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

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 »

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

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 »

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

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 »

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

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 »

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

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 »

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

By: Anthony J. Carucci

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.

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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

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:

  1. 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.
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Avoiding Lender Liability for Credit-Related Actions in California

By: Anthony J. Carucci

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 »

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Applying New California Rules to Your Real Estate Litigation Practice

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

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 »

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

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 »

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Easements Made Easier: Building Pipelines with the Power of Eminent Domain Under the Natural Gas Act

By: Richard H. Herold

Any person or entity seeking to construct a natural gas pipeline and successful in obtaining a certificate of convenience and necessity from the Federal Energy Regulatory Commission may exercise the power of eminent domain to obtain easements across private property when those easements are necessary and cannot be obtained consensually (by contract) from the landowners.  Columbia Gas Transmission, L.L.C. v. 76 Acres More or Less, 2014 WL 2960836 (D. Md. June 27, 2014).  the Columbia Gas Court recently held that (1) the property’s legal description need not be attached to sufficiently identify the property to be condemned, and (2) even in the absence of a federal condemnation statute authorizing immediate possession of the property, the condemning plaintiff may obtain an order to take immediate possession of the property since it would be wasteful and inefficient to skip over one or more parcels in the construction process – only if the condemning plaintiff is capable of satisfying the requirements for preliminary injunctive relief under Fed.R.Civ.P.… Read More »

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Sellers Cannot Look to the Appraiser When Lenders Pull the Plug on a Prospective House Flip

By:  Eric Spencer

An outgrowth of Arizona’s housing downturn in recent years has been the proliferation of would-be real estate investors who purchase, renovate and flip residential properties.   On the other hand, in part to prevent the next downturn from occurring, lenders have tightened borrowing requirements and balked at financing any purchase of a “flipped” home that exceeds the appraised value.  Often caught in the middle of these competing interests are the appraisers themselves: when a lender-commissioned appraisal comes back substantially below the proposed purchase price, the prospective buyer often has no choice but to walk away.   And, when the real transaction falls apart accordingly, the real estate investor-turned-seller might seek to hold the appraiser liable for what it deems to be a negligently-conducted valuation of the property. … Read More »

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Bidding on State Land Trust Leases: Even the Top Revenue-Generating Bids Must be Balanced Against Qualitative “Best Use” Factors Designed to Protect the Land

By:  Richard H. Herold

The Court of Appeals recently held that that the Commissioner of the State Land Trust Department properly balanced Wildearth Guardians, Inc.’s higher revenue-generating bid against “best use” qualitative factors set forth in the Arizona Administrative Code.  As a result, the appellate court affirmed the Commissioner’s decision to award a 10-year grazing lease to the Knights for their 28-year record of stewardship and protection of the leased land near Springerville, Arizona, despite the $79,344 in additional revenue over 10 years which would have been generated for the benefit of Arizona’s public schools by the Wildearth Guardian’s bid.  Wildearth Guardians, Inc.Read More »

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Suing a Licensed Real Estate Professional May Require You to Complete and Turn In Your Homework.

By: Cory L. Braddock

A lawyer must have a good faith belief, after reasonable inquiry, that a lawsuit he files is grounded in fact and warranted by existing law.  Ariz. R. Civ. P. 11.  In other words, lawyers violate Arizona’s rules of civil procedure when they file frivolous lawsuits.  In Arizona, the legislature has, at least in some cases, added an additional layer of scrutiny to lawsuits filed against licensed professionals.  Specifically, a plaintiff must certify whether or not expert testimony is necessary to prove the licensed professional’s standard of care or liability for the claim.  See A.R.S. § 12-2602(A). When expert testimony is necessary, the plaintiff is required to serve a preliminary expert opinion affidavit with their Rule 26.1 initial disclosure.… Read More »

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The U.S. Supreme Court’s Latest Attempt to Differentiate a Fair Quid Pro Quo in the Developer’s Permitting Process From an Unconstitutional Taking

By:  Rick Herold

Introduction

The U.S. Supreme Court has issued an important decision in an attempt to add clarity and help government land use planners understand the difference between reasonable requests and unreasonable demands rising to the level of unconstitutional takings in the permitting process.  Koontz v. St. Johns River Water Management District, 2013 WL 3184628 (June 25, 2013).

When does a fair quid pro quo, a legitimate exercise of police power in the permitting process, go too far and lapse into an unconstitutional taking without just compensation through the government’s unconstitutional conditions in the permitting process?  In Koontz, the Supreme Court ruled that the seminal cases of Nollan v.Read More »

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Does an Appraiser Owe a Duty of Care to Non-Client Third Parties? It Depends.

By: Andy Stone

Under what circumstances do appraisers owe a duty of care to third parties sufficient to give rise to liability for negligent misrepresentation claims was examined (again) by the Arizona Court of Appeals in late 2012.  See Belen Loan Investors, LLC v. Bradley, 296 P.3d 984, 650 Ariz. Adv. Rep. 8 (App. 2012).  This question has been examined multiple times by the Arizona Court of Appeals over the past few years.  See id.; see also Sage v. Blagg Appraisal Co., 221 Ariz. 33, 209 P.3d 169 (App. 2009); Kuehn v. Stanley, 208 Ariz. 124, 91 P.3d 346 (App.… Read More »

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