Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

The Youth Re-Entry Program helps young people re-enter society after foster care or juvenile detention. About 80 percent of its members are black. The program moved to the Cleveland suburb, Lakewood, to house clients in apartments in Hidden Village. Lakewood’s building commissioner (Barrett) took the position that this was a prohibited institutional use. The program nonetheless moved into Hidden Village. Barrett ordered removal, but the planning commission reversed his decision. The police department sent officers a memo stating that “[c]itations and arrests are the preferred course of action for violations ... in the vicinity of [Hidden Village].” Program participants began complaining about harassment, such as tickets and astronomical fines for jaywalking, failure to attach a license plate to a bicycle, and walking on railroad tracks. The mayor stated that he intended to remove the program. Police, an officer in SWAT attire, a canine unit, and fire and health department workers visited Hidden Village, unannounced and without a warrant, to conduct a “joint inspection.” Another fire inspection followed a week later. Hidden Village sued, 42 U.S.C. 1981-1983. The Youth Program did not participate. The district court denied the defendants summary judgment and held that individual defendants did not enjoy qualified immunity. The Sixth Circuit affirmed in part. Hidden Village produced evidence from which a jury could reasonably conclude that defendants discriminated on the basis of race. View "Hidden Village, LLC v. City of Lakewood, OH" on Justia Law

Miller and his pastor Wellons wanted to buy investment land for $790,000. Miller formed Fellowship, with eight investment units valued at $112,500 each, to purchase the land and recruited investors. Miller and Wellons did not purchase units, but Miller obtained a 19.5% interest as Fellowship’s manager and Wellons obtained a 4.5% interest as secretary. Miller secured $675,000 in investments before closing and obtained a loan from First Bank, representing that DEMCO, one of Miller’s development companies, needed a $337,500 loan that would be paid within six months. Because DEMCO pledged Fellowship’s property, First Bank required a written resolution. The resolution contained false statements that all Fellowship members were present at a meeting, and that, at this nonexistent meeting, they unanimously voted to pledge the property as collateral. Fellowship’s members, other than Miller and Wellons, believed that the property was being purchased free of encumbrances. After the closing, $146,956.75 remained in Fellowship’s account. Miller then exchanged his ownership in Fellowship for satisfactions of debts. Despite having no ownership interest, Miller modified and renewed the loan. Later Miller told Fellowship members the truth. Miller was convicted of two counts of making false statements to a bank, 18 U.S.C. 1014, and two counts of aggravated identity theft, 18 U.S.C. 1028A. The Sixth Circuit affirmed conviction on one count of false statements, but vacated and remanded the other convictions. View "United States v. Miller" on Justia Law

REX was unsuccessful in privately obtaining easements from defendants to install an interstate natural-gas pipeline authorized by the Federal Energy Regulatory Commission (FERC) under a coal mine in Ohio and had to condemn the easement, 15 U.S.C. 717f. REX built the pipeline and gas began flowing in 2009. Defendants believed that safety concerns regarding the pipeline would delay its mining permits and accelerated its mining, resulting in unanticipated costs associated with inefficient mining techniques. In valuing the easement, the district court determined that the defendants suffered no compensable damages to its coalmining operations as a result of the pipeline. The Sixth Circuit affirmed, stating that FERC found as a matter of fact that the pipeline would not compromise mining and that the two operations could co-exist. View "Rockies Express Pipeline, LLC v. 4.895 Acres of Land, More or Less" on Justia Law

Tompkins was injured when she slipped in a pool of water on the floor and fell at McNamara Terminal in the Detroit Metropolitan Airport (DTW). She sued Northwest Airlines, which she alleged had possession and control of McNamara at the time; Wayne County Airport Authority (WCAA), which owns DTW; and Kimco, which provided janitorial services. Contractors involved in the installation and repair of an allegedly leaky roof were brought into the suit as third party defendants. Her claims against WCAA were for liability under the public building exception to the Governmental Tort Liability Act, Mich. Comp. Laws 691.1406; claims against Northwest and Kimco were based on theories of failure to inspect and maintain the premises. The district court granted the contractors, WCAA, and Kimco summary judgment, but denied Northwest’s motion on procedural grounds. A jury awarded $3,198.80 in damages, of which only $1,439.46 was attributable to Northwest. The Sixth Circuit affirmed. There was sufficient evidence for a jury to conclude that Northwest had constructive notice of the condition. View "Tompkins v. Crown Corr, Inc." on Justia Law

