Justia Real Estate & Property Law Opinion Summaries

Articles Posted in Washington Supreme Court
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In "King County v. Michael J. Abernathy et al.", the Supreme Court of the State of Washington answered a question certified by the United States District Court for the Western District of Washington. The case involved a dispute over the ownership of a 3.6 mile section of land along the shore of Lake Sammamish, known as the Corridor. In 1887, prior to Washington becoming a state, a railroad company was granted a "right-of-way" to build a railroad over the Corridor. Since then, the Corridor and surrounding shorelands have been used by various parties including individual property owners, the state, and the county. The certified question asked whether a right-of-way approved by the United States Department of the Interior under the General Railroad Right-of-Way Act of 1875 is a conveyance "patented by the United States" under Article XVII, Section 2 of the Washington State Constitution. If the land was "patented" by the federal government, it would have been owned by the railroad and later King County. If the land was not patented, Washington would have owned it at the time of statehood and later conveyed it to private parties, and the shoreland would currently belong to the homeowners, the Abernathys. The Washington Supreme Court held that the right-of-way was an easement and did not constitute a land conveyance patented by the United States. Therefore, the land belonged to Washington at the time of statehood and is presently owned by the homeowners. View "King County v. Abernathy" on Justia Law

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In Washington State, a second-tier subcontractor, Velazquez Framing LLC, was not paid for the work it did on property owned by Cascadia Homes Inc., a general contracting company. High End Construction LLC, who had been contracted by Cascadia, subcontracted the work to Velazquez without informing Cascadia. After completing the work, Velazquez filed a lien for labor and materials without giving prelien notice, which resulted in a dispute over whether prelien notice was required for labor liens under Chapter 60.04 of the Revised Code of Washington (RCW). The Supreme Court of the State of Washington ruled that, based on the plain language of the relevant statutes and legislative history, prelien notice is not required for labor liens. The court noted that while Velazquez could not lien for its materials and equipment without providing prelien notice, it could lien for its labor. The case was remanded to the trial court to determine the value of the labor performed. The court's decision reversed the rulings of the Court of Appeals and the trial court, both of which had concluded that prelien notice was required. View "Velazquez Framing, LLC v. Cascadia Homes, Inc." on Justia Law

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In Washington, a couple, the Lewises, moved into a rental property owned by another couple, the Ridgways. After the Lewises moved out, a dispute arose over the return of their security deposit. The Ridgways claimed the Lewises caused damage to the property and deducted repair costs from the deposit. The Lewises disputed these charges, and the case was sent to arbitration. During arbitration, the Lewises were awarded the full amount of their security deposit, but the Ridgways were given attorney fees under the small claims statute. The Lewises attempted to appeal the arbitration award and a pre-arbitration order granting partial summary judgment to the Ridgways. However, the Lewises did not personally sign their request for a trial de novo, a requirement under court rules and the arbitration statute.The Washington Supreme Court held that the Lewises' request for a trial de novo was ineffective because they did not personally sign the request, as required by the court rule and the arbitration statute. The court also held that, absent a valid request for a trial de novo, the Lewises could not appeal the pre-arbitration order granting partial summary judgment to the Ridgways. The court further stated that the question of who should be considered the prevailing party for the purpose of any attorney fee award needed further consideration, and remanded the case back to the lower court for determination of attorney fees. View "Crossroads Mgmt., LLC v. Ridgway" on Justia Law

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In this case, the Supreme Court of the State of Washington was asked to determine whether a landowner could delegate its duty to protect invitees on its premises from known or obvious dangers to an independent contractor. The case arose from the death of Jeffry Eylander, an employee of an independent contractor, Commercial Industrial Roofing Inc. (CIR), who fell through a skylight while cleaning the roof of a warehouse owned by Prologis Targeted U.S. Logistics Fund and Prologis Management LLC (collectively, Prologis). Eylander's daughter, as personal representative of his estate, sued Prologis for wrongful death, alleging that Prologis had breached its duty of reasonable care to protect Eylander from harm.The Court held that Prologis had reasonably delegated its duty of reasonable care to protect invitees from known or obvious dangers to CIR. The Court found that Prologis had fulfilled its duty by selecting a professional and experienced contractor, CIR, and by requiring CIR to follow all applicable laws, be solely responsible for the health and safety of its employees, and create and post a site-specific safety plan before starting work. Therefore, the Court affirmed the lower court's grant of summary judgment in favor of Prologis. View "Eylander v. Prologis Targeted U.S. Logistics Fund" on Justia Law

