Attorney-at-Law

“ES IST EIN GANZES MEER”

In Uncategorized on 04/27/2021 at 12:46

I don’t know if Judge James S (“Big Jim”) Halpern is a lover of classical music. He may never have heard Johannes Brahms’ punning description of Johan Sebastian Bach’s output: “Das ist ein Bach? Es ist ein ganzes Meer!”

I guess I should translate, and explain. “That’s a brook? That’s an entire ocean.” The word “Bach” in German means “brook.”

Today Judge Big Jim has a mere order in 901 South Broadway Limited Partnership, Standard Development, LLC, Tax Matters Partner, Docket No. 14179-17, filed 4/27/21. The order recharacterizes an attempted response to a motion conjoined with a motion for summary J (multiple motions conjoined are a Tax Court no-no, unlike every other Court I know of), and denies the 901s partial summary J. Should be a one, or maybe two, pager.

Not when the 901s mount yet another assault on dear old Reg. Section 1.170A-14(g)(6), when perpetuity is in play and “a joy forever” is the name of the tune. Judge Big Jim is good for 31 (count ’em, 31) pages. It’s a ganzes Meer.

This should be a T. C. Memo., Judge.

Once again, the mortgagee might glom the proceeds if the façade easement is judicially extinguished. And before you say “Hey, 1st Cir put paid to that one” and direct Judge Big Jim to Kaufman v. Shulman, 687 F.3d 21 (1st Cir., 2012), the 901s are Golsenized to 9 Cir., and Judge Big Jim is ahead of you.  See order, at pp. 5-6.

Oakbrook gets a heavy duty workout, as do the Palmolives. I’ve blogged both so often that I’ll spare you the cites to my blogposts; I’m sure Google has them all.

The 901s trudge extensively through the deed language and CA law. CA law supposedly states that good faith and fair dealing rule when mortgagees have discretion to glom insurance or condemnation proceeds. But since the mortgage never got into the record, Judge Big Jim can make an adverse inference that mortgagee has no discretion and therefore can just grab. Anyway, when there’s a casualty loss, insurance proceeds might be used to repair and restore; but when eminent domain means total taking, neither the owner nor the 501(c)(3) defender has anything to repair or restore.

I leave it to my colleague Peter Reilly, CPA, to dissect, slice and dice Judge Big Jim’s prose. Judge Big Jim has written IRS’ brief for them to use in the Oakbrook appeal. And every other perpetuity appeal, be it conservation or façade.

Judge Big Jim’s “somber reasoning and copious citation of precedent” notwithstanding, my money is still on so-remote-as-to-be-negligible. No cash-strapped municipality is going to raise taxes or incur bonded indebtedness to acquire a landmarked building, whose façade cannot be altered without starting the whole preservationist brouhaha. Cheaper just to grab a half-empty, newly-built, underwater, glass-and-steel office building, whose owners would be ecstatic to get anything for it, and whose tenants would love to bail on their pre-COVID leases. And that will be so even after the pandemic fades away. Teletubby is the new normal.

Judge Holmes got it right in his Oakbrook dissent.

Edited to add, 4/28/21: Problem for all the appellants is that they didn’t raise so-remote-as-to-be-negligible below, thus leaving their best argument in the locker room.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: