Commercial Real Estate Industry

A so-called “offer to compromise” under California Code of Civil Procedure section 998 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. When making a 998 offer, parties may designate the plaintiff as the prevailing party and provide that the plaintiff may seek attorneys’ fees allowed by law, or expressly include the plaintiff’s attorneys’ fees within the amount of the offer. But does an offer that simply provides that the plaintiff may seek attorneys’ fees “allowed by law” provide the plaintiff with an independent right to attorneys’ fees?… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, construction, contractor, real estate, real estate litigation, Snell & Wilmer

That’s Common Knowledge! Failure to Designate an Expert Witness in a Professional Negligence Case is Not Fatal Where “Common Knowledge” Exception Applies

Posted on May 16, 2019 by Lyndsey Torp

By: Lyndsey Torp

In reversing summary judgment for defendants, the California Fourth District Court of Appeal recently held that homeowners suing their real estate broker for negligence did not need an expert witness to establish the elements of their causes of action. Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal. App. 5th 637. Typically, expert witnesses are required to establish the standard of care in professional negligence cases. But in Ryan, the court of appeal held that the “common knowledge” exception applied despite this general rule, because the conduct required by the particular circumstance of the case was within the common knowledge of a layman.… Read More »

Author: Lyndsey Torp | Leave a comment Tagged brokers, common knowledge, experts, professional negligence, real estate litigation, summary judgment

Appellate Court Affirms Medical Marijuana Variance in Phoenix

Posted on May 13, 2019 by Patrick J. Paul

By: Patrick J. Paul

On May 2, 2019, the Arizona Court of Appeals in a memorandum decision, upheld a superior court judgment affirming a variance granted by the City of Phoenix Board of Adjustment (Board) to allow the operation of a medical marijuana dispensary in North Phoenix. Dreem Green Inc. v. City of Phoenix, 2019 WL 1959618.

In Arizona, the Arizona Department of Health Services (DHS) is authorized to allocate medical marijuana dispensary registration certificates via population-based geographic areas individually referred to as a Community Health Analysis Area or “CHAA.” In this instance DHS granted a medical marijuana registration certificate to prospective facility operators for the North Mountain CHAA, and those certificate holders sought to open a dispensary near Dunlap Ave and Interstate 17 in Phoenix on property zoned C2. … Read More »

Author: Patrick J. Paul | Leave a comment Tagged Board of Adjustment, cannabis, CHAA, DHS, Medical Marijuana, pot

Colorado Court of Appeals clarifies that a finding of irreparable harm is not required to enter a permanent injunction to enforce an easement

Posted on May 7, 2019 by Luke Mecklenburg

On March 21, 2019, the Colorado Court of Appeals issued its opinion in Rinker v. Colina-Lee, holding for the first time that the “irreparable harm” element typically required to grant a permanent injunction is not needed for injunctions issued to enforce easements. 2019 COA 45. While the facts underlying the case are long and somewhat convoluted, for the purposes of the court’s “irreparable harm” holding, the case involves two real property owners along a private road governed by an association agreement. Id., ¶¶ 12-14. Uphill property alterations by the association and other members caused debris to accumulate on Mr.… Read More »

Author: Luke Mecklenburg | Leave a comment Tagged colorado real property, commercial real estate, developer, easements, injunction, irreparable harm, real estate, real estate litigation, real property, Snell & Wilmer

Estoppel Certificate? Estop and Check Your Lease

Posted on April 9, 2019 by Lauren Podgorski

By: Lauren Podgorski

If you are leasing space in a building, there may come a time when you receive a request from your landlord to fill out and sign an estoppel certificate. Estoppel certificates are usually sent to tenants in connection with the sale or refinance of a building, and a third party may rely on the accuracy of the statements and information contained in the estoppel certificate in connection with that transaction. Estoppel certificates can range from a very simple, one-page document, to several pages.

I’ve received an estoppel certificate in the mail. What do I do now?

Consider the following:

Check your lease.… Read More »

Author: Lauren Podgorski | Leave a comment Tagged Estoppel Certificate, landlord, lease, tenant

Land Banking. Why Consider It?

Posted on March 30, 2019 by Lauren Munsell

By: Lauren L. Munsell

For homebuilders, financing a real estate transaction, oftentimes via an institutional lender, is common place in the industry. But what is land banking and why should it be considered by homebuilders?

Land banking is an off-balance sheet financing structure whereby the land banker purchases fee title to the homebuilder’s desired lots – instead of the homebuilder. Simultaneously, the homebuilder enters into an option agreement with the land banker wherein the homebuilder obtains an option to purchase the desired lots from the land banker. Such option is generally secured by a non-refundable option fee paid by the homebuilder to the land banker.… Read More »

Author: Lauren Munsell | Leave a comment Tagged homebuilder, land bank, landbank

Am I Still Covered Under the Title Insurance Policy?

