Consumer Protection

Arizona Supreme Court holds that the implied warranty in new home sales cannot be disclaimed

/ Consumer Protection, Real Estate Transactions

In an important decision, the Arizona Supreme Court held that buyers of new homes have a nonwaivable right to a warranty of fitness. Zambrano v. M & RC II, LLC, 254 Ariz. 53, 517 P.3d 1168 (Ariz. 2022). The court explained that allowing waivability would mean the end of the implied warranty since all builders would include such a waiver in their agreements and buyers would neither know to contest it nor have the power to get the buyer to change the contract terms. The dissent argued that “freedom of contract” should prevail and that it is important to give the parties the benefit of the bargain they made, whatever that is.

Implied warranty of workmanship & habitability in new housing cannot be waived

/ Consumer Protection, Real Estate Transactions

The Arizona Supreme Court has held in Zambrano v. M & RC. II LLC,, 517 P.3d 1168 (Ariz. 2022) that the implied warranty of workmanship and habitability in new housing cannot be disclaimed or waived. The involved a sales contract with a detailed express warranty that disclaims any obligation to comply with common law obligations under the implied warranty as defined in Arizona law. The Arizona Supreme Court held that any waiver of the implied warranty was void even if it was partial, as it was here because an express warranty existed, albeit narrower than the implied warranty. The Court refused to make an exception for sophisticated buyers (the buyer here was a licensed real estate agent) because such a rule would be hard to administer and because even sophisticated buyers need the protection of the rule which protects buyers from latent defects that the buyer could not have reasonably discovered at the time …

Implied warranty of workmanship & habitability in new housing cannot be waived Read More »

Federal court rejects claim for religious or speech exemption from state public accommodations law for wedding photographer

/ Antidiscrimination Law, Consumer Protection, Free Speech, Religious Freedom, Sexual Orientation

A federal judge for the Western District of New York has ruled that the state public accommodations statute can be applied to a wedding photographer who refused to provide services for same-sex couples. Carpenter v. James, 2021 WL 5879090 (W.D.N.Y. 2021). On the speech claim, the court assumed that the law compelled speech on the part of the photographer but held that the law only affected speech incidentally in connection with regulation of economic activity and that the law was narrowly tailored to achieve its purposes. The court also held that the provision of photography services did not require the photographer to participate in a religious ceremony. Note that an Eighth Circuit decision disagrees. Telescope Media Group v. Lucero, 936 F.3d 740 (8th Cir. 2019).

Damages awarded tenant when landlord threatens to engage in illegal self-help eviction

/ Consumer Protection, Leaseholds, Real Estate Transactions

The Maryland Supreme Court held that residential tenants can sue for damages if the landlord posts a notice telling them that they are being evicted. This constitutes a form of “nonjudicial self-help eviction” prohibited by state law, which requires landlords to use court eviction procedures to recover possession of the premises. State law would have allowed self-help eviction only if the landlord had a reasonable belief based on a reasonable inquiry that the tenants had abandoned the premises, something that did not happen in this case. Wheeling v. Selene Finance LP,2021 WL 1712318 (Md. 2021). The court found that a threat to use self-help eviction violated the statute and that this allowed a suit for damages under the state statute prohibiting self-help eviction, Md. Real Prop. art. §7-113, and a suit for emotional damages under the Maryland Consumer Protection Act, Md. Commercial Law art. §13-101 et seq.

Commercial tenant right to lost profits and specific performance when landlord breaches lease obligation to make structural repairs

/ Consumer Protection, Leaseholds

When a landlord breached a commercial lease obligation to make structural repairs to the property, the tenant was entitled to lost profits in addition to specific performance. Motsis v. Ming’s Supermarket, Inc., 2019 WL 5704322 (Mass. App. Ct. 2019). The tenant had been constructively evicted when a sprinkler pipe froze and burst, leading to an inspection by the city that found numerous unsafe structural conditions that led the tenant (a grocery store) to move out of the premises). The trial court properly ruled that the tenant was not limited to a right to terminate the lease and recover relocation costs. The Massachusetts Appeals Court rejected the argument that specific performance is limited to promises to convey title to land, holding that it is available and proper in lease arrangements as well. In addition, the landlord’s “disregard of known contractual relationships…constitutes an unfair act or practice” under the state consumer protection statute.

