Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Skidmore’s West Virginia home sits 70-80 feet west of Norfolk’s railroad track, across Loop Creek. In 2001, Norfolk installed a culvert to drain surface water from its tracks into Loop Creek near Skidmore’s home. According to Skidmore, the water streaming from the culvert caused soil erosion and threatened the foundation of her home. Skidmore sued Norfolk in state court, alleging negligence, private nuisance, and trespass.Norfolk obtained a survey and deeds revealing that, in 1903, Norfolk obtained a right of way extending across Loop Creek, over part of the land on the other side. Part of Skidmore’s house sits atop the land over which the right of way runs. Norfolk asserted an affirmative defense that Skidmore lacked standing because she had no right to exclude Norfolk from the land. Skidmore amended her complaint to add claims for adverse possession and prescriptive easement (quiet title claims). Norfolk removed the case to federal court, arguing that the Interstate Commerce Commission Termination Act completely preempts the quiet title claims. The district court dismissed for lack of subject matter jurisdiction.The Fourth Circuit vacated. While 49 U.S.C. 10501(b) “entirely displaces” Skidmore’s quiet title claims, a conclusion that complete preemption applies means that the court has jurisdiction over ostensibly state-law claims. On remand, the court must convert Skidmore’s quiet title claims into claims under the Termination Act and may permit Skidmore to amend her complaint to clarify the scope of her Termination Act claims. View "Skidmore v. Norfolk Southern Railway Co" on Justia Law

Appellants filed suit against Dorchester County, seeking compensation pursuant to the Takings Clause of the Fifth Amendment for the death of their bees. Appellants contend that the bees died after the County sprayed pesticide in an effort to kill mosquitos, and the bees' death amounted to a taking of appellants' private property.The Fourth Circuit affirmed the district court's grant of the County's motion for summary judgment, holding that there was no taking because the loss of appellants' bees was only an incidental consequence of the County's action. The court noted that the death of appellants' bees is undoubtedly a tragedy, but the court cannot conclude that it was the foreseeable or probable result of the County's action when it is a clear outlier in terms of collateral damage arising out of the County's mosquito abatement effort. Therefore, because the death of the bees was neither intended nor foreseeable, the Takings Clause does not require compensation. View "Yawn v. Dorchester County" on Justia Law

After a trial before a three-member land commission, the district court awarded compensation to Landowners after the government took an easement on their land. The district court awarded Landowners $4.4 million, apportioned attorney's fees and litigation costs, and split the cost of the commission.The Fourth Circuit affirmed the district court's award of just compensation and the splitting of the commission costs. The court concluded that the district court was within its discretion to weigh the evidence and to determine that the Landowners had shown a non-speculative demand for industrial and residential development in the reasonably near future. Therefore, the court could not say that the district court clearly erred in calculating its award of just compensation. The court also concluded that the district court has broad discretion in apportioning commission costs, and upheld its decision to do so. However, the court concluded that identifying the "prevailing party" for purposes of the attorney's fee award is a legal question that the court reviewed de novo. The court found that the district court erred in making that determination, concluding that because the government's $937,800 value is closer to the district court's final award of $4.4 million, the government, not the Landowners, is the "prevailing party" in this litigation. Accordingly, the court affirmed in part and reversed in part. View "United States v. 269 Acres Located in Beaufort County" on Justia Law

Plaintiffs filed suit alleging that pressure tactics used by Quicken Loans and TSI to influence home appraisers to raise appraisal values to obtain higher loan values on their homes constituted a breach of contract and unconscionable inducement under the West Virginia Consumer Credit and Protection Act. The district court granted summary judgment to plaintiffs.The Fourth Circuit concluded that class certification is appropriate and that plaintiffs are entitled to summary judgment on their claims for conspiracy and unconscionable inducement. However, the court concluded that the district court erred in its analysis of the breach-of-contract claim. The court explained that the district court will need to address defendants' contention that there were no damages suffered by those class members whose appraisals would have been the same whether or not the appraisers were aware of the borrowers' estimates of value—which one might expect, for example, if a borrower's estimate of value was accurate. The court agreed with plaintiffs that the covenant of good faith and fair dealing applies to the parties' contract, but concluded that it cannot by itself sustain the district court's decision at this stage. The district court may consider the implied covenant of good faith and fair dealing to the extent that it is relevant for evaluating Quicken Loans' performance of the contracts. Accordingly, the court affirmed in part and vacated and remanded in part. View "Alig v. Quicken Loans Inc." on Justia Law

The Fourth Circuit affirmed the district court's ruling that three local zoning ordinances are constitutional under the Takings Clause and the Due Process Clause, and that Clayland's equitable claims are moot. In this case, Bill No. 1214 reduced the permissible density of residential properties from four units per acre to one unit per two acres and prohibited subdividing any existing parcel into more than one additional lot. Bill No. 1229 established seven tier classifications related to "the type of subdivision and the kind of wastewater treatment system planned for each subdivision type." Bill No. 1257 extended Bill No. 1214's restrictions on Village Center zones (including the decreased density of residential units and the limitations on new subdivisions) until Talbot County "adopt[ed] . . . comprehensive rezoning and land use regulations regarding density . . . pursuant to the County's comprehensive plan."The court concluded that Bill Nos. 1214 and 1257 do not constitute a taking where the balance of the Penn Central factors ultimately favors the County. The court explained that Bill Nos. 1214 and 1257 were public-benefit regulations that did not deprive Clayland of all development potential and—most significantly, and perhaps even decisively—did not divest Clayland of any vested rights. The court also concluded that Bill Nos. 1214, 1257, and 1229 do not constitute a substantive due process violation. Finally, the court concluded that Clayland's equitable claims are moot. View "Clayland Farm Enterprises, LLC v. Talbot County" on Justia Law