Posted on March 14, 2019 by Ian Douglas

By: Ian Douglas

When transferring property for corporate restructuring or estate planning purposes, an important issue to consider is whether the successor owner will be covered by the grantee’s title insurance policy. Because title insurance policies insure only the title of the “Insured” identified in the policy, the successor in interest of the named insured may not be covered following the transfer.

In older ALTA title insurance policies, the definition of “Insured” included the person or entity specifically identified in the policy as the insured, as well as any subsequent owners who took title to the subject property by operation of law. … Read More »

Author: Ian Douglas | Leave a comment

Recording “Un-Neighborly” Documents

Posted on March 5, 2019 by Bob Henry

By: Bob Henry

In September 2018, in Baumgartner v. Timmins, 245 Ariz. 334, 429 P.3d 567, the Arizona Court of Appeals provided further clarification on what constitutes an “encumbrance” on a property for purposes of Arizona’s statutory scheme prohibiting the recording of “false documents.” The statute, A.R.S. § 33-420, prohibits the recording of documents that a person knows to be forged, are groundless, or that contain material misstatements (or false claims). A person who claims an “interest in, or a lien or encumbrance against” real property who records such documents can be held liable for $5,000 or treble the actual damages caused by the recording (whichever is greater), A.R.S.… Read More »

Author: Bob Henry | Leave a comment Tagged A.R.S. § 33-420, Baumgartner, real estate litigation, recording false documents

“Bee” Careful: Unique Considerations When Negotiating a Bee Storage Lease Agreement

Posted on March 1, 2019 by Colton Addy

By: Colton Addy

As demand for commercial bees used to pollinate crops (such as almond trees) has grown, so has the demand for facilities to store bees. Entering a lease agreement for the storage of live bees presents some unique issues the parties need to consider when negotiating the lease agreement.

Don’t Bee Short-Sighted: Bees are often transported to different areas depending on the time of year, which means bees are not stored in the same facility all year. The lease agreement will often only provide for the storage of bees during the season when the bees are used for pollination in that particular area, but that does not mean the parties must limit the term of the lease agreement to a single season. … Read More »

Author: Colton Addy | Leave a comment Tagged Bee, Bee Colony Box, Bee Facility, Bee Lease Agreement, Bee Storage, Bee Storage Agreement, Bee Storage Facility, commercial bees, commercial real estate, farm, farm products, farming, lease, Lease Agreement, livestock

What If Your CCP 998 Offer is Silent on Costs?

Posted on January 17, 2019 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 is that “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.” Cal.… Read More »

Author: acarucci | Leave a comment Tagged commercial real estate, construction, contractor, developer, foreclosure, Guarantor, guaranty, real estate, real estate litigation

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

Posted on October 19, 2018 by Erica Stutman

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

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

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

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

Posted on June 14, 2018 by acarucci

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

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

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

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

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

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

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

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

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

Posted on June 8, 2017 by acarucci

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

Landlords Beware: Subordination Agreements

Posted on April 27, 2017 by Kevin Parker

By: Kevin J. 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

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

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

Posted on December 5, 2016 by Erica Stutman

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

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

“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

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

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

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

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

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

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

http://www.swlaw.com/attorneys/lyndsey_torp

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

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

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

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

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

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

Guarantor Waivers Narrowed

Posted on December 18, 2014 by Sean M. Sherlock

By: Lyndsey A. Torp and Sean M. Sherlock

A general waiver by a guarantor of “all defenses” does not actually waive “all defenses.” California Bank & Trust v. Del Ponti, — Cal.Rptr.3d —, 2014 WL 6908141 (Cal.App. 4 Dist.). That was the holding in a recent opinion wherein the California Court of Appeal affirmed judgment against a lender, holding that the bank could not recover on its loan guaranties because it had breached the underlying loan agreement.

