The summertime tends to be a busy season for the appellate courts, and this year has been no different. With the United States Supreme Court already in its full swing of issuing weekly opinions, there is ample new caselaw that could impact you and your business. Read on to learn more.

The US Supreme Court recently considered two different cases about claims that are subject to an arbitration clause.

In the first case, Smith v Spizzirri, a person filed a lawsuit in federal court, but the lawsuit related to a contract that was subject to an arbitration clause. The defendant (the person who was sued) requested that the lawsuit be dismissed, arguing that the parties should go to arbitration instead. The plaintiff (person who brought the lawsuit) argued that the case shouldn’t be dismissed, but instead should simply be paused while arbitration occurred. The US Supreme Court found that the plaintiff was correct – under the Federal Arbitration Act, a pending federal case that is subject to an arbitration clause should be paused, rather than dismissed, while the arbitration proceeds.

In the second case, Coinbase v Suski, a consumer signed two different contracts with Coinbase. Both contracts were subject to an arbitration clause. The first contract contained language that said that if there were questions about how the arbitration was to proceed (such as the scope of the arbitration agreement), the arbitrator was to answer those questions. The second contract, on the other hand, said that if questions about the arbitration agreement arose, they were to be answered by a California court. When a lawsuit was filed, one party argued that the first contract should govern, whereas the other party argued that the second contract should govern. The US Supreme Court found that there is no single principal that determines whether the first or second contract should be used when both contracts are applicable to the issue at hand. Instead, the Court ruled, a judge must carefully consider the particular facts of the dispute to determine which contract the parties intended to govern over that particular issue.

In Cantero v Bank of America, NA, the US Supreme Court analyzed whether the National Bank Act preempts application of state escrow interest laws to national banks. This question arose because the National Bank Act does not require the interest in escrow accounts to be paid to the borrower, whereas New York state banking law does require it.

The US Supreme Court held that the National Bank Act preempts state law “only if” the state law i) discriminates against national banks as compared to state banks or ii) prevents or significantly interferes with the national bank’s exercise of powers. To answer the latter question, a Court must assess the nature and degree of interference caused by the state law in question. Here, the Circuit Court did not make such an assessment, so the case was reversed and remanded.

In Loper v. Raimondo, the U.S. Supreme Court overturned the long-held doctrine of judicial deference to federal agency interpretations of statutes, called Chevron deference. Under the Chevron doctrine, federal agencies were able to make regulatory decisions about areas of federal law that were ambiguous or unclear. While the immediate impact of the Loper decision is limited to the non-real estate related matters in the case, the long-term impact on federal regulation is quite extensive, drastically increasing judicial scrutiny on the actions and regulations of federal agencies.

In Coats v. Ayers¸ the Alabama Supreme Court considered a private right-of-way condemnation case. Private right-of-way condemnation cases are similar to prescriptive easements, where one property is landlocked, so access to that property requires traveling over another property. In this case, the Coatses owned two parcels of property, Parcels A and B, with differing circumstances for each parcel.

Parcel A was a piece of property with a river running through it. One part of Parcel A was accessible by a public road, but the part across the river was only accessible via a road that ran over someone else’s (the Ayers’) property. The Coatses argued that it would be prohibitively expensive for them to build a bridge over the river to be able to access the other side of Parcel A, and that they should instead be able to use the road on the Ayers’ land.

Similarly, Parcel B did not have its own road access. Instead, the Coatses were required to travel over the same road on the Ayers’ land, as well as over a river located on a third person’s property. For multiple years, the Coatses (or their predecessor in title) were able to cross both properties, until the Ayers objected, resulting in the lawsuit. The Ayers argued that since their property was not the only barrier for the Coatses – they also had to travel by boat across the other property – the Coatses’ right-of-way condemnation action was inappropriate.

