Justia Real Estate & Property Law Opinion Summaries

A city in California owned a downtown parking garage known as Garage 5, which was in poor condition and underutilized according to studies conducted in 2019 and 2022. The city had previously adopted a housing plan to identify public land suitable for housing development. In public meetings and study sessions throughout 2021 and 2022, city staff and consultants presented data showing declining demand for public parking and the high cost of necessary repairs to Garage 5. After further study and public comment, the city’s council passed a resolution in December 2022 declaring Garage 5 to be surplus land under the Surplus Land Act, provided that any future development retain at least 75 public parking spaces.The owner of nearby properties, Airport Business Center, filed a petition for writ of mandate and complaint for declaratory relief in Sonoma County Superior Court. The petitioner argued the city had violated the Surplus Land Act by declaring the garage surplus while there was still an ongoing need for public parking and contended that the city’s findings were not supported by the evidence. The Superior Court denied the petition, finding the city’s actions were not arbitrary or capricious, and that there was substantial evidentiary support for the resolution. A temporary stay was granted pending appeal, but the Court of Appeal denied a request for further stay.The California Court of Appeal, First Appellate District, Division Three, reviewed the case. It held that the Surplus Land Act’s requirement that property be “not necessary for the agency’s use” allows a city to designate property as surplus if it is not indispensable for agency operations, even if the property serves a public purpose like parking. The evidence supported the city’s determination, and the findings in the resolution satisfied statutory requirements. The appellate court affirmed the judgment, awarding costs to the city. View "Airport Business Center v. City of Santa Rosa" on Justia Law

A property owner in Los Angeles obtained a density bonus from the city in 2005, allowing him to build one additional housing unit beyond what zoning would otherwise permit, in exchange for agreeing to rent one of the units to low-income households for at least 30 years. This agreement was formalized and recorded against the property in 2006. The owner had previously taken out a mortgage, and the lender recorded its deed of trust against the property in 2005. After the owner defaulted, the lender foreclosed on the property in 2013. Several years later, new owners purchased the property, allegedly unaware of the recorded agreement requiring the low-income rental restriction.Following a notice from the City demanding compliance with the affordable housing agreement, the new owners filed suit in the Superior Court of Los Angeles County, seeking quiet title and declaratory relief. They argued that the affordable housing agreement, recorded after the original deed of trust, was a junior encumbrance extinguished by the foreclosure. The City countered that the agreement was a condition of a building permit and survived foreclosure. The trial court sustained the City’s demurrer without leave to amend, finding that the agreement was a covenant running with the land and survived foreclosure.On appeal, the California Court of Appeal, Second Appellate District, Division One, affirmed the trial court’s judgment. The appellate court held that the affordable housing agreement was equivalent to a “condition attached to a permit” under Government Code section 65009, subdivision (c)(1)(E), and thus survived foreclosure. Permit conditions that have not been timely challenged run with the land and remain enforceable against successor owners, even those who acquire the property through foreclosure. The court concluded that the plaintiffs failed to state a valid claim and were not entitled to amend their complaint. View "Rodriguez v. City of Los Angeles" on Justia Law

