Justia U.S. 2nd Circuit Court of Appeals Opinion SummariesArticles Posted in Real Estate & Property Law
Maddox v. Bank of N.Y. Mellon Trust Co., N.A.
The Second Circuit vacated the district court's denial of the Bank's motion for judgment on the pleadings. In this case, the district court concluded that plaintiffs have Article III standing to sue the Bank for violating the timely recordation requirements imposed by New York State's mortgage-satisfaction-recording statutes and certified the question for interlocutory appeal. The court held, however, that plaintiffs' allegations fail to support their Article III standing, and that they may not pursue their claims for the statutory penalties imposed by the New York Legislature in federal court. In this case, plaintiffs have not suffered a concrete harm due to the Bank's violation. View "Maddox v. Bank of N.Y. Mellon Trust Co., N.A." on Justia Law
Cangemi v. United States
Property owners in the Town of East Hampton appeal from two separate decisions of the district court concerning their claims that the jetties abutting Lake Montauk Harbor have caused significant erosion on their properties. First, the district court dismissed plaintiffs' Federal Tort Claims Act (FTCA) claims against the Untied States for lack of subject matter jurisdiction on sovereign immunity grounds, citing the FTCA's discretionary function exception. Second, the district court granted judgment as a matter of law to the Town on plaintiff's state-law private nuisance and trespass claims.The Second Circuit affirmed the district court's judgment in both decisions, concluding that the district court correctly concluded that plaintiffs' claims against the United States are barred by sovereign immunity. In this case, neither the FCSA nor the 3x3x3 Paradigm prescribes a specific course of action abridging the USACE's broad discretion in carrying out the LMH Study, and that study and the Lake Montauk Harbor FNP are clearly susceptible to policy analysis. The court also held that, under New York law, the Town's ownership of the land beneath the jetties, standing alone, did not give rise to a duty to mitigate any erosion caused by the jetties. The court concluded that the district court had subject matter jurisdiction over plaintiffs' state-law claims; the district court properly granted the Town's renewed motion for judgment as a matter of law; and the law of the case doctrine did not compel denial of the Town's motion for judgment as a matter of law. View "Cangemi v. United States" on Justia Law
53rd Street, LLC v. U.S. Bank National Ass’n
The Second Circuit vacated the district court's grant of summary judgment to plaintiff in a quiet title action regarding a property subject to a mortgage held by the bank. The district court, relying on a statement in Milone v. U.S. Bank, N.A., 164 A.D.3d 145 (2d Dep't 2018), held that U.S. Bank's purported de-acceleration was motivated only by a desire to avoid the expiration of the limitations period and was therefore insufficient to de-accelerate. While this appeal was pending, the New York Court of Appeals, in Freedom Mortgage Corp. v. Engel, 37 N.Y.3d 1 (2021), abrogated the proposition of Milone on which the district court relied. Therefore, this intervening decision undermined the reasoning of the district court. The court remanded for further proceedings. View "53rd Street, LLC v. U.S. Bank National Ass'n" on Justia Law
Cayuga Nation v. Tanner
The Nation and some of its officials filed suit against the Village of Union Springs and certain of its officials, seeking a declaratory judgment that the Indian Gaming Regulatory Act (IGRA) preempts the Village's ordinance regulating gambling as applied to the Nation's operation of a bingo parlor on a parcel of land located within both the Village and the Nation's federal reservation, and for corresponding injunctive relief.The Second Circuit affirmed the district court's grant of summary judgment in favor of the Nation, agreeing with the district court that neither issue nor claim preclusion bars this suit and that IGRA preempts contrary Village law because the parcel of land at issue sits on "Indian lands" within the meaning of that Act. View "Cayuga Nation v. Tanner" on Justia Law
Dorce v. City of New York
Plaintiffs filed a putative class action challenging New York City's Third Party Transfer (TPT) Program, through which the City initiates in rem foreclosure proceedings against tax-delinquent properties and, following a foreclosure judgment, transfers ownership of the properties to third party partners who develop and manage the properties. Plaintiffs alleged federal constitutional and state law claims stemming from the transfer of their properties through the TPT. The district court dismissed the complaint.The Second Circuit concluded that plaintiffs lack standing to seek injunctive and declaratory relief; the TIA is not directly applicable to plaintiffs' claims and the district court exceeded its discretion in concluding that comity bars their claims; and the Rooker-Feldman doctrine does not bar plaintiffs' equal protection and due process claims, or their second takings claim – that their property was taken for a public purpose without just compensation – to the extent that for each of those claims, they seek only the value of their lost property in excess of the amount owed in taxes. Accordingly, the court reversed in part, affirmed in part, and remanded for further proceedings. The court also vacated and remanded the district court's decision not to exercise supplemental jurisdiction over plaintiffs' state law claims. View "Dorce v. City of New York" on Justia Law
CIT Bank N.A. v. Schiffman
The Second Circuit affirmed the district court's order adopting the Report and Recommendation of the magistrate judge and granting summary judgment in favor of CIT Bank N.A. in a foreclosure action against defendants. On appeal, plaintiffs argue that CIT failed to prove compliance with the pre-foreclosure notice requirements of New York Real Property Actions and Proceedings Law (RPAPL) 1304 and the pre-foreclosure filing requirements of RPAPL section 1306.After receiving guidance from the New York Court of Appeals on the issues of state law that govern defendants' arguments, the court found that CIT has adequately proven compliance with RPAPL 1304 and 1306. The court held that defendants have not rebutted the presumption that CIT mailed, and that they received, the required section 1304 notices. The court also held that, because there is no dispute that CIT timely submitted a section 1306 filing with all the required information about one defendant, the wife, it has complied with the statute. The court explained that the fact that CIT did not submit a filing with respect to the husband is irrelevant, as CIT was not required to do so. View "CIT Bank N.A. v. Schiffman" on Justia Law
Maddox v. Bank of New York Mellon Trust Co.