In 2007 Hamilton Township imposed impact fees of about $2,100 per lot on developers of residential property. Salt Run, a residential developer, sought to avoid the fees by annexation to the Village of Maineville. Unable to stop the annexation in court, Hamilton Township imposed a lien on the property. Salt Run ultimately defaulted on its loan as a result of funding an escrow so that it could sell the property, despite the lien. Salt Run sued the Township, alleging a takings claim. While the case was pending, the Ohio Supreme Court ruled that Hamilton Township had no authority to impose the fee. The district court granted judgment in favor of Salt Run on some claims but denied its claim that the lien amounted to an unconstitutional taking. Salt Run appealed that ruling and sought attorney’s fees. The Sixth Circuit affirmed, finding that Salt Run was not a prevailing party and characterizing the suit as, at most, asserting an improper “collection mechanism.” View "Vill. of Maineville, OH v. Hamilton Twp. Bd. of Trs." on Justia Law

Dayton Title brokered real estate closings and had a trust account at PNC Bank for clients’ funds. In 1998-1999, Dayton facilitated bridge loans from defendants to Chari, from $1.9 million to $3.2 million, for commercial real estate purchases. Defendants would deposit funds into Dayton’s PNC account, which Dayton would transfer to Chari. Chari’s loan payments would pass through Dayton’s account. The first six bridge loans were paid, but not always on time. Defendants provided Chari another bridge loan, for $4.8 million. After the due date, Chari deposited a $4.885 million check into Dayton’s account. The PNC teller did not place a hold on the check. On the same day, Dayton “pursuant to Chari’s instructions” issued checks to defendants. PNC extended a provisional credit for the value of Chari’s check, as is standard for business accounts. After the checks were paid, PNC learned that Chari’s check was a forgery drawn on a non-existing account, exercised its right of “charge back” on the Dayton account, and regained about $740,000 of the provisional credit. Dayton was forced into bankruptcy. Chari declared bankruptcy and was convicted of racketeering, fraud, and forgery. Dayton’s bankruptcy estate and PNC sued, seeking to avoid the $4.885 million transfer to defendants as fraudulent under 11 U.S.C. 548 and Ohio Rev. Code 1336.04(A)(2). The bankruptcy court held that all but $722,101.49 of the transfer was fraudulent. The district court held that all but $20,747.13 of the transfer was not fraudulent. The Sixth Circuit reversed the district court, reinstating the bankruptcy court holding. Dayton did not hold the provisional credit funds in trust; the funds were not encumbered by a lien at the time of transfer. The funds were “assets” held by Dayton, so the transfer satisfied the statutory definition of “fraudulent.” View "In re: Dayton Title Agency, Inc." on Justia Law

The debtor worked Saylor’s nightclub and for another entity owned by Saylor, scouting for commercial properties. Debtor obtained loans ($1,018,350) to purchase four Michigan car washes. The loan closings were conducted by another company controlled by Saylor, acting as agent for the title company, which never released loan proceeds to complete the purchases. After the debtor defaulted, Bayview, assignee of the notes, discovered that he did not hold title to the properties securing the notes. Bayview filed claims under the title commitments. The title company claimed that the loan applications contained false statements and denied the claim for failure to exercise due diligence in approving the loans. Bayview sued and the parties settled; Bayview assigned an interest in the notes to the title company, which obtained a default judgment of $10,172,840 against Saylor. The debtor filed a Chapter 7 bankruptcy petition. The title company filed an adversary complaint claiming that the Bayview notes were undischargeable under 11 U.S.C. 523(a)(2)(B). The bankruptcy court rejected the argument, holding that under Michigan law, claims for fraud cannot be assigned and that the title company had the right to pursue Saylor, but not the debtor. The district court reversed. The Sixth Circuit affirmed, holding that the title company can seek nondischargeability under section 523(a)(2) View "Pazdzierz v. First Am. Title Ins. Co." on Justia Law

