More on my favorite landlords: Mr. and Mrs. Macy

So in one of the posts below, an anonymous poster left an address to a site where someone kindly posted a copy of a declaration from a private investigator. This text document may or may not have been used in the bail hearing last week which resulted in the lowering of bail for Mr. and Mrs. Macy.

The anonymous poster (aka IP address 24.80.10) went on to say that the document proved that the victim-witness was indeed untrustworthy. Now, I will admit. I have a bias in favor of tenants. This bias comes to me honestly: I represent a lot of them when they are facing landlords in eviction proceedings.

So I started looking through the alleged declaration (since I have no way of confirming whether this is the final version which was submitted to the court). The document lays out the alleged history fo the building, including what was described in it as "the cheapest sex (club) in the city."

It tells how Scott Morrow is a long-term tenant who seems to get most of his income from public assistance, which makes it possible for him to afford the low rent. There is also mention of a probate case which I missed in my perusal of the online records for the San Francisco Superior Court where Morrow made a claim against the estate of a previous owner. (However, if you look at the description of what happened, it seems like there was something very odd going on in the relationship between the ownership of 744-746 Clementina and the tenants residing there.) Now the claim was rejected, but that was probably correct given that the proper avenue for that claim was a civil action... which Morrow did file and did prevail on in the form of a settlement when the Estate and other defendnats in the suit.

Next, the document starts to refer to each of the complaints made to DBI concerning the 744-746 Clementina. Complaint 200455752 found that the heater did not work, that the thermostat was hanging by a wire, and that a light fixture was also hanging by a wire; 200558238 states again that the heat was not working (tho this time due to PG&E); 200563396, the inspector found that there was no heat, mold, holes in the ceiling, and other code violations; 200563950, the heater not working; 200564814 plumbing work being done without a permit and other work being done with an expired permit; 200564808 refers to the water being cutoff (it was for work which the landlords had failed to give proper notice of); 100564844 (although this appears to be a type and should be 200564844) found that the owners were doing work without a permit and had turned off the water to do it; 200672987 found that there was unpermitted demolition work going on in the building; 200673688 was a complaint that resulted in a notice of violation for a boarded up fire door and missing fire extinguishers; 20067575, and 200795995 are numbers which do not correspond to on-line records; 200676707 complaint records how the building inspector found that the gas to Mr. Morrow's unit had been shut off and could not be turned back on; 200791172 is a little weird, it deals with possibly improperly done work that appears to have been done without a permit; 200795056 appears to have never been fully investigated because the person never met with the inspector; 200795656 deals with more work being done to the building (originally reported as a wall being demolished) without a permit; 200702242 shows a complaint over electrical work being done but does not show any investigation being done beyond opening a file; 200702241 indicates that there was more plumbing work being done without a permit; and complaint 200702930 shows that the Macy's were doing more work at the address, this time with an expired permit.

Complaint 200676878 is my personal favorite. In it, the building inspector writes "Posted NOV at building. Also, Fire, Police and PG&E were there. Viewed unit #2; took photos of cut joists in north west room, saw gas valve in kitchen - it was not capped, and shutoff valve was broken, PG&E capped the pipe." Nine months later, the problems still remained unresolved.

Complaints 200564808, 200673688, 200676878 and 200676707 are the ones which can be directly attributed to Mr. Morrow. All four of these complaints were confirmed by observations of the San Francisco building inspectors.

As for the final portion of the document, the hearsay statements attributed to a Mr. John Larkin, I cannot comment on them. All I can say is that they are unsurprising given that Mr. Larkin was an heir who was presumably caught up in the unlawful eviction case. People tend to not look favorably on people who file suit against their interests.

So let's see. Mr. Morrow has successfully defended suits against him trying to evict him. He has successfully pursued his rights in an affirmative case. Of the complaints made to the San Francisco Department of Building Inspection , all four have resulted in Notices of Violation being issued to the owners of the property. In fact, one of them seems to substantiate the claim that the landlord's were cutting away the support joists which held up the floor to his apartment! The worst that can be said about this person is that his former landlord's do not like him and that he lives on public assistance.

