A Horse Story

Once upon a time in the East Bay, a post-depression, pre-war family lived on five acres east of Livermore.

The son and grandmother lived with the gainfully employed mother and father. On the side the family tended almonds, bee hives and chickens.

A benefit for their teenage son was the ability to own a horse which he rode to Coral Hollow with his buddy whose family owned a ranch at the end of Tesla Road.

When the war came, the son enlisted and grandma passed away. The mother and father decided that they could no longer handle the chores that produced the income that made the small ranch worthwhile.

One issue became a problem. What should they do with the horse? They decided to purchase a 20-acre parcel close to town for $450. There the horse lived out his years, but after he died, the 20–acre parcel was retained.

When the mother and father reached retirement age, they spent summers camping in Plumas County where they set up camp from May to September.

As the years went by, they became cramped in a 19 ft trailer. To solve the problem, they sold the 20-acre parcel. In 1963 they received enough money from the sale proceeds to allow them to afford a lake-front summer home at Lake Almanor.

This was something they never dreamed they would be able to do.

Thank you Mr. horse.

Completion of a Permanent Ranch Road Easement is Near

It is very likely that our Alameda County Ranch has been accessible by some type of road since before California became a state. At the time when Mexico owned California and Mexican citizens managed and/or owned the Ranchos, cattle and sheep grazed in the hills near Sunol. After the United States took title to California, the U.S. Congress created legislation that would guide the Mexican Rancho owners towards continuing ownership with a series of hearings by Land Commissions.

The area between our ranch and Sunol was Rancho land that was called Rancho El Valle de San Jose. The United States never owned this land. However there was a road over this land that provided access to our ranch. In 1882, Alameda County created a county road and called it County Road 2012. That would have been the end of the story, but so much controversy occurred over the creation of the county road that it was never completed and was eventually abandoned.

This series of events created a basis for our right of access, but it also created many serious legal challenges. In the end, we were able to negotiate a recordable easement agreement that will forever protect our right to access our property. The process took about nine years with legal costs of over $250,000.

Last week the San Francisco Public Utilities Commission approved our settlement agreement and easement agreement. Over the next month and a half the City and County of San Francisco will review the agreements and we believe that the documents will be signed.

We’ve learned a lot about easements, the legal process, litigation, negotiation and working with bureaucracy. As I gather my thoughts, I’ll come up with a process to publish some information that may be useful to others who end up in similar predicaments.

The First Right of Refusal

About 35 years ago, my brother and I were looking for a ranch. We had little money, but lots of time and energy.

We heard about a property we might be able to buy at an affordable price. It was listed for sale with a real estate broker with whom I was acquainted. He explained the situation like this.

Two brothers, Frankie and Al, had owned a ranch for many years. They had purchased it primarily as a hunting club. One of the brothers ran the business affairs and the other had made a hobby of making physical improvements like dams and roads. Over time they purchased additional property and the ranch grew to over 1,000 acres. In addition, it was adjacent to two land-locked sections of BLM ground – giving them almost 2,000 acres on which to hunt. The had it almost to themselves.

They had also built a very nice home on the property and they invited family members to hunt. Some of their guests actually paid a fee which allowed them unaccompanied access to the ranch.

Over the years, the brothers agreed that in their old age, they would sell the ranch if they needed money for retirement. Little did they know that Albert would drop dead from a heart attack at about the age of 50. Al was married and his portion of the ranch went to his wife. Having no other means to support herself, Albert’s wife asked Frank to purchase her interest in the property, or (at least) allow her to sell her half.

Although Frank did not agree to purchase her half, he did agree to letting her subdivide and sell subject to Frank having a first right of refusal to purchase.

Their agreement included a division of half the ranch into five 120 acre parcels. The parcels were put on the market for about $100,000 each with seller financing. As offers came in, Frank had the right to either match the offer or let Albert’s wife sell to the buyer.

The price was acceptable, but nobody wanted to be the guinea pig for Frank. It became clear to us that the agent and Albert’s wife were frustrated by their inability to obtain a viable offer.

