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American Bar Association

  Real Estate Litigation

Case Notes

 

Mass. SJC Formally Recognizes Absolute Judicial Deliberative Privilege

The Massachusetts SJC recently ruled that a judge cannot be compelled to testify as a witness nor to provide documents regarding his or her deliberative process.


Broker Not Personally Liable For Fraudulent Activities of Agent

Under California BPC § 10159.2, a broker is not personally liable for the fraudulent activities of an agent even where the broker has not adequately supervised the agent.


California Court Reiterates Support for MERS System

The case provides a good review of exactly what MERS is, its usefulness in real-estate funding and securitization, and the treatment these kinds of lawsuits have been receiving.


Broker Expects Commission on Offer, Not Sale

In RealPro v. Smith Residual Company, a broker listed real property for sale at an asking price of $17 million but refused an offer, asking for $19.5 million.


Tenant Prevails Despite Defaulting on Rent

In Kumar v. Yu, a landlord sued a commercial tenant for unlawful detainer and breach of lease.


Wash. Supreme Court Clarifies Mechanic's Lien Requirements

In Williams v. Athletic Field, Inc., 261 P.3d 109 (Wash. 2011), the Washington Supreme Court addressed the proper form of a mechanic’s lien under RCW 60.04.091.


Wash. Court: Association Has Authority to Deny Subdivision Requests

In Jensen v. Lake Jane Estates, 267 P.3d 435 (Wash. Ct. App., 2011), the court of appeals held that a homeowners’ association had authority to assume powers originally granted to a now-defunct developer under a set of restrictive covenants.


Massachusetts Supreme Judicial Court Issues First Post-Ibanez Decision Regarding Title

On October 18, 2011, the Massachusetts Supreme Judicial Court issued its decision in Bevilacqua v. Rodriguez, 2011 Mass. LEXIS 918 (Oct. 18, 2011). Francis J. Bevilacquapurchased a home from U.S. Bank after U.S. Bank foreclosed a mortgage granted by Pablo Rodriguez on the property. However, MERS, as nominee for the original lender, did not assign the mortgage to U.S. Bank until after the foreclosure sale had been conducted. Seeking to clear any cloud on title that might exist as a result of the SJC’s recent decision in U.S. Bank Nat’l Assn. v. Ibanez, 458 Mass. 637 (2011), Bevilacqua brought an action in the Land Court pursuant to G. L. c. 240, §§ 1–5, the so-called “try title” statute.


California Court Rules on Priority of Parties' Liens Against the Same Real Property

First Bank filed a declaratory relief action against East West Bank seeking a determination about the priority of the parties' liens against the same real property. The trial court held that the deeds of trust had equal priority because they were recorded on the same date, and the court of appeal affirmed. The parties' liens were both deposited in the Recorder's Office drop box before business hours.


Arizona Court of Appeals Extends Doctrine of Equitable Subrogation to Cash Purchasers

In Sourcecorp, Inc. v. Dean D. Norcutt, 1 CA-CV 10-0212 (Ariz. Ct. App., 8/2/2011), the Arizona Court of Appeals answered a question of first impression in Arizona—whether a cash purchaser of property who pays off an existing lien is equitably subrogated to that position over a junior lien holder. Arizona had previously applied the doctrine of equitable subrogation to mortgagee and lien holders, but not to a purchaser who pays off an encumbrance as part of the purchase of real property. Recognizing a split in authorities, the Arizona Court of Appeals held that the Norcutts, the buyers of the property who paid cash ($667,500), the majority of which ($621,307.36) was used to pay off a first position lien against the property held by Zions Bank, were equitably subrogated to the lien position previously held by Zions Bank.


Indiana Court of Appeals Recognizes Fraud Claim Related to Sale of Home

For more than 125 years, Indiana courts have followed the common law rule that “a seller of property [may] lie with impunity as long as the prospective buyer had a reasonable opportunity to inspect the property.” See Dickerson v. Strand, 904 N.E.2d 711, 715–716 (Ind. Ct. App. 2009) (citing Cagney v. Cuson, 77 Ind. 494 (1881)). A recent decision from the Indiana Court of Appeals, Wise v. Hays, 943 N.E.2d 835 (Ind. Ct. App. 2011), highlights an important change by recognizing a statutory fraud claim pursuant to the Residential Real Estate Sales Disclosure Act, Indiana Code Section 32-21-5-1(the Act). A seller of residential property may be liable for any knowing misrepresentation on a sales disclosure form required under the Act.


California Court of Appeals Settles “Spite Fence” Allegation

The California Court of Appeals resolved an unclear issue about whether a row of trees could be considered a "spite fence" under California Civil Code section 841.4. (Vanderpol v. Starr [PDF], 2011 Cal. App. LEXIS 443 (Cal. App. 4th Dist., Apr. 15, 2011).


Massachusetts Court Ruling Calls into Question the Validity of Many Foreclosures

This consolidated lawsuit was brought by two homeowners challenging the validity of the foreclosures of their properties. The banks that carried out the foreclosure actions were not the original mortgagees. The respective notes had been transferred into trusts for which the foreclosing banks were the servicers. The mortgages, however, had not been assigned to the foreclosing banks.


Purchaser's Right to Resend a Purchase Contract Expands to Three Years Under the ISLA

The Southern District of Florida denied the defendant’s motion for summary judgment for its claim of exemption from ILSA notice requirements and its claim that the plaintiff failed to invoke rescission of the purchase contract within the two-year time frame.


Fore! Express Easement Precludes Any Action in Nuisance and Trespass

A Georgia appellate court ruled that an express easement allowing golf balls to enter a homeowner’s property precluded any action in nuisance and trespass regardless of the number of golf balls falling into the property.