Articles Posted in Real Estate & Property Law

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Cracker Barrel Old Country Store, Inc., and Cracker Barrel Associates, LLC, (collectively “Plaintiffs”) owned certain real property on Sidco Drive in Davidson County. Richard Epperson and Timothy Causey (collectively “Defendants”) owned adjoining property. Both parcels were subject to a Declaration of Reciprocal Rights and Easements and Restrictive Covenants (“Declaration”), created by the original developer of these two parcels and several others in the same development. In April 2005, Defendants submitted to the Nashville/Davidson County Metropolitan Council a proposal to expand the building on their property. Upon learning of the plan, Plaintiffs notified Defendants that they believed the new construction would violate covenants 1(a), 2, and 3 of the Declaration, granting mutual vehicular easements to the adjoining owners and prohibiting obstruction to traffic flow. Defendants disagreed and persisted in seeking approval for their plan. In August, Plaintiffs filed suit to try and stop Defendants' building plans. The trial court ultimately granted Plaintiffs’ motion for temporary injunctive relief. On October 21, 2005, Plaintiffs filed a Motion for Costs and Expenses, seeking almost $62,000 in attorney fees to that point. The ultimately resolved the substantive issues of the lawsuit and on January 30, 2006, the trial court entered an Agreed Judgment and Permanent Injunction, which permanently enjoined Defendants from expanding the building on their property. With regard to fees, the parties agreed that they would submit the fee matter to non-binding mediation. After the parties failed to reach an agreement, Plaintiffs renewed their motion for costs and expenses, requesting $3,913.75 in costs and expenses and a total of $117,334.50 in attorney fees. In their response to Plaintiffs’ motion, Defendants again asserted that Plaintiffs were not entitled to recover attorney fees because the Declaration did not expressly provide for their recovery. The trial court ultimately denied Plaintiffs’ request for attorney fees, explaining that no authority presented supported a finding that the contractual language of Paragraph 9 of the Declaration created a right to recover attorney fees. On appeal, the Court of Appeals affirmed the trial court’s denial of attorney fees. The Tennessee Supreme Court granted Plaintiffs’ application for review to clarify the application of the American rule regarding attorney fees to the language in the Declaration, and affirmed the Court of Appeals. View "Cracker Barrel Old Country Store, Inc., et al. v. Epperson, et al." on Justia Law

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Mortgage Electronic Registration Systems, Inc. (MERS) brought this action to set aside a tax sale of real property, arguing that the county’s failure to provide it with notice of the sale violated his right to due process. The purchaser of the real property (Defendant) moved for judgment on the pleadings, asserting that MERS did not tender payment of the sale price plus the accrued taxes before bringing suit, as is statutorily required in a suit challenging the validity of a tax sale, and that MERS did not have a protected interest in the subject property. The trial court granted Defendant’s motion, concluding that MERS did not have an interest in the property. The Court of Appeals on the grounds that MERS lacked standing to file suit. The Supreme Court affirmed on different grounds, holding (1) MERS was not required to tender payment before filing this lawsuit; and (2) MERS acquired no protected interest in the subject property, and therefore, its due process rights were not violated by the county’s failure to notify it of the tax foreclosure proceedings or the tax sale. View "Mortgage Elec. Registration Sys., Inc. v. Ditto" on Justia Law

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Plaintiffs filed suit against Defendants, who for years enjoyed the continuous and exclusive possession of their lands, to settle a boundary dispute. As a result of the boundary litigation Defendants discovered that their ancestors had acquired title during the “gap years” and, consequently, had owned the lands as tenants in common with no right of survivorship rather than tenants by the entirety. Proceeding as third-party plaintiffs, Defendants filed a third-party complaint against descendants of their ancestors, who each claimed an ownership interest in the disputed lands by inheritance, seeking to quiet title to the disputed lands. The trial court granted summary judgment in favor of the third-party defendants. On remand, Defendants amended their third-party complaint, asserting absolute fee simple title by prescription. The trial court again denied relief. The court of appeals affirmed, holding that the third-party defendants’ ignorance of their status as co-tenants in common with their relatives prevented Defendants from taking title by prescription. The Supreme Court reversed, holding that each of the elements of title by prescription had been satisfied in this case, and therefore, the third-party defendants failed to rebut the presumption of title in favor of Defendants. View "Roberts v. Bailey" on Justia Law

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After law enforcement officers discovered child pornography on Defendant’s home computer, Appellant was found guilty of felony sexual exploitation of a minor by knowingly possessing over 100 images of child pornography. The State then filed a complaint for judicial forfeiture against Appellant. Because foreclosure proceedings were already underway, the trial court enjoined the mortgage lender from disbursing to Appellant any excess proceeds from the anticipated foreclosure sale. After Appellant’s home was sold at auction and a trial was held on the complaint for forfeiture, the trial court ordered forfeiture of the proceeds from the sale of Appellant’s home. The court of appeals affirmed. The Supreme Court reversed, holding (1) in forfeiture proceedings, the seizing authority is required to present affirmative proof that it complied with both the procedural and the substantive requirements in the forfeiture statutes; (2) both the procedural and the substantive provisions of the forfeiture statutes must be strictly construed; and (3) the State in this case failed to show that it complied with the procedural requirements in the forfeiture statutes. View "State v. Sprunger" on Justia Law

