Excessive Social Distancing: 15-yard penalty and Loss of Down

A restaurant chain wrote this text in a form letter, sending it to dozens of landlords across the land last week:
“As you know, the COVID-19 crisis is having a devastating impact on the restaurant industry on an unprecedented level. The National Restaurant Association projects an economic impact of at least $225 billion with five to seven million jobs lost. Bagel Brands is no exception to this impact, and it is therefore now incumbent upon us to balance this impact on all of our stakeholders as best as we possibly can. At Bagel Brands we are focused on giving the highest priority to protecting the health and well-being of our customers and team members as we also ensure the long-term viability of our company.

I am writing to update you on steps we are taking with respect to our landlords. We understand that we are in this together and while these are necessary steps, the consequences to both top line and bottom line are significant to our businesses. Our objective is to emerge on the other side of this COVID-19 business crisis in a position to regain our footing, re-staff our operations, and once again grow our brand.

To mitigate some of the impact of this COVID-19 crisis, Bagel Brands will implement revised rental payments beginning April 1st.

Revised rental payments will provide relief to protect Bagel Brands’ continued operations while also supporting some payments to you. The amount we will send you reflects our estimates of what we can pay given the current and anticipated business environment.”

The letter then went on to say that the rent would be reset every month, depending on how BB saw things unfolding, and that BB wasn’t waiving any of its lease defenses, including (naturally) force majeure.

Not only does this violate Widener’s precepts of (a) being kind to one another in these difficult times, and (b) being communicative, this posture only makes sense in certain contexts – not in every set of leasing circumstances, in other words. And the knuckle-headed reliance on the French expression for “uncontrollable conditions” continues to baffle me. So, a bit of history from, golly, back to the preceding decade.

A fellow named Trump had development companies and joint ventures called loosely the Trump Organization (“TO”). TO wanted to build its biggest mixed-use hotel project to date in the business center of Chicago. To do so, TO had taken out a $640 million loan — including $40 million Donald J. Trump personally guaranteed — to finance the Trump Tower on the site of the old Chicago Sun-Times building. When $40 million was due in 2008, TO didn’t pay the installment, after the bank advised TO it would not amend the note to provide an extension for the installment due date. Deutsche then sued on Nov. 28, 2008.

TO, in a counter lawsuit filed in New York City, asserted “force majeure.” TO claimed that the 2008 economic crisis was a “once-in-a-century credit tsunami,” an act of God equivalent to an earthquake. Since the Great Recession couldn’t have been anticipated, and it wasn’t the TO’s fault, TO and the guarantor weren’t obliged to pay Deutsche Bank anything.

The TO complaint alleged:
“This action by Deutsche Bank [refusing to grant an extension to pay the impending installment] is a breach of Deutsche Bank’s obligations to Borrower and the other lenders. Deutsche Bank has created a disjointed and dysfunctional group of lenders and Deutsche Bank’s actions will cause tremendous damage to Plaintiffs, the Trump brand, the Project, and those lenders who are trying to act reasonably and in good faith.”

Claims and counterclaims in the litigation settled in 2010, with Deutsche Bank’s lender group giving a five-year extension on TO’s previously defaulted loan.

Does that mean that the “force majeure” is a viable defense? Settlements occur for myriad reasons, and just some of them are based on merits of legal claims. If you believe that “force majeure” automatically excuses your performance of any of your legal obligations in these days of isolation and stay at home orders, you’re free to proceed to defy your landlord and other creditors. And you’re foolish. At a minimum, you’re not Donald J. Trump.

To recap: Covid-19 isn’t an act of God. It was caused entirely by homo sapiens. If your store can still be operated, you’ve not got a leg to stand on, IF your lease says the tenant must either be denied all access to the leased premises or otherwise be put out of business altogether. And lost profits is not synonymous with “loss of all revenues.” If your store has a drive through feature or pickup window, you don’t have a force majeure defense, in all likelihood.

Get a lawyer to read your lease’s force majeure clause, if it contains one. You need to understand what the language says before acting. Not what you think it means, or what you hope it means. If you guess wrong, you could have a judgment taken against you for the rent due for the entire remaining lease term. It’s too early in this crisis to be filing for bankruptcy, folks.

Let’s End Homelessness, Part 2: Where’s the New Housing Going?

