Tag Archives: real estate litigation

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

California Civil Code section 1717 entitles the prevailing party to attorneys’ fees “[i]n any action on a contract,” where the contract provides for an award of attorneys’ fees to the prevailing party, regardless of whether the prevailing party is the party specified in the contract or not. But what about an action that alleges tort causes of action against an alter ego of a contracting party but that does not include a breach of contract claim against the alter ego? This was the question facing the California Court of Appeal in 347 Group, Inc. v. Philip Hawkins Architect, Inc.… Read More »

Author: acarucci | Leave a comment Tagged attorneys fees, commercial real estate, construction, contractor, real estate litigation

Married Couple’s Acquisition of Title as Joint Tenants Does Not Rebut the Presumption of Community Property

Posted on December 1, 2020 by Kevin Parker

By: Kevin J. Parker

In re Brace, 470 P.3d 15 (Cal. 2020), a California married couple acquired real property with community funds, and took title as “husband and wife as joint tenants.” When the husband filed a chapter 7 petition in bankruptcy, the bankruptcy trustee sought to include the property in the debtor’s estate. The Bankruptcy Code provides that community property is part of the bankruptcy estate. The bankruptcy court found that the couple acquired the property with community assets and thus the property was presumptively community property. The couple objected and appealed to the Ninth Circuit, which certified questions to the California supreme court. … Read More »

Author: Kevin Parker | Leave a comment Tagged community property, joint tenancy, real estate litigation

Does a Landlord’s Violation of the Arizona Residential Landlord-Tenant Act Constitute Negligence Per Se?

Posted on August 6, 2020 by Kevin Parker

In a recent Arizona Court of Appeals case, Ibarra v. Gastelum, 2020 WL 4218020 (7/23/20), the Court of Appeals addressed the question whether – in a tenant’s personal injury claim against the landlord – a landlord’s violation of the Arizona Landlord-Tenant Act constituted negligence per se. The tenant alleged he was injured by stubbing his toe on a crack in the floor. The tenant alleged that he had made repeated demands that the landlord repair the crack. The statute required the landlord to make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.… Read More »

Author: Kevin Parker | Leave a comment Tagged negligence per se, personal injury, real estate litigation, residential landlord tenant

Does a Broker Forfeit His or Her Commission for Technical Non-Compliance with Department of Real Estate Statutory Requirements?

Posted on August 6, 2020 by Kevin Parker

In a recent Arizona Court of Appeals case, CK Revocable Trust v. My Home Group Real Estate LLC, 2020 WL 4306183 (7/28/2020), the Court of Appeals addressed the distinction between “substantive” and “technical” statutory requirements for real estate broker commission agreements.

The Court explained that failure to comply with a substantive requirement would preclude the broker from recovering a commission, but failure to comply with a technical requirement would not. As examples of such substantive requirements, the Court identified the statutory requirement that the broker be licensed at the time the claim for commission arose, and the statutory requirement that the listing agreement be signed by both the broker and the client.… Read More »

Author: Kevin Parker | Leave a comment Tagged brokerage agreements, forfeiture of commission, real estate litigation, violation of Department of Real Estate regulations

If You Purchase a House at an HOA Lien Foreclosure, Are You Entitled to Excess Sale Proceeds?

Posted on November 12, 2019 by Ben Reeves

That pesky excess sale proceeds statute, A.R.S. § 33-727, is making waves again. We previously blogged about this statute here. In the prior post, we explained that excess sale proceeds (i.e., a foreclosure sale price greater than the lien being foreclosed) must be used to pay other lien creditors, in full, before the owner receives anything. Recently, the Arizona Court of Appeals held that creditors also take excess sale proceeds before the person who purchased the property at foreclosure. The case, Vista Santa Fe Homeowners Association v. Millan, No. 1 CA-CV 18-0609 (Ct.… Read More »

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

Foreclosure Deficiency: Construction Loan vs. Home Improvement Loan

Posted on August 23, 2019 by Kevin Parker

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 | Leave a comment Tagged anti-deficiency, Deficiency judgment, foreclosure, real estate litigation

CCP 998 Does Not Confer an Independent Right to Attorneys’ Fees

Posted on June 7, 2019 by acarucci

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

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

Vacation Rentals: Liability of the Owner for Injury Suffered by the Renter

Posted on April 19, 2019 by Kevin Parker

With the explosion of the “private” rental business wherein residential property owners rent their house or condo on a short-term basis to third-parties, certain legal issues have arisen with regard to the duties owed by the property owner to the renter.

