Real Estate Litigation | A Snell & Wilmer Blog

The Arizona Court of Appeals recently held that any successful plaintiff in a forcible detainer action (i.e., an eviction action) may recover an award of its attorneys’ fees and costs incurred at trial under A.R.S. § 12-1178(A). See Bank of New York v. Dodev, 1 CA-CV 17-0652 (Ct. App. Nov. 20, 2018). Prior to this decision, caselaw held that fees were only awardable in actions arising out of the termination of a residential lease. RREEF Mgmt. Co. v. Camex Prods., Inc., 190 Ariz. 75, 945 P.2d 386 (Ct. App. 1997). Changes to the statute, however, rendered the prior caselaw obsolete.… Read More »

Author: Ben Reeves | Leave a comment Tagged Arizona, Eviction Action, real estate litigation

Court Addresses HOA Attempt to Restrict Short Term Rentals

Posted on November 15, 2018 by Kevin Parker

In a recent case, the Texas Supreme Court addressed an attempt by a homeowners’ association (“HOA”) to restrict short-term rentals based upon recorded Covenants, Conditions, and Restrictions (“CC&Rs”) applicable to a residential subdivision. The property was a single-family home. The homeowner rented the home through websites such as VRBO. The HOA issued notices of violation; the homeowner kept renting; the HOA assessed fines against the property. The property owner then sought a declaration from the court that the CC&Rs did not impose a minimum duration on occupancy or leasing. The trial court agreed with the HOA.… Read More »

Author: Kevin Parker | Leave a comment Tagged real estate litigation, Restrictions on short term rentals, restrictive covenant

Condemnation Actions: How Valuable Is Your Evidence of Property Value?

Posted on October 19, 2018 by Erica Stutman

When a government condemns (takes) private property for a public use, the property owner is entitled to receive “just compensation” equal to the property’s market value. Value is typically determined by appraisals, but if the parties cannot agree, a judge or jury will determine the amount in a condemnation lawsuit. The parties may seek to present various forms of evidence of value, though it will be admissible only if the evidence is relevant and its value is not substantially outweighed by the risk of causing unfair prejudice, confusion, undue delay or waste of time, does not mislead the jury, and is not needlessly cumulative.… Read More »

Author: Erica Stutman | Leave a comment Tagged assemblage, condemnation, eminent domain, highest and best use, just compensation, project influence

Arizona Court Determines Statute of Limitations Applicable to a Claim for Reformation of a Deed of Trust (and a Related Claim for Declaratory Judgment)

Posted on September 18, 2018 by Kevin Parker

In a recent Arizona Court of Appeals case, Deutsche Bank National Trust Co. v. Pheasant Grove LLC, 798 Ariz. Adv. Rep. 15 (August 23, 2018), the Court of Appeals addressed the question of what statute of limitations was applicable to a declaratory judgment claim. In that case, a bank’s deed of trust inadvertently omitted one of the lots that was supposed to secure that bank’s loan. The deed of trust should have covered lots 8 and 9, but by its terms covered only lot 8. A different bank subsequently recorded a deed of trust that encumbered lot 9. … Read More »

Author: Kevin Parker | Leave a comment Tagged declaratory judgment, equitable subrogation, real estate litigation, reformation, replacement mortgage, Statute of Limitations

Ten Years After Colorado’s Adverse Possession Amendment: a brief look backwards and forwards

Posted on September 10, 2018 by Luke Mecklenburg

In response to national outrage over an infamous adverse possession case in Boulder, Colorado, in which a lawyer and a judge intentionally took their neighbors’ undeveloped land through adverse possession, the Colorado legislature amended the state’s adverse possession statute (C.R.S. § 38-41-101) to make the claim significantly harder to prove. It did this because it believed “there were insufficient ‘obstacles’ to establishing a claim for adverse possession under the existing law.”[1] Effective July 1, 2008, the amendment created a heightened burden of proof, additional element requirements, and the possibility of a losing defendant recovering money from successful plaintiffs for the value of the land they took and the taxes the defendant had paid on that land.… Read More »

Author: Luke Mecklenburg | Leave a comment Tagged adverse possession, colorado real property, CRS 38-41-101, real estate, real estate litigation, real property, residential, Snell & Wilmer

Wait, You Want An HOA?! Restricting Implied Common-Interest Communities

Posted on August 31, 2018 by nmcconomy

While the butt of many jokes and a thorn in the side of some property owners, homeowners associations (“HOAs”) serve the vital function of collecting and disbursing funds to care for and maintain common areas of residential developments. Without HOAs, neighborhood open spaces, parks, and other amenities risk falling into disrepair through a type of tragedy of the commons, wherein residents use such amenities but refuse to subsidize care and maintenance for these common areas believing someone else will pony-up the funds. HOAs, when properly organized and managed, avoid this problem by ensuring everyone pays their fair shares for the common areas.… Read More »

Author: nmcconomy | Leave a comment Tagged CCIOA, common-interest communities, HOA, homeowner, homeowners association, homeowners' associations, real estate, real estate litigation, real property, residential, residential construction, residential real estate development

Cybersecurity on Your Project: Why Not Follow National Security Strategy?

Posted on August 20, 2018 by Rick Erickson

By Rick Erickson

In its recent Cybersecurity Strategy, the U.S. Department of Homeland Security (DHS) defined “cyberspace” as “the independent network of information technology infrastructure, including the Internet, telecommunications networks, computers, information and communications systems, and embedded processors and controllers.” To DHS, protecting cyberspace includes threats against “federal and nonfederal information systems.” In other words, both private and public interests are at risk. In his 2018 National Defense Strategy, U.S. Department of Defense Secretary, Jim Mattis, essentially concurred in declaring cyberspace a “warfighting domain” and promising to “invest in cyber defense, resilience, and the continued integration of cyber capabilities into the full spectrum of military operations.”

The construction industry is a key player in cybersecurity because contractors, designers and owners are responsible for building and delivering projects providing critical public services like national defense, health care, law enforcement, transportation, and utilities.… Read More »

Author: Rick Erickson | Leave a comment Tagged breach of contract, builder, chief information officer, construction, construction law, construction management, contractor, cyber, cyber threat, cybersecurity, design team, DHS, electronically stored information, ESI, general contractor, homeland security, information systems, liability insurance, national security, national security strategy, network security, project manager, real estate, real estate development, risk management, subcontractor

Everyone Wins When a Foreclosure Sale Generates Excess Proceeds

Posted on July 13, 2018 by Ben Reeves

Introduction

When a foreclosure sale generates more money than needed to pay off the lien, the excess proceeds usually go first to creditors in the order of their priority, and second to the owner after creditors are paid in full. So, in truth, not everyone wins when a foreclosure sale brings in too much money. Amusingly, in Steinmetz v. Everyone Wins, the court awarded excess sale proceeds to….you guessed it…Everyone Wins, despite the owner’s argument that Arizona’s anti-deficiency statutes barred it from recovering anything.

In addition to supplying a clever title for this post, Steinmetz v. Everyone Wins provides an important analysis of how Arizona’s anti-deficiency statutes, homeowner’s assessment lien statutes, and foreclosure statutes apply when determining who “wins” when it comes to excess sale proceeds.… Read More »

Author: Ben Reeves | Leave a comment Tagged Excess Sale Proceeds, foreclosure, real estate litigation

Not so Fast! How Does Revoking Acceleration of a Note Impact the Statute of Limitations?

Posted on July 2, 2018 by Ben Reeves

Introduction

Lenders routinely accelerate notes after a default occurs, calling the entire loan due immediately. Less regularly, a lender may change its mind and unilaterally revoke the acceleration. Rarely, however, does a lender fail to foreclose on its real property collateral before the statute of limitations expires. In Andra R. Miller Designs, LLC v. U.S. Bank, N.A., 244 Ariz. 265, 418 P.3d 1038 (Ct. App. 2018), a unique set of facts involving these issues led the Arizona Court of Appeals to hold that proper revocation of acceleration resets the statute of limitations.

The Facts

In Miller, a lender made a $1,940,000 loan evidenced by a promissory note and secured by a deed of trust against a home in Paradise Valley, Arizona. … Read More »

Author: Ben Reeves | Leave a comment Tagged Acceleration, Andra R. Miller v. U.S. Bank, Deed of Trust, Promissory Note, Revocation

California Supreme Court Clarifies Deadline to File Anti-SLAPP Motions in Light of Amended Pleadings

Posted on June 14, 2018 by acarucci

By: Tony Carucci

California’s “anti-SLAPP” (“SLAPP” is an acronym for strategic lawsuit against public participation) statute—codified at California Code of Civil Procedure section 425.16 et seq.—is the primary vehicle for defending against any action involving petitioning or free speech. The statute was designed to provide an early and fast summary judgment-like procedure to allow defendants and cross-defendants to file a motion to dismiss either an entire complaint, specific causes of action, or even just portions of a cause of action, and to require the plaintiff to respond before conducting discovery. By facilitating an early challenge to a plaintiff or cross-complainant’s claims, the anti-SLAPP statute allows the responding party to avoid the costs and delay that chill the exercise of constitutionally protected rights.… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, construction, developer, eminent domain, real estate litigation, real property

“But I didn’t know what I was signing….”

Posted on May 29, 2018 by Bobby Kethcart

By Bobby Kethcart

In real estate cases—which frequently involve long purchase agreements, loan documents, personal guarantees, deeds of trust, etc.—we’ve likely all had a client or opposing party who trots out the line that they didn’t know what they were signing, or they didn’t read or understand what they were signing, so the document shouldn’t be enforced according to its terms.

Most of us instinctively believe the claim is a loser: You signed the document, you’re bound by it.

But is this actually right? … Read More »

Author: Bobby Kethcart | Leave a comment

Developers Celebrate Arizona’s Opportunity Zones

Posted on April 27, 2018 by Patrick J. Paul

By: Patrick J. Paul

President Trump’s Tax Cuts and Jobs Act passed by Congress in December included a new community development program designed to promote investment in low income urban and rural communities. These “Opportunity Zones” provide that every Governor may nominate up to 25% of qualifying low-income Census tracts for consideration in the program which provides substantial reductions on capital gains taxes with the greatest benefits to those holding their investments for a period of at least 10 years.