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U.S. Bank National Association foreclosed on property owned by real estate company Dalton M, LLC. The bank did not have the right to do that: Dalton M actually owned the property outright, not subject to any lien. Dalton M ended up suing U.S. Bank to quiet title and for damages for slander of title. Dalton M prevailed at trial on both of those claims. The trial court also awarded substantial fees to Dalton M based on the slander of title claim. The Court of Appeals reversed on that claim, holding that Dalton M had failed to prove its “pending sale” element, which wiped out the sole basis for the trial court's fee award. Instead, the Court of Appeals awarded fees to Dalton M on an entirely new theory that no party had pleaded or argued to the trial court and that the trial court had never considered: the theory that U.S. Bank had engaged in extensive prelitigation bad faith conduct not amounting to violation or contempt of any court order or ruling, and that this provided a new equitable exception to Washington’s general rule that each party must bear their own costs of suit. The Washington Supreme Court determined the appellate court's decision violated both the Rules of Appellate Procedure (RAPs) and Washington controlling precedent. The Court of Appeals violated these rules: it sua sponte raised a new issue that was more like an unpleaded claim, that new issue was distinct from issues or theories raised before, resolution of that new issue was not necessary to resolve the questions presented about the claims actually pleaded, and resolution of that new issue depended on facts that the parties never had a chance to develop at trial. The Supreme Court therefore reversed the Court of Appeals’ award of attorney fees. View "Dalton M, LLC v. N. Cascade Tr. Servs., Inc." on Justia Law

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In 1993, respondents Brock and Diane Maslonka purchased land bordering the Pend Oreille River. A dam had been constructed on the river in 1955. The previous owners informed the Maslonkas that the land occasionally flooded. In 2016, the Maslonka sued the Pend Oreille Public Utility District (PUD), alleging its operation of the dam entitled them to damages based on inverse condemnation, trespass, nuisance and negligence. The trial court found the subsequent purchaser rule barred the inverse condemnation claim, and the PUD established a prescriptive easement barring the trespass and nuisance claims. The Court of Appeals reversed, finding the PUD could not benefit from the subsequent purchaser rule because it failed to prove its conduct constituted a taking prior ro the Maslonkas’ purchase. The Washington Supreme Court held that an inverse condemnation claimant must show the subsequent purchaser rule does not bar their suit. Further, an inverse condemnation claimant barred by the subsequent purchaser rule has no viable tort claim if the tort is based ont he’s same government conduct. The Court reversed the Court of Appeals and remanded to the trial court to reinstate its summary judgment orders. View "Maslonka v. Pub. Util. Dist. No. 1 of Pend Oreille County" on Justia Law

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Gary and Jeanette Merritt own four residential properties in Marysville, Washington. Between 2005 and 2007, the Merritts opened five home equity lines of credit (HELOCs), executing five five promissory notes (notes or HELOC agreements) in favor of USAA Federal Savings Bank. The Merritts secured these loans by executing deeds of trust on the properties with USAA as the beneficiary. In November 2012, the Merritts filed for Chapter 7 bankruptcy. The Merritts stopped making their monthly payments on the USAA loans prior to the November 2012 bankruptcy filing. USAA never accelerated any of the loans or acted to foreclose on the properties. In 2020, the Merritts filed four quiet title complaints seeking to remove USAA’s liens on each of the properties. Relying on Edmundson v. Bank of America, NA, 378 P.3d 272 (2016), the Merritts argued that the six-year statute of limitations to enforce the deeds of trust expired six years after February 12, 2013, the day before their bankruptcy discharge. In October 2020, the Merritts moved for summary judgment in each case. In November 2020, the trial court denied each of these motions. In February 2021, USAA moved for summary judgment in each case. USAA argued that the plaintiffs were not entitled to quiet title because the statute of limitations to foreclose on the deeds of trust would not begin to run until the maturity date of each loan, the earliest of which will occur in 2025. The Court of Appeals affirmed the trial court, holding that the the six-year statute of limitations had not begun to run on enforcement of the deeds of trust since none of the loans had yet matured. The issue this case presented for the Washington Supreme Court's review was whether a bankruptcy discharge triggered the statute of limitations to enforce a deed of trust. The Court affirmed the Court of Appeals and the trial court and hold that bankruptcy discharge did not trigger the statute of limitations to enforce a deed of trust. View "Merritt v. USAA Federal Savings Bank" on Justia Law