A recent Virginia Supreme Court case, Haynes-Garrett v. Dunn, 818 S.E.2d 798 (Va. 2018), addressed that issue. In that case, the property owners owned a rental house in Virginia Beach. The property was not the owners’ main residence, but rather a vacation home that was sometimes used by the owners, but mostly used as a rental.… Read More »

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

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

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.”… Read More »

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

Attorneys’ Fees Are Available in Arizona Eviction Actions

Posted on November 30, 2018 by Ben Reeves

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

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

Court Addresses HOA Attempt to Restrict Short Term Rentals

Posted on November 15, 2018 by Kevin Parker

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

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

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

Posted on September 18, 2018 by Kevin Parker

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

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

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

Posted on September 10, 2018 by Luke Mecklenburg

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

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

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

Posted on August 31, 2018 by nmcconomy

By: Neal McConomy

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

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

Everyone Wins When a Foreclosure Sale Generates Excess Proceeds

Posted on July 13, 2018 by Ben Reeves

Introduction

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

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

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

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

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

Posted on February 23, 2018 by Ben Reeves

Introduction

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

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

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

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

Oregon and Nevada Adopt the Uniform Commercial Real Estate Receivership Act

Posted on January 4, 2018 by Ben Reeves

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

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

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

Posted on November 2, 2017 by Ben Reeves

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

• National Tier 1: Litigation – Real Estate

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

• Utah Tier 1: Litigation – Real Estate

• Colorado Tier 1: Litigation – Real Estate

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

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

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

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

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

Posted on October 27, 2017 by acarucci

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

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

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

Posted on October 10, 2017 by Ben Reeves

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

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

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

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

Posted on September 6, 2017 by Kevin Parker

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

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

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

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

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

Posted on May 2, 2017 by Ben Reeves

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

The Facts

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

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

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

Posted on January 19, 2017 by acarucci

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

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

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

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

Posted on September 14, 2016 by Ben Reeves

Centurion Properties III, LLC v.… Read More »

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

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

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

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

Posted on August 30, 2016 by Kevin Parker

By Kevin J. Parker

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

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

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

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

Special Rules for Eviction Actions

Posted on April 11, 2016 by Kevin Parker

By: Kevin Parker

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

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

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

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.”… Read More »

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

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

Posted on January 8, 2016 by Ben Reeves

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

The Loan Agreements

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

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

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

Posted on December 15, 2015 by Ben Reeves

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

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

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

Posted on October 26, 2015 by Kevin Parker

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

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

It just got a little bit easier to enforce judgment liens

Posted on October 20, 2015 by Ben Reeves

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

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

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

Posted on July 29, 2015 by Ben Reeves

By: Aaron D. Ford and Karl O. Riley

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

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

Are Short-Term Vacation Rentals Legal?

Posted on July 9, 2015 by Ben Reeves

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

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

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

Arizona Court Clarifies Premise Liability

Posted on July 2, 2015 by Kevin Parker

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

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

Successful Laches Defense Becoming Commonplace in Colorado

Posted on May 8, 2015 by nmcconomy

By: Neal McConomy

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

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

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

Posted on April 30, 2015 by Bob L. Olson

By: Bob L. Olson

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

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

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

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

Posted on March 20, 2015 by Ben Reeves

By: Ben Reeves & Bob Olson

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

Facts

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

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

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

Posted on February 25, 2015 by Kevin Parker

By Kevin Parker

When a land owner mistakenly builds a house or other building or structure that encroaches on a neighbor’s property, what is the remedy? Does the offending land owner have to physically remove the structure from the neighbor’s property? Is the harmed neighbor entitled to a mandatory injunction against continuing trespass? Can the offending land owner invoke equitable “balancing of hardships” and simply pay damages? In a recent case, the Supreme Court of Rhode Island distinguished the encroachment situation from traditional injunctive relief analysis. (A court order requiring the offending land owner to remove the offending structure would be a mandatory injunction order.) … Read More »

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

Can an Unsigned Minute Entry Create a Judgment Lien?

Posted on January 22, 2015 by Ben Reeves

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

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

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

It just got a little bit harder to enforce judgment liens

Posted on December 16, 2014 by Ben Reeves

Introduction

As everyone knows, the enactment of the Statute of Westminster II in 1285 ushered the concept of a “judgment lien” into English law. The statute – for the first time in English legal history – authorized a judgment creditor to obtain a writ of elegit (as opposed to a writ of fieri facias) to take possession of the judgment debtor’s land to pay for the judgment debtor’s debts. 1285 was indeed a very good year for judgment creditors. Nearly three-quarters of a millennium later, the judgment lien remains an important remedy for judgment creditors.