States were required by March 21st to submit nominations or request a 30 day extension to subsequently submit. The Treasury Department in turn has 30 days from the date of submission to designate the nominated zones. … Read More »

Author: Patrick J. Paul | Leave a comment Tagged Arizona Commerce Authority, IRS, Opportunity Zones, Tax Cuts and Jobs Act, Treasury Department

Property Owner Entitled to Rely on Zoning Administrator Advice

Posted on April 17, 2018 by Kevin Parker

In the recent case of In Re Langlois/Novicki Variance Denial, 175 A.3d 1222, 2017 VT 76 (2017), the Vermont court addressed the question of whether a property owner could enforce – by equitable estoppel principles – a representation by a town zoning administrator that no permit or variance was needed for the property owner’s proposed construction. In that case, a landowner wanted to add a pergola to an existing concrete patio on his land. During a social visit at the property, the property owner asked the town zoning administrator if he needed a permit. The town zoning administrator told the property owner that no permit was needed. … Read More »

Author: Kevin Parker | Leave a comment Tagged estoppel, Real eestate litigation, zoning

Under Colorado House Bill 17-1279, HOA Boards Now Must Get Members’ Informed Consent Before Bringing A Construction Defect Action

Posted on April 6, 2018 by Luke Mecklenburg

By: Luke Mecklenburg

Last year, I wrote a post calling attention to stalled efforts in the Colorado legislature to pass meaningful construction defect reform. Shortly thereafter, the legislature got it done in the form of House Bill 17-1279. This bill creates an important pre-litigation notice-and-approval process whenever an HOA initiates a construction defect action in its own name or on behalf of two or more of its members.

Before May 2017, the pre-litigation requirements that an HOA had to fulfill before bringing a construction defect claim under the Colorado Construction Defect Action Reform Act (“CDARA”) were generally minor. For example, while many declarations required majority approval from the community prior to initiation of claims, in practice, what the industry was seeing is that some HOAs were making it so that only a majority of the HOA Board had to approve bringing the claim, rather than the majority of interested unit owners. … Read More »

Author: Luke Mecklenburg | Leave a comment Tagged C.R.S. § 38-33.3-303.5, CCIOA, CDARA, construction defect, HB 17-1279

California’s Right To Repair Act Is The Sole Remedy For Damages For Construction Defects In New Residential Construction

Posted on March 6, 2018 by Mark Johnson

By: Mark Johnson

The California Supreme Court ruled in McMillin Albany LLC et al. v. The Superior Court of Kern County, (1/18/2018) 4 cal. 5^th 241, that California’s Right to Repair Act, California Civil Code sections 895 et seq. (“Act”) is the sole remedy for construction defect claims for economic loss and property damages regarding new residential construction. The Act establishes a pre-litigation dispute resolution process that must be followed before filing a construction defect action for new residential construction purchased after January 1, 2003. The Act provides a builder with the right to attempt to repair construction defects before litigation is filed.… Read More »

Author: Mark Johnson | Leave a comment Tagged construction, construction defect claims, new residential construction, property damage, residential

What Types of “Damages Claims” Survive a Trustee’s Sale?

Posted on February 23, 2018 by Ben Reeves

Introduction

Arizona’s trustee’s sale statutory scheme provides for the waiver of all defenses and objections to a trustee’s sale that: (i) are not raised prior to the sale, and (ii) do not result in an injunction against the sale going forward. See A.R.S. § 33-811(C). In other words, if you have an objection to a trustee’s sale, you must seek and obtain an injunction prior to the sale or your objection will be waived.

Arizona’s Court of Appeals previously held that notwithstanding this statutory waiver, “common law” defenses to repayment of the debt survive a non-judicial foreclosure even in the absence of an injunction prior to the sale. … Read More »

Author: Ben Reeves | Leave a comment Tagged ARS 33-811, foreclosure sale, real estate litigation, trustee's sale, wrongful foreclosure

When Does a Contractor Legally Abandon a Construction Project?

Posted on January 15, 2018 by Rick Erickson

By Rick Erickson

Lately, we’ve been spending more time as litigators pursuing and defending claims of abandonment against contractors. It has become apparent that abandonment is often misinterpreted in its legal meaning and effect. Here are some thoughts on abandonment to consider.

On its face, the concept of abandonment is simple enough. For any number of reasons, a contractor abandons a project when the contractor stops showing up. Abandonment is major concern for all players on the project because it causes critical path delays and significant costs to replace the contractor with another contractor, many times at a much higher cost than the original contractors’ bid.… Read More »

Author: Rick Erickson | Leave a comment Tagged abandon, abandonment, breach, breach of contract, claims, construction, construction litigation, contract, contractor, developer, legal excuse, licensing, owner, Registrar of Contractors, subcontractor

Withdrawal of an Admission in California May Shift Costs—Including Attorneys’ Fees—Incurred in Connection with the Withdrawal

Posted on January 11, 2018 by acarucci

By: Tony Carucci

Under California Code of Civil Procedure section 2033.300, a court may permit a party to withdraw an admission made in response to a request for admission upon noticed motion. The court may only do so, however, “if it determines that the admission was the result of mistake, inadvertence, or excusable neglect, and that the party who obtained the admission will not be substantially prejudiced in maintaining that party’s action or defense on the merits.” Cal. Code Civ. Proc. § 2033.300(b). The court may also “impose conditions on the granting of the motion that are just, including, but not limited to .… Read More »

Author: acarucci | Leave a comment Tagged real estate litigation

Oregon and Nevada Adopt the Uniform Commercial Real Estate Receivership Act

Posted on January 4, 2018 by Ben Reeves

Nevada and Oregon join Utah in adopting the Uniform Commercial Real Estate Receivership Act (the “Act”) promulgated by the Uniform Law Commission. We have been following the development of the Act since its drafting stages. If you want more information about the Act, check out our prior posts about the drafting process, what the Act is and does, and Utah’s enactment of the Act.… Read More »

Author: Ben Reeves | Leave a comment Tagged Commercial Real Estate Receivership Act, real estate litigation, uniform law commission

Is the Issuance of a City Use Permit Referable? Not When It Is an Administrative Act

Posted on December 22, 2017 by Adam Lang

By: Adam E. Lang

Arizona’s Constitution gives electors in cities, towns, and counties the ability to refer legislation that was enacted by their local elected officials to the ballot for popular vote. Ariz. Const. art. IV, Pt. 1 § 1(8). But only legislative acts are referable; administrative acts are not. In general, a legislative act makes new law and creates policy, is permanent in nature, and is generally applied. On the other hand, an administrative act is one that executes and implements a law already in place. Wennerstrom v. City of Mesa, 169 Ariz. 485, 489-90, 821 P.2d 146, 150-51 (1991).… Read More »

Author: Adam Lang | Leave a comment Tagged administrative act, electors, initiative, legislative act, petition, referable, referendum, rezoning, use permit, zoning

Specific Performance of an Option Contract to Purchase Real Property is Barred Absent Agreement on All Material Terms

Posted on December 5, 2017 by Richard Herold

By: Richard H. Herold

On November 14, 2017, the Court of Appeals (Division 1), in Offerman v. Granada, LLC, 2017 WL 5352664, reversed a trial court order directing specific performance of an alleged option to purchase real property, holding that the alleged option was too indefinite to be specifically performed because the parties did not agree to all of the material terms of the option.

Tenant-Purchaser Offerman executed a two-year lease with Landlord-Seller Granada, which granted Offerman “the option to purchase [the] property…for a sales price to be determined at that time by an independent appraiser acceptable to both Tenant and Landlord.… Read More »

Author: Richard Herold | Leave a comment Tagged appraisal, option

The Contributors to This Blog Are Pleased to Announce That….

Posted on November 2, 2017 by Ben Reeves

Snell & Wilmer’s Real Estate Litigation Group, which provides the content for The Real Estate Litigation Blog, is pleased to announce that it has been recognized in both the national and metropolitan rankings by U.S. News Media Group and Best Lawyers for the 2018 edition of “Best Law Firms.” We achieved the following rankings:

• National Tier 1: Litigation – Real Estate

• Phoenix (AZ) Tier 1: Litigation – Real Estate

• Utah Tier 1: Litigation – Real Estate

• Colorado Tier 1: Litigation – Real Estate

• Reno (NV) Tier 1: Litigation – Real Estate

• Tucson (AZ) Tier 1: Litigation – Real Estate

The rankings are determined through an evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. … Read More »

Author: Ben Reeves | Leave a comment Tagged Best Lawyers, National Tier 1, real estate litigation, U.S. News Rankings

California Mediation Confidentiality May Apply to Third Party “Participants” Retained to Provide Analysis

Posted on October 27, 2017 by acarucci

By: Tony Carucci

California Evidence Code section 1119 governs the general admissibility of oral and written communications generated during the mediation process. Section 1119(a) provides that “[n]o evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation . . . is admissible or subject to discovery, and disclosure of the evidence shall not be compelled, in any . . . civil action . . . .” Cal. Evid. Code § 1119(a) (emphasis added). Similarly, section 1119(b) bars discovery or admission in evidence of any “writing . . . prepared for the purpose of, in the course of, or pursuant to, a mediation .… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, eminent domain, foreclosure, foreclosures, real estate litigation

Arizona Supreme Court Clarifies Area Variance Standard; Property Owners May Obtain an Area Variance When Special Circumstances Existed at Purchase

Posted on October 10, 2017 by Ben Reeves

By: Nick Wood, Adam Lang, Noel Griemsmann, and Brianna Long

In Pawn 1st v. City of Phoenix, the Arizona Supreme Court rejected a Court of Appeals rule that would have unduly restrained alienation of property in Arizona. The Court of Appeals found that the City of Phoenix Board of Adjustment acted beyond its authority when it granted an area variance to a pawn shop where the special circumstances causing a need for the variance existed before the pawn shop purchased the property. Under Arizona law, boards of adjustment cannot grant an area variance where the special circumstances requiring the variance are self-imposed.… Read More »

Author: Ben Reeves | Leave a comment Tagged LLC v. Phoenix, Pawn 1st, real estate litigation, variance, zoning

Who says you can’t choose between liquidated damages or actual damages?

Posted on October 6, 2017 by Kevin Walton

In Colorado, courts enforce liquidated damages provisions if three elements are satisfied: (1) the parties intended to liquidate damages; (2) the amount of liquidated damages was a reasonable estimate of the presumed actual damages caused by a breach; and (3) at the time of contracting, it was difficult to ascertain the amount of actual damages that would result from a breach. But what happens when a contract gives a party a right to choose between liquidated damages or actual damages? This seems troublesome because it allows a party to set the floor for their damages without limitation if actual damages exceed the contractual amount.… Read More »

Author: Kevin Walton | Leave a comment Tagged colorado real estate, developer, liquidated damages, real estate

What Happens When a Secured Creditor Files a Late Claim in an Equity Receivership?

