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About This Blog
Welcome to the Snell & Wilmer real estate litigation blog. Check back here often for useful news and information about current topics involving real estate litigation. We hope that you will find the blog both timely and helpful, and we invite you to join the discussion by posting comments about the articles and contacting the authors with your thoughts about the posts.
Real Estate Litigation Group Members and Blog Contributors
- Bob Henry
- Kevin Parker
- Matt Fischer
- Adam Lang
- Cory Braddock
- Benjamin Reeves
- Erica Stutman
- Patrick Paul
- Rick Erickson
- Ginny Olmstead
- Neal McConomy
- Michael E. Lindsay
- Bob L. Olson
- Nathan G. Kanute
- Sean M. Sherlock
- Lyndsey Torp
- Anthony Carucci
- Luke Mecklenburg
- Jon Frank
- Kevin Walton
- Lauren Munsell
- Lauren Podgorski
- Addy Colton
- John Sarager
- Jenna Le
- Ian Douglas
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Recent Posts
- Short-Term Rental Legislation & Litigation On the Way!
- Foreclosure Deficiency: Construction Loan vs. Home Improvement Loan
- Know your Obligations: Colorado’s Statutory Expansions of the Implied Warranty of Habitability Are Now in Effect
- CCP 998 Does Not Confer an Independent Right to Attorneys’ Fees
- Is a Bankruptcy Plan that Violates Federal Criminal Law Proposed in Bad Faith?
Topics
- Anti-deficiency Statute
- Bankruptcy
- Commercial Real Estate Industry
- Construction and Development
- Environmental
- Evictions
- Foreclosures
- Guaranty Contracts
- Judgment Liens
- Medical Marijuana
- Real Estate and Bankruptcy
- Real Estate Appraiser Litigation
- Real Estate Broker Litigation
- Real Estate Purchase/Sale Transaction Litigation
- Real Estate Receivers
- Statutes Affecting Real Estate
- Title Insurance
- Uncategorized
- Zoning
Foreclosure Deficiency: Construction Loan vs. Home Improvement Loan
By: Kevin J. Parker
In a recent Arizona Court of Appeals case, Helvetica Servicing, Inc., v. Pasquan, 2019 WL 3820015, (8/15/19), the Court of Appeals addressed the distinction between (1) a construction loan (or refinance of same) and (2) a home improvement loan (or refinance of same), as it relates to Arizona’s anti-deficiency statute, A.R.S. §33-729(A).
In general, an anti-deficiency statute provides that although a purchase-money lender or a construction lender can – in appropriate circumstances – foreclose on their loan and cause a sale of the property to pay the loan, the lender cannot (if the statutory criteria are met) force the homeowner/borrower to pay the remaining balance still owed on the loan following the foreclosure (known as the deficiency).… Read More »
Author:
Kevin Parker
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Tagged anti-deficiency, Deficiency judgment, foreclosure, real estate litigation
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What If Your CCP 998 Offer is Silent on Costs?
By: Tony 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 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
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Tagged commercial real estate, construction, contractor, developer, foreclosure, Guarantor, guaranty, real estate, real estate litigation
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Everyone Wins When a Foreclosure Sale Generates Excess Proceeds
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
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Tagged Excess Sale Proceeds, foreclosure, real estate litigation
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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 »
Author:
acarucci
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Tagged commercial real estate, eminent domain, foreclosure, foreclosures, real estate litigation
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Green Energy Can Complicate Real Estate Foreclosures
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
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Tagged alternative energy, fixture, foreclosure, green energy, lease, renewable energy, solar
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Avoiding Lender Liability for Credit-Related Actions in California
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
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Tagged commercial real estate, foreclosure, foreclosures, real estate, real estate litigation, real property
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What Do I Do With This Stuff? Dealing With Abandoned Property After Foreclosure
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
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Tagged abandon, abandoned property, foreclosure, lost property, personal property, records
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California’s One-Action Rule May Apply to Federal Lenders
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
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Tagged anti-deficiency, commercial real estate, deficiency, foreclosure, foreclosures, Guarantor, guaranty, one-action rule, real estate, real estate litigation, real property
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California Case Deals with Nuisance Lawsuit Intended to Delay Foreclosure
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
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Tagged demurrer, foreclosure, judicial notice
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Nevada Supreme Court Holds that Foreclosure Of HOA Lien Extinguishes Equal Priority HOA Lien.
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
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Tagged foreclosure, Homeonwers Associations, lien priority, NRS 116.3116, San Florentine, Southern Highlands
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Transfer of Property Title to a Holding Company Did Not Divest Landowner of Owner-Occupant Status Under A.R.S. § 33-1002(B)
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
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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
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General Contractor’s Prospective Waiver Of Its Lien Rights Is Enforceable In California
By: Lyndsey Torp
http://www.swlaw.com/attorneys/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
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Tagged contractor, deed, foreclosure, lien, loan, mechanics, owner, subordination, waiver
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Homestead Exemption Cannot be Denied on Equitable Grounds
Arizona’s homestead exemption allows a person to protect from certain creditors up to $150,000 of their equity in their residence (dwelling house, condominium, or mobile home). A.R.S. § 33-1101 et seq. This homestead equity is exempt from non-consensual liens, for example recorded judgments against the owner. The homestead exemption does not apply as against consensual liens such as a mortgage or deed of trust.
In a recent opinion, the Arizona Court of Appeals addressed the question of whether a property owner could be precluded on equitable grounds from asserting the homestead exemption. Rogone v. Correia (Opinion filed September 25, 2014). … Read More »
Author:
Kevin Parker
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Tagged foreclosure, homestead exemption, judgment liens, real estate litigation
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Arizona Supreme Court to Contractor: Sorry But Equitable Subrogation of a Bank’s Later Deed of Trust Trumps Earlier Mechanics’ Lien Rights
By Rick Erickson
http://www.swlaw.com/attorneys/rick_erickson
The smoke has finally cleared in a hard and long-fought battle between a bank and contractor both claiming priority to foreclose millions of dollars on a Phoenix condominium project. The project, well-known as Summit at Copper Square in central Phoenix (“Summit”), went broke in 2007. The foreclosure case began in 2008, and the construction and real estate industries have been keeping a close eye on the outcome. In the end, the Arizona Supreme Court weighed in for its “first opportunity to address the interplay between equitable subrogation and the priority granted to mechanics’ liens by [Arizona Revised Statutes] § 33-992(A).”
The Arizona Supreme Court issued its decision in The Weitz Company L.L.C.… Read More »
Author:
Rick Erickson
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Tagged contractor, equitable, foreclosure, lien, loan, mechanics, security, subrogation
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Guarantors Score Two Victories Before the Nevada Supreme Court.
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
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Tagged deficiency, foreclosure, Guarantor, one-action rule
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Nevada Supreme Court and District Court Issue Decisions Regarding Nevada’s Limitations on Deficiency Judgments.
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
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Tagged AB 273, anti-deficiency, deficiency, Eagle SPE, foreclosure, Sandpointe
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