Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Articles Posted in Real Estate & Property Law
by
The First Circuit affirmed the judgment of the Bankruptcy Appellate Panel for the First Circuit (BAP) affirming the summary judgment entered by the bankruptcy court against the bankruptcy trustee (the Trustee) for an estate of two individuals, holding that an unrecorded mortgage in Puerto Rico is not a transfer of the debtor's property that is voidable by a bona fide purchaser that triggers the bankruptcy trustee's authority to avoid and preserve the lien.Jose Antonio Lopez Cancel and Carmen Nereida Medina Gonzalez acquired a property in Puerto Rico that they used as their primary residence. Banco Popular de Puerto Rico held the mortgage, but the mortgage was never recorded. The bankruptcy court treated the mortgage as a general unsecured claim covered by an earlier discharge order. The Trustee then filed this action to avoid the mortgage and preserve it on behalf of the bankruptcy estate, arguing that the unrecorded mortgage was a transfer of the debtor's property that was voidable by a bona fide purchaser. The bankruptcy court concluded that the Trustee could not avoid and preserve an unrecorded mortgage because, under Puerto Rican law, an unrecorded mortgage is not a property interest. The BAP affirmed. The First Circuit affirmed, holding that there was no error. View "Segarra Miranda v. Banco Popular de Puerto Rico" on Justia Law

by
In this en banc decision involving a real property dispute, the First Circuit affirmed the judgment of the district court holding that the "Penobscot Indian Reservation" (the Reservation) does not include the waters and submerged lands constituting the riverbed of the six-mile stretch of the Penobscot River known as the Main Stem, holding that the district court did not err.The Penobscot Nation sued the State of Maine and various state officials seeking a declaratory judgment that the Nation had exclusive regulatory authority over the Main Stem and a declaratory judgment that the Nation had sustenance fishing rights in the Main Stem. The district court declared that the Reservation does not include the waters of the Main Stem or the submerged lands of the riverbed beneath it but that the Nation had sustenance fishing rights in the Main Stem. A divided panel of the First Circuit affirmed in part and vacated in part. The First Circuit subsequently vacated the panel opinion and granted rehearing en banc. The Court then held (1) the Reservation does not include the waters and submerged lands constituting the riverbed of the Main Stem; and (2) as to the Nation's claim that Maine infringed on its fishing rights, the claim was not ripe and the Nation lacked standing. View "United States v. Frey" on Justia Law

by
The First Circuit affirmed the judgment of the district court holding that the Federal National Mortgage Association (Fannie Mae) and the Federal Housing Finance Agency (FHFA) were not subject to Appellants' Fifth Amendment claims, holding that there was no error.Appellants obtained loans secured by mortgages on their real property in Rhode Island. The loans and mortgages were later sold to Fannie Mae while the FHFA was acting as Fannie Mae's conservator. Consistent with Rhode Island law, when Appellants defaulted on their loans Fannie Mae conducted nonjudicial foreclosure sales of the mortgaged properties. Appellants brought suit in a federal district court, arguing that the nonjudicial foreclosure sales violated their procedural due process rights under the Fifth Amendment. The district court dismissed those claims. The First Circuit affirmed, holding that FHFA and Fannie Mae were not government actors subject to Appellants' due process claims. View "Montilla v. Federal National Mortgage Ass'n" on Justia Law

by
The First Circuit dismissed Plaintiffs' appeal for want of jurisdiction, holding that the Federal Rules of Bankruptcy Procedure (the bankruptcy rules), and not the Federal Rules of Civil Procedure (the civil rules), govern cases that have come within the federal district court's jurisdiction as cases "related to" a pending bankruptcy proceeding. 28 U.S.C. 1334(b).In this case arising from the derailment and explosion in Lac-Megantic, Canada, Plaintiffs brought thirty-nine separate suits against several defendants. The derailment occurred on the watch of Montreal, Maine and Atlantic Railway (MMA). MMA sought the protection of the bankruptcy court. Plaintiffs' suits were removed to federal district court. Plaintiffs subsequently joined Canadian Pacific Railway Company as an additional defendant. The suits were centralized in the District of Maine. The district court later granted Plaintiffs' request to dismiss their claims against all defendants except Canadian Pacific pursuant to a settlement agreement that was part of MMA's plan of liquidation. The district court entered judgment for Canadian Pacific. Plaintiffs moved for reconsideration of their motion to file an amended complaint. The district court denied the motion as untimely. The First Circuit dismissed Plaintiffs' appeal, holding that the Bankruptcy Rules governed the procedural aspects of this case, Plaintiffs' motion to reconsider was untimely, and the attempted appeal was untimely. View "Roy v. Canadian Pacific Railway Co." on Justia Law

by
The First Circuit vacated the judgment of the district court granting summary judgment in favor of Bautista Cayman Asset Company in its action for collection of monies and foreclosure of collateral against Fountainebleu Plaza, S.E., Edwin Loubriel Ortiz, and Sedcorp, Inc., holding that remand was required for the sole purpose of better determining the amount due.Fountainebleu and Loubriel (collectively, Appellants) appealed the district court's judgment, arguing that the district court lacked subject matter jurisdiction over the case and that, alternatively, genuine issues of material fact precluded summary judgment. The First Circuit vacated the judgment, holding that because the record failed to account for payments made to Bautista's predecessor, the case must be remanded for the sole purpose of better determining the amount due. View "Bautista Cayman Asset Co. v. Fountainebleu Plaza, S.E." on Justia Law

