October 2010 Archives

Sonoma County forecast: foreclosures storms followed by litigation clouds

October 29, 2010,

The Press Democrat reports that the Bay Area and Sonoma County are looking at a new wave of foreclosures once banks wrap up their reviews of their paperwork procedures.

As a result of revelations that foreclosure paperwork was massively flawed, the Sonoma real estate market is girding for the next phase in the crisis - litigation.

Sean O'Toole, CEO of ForeclosureRadar, a foreclosure tracking firm based in the East Bay, said he expects "lots of solicitations for homeowners from law firms" offering to go to court to try to get their homes back.

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Santa Rosa, CA candidate twice filed for bankruptcy

October 20, 2010,

I'm the first one to tell potential clients that filing bankruptcy is not a moral failing. Perhaps I should ask people if they're intending to run for office, though. The Press Democrat has been giving city council candidate Juan Hernandez a hard time over his two bankruptcy filings.

Hernandez and his wife filed for Chapter 13 bankruptcy protection last years, listing $156,000 in liabilities and just $59,000 in assets. $67,000 of those liabilities are unpaid taxes, which aren't dischargable and being repaid through a Chapter 13 plan.

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Marin County bankruptcy: Why you should not think about hiding assets

October 19, 2010,

The Las Vegas Sun reports on the case of a Tiburon man who filed bankruptcy and tried to hide assets from the IRS and other creditors.

Really bad idea.

James Dennis Territo, 59, of Tiburon, Calif., was indicted Sept. 28 in Las Vegas on charges of bankruptcy fraud and concealment of assets, both felony offenses. If convicted, he faces up to five years in prison and a $250,000 fine on each count.

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Let's Go, Giants!

October 19, 2010,

California Landlords Unlikely to Permit Prop. 19 Pot Gardens

October 10, 2010,

Proposition 19 "legalizes" marijuana for personal use, right? So tenants should be free to grow their personal pot gardens and their landlords should have no problems with that. Well, not exactly. First, let's take a look at what Prop 19 legalizes and what it doesn't.

On the question of personal use, if the voters pass the initiative, it will be legal for individuals to possess up to one ounce for personal consumption, smoke in private spaces and grow a pot garden for personal consumption up to 25 square feet.

So does that mean that tenants can start clearing weeds for their "25 for 420" as soon as they move in to a rental? Definitely not. The proposition clearly states: "Cultivation on leased or rented property may be subject to approval from the owner of the property." (Proposed Health & Safety Code section 11300 (a)(ii).)

In other words, tenants need their landlords' approval to do what they would be able to do freely if they owned the property themselves. This raises some interesting issues. Indeed it puts landlords in an absurd Catch-22.

Marijuana is still a controlled substance under federal law. Regardless of what the state law says, growing ganja is a crime. And homeowners who know their property is being used for illegal drug cultivation are subject to having their property seized by the federal government under civil forfeitures statutes. The government doesn't even have to file a charge or obtain a criminal conviction. They just have to show probable cause of the property's (home's) involvement in the "crime."

The only defense to property seizure is that the homeowner had no knowledge of the use.

So, as a landlord, are you going to put in writing - say, a legally binding lease agreement - that your tenant can grow marijuana on your property??? Even an oral agreement would defeat the ignorance defense. Given the risks, any landlord would be certifiable to put consent in writing and well-advised not to give oral consent, either.

Now, you say, those federal seizure laws are aimed at large-scale grow houses, not 5x5 plots of pot. And, you might add, the Obama Administration has vowed to respect California's medical marijuana laws, so isn't there little risk that the feds are going to come after individual homeowners for a tenants personal use garden, legal under state law?

Actually the Dept. of Justice directive under Attorney General Eric Holder says that prosecuting medical marijuana is not a priority but that prosecuting non-medical use remains a priority. And, anyway, that policy might change when President Sarah Palin appoints Christine O'Donnell as the next attorney general.

Large corporate landlords could be looking at thousands of plants being grown on their complexes. Suddenly, the benign-sounding phrase "consent of the property owner" becomes untenable.

Tenants, I don't think you're going to get your landlords to consent to your personal pot gardens under the new state law. That means tenants will grow gardens without consent, just as they do now. I doubt that police forces will be interested in prosecuting growers within the 5x5 limit regardless of whether it's legal or not, but the issue for tenants will become this: When the landlord finds out, can she evict you for illegal use of the premises? Can a lease forbid you from growing your personal stash?

Under current law, it's pretty clear that growing marijuana on the landlord's property would subject a tenant to eviction on the grounds that they are creating a nuisance. Would the fact that the growth is approved by state law forbid eviction in a state court?

Nope. I think you'd have to have a clause in a lease - or a least a signed letter from the landlord -- that permitted the personal-use garden in order to combat the nuisance eviction.

Under the terms of Prop. 19, consent of the landlord can be required. Thus, it seems clear that leases can specifically refuse to allow pot gardens.

Finally, it is OK that the law treats tenants and homeowners differently? Since a "leasehold" gives the tenant exclusive control of the premises and since the personal use garden is a legal activity under state law, why should landlords be given the right to infringe on that right? Since a lease is a contract the parties can waive many legal rights - the right to smoke, for instance. Only a few rights - the right to habitable conditions, say - cannot be contracted away.

The right to pot is not a particularly compelling one, indeed under federal law, it's not right at all, so tenants will find themselves signing away that right, unless they can find a landlord who agrees to let them keep their pot rights.

Good luck with that.

Did Sonoma courts pick commissioner Ornell based on age?

October 1, 2010,

Former Sonoma County Commissioner Ted Dejung, 71, has settled a long-standing age discrimination case with the Sonoma County courts, The Press Democrat reports.

Terms were not announced but speculation had it at $250,000 in damages and being a top pick for on-call commissioners.

In the lawsuit, filed in 2006, Dejung claimed he was told by then-presiding Judge Allan Hardcastle that selection committee members "want somebody younger, maybe in their 40s," when he asked about moving from part-time commissioner to a full-time slot.

Shortly after the conversation, Dejung said the executive board appointed Larry Ornell, then age 42. Dejung was 64 at the time.

In its 24-page decision, the appellate panel noted that the top three candidates after the interview process were near in age to Dejung at 62, 56 and 50 years old.

"Nevertheless, rather than hiring Dejung or any of these three candidates, the Superior Court chose the (42)-year-old Ornell, the candidate apparently ranked fourth by the interview panel," the opinion reads.

My, my...

Sonoma County tenant victory of sorts

October 1, 2010,

So, this was a victory that only came about because the tenant was able to find another place to rent. It's a weird sort of case, but it comes down to this: The landlord took a default judgment after the tenant tried to file an answer but was turned away - erroneously - by the clerk. Eviction was scheduled for Tuesday.

We asked opposing counsel to stipulate to a set-aside of the default, but they declined. So we applied for a stay of execution and filed a motion to set aside the default -- and won. Now that the case is stayed, the tenant can move to her new rental and opposing counsel is perfectly willing to stip to the set aside and dismiss the case.

Smooth landing, no default judgment ... Added benefit, the tenant's 19-year-old daughter was on the lease as well, so we are avoiding her starting off her adulthood with an eviction judgment on her record.