KEEPING CURRENT PROPERTY CASES EMINENT DOMAIN: Just compensation clause of state constitution waives sovereign immunity for inverse-condemnation claim that seeks injunctive relief. The government’s road-widening project caused flooding “within and around” Mixon’s real property. Mixon sued the government for inverse condemnation under the just compensation clause of the state constitution, seeking both damages and injunctive relief to prevent recurrent flooding. The trial court denied the government’s defense of sovereign immunity. The appellate court affirmed, and the supreme court agreed, with some narrowing language with respect to the claim for injunctive relief. The court began by noting a long line of cases and constitutional amendments regarding just compensation and sovereign immunity, explaining that just compensation must be paid prior to a taking and that this principle carries over to inverse condemnations. This right necessarily waives sovereign immunity. Otherwise, the state’s obligation to pay just compensation before damaging property would ring hollow. When the government invokes eminent domain and has not prepaid compensation for the taking, the just compensation clause waives sovereign immunity. Likewise, when the government takes or damages private property without invoking eminent domain, the just compensation clause also waives sovereign immunity. With respect to Mixon’s claim for injunctive relief, the court held that sovereign immunity is waived to the extent that her claim seeks to stop Keeping Current—Property Editor: Prof. Shelby D. Green, Elisabeth Haub School of Law at Pace University, White Plains, NY 10603, sgreen@law.pace.edu. Contributor: Prof. Darryl C. Wilson.
Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
the taking or damaging until the government fulfills its legal obligations that are conditions precedent to eminent domain. Dep’t. of Transp. v. Mixon, 864 S.E.2d 67 (Ga. 2021). FORECLOSURE: Title to property bought at homeowners’ association foreclosure sale is subject to additional attorney’s fees imposed under prior deed of trust. At a foreclosure sale of a homeowners’ association lien, Oella Ridge Trust paid $4,700 for the property, subject to a first deed of trust held by Silver State. Oella Ridge Trust brought an action to quiet title against Silver State, claiming that the homeowners’ association was entitled to superpriority and therefore the foreclosure sale extinguished the deed of trust. Although Oella Ridge Trust prevailed in trial court, the state supreme court reversed, ruling that Silver State’s deed of trust still had first priority. Oella Ridge Trust then sought to pay off the debt, which had a remaining principal balance of $138,000. Silver State demanded an additional amount of $96,500 for attorneys’ fees incurred in defending the quiet title action. Oella Ridge filed a complaint for declaratory relief, alleging that the attorneys’ fees were unreasonable, and that Silver State had waived any request for attorneys’ fees by failing to seek them during the litigation to affirm the deed of trust, as required by Nev. Rules of Civil Proc. 54(d)(2). The trial court granted partial
summary judgment to Silver State, concluding the deed of trust allowed it to add the fees to the debt, without moving for those fees in court. The supreme court affirmed. As an initial matter, the court concluded that the provision of the deed of trust applied to Oella Ridge. Because Oella Ridge purchased the property at an HOA foreclosure sale, it took title subject to all the terms of Silver State’s prior deed of trust, which was not extinguished by the sale. Although Oella Ridge was not personally liable for the attorneys’ fees, if it wishes to pay off the note, then it must to pay any costs Silver State properly added to the secured debt pursuant to the deed of trust. Since the fees did not arise from a judgment, Silver State’s claim was not subject to the time requirements of Rule 54(d)(2). Oella Ridge Trust v. Silver State Schs. Credit Union, 500 P.3d 1253 (Nev. 2021). FORECLOSURE: Lender who immediately assigns rights after sale is still purchaser for purpose of calculating deficiency based on fair market value of property. Rockwell Homes defaulted on a loan from Jackson Lumber with a balance due of $1.041 million. Appraisals showed the property had an “as is” value of $1.1 million. At the foreclosure sale, Jackson Lumber was the highest bidder at $550,000. It executed a purchase and sale agreement naming itself as both seller and “purchaser” of the property. Jackson Lumber then assigned rights under the purchase and sale agreement and gave a deed to the eventual purchaser. Jackson Lumber then brought suit against Rockwell Homes for a deficiency judgment. The trial court entered judgment for Rockwell Homes on the ground that as mortgagee who purchased the property at the sale, the deficiency judgment is determined by comparing the amount owed with the fair market value of the property at
Published in Probate & Property, Volume 36, No 3 © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
May/June 2022 17
