Latest 7 Cases This Week: Five Star Royalty Partners, Ltd. v. Mauldin (5th Cir.), Capitol Farmers Market, Inc. v. Delongchamp (Ala.), Bennett v. ...

Trump Swings His Wrecking Ball at Social Security

NEIL H. BUCHANAN

Neil H. Buchanan—UF law professor and economist—dispels some common misunderstandings about the future of Social Security but explains why President Trump’s recent comments are cause for concern. Buchanan explains why, contrary to claims by reporters and politicians, Social Security is not at the brink of insolvency, but points out that if Trump were to permanently eliminate payroll taxes, that would doom the program on which tens of millions of retirees depend.

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Five Star Royalty Partners, Ltd. v. Mauldin

Court: US Court of Appeals for the Fifth Circuit

Docket: 19-50860

Opinion Date: August 31, 2020

Judge: Jerry Edwin Smith

Areas of Law: Energy, Oil & Gas Law, Real Estate & Property Law

Defendants appealed the district court's judgment favoring Five Star in a quiet title action over oil-and-gas interests. Five Star, asserting itself as the grantee’s successor-in-interest, sought a declaration that it owns a "floating" royalty entitling it to a three-eighths share of any leased royalty. The district court declared that Five Star owns an undivided three-eighths mineral interest pursuant to a 1927 deed. The Fifth Circuit affirmed the judgment, but clarified that Five Star's three-eighths mineral interest includes solely a right to receive a proportionate share of royalties and does not include an executive right or right to develop the land.

Capitol Farmers Market, Inc. v. Delongchamp

Court: Supreme Court of Alabama

Docket: 1190103

Opinion Date: August 28, 2020

Judge: Tommy Bryan

Areas of Law: Civil Procedure, Real Estate & Property Law

Capitol Farmers Market, Inc. appealed a circuit court order entered in favor of Cindy C. Warren Delongchamp. In 2003, Delongchamp acquired two adjacent parcels of property burdened by restrictive covenants by her predecessor-in-interest. In 2015, Capitol Farmers Market acquired two adjacent parcels of property. The parties agreed that one of the parcels ("the Capitol Farmers Market property") was included within the property similarly burdened by the restrictive covenants (the 1982 Declaration). The Capitol Farmers Market property abutted the Delongchamp property; it was undisputed that the other parcel acquired by Capitol Farmers Market was not subject to the restrictive covenants set out in the 1982 Declaration. In September 2017, Delongchamp filed a complaint in the circuit court that, as amended, sought a declaratory judgment and injunctive relief regarding the Capitol Farmers Market property, alleging that Capitol Farmers Market was planning to "subdivide the Capitol [Farmers Market p]roperty into a high density residential subdivision with proposed lots being substantially less than the required five (5) acre minimum." Delongchamp sought a judgment declaring that the Capitol Farmers Market property was encumbered by the restrictive covenants set out in the 1982 Declaration and that Capitol Farmers Market was required to abide by the restrictive covenants on the Capitol Farmers Market property. Delongchamp also sought an injunction restraining Capitol Farmers Market from "violating" the restrictive covenants set out in the 1982 Declaration "to include, but not limited to, subdividing the Capitol [Farmers Market] property into lots less than five (5) acres." In August 2019, the special master filed a report of his findings and his recommendation in the circuit court. On appeal, the Alabama Supreme Court determined an adjacent property owner, whose property was also burdened by the 1982 covenants, should have been joined as a party to this action. "If Alfa cannot be made a party, the circuit court should consider the reasons Alfa cannot be joined and decide whether the action should proceed in Alfa's absence. In light of the foregoing, we express no opinion concerning the merits of the arguments made by the parties on appeal."