Three fundamental policy choices underlie municipal decisions on reducing homelessness: Location, permanence and prioritizing the quality of housing stock. The first choice deals with the simple calculation of “where will you put the homeless housing inventory?” It would be convenient to leadership if cities could simply privateer numerous under-utilized motels, hotels, and other residential and quasi-residential sites and move homeless persons into them. Since that inventory likely isn’t sufficient and cities aren’t privateers, let’s dispose of that fantasy and move on. There’s not going to be a convenient concentration of sites, so policy leaders are going to have to disperse the inventory in almost all communities. Most cities won’t be lucky enough, in other words, to have the federal government abandon a military base of hundreds of acres in size covered by dozens of convertible residential and other buildings. Absent the “campus opportunity,” the homeless will have to be dispersed throughout a city’s boundaries.

Everyone in an enlightened city will have to share the burden of addressing homelessness. It’s a city wide problem from which no one can “opt out,” despite zoning ordinances deliberately calculated to keep traditional single family neighborhoods pristine and grand. Happily, there’s an opportunity to disperse the homeless population, through the mission work of church, temple and mosque campuses. A significant majority of churches, etc., have immense parking lots; and they are scattered around the city. A significant number of churches and temples are over-parked, whether their parking burdens were sensibly calculated or not from the outset. Finding a half acre or more of land within parking fields on a church campus that could accommodate eight to 10 or housing units would not be difficult. Sabbath services that fill the parking areas of most churches and temples constitute such a low percentage of gatherings held on these campuses that building on some parts of these parking areas would not be missed.

I cannot address most temples or mosques, but I’m confident that many churches are decreasing in weekly attendance and participation. This explains why cell towers are becoming features of church campuses in communities where coverage is spotty. There’s nothing aesthetically pleasing about cell towers compelling church leaderships to seek partnerships with wireless communications companies. Seems to me that churches will be induced to support some degree of homeless housing through government subsidies for providing housing opportunities in transitional housing.

Yep, this policy choice is going to create havoc in neighborhoods claiming they’re desperately fighting to preserve their character and quality. Some such neighborhoods cannot be induced to consider hosting affordable housing, much less this “disruptive” residential use. That’s an issue for leadership to manage through appropriate backbone and messaging. It’s simply unlikely that homelessness will be productively curbed without neighborhoods’ acceptance of their collective burdens to participate in the solution. And that means allowing housing for portions of the homeless population in your neighborhood. It’s not unreasonable to establish a few ground rules for homeless persons entering into a new neighborhood, however. Local government should be prepared to promote regulations that are humane and protect some measure of neighborhood serenity.

Of course, church, temple and mosque campuses are suitable locations for transitional homeless housing for several other reasons. Many of them have industrial-scale (or smaller) kitchens suitable for central processing of prepared foods for homeless on-campus residents.

God bargained for a mutual covenant: I will be your God, in return for which you will be my people. Grace ain’t cheap, D. Bonhoeffer wrote. Many churches and temples will be ready to explore doing their parts. Maybe mosques, too. Established neighborhoods have to take on a few of the hardships, too. At least, if we’re all serious about ending homelessness.


Knucklehead season is underway. A mattress company sent a “firm” letter to my landlord client announcing it was shorting its monthly rent installments for a while, starting next month. No description of by how much Tenant is discounting rent, or for how long – it’s just announcing “this is happening.”

The problem is that a second virus, called misinformation, sweeps the American commercial leasing landscape. This virus has settled on one lease provision known as the force majeure clause. It begins with the false believe that the clause essentially means, “if you’re in a jam, you don’t have to pay rent.” The text of the force majeure clause in a lease may vary radically from one deal to the next. If you’re a tenant, you may think you understand the text of the clause, but you may badly be mistaken. Here’s the clause, extracted from the lease I’m commenting on:

Inability to Perform and Force Majeure: EXCEPT as to the Target Date AND THE TIMELY PAYMENT OF MONETARY OBLIGATIONS HEREUNDER, Landlord and/or Tenant shall be excused for the period of any delay and neither party shall be deemed in default with respect to the performance of any of the terms, covenants, and conditions of this Lease to be performed by it if any failure of its performance shall be due to any strike, lockout, civil commotion, war, warlike operation, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, inability to obtain any material or service, Act of God, weather, or any other cause whatsoever that is not (i) failure of financial markets, or (ii) lack of availability of funds due to cash flow problems caused by the party’s mismanagement or over encumbrance of its resources (including failure of either party to supply necessary data or instructions) beyond the reasonable control of such party, and the time for performance by such party shall be extended by the period of delay resulting from or due to any of said causes.

