Keeping Current PropertyKeeping Current Property offers a look at selected recent cases, rulings and regulations, literature and legislation. The editors of Probate & Property welcome any suggestions and contributions from readers.
- ABANDONED PROPERTY: Ownership. Under the federal common law of finds, metal tokens less than 100 years old and embedded in the soil within national forests belong to the United States as landowner rather than to the finder. The court rejected the argument that title should vest in the finder because the Archaeological Resources Protection Act does not apply to artifacts less than 100 years old. United States v. Shivers, 96 F.3d 120 (5th Cir. 1996).
- BANKRUPTCY: Automatic stay; foreclosure sale. Analyzing Illinois law, the court held that the debtor could not cure arrearages when the foreclosure sale took place prepetition even though the sale was not confirmed until after the petition was filed. The right to cure ended with the foreclosure sale. In re Christian, 199 B.R. 382 (N.D. Ill. 1996).
- BANKRUPTCY: Bifurcation and cramdown. In a Chapter 13 case described as a case of first impression, the bankruptcy court confirmed a debtor's plan that bifurcated a second mortgagee's claim on debtor's principal residence into secured and unsecured elements and then crammed-down the secured claim to the value of the collateral, provided that the last payment on the secured portion would be due during the term of the plan. The court distinguished Nobelman v. American Sav. Bank, 113 S. Ct. 2106 (1993). In re Young, 199 B.R. 643 (E.D. Tenn. 1996).
- BANKRUPTCY: Principal residence. Boilerplate deed of trust language that loans on the principal residences of the debtors were also secured by easements, appurtenances, rents, profits and fixtures did not affect the nature of the lender's claim, which was secured "only" by the debtor's principal residence. Lievsay v. Western Fin. Sav. Bank, 199 B.R. 705 (9th Cir. 1996); PNC Mortgage Co. v. Dicks, 199 B.R. 674 (N.D. Ind. 1996).
- BANKRUPTCY: Trustee's environmental liability. Bankruptcy trustee was not liable for environmental problems when he was acting within the scope of his authority and no breach of fiduciary duty was alleged. Although the court noted that trustees must comply with environmental laws, it found no cases in which a bankruptcy trustee has been held personally liable to non-parties to the bankruptcy proceeding for the debtor's environmental problems. Tennsco Corp. v. Estey Metal Prod., Inc., 200 B.R. 542 (D.N.J. 1996).
- BANKRUPTCY: Unsecured claim of junior mortgagee. Following Nobelman v. American Sav. Bank, 113 S. Ct. 2106 (1993), the court held that even a totally unsecured second mortgage loan could not be modified by a debtor's plan. In re Barnes, 199 B.R. 256 (W.D.N.Y. 1996).
- DEEDS: General warranty covenants. When the grantee under a general warranty deed is successful in a quiet title action against an adverse possessor, the general warranty covenants are not breached and grantee cannot recover damages or attorney's fees from the grantor. Keilbach v. McCullough, 669 N.E.2d 1052 (Ind. Ct. App. 1996).
- DEEDS: Reservation of life estate to third party. Saying that the grantor's intent was paramount to a common law rule derived "from archaic feudal forms of conveyance," the court held that a conveyance by grantor "subject to . . . life estate in" a third party who had lived with grantor on the premises for 13 years was valid to establish a life estate in the third party. Nelson v. Parker, 670 N.E.2d 962 (Ind. Ct. App. 1996).
- EMINENT DOMAIN: Regulatory takings. Whether a regulatory taking has occurred presents mixed questions of law and fact and thus was properly submitted to a jury, the court held. It upheld a jury verdict finding that the city-imposed restrictions either did not substantially advance legitimate public purposes or denied economically viable use of the property to the owner. That the owner had sold the property to the state for more than the owner had paid did not render the issues moot, the court noted. Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d 1422 (9th Cir. 1996).
- ENVIRONMENT: CERCLA; passive disposal. Noting several decisions to the contrary, the court concluded that passive migration of pollutants from a landowner's property does not constitute disposal. United States v. CDMG Realty Co., 96 F.3d 706 (3d Cir. 1996).
- JOINT TENANCY: Leases. When one joint tenant leases her interest to a third party without consent of the other joint tenant during the period of the lease, the lessee succeeds to the rights of the lessor and is entitled to enjoy the possession of the property with the other joint tenant just as fully as the lessor could have without the lease. Bangen v. Bartelson, 553 N.W.2d 754 (N.D. 1996).