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The property at issue in this case was a residential home that was purchased in 2007 by Shawn and Stephanie Kurtz. The house was located in a subdivision, which required property owners to pay homeowners association (HOA) assessments to petitioner Copper Creek (Marysville) Homeowners Association. If the assessments were not paid, then Copper Creek was entitled to foreclose on its lien. However, Copper Creek’s lien was “subordinate to any security interest perfected by a first deed of trust or mortgage granted in good faith and for fair value upon such Lot.” The Kurtzes stopped paying their HOA assessments and the home loan in varying times in 2010. The Kurtzes (in the process of divorcing) individually filed for bankruptcy. Neither returned to the house, nor did they make any further payments toward their home loan or their HOA assessments. However, there was no attempt to foreclose on the deed of trust. As a result, the house sat vacant for years and fell into disrepair. The Kurtzes remained the property owners of record and HOA assessments continued to accrue in their names. In 2018, Copper Creek recorded a notice of claim of lien for unpaid HOA assessments, fees, costs, and interest. In January 2019, Copper Creek filed a complaint against the Kurtzes seeking foreclosure on the lien and a custodial receiver for the property. The issue this case presented concerned the statute of limitations to foreclose on a deed of trust securing an installment loan after the borrower receives an order of discharge in bankruptcy. As detailed in Merritt v. USAA Federal Savings Bank, No. 100728-1 (Wash. July 20, 2023), the Washington Supreme Court held that a new foreclosure action on the deed of trust accrues with each missed installment payment, even after the borrower’s personal liability is discharged. Actions on written contracts are subject to a six-year statute of limitations. Therefore, the nonjudicial foreclosure action on the deed of trust in this case was timely commenced as to all unpaid installments within the preceding six years, regardless of the borrowers’ bankruptcy discharge orders. In addition, the Court held the trial court properly exercised its discretion to award fees as an equitable sanction for respondents’ litigation misconduct. View "Copper Creek (Marysville) Homeowners Ass'n v. Kurtz" on Justia Law

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The issues this case presented for the Washington Supreme Court involved the priority of mortgage liens, the scope of RCW 60.04.226, and whether to adopt certain sections of the Restatement (Third) of Property: Mortgages (Am. Law Inst. 1997). Principal among them: whether a senior mortgage holder’s future advances clause maintained priority over an intervening junior mortgage on the same property. The parties and the Court of Appeals referred to future advances and modification of mortgages interchangeably throughout this case. Though similar, these were different mortgages provisions, carried different legal consequences, and were governed by different provisions of the Restatement. The parties and the appeals court applied Restatement § 7.3 to the future advances clause in the instant mortgage documents. Restatement § 2.3 was the provision that governed future advances while Restatement § 7.3 governed mortgage modifications. Applying both Restatement § 7.3 and RCW 60.04.226 to a future advances clause creates a conflict because the statute does not provide a “stop-notice” protection while the Restatement does. The Washington Supreme Court read RCW 60.04.226 as applying only in the construction context. The Court thus reversed the Court of Appeals and remanded to the trial court to determine the correct priority of claims by applying the common law rules outlined in our cases for both future advances and modifications. View "In re Gen. Receivership of EM Prop. Holdings, LLC" on Justia Law

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RCW 49.60.227 permitted a court to strike a racially restrictive, legally unenforceable covenant from the public records and eliminate the covenant from the title. This case concerned what under the statute, striking from the public records and eliminating from the title meant, and whether a court order declaring the covenant struck and void was all that was required or allowed. Alex May sought a declaratory action under former RCW 49.60.227 (2006) to have a racially restrictive covenant voided and physically removed from the title to his property and from the public records. Both the trial court and the Court of Appeals concluded that the statute at issue did not allow the physical removal of the covenant from the title but, instead, allowed only for an order voiding the covenant to be filed with the title. In the interim, the legislature amended RCW 49.60.227, clarifying the procedure under which these covenants were struck and eliminated. The Washington Supreme Court held that the interim amendments in Laws of 2021, chapter 256, section 4 applied, and therefore the Supreme Court did not address the statute under which May initially sought to have the covenants removed. Accordingly, the case was remanded to the trial court for relief under Laws of 2021, chapter 256, section 4. View "In re That Portion of Lots 1 & 2" on Justia Law