So how does that make him, of the four tenants who are victims in this case, somehow uncredible? Oh, that's right, he did have one suit against the Salvation Army which did not result in him being the prevailing party. Therefore, all the documentary evidence, in addition to the photographs taken by DBI should count for nothing because one of the victims filed a lawsuit in which he did not prevail.

Please, if you are going to smear the victims and give "evidence" of the untrustworthiness of the victim, let's have something better than this.

Dylan Don't Do It

Seriously. I know you played Bobby Donnell on one of my favorite lawyer shows (well at least until it got just silly with that whole Lindsay shooting the stalker and Bobby cheating on her) during law school. But that does not mean you should represent yourself in your own divorce action.

Now, while I do not enjoy doing family law cases, I am willing to take you on as a client. I will do a good job for a very reasonable fee.

While you can represent yourself, that does not necessarily mean you should. If you can afford the attorney, pay for it. If you cannot afford the attorney, and I know that Mr. McDermott's show is either on the bubble or cancelled, there are invariably pro bono agencies who can help find you low-cost or free representation.

Just because the forms are look easy to fill out does not mean that the process will be as easy. There will be times when a person would be better off having someone who is not emotionally invested in the process representing, calming them down, and doing things that need to be done to make the process and painless and as quick as possible.

So seriously, Mr. McDermott, I will make an exception to my rule of not accepting clients through this blog. Drop me a line, we can talk. Its really a bad idea to represent yourself.

Why Am I Surprised? (More on the Macy Case)

Apparently, according to Superior Court Judge Garrett Wong, lowering bail for accused criminals is perfectly in line with the law if their victims is alleged to be a vexatious litigant. Maybe that is a little too simplistic, but it seems to be what has happened in the case of People v. Kip Macy and Nicole Macy.

Who are Kip and Nicole Macy? They are the two landlords which have been charged with a host of crimes arising from their ownership of 744 - 746 Clementina St., San Francisco. The short list is this: removing support joists from their tenant's floor when he dared to exercise his rights to contest his eviction, breaking into their apartments and stealing from them, calling 911 to have the police arrest a tenant whom they claimed was a "vagrant" squatting in the building, and trying to convince a city inspector to red tag their building to get rid of their tenants.

But apparently, at a second bail hearing for both Mr. and Mrs. Macy, Judge Wong lowered the bail. Attorneys for the couple, Lisa Dewberry and Michael Whelan, have apparently decided to make the victims in this case appear as the criminals. Dewberry started this a month ago as I noted here. The attorneys argued that the clients have strong ties to the community, no prior criminal history, and that one of the victims was a vexatious litigant who was turning the building into his own personal cash cow by filing suits against the owners.

Whelan, in court on Friday, apparently claimed that the tenant in question, Mr. Scott Morrow, had a "documented litigious nature"who saw the building "essentially as a cash cow to support him" and had "made $140,000 in litigation connected to this case."

Let's see. Landlord wrongs tenant by unlawfully attempting to evict him. Forces him to fight in court in order to preserve the only home he has. After successfully defending his rights, it appears that Judge Wong believes that the tenant should just let by-gones be by-gones and not try to recover for the loss which they have suffered.

And then, when the new landlords took over and performed a bogus Ellis Act, apparently Mr. Morrow was also supposed to just let things go and not try to defend his home. Or to seek to punish, through the courts the people who were committing the wrongdoing.

What I want to know is why the prosecutors did not lay out exactly the history of the litigation instead of allowing Judge Wong to just lower the bail on the theory that one of the victims may be a vexatious litigant. According to the account I am reading, all he did was focus on the fact that there were only four cases filed, as opposed to the number of meritless cases filed against Mr. Morrow.

Of course, there is a hostility in the judiciary right now against tenants. Witness the Action Apartments case and the 1100 Park Lane decisions which have come down in the last 12 months. Apparently Judge Wong decided to read into Penal Code 1272.1 that the criteria for bail must also include how well a defense attorney can attack the character of one of the victims.

Shocker (Ho Hum)

So what would you do? You are the administrator of the EPA. There is just over a year left in a lame duck administration. You have the chance to grant a waiver which will provide the impetus to two industries to change how they do business to improve the environment. It will help with the particulates in the air which are linked to the increase in respiratory diseases in children and the population in general. However, you have pressure from the White House to deny it, most likely because a deal has been cut with the automobile and oil industries. Failure to deny it will probably be the end of your tenure (although it will be termed as a resignation for "family reasons"). Which choice would you make?