Bennett v. Bank of Eastern Oregon

Court: Idaho Supreme Court - Civil

Docket: 47346

Opinion Date: August 31, 2020

Judge: Roger S. Burdick

Areas of Law: Banking, Civil Procedure, Real Estate & Property Law

Bret and Mary Bennett filed an action to quiet title to their residence in Payette, Idaho, against the Bank of Eastern Oregon (“BEO”), seeking to remove a judgment lien and a deed of trust. In 2007, the Bennetts started a motorsports business in Ontario, Oregon, which leased its premises from a different business entity owned by the Bennetts. In 2008, the Bennetts personally guaranteed one or more loans between BEO and these businesses. Among these loans was a $100,000 promissory note (“the Note”) that was secured by a deed of trust on the Bennetts’ residence situated on the other side of the Snake River in Payette, Idaho (“the Property”). The deed of trust designated 1st American Title Company of Malheur County, Oregon as trustee. The parties signed the deed of trust on April 10, 2008. One day later, on April 11, 2008, BEO recorded the deed of trust in the Payette County Recorder’s Office. By its terms, the deed of trust was set to mature on May 5, 2009. The Bennetts later defaulted on the Note and other obligations to BEO. Rather than seeking to foreclose on the Property for a breach of the Note’s terms, BEO successfully pursued a collection action against the Bennetts in Oregon state court to recover on all of the Bennetts’ debts, including the Note. This appeal addressed whether a debtor could use Idaho’s single-action rule as a sanction to quiet title against a deed of trust when the secured creditor has violated the rule by filing an action against the debtor to recover on the debt before seeking satisfaction of the debt by foreclosing on the property serving as security. The Idaho Supreme Court determined the Bennetts stated a cause of action that could allow them to quiet title against BEO for the deed of trust. Construing the pleadings in favor of the Bennetts, BEO violated the single-action rule codified in Idaho Code section 45-1503(1) by seeking to recover from the Bennetts on the Note personally before seeking to foreclose on the Property. Thus, the Supreme Court reversed the district court's decision granting BEO's motion to dismiss, vacated the judgment of dismissal, and remanded for further proceedings.

Kuhn v. High

Court: Supreme Court of Mississippi

Citation: 2018-CA-01760-SCT

Opinion Date: September 3, 2020

Judge: James W. Kitchens

Areas of Law: Constitutional Law, Real Estate & Property Law

In this case's second time before the Mississippi Supreme Court, the Court held in High v. Kuhn, 191 So. 3d 113 (Miss. 2016) (High I), that article 4, section 110, of the Mississippi Constitution forbade the condemnation of a private road across the property of Cheryl High for the benefit of Todd and Angela Kuhn. After the Court’s mandate, High moved the Harrison County Special Court of Eminent Domain for attorney fees pursuant to Mississippi Code Section 11-27-37 (Rev. 2019). The special court found that Section 11-27-37 did not apply. High appealed, and the Supreme Court reversed and remanded for the special court to consider the merits of the motion for attorney fees and the reasonableness of the amount of fees requested. On remand, High filed an amended motion requesting attorney fees for a frivolous filing under the Mississippi Litigation Accountability Act (LAA). After a hearing, the special court awarded attorney fees to High as a sanction for the Kuhns’ frivolous filing. The special court found that the $29,049.60 requested by High was reasonable and assessed that amount jointly and severally against the Kuhns and their attorney, Virgil Gillespie. The special court denied the Kuhns’ motion to reconsider and amended the judgment to add $1,000 in attorney fees that High had incurred in defending the motion for reconsideration. The Kuhns and Gillespie appealed, arguing that the special court erred by: (1) adopting High’s findings of fact and conclusions of law; (2) awarding a judgment to one of High’s attorneys who was not a party to the lawsuit; (3) imposing a sanction for a frivolous filing; (4) awarding interest; and (5) allowing attorney fees beyond those permitted by Section 11- 27-37. The Supreme Court concluded the special court of eminent domain did not abuse its discretion by imposing the sanctions nor did it err in its application of the law. The Court reversed in part only to correct a scrivener’s error in the amended judgment.