In 2009, Epling purchased a manufactured home, borrowing funds from Vanderbilt secured by a security interest in her manufactured home. Epling resided in Magoffin County, Kentucky. Vanderbilt filed an application for first title and an application for a title lien statement in Bell County, Kentucky and later filed the Certificate of Title for the manufactured home, which listed Vanderbilt’s lien, in Bell County. In 2010, Epling filed a voluntary Chapter 7 bankruptcy petition. The trustee initiated a strong-arm proceeding to avoid Vanderbilt’s lien on the manufactured home, under 11 U.S.C. 544, because the lien was not properly perfected under the Kentucky law. The bankruptcy court granted the trustee summary judgment, concluding that Vanderbilt had failed to perfect its lien because it had filed the required title lien statement in its county of residence, rather than in Epling’s county of residence. The district court and Sixth Circuit affirmed. View "Vanderbilt Mortg. & Fin., Inc. v. Westenhoefer" on Justia Law

The Michigan State Real Estate Transfer Tax, MICH.COMP.LAWS 207.521, and the County Real Estate Transfer Tax, section 207.501, impose a tax when a deed or other instrument of conveyance is recorded during the transfer of real property. The tax is imposed upon “the person who is the seller or grantor.” State and county plaintiffs sought to recover transfer taxes for real property transfers recorded by Fannie Mae, a corporation chartered by Congress to “establish secondary market facilities for residential mortgages,” in order to “provide stability in the secondary market for residential mortgages,” and “promote access to mortgage credit throughout the Nation,” 12 U.S.C. 1716; Freddie Mac, also a corporation chartered by Congress for substantially the same purposes; and the Federal Housing Finance Agency, an independent federal agency, created under the Housing and Economic Recovery Act of 2008, 12 U.S.C. 4617, which placed Fannie and Freddie into conservatorships, 12 U.S.C. 4617(a)(2). When Congress created defendants, it expressly exempted them from “all” state and local taxes except for taxes on real property. The district court entered summary judgment in favor of the plaintiffs, reasoning that “transfer taxes are excise taxes, not taxes on real property. The Sixth Circuit reversed. View "Genesee Cty, v. Fed. Hous. Fin. Agency" on Justia Law

In 2004 Wallace financed a home purchase with a $272,315 mortgage. He took a second mortgage of $164,500 for improvements and to pay down debt. In 2006, Wallace sought a refinance loan of $422,500. Midwest obtained an appraisal from Brock, through the now-defunct Accupraise. A former Accupraise employee explained that Midwest would send a requested appraisal value and Brock would return a tailor-made appraisal, often without seeing the property. Accupraise and Brock valued Wallace’s home at $500,000. Unbeknownst to Wallace, his refinance was an adjustable-rate mortgage that allows negative amortization; he had a teaser rate of two percent that quickly multiplied. For securing a high long-term interest rate, Midwest received a premium in excess of $14,000. The loan created insurmountable financial problems for Wallace. He learned that the true 2006 value of his home was $375,000. Wallace declared bankruptcy, surrendered the home, and sued alleging that he was the victim of a fraudulent scheme violating the Racketeer Influenced and Corrupt Organizations Act and Kentucky conspiracy law. Mediation produced a settlement, under which Wallace prevailed on a RESPA claim. The district court granted defendants partial summary judgment. The Sixth Circuit reversed a finding that Wallace did not sufficiently demonstrate that the appraisal proximately caused his financial injuries, but otherwise affirmed. View "Wallace v. Midwest Fin. & Mortg. Servs., Inc." on Justia Law