Well, we all know what the current head of the EPA chose to do. Not only is Stephen Johnson, Director of the EPA, against protecting the environment but apparently he is unwilling to put his job over his patronage. Now, I understand that he is appointed and serves at the pleasure of the President. Yes, he only got the job by being someone which either the President new or had him recommended for his loyalty to the President's part of the party.

However, its disturbing to find out that, as was reported today, that Johnson was in favor of granting in full California's request for a waiver under the Clean Air Act. However, he reversed himself and denied the request. Why did this happen? Apparently under document which were finally released by the EPA, the White House, "played a decisive role in the rejection of the California motor vehicle standards[.]"

Nice to see that keeping one's job got in the way of doing one's job.

Not the Answer I Was Hoping For...

In Case You Did Not Hear That Sound....

....from all the right-wing conservative groups.... the California Supremes today handed down an itty bitty decision on family law. Here it is... all 172 pages of it. I will be reading this for a month.

S147999 - Upload a doc

Read this doc on Scribd: S147999

Do you think that maybe Obama and Hillary were hoping that the California Supremes were willing to take a pay-cut so they would not have to talk about this?

Some Misconceptions About Prop 98

So I have been looking through the comments that I have gotten on my posts about Prop 98. I figured I would take this moment to answer them.

Now, the first comment, left by an anonymous poster, deals more with my view of the referendum process in California. I think we allow our legislature here in California get away with too much by having a referendum system that can be used too often. Sure, Propositions 215, 59, and 13 may be much loved. However, for every one of those which might be "much loved", we have had Prop 22 (which changed the California constitution to prevent same-sex marriages), Prop 164 (imposition of terms, giving us the muscial chairs of elected officials), Prop 64 (which has diminished consumer protections by limiting the use of the Unfair Business Practices Act, rushed onto the ballot by the pro-business lobby seizing upon the acts of a small group of unethical people), Prop 71 (the stem cell initiative which passed but as of yet has managed to accomplish....?), Prop 83 (increasing penalties against sex offenders, and possibly tossing away the 8th Amendment, Cal Const. Art. 1 Sec. 17, in the process).

Then again, we have also already, as voters, consider the issue of emminent domain reform in the 2006 election with Proposition 90. And with almost the same language to boot. So hurray, we Californians get to foot the bill to vote, again, on virtually the same ballot initiative.

So, now, to the second comment left by an anonymous poster. (Which by the way annoys me. My favorite scene in the West Wing deals with anonymous letters and how Sam Seborn deals with them.) And in it, this person writes that Prop 98 only outlaws new rent control, but otherwise, it just "only outlaws transfer from one private individual to an other."

First, localities in California (i.e. your local city or town) has been prohibited from enacting new rent control schemes since February 1, 1995 when the Costa Hawkins Act (Civil Code section 1954.50 et seq., and specifically Civil Code 1954.52) went into effect. So, the idea that Proposition 98 will prevent the invidious spread of rent control in California is just plainly wrong. The jurisdictions which have it now are the only ones who are able to have it.

Now, the second misconception is that Prop 98 only outlaws the state of California transferring private property from one individual to another. That is what the proposition's backers would have people believe. However, lets take a look at the actual proposed language in the initiative. It reads,

Sect 19(a) Private property may be taken or damaged only for a stated public use and when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legislature may provide for possession by the condemnor following commencement of eminent domain proceedings upon deposit in court and prompt release to owner of moeny determined by the court to be the probable amount of just compensation. Private property may not be taken or damaged for private use.

(Instead of underlines, I am using italics to show where the proposition would amend the state constitution)

Now, that is to be expected. The real changes, as they often happen in legal documents, occur in the definitions. There, the changes read, in part,

(b) For purposes of this section:

(1) "Taken" includes transferring the ownership, occupancy, or use of property from a private owner to a public agency or to any person or entity other than a public agency, or limiting the price a private owner may charge another person to purchase, occupy or use his or her real property.

