Justia Contracts Opinion SummariesArticles Posted in Real Estate Law
Mason-McDuffie Real Estate, Inc. v. Villa Fiore Dev., LLC
Appellant leased commercial real property from Respondent. Appellant vacated the property and ceased paying rent after a significant water intrusion event. Respondent filed a complaint alleging that Appellant breached the lease. Appellant counterclaimed that Respondent constructively evicted Appellant by failing to maintain the roof. The district court entered judgment in favor of Respondent, concluding (1) severe water intrusion justified Appellant’s vacating the property; but (2) the lease obligated Appellant to provide Respondent written notice of and thirty days to cure the water intrusion before exercising any other potential remedies, and Appellant did comply with the notice and cure provision. The Supreme Court reversed, holding that the district court’s factual findings did not support Appellant’s argument that it was constructively evicted, and therefore, the Court did not need to address whether Appellant was required to comply with the lease’s notice and cure provision in order to successfully assert constructive eviction.View "Mason-McDuffie Real Estate, Inc. v. Villa Fiore Dev., LLC" on Justia Law
Black v. St. Joseph’s Hosp. of Buckhannon, Inc.
In 1982, Hospital and Doctor entered into a “Memorandum Agreement” in which Hospital agreed to deed certain real property to Doctor. The Memorandum Agreement contained a provision entitled “Option to Repurchase.” In 2012, Hospital filed a complaint for declaratory judgment against Doctor asking the circuit court to declare that the Option to Repurchase was an option contract rather than a right of first refusal. The circuit court entered summary judgment in favor of Hospital, finding that the Option to Repurchase agreement was a “valid” option contract. Doctor appealed, arguing that the validity of the option contract was not an issue before the circuit court, and therefore, the summary judgment order should be reversed. The Supreme Court (1) reversed the ruling contained in the circuit court’s summary judgment order that the option contract was a “valid” option contract, as Hospital’s complaint for declaratory judgment did not seek a determination of the validity of the option contract; and (2) affirmed the order’s ruling that the Option to Repurchase agreement was an option contract.View "Black v. St. Joseph's Hosp. of Buckhannon, Inc." on Justia Law
Najah v. Scottsdale Ins. Co.
Plaintiffs filed suit against Scottsdale for breach of its insurance contract and tortious breach of the implied covenant of good faith and fair dealing. At issue was whether plaintiffs can pursue a claim for preforeclosure damage to the property at issue deliberately caused by the purchaser under an insurance policy issued by Scottsdale containing a mortgage coverage provision. The court concluded that plaintiffs' full faith and credit bid at the foreclosure sale under the second deed of trust precluded them from making a claim on the insurance proceeds. Further, the trial court did not abuse its discretion in finding that a defense offer to compromise under Code of Civil Procedure section 998 was reasonable. Accordingly, the court affirmed the judgment of the trial court.View "Najah v. Scottsdale Ins. Co." on Justia Law
Rasnic v. ConocoPhillips Co.
Rita Sue Rasnic, (f/k/a Johnson) appealed the grant of summary judgment quieting title to disputed mineral interests in McKenzie County to Norris and Beverly Hildre. Rasnic argues she was entitled to the disputed mineral interests because those mineral interests were subject to a mortgage held by her predecessor in interest, American State Bank. Upon review, the North Dakota Supreme Court concluded the plain language of the Hildres' 1988 mortgage applied only to mineral interests owned by them when the mortgage was executed and title to the disputed mineral interests, which was acquired by the Hildres after the mortgage was executed, did not inure to American State Bank as security for the Hildres' debt under N.D.C.C. section 35-03-01.2(4). Accordingly, the Court affirmed the judgment quieting title in the disputed mineral interests to the Hildres. View "Rasnic v. ConocoPhillips Co." on Justia Law
Fleet v. Bank of America
The Fleets applied to have their Bank of America (BofA) home loan modified in 2009 under the Making Homes Affordable Act. The result of multiple telephone calls and letters to various BofA-related personnel, the Fleets were either (a) assured the Fleets that everything was proceeding smoothly or (b) told BofA had no knowledge of any loan modification application. Finally, in November 2011, BofA informed the Fleets they had been approved for a trial period plan under a Fannie Mae modification program. All they had to do, was to make three monthly payments starting on December 1, 2011. If they made the payments, then they would move to the next step (verification of financial hardship); if they passed that test, their loan would be permanently modified. The Fleets made the first two payments, for December 2011 and January 2012, which BofA acknowledged receiving, and therefore foreclosure proceedings had been suspended. Toward the end of January 2012, their house was sold at a trustee’s sale. Two days after the sale, a representative of the buyer showed up at the house with a notice to quit. The Fleets informed him that the house had significant structural problems, and he said he was going to rescind the sale. The Fleets continued to try to communicate with BofA regarding the property. A BofA representative left voice mail messages to the effect that BofA wanted to discuss a solution to the dispute, but otherwise it appeared that productive conversation between the Fleets and BofA and between the Fleets and the buyer had ceased. In light of this silence (which they interpreted to mean the buyer was trying to rescind the sale), the Fleets spent $15,000 to repair a broken sewer main, which was leaking sewage onto the front lawn. They were evicted in August 2012. In June 2012, the Fleets sued BofA, the trustee under their deed of trust, BofA officers and some of the employees who had been involved in handling their loan modification, and the buyer of the property and its representative. BofA’s demurrer to the first amended complaint was sustained without leave to amend as to the remaining causes of action promissory estoppel, breach of contract, fraud, and accounting. All of the BofA defendants were dismissed. The Court of Appeal reversed: "Although the Fleets’ amended complaint spreads the fraud allegations over three causes of action and contains a great deal of extraneous information, it also alleges the requisite elements of promissory fraud. [. . .] This cause of action may or may not be provable; what it definitely is not is demurrable." The Court sustained the demurrer to the Fleets' action for promissory estoppel, and affirmed the trial court in all other respects. The case was remanded for further proceedings. View "Fleet v. Bank of America" on Justia Law
Snyder v. Ohio Dep’t of Natural Res.