My agreement with the seller’s agent was that we would split a 10% commission, but I couldn’t see making an offer just to watch Frank take the opportunity away from us. The $100,000 price was a little too rich for Rob and I to handle on our own, so we found a partner who would become  co-owner if the deal came together.

Then I got an idea that made a lot of sense. If the seller wanted to get the property sold, she might need to pay a higher commission. If she were willing to pay 20% and the selling agent was willing to accept 5%, we could pay me 15% even if Frank purchased the property. That would fund a pay out of 5% to me and each of my partners. Once I proposed this idea, my partners were a go. If Frank acted on the first right, we would each be compensated for our efforts.

The seller’s agent and the seller were fine with idea. At this point we made our $100,000 offer and waited to hear from Frank. He acted upon the first right.

There were  four remaining parcels available and we still didn’t know exactly what to expect from Frank, so we made an offer that would repeat itself on each of the remaining parcels with a commission being paid to me (and indirectly my partners) each time Frank acted.

Frank not only exercised his first right, but he became so annoyed that he outright purchased the remainder of the ranch. I received a commission of 15% on all five parcels. My partners and I were disappointed that we couldn’t own the property, but we were compensated for our disappointment.

Some significant information can be gleaned from this story. First of all, it is clear that a first right of refusal has a negative impact on one’s ability to sell property. And, it is clear that the first right decreases the value of the property – in this case about ten percent. In my opinion the actual decrease in value was even higher than that.

Mediation as an Alternative Dispute Resolution

We’re going to mediation this week. The parties will be the defendant, the City and County of San Francisco (CCSF) and us, the plaintiff.

r2e t4s 1905 for export to adobe Click on this link to see a map of the ranch and surrounding area.

In a perfect world, all disputes would end with mediation. In this case we’ll tell our side of the story and why our legal position is correct and the defendants will tell their side of the story and why it is legally correct. The mediator will assist us in understanding our positions and after great reflection and a little compromise from both sides, we’ll come to an agreement.

That’s how the mediation worked in our last suit, a suit for partition. In that case we had seven parties. Three of the co-owners sold their interest and four others were deeded parcels of land.

In this mediation there will be three parties, but the CCSF will only be a party to the mediation, not the court case. They were invited because they own much of the land over which we access our ranch. And, they want to purchase the parcel over which the right-of-way is disputed. CCSF always wants to minimize travel over their property and I don’t blame them for that. However, they are in a position to resolve all our access issues if they choose to.

At the end of the day of mediation we will have a pretty good idea of whether the case will be resolved or go on to court.  We have submitted our mediation brief, which tells our side of the story and the defendants have submitted their response which I read this weekend. Of course we take issues with many of their statements and legal interpretation.

The CCSF will probably have their brief done on Monday or Tuesday this week. They are the elephant in the room.

We believe we have very good legal representation. One of the biggest costs of this undertaking is the cost of educating attorneys. There is a lot of information for them to understand. At this point our attorneys are still learning about the ranch, the multiple access routes, topography and history. By the end of mediation they should be fully immersed in these topics.

Locked Out – The Battle for LaCosta Ridge

Accessing property via a road that has no deeded rights is common. In the hills around Livermore, very few of the landowners have right-of-ways that have been validated by an official grant of easement.

On the other hand, very few of these access roads are disputed. The land seldom changes hands, so the owners are known to other landowners along the route. Good neighbor policy is to leave reasonable people alone and not create a Hatfield’s and McCoy situation.

In our case, most of the property along our access road is owned by the City and County of San Francisco. This is a situation with both good and bad implications.

We do however, have a portion of our road that passes through a privately owned piece and this has become a problem. Recently the owners of this small parcel have decided that we do not have the right to pass and locked the gate. Doing what we could to make it clear that we believe the route is our legal access, we enforced our rights by cutting the chain (we used our giant master key, the bolt cutter) and placed our own lock on the gate.  The property owner promptly removed our lock, and thus the battle of LaCosta Ridge. (Juan LaCosta was one of the early landowners in the area.)