Judgment Liens in Arizona

Although Arizona law has (for the most part) abandoned the use of fanciful Latin phraseology, Arizona does provide for a “judgment lien” – which (despite the plain, uninspired name) creates a lien against all of the real property then owned or later acquired by the judgment debtor. … Read More »

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

Homestead Exemption Cannot be Denied on Equitable Grounds

Posted on October 8, 2014 by Kevin Parker

By Kevin J. Parker

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 | Leave a comment Tagged foreclosure, homestead exemption, judgment liens, real estate litigation

Lenders Beware: the Nevada Supreme Court Holds That Foreclosures of Homeowners’ Association Liens May Extinguish First Priority Deeds of Trust

Posted on September 30, 2014 by Ben Reeves

By: Bob L. Olson

Nevada has adopted the Uniform Common Interest Ownership Act of 1982 (the “Act”) which governs homeowners’ associations (“HOA”). One particular provision of that Act, enacted by Nevada in 1991 and later amended, and codified as NRS 116.3116 (the “Statute”), states that HOA liens are “prior to all other liens and encumbrances on a unit” except for, among other liens:

(b) A first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent . . . :

NRS 116.3116(2)(b) (emphasis added).

At first glance the Statute unconditionally subordinates the HOA’s lien to a first priority mortgage or deed of trust (hereinafter “first priority lien” and the holder, the “mortgage holder”) recorded against the unit before the date on which the assessment sought to be enforced became delinquent.… Read More »

Author: Ben Reeves | 1 Comment Tagged HOA Lien, Nevada, NRS 116.3116, real estate litigation, SFR Investments v. U.S. Bank

A Subsequent Developer has no Ability to Force a Public Body to Call an Abandoning Developer’s Performance Bonds for Infrastructure Improvements.

Posted on August 19, 2014 by Ben Reeves

The Arizona Court of Appeals decided on July 22, 2014 that a developer cannot compel a public entity to call its performance bonds to complete infrastructure improvements on a construction project that a prior developer abandoned due to bankruptcy. Ponderosa Fire Dist. et al. v. Coconino County et al., 1 CA-CV 13-0545.

– See more on this case from our blogger Rick Erickson at: http://www.swlaw.com/blog/construction-ally/2014/07/23/a-subsequent-developer-has-no-ability-to-force-a-public-body-to-call-an-abandoning-developers-performance-bonds-for-infrastructure-improvements/#sthash.3iBSqIC1.dpuf… Read More »

Author: Ben Reeves | Leave a comment Tagged developer, performace bonds, Ponderosa Fire v. Coconino County, real estate litigation

Guarantors Remain Liable for “Carve-out” Obligations, Despite Non-recourse Loan

Posted on July 31, 2014 by Ben Reeves

Introduction

Believe it or not, guaranty contracts mean what they say. If a guarantor agrees to reimburse a lender for misappropriated security deposits, unpaid taxes, and the cost of enforcement, then – not surprisingly – courts will hold the guarantors liable for these expenses.

In Investors Warranty of America, Inc. v. Arrowhead Business Center, L.P., the guarantors signed a limited guaranty contract obligating them to pay up to $350,000 if the borrower defaulted on the $5,250,000 commercial loan secured by an office building in Peoria. In addition to this capped amount, the guarantors agreed to pay for certain “carve-out” expenses, including misappropriated security deposits, unpaid taxes, and costs of enforcement. … Read More »

Author: Ben Reeves | Leave a comment Tagged bad-boy guaranty, carve-out, investors warranty v. arrowhead, non-recourse, real estate litigation

Brandt Revocable Trust v. U.S. – the United States’ theory of land ownership derailed

Posted on March 30, 2014 by Erica Stutman

By: Erica Stutman

In Brandt Revocable Trust v. U.S., the United States Supreme Court held that abandoned railway rights-of-way that had been granted to railroad companies under the General Railroad Right-of-Way Act of 1875 left underlying landowners with property free of the rights-of-way, and the United States government has no interest in the abandoned land.

Pursuant to the Act, the government granted railroad companies the right to build railroads through public lands. In large part, the government later conveyed the public land underlying the rights-of-way to private landowners by a land patent, which stated that the land was conveyed subject to a right-of-way for railroad purposes.… Read More »

Author: Erica Stutman | 1 Comment Tagged Brandt, condemnation, easement, General Railroad Right-of-way Act of 1875, real estate litigation, reversionary interest

Not All Property Acquired Post-Petition is Safe from Creditors

Posted on March 3, 2014 by Ben Reeves

Although property obtained by a debtor after filing for bankruptcy is usually safe from creditors, a recent case from the Ninth Circuit Bankruptcy Appellate Panel allowed a Chapter 7 Trustee to sell real property obtained by the debtors post-petition.