The classic view of eminent domain, at least as I remember it being taught to me back in junior high and high school is that the government uses the power to force the owner to sell property to the government. However, under this iteration, a taking would include "limiting the price a private owner may charge another person to purchase, occupy, or use" their real property. Rent control limits a private owner's ability to raise rents of their tenants. Therefore, if Prop 98 were to pass, rent control would be history as soon as it went into effect.

However, the "taken" definition could also be applied in other ways. Because the revisions to the California Constitution would now define ordinances which limit the price that a private property owner can charge to sell, it would render unconstitutional a number of environmental laws which limit the use of property. For instance, the California Coastal Commission would find it difficult to protect, conserve, and restore the coastlines, unless every single property owner agreed to be bound by it.

But forget the controversial things like environmental protection. Basically, Proposition 98 would prevent localities, counties, and the State from placing limitations on properties. Think thats just the AngryBell overreacting? Well, read on in the proposition's language and you will note that it says, when defining private use,

(iii) regulation of ownership, occupancy or use of privately owned real property or associated property rights in order to transfer an economic benefit to one or more private persons at the expense of the property owner.

Now, take private use's definition, and read it with the portion which reads, " Private property may not be taken or damaged for private use." This creates an overly expansive definition of the concept of private use. City zoning ordinances could be invalidated because they promulgate rules which limit how a private person uses his or her real property. As the Planning and Conservation League wrote,

Proposition 98 is full of ambiguous language that is open to wide interpretation by the courts. Almost all restrictions on developments and land use provide economic benefits to someone whether through increased property values or benefits to local retail stores who profit from restrictions on locations of “big box” retail giants.

I can think of a number of unintended consequences of the passage of Proposition 98, you could end up with the adult bookstore right next door to the primary school. Big box retailers would be able to put up whatever monstrosities they wanted, where they wanted, how they wanted, as long as they could buy the land.

Now, I like free markets, and a minimum of government regulation. However, in the modern economic landscape, there needs to be some breaks on what people do with their property. Prop 98 has the potential to eliminate all limitations on the State and localities ability to regulate property owners.

Things in favor of Prop 98: Prevent's Kelo-type takings (i.e. condemning private property and transferring it to another private entity).

Things against Prop 99: Elimination of rent control; elimination of environmental laws; elimination of local zoning ordinances.

From my perspective, as a once and future property owner, this is just a bad law. It goes beyond the needs of the people of the State of California. It will impede the ability of the people of this state to enact reforms which are necessary to protect the environment, zoning, and eliminates rent control. There's more than one reason to vote against this law.

Of course, if you want exempt all private real property from virtually any regulation, making it impossible for the state to have any police powers in that regard, then vote for it. But if you are interested in real eminent domain reform, then Vote No on 98.

Rent Control in General (and Just a General Plea to Vote No on Prop 98)

Lately, there has been some articles out there attacking rent control. And to a certain extent, there is something easy about attacking it. Hell, we are Americans here. Kicked the British Crown off of our backs two centuries ago essentially because we wanted to decrease government regulation. There is also the hint that things like rent control are an invidious form of socialism which devalues private property rights.

The problem with any system is that there is always going to be some people who end up getting off better than the system intended. Over at Eye on Blogs, there was a link to a story that purported to be "A Case Study". The actual title is "Adios Rent Control". Now, the gist of the article is that because one person has somehow ended up with a sweet deal, i.e. a house for approximately $2000, per month, rent control as a hole is flawed and therefore should be abandoned.

However, that being said, eliminating rent control, especially in a city like San Francisco would be serious mistake. Take a look at it by the numbers: a median household income for a family here is $67,809 with an average family being 3.22. This works out to approximately $5650.75 per month. Now, according to SFRentStats, the median rent in San Francisco is $2250 per month. This comes out to roughly 40% of the median family's income. Thats a bit on the high side. Most people will tell you that you should never pay for housing that costs more than a third of your take home.

So, you think, that's a measely seven extra percent. Of course, that takes into account that median includes all those little one bedroom and studio apartments. When you start looking at 2 bedroom units (median: $2700 or 47%; average: $3053), three bedroom units (median: $3400 or 60%; average: $3811), and four bedroom units (median: $4000 or 70%; average: $4621), the number change significantly.