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Plaintiff contracted to sell Defendants certain real property. The contract provided that Plaintiff would retain ownership of a sixty-foot wide strip of property to provide access to her remaining property, but the warranty deed failed to include the reservation. When it became difficult for Plaintiff to access her property due to improvements on the purchased real property, Plaintiff sued Defendants, alleging, among other claims that were subsequently dismissed, breach of contract. The trial court ruled for Plaintiff on the breach of contract claim and awarded her $650,000 in damages. The Court of Appeals reversed, concluding that the gravamen of Plaintiff’s prevailing claim was injury to real property, and therefore, the claim was barred by the three-year statute of limitations applicable to “actions for injuries to personal or real property.” The Supreme Court reversed, holding that Plaintiff’s claim was not barred by the three-year statute of limitations because the gravamen of Plaintiff’s prevailing claim was breach of contract, to which the six-year statute of limitations for “actions on contracts not otherwise expressly provided for” applied. View "Benz-Elliott v. Barrett Enters., LP" on Justia Law

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Property Owners filed an action against Montgomery County, asserting a claim of regulatory taking under Tenn. Const. art. I, 21, for which they sought compensation pursuant to the inverse condemnation statute. The County filed a motion to dismiss for failure to state a claim. The trial court denied the motion. The Court of Appeals reversed in part and remanded, holding (1) the Property Owners’ regulatory takings claim should be dismissed because the Court had not yet recognized regulatory takings under the state Constitution; but (2) the Property Owners alleged facts sufficient to state a claim for inverse condemnation. The Supreme Court reversed the Court of Appeals’ judgment insofar as it reversed the trial court’s judgment and dismissed the Property Owners’ regulatory taking claim, holding (1) like the Takings Clause of the federal Constitution, Tenn. Const. art. I, 21 encompasses regulatory takings; and (2) the Property Owners’ complaint was sufficient to allege a state constitutional regulatory taking claim, for which they may seek compensation under Tennessee’s inverse condemnation statute. View "Phillips v. Montgomery County" on Justia Law

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Landlords brought an unlawful detainer action against Tenants to regain possession of the premises and recoup damages. The general sessions court later entered a default judgment granting Landlords possession of the property and a $42,500 judgment for past due rent and attorneys' fees. Tenants filed a notice of appeal and posted an appeal bond by depositing $250 cash with the clerk of court. Landlords filed a motion to dismiss, arguing that Tenants violated Tenn. Code Ann. 29-18-130(b)(2) by failing to post a bond equal to one year's rent. The circuit court denied the motion, concluding that a bond for one year's rent was unnecessary because Tenants had already surrendered possession of the property and vacated the premises. The Supreme Court affirmed the circuit court's denial of Landlords' motion to dismiss, holding that the circuit court did not err in determining that section 29-18-130(b)(2) does not require a tenant who has surrendered possession of the property to post a bond for one year's rent when appealing an adverse judgment of the general sessions court in an unlawful detainer action. View "Johnson v. Hopkins" on Justia Law

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After the death of the president of the original corporate developer of a residential development, a successor developer purchased the property with the intent to continue to develop it. Homeowners filed suit, alleging the successor developer's new development plan violated restrictive covenants. The court of appeals remanded on the question of whether a general plan of development, or the plat for the subdivision, gave rise to certain implied restrictive covenants. Meanwhile, the homeowners' association amended its charter and the restrictive covenants, which the homeowners challenged. The trial court granted the successor developer summary judgment on all claims in both suits. The court of appeals remanded with directions to determine whether the amendments were reasonable and whether the plat supported the existence of implied restrictive covenants. The successor developer appealed, contending that Tennessee law did not support the court of appeals' reasonableness inquiry and that the plat provided no basis for the existence of implied restrictive covenants. The Supreme Court held that the amendments were properly adopted but found that there was no basis for implied restrictive covenants arising from a general plan of development or from the plat, thus vacating the portion of the court of appeals' judgment remanding the case.View "Hughes v. New Life Dev. Corp." on Justia Law

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Jefferson County enacted a comprehensive zoning ordinance limiting the use of certain property, including Plaintiff's property, to agricultural purposes. Before the passage of the ordinance, Plaintiff undertook various activities designed to establish business operations for its property. When the County issued a stop work order, Plaintiff, without first receiving a decision from the County's board of zoning appeals, filed a declaratory judgment action arguing that the portion of the property not previously subject to zoning qualified as a pre-existing non-conforming use. The trial court (1) concluded Plaintiff was not required to exhaust its administrative remedies, and (2) ruled that the business activities on the property qualified for protection under Tenn. Code Ann. 31-7-208. The court of appeals set the judgment aside, holding that Plaintiff had failed to exhaust its administrative remedies. The Supreme Court reversed and reinstated the judgment of the trial court, holding (1) the trial court did not err by ruling that Plaintiff was not required to exhaust the administrative remedies; and (2) the evidence did not preponderate against the trial court's finding that Plaintiff had established operations sufficient to qualify for protection under section 13-7-208. View "Ready Mix, USA, LLC v. Jefferson County" on Justia Law

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After Decedent's will was admitted to probate in the probate court, the Bureau of TennCare filed a claim against her estate seeking reimbursement for services provided through the TennCare program. Decedent's personal representative filed an exception to this claim. The probate court upheld TennCare's claim, and the Estate appealed. The circuit court determined that Decedent's real property was not subject to TennCare's claim. TennCare appealed. The court of appeals vacated the circuit court's judgment and affirmed the probate court, holding that the circuit court lacked subject matter jurisdiction over the appeal from the probate court and that the appeal should have been filed with the court of appeals. The Supreme Court affirmed, holding (1) the circuit court lacked jurisdiction over the Estate's appeal from the probate court's judgment regarding TennCare's claim; and (2) the real property owned by Decedent at the time of her death was subject to TennCare's claims for reimbursement. View "In re Estate of Trigg " on Justia Law