Seller sues over point-of-sale law

In the case Walker v. Calumet City, the homeowner (Ayanna Walker) wanted to sell her home and discovered that she would first have to comply with the city's point-of-sale (POS) ordinance, which required various inspections; fees; correcting property conditions that didn't comply with the building or zoning codes; and obtaining transfer stamps.

(The local association of Realtors had already challenged the ordinance in court, but the case was dismissed because the Realtors lacked standing. The homeowner was then brought in to the case.)

The homeowner's claim against the city alleged that the POS ordinance improperly restrained her from being able to sell her home and deprived her of due process.

While the case was pending, the city inspected the homeowner's property; she completed the required repairs; and the city granted her the right to sell the home with no further POS ordinance requirements. The trial court then dismissed the case against the city as moot.

The trial court then granted the homeowner $189,000 in attorneys' fees on grounds that she had achieved her goals for the case and, thus, was a prevailing party under 42 U.S.C. 1988(b).

The appeals court, however, overruled the trial court's attorney fee award. The appellate court clarified that if the trial court had stated its intention to find in favor of the homeowner prior to the case becoming moot, the homeowner would have been entitled to attorneys' fees. Also, if the trial court's dismissal had contained language mandating the city to refrain from enforcing the POS ordinance against the homeowner and later owners of the property, and providing for judicial enforcement of that mandate, the homeowner's attorney fee award would have been upheld.

On appeal, however, the court found that the district court had made no decision on the merits of the matter but, rather, had simply "enshrined" the city's voluntary agreement with the homeowner in the language of the dismissal. Accordingly, the homeowner was not a prevailing party entitled to attorneys' fees under 42 U.S.C. 1988(b).

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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