Posted on September 22, 2017 by Ben Reeves

Pitting a receivership court’s inherent equitable powers against pre-existing property rights can lead to some pretty interesting questions. In SEC v. Wells Fargo Bank, N.A., 848 F.3d 1339, 1343-44 (11th Cir. 2017), the Eleventh Circuit recently examined whether a district court’s inherent authority to establish a claims submission process allowed the court to extinguish a security interest in real property based solely upon an untimely proof of claim. Much to the relief of secured creditors, the Eleventh Circuit held that the district court erred, as a matter of law, by extinguishing the creditor’s pre-existing property rights under those circumstances.… Read More »

Author: Ben Reeves | Leave a comment Tagged equity receivership, real estate blog, receivership claims, SEC v. Wells Fargo

Arizona Court of Appeals Awards Attorneys’ Fees in Quiet-Title Action

Posted on September 14, 2017 by Kevin Walton

In Arizona, a party successfully quieting title to property may recover its attorneys’ fees if it satisfies three requirements: (1) the party requests a quitclaim deed from the party adversely claiming title twenty days before bringing the quiet-title action; (2) the party tenders five dollars for the execution and delivery of the deed; and (3) the adverse party fails to comply. Ariz. Rev. Stat. § 12-1103(B). Recently, in McCleary v. Tripodi, No. 2 CA-CV 2016-0145, 2017 WL 3723472 (Ariz. Ct. App. Aug. 29, 2017), the Arizona Court of Appeals awarded attorneys’ fees to the prevailing party under this statute.

In McCleary v.… Read More »

Author: Kevin Walton | Leave a comment

Pacing in Construction Scheduling Disputes

Posted on September 11, 2017 by Luke Mecklenburg

On a high level, construction delay litigation involves sorting out the impacts to the critical project path and determining which party is responsible for those impacts. One of the more difficult elements of this process is determining whether a delay would have occurred regardless of one party’s critical path impact due to a separate, independent impact to the critical path by the other party. For example, a contractor cannot collect delay damages for delays caused by the owner if the contractor itself was causing independent impacts that would have pushed off the completion date anyway.

However, the concept of “pacing” provides a potential defense for a party who is not on pace with the as-planned schedule for noncritical activities, even where those activities are still ongoing after the planned completion date.… Read More »

Author: Luke Mecklenburg | Leave a comment

The “Ugly” Property Next Door is Ruining My Property Value

Posted on September 6, 2017 by Kevin Parker

Traditional bases for private nuisance claims include circumstances where noise, light, vibration, or odor emanating from a neighboring property harm the value of your property. Such bases can be objectively verified and quantified. Courts in various states depart, however, on the issue of whether pure unsightliness of a neighboring property, which diminishes the value of your property, supports a cognizable damages claim against the neighboring property owner under the law of nuisance.

As explained by the Vermont Supreme Court in the recent case of Myrick v. Peck Electric Co., 2017 WL 129041 (January 13, 2017), state laws vary on the viability of a claim for aesthetic nuisance. … Read More »

Author: Kevin Parker | Leave a comment Tagged nuisance, real estate litigation

Nevada Supreme Court Clarifies the Litigation Waiver of the One-Action Rule

Posted on September 1, 2017 by Bob L. Olson

By Bob L. Olson

Nevada has a one-action rule which, with limited exceptions, requires a creditor seeking to recover a debt secured by real property to proceed against the security first prior to seeking recovery from the debtor personally. In the event that a law suit is filed in violation of the one-action rule, final judgment may be entered in favor of the creditor but that judgment “releases and discharges the mortgage or other lien.” NRS 40.455(3). Nevada law further provides that, with the exception of certain guaranties, any provision in an agreement relating to the sale of real property which contains a waiver of Nevada’s anti-deficiency laws may not be enforced by a court because doing so violates Nevada’s public policy. … Read More »

Author: Bob L. Olson | Leave a comment Tagged affirmative defense, anti-deficiency, deficiency, Hefetz, Hefetz v. Beavor, NRS 40.430, NRS 40.435, NRS 40.453, NRS 40.455, one form of action rule, one-action rule, Rule 8

Arizona Supreme Court Confirms a Prevailing Homeowner Can Recover Fees on Implied Warranty Claims

Posted on August 24, 2017 by Rick Erickson

By Rick Erickson

On August 9th, in Sirrah Enterprises, L.L.C. v. Wunderlich, the Arizona Supreme Court settled the question about recovery of attorneys’ fees after prevailing on implied warranty claims against a residential contractor. The simple answer is, yes, a homeowner who prevails on the merits can recover the fees they spent to prove that shoddy construction breached the implied warranty of workmanship and habitability. Why? Because, as Justice Timmer articulated, “[t]he implied warranty is a contract term.” Although implied, the warranty is legally part of the written agreement in which “a residential builder warrants that its work is performed in a workmanlike manner and that the structure is habitable.”

In other words, a claim based on the implied warranty not only arises out of the contract, the claim is actually based on a contract term.… Read More »

Author: Rick Erickson | Leave a comment Tagged attorneys fees, breach of contract, construction law, contractor, homebuilder, homeowner, implied warranty, implied warranty of workmanship and habitability, insurance coverage, liability insurance, residential construction

RICO Madness: The Nuisance of Owning and Operating a Marijuana Facility

Posted on July 21, 2017 by Ben Reeves

By: Bob Henry

On June 7, 2017, the Tenth Circuit Court of Appeals issued its opinion in Safe Streets Alliance, et al. v. Hickenlooper, et al., (No. 16-1048), an opinion that could open the doors to property use litigation involving marijuana facilities. One of the issues in Safe Streets was whether a property owner can use the federal RICO statutory scheme to obtain relief arising out of a neighboring property owner using property for the cultivation of marijuana in a manner that causes an impact to the value, use, and enjoyment of one’s property.

The pertinent factual allegations in Safe Streets (on the federal RICO issue) were straightforward. … Read More »

Author: Ben Reeves | Leave a comment Tagged Federal RICO, Medical Marijuana, nuisance, Safe Streets

Erasing Any Doubt: Arizona FED Actions Do Not Accrue Until Formal Demand for Possession is Tendered

Posted on July 6, 2017 by Bob Henry

By: Bob Henry

Clearing up any lingering confusion, in Carrington Mortgage Services, LLC v. Woods, 767 Ariz. Adv. Rep. 4 (June 22, 2017), the Arizona Court of Appeals confirmed that residential forcible entry and detainer actions in Arizona accrue for statute of limitations purposes when a party entitled to possession makes a formal demand for return of possession not when the party could have made a demand for return of possession.

In Carrington, the borrowers (the Woodses) remained in property that they had acquired in 2008 but then lost to foreclosure several years later. The original lender obtained title to the property at a trustee’s sale on February 16, 2010, but did not take any action to remove the Woodses at that time. … Read More »

Author: Bob Henry | Leave a comment Tagged Arizona residential FED actions; Arizona residential forcible entry and detainer actions; A.R.S. § 12-1173.01; Notice to Vacate

Orchestrating Bias: Arbitrator’s Undisclosed Membership in Philharmonic Group with Pauly Shore’s Attorney Not Grounds to Reverse Award in Real Estate Dispute

Posted on June 19, 2017 by Lyndsey Torp

By: Lyndsey Torp

The California court of appeal recently issued an unpublished decision in Knispel v. Shore, 2017 WL 2492535, affirming a judgment confirming an arbitration award in a real estate dispute involving Pauly Shore. The court of appeal held that the arbitrator’s failure to disclose her membership in the Los Angeles Lawyers Philharmonic Group with the attorney representing Pauly was not grounds to overturn the judgment.

The underlying arbitration involved a dispute between Michael Scott Shore, on the one hand, and his brother, Pauly, among others, on the other hand, regarding certain residential property located on Sunset Boulevard near The Comedy Store in West Hollywood (owned and operated by their mother, Mitzi Shore).… Read More »

Author: Lyndsey Torp | Leave a comment Tagged arbitration, arbitrator, bias, disclosure, real estate

California Supreme Court Hands Victory to Private Property Owners Over Public Use

Posted on June 16, 2017 by Sean M. Sherlock

By: Sean M. Sherlock

In 1970 the California Supreme Court held that, under certain circumstances, private property owners impliedly dedicate their property to the public if they permit the public to use it. Gion v. City of Santa Cruz (1970) 2 Cal.3d 29. This holding was controversial, and the next year the California Legislature enacted Civil Code section 1009 limiting the public’s ability to permanently use private property through an implied dedication.

In the 40-plus years since then, the lower courts have wrestled with the issue of whether the statute limiting implied dedication applies only to recreational uses by the public, or also to nonrecreational uses.… Read More »

Author: Sean M. Sherlock | Leave a comment Tagged implied dedication, private property, public use

Appeals of Rulings by The Registrar of Contractors Must Be Timely Filed in Superior Court.

Posted on June 12, 2017 by Rick Erickson

By Rick Erickson

Recently in Johnson v. Arizona Registrar of Contractors, the Arizona Court of Appeals affirmed dismissal of a homeowner’s late appeal of an adverse decision by the Registrar of Contractors (“Registrar”). After successfully pursuing a complaint to suspend a roofing contractor’s license, the homeowner tried but failed to get her roofing repair costs from the Registrar’s Recovery Fund. The homeowner sent her appeal to the Registrar. However, the governing Arizona statute, A.R.S. § 12-904(A), clearly required the homeowner’s appeal to be filed in Superior Court, not with the Registrar. Once the homeowner realized her mistake, her appeal to Superior Court was a day late. … Read More »

Author: Rick Erickson | Leave a comment Tagged appeals, contractor complaints, homeowners, judicial review, jurisdiction, recovery fund, Registrar of Contractors, residential construction

Does Your 998 Offer to Compromise Include Attorneys’ Fees and Costs?

Posted on June 8, 2017 by acarucci

In California, the “prevailing party” in litigation is generally entitled to recover its costs as a matter of law. See Cal. Code Civ. Proc. § 1032. But under California Code of Civil Procedure section 998, a party may make a so-called “offer to compromise,” which can reverse the parties’ entitlement to costs after the date of the offer, depending on the outcome of the litigation. Cal. Code Civ. Proc. § 998. The potential payoff of a 998 offer to compromise is explained in section 998(c)(1):

If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.

Author: acarucci | Leave a comment Tagged commercial real estate, real estate litigation

Conflicts of Laws, Deficiency Actions, and Statutes of Limitations – Oh My!

Posted on May 2, 2017 by Ben Reeves

What law governs a deficiency action if the choice-of-law provisions in the note and deed of trust conflict? The Arizona Court of Appeals answered that very question in ZB, N.A. v. Hoeller, No. 1 CA-CV 16-0071 (Ct. App. April 15, 2017). It turns out, the note controls.

The Facts

In ZB, ZB, N.A. (ZB), a Utah bank, lent money to the Hoellers to purchase a commercial property in Missouri. The note included a choice-of-law provision stating that Utah law governed the debt. The deed of trust securing the commercial property, however, provided that Missouri law controlled “procedural matters related to the perfection and enforcement of [ZB’s] rights and remedies against the [p]roperty.” In 2012, the Hoellers defaulted, and the bank recovered the property through a trustee’s sale.… Read More »

Author: Ben Reeves | Leave a comment Tagged choice-of-law provisions, deficiency action, real estate litigation, Statute of Limitations

Landlords Beware: Subordination Agreements

Posted on April 27, 2017 by Kevin Parker

In the recent Arizona Court of Appeals case Earle Investments, LLC v. Southern Desert Medical Center Partners, 762 Ariz. Adv. Rep. 12 (2017), the Court of Appeals addressed the question of the scope of a subordination agreement signed by the property owner (Lessor/Landlord) at the request of the Lessee/Tenant and Lessee/Tenant’s Lender. In general, by subordination, Party No. 1 with a higher/better lien priority agrees to allow Party No. 2 (usually a lender providing construction funds for the overall betterment of the property) to get a lien position in front of Party No. 1. Party No.… Read More »

Author: Kevin Parker | Leave a comment Tagged subordination

Colorado House Bill 1279 stalls over 120-day unit owner election period

Posted on April 14, 2017 by Luke Mecklenburg

With the session more than halfway through, the Colorado Legislature’s 2017 attempts at meaningful construction defect reform may fail again. This year, the Legislature did not attempt a single-bill construction defect overhaul like those that have failed over the last half-decade. Rather, it has sought to enact reforms on a piecemeal basis, with several smaller bills addressing specific issues that have been affecting condominium construction along Colorado’s booming Front Range.

This new approach appears to be headed towards much the same outcome as the failed efforts of the past. House Bill 1169 would have given developers a statutory right to repair before being sued by homeowners, and Senate Bill 156 would mandate arbitration or mediation. … Read More »

Author: Luke Mecklenburg | Leave a comment

What is the Effect of an Untimely Challenge to the Timeliness of a Trustee’s Sale?

Posted on April 11, 2017 by Ben Reeves

Ever wonder what happens if a person challenges the timeliness of a trustee’s sale after the sale already occurred? Waiver of the argument of course! And, in the case of Wells Fargo Bank, N.A. v. Waltner, the affirmance of an eviction judgment.

In the Waltner case, Wells Fargo Bank, N.A., as Trustee for WaMu Mortgage Pass-Through Certificates, Series 2005-PR4 Trust (the “Bank”), purchased a residential property at a trustee’s sale in September 2015. The Bank gave the occupant of the house, Sarah Waltner (“Waltner”), notice to vacate the property, but she did not do so. Accordingly, the Bank filed a summary action to evict Waltner, which the trial court ultimately granted.… Read More »

Author: Ben Reeves | Leave a comment Tagged A.R.S. 33-811(C), Statute of Limitations, trustee's sale, waiver

Utah Becomes First State to Enact the Uniform Commercial Real Estate Receivership Act

Posted on March 27, 2017 by Ben Reeves

By: David Leta

On March 25, Utah became the first state to enact the Uniform Commercial Real Estate Receivership Act (“UCRERA”) which was drafted by the National Conference of Commissioners on Uniform State Laws (the “Conference”) and adopted by the Conference at its annual meeting in July 2015. The Utah Uniform Commercial Real Estate Receivership Act, (the “Utah Act”) mirrors UCRERA and applies to all commercial real property receiverships that are filed in the Utah District Courts on and after May 9, 2017.

The Utah Act provides both substantive and procedural guidance in an area of law that historically has been marked by inconsistency and uncertainty.… Read More »

Author: Ben Reeves | Leave a comment

Arizona Supreme Court Holds a Credit Bid at a Trustee’s Sale Should Not be Credited to a Title Insurer Under a Standard Lender’s Title Policy To the Extent the Bid Exceeds the Collateral’s Fair Market Value

Posted on February 28, 2017 by Richard Herold

By: Richard H. Herold

The Arizona Supreme Court recently addressed what impact, if any, a lender’s credit bid at an Arizona trustee’s sale has on an insurer’s liability under Sections 2, 7 and 9 of the standard’s lender’s title policy (“Policy”), holding in Equity Income Partners, LP v. Chicago Title Insurance Company, 241 Ariz. 334, 387 P.3d 1263 (February 7, 2017) as follows:

Section 2 of the Policy, entitled “Continuation of Insurance,” not Section 9, entitled “Reduction of Insurance; Reduction or Termination of Liability,” applies when a lender acquires property at a trustee sale by “either a full- or partial-credit bid” since Section 2 directly addresses the existence and amount of coverage in such circumstances.

Author: Richard Herold | Leave a comment Tagged credit bid, Lender's title insurance, trustee's sale

Federal Court Issues Permanent Injunction and Permanently Shuts Down Santa Ysabel’s Desert Rose Bingo

Posted on January 19, 2017 by acarucci

On December 12, 2016, Judge Battaglia of the United States District Court for the Southern District of California issued the Court’s long-awaited ruling on the State of California and Federal Government’s motions for summary judgment in the Iipay Nation of Santa Ysabel tribe’s (the “Tribe”) Desert Rose Bingo case. The State of California argued that the Tribe’s Internet bingo website, Desert Rose Bingo, offered a Class III game—as classified under the Indian Gaming Regulatory Act (“IGRA”)—to patrons in violation of the Tribe’s Tribal-State Compact with the State. Both the State and the Federal Government also argued that the Tribe’s Internet bingo operation violated the federal Unlawful Internet Gambling Enforcement Act (“UIGEA”) by allowing patrons to participate off-reservation.… Read More »

Author: acarucci | Leave a comment Tagged real estate, real estate litigation

Forcible Entry and Detainer Actions: Courts May Not Consider Tenant’s Hardship

Posted on December 5, 2016 by Erica Stutman

If you own property and a tenant wrongfully refuses to vacate the premises (for example when the lease expires or after proper written notice of termination), you may have a quick and easy remedy to have the tenant removed. Arizona’s forcible entry and detainer (FED) statute allows a person to bring a speedy, summary action to obtain an order that the person must leave the property immediately. See A.R.S. § 12-1171 – 1183. To allow for quick resolution, the only question a court may consider in a FED action is who has the right of possession of the property. … Read More »

Author: Erica Stutman | Leave a comment Tagged eviction, Forcible Entry and Detainer, Sunquest, Tucson Lot 4

Green Energy Can Complicate Real Estate Foreclosures

Posted on November 24, 2016 by Bob L. Olson

Bob L. Olson

A quick drive through almost any newer residential community in the Southwest will show that a lot of residents are embracing “Green Energy” or renewable energy by placing solar panels on their properties. While most people would agree that increasing the use of alternative energy is socially responsible, there are a number of real estate investors that may view it as an opportunity to make additional profits by purchasing distressed properties with solar panels and then reselling those properties for more than they would be worth without solar panels. The theory is relatively straight forward as many believe that foreclosure of a deed of trust that was recorded before the solar panels were installed would extinguish any liens in favor of the vendor that sold or financed the sale of the solar panels. … Read More »

Author: Bob L. Olson | Leave a comment Tagged alternative energy, fixture, foreclosure, green energy, lease, renewable energy, solar

Franchisors Should Consider Signing a Conditional Lease Assignment Rather Than a Franchisee’s Lease

Posted on November 10, 2016 by Richard Herold

By: Richard H. Herold

In Franchise & High Properties, LLC v. Happy’s Franchise, LLC, a 2015 decision issued by the Court of Appeals in Michigan, the franchisor, Happy’s Pizza Franchise, LLC, signed a five-year lease for the commercial space to be occupied by its franchisee, Happy’s Pizza #19, Inc. The franchisor did so to secure a right of first refusal to purchase the property and to enforce the franchise agreement to have the lease assigned to the franchisor if the franchisee defaulted.

The issue in the case was whether the term “tenant” referred solely to Happy’s Pizza #19 or whether it also included Happy’s Franchise as a co-tenant. … Read More »

Author: Richard Herold | Leave a comment Tagged franchise litigation, franchisee, Guarantor, landlord, lease, tenant

Sierra Pacific v. Bradbury goes unchallenged: Colorado’s six-year statute of repose begins when a subcontractor’s scope of work ends

Posted on October 25, 2016 by Luke Mecklenburg

It’s official: the October 20, 2016 deadline to petition for certiorari to the Colorado Court of Appeals on its decision in Sierra Pacific Industries, Inc. v. Bradbury has passed, so it appears that decision will stand.

In Sierra Pacific, the Court of Appeals held as a matter of first impression that the statute of repose for a general contractor to sue a subcontractor begins to run when a subcontractor’s scope of work is substantially complete, regardless of the status of the overall project. Sierra Pac. Indus., Inc. v. Bradbury, 2016 COA 132, ¶ 28, ___ P.3d ___. The Court of Appeals interpreted the statute of repose in C.R.S.… Read More »

Author: Luke Mecklenburg | Leave a comment

Avoiding Lender Liability for Credit-Related Actions in California

Posted on October 21, 2016 by acarucci

Aside from general statutory prohibitions on lender discrimination, there are certain circumstances under California law in which lenders may be held liable for credit-related actions, such as negotiating or denying credit. See generally 11 Cal. Real Est. § 35:3 (explaining that the business of lending money is subject to the Unruh Civil Rights Act, Cal. Civ. Code § 51 et seq., the Fair Employment and Housing Act, Cal. Gov. Code § 12900 et seq., the Federal Fair Housing Act, 42 U.S.C. § 3601 et seq., and the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq.… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, foreclosure, foreclosures, real estate, real estate litigation, real property

What Do I Do With This Stuff? Dealing With Abandoned Property After Foreclosure

Posted on October 5, 2016 by Lyndsey Torp

By: Lyndsey Torp

You’ve successfully foreclosed on a commercial building in California, and, thankfully, the borrower moved out after foreclosure or after a period of tenancy. But the borrower left behind all sorts of property – furniture, filing cabinets, records, and other assorted property. While you may be tempted to just toss it all in the dumpster, doing so may subject you to liability. There are several statutes that you should consider when determining how to handle the abandoned property.

Statutory Options for a Landlord

A landlord-tenant relationship may arise following foreclosure if, for example, the owner of the property accepts rent from the former owner.… Read More »

Author: Lyndsey Torp | Leave a comment Tagged abandon, abandoned property, foreclosure, lost property, personal property, records

Developer Awarded Cost of Preparing Administrative Record in CEQA Lawsuit

Posted on September 22, 2016 by Sean M. Sherlock

Lawsuits under the California Environmental Quality Act (“CEQA”) typically proceed as petitions for administrative mandamus. This means the petitioner is asking the court to review an agency’s decision and ultimately issue a mandate directing the agency to set aside its decision. In this respect the court acts like an appellate court, reviewing the agency’s decision. There are no witnesses or trial exhibits or jurors or opening statements. The court reads the parties’ briefs, hears their arguments, and makes its decision based on the evidence in the administrative record of proceedings.

The administrative record is often voluminous. It includes not only the environmental reports, but also all project application materials, staff reports and related documents, public notices, written comments and responses, all evidence or correspondence submitted to or relied upon by the agency, hearing transcripts, written findings, and more. … Read More »

Author: Sean M. Sherlock | Leave a comment Tagged administrative record, CEQA, costs of suit

Washington Answers the Question of Whether Title Companies Owe a Duty of Care to Third Parties…

Posted on September 14, 2016 by Ben Reeves

Centurion Properties III, LLC v.… Read More »

Last year (as we blogged about here and wrote a more in depth Law360 article about here), the Ninth Circuit certified to the Washington Supreme Court the question of whether title companies owe a duty of care to third parties when they record legal instruments. We finally have an answer…

“We answer the certified question no and hold that title companies do not owe a duty of care to third parties in the recording of legal instruments. Such a duty is contrary to Washington’s policy and precedent, and other duty of care considerations.”

Author: Ben Reeves | Leave a comment Tagged Centurion, duty, gratuitous recording, real estate litigation, title company liability

California Supreme Court Upholds Precondemnation Procedures

Posted on September 9, 2016 by Patrick J. Paul

By Patrick J. Paul

On July 21, 2016, the California Supreme Court in Property Reserve v. Superior Court upheld the state’s precondemnation entry and testing statutes provided they were reformed to allow impacted property owners the ability to have a jury trial to determine damages associated with such entry and testing.

The California Department of Water Resources (DWR) sought to construct water conveyance facilities that would require significant property condemnation. As part of this process, DWR further sought to investigate the environmental and geological suitability of more than 150 private properties considered for the conveyance route.

DWR proposed two sets of precondemnation diligence – – environmental and geological activities.… Read More »

Author: Patrick J. Paul | Leave a comment

Equitable Subrogation Part Deux: Mechanic’s Lien vs. Later Bank Deed of Trust

Posted on August 30, 2016 by Kevin Parker

By Kevin J. Parker

https://www.swlaw.com/people/kevin_parker

This post follows, almost two years to the day, Rick Erickson’s post of August 29, 2014. As noted by Rick Erickson in his August 29, 2014 post, the Arizona Supreme Court in the Weitz case (2014) had determined that equitable subrogation principles were applicable to enable an earlier-recorded mechanic’s lien to be trumped by a later-recorded bank deed of trust, if the loan secured by the later deed of trust paid off a lien that had been ahead of the mechanic’s lien. In a decision filed August 9, 2016, the Arizona Court of Appeals further clarified the scope of such equitable subrogation.… Read More »

Author: Kevin Parker | Leave a comment Tagged equitable subrogation, mechanic's lien, real estate litigation

“Rip and Tear” Damage Remains Covered Under CGL Policy as “Accident”—for Now.

Posted on August 4, 2016 by mlindsay

By: Michael Lindsay and Luke Mecklenburg

The Colorado Supreme Court has approved a settlement between the parties to an appeal of the 2012 Colorado Pool Systems v. Scottsdale Insurance Company Court of Appeals case, leaving that ruling intact. The ruling parses a fine line between uncovered costs of repairing defective work and covered costs of damage caused to nondefective work while repairing defective work. This nuanced opinion, which is now established Colorado law, is worth a second look.

In Colorado Pool Systems, Inc. v. Scottsdale Insurance Company, the Colorado Court of Appeals determined that so-called “rip and tear” damage caused by a construction professional to nondefective work while correcting defective work is covered as an “accident” under standard Commercial General Liability insurance language. … Read More »

Author: mlindsay | Leave a comment

Landlords Must Not be Arbitrary When Denying a Tenant’s Request To Sublease or Assign

Posted on July 8, 2016 by Richard Herold

By: Richard Herold

So, you’re a landlord who’s entered into a 30-year lease, the lease has rent escalation clauses which are dramatically out of step with the market, and it’s your view that you are therefore losing money every month. The tenant is closing its business and wants to sublet or assign the lease to a similar business for the final seven years of the lease. While these cases are fact-sensitive, some of the following rules may apply where the lease provides the tenant with an opportunity to ask the landlord to consent to an assignment of the lease or a sublease.… Read More »

Author: Richard Herold | Leave a comment Tagged Arizona real estate, commercial real estate, landlord, lease, real estate litigation, tenant

Hold that paintbrush! A glimpse into design-control in planned communities

Posted on June 27, 2016 by Erica Stutman

You are choosing a new paint color for the outside of your house, and you think, “Since all the other houses are beige, I’ll do mine purple.” Not so fast – you better check your community’s governing documents before brushing on that first coat of paint.

If you live in a planned community, you’ve probably seen a Declaration of Covenants, Conditions, and Restrictions (or similarly-titled document) (CC&Rs), which established the community and a homeowners’ association to govern it. Among other things, CC&Rs often allow for the creation of a design-review or architectural committee to act on behalf of the association, giving the committee members broad discretion to review and approve homeowners’ plans to modify their properties.… Read More »

Author: Erica Stutman | Leave a comment Tagged architectural committee, CC&Rs, design-control, HOA, homeowners association

Common Law Indemnity Claim Affirmed on Justifiable Beliefs

Posted on June 22, 2016 by Rick Erickson

By Rick Erickson https://www.swlaw.com/people/rick_erickson

Yesterday, the Arizona Court of Appeals issued an interesting opinion in Hatch Development v. Solomon. Hatch illustrated two key points in real estate and construction litigation: (1) a contractor’s indemnity does not always require an expressly written obligation; and (2) when facts are undisputed that a contractor is solely at fault for a construction defect, a property owner can be indemnified after paying a neighboring property owner for damages caused by the contractor’s defective work.

Hatch was a homeowner who hired Solomon to install sewer lines. After installation, heavy rain led to muddy water in the sewer lines, suggesting a defect in the installation. … Read More »

Author: Rick Erickson | Leave a comment Tagged Arizona real estate, common law indemnity, construction, construction defect litigation, implied indemnity, indemnity, real estate, residential construction, restatement of restitution, sewer installation, statute of limitation

California’s One-Action Rule May Apply to Federal Lenders

Posted on June 3, 2016 by acarucci

California’s one-action rule provides that “[t]here can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property or an estate for years therein . . . .” Cal. Code Civ. Proc. § 726(a). In other words, the one-action rule prescribes that the only process for recovery of a debt secured by a mortgage or deed of trust is to foreclose on the lien. The rule aims to prevent a multiplicity of actions and vexatious litigation, and to force a beneficiary to look to all of the security as the primary fund for payment of a debt before looking to the trustor’s other assets.… Read More »

Author: acarucci | Leave a comment Tagged anti-deficiency, commercial real estate, deficiency, foreclosure, foreclosures, Guarantor, guaranty, one-action rule, real estate, real estate litigation, real property

Governor Ducey Vetoes Water and Development Bills

Posted on June 2, 2016 by Patrick J. Paul

By Patrick J. Paul

With the second regular legislative session of Governor Doug Ducey’s tenure complete, the Governor exercised his veto pen rejecting several laws impacting water and land development.

On May 9th, Governor Ducey vetoed two measures that could have allowed developers to manipulate the requirements of Arizona’s Groundwater Management Act of 1980: Senate bills 1268 (adequate water supply requirements) and 1400 (county water supply). The bills’ sponsor, Senator Gail Griffin, had expressed concerns that the federal government was exercising too much control of the water supply in Cochise County in its efforts to ensure the continued flow of water in the San Pedro River.… Read More »

Author: Patrick J. Paul | Leave a comment

Applying New California Rules to Your Real Estate Litigation Practice

Posted on May 18, 2016 by Lyndsey Torp

By: Lyndsey Torp

Several new California procedural rules went into effect on January 1, 2016. While we are several months into the new year, litigators may need a reminder of these new rules. The list below summarizes several of the notable new rules.

Pleading Stage
- New California Code of Procedure section 430.41(a)(2) mandates that the parties meet and confer at least five days before filing a demurrer (California’s motion to dismiss). If the parties fail to meet and confer, the demurring party may submit a declaration to the court explaining why the meet and confer did not happen, and the demurring party is granted an automatic 30-day extension.

Author: Lyndsey Torp | Leave a comment Tagged 2016 California Code of Civil Procedure, 2016 California rule changes

California Case Deals with Nuisance Lawsuit Intended to Delay Foreclosure

Posted on May 11, 2016 by Sean M. Sherlock

A recent California case provides good precedent for dealing with nuisance lawsuits that are intended to delay valid foreclosures. In Brown v. Deutsche Bank National Trust Company —Cal.Rptr.3d—, 2016 WL 2726229 (May 9, 2016), plaintiff sued defendants to stop them from foreclosing on her home. The trial court sustained defendants’ demurrer without leave to amend, and dismissed plaintiff’s complaint. The court of appeal affirmed.

