Judge Travis A. (“Tag”) Greaves deals with a bunch of “highly contestable” readings of clauses in a conservation easement deed in Malibu Valley Land, LLC, Spectrum Development, Inc., Tax Matters Partner, Docket No. 20442-19, filed 1/19/21.

We go coast to coast, as the Malibus stuck a $32 million easement on some 298 acres of CA. The big deal seems to be over the Malibus’ reservation of ” five ‘equestrian areas’, including ‘pipe corrals and other structures’ within the property without specification as to where those areas were to be located or how large the areas were to be (reserved equestrian rights). Only the exercise of the reserved equestrian rights required advance notice and approval by[501(c)(3) protector], but did not require this notice to be in writing.” Order, at p. 2. (Footnote omitted, but read the notice provision; exactly how do you mail oral notice?).

The usual improvements-in-or-out argy-bargy runs aground on what is the valuation date of  the proportionate share of extinguishment proceeds. The deed doesn’t state, which Judge Tag Greaves finds ambiguous, and so evidence is needed. Hence no summary J for IRS. Judge Tag Greaves proves once again that a lawyer who can’t find an ambiguity in any document needs to find another way to make a living.

Of course the Malibus are arguing Hewitt and Oakbrook, and has other and further arguments to slug poor old Reg. Section 1.170A-14(g)(6)(ii), but Judge Tag Greaves holds off on those. Cain’t hardly wait to see what those are.

IRS claims that the clauses requiring notice, 501(c)(3) to give notice before entering property to make sure conservation is going on, and Malibus to give notice before doing anything to the servient tenement (that’s the property encumbered by the easement, not a crash pad for extras from Fifty Shades of Grey) lets the Malibus get away with too much, but that doesn’t fly for summary J. No problem with notice by the 501(c)(3); they can enter and do their thing the minute they give notice. As for notice to the 501(c)(3), there’s a fact question whether whatever the Malibus could do would adversely impact the conservation.

Finally, the horsing around. Horseback riding is a permitted use, so pipe corrals are OK even if. not located in the deed, where housebuilding, land-swapping, and Swiss cheesing aren’t.

No summary J, but IRS don’t look so good in this horserace.