Articles Posted in Real Estate & Property Law

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In 2009, plaintiff Nikola Vekic sought to buy three oyster leases which were jointly owned by Dragutin Popich and his daughters Mary Popich and Helen Popich Harris (collectively “the Popich family”). Although the parties disputed the content of the discussions which took place between them regarding the sale of the three oyster leases, it was undisputed that the Popichs’ lawyer, Roger Harris (husband of Helen), transmitted a letter stating that Popich was “unwilling to do a credit sale.” Instead, Harris drafted and submitted an agreement entitled “Sublease Agreement With Option to Purchase” along with a proposed act of sale to Vekic, who reviewed the documents along with his attorney. Vekic executed the sublease agreement on April 14, 2009, without raising any issues regarding its contents. The terms of the artfully-crafted agreement differed significantly from a typical lease or sublease in that the Popich family transferred all of the rights and responsibilities of ownership to Vekic without the benefit of a formal transfer of title between the parties. Vekic was bound to pay the full $90,000 in “rent” regardless of whether the leases were damaged or were even subject to a complete taking. Vekic could not under any condition terminate the lease and was responsible for fulfilling all of the legal requirements to maintain the leases, including paying the $2 per-acre lease fee to the Department of Wildlife and Fisheries. After paying $60,000 of the "rent" owed, the British Petroleum Deepwater Horizon well exploded, closing the area where the leases at issue here were located for a considerable amount of time. Vekic paid the Popich family the remaining $30,000 he owed under the agreement in May, 2011. On June 19, 2011, Mr. Vekic exercised his option to purchase, and the parties executed the act of sale, which had been prepared in 2009 along with the original agreement, without any modifications. In the wake of the spill, a class action lawsuit was filed against BP. Vekic filed a claim with the Deepwater Horizon Economic Claim Center (“DHECC”) which included the leases at issue. Helen Harris, also an attorney, prepared and filed claims for the Popich family, informing the DHECC of the 2009 agreement with Vekic and post-spill Act of Sale. A dispute arose regarding which party was entitled to the proceeds from the oil spill settlement for damages to certain oyster leases. The Louisiana Supreme Court disagreed with the Court of Appeal and found that the trial court did not err in accepting evidence beyond the four corners of the contract at issue and did not manifestly err in its factual findings and ultimate interpretation that the agreement at issue entitled the plaintiff to the settlement proceeds for property damage to the leases at issue. View "Vekic v. Popich" on Justia Law

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Tax sale purchasers of three condominium units brought actions to quiet title following the tax debtor’s failure to pay ad valorem taxes on the units. The district court found the tax sale purchasers had provided insufficient notice of the right to redeem to the mortgagee for the units, denied the petitions to quiet title, and afforded the defendant mortgagee thirty days to redeem the properties. The issue presented through this appeal was whether the post-sale notice required by La. Rev. Stat. 47:2122(4) could be effectuated either by the tax collector under La. Rev. Stat. 47:2156(B) or by the tax sale purchaser under La. Rev. Stat. 47:2156(A). After review of the applicable statutes, the Louisiana Supreme Court found the court of appeal erred in finding the failure of the tax collector, though mandated to do so by La. Rev. Stat. 47:2156(B), to mail or attempt to mail post-sale written notice of the tax sales to the mortgagee required the tax sales to be set aside. Instead, the Court found the plain language of the governing statutes allowed post-sale notice to the interested tax party to be provided by a tax sale purchaser in accordance with La. Rev. Stat. 47:2156(A), and thus the requirement that the interested party must be duly notified of the tax sale under La. Rev. Stat. 47:2122(4) could be satisfied by the tax sale purchaser. Accordingly, the Court reversed the court of appeal, and remanded the case to that court for consideration of the issues pretermitted by the court of appeal’s reasoning. View "Central Properties v. Fairway Gardenhomes, LLC" on Justia Law