The Fourth Circuit affirmed the district court's judgment affirming the IRS's disallowance of a charitable deduction that plaintiffs claimed on their 2011 joint income tax return. After plaintiffs purchased real property, they donated the existing house on the underlying land so that they could build a new one in its place. However, the charity ended up disassembling some of the house, salvaging useful components, and leaving the remainder for demolition by plaintiffs' contractor. Plaintiffs took a charitable deduction of $675,000 on their income tax return, representing the appraised value of the house as if it were moved intact to another lot. The IRS disallowed the deduction under 26 U.S.C. 170(f)(3). Plaintiffs paid the additional taxes assessed by the IRS and filed suit against the United States, seeking a refund of approximately $213,000.The court concluded that defendants donated their entire interest in the house and that they supported their donation with a "qualified appraisal" of the contributed property. In this case, the house was never recorded in the public land records, Plaintiff Linda Mann always retained record ownership of the house. Furthermore, even if the court were to accept that the donation agreement both "constructively severed" the house from the land and conveyed contractual ownership of the house to the charity, Linda still remained the record owner of the house responsible for real-estate taxes. The court also concluded that, even setting aside the consequence of Linda's continuing as the house's record owner, both the donation agreement considered as a whole and the substance of the transaction demonstrate that Linda failed to transfer her entire interest in the house to the charity. The court explained that Linda maintained the benefits and burdens of ownership of the remaining components which she ultimately paid her contractor to demolish. Therefore, she did not donate, as personal property, her entire interest in the house to the charity, making plaintiffs' attempt to claim the value of the entire house as a charitable deduction improper. Finally, the court concluded that the $313,353 appraisal used to claim the deduction was not a qualified appraisal of the contributed property under 26 U.S.C. 170(f)(11)(C). View "Mann v. United States" on Justia Law

Plaintiffs, neighbors of Murphy-Brown's hog production facilities, filed suit against the company, seeking relief under state nuisance law from odors, pests, and noises they attribute to farming practices Murphy-Brown implemented at an industrial-scale hog feeding farm. On appeal, Murphy-Brown challenges a jury verdict against it awarding compensatory and punitive damages to plaintiffs.As a preliminary matter, the Fourth Circuit affirmed the district court's judgment rejecting Murphy-Brown's argument that Kinlaw Farms was a necessary and indispensable party under Federal Rule of Civil Procedure 19. Furthermore, the district court's decision as to the applicable statute of limitations was not legal error, and refusing to give the inapplicable jury instruction on continuing nuisances was not an abuse of discretion.The court affirmed the jury's verdict as to liability for compensatory and punitive damages. The court rejected Murphy-Brown's contention that North Carolina private nuisance law bars recovery of compensatory damages of any kind pursuant to the 2017 Right to Farm Act amendment. Rather, the court concluded that the amendment represents a substantive, forward-looking change in the law, and affirmed the district court's conclusion that the issue of annoyance and discomfort damages should go to the jury based on longstanding North Carolina case law allowing such recovery in nuisance suits. The court also affirmed the district court's decisions as to the admission and exclusion of expert testimony, and the district court's jury instruction as to vicarious liability because the contested jury instruction did not prejudice Murphy-Brown. However, the court vacated the jury's judgment as to the amount of punitive damages and remanded for rehearing on the punitive damages issue without the parent company financial evidence, including executive compensation. View "McKiver v. Murphy-Brown, LLC" on Justia Law

After his taxes were paid late from his mortgage escrow account, causing him to incur $895 in penalties, the homeowner-borrower filed a putative class action against the company that serviced his mortgage. Under the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. 2601, if a mortgage contract requires the borrower to place property tax payments in escrow, “the servicer” must make those tax payments on time. The right to service a mortgage is subject to purchase and sale. The rights to service the plaintiff’s mortgage had been transferred between the time of the plaintiff’s payment into the escrow account and the tax’s due date.Reversing the district court, the Fourth Circuit concluded that when servicing rights are transferred in the window between the borrower’s payment to escrow and the tax’s due date, RESPA requires taxes to be paid by the entity responsible for servicing the mortgage at the time the tax payment is due. By requiring “the servicer” to make tax payments “as [they] become due,” RESPA connects the servicer’s obligation to a payment’s due date, not the date of payment into escrow by the borrower. View "Harrell v. Freedom Mortgage Corp." on Justia Law

The district court held defendant in contempt after finding him in violation of a consent order limiting his participation in the mortgage industry. The district court ordered the disgorgement of over half-a-million dollars of defendant's contemptuous earnings.The Fourth Circuit affirmed the district court's contempt decision, holding that the district court cited several proper reasons for holding defendant in contempt. However, the district court based its disgorgement sanction on an erroneous legal interpretation of the terms of the underlying consent order. Accordingly, the court vacated the disgorgement order and remanded for further proceedings. View "Consumer Financial Protection Bureau v. Klopp" on Justia Law

A bank office that conducts no mortgage-related business does not qualify as a "branch office" of a "mortgagee" under 24 C.F.R. 203.604(c)(2). Section 203.604(c)(2) excuses a face-to-face meeting between the bank and the mortgage borrower before a foreclosure when the "mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either."The Fourth Circuit affirmed the district court's grant of U.S. Bank's motions to dismiss. The court agreed with the district court that U.S. Bank's Richmond office – the only one within 200 miles of plaintiff's home – conducted no mortgage-related business and was not open to the public, and thus did not qualify as a "branch office" of a "mortgagee." View "Stepp v. U.S. Bank Trust N.A." on Justia Law