Now, I know what you are thinking. Median is not the same as average. (Median is in fact the middle point. As Hyperstats Online explains, " The median is the middle of a distribution: half the scores are above the median and half are below the median. The median is less sensitive to extreme scores than the mean and this makes it a better measure than the mean for highly skewed distributions. The median income is usually more informative than the mean income, for example. ) What it does show that is for fifty percent of the families in San Francisco, the median rents, not to mention the average, are eating up a considerable portion of their monthly budget.

Another argument that is made, and I suppose is made in the "Adios Rent Control" article, is that people hang on to these rent controlled units forever. This in effect means that the population is supporting an individual or family, instead of the unit. However, in a 2007 study commissioned by the city, more than 50% of all renters had been at their current rental for 5 years of less. Only 10 percent had been there for six years, and less than 10 percent had been in the same rental unit for 20 years of more. What does this all mean? Tenants are not staying in rent controlled units forever. Most are moving within five years.

Everyone "knows" someone like the renter in the Adios article. In my practice, I have come across the occasional spectacular deal. However, in most cases, the numbers just do not bear this out. Do not make a decision based on what is clearly the exception and not the rule.

In other places, anti-rent control advocates have argued that rent control prevents new buildings from being built. Combined with a disincentive to invest in older buildings, because of the alleged mass of below market-rate tenants whose rent would make it unprofitable, and you are left with cities with decaying buildings.

Well, if one were to look at the San Francisco Rent Ordinance, or the Berkeley Rent Ordinance (see Section 13.76.050 I), or the Santa Monica Rent Ordinance (see Section 12060 ), or the Los Angeles rent control ordinance (see the fact sheet here) one would notice something in common. All new construction after a certain, typically in 1979, would be exempt from rent control. So why then, is this claimed dearth of new construction? Rent control would not affect these new rental units.

According to the people quoted in today's S.F. Gate, passing Prop 98 would free the developers from having to deal with rent control and lead to an immediate increase in newly built units on the market. This in turn would depress the rental market as a whole.

Sounds like a nice theory. Except when has that ever happened. The best case study available looks to be Massachusetts. In the 1990s, the voters approved a ballot measure which ended rent control throughout the state. What they found was predictable in a way. Yes, landlord's did invest more to rehabilitate their properties (though I have not seen where there was a surge in new rental construction starts). However, they also found that the rents had doubled. Another interesting fact is that the rents in the non-rent controlled jurisdictions also took a jump.

Suddenly, those numbers I mentioned earlier become a whole lot uglier. The median income remains the same ($ 5670.75 per month) but the median rent goes up significantly and the average might be somewhere up around $ 4500? (Hey if my math is wrong, feel free to chime in).

In the case of Massachusetts, and particularly Cambridge, the distribution of people living in rent controlled units was a little different. Unlike Massachusetts, which found that there was actually a very small number of poor or elderly people being helped by rent control, in San Francisco alone there are 80,000 units being rented where the household income is less than $49,000. Thats a significant number of people who will be forced to either pay higher rent or move out of the urban cores (where most rent controlled jurisdictions are). Now, add in the fact that gas in California is now $4.00 per gallon (more or less). So these people will have to commute longer to find jobs, or to maintain the services they require. With no real public transportation alternative available, they will have to spend more money on housing and on transportation.

Now, for those who have jobs out there, but cannot bear the burden of the increased rent which will happen following rent control's demise, think about where you work. According the 2007 housing study, 80% of the people renting in San Francisco also work in San Francisco. How many of those jobs will increase the pay of their employees to help them meet the new rental increases?

Despite the rosy predication of Howard Jarvis Taxpayers Association and other libertarian/conservative groups, a lot of people will lose out if Prop 99 passes and rent controls in California are abolished. Not only will the controls which dictate how much the annual increase on rental units be abolished, but tenant's protections will be eviscerated completely. No longer will landlords be required to evict only for just cause. Without these protections, the landlord would be able to evict simply because they want to raise the rent.

Who will really benefit from deregulation of the rental markets in California? One group: the landlords. However, landlords choose to be landlords (I myself hope to be one someday). However, the amount of benefits which landlords will accrue if Prop 98 passes is out of proportion to what the rest of the population gives up. They become immune to government regulation, since that could be construed as a taking. They get to be free of rent control, meaning that in urban areas, where space is at a premium to begin with, people will be constructively evicted by their rent increases.