See the problem? Mattress Guys agreed that force majeure won’t excuse the ongoing payment of its rent obligations – in writing!! In fact, there’s about 3 other instances of bad language for the Tenant in this paragraph. But, don’t let that keep you from taking an aggressive position! There’s nothing to be gained by talking to your Landlord and requesting some relief, when you can punch your Landlord in the nose in a letter – right? Well, no, in case my sarcasm isn’t obvious; there is much to be gained by communicating with your leasing counter-party.

By the way, a plague of locusts may be an Act of God, but poor human dietary and hygiene habits, combined with failure of government and the healthcare infrastructure, resulting in a pandemic does not an Act of God make. There’s no “out” in the quoted lease’s text for a pandemic. Not, at least, until the applicable local government declares that shopping at retail stores other than food markets is not permitted under any circumstances. Were it not for the capitalized words in the clause offered, the shutdown of shopping might qualify as a force majeure event under “governmental regulations or controls” beyond Tenant’s reasonable control. That hasn’t happened in Arizona and a majority of states, although there’s a trend line apparent.

More consequentially, by the way, Mattress Guys just repudiated the primary term of the lease, the rent covenant. The New York Court of Appeals once succinctly stated: “An anticipatory breach of contract by a promisor [a promising party] is a repudiation of a contractual duty before the time fixed in the contract for its performance has arrived.” I’m not paying your rent next month, expressed in writing, is an anticipatory breach.

But words of caution: First, if the Landlord regards Tenant’s apparent repudiation as an anticipatory repudiation, terminates Landlord’s own performance (such as by locking out the Tenant before the next installment of rent is due) and sues for the breach, the Landlord is in jeopardy of being found to have breached, if the court determines the apparent repudiation was not sufficiently unequivocal to constitute an anticipatory repudiation justifying Landlord’s non-performance. (A Landlord with a squishier lease than the quoted one above may have to seek clarification before going nuclear on the Tenant, no matter how incensed the Landlord becomes upon receiving a knucklehead communication.)

Second, A party who has repudiated its obligations under the contract may nevertheless retract its repudiation until the other party has terminated the contract or materially changed its position in reliance on the repudiation. Better the parties should keep talking and trying to accommodate one another, to avoid these quagmires.

Good Taste, Nutrition and Competitive Balance in the Food Industry, 2020 Edition

Local regulation of land development and operation guards against reckless and self-absorbed conduct by landowners. Zoning codes came along in the early 20th Century to diminish incidences of factories locating near residential areas for the convenience of their owners needing readily available labor, before use of autos was widespread. The result was contamination of rented residential quarters with fugitive dust and airborne poisons, as well as contamination of drinking water. People began owning residences and land in cities used for other non-factory purposes, and the regulatory bureaucracy grew. As zoning regulation became more commonplace, the pendulum swung sometimes toward pervasive regulation of ever finer-grained details of city neighborhoods. In moments like the Covid-19 pestilence, we need to recall that, temporarily at least, aesthetics is a less compelling virtue than economic survival. Here’s a small suggestion that could have a ripple effect of some magnitude in the current circumstances. First of all, let me assure you I have no political persuasion in the matter, since I’ve represented single unit (mom and pop) restaurant operators, corporations having multiple units in the Phoenix Valley, and fast-food franchisees alike. Among them, they employ more than three thousand persons. Well, until lately they did.

The Phoenix City Council, and other communities around the Valley, have halted the primary functions of full-service restaurants and bars. It seems to me that banning in-property dining practices will serve to divide prepared-food providers into two groups. The fast food (and quick beverage-serving) franchisees will suffer but will survive because social distancing is in their business model. That’s because, I understand anecdotally, virtually all of them sell most of their food and drinks through their drive-thru lanes already. (Except those like Dominoes that are essentially only in-and-out pickup/pay, of course.) The small, less-well marketed restaurants are getting clobbered, even those with locally stronger brands. Ironically, this means the “winners” in this divide will be the ones selling less healthy food and soft drinks as standard fare. I’m not judging anyone’s diet in observing that this reality doesn’t advance either short- or long-term public health. (And, of course, I am judging someone’s diet! My wife attended cooking school in Paris in the 1970s. Yeah, I’m a food snob, one acquiring his paunch honestly and contentedly.)