In California Bank & Trust v. Del Ponti, borrower obtained a construction loan from Vineyard Bank (which was later assigned to California Bank & Trust) to develop a townhome project, with guaranties from two principals of the borrower. … Read More »

Author: Sean M. Sherlock | Leave a comment Tagged defense, Guarantor, guaranty, waiver

California Case Requires Arbitration Despite Lack of Actual Controversy

Posted on December 9, 2014 by Sean M. Sherlock

By: Lyndsey A. Torp and Sean M. Sherlock

For parties to litigate a contract dispute in a court of law, the parties’ disagreement must have ripened into an actual controversy presenting more than a mere academic difference of opinion. But under a recent California Court of Appeal opinion, no actual controversy is required to compel arbitration over a disagreement. Bunker Hill Park Limited v. U.S. Bank National Association, — Cal.Rptr.3d —, 2014 WL 6684796 (Cal.App. 2 Dist.). To avoid being compelled to arbitrate purely academic disagreements, parties should draft their arbitration clauses to limit arbitrable disputes to those that have ripened into actual controversies.… Read More »

Author: Sean M. Sherlock | Leave a comment Tagged arbitration, justiciability, ripeness

Nevada Supreme Court adds New Elements to Constructive Eviction Claims.

Posted on December 5, 2014 by Bob L. Olson

By Bob L. Olson

Nevada, like many jurisdictions, has recognized the ability of a tenant to vacate property if it becomes unfit for occupancy for the purpose for which it was leased. This is commonly known as a “constructive eviction.” Traditionally, to establish a claim for or defense of constructive eviction, the tenant had to prove the following three elements:

1. The landlord either acted or failed to act;

2. The landlord’s action or inaction rendered the whole or a substantial part of the premises unfit of occupancy for the purpose for which it was leased; and

3. The tenant must actually vacate the property within a reasonable time.… Read More »

Author: Bob L. Olson | Leave a comment Tagged commercial lease, constructive eviction, evict, eviction, landlord, lease, tenant

General Contractor’s Prospective Waiver Of Its Lien Rights Is Enforceable In California

Posted on November 12, 2014 by Lyndsey Torp

By: Lyndsey Torp

In another decision favoring lenders (See http://www.swlaw.com/blog/real-estate-litigation/2014/08/29/arizona-supreme-court-to-contractor-sorry-but-equitable-subrogation-of-a-banks-later-deed-of-trust-trumps-earlier-mechanics-lien-rights/), the California Court of Appeal, in an opinion published in September 2014, entitled Moorefield Construction, Inc. v. Intervest Mortgage Investment Company, et al., D065464, held an original contractor can contractually waive or impair its own lien rights, even before it gets paid or performs work, as long as it does not waive or impair the lien rights of its subcontractors. In Moorefield, the court of appeal reversed a trial court’s decision awarding a general contractor $2.2 million on its mechanic’s lien. In doing so, the court of appeal upheld a subordination agreement that the general contractor, Moorefield Construction, Inc., signed with the lender, Intervest Mortgage, “subordinating” the general contractor’s mechanic’s lien claim to the lender’s deed of trust, which was security for the construction loan.… Read More »

Author: Lyndsey Torp | Leave a comment Tagged contractor, deed, foreclosure, lien, loan, mechanics, owner, subordination, waiver

New California Case Illustrates Peril of Full Credit Bid

Posted on October 6, 2014 by Sean M. Sherlock

By: Sean M. Sherlock

In a new California case, a lender that made a full credit bid at a foreclosure sale lost its right as mortgagee under a lender’s insurance policy for damage to the property that occurred prior to foreclosure. This was so even though the lender held multiple deeds of trust, and foreclosed on only one of them. The case provides valuable guidance in devising a foreclosure bidding strategy.

In Najah v. Scottsdale Ins. Co., ___ Cal.Rptr.3d ___, 2014 WL 4827882 (Cal.App. 2 Dist., Sep. 30, 2014), plaintiff (lender) sued defendant (insurer) for failing to pay a claim for property damage that occurred prior to plaintiff’s foreclosure on the property.… Read More »

Author: Sean M. Sherlock | Leave a comment Tagged foreclosure bid, Full credit bid, lender's insurance, mortgagee insurance

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

Posted on September 29, 2014 by Richard Herold

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 »

Author: Richard Herold | Leave a comment Tagged condemnation, easements, eminent domain, natural gas act, pipelines

Nevada Supreme Court Clarifies Mechanic and Materialman Lien Issues

Posted on August 22, 2014 by Nathan Kanute

By: Nathan Kanute and Bob Olson

On August 7, 2014, the Nevada Supreme Court issued two opinions dealing with the priority of mechanics’ liens and the proof required for a materialman to establish a lien. These cases provide valuable guidance to lenders, materialmen, contractors, and subcontractors operating in Nevada.