What actually needs to be fixed? Oh, that's right, California's eminent domain law. But the landlord's decided that they would try and get it all in one fell swoop when they came up with Prop 98. Do not let them get away with it.

Please get out there and vote on June 3, 2008. Vote no on Prop 98.

What? (Following Up On My Dancing With The Stars Sickness)

Why does the American public do this? Why are they rewarding Cristian De La Fuente? Yes, he hurt his arm, that does not make the rest of the dance better.

Mario should have been saved.

Ridiculous.

I Hope She Sues

Over at Above the Law, there is an email from an associate who was recently terminated by Paul Hastings.

Now, I have never experienced a miscarriage (mostly because I am male). However, having worked for a smaller, pettier firm, I know what its like to be told that the work is good and then to be blindsided by performance review which bears no relation to reality. The performance review that says the attorney has failed in numerous areas, but there is no empirical evidence to back up the assertions.

Carolyn Elefant, over at thinks this was the wrong response (she also suggest that she blogged about it, even though I can not find that this associate did). I disagree. Now, I am not an employment specialist, but I don't think this is going to hurt her case. Of course, Paul Hastings is not going to rescind their termination of her employment (law firms never admit to errors against their own employees).

I have to say, I wish I could have written this email when I was leaving my former firm. However, unlike this unnamed associate, I did not have enough in the bank to do that.

Mrs. AngryBell has this to say, "I want to be on that jury. They do this to women all the time in big firms. As a man, you can be mediocre and make partner. As a woman, one little misstep and you are gone. Every time Paul Hastings opens their mouth, I would just add another zero to that judgment."

More of My Dancing With The Stars Madness

What were they thinking?

Carrie Anne gives Cristian "Whiny" De La Fuente a 10 and then complains that Kristi Yamaguchi's dance was not very good. Huh? She is such a soft touch when it comes to judging. Give her a sob story and she bumps the contestant 2 points it seems. Try something ambitious and she downgrades. Mrs. AngryBell is still aghast and agog.

And then, where does Ms. Inaba get off saying that Jason Taylor's head was down too much? Every time the camera had the judges table, her head was down looking something up. Perhaps she needs to be watching the dance and not making notes or trying to learn what she should actually be judging them on.

Will people please stop voting for Cristian so we can stop being tortured by him?

On the other hand, Marissa Winokur was a lot of fun tonight. It would be nice to see her make the semi-finals.

And a note to Edyta from Mrs. AngryBell. She says you should just give up on wearing so much and go with some pasties. All I can say... it was nice to see her back in the style of costumes we've come to know and love.

83 Years Ago

Amid all the celebrating of the Battle of Puebla, perhaps we should consider that something else happened today: the Scopes Monkey Trial.

Following Up On Those Poor Innocent Landlords

As I was clicking through links today, I came across another article on Macys (the landlords from San Francisco, not the department store). In it, I noticed that the City and County of San Francisco had filed suit against the Macys.

CCSF v Kip Macy - Upload a doc

Read this doc on Scribd: CCSF v Kip Macy

In case you did not want to read all 96 pages of it, apparently the Macys have allegedly been in violation of the law. According to this filing, the Macys have been using the Ellis Act the evict tenants from their building. However, under the Ellis Act, when the property owner removes the property from the rental market, they cannot re-let any of the units for at least five years. It seems that after evicting most of the tenants, they then entered into agreement (exhibit D, page 44) with another individual, by the name of Ricardo Cartagena. Under this agreement, Cartegena would obtain new tenants for the building and be allowed to become a part owner of the building.

Essentially, they were using Cartagena as a straw man so that they could re-rent the units. After new tenants were brought it, the Macy's are alleged to have then evicted Cartegena from the building.

Then there is the litany of building violations committed by the Macys.

Yes, I understand that a person is innocent until proven guilty. However, if the documents attached as exhibits the City's complaint are real, then Kip and Nicole Macy have some serious explaining to do. And somehow, I don't think it can be explained by saying that this is all a hullabulloo caused by a tenant who is "behaving in a manner approaching vexatious litigation".