Weaver v. Recreation District

Court: South Carolina Supreme Court

Docket: 27991

Opinion Date: September 2, 2020

Judge: Donald W. Beatty

Areas of Law: Civil Procedure, Constitutional Law, Real Estate & Property Law, Tax Law

Appellant Don Weaver brought a declaratory judgment action to challenge the constitutionality of S.C. Code Ann. section 6-11-271 (2004), which addressed the millage levied in certain special purpose districts. Appellant owned property and was a taxpayer in the Recreation District, a special purpose district created to fund the operation and maintenance of parks and other recreational facilities in the unincorporated areas of Richland County, South Carolina. Appellant first argued section 6-11-271 was unconstitutional because it violated the South Carolina Constitution's prohibition on taxation without representation. Appellant next contended section 6-11-271 did not affect all counties equally and was, therefore, special legislation that was prohibited by the South Carolina Constitution. Appellant lastly argued section 6-11-271 was void because it violated Home Rule as set forth in the state constitution and the Home Rule Act. The circuit court found Appellant failed to meet his burden of establishing any constitutional infirmity. To this, the South Carolina Supreme Court concurred and affirmed judgment.

Trent v. Mountain Commerce Bank

Court: Tennessee Supreme Court

Docket: E2018-01874-SC-R11-CV

Opinion Date: August 26, 2020

Judge: Lee

Areas of Law: Real Estate & Property Law

The Supreme Court affirmed the judgments of the trial court and the court of appeals denying reformation of a quitclaim deed, holding that equitable reformation was not available when reformation would benefit parties with constructive notice of a title defect but harm the rights of creditors with recorded judgment liens. A husband and wife quitclaimed parcels of real property. The wife, who owned the property with her husband as tenants by the entirety, was omitted as grantor on one of the quitclaim deeds. Later, two banks obtained judgments against the husband and wife. When the property was sold, the purchasers discovered that the property was subject to the wife's retained ownership interest and the banks' recorded judgment liens. The wife signed a quitclaim deed of correction. The purchasers then filed a declaratory judgment action asking to the trial court to hold, based on mutual mistake, that the corrected quitclaim deed reformed the original quitclaim deed. The court denied reformation. The Supreme Court affirmed, holding that because reforming the quitclaim deed would deprive the banks of their recorded judgment liens and benefit the purchasers and their lender, who acquired the property with constructive notice of the banks' recorded judgment liens and the wife's remaining interest in the property, the purchasers were not entitled to reformation.

Johnson County Ranch Improvement #1, LLC v. Goddard

Court: Wyoming Supreme Court

Citation: 2020 WY 115

Opinion Date: September 1, 2020

Judge: Kautz

Areas of Law: Real Estate & Property Law

The Supreme Court reversed in part the district court's final judgment incorporating the jury's special verdict in favor of the Goddards and rendering judgment in favor of Sand Creek Ranch Preservation Association, Inc. (SCRPA) and against Goddard Ranch on two of its claims for declaratory relief that were not included in the jury's verdict, holding that SCRPA and Johnson County Ranch Improvement #1 (JCRI) waived their arguments on appeal and that the district court erred in entering final judgment on SCRPA's claims for declaratory relief. Goddard Ranch, LLC purchased ranch lands in a subdivision where private home lots were surrounded by ranch land. The fence encroached upon easements belonging to the homeowners. JCRI and SCRPA, whose members were owners of the residential lots, sued Goddard Ranch and three individuals (collectively, the Goddards). The jury returned a special verdict for the Goddards. The final judgment incorporated the special verdict and rendered judgment in favor of SCRPA on two of its claims for declaratory relief that were not included in the jury's verdict. The Supreme Court held (1) the arguments SCRPA and JCRI on appeal were not reviewable; and (2) there was no justiciable controversy with respect to SCRPA's claims for declaratory relief concerning SCRPA's right to install signage and certain facilities within the easements.