When seeking to have the owners sign a grant deed that could be recorded to validate our rights, we were told they could not do that as they were planning to sell their piece and the purchasers were not interested in buying if a right-of-way existed. Thus we sued to establish our right.

For the early years of my life, I dreaded law suits and therefore avoided legal action at almost all cost. Now, after having courtroom experience, I’ve concluded that when you believe you’re right, court is a good place and having concluded that we’re right, it looks like that’s where we’re headed.

This battle of LaCosta Ridge has motivated me to learn about the history of the road and it’s very interesting. The earliest inhabitants were Ohlone Indians. They gave way to Spanish Missionaries in the late eighteenth century. The area down stream of our ranch became known as Rancho El Valle de San Jose and a Spanish Mexican land grant turned most of the bottom land over to the Bernal family – soon to become also known as the Sunols (by marriage). Thus leading to the name for the railroad town at the head of Niles Canyon – Sunol.

When California became a state, there was some debate about the validity of their Land Grant ownership, so a land commission was formed to validate the Spanish Mexican land grants and validate they did. Shortly thereafter the upstream area, now best described by the Public Property Survey System, was surveyed with the intent by the U.S. Government of selling. The Township in which our ranch is located is Tier 4 South, Range 2 East, Mount Diablo Base and Meridian. And, the parcels within this township were created by surveys that took place about the time of the Civil War.

Not long after the Civil War, the properties of this township were sold and the land transfers took place by U.S. Land Patents. In most cases the Homestead Act.

During this time, the homesteaders utilized the land by grazing cattle, sheep and horses.

Learning about the history of our ranch has been enjoyable, but it also makes us realize that there were many before us. The first recorded documents related to road access to the area occurred in 1882 when a group of about twenty people petitioned the County of Alameda to make the access road a County Road, which they did. But the County Road was abandoned in 1922.

One thing we’ve learned while preparing for this law suit is that right-of-way law is very complex. Fortunately for us, it looks like the story of our rights is simple.

Governor Signs SB1058 – Assures Tag and Stamp Money will be used for Conservation

For several years, the COHA has worked with The Mule Deer Foundation and other conservation groups to pass legislation that will assure that money from tag and stamp sales will be used for conservation.

In the past, tag and stamp money has been funneled away from intended uses creating great consternation for hunters. In an effort to correct this problem, COHA  (supported by members of many conservation organizations) has pursued a legislative solution.

After passing through the state legislature for three straight years, Governor Schwarzenegger finally signed SB1058 into law this week after twice vetoing it.

COHA staff, especially Mark Hennelly and Jason Rhine, displayed great patience and adaptability while working with conservationists and legislators over a period of years to guide SB1058 to fruition. This bill creates a building block for future conservation legislation.

Congratulations to Bill, Mark, Jason, Christine and the entire COHA board of directors.

I’m sure we’ll all be back soon to build on this success.

Title Insurance

How many times have I purchased title insurance over the years? Can’t even imagine.

It’s one of those expenses that you assume you must do, and you must if you have a lender, or you won’t get a loan. However, if you’re purchasing ranch property and you pay cash, you may think about taking a pass on title insurance, and I’ve done that.

However, I’ve learned something about title insurance this past year and now I’m a believer.

When you have a title guarantee provided by title insurance, you are not only protected to the dollar amount you paid for, but you also are entitled to the cost of legal defense of your claim. In other words, the title company must pay to establish whether or not the title problem you encounter really exists. The cost of resolving a legal issue can be the most expensive part of solving a title problem and the coverage by the title company, with regard to the legal defense, is not limited.

There are several ramifications of this, but the most important is that because you are backed by big money, you are on a level playing field with almost any adversary and legal issues are sometimes resolved on the basis of the law, but more often are resolved by the size of the bankroll of those in the dispute. With the title company on your side, you are much more likely to come out with a win or at least an acceptable compromise.

It’s almost as if the fact that you are insured makes it true. How valuable is that?