If a City Council decides to order the closure of restaurants for indoors sales, I propose that City suspend all enforcement of its sign code addressing temporary banners. This would permit non-franchised restaurants to advertise to “folks on the street” that they remain open for takeout order business. The city could dictate the size, shape and attachment of temporary signs so long as the regulation didn’t make it prohibitively expensive for restaurants to comply. In fact, you even could devise standard “copy” or even a symbol indicating that a restaurant is open for business for takeout, like a “T” (for takeout) in a particular, uniform hue. Since a lot of restaurants don’t have a big visibility window (except free-standing buildings occupying corners – usually, franchisees of big chains) along major streets, having a uniform, readily-recognizable symbol facing the nearest street would aid restaurants operating with takeout and people searching for those dining opportunities.

You could argue, “can’t they just fix their website to indicate they’re still open?” Sure, assuming optimistically that (a) the store has a non-static webpage, (b) the cost of modifying their web pages is affordable (what about their ongoing ability to pay for hosting their Websites?), and (c) many former “seated” customers routinely review small-restaurant webpages in the hope of seeing good news on deliveries and take-out, instead of reflexively cruising over to Brand X purveyor of fine foods (oops, if I just violated AJ’s trademark, may Bashas’ forgive me!) with drive-through lanes, menu boards and two windows to collect your payment and hand you your fries.

I’d sure like to see some small restaurants’ employees keep their jobs during a tough time. This proposal, as well as any other loosening of regulating signs or any portion of a local zoning ordinance, won’t guarantee that will happen. Still, temporary liberalization may increase small businesses’ survival odds somewhat. The rest, of course, is controlled by the managements of these enterprises. And good luck to all of them.

Note: The need for banners isn’t my conception. Local restaurants who aggressively pursue survival are already putting up exterior printed banners. Predictably, they intend to call attention to their whereabouts. Predictably, some such signs are garish and larger than they need to be–unless their target customers are the genetic lineage of Mr. Magoo!


An NLP Visualization Exercise for Coronavirus COVID-19

We all know that our other than conscious mind is very powerful; it keeps our hearts beating, our lungs breathing, our spleens spleening (is that a thing?) and so one of the most powerful things we can do to stay healthy is to be sure that both our conscious minds, and our other than conscious minds, are in alignment about our health.

Many of us struggle with health issues which are sometimes a problem between what we think we want and what our other than conscious mind is doing. So let’s look at what we can do to get them in alignment.

There are several ways to get yourself in alignment. My preferred method, and one you can do yourself easily, is using a form of visualization. Visualization is used by many sports figures to increase their performance, by visualizing the result they want, repeatedly. Steve Nash, who had the best free throw record in Basketball, could be seen visualizing the result he wanted right before making the shot, visualizing the ball going in. Aerobatic performers like Patty Wagstaff use visualization to “fly” through their entire routine before getting in the plane.

And on a more relevant note, a researcher named Lee Pulos worked with cancer patients before they had surgery, and was able to get tumor sizes dramatically reduced, using visualization. There are many other examples, one is my own story wherein I got my complexion to not be horrible by visualizing myself with perfectly clear skin.

So how does it work? We need to find a way to talk to our other than conscious mind. A hypnotist can do it, get the conscious out of the way, but there are ways you can do it, too.

When you are ready to go to sleep, close your eyes and visualize your body being strong. Grounded. Powerful. Invincible to the effects of viruses. Visualize a star-trek like shield around yourself; impenetrable to any bacterial or viral agent that might try to reach you. See the virus particles hit the shield and just fall off. See the shield grow stronger and stronger, as you sleep. See it get stronger with each breath you take. Make it the color that means health to you. Each time you take a sip of water, each time you breathe, each time you reach for your phone, think of the shield getting stronger, more powerful, more protective.