In In re Jones, a debtor’s grandmother signed and recorded a “Beneficiary Deed” that transferred certain real property to the debtor effective upon the grandmother’s death. A year and a half after the grandmother recorded the deed, the debtor filed for bankruptcy. Three days after he filed for bankruptcy, the grandmother passed away.

The Chapter 7 Trustee attempted to sell the inherited property, but the debtor objected. … Read More »

Author: Ben Reeves | Leave a comment Tagged bankruptcy, beneficiary deed, property of the estate, real estate litigation

Mortgage Lenders Can’t Jump Ahead of Mechanic’s Liens

Posted on February 11, 2014 by Ben Reeves

In Weitz Co., LLC v. Heth, 223 Ariz. 442, 314 P.3d 569 (Ct. App. Nov. 26 2013), the Arizona Court of Appeals held that the plain language of Arizona’s mechanic lien statute, A.R.S. § 33-992(A), does not allow a lender to jump ahead of a mechanic’s lien under the doctrine of “equitable subrogation.”

In Weitz, First National Bank of Arizona lent a developer $44,000,000 to build a 165-unit, mixed-use commercial/residential project in downtown Phoenix. The bank secured repayment of the construction loan by recording a deed of trust against the project.

The developer hired The Weitz Company as its general contractor. … Read More »

Author: Ben Reeves | Leave a comment Tagged equitable subrogation, mechanic's lien, real estate litigation, Weitz v. Heth

Commercial Real Estate Broker Liens

Posted on January 27, 2014 by Kevin Parker

Arizona, by statute, allows a commercial real estate broker in certain limited circumstances to record a lien against the owner’s real property which is the subject of the commission agreement, in order to protect the broker’s entitlement to their commission. See A.R.S. §§ 33-1071 – 1076. The lien rights apply only to commercial real property and residential property with five or more residential units. The lien rights apply only to leasing and rental transactions, not sales. The lien is enforceable by a foreclosure action the same as a mortgage. The statutes identify very specific protocols that need to be followed. For example, in order to take advantage of such lien rights, such lien rights must be referenced in the pertinent brokerage/listing agreement between the broker and the owner of the real property; a preliminary notice of intent to lien must be recorded no later than 15 days before the date the tenant takes possession; and in certain circumstances a notice of lien must be filed within 90 days after the tenant takes possession. … Read More »

Author: Kevin Parker | Leave a comment Tagged broker commissions, broker lien, real estate 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.” … Read More »

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

Developers and Homebuilders: The Ramifications of Yanni v. Tucker Plumbing, Inc.

Posted on December 6, 2013 by Bob Henry

By Bob Henry

On November 20, 2013, Division Two of the Arizona Court of Appeals issued its opinion in Yanni v. Tucker Plumbing, Inc., 2013 Ariz. App. LEXIS 235. While the opinion was a victory of sorts for the real estate and construction industry generally in Arizona, the opinion could have long-term ramifications to developers and home builders. In short, the opinion could encourage more direct suits by homeowners against developers and homebuilders – including potential class actions, as was the situation in Yanni – for defects in the construction of homes arising out of defective and substandard work by subcontractors.… Read More »

Author: Bob Henry | Leave a comment Tagged construction defect litigation, implied warranty of workmanship and habitability, real estate litigation, Yanni

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

AZRE Article Discusses Social Media Resources for the Industry

Posted on September 30, 2013 by Matthew Fischer

By: Matthew P. Fischer

In the most recent issue of the magazine AZRE: Arizona Commercial Real Estate (September October 2013), reporter and former editor Peter Madrid wrote on social media coverage of the Arizona commercial real estate industry in his article, “The Message Is the Medium: Commercial real estate practice groups embracing social media as a source and outlet of gathering disseminating relevant news.” Among the social media resources mentioned, Mr. Madrid discusses the Snell & Wilmer Real Estate Litigation Blog. You can read the article online by clicking the hyperlinked title. Keep up the great work AZRE!… Read More »

Author: Matthew Fischer | Leave a comment Tagged Arizona real estate, AZRE Magazine, blog, commercial real estate, real estate litigation, Snell & Wilmer

Can You Waive the Right to a “Fair Market Value” Hearing?

Posted on September 13, 2013 by Ben Reeves

We finally have an answer to the question of whether parties can contractually waive the right to a “fair market value” hearing under Arizona law – and the answer, according to the Court of Appeals – is “no.”

