Transcript Integra Realty Resources, Inc.

Litigation and the
Counselor of Real
Estate
The Courts are Filled with Real
Estate Related Litigation Cases
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Eminent Domain
Assessment
Challenges
Bankruptcy
Partnership
Disputes
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Equitable
Distribution
Civil Actions
Chancery Actions
Contract Liability
Essentially All Cases Require
the Services of ?
An Expert !
What is an Expert ?
An expert witness or professional witness is a witness
who by virtue of education, training, skill, or
experience, is believed to have knowledge in a particular
subject beyond that of the average person, sufficient that
others may officially (and legally) rely upon the witness's
specialized (scientific, technical or other) opinion about an
evidence or fact issue within the scope of their expertise,
referred to as the expert opinion, as assistance to the
fact finder. Expert witnesses may also deliver expert
evidence about facts from the domain of their expertise.
At times, their testimony may be rebutted with a learned
treatise, sometimes to the detriment of their reputations
Real Estate Cases Often Require
Various Experts
Real Estate Appraisers
Real Estate Counselors
Business Valuation Experts
Specialist (Engineers, Planners,
Architects)
Scientist (Environmental,
Contamination)
Economist (Macro & Micro)
Who is Who
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The Judge: The judge is the “gatekeeper” of
evidence and opinions admitted in court.
The Lawyers: Each lawyer is an advocate for
“THEIR” client.
Appraiser: An independent expert who at best is
an advocate for the property or property rights.
Councilor: May serve as an expert or by
agreement serve as an advocates aide to the
Lawyer.
The Cast #1
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The Judge:
 The fact finder and gatekeeper of the
admission of evidence and testimony.
 Bound by State and Federal case law and
Court rules.
 Most judges hate to hear real estate testimony.
 Most Judges live by the rule that value
testimony is + or – 10% plus some advocacy.
The Cast #2
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The Lawyers:
 Always working as their clients advocate.
 Almost always on a contingency fee.
 Rarely understand complex real estate issues.
 Almost always want to please the Judge (no
need for testimony)
 Always want the best possible expert and
counsel. (Often at the best price $.)
The Cast #3
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The Expert Witness:
 Always must be independent, with no contingency
or performance fee.
 Must not accept assignment based on a
predetermined conclusion or result.
 Must present analysis based on State Court rules and
industry accepted standards.
 Testimony may be subject to Federal Rule #702;
1)based upon sufficient facts and data; 2) the
product of reliable principals and methods; 3) must
reliably apply methods and facts. (see also Duabert)
What Role Does the Councilor Play
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All our litigation files begin as counseling
assignments.
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In cases where the client may desire valuation
testimony we ALWAYS propose a two phase
engagement.
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We never accept a litigation assignment on a
contingency or performance basis, even as
consultants or advocate aide.
Phase #1
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Billed hourly this is review and identification of
the property, issues, interest, purpose and scope
of the assignment.
We focus on case issues and conflicting
positions of the parties.
 We define the interest to be evaluated and
focus on Real Estate issues only.
 We attempt to compile facts, data, and
early reconnaissance of issues and look for
areas of legitimate dispute. (Devils Advocate)
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Phase #1 (con’d)
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We identify all relevant data and facts that will
impact reasonable conclusions
We identify areas where other special expertise
may be helpful and relevant to the matter.
We provide a list of documentation and facts
that may be needed to properly support the
issues.
We provide and oral report to the attorney with
our recommendations on the cost and
development of Phase #2.
What if an Appraisal is Required
Our Phase #1 analysis will confirm if we have
competence for the assignment or should
engage a different appraiser.
If we do the appraisal, the proposal letter has
already spelled out the independence and terms
of our engagement.
We have framed the issues and can focus on the
scope and purpose of the assignment to
evaluate the Real Estate issues.
Our Equitable Distribution Practice
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For the past 30 years we have been involved in
numerous matrimonial matters involving high
net worth individuals with huge personal real
estate holdings.
On many occasions we have been successful in
helping individuals resolve equitable distribution
at the phase #1 level.
Interest Evaluated
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This work often has more than just market value
implications.
 Often large scale investors have partnership
interest in multiple entities.
 Many times portions of the real estate holding are
interest (fee, leasehold, leased fee) in real property
that is part of an operating business.
 Often the real estate is part of an ongoing or in
process development plan, soon to mature into a
different asset.
Settlement is Almost Always Better
(Judges hate Real Estate Testimony)
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Family Court Judges in NJ always order
mediation.
This is always a good start toward a settlement.
 Our Phase #1 work goes a long way to identify the
easy to settle properties.
 We work closely with the BV appraisers as they often
need to understand the relationship between market
rent and market value.
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Focus on Facts and Issues
(Never Advocate)
Mediation offers the opportunity to compile
comprehensive discovery so all the issues are on the
table.
 NJ Family Courts do not like minority interest
discounts, thus partnerships often pose liquidity
issues.
 Fair and Equitable settlements are better for
everyone, often the most trying time in their life.
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What I Said in 1973 After My First
Matrimonial Case.
“ When you think you can not afford a divorce,
YOU CAN AFFORD A DIVORCE.
By the time you believe you can afford a divorce,
YOU CAN NOT AFFORD A DIVORCE!”