And The Spin Begins

If you were watching the news last week, you might have noticed a story on a pair of landlords who were arrested. They are alleged to have been doing some very naughty things to their tenants. This includes: breaking into their apartments and stealing from them, trying to convince a city inspector to red tag their building to get rid of their tenants, and cutting out support beams from underneath the floors of their tenants apartments.

So of course, you know what their defense is. Say it with me, "Its All The Tenant's Fault". According to their attorney, Lisa Dewberry, the landlords are simple, good folk who own a building and have been beset with one problematic tenant who is a "vexatious litigant".

Say the word vexatious litigant to a judge and suddenly they have the image of another Patty Sue in their mind. Add in to the fact that the alleged Patty Sue is, horror, a tenant of their landlords, and suddenly Judge Wong, hearing the bail motion today, said,

he found it "disturbing" that one of the complaining tenants in the case may have previously sued past property owners with similar allegations, as DewBerry alleged today.
"This is a new revelation," Wong said, allowing that he could consider a renewed bail motion at a later date, if defense attorneys can offer written proof of such a claim.

So... if you are a tenant, stand up for your rights, and then have them egregiously violated by your landlord, you have less credibility? Goes back to my theory that tenants have no rights in California.

By the way, the tenant that complained is named Scott Morrow. A review of the San Francisco Superior Court's docket reveals that he has been involved in litigation over the years. By my count, been a party to 3 restraining order proceedings (two as plaintiff and one as defendant), the plaintiff in 3 other unlimited civil jurisdiction cases (all three as a plaintiff) , one probate matter, and 2 unlawful detainer actions (both as defendants at the Clementina Street address).

Now, sounds like a lot of paper flying back and forth. But then take a step and consider that most of it interacts with each other. For example, in 2000, the former owners of the building tried to evict Morrow. He fought and won the case at the summary judgment stage (which is fairly impressive when you consider that judges do not like to grant summary judgment motions, and the system is set up to make it, rightly, hard to get a summary judgement in one's favor). As a result of the attempt to unlawfully evict , Morrow apparently turned around and filed a wrongful eviction suit in 2001. Looking at the docket, it appears that a settlement was reached. There is also a 2003 personal injury case that does not involve the property.

Between 2001 and 2006, it appears that all was quiet on the "vexatious litigant" front. Then, the new owners of the property, Dana Street LLC (the Nevada-based LLC of the Macy's... would it be wrong to suggest that they were trying to avoid paying corporate taxes to the State of California by cynically setting one up out of their vacation home?). Then suddenly litigation started again. Why? Judging by the unlawful detainer filed in the case, the Macy's... I'm sorry ...Dana Street LLC had decided to Ellis Act the building.

Now in San Francisco, when one has a multiple unit building and one wants to maximize their return on the investment, what does a building owner do? Well, the TIC and/or condo convert it. Why not keep renting it out? Well, simple economics will give you that answer. Looking at the prices of real estate, especially in the smaller multi-unit buildings, I would hazard a guess that it is almost impossible to make a profit in the short term, especially if there are long-term tenants in the building. If one is prepared to be a landlord for a few years, the profit will come. However, with two unit buildings going for well over a million dollars (and in some neighborhoods going for two million), it is almost impossible to get tenants who will be able to afford the rent necessary to pay for the inflated prices. But, if you sell it off as individuals, you too can contribute to the price inflation by getting close to million (if not more) for each unit as a TIC (more if you win the condo lottery).

(This then contributes to the prices being high, TIC owners being ticked, and affordable housing for median income earning San Franciscans from being destroyed.)

But, instead of simply going quiet into that goodnight, Morrow fought back. And from the looks of it, had the Unlawful Detainer case fought to a grinding standstill. Mr. Morrow was probably going to lose.

And then, as they say, something happened.

First, on the heels of winning summary adjudication on some issues, the attorneys for Macy's and Dana Street LLC,the firm of Zacks, Utrecht, and Leadbetter LLP, made a motion to be removed as counsel for the plaintiffs. Now this is kind of odd, one would think. Sometimes, attorneys have falling outs with their clients. Sometimes the clients do not pay the bills on time (or ever). But with the filing of the 2007 complaint, it seems more than likely that something else was going on and Zacks and his firm had to remove themselves from the case.