In 2004, plaintiff took a $450,000 home loan from Washington Mutual Bank. Washington Mutual failed in 2008, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed its receiver. The FDIC sold many of Washington Mutual’s assets, including loans and mortgage servicing rights, to JPMorgan Chase Bank (“Chase”). … Read More »

Author: Sean M. Sherlock | Leave a comment Tagged demurrer, foreclosure, judicial notice

Special Rules for Eviction Actions

Posted on April 11, 2016 by Kevin Parker

By: Kevin Parker

In a recent case, the Arizona Court of Appeals addressed the special rules of procedure for eviction actions. The eviction rules became effective January 1, 2009. In Sotomayor v. Sotomayor-Munoz, 735 Ariz. Adv. Rep. 28 (March 28, 2016), the court addressed the question of whether the evicted tenant had timely appealed. The trial court had entered a formal judgment of eviction; and the tenant had filed various post-judgment motions which the tenant apparently believed extended the tenant’s deadline for filing a notice of appeal. The Court of Appeals determined that the appeal was untimely because, according to the court, the particular motions filed by the tenant did not extend the appeal deadline. … Read More »

Author: Kevin Parker | Leave a comment Tagged appeal, eviction, landlord-tenant, real estate litigation

Nevada Supreme Court Holds that Foreclosure Of HOA Lien Extinguishes Equal Priority HOA Lien.

Posted on April 8, 2016 by Bob L. Olson

By: Bob L. Olson

In Nevada’s master-planned communities it is common for one home to be in multiple homeowners’ associations. In such cases there is generally a master association for the master-planned community and then sub-associations for specific developments within the master-planned community. The liens of the master association and the sub-association have equal priority unless their declarations provide otherwise. See NRS 116.3116(8) (formerly NRS 116.3116(4)). Earlier this year in Southern Highlands Community Association v. San Florentine Avenue Trust, 132 Nev. Adv. Op. 3 (Jan. 14, 2016), the Nevada Supreme Court (the “Court”) had the opportunity to discuss the effect of the foreclosure by one association on the other association’s lien of equal priority.… Read More »

Author: Bob L. Olson | Leave a comment Tagged foreclosure, Homeonwers Associations, lien priority, NRS 116.3116, San Florentine, Southern Highlands

Examining Denver’s new construction defect reform ordinance

Posted on March 18, 2016 by mlindsay

Construction defect reform is a hot-button issue in Colorado. This is especially true along the booming Front Range, where rapidly increasing population has driven the prices of renting and buying property a mile high. Developers maintain that building condominiums is just too risky given their exposure to lawsuits from dissatisfied owners under current state law, while homeowners’ rights groups insist that the current system is necessary to protect homeowners from shoddy construction in what amounts to the biggest investment of many peoples’ lives.

In the face of such a polarizing issue, the Colorado legislature has tried but failed to pass any meaningful reform.… Read More »

Author: mlindsay | Leave a comment

Eminent Domain: Be Careful What You Ask For

Posted on February 5, 2016 by Richard Herold

By: Richard Herold and Patrick Paul

The condemnation[1] of property for public works may not always be as clean and easy as the government would like. Although local governments are often critical players in the cleanup and redevelopment of contaminated properties, contaminated property can: (1) trigger disclosure requirements; (2) lead to environmental liability, for example, under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) (42 U.S.C. §9601, et seq.) or an analogous state statute;[2] and/or (3) impact the ultimate valuation of the property.

Local governments can be liable under CERCLA as any one of the following:

A current owner or operator of the contaminated property
An owner or operator of the property at the time of contamination
A party who arranged for the disposal of contamination
One who transported the hazardous substances to the property

Condemning authorities can, however, avail of Superfund’s bona fide prospective purchaser defense by engaging in all appropriate inquiry in advance of condemnation and/or taking reasonable post condemnation steps with respect to any known or discovered contamination.… Read More »

Author: Richard Herold | Leave a comment Tagged condemn, condemnation, eminent domain, environmental liability, real estate, real estate litigation, real property, seller disclosures, valuation

Tips on Pursuing and Defending Complaints against Contractors

Posted on January 18, 2016 by Rick Erickson

By Rick Erickson firm bio

The often staggering cost of litigation has prompted an equally staggering amount of regulatory complaints against contractors in recent years. Why? Because filing a complaint against a contractor may not cost a complainant anything but time. And any litigation expenses are mostly borne by the contractor/respondent, who is anxious to defend and protect their license and reputation (i.e. their livelihood).

Here are some tips for pursuing or responding to a complaint and getting the best out of your state’s contractor regulatory agency (in Arizona, the Registrar of Contractors):

(1) Respect the Registrar. Your regulatory agency is probably understaffed and overworked.… Read More »

Author: Rick Erickson | Leave a comment Tagged building code, construction, construction bonds, construction litigation, contractor administration, Registrar of Contractors, regulation of contractors, regulatory complaints, surety liability, workmanship

Lenders Should Contract for the Right to Recover Lost Goodwill Proceeds when Commercial Property is taken in Eminent Domain

Posted on January 14, 2016 by acarucci

Business Goodwill Generally

In California, the “goodwill” of a business “consists of the benefits that accrue to a business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage.” Cal. Code Civ. Proc. § 1263.510(b). Put another way: “Goodwill is the amount by which a business’s overall value exceeds the value of its constituent assets, often due to a recognizable brand name, a sterling reputation, or an ideal location. Regardless of the cause, however, goodwill almost always translates into a business’s profitability.” People ex rel.… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, condemnation, eminent domain, just compensation, lien, real estate, real estate litigation

Guarantors’ “Lost Profits” Completely Offset Lender’s Deficiency Claim

Posted on January 8, 2016 by Ben Reeves

Believe it or not, lenders can breach loan agreements too…and when they do, there can be significant consequences. In Great Western Bank v. LJC Dev., LLC, 726 Ariz. Adv. Rep. 21 (Ariz. Ct. App. Nov. 10, 2015), the Court of Appeals affirmed that guarantors’ “lost profits” resulting from the lender’s breach of a loan agreement completely offset the amount owed under the guaranty. Much can be learned from this unusual outcome, so please continue reading for an analysis of the facts and legal principles of this case.

The Loan Agreements

In Great Western Bank, the bank entered into an acquisition and development loan (the “A&D Loan”) with Cedar Ridge Investments, LLC (“Borrower”) to allow Borrower to acquire and begin the development of infrastructure for a fifty-home subdivision in Flagstaff, AZ to be known as Cedar Ridge.… Read More »

Author: Ben Reeves | Leave a comment Tagged deficiency action, Guarantor, lost profits, offset, real estate litigation

The Uniform Law Commission Approves the Uniform Commercial Real Estate Receivership Act

Posted on December 15, 2015 by Ben Reeves

As we previously reported here, several years ago the Uniform Law Commission (the “ULC”) (the organization that drafted such favorites as the Uniform Commercial Code and the Uniform Arbitration Act) determined that states would benefit from a model act that would govern the powers, rights, and duties of receivers appointed over commercial real property. Since that time, a drafting committee has worked diligently to prepare a comprehensive statute that would address this unique area of law. The ULC recently approved the drafting committee’s final version, and the result is the Uniform Commercial Real Estate Receivership Act (the “Act”).… Read More »

Author: Ben Reeves | Leave a comment Tagged model receivership act, real estate litigation, receiver, Uniform Commercial Real Estate Receivership Act

School district’s condemnation of a private road passes the test

Posted on December 4, 2015 by Erica Stutman

By: Erica Stutman 

The power of eminent domain allows a government or quasi-governmental entity to condemn (take) private property for a public use upon a showing of necessity. In exchange, the property owner must receive “just compensation” equal to the property’s fair market value, and may be entitled to additional damages, such as severance damages, relocation expenses, costs, or interest. The eminent domain powers of school districts and other political subdivisions is set forth in A.R.S. § 12-1111.

In Catalina Foothills Unified School District No. 16 v. La Paloma Property Owners Association, the Arizona Court of Appeals confirmed that a school district may condemn a private road for vehicles to enter a school campus. … Read More »

Author: Erica Stutman | Leave a comment Tagged ARS 12-1111, condemnation, cost to cure, eminent domain, fair market value hearing, just compensation, severance damages

Property Taxes: A Shopping Center May Not Always be a Shopping Center

Posted on November 2, 2015 by Richard Herold

By: Rick Herold, Craig McPike & Ben Reeves

In the world of real property taxes, Valuation + Classification = Assessed Valuation. Sounds simple, right? The County Assessor determines the first factor, valuation (subject to certain guidelines under applicable Arizona law). The Arizona State Legislature determines the second factor, the property’s legal classification and corresponding assessment ratio (i.e., tax rate). Given the wide disparity in assessment ratios, classification can be a major issue for taxpayers.

Recently, the Court of Appeals confirmed that a shopping center for valuation purposes may not be a shopping center for classification purposes. Scottsdale/101 Associates LLC v.… Read More »

Author: Richard Herold | Leave a comment Tagged movie theater, real estate, shopping center, tax appeal, valuation, zoning

Statute of Frauds: (1) Email as “Writing” and (2) Email Signature as “Signature”

Posted on October 26, 2015 by Kevin Parker

Arizona, like most states, has a Statute of Frauds that essentially requires real estate related contracts to be both (1) in writing and (2) signed by the party to be charged. A.R.S. § 44-101. Questions often arise as to whether an email can satisfy the “writing” requirement, and whether an electronic signature can satisfy the “signed by the party to be charged” requirement. The answer to these questions, like many legal questions, is: it depends. Whether an email can satisfy the “writing” requirement might depend on whether the transaction relates to interstate commerce. Pursuant to federal statute, 15 U.S.C.… Read More »

Author: Kevin Parker | Leave a comment Tagged electronic signature, real estate litigation, statute of frauds

It just got a little bit easier to enforce judgment liens

Posted on October 20, 2015 by Ben Reeves

Last year, we posted It just got a little bit harder to enforce judgment liens, which analyzed a Court of Appeals decision that invalidated a judgment lien against third-party purchasers due to the judgment creditors’ failure to record an information statement along with the judgment. Lewis v. Debord, 236 Ariz. 57, 335 P.3d 1136 (Ct. App. 2014). In that case, even though the Court of Appeals found that the judgment lien remained valid, the opinion concluded that the failure to record the information statement affected the “priority” of the judgment lien and rendered the third-party purchasers’ ownership interest superior to the judgment creditors’ lien interest. … Read More »

Author: Ben Reeves | Leave a comment Tagged judgment lien, Lewis v. DeBord, real estate litigation

Offensive Discovery after Strudley and Changes to the Colorado Rules of Civil Procedure

Posted on September 10, 2015 by nmcconomy

Toxic tort cases often involve real property, especially in areas with large mining and energy sectors like the West and Southwest. The cases frequently have large potential damage values and require extensive discovery. Numerous expert witnesses, vast amounts of real property testing, and significant document production are common. The cost of engaging in this far reaching discovery is often a significant factor in early settlement negotiations. Toxic tort defendants have a substantial incentive to settle disputes before engaging in discovery no matter the likelihood of success at trial because the discovery costs alone represent a sizeable expense that cannot be recovered even with a successful verdict at trial.… Read More »

Author: nmcconomy | Leave a comment Tagged Civil Procedure, Colorado, Colorado Rules of Civil Procedure, discovery, Lone Pine orders, offensive discovery, quash, toxic tort

Homebuilders Welcome Recent Court Decisions

Posted on September 2, 2015 by Patrick J. Paul

By: Patrick Paul

Arizona homebuilders will welcome with open arms two recent legal rulings of substantial impact to their industry. In the first decision, on July 28, 2015, in Sullivan v. Pulte Home Corp., No. 1 CA-CV 14-0199, the Arizona Court of Appeals held that homebuilders do not owe a duty of care to subsequent (non-original homeowners) for economic losses arising from latent construction defects unaccompanied by physical injury to persons or other property.