- LANDLORD AND TENANT: Landlord's lien; UCC. On an issue of first impression in Michigan, a court held that a landlord's lien is a form of chattel paper covered by UCC Article 9. Thus the secured party must file a financing statement pertaining to the lien with the appropriate state agency. Otherwise, the interest remains unperfected and is subordinated to other security interests or types of creditors. Shurlow v. Bonthuis, 553 N.W.2d 366 (Mich. Ct. App. 1996).
- LATERAL SUPPORT: Damages for removal. When the defendant removed lateral support of the plaintiff's adjoining land, the plaintiff was entitled to both permanent damages for diminution in value and costs of restoration. Pugel v. Monheimer, 922 P.2d 1377 (Wash. Ct. App. 1996).
- MORTGAGES: Foreclosure; deficiency; bankruptcy stay. Three days after the foreclosure sale, the mortgagor filed for bankruptcy. Under Oklahoma law, the mortgagee creditor has 90 days after foreclosure to pursue a deficiency. Although the filing of the bankruptcy and resulting stay do not toll the limitation period, the common law of Oklahoma suspends the 90 day period until the stay is lifted. Statewide Funding Corp. v. Reed, 925 P.2d 578 (Okla. Ct. App. 1996).
- NEGLIGENCE: Premises liability; duty of care. A business proprietor has a duty, at least under some circumstances, to take reasonable safeguards to protect customers from the dangers posed by crossing an adjoining highway to an area the proprietor knows or should know the customers will use for parking. Mulraney v. Auletto's Catering, 680 A.2d 793 (N.J. Super. Ct. App. Div.), cert. denied ___ A.2d ___ (N.J. 1996).
- NEGLIGENCE: Premises liability; duty of care. The Nebraska Supreme Court recently eliminated the com-mon law distinction between licensees and invitees and adopted a standard of reasonable care to all lawful visitors. The court retained a separate classification for trespassers. Heins v. Webster County, 552 N.W.2d 51 (Neb. 1996).
- NUISANCE: Failure to abate; notice. A city demolished a fire damaged apartment building after several hearings at which the owners were present and after 30 days notice of the city's intent to demolish if the owners failed to repair. The court found that the notices given to the owners were adequate to satisfy 14th amendment procedural due process requirements and that their fourth amendment rights were not violated. Samuels v. Meriwether, 94 F.3d 1163 (8th Cir. 1996).
- SALE-LEASEBACK AGREEMENT: Side agreement. When an unrecorded side agreement provided that an optionee could purchase at a significantly lower price than that provided in the lease and option, neither the optionee nor the optionee's successor in interest could enforce the undisclosed side agreement against the Resolution Trust Corporation as receiver for optionor's mortgage. Tyson Foods, Inc. v. Adams, 930 S.W.2d 374 (Ark. 1996).
- ZONING AND PLANNING: Growth control ordinance. In an action by developers to enjoin enforcement of a comprehensive growth control ordinance, the trial court determined that, for subdivisions already approved, platted and improved, the developers would likely prevail because the ordinance would probably violate the developers' substantive due process rights and the developers would suffer irreparable harm. Schenck v. City of Hudson Village, 937 F. Supp. 679 (N.D. Ohio 1996).
- ZONING AND PLANNING: Land use plan not zoning. The county had adopted a comprehensive plan that designated one owner's land as rural residential, but had not enacted a zoning ordinance to implement the plan. The court ruled that the county could not prevent commercial use of the land, which was, in effect, unzoned. Ford v. Board of County Comm'rs of Converse County, 924 P.2d 91 (Wyo. 1996).
- ZONING AND PLANNING: Sign ordinance; trademarks. An ordinance that prohibited two-color signs in the area where a shoe store was located did not impermissibly alter the plaintiff's registered trademark. Payless Shoesource, Inc. v. Town of Penfield, 934 F. Supp. 540 (W.D.N.Y. 1996).
- ZONING AND PLANNING: Split lots. Part of a lot divided by a municipal boundary could not be used as acces- sory parking for a multi-family residential use permitted in the adjoining city, when the town's zoning barred residential uses at that location. Dupont v. Town of Dracut, 670 N.E.2d 183 (Mass., Ct App. 1996).