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Following Hurricanes Katrina and Rita, the Louisiana legislature in 2006 passed Act 853 and Act 567, which amended the laws governing compensation for levee servitude appropriations with a particular focus on appropriations for use in hurricane protection projects. The Louisiana Supreme Court granted certiorari in this matter for three purposes: (1) to interpret specific provisions of the 2006 amendments to La. Const. art. I, section 4, La. Const. art. VI, section 42, and La. R.S. 38:281(3) and (4); (2) to determine the amount of compensation that was due a property owner whose property was appropriated by a levee district pursuant to a permanent levee servitude for use in a hurricane protection project; and (3) to determine whether La. R.S. 38:301(C)(2)(f) or La. R.S. 13:5111 governed an award for attorneys’ fees in a levee servitude appropriation dispute. The Court held the 2006 amendments to La. Const. art. I, section 4, La. Const. art. VI, section 42 and 38:281(3) and (4) reduced, rather than eliminated, the measure of damages to be paid to a property owner for the taking of, or loss or damage to, property rights for the construction, enlargement, improvement, or modification of hurricane protection projects from “full extent of the loss” to the more restrictive “just compensation” measure required by the Fifth Amendment to the United States Constitution, which was the fair market value of the property at the time of the appropriation, based on the current use of the property, before the proposed appropriated use, and without allowing for any change in value caused by levee construction. Furthermore, the Court held La. R.S. 38:301(C)(2)(f) governed an award for attorneys’ fees in a levee appropriation dispute. View "South Lafourche Levee Dist. v. Jarreau" on Justia Law

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Plaintiff Dana Johno filed suit against Plaquemines Parish Government (“PPG”) and numerous other defendants alleging his house was unlawfully demolished by PPG and its agents after Hurricane Katrina. The plaintiff subsequently moved to have La. R.S. 9:2800.17, which provided retroactive statutory immunity to the government and its agents for certain actions taken in the wake of Hurricane Katrina, declared unconstitutional. The District Court granted the plaintiff’s motion. Significantly, the issue of immunity was never raised or argued by PPG. Only one of the defendants, Hard Rock Construction, LLC, one of the contractors for PPG, appealed the District Court’s ruling. The Supreme Court affirmed: "When a party acquires a right to assert a cause of action prior to a change in the law, that right is a vested property right which is protected by the guarantee of due process. Thus, a cause of action, once accrued, cannot be divested by subsequent legislation." Because the plaintiff’s causes of action accrued before effective date of the statute, the statute was unconstitutional as applied in this matter. View "Johno v. Doe" on Justia Law

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Whitney and Pamela Smith entered into a residential mortgage contract with Saxon Mortgage Services (“Saxon”), which was secured with a promissory note on the Smiths’ home in Grant Parish. The Smiths later failed to make their installment payments beginning June 1, 2004. Two months later, Mr. Smith died in an automobile accident. On November 4, 2004, J.P. Morgan Chase Bank (“Chase”), as trustee for Saxon, filed suit for executory process against the Smiths, seeking to deliver a notice of seizure to Ms. Smith. Ms. Smith, fearing that she would be evicted from her home over the holidays, moved her children out of the house and sought an injunction to stop the seizure by executory process. In support, she argued the foreclosure documents were not in authentic form pursuant to the requirements set forth in La. Code Civ. P. art. 2635(A)(2) because they were executed in front of only one witness. Ms. Smith also filed a reconventional and third party demands against Chase, alleging wrongful seizure, conversion, and federal due process violations pursuant to 42 U.S.C. 1983. Ultimately, the Banks were found to have improperly seized the Smith home. The Supreme Court granted certiorari to determine whether private attorneys for the lender were entitled to judgment as a matter of law on the ground their actions did not violate 42 U.S.C. 1983. The Supreme Court found that the district court properly granted summary judgment, and the court of appeal erred in reversing that judgment. View "Bank of New York Mellon v. Smith" on Justia Law

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The predecessor(s) of defendant, Union Pacific Railroad Company acquired the right to build a railroad over the property at issue in this case in the late 1880s. The railroad company provided not only public crossings over its tracks but also private crossings for the convenience of landowners, whose large tracts of land were divided by the railroad tracks. Sometime in 2006, Union Pacific began posting written notices at selected private railroad crossings, indicating its intent to close those crossings. In 2007, plaintiffs, who alleged their farming operations would be disrupted by the closure of the private crossings on which they relied to move farming equipment and materials from one section of farmland to another separated by the railroad tracks, filed suit seeking declaratory and injunctive relief to prevent Union Pacific from closing approximately ten private crossings and to require that Union Pacific reopen the private crossings it had already closed. Union Pacific removed the suit to the federal district court and filed a counterclaim seeking declaratory and injunctive relief to permit it to close the private crossings and to prevent the plaintiffs from interfering. Shortly after the filing of this litigation, the Louisiana Legislature passed 2008 La. Acts, No. 530 (effective August 15, 2008), enacting LSA-R.S. 48:394, which required the submission of an advance written notice, by registered or certified mail, to the Louisiana Public Service Commission (“LPSC”) and to the “owner or owners of record of the private crossing traversed by the rail line” by a railroad company desiring to close or remove a private crossing. The Louisiana Supreme Court accepted a certified question of Louisiana law presented from the federal district court, which asked: whether the application of LA. REV. STAT. section 48:394 to any of the properties in this case amounts to an unconstitutional taking of private property without a public purpose, in violation of Article I, Section 4 of the Louisiana Constitution. The Louisiana Supreme Court concluded that LSA-R.S. 48:394 did not effect an unconstitutional taking of private property as applied to the facts established in this case. View "Faulk v. Union Pacific Railroad Co." on Justia Law

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Plaintiff John Boudreaux filed suit against defendant Paul Cummings seeking recognition of a predial servitude/right of way by virtue of acquisitive prescription and a permanent injunction prohibiting Cummings from interfering with his use of the right of way. Specifically, Boudreaux averred that since at least 1948, he and his ancestors in title have been using a pathway and gate to cross the neighboring property that belonged to Cummings and his ancestor in title, the Weills. Testimony established that Boudreaux, his family, and farmers employed by Boudreaux used the right of way to transport farm equipment, to get to and from town for personal errands, and for convenient access to the adjacent road. In 1969, the Weills asked Boudreaux to move the right of way. Boudreaux acquiesced in the request and continued to use the pathway until 2012, when Cummings locked the gate and prevented Boudreaux’s use. Boudreaux alleged that he adversely possessed the predial servitude for thirty years and was entitled to ownership thereof. Cummings filed a motion for summary judgment, contending that Boudreaux was a precarious possessor, and that acquisitive prescription never began to run in Boudreaux’s favor. The trial court denied the motion for summary judgment, finding genuine issues of material fact remained. The matter went to trial and the court found precarious possession was irrelevant to a discussion of ownership of an incorporeal immovable, such as a predial servitude. The trial court rendered judgment in favor of Boudreaux, ruling that the Boudreaux estate acquired a right of way over the Cummings estate by way of acquisitive prescription. Cummings appealed. After review, the Supreme Court found Boudreaux was a precarious possessor of the predial servitude, who never gave actual notice of his intent to possess on his own. Accordingly, acquisitive prescription could not and did not run in his favor. The Court reversed the court of appeal’s judgment and rendered judgment in favor of Cummings. View "Boudreaux v. Cummings" on Justia Law

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Canal/Claiborne, Limited owned property located at 1661 Canal Street in New Orleans. In January 1995, Canal/Claiborne entered into a lease with Stonehedge Development, L.L.C. Stonehedge entered into a sublease in June 1995 with the State of Louisiana, Department of Children and Family Services. The Department occupied the premises, remitting monthly rent payments of about $53,000.00 to Stonehedge, which in turn remitted monthly payments of about $36,000.00 to Canal/Claiborne until Hurricane Katrina struck the city in 2005. Following Katrina, the Department failed to remove its partially damaged movable property from the premises of the plaintiff’s building. During this time, the Department also failed to remit rental payments to Stonehedge. Canal/Claiborne sought remuneration for lost rental income. The issue presented in this case was whether Canal/Claiborne's quasi-contractual claim of unjust enrichment, based on the lost rental income, fell within the scope of that waiver of sovereign immunity. The Supreme Court concluded that the unjust enrichment claim did not fall within the scope of the waiver of sovereign immunity in contract or tort. Furthermore, the Court also found Canal/Claiborne's suit asserting a claim of unjust enrichment had not been otherwise permitted by the legislature in a “measure authorizing … immunity from suit and liability.” View "Canal/Claiborne Ltd. v. Stonehedge Development, LLC" on Justia Law