by
In this admiralty proceeding arising out of the grounding and constructive total loss of a newly purchased yacht, the First Circuit affirmed the judgment of the district court dismissing certain third-party complaints pursuant to Fed. R. Civ. P. 12(b)(6), holding that the district court did not err.Afunday Charters, Inc., which purchased the yacht from its builder, Spencer Yachts, Inc., sued Spencer Yachts and its employee, Joseph Daniel Spencer, alleging that Spencer negligently ran the yacht aground and that Spencer and Spencer Yachts were jointly and severally liable for the loss of the yacht. Spencer and Spencer Yachts raised an affirmative defense of negligence by Afunday's agents Sean Alonzo and Anthony Norman Sabga and filed a third-party complaint against Alonzo and Sabga. The district court dismissed the third-party complaints. The First Circuit affirmed, holding that the district court properly dismissed the complaints seeking to assert that the third-party defendants were directly liable to Afunday. View "Spencer v. Alonzo" on Justia Law

by
The First Circuit affirmed in part and reversed in part the judgment of the district court granting summary judgment in favor of Defendants and dismissing Blackstone Headwaters Coalition, Inc.'s complaint alleging that Defendants had violated the Federal Clean Water Act (CWA), 33 U.S.C. 1251 et seq., holding that the district court erred by granting summary judgment on Count I of the complaint.Plaintiff, a non-profit environmental organization, sued two companies and two individuals involved in the development of a residential construction site in Massachusetts. In Count I of the complaint, Plaintiff alleged that three defendants had violated the Federal CWA by failing to obtain from the EPA a construction general permit. Count II alleged that all four defendants had violated the Federal CWA by failing to prevent sediment-laden stormwater discharges from flowing from that construction site into waters leading to the Blackstone River. The district court granted summary judgment for Defendants. The First Circuit reversed in part, holding that nothing supported Defendants' argument that a citizen suit under the Federal CWA cannot be brought against an entity that is alleged to be an operator of a construction site that is unlawfully discharging pollutants into federal waters long as another entity controlled by the same individuals has such permit coverage. View "BBlackstone Headwaters Coalition, Inc. v. Gallo Builders, Inc." on Justia Law

by
In this property dispute leading to a bankruptcy filing, the First Circuit held that a probate court's contempt proceedings and resultant penalties were excepted from an automatic stay and that the bankruptcy court did not abuse its discretion in partially lifting the stay.Donald Kupperstein rented certain property that he did not own to various tenants. The property belonged to the Estate of Fred Kuhn, now managed by Irene Stall. The Estate owed money to Massachusetts Office of Health and Human Services (MassHealth). When Kupperstein would not relinquish his claim to the property, the parties ended up in several Massachusetts courts. The probate court voided the property's transfer and ordered Kupperstein to pay to rents collected from the property to MassHealth. Kupperstein subsequently filed for bankruptcy, and the court held him in contempt. Schall and MassHealth filed motions in the bankruptcy court to lift the automatic stay as it applied to state court actions so the cases could proceed. The court lifted the stay and denied Kupperstein's motion to hold MassHealth in contempt and to impose sanctions. The district court affirmed. The First Circuit affirmed, holding that the district court did not err in denying relief. View "Kupperstein v. Schall" on Justia Law

by
The First Circuit affirmed the judgment of the district court dismissing the claims in Plaintiffs' complaint against WM Capital Management, Inc. and granting summary judgment in favor of WM Capital on its counterclaim, holding that the district court did not err or abuse its discretion.This case arose from a dispute over the enforcement of a contract that controlled the liquidation and assignment of several mortgage notes. Plaintiffs initiated an action against WM Capital bringing claims for redemption of property and breach of contract. WM Capital filed a counterclaim seeking specific performance of the contract and joinder of Tenerife Real Estate Holdings, LLC, a signatory to the contract at issue. The district court joined Tenerife, dismissed Plaintiffs' complaint, and granted summary judgment for WM Capital on its counterclaim. The First Circuit affirmed, holding that the district court did not err. View "Almeida-Leon v. WM Capital Management, Inc." on Justia Law

by
In this civil forfeiture action against a 2008 33' Contender Model Tournament Vessel, the First Circuit affirmed the judgment of the district judge striking Appellants' answer and claims and granted the government's motion for default judgment, holding that the district court did not err.The district court entered default judgment in favor of the government due to Appellants continually missing their discovery deadlines. After Appellants once again missed a discovery deadline, the district court denied their motion for an extension. The court then granted the government's motion to strike Appellants' answer and claims and the motion for default judgment. The First Circuit affirmed, holding that the district judge was well within her discretion in striking Appellants' answer and claims and granting the government's motion for default judgment. View "United States v. De Jesus-Gomez" on Justia Law