- Involuntary Conversion: Joint venture property. The IRS ruled that a partner in a joint venture was not entitled to 1033 involuntary conversion treatment on a condemnation sale that occurred one day after the partner and its co-partner each received a 50 % tenants-in-common interest in the condemned property as a distribution from the joint venture. The distribution did not occur until the timing and the fact of the actual closing were known. The sale was made, in substance, by the joint venture. Furthermore, even if the partners made the sale, 1033 treatment would not be allowed because the partners could not show that the property was held for productive use in the taxpayer's trade or business for the one day that it was held by the partners. PLR 9645005 (July 23, 1996).
- Like-Kind Exchanges: Farm lands. Six taxpayers owned equal undivided interests in 23 separate parcels of farm land. The IRS ruled that their exchanges of these interests for 100 % ownership in specific parcels of the 23 parcel group qualified as 1031 like-kind exchanges. PLRs 9642029, 9642032, 9642033, 9642034 and 9642035 (July 16, 1996).
- Community property, Texas style. James W. Paulsen discusses community property in the Texas constitution of 1845, national reaction to the Texas property system and its importance in the women's rights movement in Community Property and the Early American Women's Rights Movement: The Texas Connection, 32 Idaho L. Rev. 641 (1996).
- Easement holders' liability under CERCLA. After extensive review and analysis of CERCLA cases, E. Peyton Whitener concludes that cleanup costs should be assessed to easement holders when the easement area in question is contaminated in Cleaning Up the Confusion: Long Beach, Grand Turk, and the Scope of Easement Holder Liability under CERCLA, 45 Emory L.J. 805 (1996).
- Ground leases and income taxes. In The Income Tax Treatment of Interests Acquired from a Ground Lessor, 23 Florida St. U.L. Rev. 863 (1996), Norton L. Steuben uses hypothetical situations to provide the framework for his analysis of the complex income tax implications attendant on acquisition of property from a ground lessor.
- Landlord and tenant: Religious freedom and fair housing laws. In Cohabitation, Fornication and Free Exercise of Religion: Landlords Seeking Religious Exemption from Fair Housing Laws, 46 Case Western L. Rev. 1071 (1996), Rebecca A. Wistner analyzes recent cases and the fed- eral Religious Freedom Restoration Act of 1993. She concludes that landlords' religious beliefs should not exempt them from state fair housing statutes protecting unmarried cohabitants.
- Public accommodations and private property. In No Right to Exclude: Public Accommodations and Private Property, 90 Nw. U. L. Rev. 1283 (1996), Joseph William Singer provides a thorough and insightful analysis of the right of access by all persons to public accommodations. He traces the development of the law through the decades in an interesting and instructive manner.
- Regulatory takings: Beach access. David J. Bederman explores the role of custom in the modern American jurisprudence of property rights in The Curious Resurrection of Custom: Beach Access and Judicial Takings, 96 Colum. L. Rev. 1375 (1996).
- Hawaii courts may limit property forfeitures in criminal cases when forfeiture may be grossly disproportionate to the nature of the owner's conduct. Haw. Rev. Stat. 712A-5.5.
- Hawaii declares family child-care homes housing six or fewer children to be permitted uses in residential areas. Haw. Rev. Stat. 46-15.35, 501-231, 502-111.
- Kentucky authorizes regulation of uses within designated urban residential zones on a structure-by-structure basis, thus permitting mixed uses. Ky. Rev. Stat. Ann. 100.131.
- Massachusetts adopts provisions for the protection and enhancement of river resources. 1996 Mass. Acts ch. 258.
- Michigan enacts a property rights preservation law, requiring state agencies to review actions in the light of a possible unconstitutional taking. Mich. Comp. Laws Ann. 24.421 et seq.
- Readers interested in a comprehensive review of current developments in real estate law are encouraged to subscribe to the ABA Real Estate Quarterly Report, which is prepared by the Real Property Division's Decisions Committee. For more information on this publication, contact LaPrica D. Mims at the Section office, (312) 988-6233.
Keeping Current_Property Editor: Nicholas L. White, School of Law, University of Memphis, Memphis, TN 38152. Contributing editors: Ralph Brashier, Lars Gustafsson and David A. Thomas.
Probate & Property Magazine is published six times annually and is included in section members' annual dues.