Rules governing court-ordered rental payments while eviction litigation is pending

/ Consumer Protection, Leaseholds

When a landlord sued to evict a tenant for failure to pay rent, the court ordered to make rental payments (for “use and occupancy”) during trial. The Massachusetts Appeals Court held that before ordering such payments, the trial judge must hold a hearing to determine whether the payments should be reduced because of defective conditions in the property. Davis v. Comerford, 133 N.E.3d 373 (Mass. App. Ct. 2019). And while such payments are normally paid to the court and held in escrow, they may be delivered directly to the landlord if needed to make mortgage payments on the property. The court interpreted a state statute making tenants at sufferance liable for “use and occupancy” but noted that case law did not measure the value of use and occupancy by the agreed-upon rent but upon the “sum which the trier of fact finds the use and occupation were reasonably worth,” 133 N.E.3d at …

Rules governing court-ordered rental payments while eviction litigation is pending Read More »

Eighth Circuit holds that videographers have First Amendment free speech right to refuse to provide services at same-sex weddings

/ Antidiscrimination Law, Consumer Protection, Free Speech, Religious Freedom, Sexual Orientation

In Telescope Media Group v. Lucero, 936 F.3d 740 (8th Cir. 2019), the Eighth Circuit held that Minnesota could not enforce its public accommodations law against a company that refused to provide video services for same-sex weddings. The process of producing a video, the court said, constitutes “speech” and would be posted on the company’s website. The company sought to produce wedding videos of opposite-sex couples to “affect public attitudes and behavior” by “depict[ing] marriage as a divinely ordained covenant” that exists “between a man and a woman.” To forced them to produce videos for same-sex couples constitutes compelled speech that violates the Constitution’s protection for freedom of speech. The court emphasized the creative work that would go into editing; the company was not simply videotaping the wedding but retained “ultimate editorial judgment and control.” The court accepted the company’s assertion that if it provided its services for same-sex couples, this would “compel …

Eighth Circuit holds that videographers have First Amendment free speech right to refuse to provide services at same-sex weddings Read More »

State constitutional and statutory right in Arizona to refuse to create custom wedding invitations for same-sex couples

/ Antidiscrimination Law, Consumer Protection, Religious Freedom, Sexual Orientation

In a 4-3 decision, the Arizona Supreme Court has interpreted its constitution, Ariz. Const. art. 2, §6, and its Free Exercise of Religion Act, Ariz. Rev. Stat. § 41-1493.01, to give a public accommodation the right to refuse service to same-sex couples who seek custom wedding invitations. Brush & Nib Studio, LC v. City of Phoenix, 448 P.3d 890 (Ariz. 2019). Arizona has no state statute that prohibits discrimination on the basis of sexual orientation in public accommodations, but several cities, like Phoenix, have such local laws. This case involved a public accommodation that refused to produce a custom-designed wedding invitation for a same-sex couple. While Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, 138 S.Ct. 1719 (2018) had suggested that public accommodation laws could be enforced despite religious objections by the public accommodation owner, although it did not reach the free speech issue in that case and decided the religious liberty claim on …

State constitutional and statutory right in Arizona to refuse to create custom wedding invitations for same-sex couples Read More »

Federal court allows public accommodation to refuse to create custom videos of same-sex weddings

/ Antidiscrimination Law, Consumer Protection, Free Speech, Gender Identity, Religious Freedom, Sexual Orientation

In a 2 to 1 vote, the Eight Circuit has held that the First Amendment prohibits a state from enforcing its public accommodations law if it requires videographers to create custom videotapes of same-sex weddings even though they provide this service to opposite-sex weddings. Telescope Media Group v. Lucero, 2019 U.S. App. LEXIS 25320 (8th Cir. 2019). Because the videos will be edited and posted on the videographer’s website, the majority accepted the defendant’s argument that they would convey a message of support for same-sex marriage contrary to the views of the regulated entity. Judges David Stras and Bobby Shepherd found this to be “compelled speech” that violates the business’s constitutionally-protected right to freedom of speech. Dissenting judge Jane Kelly found no compelled speech, just a statutory duty to provide the same services to both same-sex and opposite sex couples.

Nonjudicial foreclosure requires appraisal to ensure foreclosure price is close to fair market value

/ Consumer Protection, Mortgages, Real Estate Transactions

The Massachusetts Appeals Court has held that nonjudicial foreclosures must be conducted in a fair manner and that the burdens on the party who is foreclosing are greater precisely because the auction sale is not be supervised or conducted by judicial officials. Prop. Acquisition Group, LLC v. Ivester, 2019 Mass. App. LEXIS 44, 2019 WL 1716436 (Mass. App. Ct. 2019) held that the owner cannot be evicted from the property after foreclosure when the mortgagee failed in its duty of good faith and reasonable diligence by taking no steps before foreclosure to determine the fair market value of the property. “The mortgagee must get for the property as much as it can reasonably be made to bring and do what a reasonable person would be expected to do to accomplish that result…Where Massachusetts…allows foreclosure without judicial oversight, it is imperative that the foreclosing mortgagee know or ensure that efforts are taken …

Nonjudicial foreclosure requires appraisal to ensure foreclosure price is close to fair market value Read More »

Scroll to Top