In CSA 13-101 Loop, LLC v. Loop 101, LLC et al., No. 1CA-CV 12-0167 (Ariz. Ct. App. September 10, 2013), the Arizona Court of Appeals held that Arizona’s deficiency statute, A.R.S. § 33-814(A), prohibits a party from waiving the right to a “fair market value” hearing. This statute generally entitles borrowers and guarantors to an evidentiary “fair market value” hearing to determine the value of foreclosed property that should be applied towards repayment of the debt that was secured by the foreclosed property. … Read More »

Author: Ben Reeves | 1 Comment Tagged A.R.S. § 33-814, CSA 13-101 Loop LLC v. Loop 101 LLC, fair market value hearing, real estate litigation, waiver

A Non-Purchase Money Second Deed of Trust is Not Protected by Arizona’s Anti-deficiency Statute

Posted on September 4, 2013 by Ben Reeves

By: Ben Reeves & Julie Maurer

Arizona anti-deficiency laws do not prohibit a non-purchase money lender from suing on its note after foreclosure by a senior lender. In Wells Fargo Bank, N.A. v. Brewer, No. 1CA-CV 12-0383 (Ariz. Ct. App. May 21, 2013 unpublished), the Arizona Court of Appeals held that Arizona’s anti-deficiency statute, A.R.S. § 33-814, did not prevent Wells Fargo from suing on its note after a senior lender foreclosed on the borrowers’ multi-million dollar home.

In 2007, Wells Fargo agreed to lend the Brewers up to $1,000,000 and secured the loan with a second position deed of trust recorded against the Brewers’ home. … Read More »

Author: Ben Reeves | Leave a comment Tagged Arizona, ARS 33-814, Helvitica Servicing v. Pasquan, real estate litigation, Wells Fargo v. Brewer

Understanding zoning nonconforming uses is no walk in the park, but a mobile-home park may be treated as a unified use.

Posted on August 23, 2013 by Erica Stutman

By: Erica Stutman

When Arizona municipalities adopt new zoning ordinances and regulations, existing property owners have the right to continue using their property for the use in place when the new ordinance or regulation becomes effective, including the right to make reasonable repairs and alterations. See A.R.S. § 9-462.02(A). This right to continue the “legal nonconforming use,” which is premised on due process concerns, may be lost if the owner makes major changes to the property after the new zoning law takes effect. When property is divided into smaller units, questions may arise as to what constitutes the prior use and what changes destroy the protected status. … Read More »

Author: Erica Stutman | Leave a comment Tagged 9-462.02, mobile home, nonconforming, real estate litigation, Stagecoach, zoning

A Lender Holding Two Liens Can Foreclose on the Senior Lien and Sue on the Junior Lien

Posted on August 16, 2013 by Ben Reeves

In Wells Fargo Bank, N.A. v. Riggio, No. 1CA-CV-12-0430 (Ariz. Ct. App. June 4, 2013), the Arizona Court of Appeals held: (i) that the “merger of rights” doctrine does not “merge” a lender’s first and second lien into a single unitary interest upon the foreclosure of the first lien, and (ii) A.R.S. § 33-814 does not apply to an action on a junior loan. In other words, Arizona law permits a lender holding two liens against the same property to foreclose on the senior lien, and then sue on the second loan outside of Arizona’s anti-deficiency statutory scheme.… Read More »

Author: Ben Reeves | 1 Comment Tagged merger of rights, Mid Kansas v. Dynamic Development, real estate litigation, Wells Fargo v. Riggio

Anticipating Earnest Money “Damages” – Don’t Assume It

Posted on July 24, 2013 by Bob Henry

By Bob Henry

The Arizona Supreme Court issued an opinion last month in Thomas v. Montelucia Villas, LLC, 2013 Ariz. LEXIS 152 (June 14, 2013) that adds a few wrinkles to efforts by sellers in real estate transactions to retain “earnest money” from a buyer upon the buyer’s default. While the opinion addresses issues that are fairly unusual in the earnest money world, the holding is one that any seller or developer of real estate should keep in mind when drafting real estate contracts.… Read More »

Author: Bob Henry | Leave a comment Tagged earnest money, real estate litigation, Thomas v. Montelucia Villas

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

Posted on July 18, 2013 by Richard Herold

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 »

Author: Richard Herold | Leave a comment Tagged condemnation, eminent domain, essential nexus, just compensation, land use, real estate litigation, rough proportionality, unconstitutional conditions, unconstitutional taking

Arizona’s Anti-deficiency Statute, A.R.S. 33-814(G), Cannot be Prospectively Waived Says the Court of Appeals

Posted on July 12, 2013 by Ben Reeves