The Alabama Supreme Court first held that Parcel A is to be considered one piece of property, regardless of the river running through it. Under Alabama law, if any part of a property is accessible via a public road, then a private right-of-way condemnation is not applicable. Since one part of Parcel A did have such access, the Court declined to apply private right-of-way condemnation. However, the Alabama Supreme Court was willing to allow a right-of-way condemnation action for Parcel B. The court noted that, according to the Coatses, they had permission to cross the intervening property and only needed a right-of-way across the Ayers property, which is what they were requesting.

In Washington and Williams v Johnson, the Alabama Supreme Court issued an opinion related to the partition of heirs property. In this case, three siblings were heirs to a property. Two of the three sought partition by sale of the property (and division of the sale proceeds among the three), but one sibling resisted the partition by sale. The circuit court ruled in favor of the third sibling, finding that the Heirs Act applied. However, the circuit court did not order that the land be partitioned in kind (i.e., divided evenly between the siblings).

The Heirs Act applies when multiple heirs own a property and is meant to protect an heir from losing a family-owned property by means of a force sale. Under the Heirs Act, the owner who wishes to retain the property is given the opportunity to purchase the other ownership interests. If they choose not to, the court must order partition in kind unless it would result in great prejudice, in which case it must order partition by sale.

In this case, the Supreme Court agreed with the circuit court that the Heirs Act applied. Since the third heir did not purchase the other heirs’ ownership interests, and great prejudice was not present, the circuit court was required to partition the land in kind.

The Alabama Supreme Court issued an opinion in May clarifying the scope of the “open and obvious” doctrine in landlord-tenant law. The case, Ex parte Housing Authority of Talladega, was brought by a tenant against the landlord, a housing authority, after the tenant fell down external stairs that lacked a handrail. The tenant had requested a handrail to be installed multiple times. In affirming the Court of Civil Appeals decision allowing the tenant’s case to proceed, the Alabama Supreme Court clarified prior decisions about the application of the “open and obvious” doctrine to landlords and tenants.

In Alabama, the general rule is that a landlord is not liable for harm caused to tenants by a dangerous condition, whether natural or artificial, which existed when the tenant moved in. However, there are several exceptions to this rule.

The first exception is that a landlord owes a duty to protect tenants from ‘open and obvious’ dangers when the danger exists on a part of the premises (1) over which the landlord retained control and (2) that a tenant is entitled to use as part of the tenancy (e.g. stairs, elevators, etc.). The second exception is that a landlord owes a duty to protect tenants from “open and obvious” dangers when the danger exists on a part of the premises (1) over which the landlord retained control and (2) is necessary for the tenant to use to access the leased premises.

With both exceptions, the “open and obvious” aspect of the danger can be used to determine whether the tenant was contributorily negligent (i.e., was also at fault), but the fact the danger is “open and obvious” does not automatically relieve the landlord of responsibility to the tenants.

In Iskra v. Bear, the Alabama Supreme Court reviewed a negligence claim brought by home purchasers related to a roofing repair. In this case, the Iskras, home purchasers, requested an inspection on a home under contract. When the inspection revealed a roof leak, the purchasers requested repair of the leak. The sellers hired the defendant company to repair the roof. They told the roof repair company that the leak needed to be fixed due to an inspection report for the upcoming sale of the home. The agreement between sellers and company was lost, but a receipt for the repairs included a transferable warranty (although the warranty was never transferred). Shortly after closing, the roof leaked in the same location, and defendant refused to honor the warranty. The Iskras sued the defendant for negligence and breach of contract.

The trial court entered summary judgment for the roofing company, reasoning that the home purchasers were not parties to the repair contract. The Alabama Supreme Court analyzed Alabama law governing third-party beneficiaries to a contract. The rule allows home purchasers to prevail in an action if they can show that 1) the defendant and seller intended, at the time of their agreement, the contract to benefit the home purchasers specifically and 2) the contract was breached. The Supreme Court reversed the summary judgment, finding that evidence sufficient to overcome summary judgment was presented to show the defendant knew about the upcoming sale and intended the warranty to cover the home purchasers.