Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Real Estate & Property Law

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The Township of Tredyffrin Zoning Hearing Board of Appeals denied an application by DePolo, a federally licensed amateur or “ham” radio enthusiast, to build a 180-foot radio antenna tower on his property so that he could communicate with other ham radio operators around the world. The property is surrounded by mountains or hills. He claimed a shorter tower would not allow him to reliably communicate with other ham radio operators. The ZHBA agreed to a tower that was 65-feet tall as a reasonable accommodation under the applicable zoning ordinance prohibition on buildings taller than 35 feet. DePolo did not appeal that decision to the Chester Court of Common Pleas as allowed under state law, but filed a federal suit, claiming that zoning ordinance was preempted by 47 C.F.R. 97.15(b), and the closely related FCC declaratory ruling, known as PRB-1. The district court dismissed, finding that the ZHBA had offered a reasonable accommodation and that the zoning ordinance was not preempted by PRB-1. The Third Circuit rejected an appeal. DePolo’s failure to appeal the ZHBA’s determination to state court rendered the decision final, entitled to the same preclusive effect that it would have had in state court. View "Depolo v. Tredyffrin Twp. Bd. of Supervisors" on Justia Law

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After a foreclosure case, Davis filed various claims against an entity that he calls “Wells Fargo U.S. Bank National Association as Trustee for the Structured Asset Investment Loan Trust, 2005-11” as the purported holder of Davis’s mortgage. Davis also sued Assurant, believing it to be the provider of insurance on his home. His claims arise from damage that occurred to his house after Wells Fargo locked him out of it, which went unrepaired and worsened into severe structural problems. The district court dismissed Davis’s claims against Wells Fargo, on the grounds that claim preclusion and a statute of limitations barred recovery, and claims against Assurant for lack of subject matter jurisdiction. The Court reasoned that Davis lacked standing to bring those claims because he sued the wrong corporate entity, namely Assurant, when he should have sued Assurant’s wholly-owned subsidiary, ASIC. The Third Circuit affirmed dismissal of Wells Fargo, but vacated as to Assurant. Standing is a jurisdictional predicate, but generally focuses on whether the plaintiff is the right party to bring particular claims, not on whether the plaintiff has sued the right party. View "Davis v. Wells Fargo" on Justia Law

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The apartment building, constructed in 1912, was used first as a factory, before it was abandoned. Goldtex purchased the the building in 2010 and hired KlingStubbins to design a plan to convert the entire building into rental apartment units and retail space. The building was almost gutted for conversion into a residential building with 163 apartment units and ground floor retail space that began accepting tenants in 2013. A housing advocacy group filed suit alleging violation of the design and accessibility requirements of the Fair Housing Act (FHA), 42 U.S.C. 3604(f)(3)(C). The district court dismissed, citing HUD’s interpretation of the provision—which exempts converted buildings from the accessibility requirements if they were constructed prior to March 13, 1991. The Third Circuit affirmed, finding the agency’s interpretation entitled to deference. The interpretations are reasonable and reflect a legitimate policy choice by the agency in administering an ambiguous statute. View "Fair Hous. Rights Ctr. v. Post Goldtex GP LLC" on Justia Law

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Davis and his wife purchased a Philadelphia rental property in 1997 1997. A longtime member of the U.S. Army Reserve, Davis was called to active duty in 2004. A few months later, the Davises transferred the property to Global LLC, owned and managed by Davis, to “insulate themselves from liability” because “his wife was unable to manage the property.” In 2009, Davis and Global asked the Philadelphia Department of Revenue to reduce Global’s property tax debt, citing the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. 3901, which limits interest imposed on a servicemember’s delinquent property taxes during active duty to a rate of six percent and forbids additional penalties. The Department denied this request, stating that the SCRA does not apply to a business owned by a servicemember and that Davis should file an abatement petition with the Philadelphia Tax Review Board. The Review Board denied that petition. Two years later the city initiated foreclosure proceedings; the state court entered judgment in the city’s favor. Davis and Global filed suit under 42 U.S.C. 1983. The Third Circuit affirmed dismissal. SCRA extends only to servicemembers; a corporation is not a “servicemember” under the statute. View "Davis v. City of Philadelphia" on Justia Law

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Mortgage Electronic Registration Systems (MERS) is a national electronic loan registry system that permits its members to transfer, among themselves, promissory notes associated with mortgages, while MERS remains the mortgagee of record in public records as “nominee” for the note holder and its successors and assigns. MERS facilitates the secondary market for mortgages by permitting members to transfer the right to repayment pursuant to the terms of the promissory note, recording such transfers in the MERS database to notify one another and establish priority, instead of recording such transfers as mortgage assignments in local land recording offices. It permits note holders to avoid recording fees. Recorders of deeds in Pennsylvania counties sued, seeking an injunction, and to recover millions of dollars in unpaid recording fees, contending that the MERS entities violated 21 Pa. Cons. Stat. 351. The Third Circuit rejected the claims, holding that section 351 does not create a duty to record all land conveyances and is so clear that certification to the Supreme Court of Pennsylvania was unnecessary. The transfers of promissory notes among MERS members do not constitute assignments of the mortgage itself. View "Cnty. of Montgomery Recorder v. MERSCorp Inc" on Justia Law