In Byrd Underground, LLC v. Angaur, LLC, 130 Nev. Adv. Op. 62, the United States Bankruptcy Court for the District of Nevada certified three questions to the Nevada Supreme Court. The questions focused on whether placement of fill materials and grading constituted “construction of a work of improvement” for purposes of a lien priority determination under NRS 108.225. … Read More »

Author: Nathan Kanute | Leave a comment Tagged lien priority, materialman's lien, mechanic's lien

Colorado Supreme Court Revisits Rule Against Perpetuities

Posted on August 14, 2014 by golmstead

By: Ginny Olmstead http://www.swlaw.com/attorneys/virginia_olmstead

In March of this year, the Colorado Supreme Court revisited a fundamental doctrine of property law, which it described as “long cherished by law school professors and dreaded by most law students: the infamous rule against perpetuities.” The rule applies an unusual formula to prevent property from remaining “tied up” by grants of contingent future interests vesting too remotely in time. Although the rule was originally crafted to prevent excessively long family settlements, courts have since applied it to commercial transactions as well. This has created some odd results in case law governing commercial transactions, because the rule’s formula is structured around “lives in being” and potential heirs. … Read More »

Author: golmstead | Leave a comment

Guarantors Score Two Victories Before the Nevada Supreme Court.

Posted on July 17, 2014 by Bob L. Olson

By: Bob Olson and Nathan Kanute

On May 29, 2013, the Nevada Supreme Court issued two decisions that all real estate lenders need to be aware of because they have the potential to eliminate the ability of a lender to recover a deficiency judgment from a guarantor.

In Nevada it is common for lenders to commence foreclosure proceedings and, at the same time, sue all guarantors that have waived the benefit of Nevada’s one-action rule for the full amount of the debt they guaranteed. Often the foreclosure sale will occur before lender obtains a judgment against the guarantor. In Lavi v.… Read More »

Author: Bob L. Olson | Leave a comment Tagged deficiency, foreclosure, Guarantor, one-action rule

Nevada Supreme Court and District Court Issue Decisions Regarding Nevada’s Limitations on Deficiency Judgments.

Posted on June 18, 2014 by Bob L. Olson

By: Bob Olson and Nathan Kanute

In 2011 the Nevada Legislature enacted Assembly Bill 273 (“AB 273”) which amended NRS 40.459 by limiting deficiency judgments to the difference between the amount the lender paid to acquire the loan or obligation and the larger of the market value of the property or the amount paid for the property at a foreclosure sale. As one can imagine, a large number of borrowers and guarantors have tried to take advantage of this recent law to limit or in some cases eliminate their liability for deficiencies. Creditors, on the other hand, have cried foul by arguing that, among other things, the law cannot be applied retroactively, it impairs the value of their pre-enactment paper and violates the Contracts Clauses of both the United States and Nevada Constitutions. … Read More »

Author: Bob L. Olson | Leave a comment Tagged AB 273, anti-deficiency, deficiency, Eagle SPE, foreclosure, Sandpointe

Is the Future Bright for Commercial Real Estate in Arizona?

Posted on June 6, 2014 by Cory Braddock

By Cory L. Braddock

AZRE Magazine recently published an interesting article discussing the outlook for the commercial real estate market in Arizona. To give it a read, click here.… Read More »

Author: Cory Braddock | Leave a comment

Borrowers Can Avoid Liability Even After a Trustee’s Sale

Posted on May 28, 2014 by Ben Reeves

Since a lender must have a valid debt and valid lien to conduct a trustee’s sale, a borrower that allows the foreclosure sale to occur impliedly agrees that the debt and lien are valid. In Madison v. Groseth and BT Capital, LLC v. TD Serv. Co. of Arizona, 229 Ariz. 299, 301, 275 P.3d 598, 600 (2012), Arizona appellate courts reached that exact conclusion, holding that under A.R.S. § 33-811(C), a borrower that does not obtain an injunction stopping a trustee’s sale waives all defenses to the validity of the sale and all defenses related to the sale. … Read More »

Author: Ben Reeves | Leave a comment Tagged A.R.S. 33-811(C), anti-deficiency, BT Capital, Moran AZ Financial v. Gotses

Unmitigated Waivers: Guarantors Remain Liable Despite 4-Year Delay in Foreclosure Sale

Posted on May 14, 2014 by Ben Reeves

If a lender delays foreclosure allowing years of default interest to accrue such that a guarantor’s obligation increases from $6 million to $12 million, should the guarantor remain on the hook for the full $12 million? In Pi’ikea, LLC v. Williamson, 683 Ariz. Adv. Rep. 32 (Ct. App. 2014), the Arizona Court of Appeals recently confirmed that if the guarantor waived the “mitigation of damages” or “impairment of collateral” defense in its guaranty contract, then the answer is an unmitigated YES.

