Real Property Disputes: Local or Transitory? Where do we go from here?
In the law, some cases are considered “local” actions, while others are described as “transitory.” What does that mean? Essentially, some cases must be decided only in a court of the one particular state that is connected to the subject of the case. Those are called “local actions.”
On the other hand, most lawsuits are “transitory” and can be litigated in any state that has jurisdiction over the parties, based on their residence or presence in the state. Sometimes several states might be potential venues for a transitory action, and the litigants may engage in “forum-shopping” because they prefer the laws of one state over another. When multiple states might be the venue of a transitory action, there are rules to help rank which state is a better venue than others. Typical examples of transitory actions are contract disputes, injury claims, and class-actions.
Quiet title actions, probate of real property and judicial foreclosure actions are all examples of “local actions” involving real estate that must be heard in the state in which the property is located.
We recently handled a case from California that addressed issues arising from both local and transitory actions. A trust estate was being litigated in California, but the estate included property located in Nevada. In that instance, the court – applying long-established exceptions to the local action rule – entered orders determining the parties’ respective interests in real estate located in Nevada. The Nevada Supreme Court recently upheld the entry of the California probate court’s order that the defendant “trustee” had no interest in the Nevada lands she had conveyed to herself. The ruling was based on the fact that the California probate court had proper jurisdiction over the trust and the parties who were all of its trustees and beneficiaries.
The same exception to the local action rule applies in a variety of other settings, the most common of which are divorce proceedings. In a divorce, a court in State “A” can divvy up property of the spouses located in State “B” and any other states. The Court’s power to do this stems from its jurisdiction over the owners – the divorcing spouses. Likewise, in a partnership dispute or dissolution, if the court has jurisdiction over the partners or the partnership, it can divvy up their real estate, no matter where it is located, and the courts where the land is located must give effect to the decree partnership dissolution (or the divorce decree) which divides the land.
Cases involving a mixture of local and transitory actions can be complicated. Incline Law Group, LLP has the experience to guide you through the process.