The case concerns challenges to groundwater replenishment charges imposed by a water district in a desert region where groundwater is the main source of potable water. The water district operates three areas of benefit (AOBs) and levies replenishment charges on customers who pump significant groundwater. Domestic customers do not pay these charges directly, but their payments for drinking water are allocated to the replenishment funds through the district’s enterprise fund system. Plaintiffs, including a taxpayer association, alleged that the replenishment charges were unconstitutionally structured, resulting in higher rates for certain AOBs and unfair subsidies for others, benefitting large agricultural businesses.The litigation began with a combined petition and class action in the Superior Court of Riverside County, which was dismissed because the court found the validation statutes applied and the statute of limitations had expired. Subsequent reverse validation actions for later fiscal years were timely filed and consolidated. The Superior Court, in rulings by two judges, found the replenishment charges to be unconstitutional taxes because they did not satisfy the requirements of California Constitution Article XIII C, Section 1, subdivision (e)(2). Specifically, the court found that the district failed to show the allocation of replenishment costs bore a fair or reasonable relationship to the burdens or benefits received by each AOB, and thus the charges were not exempt from being classified as taxes. The court awarded substantial refunds to affected ratepayers and enjoined the district from imposing similar unconstitutional charges in the future.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed both the district’s appeal of the remedies and liability findings and the taxpayer association’s cross-appeal on procedural grounds. The appellate court affirmed in full, holding that the replenishment charges were unconstitutional, the remedies were proper, and that the validation statutes applied to these charges, thus barring untimely claims for earlier years. The appellate court also found no error in the trial court’s grant of refund and injunctive relief. View "Howard Jarvis Taxpayers Assn. v. Coachella Valley Water Dist." on Justia Law

A member of the Kuwaiti royal family was defrauded by a Baltimore restaurateur, who convinced her to send nearly $7.8 million under the guise of investing in real estate and restaurant ventures in the United States. The restaurateur used the funds to acquire multiple properties, including a condominium in New York City and a home in Pikesville, Maryland, but secretly held ownership in his own name and for his personal use. After the fraud was uncovered, the investor sued the restaurateur for fraud and sought to impose a constructive trust over the properties purchased with her funds. Around the same time, she attempted to file a notice of lis pendens to protect her interest in the Pikesville property, but the notice was recorded against the wrong property and was thus ineffective.During discovery, the investor learned that World Business Lenders, LLC (WBL) had issued three loans to the restaurateur, each secured by properties acquired with her funds. She then filed suit against WBL in the United States District Court for the District of Maryland, alleging that WBL aided and abetted the restaurateur’s fraud by encumbering the properties with liens, thereby hindering her ability to recover on any judgment. Following a bench trial, the district court found for WBL on two of the loans, but found WBL liable for aiding and abetting fraud in relation to the loan secured by the Pikesville home, awarding compensatory and punitive damages.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s factual findings for clear error and legal conclusions de novo. The appellate court affirmed the district court’s judgment for WBL on the first two loans but reversed as to the Pikesville loan. The Fourth Circuit held that WBL was not willfully blind to the restaurateur’s fraud in any of the loans as a matter of law and remanded with instructions to enter final judgment for WBL on all claims. View "Al-Sabah v. World Business Lenders, LLC" on Justia Law

The plaintiffs, a microbrewery and its owner, operated a seasonal business in a tourist town and became known for engaging in political advocacy. The business applied for various permits to operate both an indoor retail outlet and, later, an outdoor beer garden. Despite being granted permits that included specific conditions—such as restrictions on outdoor operations—the plaintiffs repeatedly violated these conditions, operated without proper permits, and explicitly stated their intention to continue doing so regardless of regulatory decisions. Throughout this period, the owner was vocal in criticizing local officials on social media.After several rounds of permit applications, denials, suspensions, and revocations, the plaintiffs’ most recent permit application for an outdoor beer garden was denied by the county committee, which cited the plaintiffs’ ongoing and willful violations of permit conditions and their declared intent to continue such violations. The plaintiffs appealed administrative actions to the Oneida County Board of Adjustment, which upheld the revocations. Subsequently, the plaintiffs filed a lawsuit in the United States District Court for the Western District of Wisconsin, asserting that the permit denials and revocations constituted retaliation for protected political speech, in violation of the First Amendment. They sought a preliminary injunction to reinstate their permit and prevent further alleged retaliation.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s denial of the preliminary injunction and affirmed it. The Seventh Circuit held that, while the plaintiffs engaged in protected speech and suffered adverse permit actions, they failed to demonstrate a likelihood of success on the merits of their First Amendment retaliation claim. The court concluded that the permit denials and revocations were based on the plaintiffs’ repeated and admitted violations of permit conditions, not on retaliatory motives, and that the plaintiffs offered no evidence of disparate treatment or pretext. View "Minocqua Brewing Company LLC v Hess" on Justia Law

