and Methane. The covenant directly affects the value of the coal and methane estates. Methane was a known party with a known, present, and vested interest in real property, entitled to more than publication notice. View "Alliance WOR Properties, LLC v. Illinois Methane, LLC" on Justia Law

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The Benalcazars purchased 43 acres in Genoa Township in 2001. The property sits at the northern end of the Township’s more developed areas and abuts the Hoover Reservoir. The parcel was zoned as Rural Residential; development would have required separate septic systems, clear-cutting, and multiple driveways. In 2018, the Benalcazars obtained rezoning of the property to a Planned Residential District, which permits higher density development. Township residents approved a referendum that prevented the amendment from taking effect, O.R.C. 519.12(H).The Benalcazars sued. In a settlement, the Township agreed to change the zoning designation; the Benalcazars agreed to reduce the proposed development from 64 homes to 56 homes, to provide more open space, and to increase the width of some lots. O.R.C. 505.07 provides “Notwithstanding . . . any vote of the electors on a petition for zoning referendum … a township may settle any court action by a consent decree or court-approved settlement agreement which may include an agreement to rezone.” The district court permitted objectors to intervene, dismissed the Benalcazars’ due process claims, but ruled that the Benalcazars stated a plausible equal protection claim, and approved the consent decree. The Sixth Circuit affirmed. The Benalcazars’ due process and equal protection claims are not “frivolous” but “arguable.” The district court had subject-matter jurisdiction and had the authority to approve a settlement. No other merits inquiry was required. View "Benalcazar v. Genoa Township" on Justia Law

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In April 2017, a tax foreclosure action was commenced against the then-owner of the Cincinnati property, Davis. The city was named as a defendant. Notice of a May 2018 order for a sheriff’s sale was served on the city on June 1, 2018. During 2017-2018, a building on the property was also the subject of administrative condemnation proceedings. The condemnation decision, dated July 16, 2018, was sent by certified mail to the then-owner, Davis. After the public hearing, but before the decision to demolish the building was made, Plaintiff was the successful bidder at the July 5 sheriff’s sale. A decree confirming the sale entered on July 17. A sheriff’s deed was issued and was recorded in August.Plaintiff was not aware of the demolition decision. On November 14, 2018, the city sent letters to Plaintiff summarizing the public nuisance proceedings and the decision to raze the building, requesting that Plaintiff respond within 10 days The letters were sent via certified mail but were never delivered to Plaintiff. The city made no subsequent efforts to provide notice to Plaintiff.The building was demolished on April 8, 2019. The city demanded $10,515.00 from Plaintiff for the costs of the demolition. The Sixth Circuit affirmed the rejection of Plaintiff’s claims under 42 U.S.C. 1983 and for trespass. Plaintiff was provided with “notice reasonably calculated, under all the circumstances,” of the pendency of the condemnation proceedings. The city did not need to obtain a warrant to demolish a vacant building that had been condemned by administrative proceedings which met due process requirements. View "Keene Group, Inc. v. City of Cincinnati" on Justia Law

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When an Ohio county forecloses on a tax-delinquent, occupied property, it ordinarily sells the property at an auction, keeps proceeds to cover the outstanding taxes, and returns leftover funds to the owner. Ohio municipalities may surrender their tax interest in tax-delinquent vacant properties and transfer clear title to land banks, which may revitalize the property, sell it, or demolish the home to prepare for new neighborhoods. When counties choose the land bank route the owner's surplus equity vanishes.Harrison inherited a partial interest in her mother’s Dayton home, which had a $20,000 property tax delinquency. Montgomery County started foreclosure proceedings. The County Board of Revision transferred the home (estimated fair market value, $22,600) to the county’s land bank. Harrison never received the surplus equity; the statute offers no way to pay it.Harrison filed a purported class action under the Takings Clause. The district court dismissed, citing claim preclusion because Harrison could have raised federal takings claims at several points during the foreclosure process. The Sixth Circuit reversed, noting that federal takings law changed during the operative period. A property owner now may bring section 1983 federal takings claims in federal court “as soon as their property has been taken” without first exhausting state remedies. The Tax Injunction Act, 28 U.S.C. 1341, does not bar the suit; Harrison does not challenge Ohio’s “collection” of delinquent taxes nor seek to halt foreclosures. The court remanded for consideration of the merits. View "Harrison v. Montgomery County" on Justia Law

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The Moore family, individually or in trust, has owned and maintained the 108-acre Hiram, Ohio property since 1813. They have operated a small airport on the Property since 1948. Around 1951, the Township enacted a zoning resolution that zoned the Property as Rural-Residential and classified the airport as a nonconforming use, permitted to continue so long as the use is not abandoned for two years. The airport remained active in varying degrees but its use for ultralight aircraft and hang gliders started recently, and prompted nuisance complaints from neighbors. In 2016, Township officials told Moore that he needed a certificate of nonconforming use to continue the airport’s operations.The Board of Zoning Appeals voted to grant Moore a certificate but imposed several conditions. The Portage County Common Pleas Court modified the conditions. The Ohio Court of Appeals affirmed.While his state court appeal was pending, Moore filed a federal suit, alleging violations of his procedural and substantive due process rights and his equal protection rights under 42 U.S.C. 1983. The Sixth Circuit affirmed that the suit was barred by principles of claim preclusion. There was a prior final, valid decision on the merits by a court of competent jurisdiction; this action involves the same parties; this action raises claims that were or could have been litigated in the Ohio action; and this suit arose out of the transaction or occurrence that was the subject matter of the Ohio action. View "Moore v. Hiram Township" on Justia Law