The Facts

In 2004, TBM Equities, LLC borrowed $5,922,000 to build an apartment complex in Tucson, AZ. … Read More »

Author: Ben Reeves | Leave a comment Tagged Guarantor, guaranty, impairment of collateral, mitigation of damages, Pi'ikea v. Williamson, waiver

Arizona Supreme Court Holds That Property Owner Who Quarreled With Light Rail Construction Should Be Compensated For Lost Access

Posted on April 22, 2014 by Eric Spencer

By Eric H. Spencer

Late last week, the Arizona Supreme Court handed down a decision that clarified the rights of property owners who lose access to an abutting road and, in the process, reinforced the principle that both elimination and substantial impairment of access is compensable under the Arizona Constitution. But perhaps more significant, the Supreme Court in City of Phoenix v. Garretson held that a property owner should be compensated even if it retains relatively convenient access to that road through other means.

In so holding, the Supreme Court no doubt sent initial shockwaves through public works departments across Arizona who may be wondering whether they are hamstrung in making even basic traffic improvements. … Read More »

Author: Eric Spencer | Leave a comment Tagged eminent domain, just compensation, right of access

The Registrar is Changing the Game for Complaints Against Arizona Contractors

Posted on April 8, 2014 by Rick Erickson

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

Sweeping changes at the Registrar of Contractors have the construction and real estate industries concerned and curious. The Registrar recently received some poor performance reports by the Auditor General and State Ombudsmen. As a result, the Registrar overhauled its procedures for handling complaints and adjudicating contested cases against Arizona contractors. You should be following these changes before the Registrar rolls out its new approach this summer.

The Registrar regulates contractor licensing and enforcement of workmanship standards against thousands of licensees throughout Arizona. In doing so, the Registrar dictates administrative remedies available to property owners on residential and commercial projects. … Read More »

Author: Rick Erickson | Leave a comment Tagged administrative remedies, contractor complaints, contractor licensing, enforcement, Registrar of Contractors, regulation of contractors

Beyond Real Estate: Publicly Traded Homebuilders (And Other Public Companies) Must be Aware of Cybersecurity and Data Breach Disclosure Requirements Applicable to SEC Filings

Posted on March 14, 2014 by Richard Herold

By: Richard H. Herold

Generally speaking, publicly traded homebuilders and other public companies must disclose material information in their SEC filings. “Information is considered material if there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision or if the information would significantly alter the total mix of information available.” Basic v. Levinson, 485 U.S. 224 (1988)

As the agenda of hackers and other criminals advances, so has the issue of cybersecurity, focusing on what risks exist in the company’s cybersecurity defenses and, if there has already been a data breach incident, whether the scope of the breach and the resulting adverse consequences (which may include regulatory investigations, SEC or FTC enforcement actions, securities class actions, and/or derivative lawsuits) is material and must be reported in SEC filings.… Read More »

Author: Richard Herold | 1 Comment Tagged SEC, securities, Securities Litigation

Frustration of Purpose: A Frustrating Doctrine

Posted on December 26, 2013 by Erica Stutman

By: Erica Stutman

Next Gen Capital, LLC v. Consumer Lending Associates, LLC illustrates the difficulty a tenant faces when trying to avoid liability for breaching a lease based on the “frustration of purpose” defense. No. 1 CA-CV 12-0624 (Ariz. Ct. App. Dec. 19, 2013). In 2007, Consumer Lending Associates (“CLA”) signed a five-year lease, which limited CLA’s primary use of the premises to operating its “payday loan” business. CLA was operating pursuant to an Arizona statute, which, by its terms, expired on July 1, 2010. When the authorizing statute expired, CLA vacated the premises and refused to pay rent due through the end of the term, claiming that the lease terminated “by operation of Arizona law.” The landlord sued for breach of contract, and the superior court granted a motion for summary judgment, holding that CLA had to pay unpaid rent and relates charges through the end of the lease term. … Read More »

Author: Erica Stutman | Leave a comment Tagged frustration of purpose, next gen capital v. consumer lending associates, real estate litigation

Partition Disputes

Posted on November 27, 2013 by Kevin Parker

Partition is a statutory procedure whereby co-tenants (for example joint tenancy, tenancy-in-common, community property) can file a court action to physically divide or sell the property. See A.R.S. § 12-1211 et seq. Unless the co-tenants have a private partition agreement, any co-tenant can compel sale or physical division of the property through the statutory partition process. Under the statutory partition process, the court appoints commissioners to study whether a physical division of the property is appropriate. If so, the property will be physically divided among the co-owners. If not, the property will be sold by the commissioners and the net proceeds divided among the co-owners. … Read More »

Author: Kevin Parker | 1 Comment Tagged partition, real estate litigation

The Uniform Law Commission Makes Progress Drafting a Model Act on the Appointment and Powers of Real Estate Receivers

Posted on October 31, 2013 by Ben Reeves