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This case stemmed from the tax sale of residential property located at 7047 Lake Willow Drive in New Orleans. In 1997, Charles and Connie Brown purchased this property pursuant to a “Cash Sale of Property.” The sale was recorded in the Orleans Parish Conveyance Records. After the Browns became delinquent on their property taxes, the property was sold at a tax sale in 2004, to Mooring Tax Asset Group. The tax collector executed a tax deed that purportedly conveyed the property to Mooring. This deed was recorded in the Orleans Parish conveyance records a year later. Presumably unaware of the tax sale, the Browns sold the property to NARA, L.L.C. pursuant to a “Cash Sale” in 2007. The sale was recorded in the Orleans Parish Conveyance Records shortly thereafter. NARA subsequently sold the property to defendant Roderick James in 2008. This sale was recorded in the Orleans Parish Conveyance Records shortly thereafter. In 2010, Mooring filed a “Petition to Quiet Title,” seeking to terminate James’ interest in the property for failure to redeem the property from the 2004 tax deed recorded in April of 2005. In June 2010, James filed exceptions and an answer to the petition, as well as a reconventional demand against the City of New Orleans, asserting that the tax sale should be nullified on several bases, including insufficient pre-sale notice and advertisement. James then filed a motion for summary judgment asserting these two bases for nullity. The trial court granted James’ motion, finding the 2004 tax sale and the 2004 tax deed were absolute nullities due to lack of sufficient pre-sale notice and for lack of sufficient pre-sale advertisement. Following the ruling, Mooring contended the declaration of nullity should be preliminary, rather than a final judgment, until it was paid costs allowed pursuant to La. R.S. 47:2291. James argued this statute could not be applied retroactively to this case, and was only applicable to tax sales that occurred after January 1, 2009. However, because Louisiana Constitution article VII, section 25(C) allowed for the delay of the effects of a tax sale nullification until certain costs are paid to the tax sale purchaser, the trial court issued a judgment allowing Mooring to submit proof of costs and James to contest costs. Mooring filed an “Affidavit of Proof of Costs Pursuant to La. R.S. 47:2221(B)(3).” James then submitted a “Motion to Contest Costs,” contending Mooring had not made a true claim for costs, and even if it had, taxes, interest, costs and penalties are not recoverable by a tax sale purchaser when the tax sale is an absolute nullity. Alternatively, James argued that if these taxes, costs and penalties are recoverable, they are not recoverable from a third-party purchaser who had no interest in the property at the time of the tax sale. After its review of the parties' arguments on appeal, the Supreme Court held that the tax sale purchaser was entitled to reimbursement of its costs prior to cancellation of the tax sale deed. Furthermore, the Court held that it was the current owner of the property who was responsible for payment of these costs. The Court reversed the rulings of the lower courts and remanded the matter to the trial court for further proceedings. View "Mooring Tax Asset Group v. James" on Justia Law

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A property owner/lessor filed suit against the City of Marksville seeking to recover damages for the City's denial of a retail alcoholic beverage permit to the lessee of its property. The issue this case presented for the Supreme Court's review centered on whether the trial court erred in finding liability on the part of the City and awarding damages. In particular, the Court considered the City's contention that an error occurred in denying its peremptory exception of no cause of action. Finding merit in the City's claim that the property owner failed to state a cause of action for interference with a contractual relation caused by the denial of a liquor permit to its lessee, the Court reversed and remanded the case for entry of judgment in favor of the City. View "MAW Enterprises, LLC v. City of Marksville" on Justia Law