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To advertise its nearby adult bookstore, Lion’s Den displays a billboard, affixed to a tractor-trailer, on a neighbor’s property. Kentucky’s Billboard Act prohibits such off-site billboards if the advertisement is not securely affixed to the ground, the sign is attached to a mobile structure, and no permit has been obtained. None of these requirements applies to an on-site billboard advertisement. The Act applies equally to commercial and non-commercial speech on billboards.In a First Amendment challenge to the Act, the Sixth Circuit affirmed an injunction, prohibiting the Commonwealth from enforcing its law. The Act regulates commercial and non-commercial speech on content-based grounds by distinguishing between messages concerning on-site activities and those concerning off-site activities. The court applied strict scrutiny and held that the Act is not tailored to achieve Kentucky’s purported interests in safety and aesthetics. Kentucky has offered no reason to believe that on-site signs pose a greater threat to safety than do off-site signs and billboards are a "greater eyesore." View "L.D. Management Co. v. Gray" on Justia Law

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CHKRS leased Friedman’s property and paid $8,500 for an option to purchase by giving 30 days’ notice. With respect to eminent-domain, the lease stated that any money from the City of Dublin was payable to Friedman “until [CHKRS] has procured on the purchase option.” Dublin was constructing a roundabout near the property. Weeks later, Dublin notified the residents that workers would be entering to construct a bike path through the leased property. Dublin initiated a “quick-take” action, adding CHKRS to the suit, and deposited $25,080. with the court. CHKRS emailed Friedman, indicating that CHKRS intended to buy the property. Ohio courts ruled that the email did not “procure” the purchase option and that Friedman was entitled to Dublin’s funds. Dublin began construction. CHKRS sued, citing the driveway's removal. In 2016, the city constructed a new driveway, which CHKRS asserts suffers from design flaws, violates building and traffic codes, creates a hazard, and limits access. CHKRS completed its purchase of the property.CHKRS filed federal litigation, asserting takings and due-process claims, seeking payment for the defective replacement driveway. CHKRS disavowed any attempt to again seek payment for the appropriation of the bike-path easements. The court held that CHKRS lacked Article III standing, reasoning that the state courts had already held that CHKRS lacked a protectable interest in the property.The Sixth Circuit reversed. Article III standing was not the correct doctrine. CHKRS established its standing by alleging a colorable interest in the property for its takings claim. The district court misread Ohio issue-preclusion law in reaching the contrary result. The court affirmed the dismissal of CHKRS’s due-process claims as forfeited. View "CHKRS, LLC v. City of Dublin, Ohio" on Justia Law

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Freed owed $735.43 in taxes ($1,109.06 with penalties) on his property valued at about $97,000. Freed claims he did not know about the debt because he cannot read well. Gratiot County’s treasurer filed an in-rem action under Michigan's General Property Tax Act (GPTA), In a court-ordered foreclosure, the treasurer sold the property to a third party for $42,000. Freed lost his home and all its equity. Freed sued, 42 U.S.C. 1983, citing the Takings Clause and the Eighth Amendment.The district court first held that Michigan’s inverse condemnation process did not provide “reasonable, certain, and adequate” remedies and declined to dismiss the suit under the Tax Injunction Act, which tells district courts not to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had" in state court, 28 U.S.C. 1341. The court reasoned that the TIA did not apply to claims seeking to enjoin defendants from keeping the surplus equity and that Freed was not challenging his tax liability nor trying to stop the state from collecting. The TIA applied to claims seeking to enjoin enforcement of the GPTA and declare it unconstitutional but no adequate state court remedy existed. The court used the same reasoning to reject arguments that comity principles compelled dismissal. After discovery, the district court sua sponte dismissed Freed’s case for lack of subject matter jurisdiction, despite recognizing that it was “doubtful” Freed could win in state court. The Supreme Court subsequently overturned the "exhaustion of state remedies" requirement for takings claims.The Sixth Circuit reversed without addressing the merits of Freed’s claims. Neither the TIA nor comity principles forestall Freed’s suit from proceeding in federal court. View "Freed v. Thomas" on Justia Law

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International, an outdoor advertising company, sought to erect digital billboards in two separate locations within the City of Troy. International's permit and variance applications were denied. International filed suit (42 U.S.C. 1983), alleging that the ordinance granted unfettered discretion and contained unconstitutional content-based restrictions as it exempted from permit requirements certain categories of signs, such as flags and “temporary signs.” During the litigation, Troy amended the Ordinance.The Sixth Circuit remanded. The original Ordinance imposed a prior restraint because the right to display a sign that did not come within an exception as a flag or as a “temporary sign” depended on obtaining either a permit or a variance. The standards for granting a variance contained multiple vague, undefined criteria, such as “public interest,” “general purpose and intent,” “adversely affect[ing],” and “hardship.” Even meeting these criteria did not guarantee a variance; the Board retained discretion to deny it. The amendment, however, rendered the action for declaratory and injunctive relief moot. The severability of the variance provisions rendered moot its claim for damages. The court reinstated a claim that the ordinance imposed content-based restrictions without a compelling government interest for reconsideration under the correct standard. A regulation of commercial speech that is not content-neutral is still subject to strict scrutiny. View "International Outdoor, Inc. v. City of Troy" on Justia Law