Loan servicer liable for negligent handling of loan modification negotiations

/ Mortgages, Real Estate Transactions

A California court has found a mortgage loan servicer to be liable for negligence in its handling of an application for a loan modification. Weimer v. Nationstar Mortgage, LLC, 260 Cal. Rptr.3d 712 (Ct. App. 2020. The court found loan servicers to be in a “special relationship” with the borrower and thus within an exception to the general rule of no tort duty for economic losses. After defaulting on a mortgage, the mortgagor entered into a loan modification process with Bank of America, and was told that he had been approved for a loan modification. Because of that approval, he made a downpayment of $50,000 to obtain the loan modification. The bank had promised him that once it received the downpayment, it would halt foreclosure proceedings. The bank transferred the loan servicing rights and obligations to Specialized Loan Servicing (SLS) which initially refused to honor the terms of the loan modification …

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Virginia prohibits sexual orientation and gender identity discrimination in housing and public accommodations

/ Antidiscrimination Law, Fair Housing Act, Sexual Orientation

By passage of the Virginia Values Act, Virginia joins 22 other states and the District of Columbia in prohibiting discrimination on the basis of sexual orientation and gender identity in public accommodations and housing (as well as employment). Va. Stat. §2.2-3904 and §36–96.3 (as amended by 2020 Va. H.B. 1663 (Feb. 27, 2020)).

Arizona Supreme Court enforces parties’ contractual agreement on disposition of frozen embryos.

/ Personal Property

In Terrell v. Torres, 2020 WL 370239 (Ariz. 2020), the Arizona Supreme Court enforced a contract between a woman and a man over the disposition of fertilized embryos. The contract provided that the embryos would be the couple’s joint property and joint consent would be required for their use or disposition. The contract provided that upon divorce or dissolution of the relationship, the embryos would either be donated to another couple or used to achieve pregnancy by implantation in one of the parties. The couple subsequently got married and then divorced. After creation of the embryos, the woman underwent treatment for cancer that left her unable to bear a child without use of the embryos. She wanted the embryos for future implantation in her while her ex-husband wanted them donated to another couple. Although there was ambiguity in the way the agreement was worded, the Arizona Supreme Court found that the …

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Nevada finds no right of reasonable access to public accommodations unless a state antidiscrimination statute confers such a right

/ Antidiscrimination Law, Trespass

The Supreme Court of Nevada held that businesses of public amusement (including casinos) have the right to exclude patrons at will unless a state or federal antidiscrimination law limits their discretion. Slade v. Caesars Entertainment Corp., 373 P.3d 74 (Nev. 2016). A state statute provided that “all gaming establishments in this state must remain open to the general public and the access of the general public to gaming activities must not be restricted in any manner except as provided by the Legislature.” Nev. Rev. Stat. §463.0129(1)(e). But it also provided that “[t]his section does not … [a]brogate or abridge any common-law right of a gaming establishment to exclude any person from gaming activities or eject any person from the premises of the establishment for any reason.” Nev. Rev. Stat. §463.0129(3)(a). The court held that the common law gave places of entertainment full powers to determine who to serve, citing one Indiana Supreme Court …

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Hawai’i Supreme Court holds that a regulation prohibiting all construction on property was not necessarily a taking of property requiring just compensation

/ Takings

The Hawai’i Supreme Court held in Leone v. County of Maui, 404 P.3d 1257 (Haw. 2017), that a building prohibition does not constitute a per se or categorical taking of property without just compensation. “[A] regulation could potentially require land to be left substantially in its natural state and still not be considered a taking” because the land could still have significant market value and the evidence at trial was conflicting on the question of the whether the land did retain economically beneficial use. In addition, the owners had bought the property for sale for $3 million, put it up for sale at a listing price of $7 million, and received two offers at $4.5 and $4.6 million which they turned down. There was also evidence that the property could have been used for commercial purposes as a private park.

Public accommodation law applies to state actor

/ Antidiscrimination Law

A federal court in Massachusetts has interpreted the Massachusetts public accommodations statute to apply to a public entity, the Martha’s Vineyard Transit Authority, when a traveler was denied access to a bus because of his race. Brooks v. Martha’s Vineyard Transit Auth., 2020 WL 30586 (D. Mass. 2020). Government entities are included in the category of “whoever” denies access. The court also held that the Authority could be vicariously liable for the acts of its agents acting within the scope of their employment. 

Outdoor displays at florist shop not a prior conforming use

/ Zoning

The Massachusetts Appeals Court ruled that outdoor displays at a florist shop exceeded the scope of prior uses by the store and thus did not constitute a prior nonconforming use that could continue despite new zoning regulations requiring special permit for such uses. Leonard v. Zoning Bd. of Appeals of Hanover, 135 N.E.3d 288 (Mass. App. Ct. 2019). Although the court found the prior law to be confusing and badly written, it interpreted that law to prohibit outdoor displays unless specifically authorized. Because the florist shop’s outdoor displays were unlawful, they could not count as prior lawful uses that could continue despite a change in the zoning law. A dissenting judge interpreted the prior law to allow the outdoor displays and would have allowed them to continue as a prior nonconforming use.

Landlord may be liable for fair housing violation if no response to one tenant’s racial harassment of another

/ Antidiscrimination Law, Fair Housing Act, Real Estate Transactions

In the case of Francis v. King’s Park Manor, Inc., 2019 WL 6646495 (2d Cir. 2019), a tenant engaged in a vicious campaign of abuse and intimidation of another tenant, coming to his door and threatening to kill him and repeatedly yelling at him and calling him the “n-word” and “fucking Jews.” The victim called the police several times and notified the landlord of the harasser’s behavior, which persisted. The victim sued the landlord, claiming that it failed to investigate or attempt to resolve the problem and allowed the harasser to continue to live in his unit without reprisal. The harasser was convicted of the crime of harassment in violation of New York Penal Law §240.26(1). The Second Circuit agreed with other Circuits that have addressed the question that post-acquisition claims are cognizable under the federal Fair Housing Act (FHA), 42 U.S.C. §§3601 et seq.. Section §3604(b) prohibits discrimination in the “terms, …

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Police can destroy home without compensation to apprehend a criminal suspect

/ Takings

The Tenth Circuit has held that the police may destroy a home if they deem it necessary to apprehend a suspect, and that doing so triggers no obligation to pay just compensation under the fourteenth amendment. Lech v. Jackson, 2019 WL 5581699 (10th Cir. 2019). Citing a precedent from the Court of Federal Claims, Bachmann v. United States, 134 Fed.Cl. 694 (2017), the court held that the police were acting within the “police power” rather than the “eminent domain” power and cannot be burdened with the condition that they compensate whomever is damaged by their actions along the way. See also Amerisource Corp. v. United States, 525 F.3d 1149 (Fed. Cir. 2008).

Shop owner has constitutional right to refuse to print gay pride T-shirts

/ Antidiscrimination Law, Religious Freedom, Sexual Orientation

An appellate state court in Kentucky has held that the first amendment gives a shop owner the right to refuse to print gay pride T-shirts for an organization espousing views the shop owner does not hold. Lexington Fayette Urban County Human Rights Comm’n v. Hands On Originals, 2017 WL 2211381 (Ky. Ct. App. 2017), aff’d, Lexington-Fayette Urban County Human Rights Comm’n v. Hands On Originals, 2019 WL 5677638 (Ky. 2019), The Kentucky Supreme Court affirmed, explaining that the public accommodations law protects individuals alone and confers no rights on organizations.

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