Appellants owned the mineral rights and the State owned the surface rights to a certain tract of land. When the property was transferred to the State, the seller reserved all mineral rights and “reasonable surface right privileges.” Appellants filed a complaint for declaratory judgment seeking a determination that they were entitled to surface-mine a reasonable portion of the property. The court of common pleas granted summary judgment for the State, and the court of appeals affirmed. The Supreme Court reversed, holding that the contract entitled Appellants to surface-mine the property, subject to the reasonableness standard of the contract. Remanded.View "Snyder v. Ohio Dep’t of Natural Res." on Justia Law
Zaman v. Felton
The issue this appeal presented for the New Jersey Supreme Court's review centered on an agreement for the sale of a residential property and a subsequent lease and repurchase agreement, specifically whether the transactions collectively gave rise to an equitable mortgage, violated consumer protection statutes, or contravened its decision in "In re Opinion No. 26 of the Committee on the Unauthorized Practice of Law," (139 N.J. 323 (1995)). In 2007, defendant Barbara Felton faced foreclosure proceedings with respect to her unfinished, uninhabitable home and the land on which it was situated. Felton and plaintiff Tahir Zaman, a licensed real estate agent, entered into a written contract for the sale of the property. A week later, at a closing in which neither party was represented by counsel, Felton and Zaman entered into two separate agreements: a lease agreement under which Felton became the lessee of the property, and an agreement that gave her the option to repurchase the property from Zaman at a substantially higher price than the price for which she sold it. For more than a year, Felton remained on the property, paying no rent. She did not exercise her right to repurchase. Zaman filed suit, claiming that he was the purchaser in an enforceable land sale agreement, and that he therefore was entitled to exclusive possession of the property and to damages. Felton asserted numerous counterclaims, alleging fraud, slander of title, violations of the Consumer Fraud Act (CFA), and violations of other federal and state consumer protection statutes. She claimed that the parties’ transactions collectively comprised an equitable mortgage and constituted a foreclosure scam, entitling her to relief under several theories. She further contended that the transactions were voidable by virtue of an alleged violation of "In re Opinion No. 26." A jury rendered a verdict in Zaman’s favor with respect to the question of whether Felton knowingly sold her property to him. The trial court subsequently conducted a bench trial and rejected Felton’s remaining claims, including her contention that the transactions gave rise to an equitable mortgage and her allegation premised upon In re Opinion No. 26. An Appellate Division panel affirmed the trial court’s judgment. The Supreme Court affirmed in part and reversed in part the Appellate Division’s determination. The Court affirmed the jury’s determination that Felton knowingly sold her property to Zaman. Furthermore, the Court affirmed the trial court and Appellate Division's decisions that Felton had no claim under the CFA, that this case did not implicate "In re Opinion No. 26," and that Felton’s remaining claims were properly dismissed. The Court reversed, however, the portion of the Appellate Division’s opinion that affirmed the trial court’s dismissal of Felton’s claim that the parties’ agreements constituted a single transaction that gave rise to an equitable mortgage, adopting an eight-factor standard for the determination of an equitable mortgage set forth by the United States Bankruptcy Court in "O’Brien v. Cleveland," (423 B.R. 477 (Bankr. D.N.J. 2010)). The case was remanded to the trial court for application of that standard to this case, and, in the event that the trial court concludes that an equitable mortgage was created by the parties, for the adjudication of two of Felton’s statutory claims based on alleged violations of consumer lending laws, as well as several other claims not adjudicated by the trial court. View "Zaman v. Felton" on Justia Law
Currie v. Jané
The parties in this case met in 2002 or 2003 and had a romantic relationship. In August 2007, the pair bought a house in Orwell. Prior to the purchase, plaintiff had been renting an apartment within the house from the owners of the property, the Tricketts. After the sale, defendant moved in with plaintiff. The parties bought the house for $245,000: Defendant’s mother contributed $200,000, defendant paid about $4,300 in closing costs, and the Tricketts financed a $45,000 private mortgage to the parties. Defendant’s mother did not ask for a promissory note, and her contribution was a gift rather than a loan. In particular, the contribution was intended as a gift to defendant, not to plaintiff. Although both parties signed the promissory note to the Tricketts, plaintiff took responsibility for making those payments, and was supposed to pay the balloon payment on the mortgage in August of 2010. The property was titled to the parties as joint tenants with rights of survivorship. Sometime after the closing, plaintiff signed an indemnification agreement that expressly acknowledged that defendant paid $200,000 plus the closing costs, that plaintiff was solely responsible for the $45,000 mortgage debt, and that plaintiff would indemnify defendant for any default on that debt. Plaintiff testified that she always believed that each party had a fifty percent interest in the property, while defendant testified that his understanding was that the parties had interests in the property commensurate their respective contributions. The trial court expressly rejected plaintiff’s testimony and concluded that both parties understood that their interests were defined by their respective contributions to the purchase price. The parties’ relationship ended, and defendant moved out of the house in 2009. In February, he stopped paying the expenses for the property and ignored plaintiff’s requests for assistance. Plaintiff has rented out a portion of the house since April 2010, collecting $700 per month. As of the trial, plaintiff had earned $27,300 from renting the house. She did not share any of this income with defendant. Plaintiff did not pay the balloon payment on the mortgage, and in 2010, the Tricketts filed a petition for foreclosure. In November 2011, plaintiff filed for bankruptcy to avoid losing the property. Plaintiff’s mother helped her to redeem the property by borrowing $143,000 against the equity in her own home. Plaintiff paid toward the mortgage on her mother’s house used to finance the redemption of the parties' house, $56,691 to the Trinketts, $12,031 for past-due property taxes, and $71,722 to pay off a home equity loan. In August 2011, in the face of an inevitable foreclosure sale, the court ordered plaintiff to sell the house. Plaintiff did not comply with the order, and the court found plaintiff in contempt on that basis. In a partition action, plaintiff sought to keep the house and buy out defendant’s interest. Defendant wanted the property awarded to him so that he could sell it and then disburse the amounts allocated by the court to plaintiff. Neither party sought to divide the property into two lots. The property was appraised at $240,000. The parties submitted the matter to the court. Plaintiff challenged the partition order reflecting the trial court’s conclusion that defendant had an 81.7% interest in the home and for applying various setoffs for contributions to the maintenance of the home after the parties purchased it. Finding no reversible error, the Supreme Court affirmed the order.View "Currie v. Jané" on Justia Law
A.J. Props., LLC v. Stanley Black & Decker, Inc.
At issue in this case was a performance bond issued by Stanley Black and Decker, Inc. to secure the obligation of an environmental consulting company to perform environmental remediation of contaminated property, a portion of which was owned by Stanley. A.J. Properties, LLC commenced the underlying action against Stanley alleging that it had been assigned the right to recover all funds paid to Stanley under the performance bond. Specifically, A.J. Properties argued that Stanley had assigned the rights to payment when it assigned a mortgage on the property to the Wyman-Gordon Company, which assigned the mortgage to A.J. Properties. A federal district court judge determined that A.J. Properties was entitled to the amounts paid to Stanley under the rule of Quaranto v. Silverman. Stanley appealed, and the court of appeals recommended certification of a question of law to the First Circuit. The First Circuit answered the question as follows: “Where a mortgage and a surety agreement secured an obligation, and both the mortgagor and the surety committed a breach of that obligation prior to a written assignment of the mortgage, the assignee does not necessarily acquire the right against the surety’s receiver for the surety’s breach of its obligation.” View "A.J. Props., LLC v. Stanley Black & Decker, Inc." on Justia Law
Gilbert Wheeler, Inc. v. Enbridge Pipelines, LP
Petitioner granted Respondent a right of way to construct a pipeline across Petitioner’s property. The parties signed an agreement requiring Respondent to install the pipeline by boring underground in order to preserve the trees on the property. The construction company Respondent hired, however, cut down several hundred feet of trees. A jury found Respondent liable for damage to Petitioner’s property on both breach of contract and trespass theories and awarded damages both to compensate Petitioner for the reasonable cost to restore the property and for the intrinsic value of the destroyed trees. The court of appeals reversed based on the trial court’s failure to submit a jury question on whether the injury to the property was temporary or permanent. The Supreme Court reversed, holding (1) the general rule that temporary injury to real property entitles the owner to damages commensurate with the cost of restoring the property and permanent injury to the property entitles the owner commensurate with the loss in the fair market value to the property as a whole applies when the wrongful conduct causing the injury stems from breach of contract rather than tort; (2) the common law exception to this general rule that entitles the landowner to damages in keeping with the intrinsic value of the destroyed trees applies in this case; and (3) any error in the jury charge related to such damages was harmless. Remanded.View "Gilbert Wheeler, Inc. v. Enbridge Pipelines, LP" on Justia Law