Court rules on numerous real estate issues.

Court rules on numerous real estate issues

Here is an overview of real estate-related court decisions:

* AIU Insurance Co. vs. Superior Court (November 1990): An insurance carrier covering "property damage" was obligated to pay toxic clean up costs pursuant to the Comprehensive Environmental Response, Compensation and Liability Act. The California Supreme Court held, however, that the insuror is not obligaged to pay for steps taken to prevent future contamination.

* Balmoral Hotel Tenants Association vs. Lee (December 1990): Allowed tenants to collect triple damages under a City of San Francisco statute for mental anguish caused by eviction may produce constitutionally excessive penalties and thus is a violation of due process, said the California Supreme Court.

* Bankruptcy of Hyman (February 1991): According to a 9th Circuit U.S. Bankruptcy Appellate panel, a debtor's principal residence is not exempt from being taken over by a trustee in a Chapter 7 bankruptcy. "If (the debtors) wanted to hold onto their property they should have sought reorganization under Chapter 13 and not under the liquidation provisions of Chapter 7."

* Citizens of Goleta Valley vs. Board of Supervisors (December 1990): The California Supreme Court unanimously upheld the sufficiency of an environmental impact report for a proposed hotel. In response to citizen objections, Hyatt scaled down its project from 574 to 400 rooms. In 1988, the project's EIR was rejected for not considering alternative sites. A supplemental EIR was then prepared with alternatives, but citizens objected yet again, contending there were not enough alternatives studied. The California Supreme Court disagreed, berating the citizens for not suggesting the alternative sites earlier and also citing evidence that none of the other sites were feasible anyway.

* City of West Hollywood vs. Beverly Towers (February 1991): A city can't enforce condominium conversion regulations enacted after a developer secures a final subdivision map and the Department of Real Estate's permission to sell, said the California Supreme Court. The City of West Hollywood sought unsuccessfully to apply a 1984 condo conversion moratorium to buildings where no units had yet been sold.

* DCM partners vs. Smith (March 1991): The California 4th District Court of Appeal determined it was not a violation of state usury laws to increase the interest rate on a real property loan in exchange for extending the maturity date. "To declare a privately negotiated bargain as illegal where the original bargain was not, will only chill the willingness of non-exempt lenders to extend credit in private transactions..."

* Federal Deposit Insurance Co. vs. Baker (January 1991): The U.S. District Court for the Central District of California ruled that expert testimony is required to prove professional negligence on the part of a bank appraiser sued by FDIC.

* Harris vs. Capital Growth Investors XIV (February 1991): The Unruh Civil Rights Act does not prohibit a landlord from requiring that prospective tenants meet a certain minimum income level. In this California Supreme Court case, the landlord would not consider tenants unless their monthly income was three times the monthly rent.

* Lambert vs. Superior Court (March 1991): The California 1st District Court of Appeal decided that a property owner may ask the court to remove an improper mechanic's lien while arbitration is pending. The trial court erred in not considering an owner's motion to remove the lien.

* Lesher Communications vs. City of Walnut Creek (December 1990): The California Supreme Court struck down a new building moratorium approved by voters in a 1985 ballot initiative. Measure H was likened to a zoning ordinance - which may not be in conflict with the city's general plan.

* Magnuson-Hoyt vs. County of Contra Costa (March 1991): According to the California 1st District Court of Appeal, the 10-year statute of limitations barred a homeowner from a claim against Contra Costa County for inverse condemnation due to landslide damage allegedly caused by the manner in which an adjacent road was constructed.

* Security Pacific Bank vs. Wozab (November 1990): The California Code of Civil procedure limits creditors to one "action" to collect any debt or enforce any right secured by real property. In Wozab, the California Supreme Court permitted secured lenders more leeway under the "one action" rule. The bank, in exercising its equitable right to set off the debt against deposit accounts held by the bank in the name of the guarantors, did lose its security interest in the loan. But this, said the court, did not foreclose the bank from suing the guarantors on an unsecured basis.

* Snyder vs. Ashkenazy Enterprises Inc. (January 1991): The California 2nd District Court of Appeal ruled that a successful unlawful detainer judgment collaterally estops action by two ousted tenants from suing their former landlord. The court affirmed a trial court decision saying that Ashkenazy Enterprises had not violated the Ellis Act or West Hollywood Rent Stabilization Ordinance.

* South Coast Air Quality Management District vs. Security Environmental Systems (February 1991): A three-judge panel of the 2nd District Court of Appeal upheld an administrative order by AQMD which required an independent environmental impact report for the $29 million East Los Angeles incinerator in Vernon.

* Surfside Colony Ltd. vs. California Coastal Commission (January 1991): The California 4th District Court of Appeal denied a public easement on private beach property in Malibu.

* Wu vs. Interstate Consolidated Industries (January 1991): The California 4th District Court of Appeal held that absent direct instructions to the contrary, when commercial rent increases are based on an appraisal of the premises, the appraisal is to be based on existing use.

* Yancey vs. Fink (January 1991): The statutory right of a debtor to repurchase real property involuntarily sold to satisfy a debt does not extend to an execution sale by a county water district after the former owners failed to pay property assessments.