Apparently, not happy with the progress that Zacks' firm was achieving for them legally, they started to play hardball. According to the complaint, this included trying to have the police remove Mr. Morrow as a squatter, shutting off his utilities, and sending out threatening messages to both Mr. Morrow's attorneys and the attorney's for Dana Street LLC. This included one message to attorney Andrew Zacks which, according to the Chronicle story, stated, "One day you are going to come home to the Victorian house ... and find (your three children) missing. Then each day a package will arrive with a piece of them. You are f- with the wrong person." Other emails which went out included a pair firing Morrow's attorney. It would have been harder to disprove, except for the fact that Morrow is apparently an elderly, disabled tenant, who does not have an email account (Yes, Luddites do exist, even in San Francisco).

I am sure that if you compare the date of that email, alleged in the 2007 complaint, you will find it corresponds to the flurry of restraining order hearings which involved Mr. Morrow in 2006.

Unfortunately, as the saying goes, a lie will be around the world before the truth gets its boots on. And in this case, the Macy's seem to have found an attorney who is not in the least bit shy about throwing mud on the victims of this case.

Fortunately, Judge Wong issued a gag order. Let's see how well that will be respected by the defendants.

Important Lesson Learned For My Business Clients

So I have been litigating this case. And we went to mediation today. And we had to settle the damn thing for less than it was worth. The end result was that the other side ended up with a huge windfall.

Now why may you ask did they do that?

Because my client, had signed an agreement. This agreement had been created by my client. Without the assistance of any in-house counsel. Without the assistance of any counsel period. From what I can tell, they got the basics out of some book. Cost of the book and forms (taking Nolo prices as an example) about $40.00. Cost of not having a lawyer consider what went into the contract: thousands of dollars.

Yes, lawyers are expensive. On the other hand, its an investment in your business' future. For a reasonable fee, the lawyer could have reviewed the contract, pointed out the omission, and made sure your interests were protected.

Lets take a hypothetical. Say you run a small business which provides a service. You sign a contract to do that service for a big corporation. The contract is valued at less than $40,000. Now for your small business, that might represent a fairly large contract. On the other hand, for the big corporation, it is just a cost. And if the relationship goes sour, it is conceivable that they could simply try to cancel the contract illegally.

Now, in civil cases, simply because something is illegal (i.e. failing to pay on a contract) does not mean that you are automatically going to get your money. That is because you have to go through the civil process to get your money. And at that point, you will need to get a lawyer invovled.

Why? You mean you think you can represent yourself? Well... it is conceivable that a sole proprietor could represent themself in court. However, with the exception of small claims court, any corporate entity must be represented by a member of the bar. Otherwise, the person representing the corporation, who is not a lawyer, will have to explain to someone why they are practicing law without a license.

So now your little company is invovled in litigation with the big corporation. And they are stonewalling you. Why? Because they can. There is a calculation that has been performed by the big old corporation. Below roughly $50,000, it is cheaper for the corporation to defend a breach than to own up and pay what they promised to. Why is that? Because if there is no attorney's fee provision in the contract, then all they have to worry about is their own costs.

Could they lose at trial? Of course they could. But that is more than a year down the road. In the meantime, your small company will have to retain counsel; be sent out to a mediation session which you will have to split the costs on (and the minimum that I have found for a mediator in the Bay Area is $250/hr with a minimum of 4 hours); then foot the costs for discovery; then the costs at trial.

Diminishing returns. And the large corporation gets away with it because they have the resources to do so.

However, if you slip a little attorney's fees provision into an agreement, it may change this calculus. When faced with having to pay the other side's fees. a party is less inclined to want to run that risk. Why fail to pay $30,000 owed under a contract and stonewall (which will cost them about $15,000 or more for their own attornies, not counting the amount that they will have to pay for your attorneys).


Now, this blog does not create an attorney-client relationship between the author or the readers, and is meant solely for me to express my opinions on things. So my opinion, which I will share forever more with anyone who does retain the services of the Law Offices of the Angry Bell is this: put the damn attorney fee provision in the frakking contract!!!!!!

Protect yourself. The other side surely will not.