The fairly simple fact scenario follows. In 2000, Pulte Home Corporation sold the home at issue to the original homeowners, who, in 2003, sold the property to the Sullivan Plaintiffs. … Read More »

Author: Patrick J. Paul | Leave a comment Tagged Clean Water Act, economic loss rule, homebuilder, Water of the United States

Does a title company owe a duty of care to third parties in the recording of legal instruments?

Posted on August 18, 2015 by Ben Reeves

This is precisely the question that the Ninth Circuit recently certified to the Washington Supreme Court in Centurion Properties III, LLC v. Chicago Title Ins. Co.

Facts of the Case

In this case, Centurion Properties III, LLC (the “Borrower”) purchased a tract of real property in Washington with a loan from General Electric Capital Corporation (the “Senior Lender”), and secured the loan with a first position lien against the property. The loan documents and lien instruments specifically prohibited further encumbrance of the property without the Senior Lender’s prior written consent. Chicago Title served as the escrow agent, closing agent, and the title insurer for this transaction.… Read More »

Author: Ben Reeves | Leave a comment Tagged Centurion Properties v. Chicago Title, duty to third-party, real estate law, title insurance

HOA Super Priority Legal Battles Continue in the Silver State: What Senate Bill 306 Means for Nevada HOAs, Lenders and Homeowners

Posted on July 29, 2015 by Ben Reeves

By: Aaron D. Ford and Karl O. Riley

In 1991, the Nevada Legislature enacted the Uniform Common-Interest Ownership Act (UCIOA) which had been promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) (the Statute).^[1] This law provides that a homeowners association (HOA) may record a lien on each home in the community it governs and in enacting this law, the Legislature authorized an HOA to foreclose its lien through a nonjudicial foreclosure process.^[2] When the lien attaches or comes into existence continues to be a dispute issue in the ongoing litigation. Under this law, the HOA’s lien is prior to the first mortgage lien to the extent of certain maintenance and abatement charges and either six or nine months of assessments for common expenses, depending on the circumstances.… Read More »

Author: Ben Reeves | Leave a comment Tagged HOA Liens, Nevada, real estate litigation, SB 306, Super-Priority Liens

New Landlords Should Not Ignore Arizona’s Requirement To Register With The County Assessor’s Office

Posted on July 23, 2015 by Cory Braddock

By: Cory L. Braddock

With ongoing price volatility in Arizona’s residential real estate market, homeowners may be tempted to become recreational landlords. Anyone considering renting their home, however, should be aware that Arizona law requires residential rental property owners to register their residential rental property with the county assessor’s office, presumably so that assessor can assess the appropriate taxes to the property owner. See A.R.S. § 33-1902.

The owner of a residential rental property is required to maintain the following information with the county assessor:

The name, address, and telephone number of the property owner;
The street address and parcel number of the property; and
The year the property was built.

Author: Cory Braddock | Leave a comment Tagged Arizona residential properties, residential, tenant

Are Short-Term Vacation Rentals Legal?

Posted on July 9, 2015 by Ben Reeves

The recent explosion in popularity of short-term vacation rentals through services such as Airbnb.com and VRBO.com not only provides terrifying horror stories about problem renters (google it if you’re interested), but also raises serious questions about the legality of the practice.

Many cities are currently struggling with this very issue. Opponents to short-term rentals argue that transient renters disrupt otherwise peaceful neighborhoods and negatively impact local business like traditional hotels. Proponents of the practice contend that they have a constitutionally protected property right to use their private property without governmental interference. In Jerome, Arizona, the City recently grappled with this very issue, and ultimately decided to inform a few of its citizens that they could no longer rent their homes on a short-term basis—much to the chagrin of the affected property owners.… Read More »

Author: Ben Reeves | Leave a comment Tagged real estate litigation, short-term rentals, zoning

Arizona Court Clarifies Premise Liability

Posted on July 2, 2015 by Kevin Parker

In a recent Arizona Court of Appeals case, the court clarified the rules for liability of a property owner to a person injured on the premises. In Lee v. M & H Enterprises, Inc. and Wal-Mart Stores, Inc. (filed April 21, 2015), the Arizona Court of Appeals addressed the question whether Wal-Mart as the property owner was liable for injuries suffered by an employee of an independent contractor performing construction services on the premises. The injured person sued both Wal-Mart and his employer, the construction company. The court reiterated the general rule that a landowner is not liable for the negligent conduct of an independent contractor on the premises unless the landowner has been independently negligent.… Read More »

Author: Kevin Parker | Leave a comment Tagged Premises liability, real estate litigation

Guarantors Can Waive Anti-Deficiency Protections

Posted on June 22, 2015 by Ben Reeves

By: Richard H. Herold and Ben Reeves

In Arizona, guarantors can now be held liable for deficiencies even where borrowers avoid liability due to Arizona’s anti-deficiency statute.

Arizona courts have been active in the last few years in addressing the law governing post-trustee’s sale deficiencies under Arizona’s anti-deficiency statute, A.R.S. §33-814(G), which provides that no deficiency action may be maintained “if trust property of two and one-half acres or less which is limited to and utilized for either a single one-family or single two-family dwelling is sold pursuant to [a] trustee’s…sale.” The deficiency is determined by crediting the borrower and guarantor with the higher of: (a) the fair market value of the property on the date of the trustee’s sale; or (b) the sale price at the trustee’s sale, to reduce the total balance due and owing.… Read More »

Author: Ben Reeves | Leave a comment Tagged A.R.S. 33-814, anti-deficiency, Arizona Bank & Trust v. Barrons, guaranty, waiver

Upheld: Injured Subcontractor’s Lent Employee Has No Claim Against Landowner or General Contractor After Choosing Workers’ Compensation and Failing to Prove Landowner Controlled the Work

Posted on May 25, 2015 by Rick Erickson

By Rick Erickson (http://www.swlaw.com/attorneys/rick_erickson)

On this Memorial Day 2015, I write in honor of my U.S. Marine Corps colleague, Megan McClung, who was killed in Iraq nine years ago this December. Major McClung and I served together in Anbar Province in 2006. She was the first female Marine Corps officer to be killed in Iraq and the first female graduate of the U.S. Naval Academy to be killed in action. She is buried at Arlington National Cemetery.

In Lee v. M and H Enterprises, Inc., — P.3d —- (decided Apr. 21, 2015), the Arizona Court of Appeals recently clarified why, in most cases, landowners and general contractors are not liable when subcontractor employees are injured or killed on construction projects.… Read More »

Author: Rick Erickson | Leave a comment

The FDIC Reigns “Supreme” in Nevada

Posted on May 22, 2015 by Nathan Kanute

By: Nathan Kanute

For several years, Nevada Courts have considered a myriad of issues related to how Nevada law applies to loans made by banks that are later take over by the FDIC. In the past eight months, the Nevada Supreme Court has addressed two of those issues. See Munoz v. Branch Banking and Trust Company, Inc., 131 Nev., Adv. Op. 23 (Apr. 30, 2015) and Federal Deposit Insurance Corp. v. Rhodes, 130 Nev., Adv. Op. 88 (Oct. 30, 2014). In both cases, the Court held that the Supremacy Clause of the United States Constitution precluded application of the applicable Nevada statutes.… Read More »

Author: Nathan Kanute | Leave a comment

Successful Laches Defense Becoming Commonplace in Colorado

Posted on May 8, 2015 by nmcconomy

Boiler plate language in responsive pleadings often includes “Plaintiff’s claims are barred by the doctrine of laches” (or “The doctrine of laches bars Plaintiff’s claims” if you prefer the active voice). However, litigation of a laches defense is fairly rare, and a defendant successfully arguing a laches defense is something of a legal Haley’s Comet, only less reliable. Often, courts refuse to consider a laches defense if a statute of limitations applies. See e.g., Ivani Contracting Corp. v. City of New York, 103 F.3d 257 (2d Cir. 1997); and Lyons P’ship v. Morris Costumes, Inc., 243 F.3d 789 (4th Cir.… Read More »

Author: nmcconomy | Leave a comment Tagged Colorado, equitable defenses, laches, real estate, real estate litigation, real property, statute of limitation

Nevada Supreme Court holds that Voluntary Payment Doctrine Prohibits a Party from Recovering Amounts Wrongly Paid to Homeowner’s Association in Order to Prevent Foreclosure

Posted on April 30, 2015 by Bob L. Olson

By: Bob L. Olson

On September 30,2014, we posted “Lenders Beware: the Nevada Supreme Court Holds that Foreclosures of Homeowner’s Association Liens May Extinguish First Priority Deeds of Trust” which discussed the recent decision of SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 130 Nev. Adv. Op. 75 (Sept. 18, 2014) (“SFR”). At the risk of oversimplification, the SFR Court held that:

NRS 116.3116 (the “Statute”) splits the lien of a homeowner’s association (“HOA”) into a “superpriority piece” and a “subpriority piece.”
The superpriority piece of the HOA’s lien consists of the “last nine months of unpaid HOA dues and maintenance and nuisance-abatement charges” and is prior to the first priority lien.