Smile as you see the shield around you. Relax, knowing you are well. That you are protected. Do this as you fall asleep every night, and do it as soon as you find yourself awake in the morning, right before the alarm goes off. See the shield around you, in your mind’s eye, as you walk around. See it in the shower. See it flare in increased strength each time you leave your home or car.

This works the best for me if I use it to fall asleep. Lay down in bed, turn off the light, set the alarm, do whatever it is you need to do to prepare to go to sleep. Then, if you have a routine you use to fall asleep quickly, such as counting sheep, or your breaths, or whatever it is, instead, visualize the shield, see it working, see it strong and powerful. Observe how it totally blocks anything negative that might try to reach you. It stops viruses, bacteria, it even stops negative thoughts and emotions from reaching you. Your shield is yours, it protects you. Think about your shield, how powerful it is, how wonderfully and magically protects you. Do this as long as you can – until you fall asleep, still thinking about the shield.

When you awaken, whether it is just before the alarm, or because of it, take a moment, hit the snooze if needed, and visualize your shield again. See it grow stronger and stronger as you move from the semi-sleep state to the awake state.

It is during these times, when our conscious mind is tired, distracted, or otherwise out of the way, that we can most easily reach the more powerful other than conscious mind. As your conviction grows, so will the power of your shield.

The more you do this, the greater will be your protection.

Be well!


Landlords, Tenants, and COVID-19

An attorney I know sent this to me anonymously. Clearly not legal advice, but wise words. — Patrick

If you’re a commercial lease stakeholder, whether a landlord or tenant. You’re also navigating personal circumstances, trying to use sanitizer, stay away from crowds, wash your hands frequently – in other words, you’re using your head to avoid the worst outcomes.

So it is with the lease relationship. You’ve got to keep your wits about you. That means if you’re a tenant, you shouldn’t be calling me to ask how to break your lease and walk away with impunity from the obligations you’ve signed onto. Similarly, it means if you’re a landlord, you shouldn’t be lining up a locksmith to “functionally evict” your tenants who don’t pay rent and CAMS in full on the first or 15th of next month, whenever the next payment comes due.

This is my immediate advice: Keep calm and start thinking constructively. Until this moment, the counter-party to your lease was a valued ally of sorts – correct? Don’t turn that counter-party into Lucifer if you get a call requesting some consideration of some kind on performing the lease over the next few months. A couple of specific suggestions:

One, call your insurance agent about the scope of your coverage. Some of you may have business interruption insurance or loss of rents coverages. The former tends to be for tenants, while the latter is essentially for landlords. Business interruption insurance is intended to cover losses resulting from interruptions to a business’s operations, and generally covers lost revenue, fixed expenses such as rent and utility, or expenses from operating from a temporary location. While these policies most frequently relate to physical property damage, businesses should nevertheless assess their coverage to determine whether they might be covered for losses due to business interruptions resulting from COVID-19. Several businesses recouped losses through business interruption insurance for various operational disruptions after the global outbreak of Severe Acute Respiratory Syndrome (SARS) in 2002- 2003. In response to that payout, however, many insurers now exclude viral or bacterial outbreaks from standard business interruption policies. There’s nothing you can do about the eventuality that outbreaks may be excluded. It’s just a good idea to know where you stand.

Two, if you’re a landlord, call your tenants. Find out how they’re doing. Tell them, especially restaurants, yoga studios and other gathering places, and retail shops, that you’re rooting for them. Right now they’re scared out of their wits. If you’re a tenant, call your landlord. Let them know how you’re doing – but don’t lie to the landlord, give it to the landlord straight. BUT THE MESSAGE IS, KEEP COMMUNICATING. Don’t go dark on your lease counter-party, because that leads directly to an atmosphere of suspicion and distrust.

Third, if you’re a landlord or a tenant, begin thinking about contingencies. Landlords may want to begin thinking about what their cash flow requirements are from a project, and how to remodel their rent stream projections to account for the possibility that some tenant business models are cratering with no idea when those models will be restored, if ever. Tenants in the consumer product and service businesses will also need to think about their cash flow requirements and how their rent is going to be paid – at least in part. After 36 years of law practice, I can promise Tenants one thing – hunkering down and declining to pay Landlords any of the rent or CAMs due is the worst possible strategy for remaining in business in their premises, with a single exception. The exception is if you’re failing and intend to file for bankruptcy anyway. Otherwise, you’ve got to come to grips with the fact that ongoing bills facing the Landlord have to be paid, at least in part. So, stopping rent payments altogether causes a Landlord to make difficult choices that seldom resolve well for Tenants. The two sides need to figure out how to keep the Tenant open and get cash into the Landlord’s hands so the Landlord can keep the property open and in decent and safe condition.