The Second Circuit affirmed the district court's order denying the Bank's motion for judgment on the pleadings. The court held that state legislatures may create legally protected interests whose violation supports Article III standing, subject to certain federal limitations. The court also decided that the New York law violations alleged here constitute a concrete and particularized harm to plaintiffs in the form of both reputational injury and limitations in borrowing capacity over the nearly ten-month period during which their mortgage discharge was unlawfully not recorded and in which the Bank allowed the public record to reflect, falsely, that plaintiffs had an outstanding debt of over $50,000.The court further concluded that the Bank's failure to record plaintiffs' mortgage discharge created a material risk of concrete and particularized harm to plaintiffs by providing a basis for an unfavorable credit rating and reduced borrowing capacity. The court explained that these risks and interests, in addition to that of clouded title, which an ordinary mortgagor would have suffered (but plaintiffs did not), are similar to those protected by traditional actions at law. Therefore, plaintiffs have Article III standing and they may pursue their claims for the statutory penalties imposed by the New York Legislature, as well as other relief. Accordingly, the court affirmed and remanded. View "Maddox v. Bank of New York Mellon Trust Co." on Justia Law
Francis v. Kings Park Manor, Inc.
In this Fair Housing Act of 1968 case, plaintiff's claims stemmed from his neighbor's verbal attacks and attempted intimidation of plaintiff based on his race. The principal question presented to the en banc court is whether a plaintiff states a claim under the Act and parallel state statutes for intentional discrimination by alleging that his landlord failed to respond to reported race-based harassment by a fellow tenant.The en banc court concluded that landlords cannot be presumed to have the degree of control over tenants that would be necessary to impose liability under the FHA for tenant-on-tenant misconduct. In this case, plaintiff failed to state a claim that the KPM Defendants intentionally discriminated against him on the basis of race in violation of the FHA, Sections 1981 and 1982, or the New York State Human Rights Law. Furthermore, plaintiff failed to state a claim of negligent infliction of emotional distress against the KPM Defendants under New York law. View "Francis v. Kings Park Manor, Inc." on Justia Law
In Re: 650 Fifth Avenue Co. & Related Properties
The Government seeks forfeiture of the Building, as well as other assets owned by claimants. The parties subsequently cross-appeal the district court's order determining that the Government had probable cause to forfeit the Building and granting the motion of claimants to modify a protective order by releasing to them a portion of the rental income generated from the Building.The Second Circuit affirmed the district court's finding of probable cause where the district court described at length the non-tainted evidence on which it relied to find probable cause, and the district court did not refuse to consider claimants' statute-of-limitations defense. The district court also did not commit reversible error by concluding that, at this stage, claimants' statute of limitations defense did not defeat a probable cause finding. Finally, the court found no abuse of discretion where the district court declined to draw an adverse inference against the Government for failing to produce statute-of-limitations discovery following the court's 2016 and 2019 opinions requiring it to do so. However, the court concluded that the return-of-rents remedy is appropriate here and modified the district court's order releasing the rental income to cover rental income generated from January 5, 2018, until October 13, 2020. View "In Re: 650 Fifth Avenue Co. & Related Properties" on Justia Law
Donovan v. Maresca
The Second Circuit affirmed the district court's judgment affirming the bankruptcy court's order granting debtor's motion to avoid a judicial lien. Debtor seeks, pursuant to 11 U.S.C. 522(d)(1) and (f)(1)(A), to exempt her interest in, and avoid a judicial lien upon, a property that her dependent son uses as a non-primary residence.The court held that the term "residence" in the so-called homestead exemption of section 522(d)(1) includes both primary and nonprimary residences. In this case, the ordinary meaning of the word "residence" does not exclude non-primary residences. Furthermore, Congress's deliberate choice of terminology, the text of the statute, and the legislative history weigh in favor of the court's conclusion. View "Donovan v. Maresca" on Justia Law