Author: Bob L. Olson | Leave a comment Tagged HOA Lien, Nevada Association Services, real estate litigation, SFR Investments

Federal Courts to Apply More Protective State Law when Analyzing Validity of Pre-dispute Jury Trial Waivers in Diversity Jurisdiction Cases

Posted on April 22, 2015 by Sean M. Sherlock

By Anthony J. Carucci

The Ninth Circuit Court of Appeals recently held that federal courts sitting in diversity jurisdiction must apply the underlying state law to determine the validity of pre-dispute jury trial waivers where the state law is more protective than the federal law. In re Cnty. of Orange, No. 14-72343, 2015 WL 1727240, at *4–5 (9th Cir. Apr. 16, 2015).

Facts/Procedural History

In 2007, plaintiff County of Orange (the “County”) hired defendant Tata America International Corporation (“Tata”) to develop a property tax management system. Id. at *5. In 2008, the parties entered into a contract for that purpose, which included an unambiguous jury trial waiver.… Read More »

Author: Sean M. Sherlock | Leave a comment Tagged jury, waiver

Arizona Courts Lacks Authority To Stay Forcible Entry And Detainer Judgments When The Judgment Itself Is Not Pending Appeal

Posted on April 16, 2015 by Nicholas Kunz

By: Nicholas Kunz

Can a court stay the execution of a Forcible Entry and Detainer (“FED”) action when the FED judgment itself is not appealed? The Arizona Court of Appeals recently addressed this question, holding that the court did not have the authority to stay the execution of the FED judgment, because only the denial of an Abeyance/Motion to Set Aside Judgment—and not the original FED judgment—was being appealed.

Facts/Procedural History

Tri City National Bank (“TCNB”) became the owner of a property occupied by the Gradys through a trustee sale. Shortly after the trustee sale, TCNB filed an action for FED to remove the Gradys from the property.… Read More »

Author: Nicholas Kunz | Leave a comment Tagged FED, Forcible Entry and Detainer

Church Property Tax Liability in Arizona for Commercial Leases

Posted on April 8, 2015 by Bob Henry

By: Bob Henry

Arizona House Bill 2128, which was signed into law by Governor Doug Ducey on March 23, 2015, has potential impact on the commercial real estate leasing market. The bill enables owners of real property that is leased to religious institutions to enjoy the closest thing to a complete exemption that is available to lessees of real property owned by for-profit organizations or individuals.

This blog does not opine on policy issues, and the wisdom of this legislation can be debated. But this legislation nevertheless creates some potential practical and logistical issues—for better or worse, and depending on one’s perspective and circumstances. … Read More »

Author: Bob Henry | Leave a comment Tagged commercial real estate, HB 2128, leasing

A Purchaser Who Doesn’t Inquire May Be Teeing Up For Failure

Posted on April 2, 2015 by Erica Stutman

Picture this: While on the hunt for new development opportunities, you stumble across a golf course in the middle of a high-end community, and you think this would be the perfect spot for more houses, or a retail center, or a movie theater, or …oh, the possibilities are endless! Better yet, you learn you can buy it for a bargain. Before closing the deal, you review the property’s recorded chain of title and find nothing requiring the property to be used as a golf course. You sign the closing papers and start planning your perfect new development.… Read More »

Author: Erica Stutman | Leave a comment Tagged equitable easement, equitable servitude, golf course, implied easement, implied servitude, real estate development, real property, restrictive covenant

If Receiver’s Sales Aren’t Foreclosures, What Are They?

Posted on March 20, 2015 by Ben Reeves

By: Ben Reeves & Bob Olson

When no statute specifically authorizes a court-appointed receiver to sell real property, what type of sale is it? The Supreme Court of Nevada recently addressed this question, holding that “a receiver sale of real property that secures a loan is a form of judicial foreclosure.” U.S. Bank v. Palmilla Dev. Co., 131 Nev. Adv. Op. 9 (2015).

Facts

In U.S. Bank v. Palmilla, U.S. Bank made a $20.15 million loan to Palmilla Development Company secured by a development of townhomes. Palmilla defaulted, and U.S. Bank applied for, and obtained, the appointment of a receiver over its real property collateral.… Read More »

Author: Ben Reeves | 1 Comment Tagged anti-deficiency, NRS 40.455, real estate litigation, receiver sales, U.S. Bank v. Palmilla

Injunctive Relief for Building Encroachment. Do I Have to Move the House?

Posted on February 25, 2015 by Kevin Parker

By Kevin Parker

When a land owner mistakenly builds a house or other building or structure that encroaches on a neighbor’s property, what is the remedy? Does the offending land owner have to physically remove the structure from the neighbor’s property? Is the harmed neighbor entitled to a mandatory injunction against continuing trespass? Can the offending land owner invoke equitable “balancing of hardships” and simply pay damages? In a recent case, the Supreme Court of Rhode Island distinguished the encroachment situation from traditional injunctive relief analysis. (A court order requiring the offending land owner to remove the offending structure would be a mandatory injunction order.) The general rule is that a party seeking injunctive relief must prove irreparable harm not remediable by damages. … Read More »

Author: Kevin Parker | 1 Comment Tagged encroachment, injunction, real estate litigation, trespass

Inverse Condemnation: When is Your Claim Precluded by the Arizona Statute of Limitations?

Posted on February 19, 2015 by Richard Herold

By: Richard Herold

An inverse condemnation of a landowner’s property can occur when a governmental entity: (1) physically takes the property without compensation; or (2) passes a new law that has a serious impact on the value and/or utility of the property. At times, the taking may be obvious, for example, if the governmental entity deprives the owner of access to the property by putting up a fence. While regulatory takings are at times less obvious and/or pressing, in both cases, the property owner may adopt the view that he or she will simply address the problem later.

Believe it or not, the property owner needs to move quickly and file suit within one year of the taking.… Read More »

Author: Richard Herold | Leave a comment Tagged inverse condemnation

Are Vacant Lots Protected Under Arizona’s Anti-deficiency Statutes?

Posted on February 11, 2015 by Ben Reeves

No, of course not. Arizona’s anti-deficiency statutes only prohibit deficiency judgments after a trustee’s sale of a “dwelling”.[1] Under no definition can a vacant lot constitute a “dwelling”. This was the Arizona Supreme Court’s holding in BMO v. Wildwood Creek Ranch, LLC.

In BMO, Shawn and Kristina Rudgear (through their company Wildwood Creek Ranch, LLC) borrowed $260,000 to fund construction of a home on a vacant 2.26-acre lot. This loan was secured by a deed of trust against the lot.

Construction of the home never began, the Rudgears defaulted, and BMO Harris Bank foreclosed via trustee’s sale.

Author: Ben Reeves | 2 Comments Tagged A.R.S. 33-814, anti-deficiency, BMO v. Wildwood Creek, M&I v. Meuller, MidKansas v. Dynamic

Can an Unsigned Minute Entry Create a Judgment Lien?

Posted on January 22, 2015 by Ben Reeves

It appears that 2014 was a banner year for Arizona law on judgment liens. Indeed, we recently posted about the Lewis v. DeBord decision, which invalidates judgment liens vis-à-vis third-party purchasers if the judgment creditor fails to record an “information statement” with the judgment. The Court of Appeals has again tackled the question of judgment liens under Arizona law.

In Sysco Arizona, Inc. v. Hoskins, the Court of Appeals held that a recorded unsigned minute entry (which awarded judgment in the amount of $395,598.00) did not create a judgment lien. The reason for this ruling is simple – under Arizona law, an unsigned minute entry (even if it awards a money judgment) is not a formal “judgment” and the statutes require the recordation of a formal “judgment” to create a “judgment lien”. … Read More »

Author: Ben Reeves | Leave a comment Tagged judgment lien, Lewis v. DeBord, real estate litigation, Sysco v. Hoskins

Transfer of Property Title to a Holding Company Did Not Divest Landowner of Owner-Occupant Status Under A.R.S. § 33-1002(B)

Posted on January 20, 2015 by Rick Erickson

By: Richard G. Erickson

Recently, in Marco Crane & Rigging Co. v. Masaryk, 703 Ariz. Adv. Rep. 29 (Dec. 30, 2014), the Arizona Court of Appeals established that a subcontractor on a residential project has no lien rights against an owner-occupant, even though the homeowner transferred the property’s title to a holding company (an Arizona limited liability company) after the subcontractor commenced work.

In other words, the lien protections afforded to owner-occupants are determined, at the latest, when a contractor records its lien. After the contractor commences work and records its lien, the homeowner’s actions in negating owner-occupant status do not divest the homeowner of statutory protections against lienholders. … Read More »

Author: Rick Erickson | Leave a comment Tagged A.R.S. § 33-1002, construction, contractor, foreclosure, general contractor, holding company, homebuilder, homebuilding, homeowner, landowner, lien, lien law, Limited Liability Company, Marco Crane & Rigging Co. v. Masaryk, mechanic's lien, owner-occupant, residential construction, subcontractor

Update – Prospective Waivers of “Fair Market Value” Hearings are Definitely Void.

Posted on January 9, 2015 by Ben Reeves

In 2013, we blogged about the Arizona Court of Appeals’ determination that prospective contractual waivers of “fair market value” hearings are unenforceable as a matter of public policy. The link to our prior blog post is here. Although we noted some deficiencies in the Court of Appeals’ reasoning, we recognized that the holding reached a defensible legal result. On review, the Arizona Supreme Court reached the same outcome…but with a more robust legal analysis. See CSA 13-101 Loop, LLC v. Loop 101, LLC, et al., No. CV-14-0029 (Ariz. Dec. 31, 2014).[1]

The Arizona Supreme Court held that although Arizona’s anti-deficiency statutory scheme did not expressly prohibit contractual waivers of “fair market value” hearings, Arizona’s overall public policy behind the trustee’s sale process entitled borrowers and guarantors to the protection afforded by a “fair market value” hearing.… Read More »

Author: Ben Reeves | Leave a comment Tagged A.R.S. 33-814, anti-deficiency, CAS 13-101 v. Loop 101, fair market value hearing, waiver

Beneath the Surface: Entek GRB, LLC v. Stull Ranches, LLC and the Continuing Battle Between Surface Owners and Subsurface Owners

Posted on December 29, 2014 by nmcconomy