Two homeowners who purchased a residence in a Montana subdivision governed by covenants brought suit against their neighbors and the homeowners’ association after plans were approved for a new home to be built on an adjacent lot. The plaintiffs objected that the proposed construction would obstruct their mountain views. The subdivision’s covenants required that building placement “should take into consideration” neighboring dwellings, with “allowance for views and solar gains.” The association’s design review committee initially approved the plans, then rescinded approval after objections, requesting revised plans showing the plaintiffs’ residence. The defendants did not submit revised plans and ultimately received reinstated approval from the association’s board, which decided to let the parties resolve their dispute independently. The plaintiffs then filed suit seeking injunctive and declaratory relief.The Eighteenth Judicial District Court, Gallatin County, denied the plaintiffs’ request for a temporary restraining order and a preliminary injunction. Subsequently, the court granted summary judgment in favor of the defendants, interpreting the covenants as not creating an enforceable obligation to protect views, and awarded attorney fees and costs to the defendants as prevailing parties.On appeal, the Supreme Court of the State of Montana reviewed whether the denial of preliminary relief should be separately addressed, whether summary judgment was properly granted, and whether attorney fees were correctly awarded. The Supreme Court held that the orders denying preliminary relief had merged into the final judgment and did not require separate review. The Court reversed summary judgment, concluding the covenants created a mandatory obligation to genuinely consider neighboring impacts, including views. The Court found material questions of fact remained as to whether the defendants and the association sufficiently considered the plaintiffs’ views, precluding summary judgment. The attorney fee award was also reversed, as no party was yet prevailing. The case was remanded for further proceedings. View "Waddell v. Studer" on Justia Law

The case concerns a borrower who executed a promissory note and mortgage in 2007, defaulted on the loan in 2009, and faced a foreclosure action that same year by the lender's predecessor. The 2009 foreclosure action included an explicit acceleration of the loan, but the lender’s standing was disputed due to the timing of the assignment of the note and mortgage. The foreclosure case lingered for over a decade, during which the mortgage and note changed hands and were eventually assigned to the current lender. In 2022, the foreclosure action was voluntarily discontinued without prejudice. Shortly thereafter, the borrower brought a quiet title action, contending that the six-year statute of limitations had expired, making further foreclosure unenforceable. The lender then initiated a new foreclosure action, which was also pending.In the Supreme Court of New York County, the lender argued that the loan was never validly accelerated due to lack of standing in the original case. The borrower sought summary judgment, asserting that under the recently enacted Foreclosure Abuse Prevention Act (FAPA), the limitations period had expired. While the motions were pending, FAPA took effect. The Supreme Court found that FAPA applied retroactively, estopped the lender from challenging the validity of the 2009 acceleration, and granted judgment for the borrower, cancelling the mortgage. The Appellate Division unanimously affirmed this decision.The New York Court of Appeals reviewed the case. It held that FAPA’s relevant provisions (sections 4, 7, and 8) apply retroactively to pending actions and do not violate the federal Due Process or Contract Clauses. The Court found that FAPA validly estops the lender from disputing the prior acceleration and that the limitations period had expired, supporting quiet title relief for the borrower. The order of the Appellate Division was affirmed. View "Van Dyke v U.S. Bank, Natl. Assn." on Justia Law