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Realtor Willis planned Southgate, involving the purchase of 68 acres on St. Croix, re-zoning, subdivision, building infrastructure, and selling individual lots. Willis worked with defendants Cheng and Dubois and their entities (OMEI, Ocean View) for financing, but the defendants did not actually intend to develop the property. Pollara, a 47-year veteran of the construction industry, was hired to create the subdivision’s entrance. Ultimately Cheng and Dubois stopped paying Pollara and locked him out of his site office. Pollara was never paid for repair work to the roadway after flooding. Defendants, standing on both sides of the financing, refused any extension of the financing terms; they withheld their consent to selling the land at a profit to a buyer whom Willis had found. They caused Ocean View to foreclose, acquiring the property free of Willis’s and Pollara’s interests. The jury found that Ocean View and Cheng had made intentional misrepresentations and that OMEI had made negligent misrepresentations and that Dubois had made negligent misrepresentations with respect to the building permit and proposals for the development plan, and intentional misrepresentations as to the other three subjects. The jury awarded Pollara compensatory damages of $391,626 from all of the defendants and punitive damages of $90,000 against Cheng. The Third Circuit affirmed. View "Frank C Pollara Grp. LLC v. Ocean View Inv. Holding, LLC" on Justia Law

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Makowka owns a home in a Pike County, Pennsylvania, planned community and, in 2005, fell behind on her homeowners’ association dues. In 2008, the Association obtained a default judgment of $2,436. As additional dues went unpaid, the Association sued again in 2010 and obtained another default judgment, worth $3,599.08. A writ of execution and attachment issued. A sheriff’s sale of Makowka’s property was scheduled for September 2011. Days before the sale, Makowka filed a Chapter 13 petition. In her proposed bankruptcy plan, Makowka moved to avoid the Association’s claims under 11 U.S.C. 522(f), which releases a debtor from obligations imposed by judicial liens and non-possessory, non-purchase money security interests. Although Makowka acknowledged that the Uniform Planned Community Act granted the Association a self-executing statutory lien on her residence for unpaid dues, she claimed that part of that lien had been extinguished because the Association failed to foreclose within the statutory period of three years. To the extent the claims represented fees due before September 2008, Makowka contended, it had obtained dischargeable money judgments. The Bankruptcy Court denied Makowka’s motion. The district court affirmed. The Third Circuit vacated, concluding that the district court relied on the wrong state precedent and that the Association did not enforce its statutory lien on Makowka’s residence when it pursued actions in debt.View "In re: Makowka" on Justia Law

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Columbia, an interstate natural gas company subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC), seeks to replace a portion of a natural gas pipeline that runs in and around York County, Pennsylvania. Because the original location of the pipeline has become heavily populated, the replacement will not track the original line but will be outside the existing right of way. To obtain easements necessary to complete construction of the replacement, in 2013, Columbia filed Complaints in Condemnation against four Landowners in federal court. The district court held that Columbia did not have the right of eminent domain required to condemn the easements, reasoning that 18 C.F.R. 157.202(b)(2)(i), was ambiguous. The Third Circuit reversed, finding that the regulation clearly anticipates replacement outside the existing right of way and contains no adjacency requirement. The district court erroneously adopted its own definition of “replace” and concluded that a “notice” of “proposed rulemaking” for “Emergency Reconstruction of Interstate Natural Gas Facilities” promulgated by FERC after 9/11 was relevant. View "Columbia Gas Transmission, LLC v. 1.01 Acres in Penn Twp" on Justia Law

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New Jersey and Pennsylvania municipalities sued the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Housing Finance Agency (FHFA) (collectively, the Enterprises). Fannie Mae and Freddie Mac are federally-chartered but privately owned corporations that issue publicly traded securities, created by Congress to establish and stabilize secondary markets for residential mortgages, 12 U.S.C. 1716; 12 U.S.C. 1451. Fannie and Freddie purchase mortgages from third-party lenders, pooling them together and selling securities backed by those mortgages. In the wake of the housing market collapse of 2008, Fannie and Freddie owned many defaulted and overvalued subprime mortgages. They went bankrupt, and Congress created the FHFA to act as conservator for Fannie and Freddie. Congress exempted the Enterprises from all state and local taxation, with an exception for taxes on real property. The plaintiffs sought declaratory judgments that the Enterprises were not exempt from paying state and local real estate transfer taxes. The district courts dismissed. In a consolidated appeal, the Third Circuit affirmed. View "Delaware Cnty. v. Fed. Hous. Fin. Agency" on Justia Law

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The sellers own an island off St. Thomas, Virgin Islands, and a launch providing access to the island from St. Thomas. In 2004, the buyers signed land contracts and an escrow agreement to purchase the properties for $21 million and $2.5 million, respectively. Premier Title served as the escrow agent and was party to the escrow agreement. Unbeknownst to the buyers, D’Amour, the sellers’ attorney-in-fact, owned Premier. The contract required an initial deposit of $1 million. The buyers paid an additional $500,000 nonrefundable deposit to extend the closing date. The sellers were to deliver “Clear and Marketable” title and assignments of all permits, submerged land leases and other licenses necessary for occupancy of the dock and other improvements. At the scheduled closing, it was determined that dock permits had expired and that there were several exceptions to title. The sellers refused to refund the deposits. The buyers appealed district court orders, rejecting certain claims; the sellers cross-appealed other orders. D’Amour appealed some holdings. The Third Circuit affirmed in part and reversed in part, concluding that conclude that the buyers are entitled to recover the $1.5 million deposit in restitution, and that the tort claims are barred by the gist of the action doctrine. View "Addie v. Kjaer" on Justia Law