In this case, the dispute centered on a Brooklyn property subject to both senior and junior mortgages. After the original borrower defaulted on the senior mortgage, a loan servicer (Central Mortgage Company) commenced a foreclosure action in 2007 but later discontinued it without prejudice in 2017. Subsequently, Article 13 LLC acquired the junior mortgage and, in 2020, filed a quiet title action in federal court seeking to have the senior mortgage canceled as time-barred under New York’s statute of limitations.The United States District Court for the Eastern District of New York initially found that there were material factual disputes regarding whether the servicer actually held the note at the time it commenced the 2007 foreclosure, denying both parties’ motions for summary judgment. Shortly thereafter, the New York Legislature enacted the Foreclosure Abuse Prevention Act (FAPA), which clarified the statute of limitations for mortgage foreclosures and addressed abusive litigation practices. Article 13 LLC moved for reconsideration, arguing the new law applied retroactively. The district court agreed, concluding that FAPA retroactively applied and precluded the senior mortgage holder from contesting the validity of the prior foreclosure acceleration, and further held that this retroactive effect did not violate due process rights.On appeal, the United States Court of Appeals for the Second Circuit certified two questions to the New York Court of Appeals regarding the retroactive application of FAPA and its consistency with the New York Constitution’s due process protections. The New York Court of Appeals held that FAPA applies to all foreclosure actions in which a final judgment of foreclosure and sale had not been enforced before its effective date, including those pending at the time of enactment. The court further held that FAPA’s retroactive application does not violate substantive or procedural due process under the New York Constitution. View "Article 13 LLC v Ponce De Leon Fed. Bank" on Justia Law

In this case, the Jewetts obtained a mortgage loan in 1999, which was later assigned to U.S. Bank. The Jewetts stopped making payments before March 2016. U.S. Bank sent a notice of right to cure in July 2018 and initiated foreclosure proceedings against the Jewetts in September 2018, also naming Unifund as a party due to its judgment lien on the property.The District Court (Newport, Larson, J.) conducted a bench trial and dismissed U.S. Bank’s foreclosure action without prejudice, finding that U.S. Bank’s notice of default and right to cure did not comply with statutory requirements under 14 M.R.S. § 6111. The court’s order barred U.S. Bank from recovering attorney fees, costs, and certain charges in any future action, but did not expressly bar claims for unaccelerated amounts due under the note. Unifund then moved to alter or amend the judgment, seeking a judgment in favor of the Jewetts to preclude future claims for unaccelerated amounts, but the court denied the motion.The Maine Supreme Judicial Court reviewed the matter de novo. It held that when a foreclosure action is dismissed due to a defective notice of default and right to cure, the dismissal is not on the merits, but claim preclusion applies to any amounts that could have been litigated in the action. The court concluded that the District Court was within its authority to dismiss the case without prejudice and was not required to enter a judgment for the Jewetts or explicitly bar future claims for unaccelerated amounts. The judgment of the District Court was affirmed. View "U.S. Bank, N.A. v. Jewett" on Justia Law

Tenants of two units in a multi-family residential building filed rent escrow complaints in the District Court of Maryland in Prince George’s County, alleging hazardous conditions such as infestations, water damage, and fire risks. The property lacked a valid rental license due to housing code violations. The tenants sought repairs and a return of rent paid during the unlicensed period, arguing that, under Assanah-Carroll v. Law Offices of Edward J. Maher, P.C., they owed no rent while the property was unlicensed and should not have to pay rent into escrow.The District Court ordered the tenants to pay rent into escrow starting September 2023, and dismissed their complaints when they declined to do so. The tenants appealed to the Circuit Court for Prince George’s County. By the time of the appeal, one tenant had vacated, and the landlord had obtained the necessary license and disclaimed any intent to collect rent from the unlicensed period. The circuit court heard the appeal de novo and dismissed it as moot, noting that the landlord was not seeking rent for the unlicensed period.On further review, the Supreme Court of Maryland concluded that no live controversy remained. The tenants no longer had possession of the units, and the landlord had renounced claims for rent during the unlicensed period. The court rejected arguments that collateral consequences or exceptions to the mootness doctrine applied, finding no judgments of possession or damages had been entered and recent legislative changes had altered the statutory framework. Accordingly, the Supreme Court of Maryland dismissed the appeal as moot. View "Wilson v. Tanglewood Venture" on Justia Law