After you understand what your cash flow needs are and how to come closest to achieving them, then you need to begin talking to your lease counter-party(ies) to discuss how and when the lease’s financial obligations will be met. And the landlord’s obligations, like those to maintain and repair the premises, also. Landlords may face the inevitable call to their lenders, to keep them informed, too.

There’s a buzz on the Internet that the so called force majeure clause in a commercial lease gives a tenant a “get out of jail free” card. That isn’t true, for reasons that I can go into with you individually. Tenants should not rely on that lease provision, if one exists, unless the applicable clause specifies that pandemic/epidemic events are force majeure events that trigger the Tenant’s right to cease performing under the lease. There are other common law legal theories that actually have more chance of success for Tenants, but again, that’s for individual consultations. And think about this for just a second. How much advice and representation will I want to provide you, whether you’re a landlord or tenant, knowing (as you may be tempted to advise me) that you’d like to use a fragment of lease language to stiff your contract counter-party? Am I next in line for such treatment?

It’s going to get tougher out there in the next few weeks, but be thoughtful and communicate. A bit of empathy for our fellow citizens will go a long way, too.

I’m rooting for each of you. And stay safe, you and your families, as best you know how.

— Anonymous Attorney

Let’s End Homelessness – Then, Let’s Square the Circle

I’m not cynical. I believe attacking systemic homelessness is a worthy idea. I don’t believe defeating homelessness permanently is possible. (More on that below). That’s not a justification for not making housing circumstances better. Kudos to Phoenix’s Mayor Gallego for teeing up the problem and challenging participation. Now, it’s a problem at the scale of digesting an elephant; it requires baby steps and a lot of thought beforehand. The devil, as they say, lurks among the details.
One bright guy I knew as a youth, the late Craig Gold, said one evening that “intractable social problems have no clear answers – but they’re susceptible to evaluating by asking better and better questions.” That’s how I envision homelessness solutions: They’re moved forward only by asking and answering probing questions first. I’m going to discuss in a few parts over several weeks how to frame the important questions, which I think are:
• What are the authentic goals of the troops in this battle?
• What difficult policy choices must local leaders make?
• What’s the most sensible implementation of short-term homelessness mitigation?
• What’s the cost to local leaders of implementing homelessness mitigation?
• Where are mitigation resources coming from?
• How do you ensure the stickiness of solutions implemented?
I begin with goals-setting. That requires stating one’s genuine individual motivations for minimizing homelessness. If the troops don’t realize why they’re charging this mountain, it gets much harder to take it. It seems there are many motivations for desiring to reduce homelessness. Here are several:
1. Homelessness is the product of an unjust society; justice demands a fix and, come the revolution, it shall be done. The problem of identity politics is imbedded in the word identity. Prepare for screaming and dangling the problem in your face until you identify with [something]. With being accountable. With being greedy because, unlike the homeless, you have someplace to live and you haven’t devoted all your time and money to solving social ills. This is the thing: Incessant restatements of the problem and identifying those responsible causes/individuals/classes in society won’t implement solution(s). Neither will admissions of failed attentiveness, which aren’t forthcoming regardless.
2. I want to make my city look enlightened, progressive and earnest, to attract youthful tech and other knowledge workers to my community, turning it into a 24-hour city and boosting taxes and other revenue streams filling municipal coffers.
3. I want to look enlightened, progressive and earnest, to attract youthful tech and other knowledge economy workers as volunteers and donors to my future campaign for office.
4. I want to contain as many homeless persons as possible, so I don’t have to look at/deal with them on the street corners and sidewalks of my town. Let’s clean up this place!
5. I want to house as many homeless persons as possible, on the chance there’s the possibility the homeless in America someday may experience dignity in their lives. That’s because a great nation extends opportunities that are accessible and affordable to a wide swath of its citizens.
6. The Lord said “Love your neighbor as yourself. There is no commandment greater.”
I align more with group 5 but slightly with a few others. I’ll cavalierly label Group 5 the “pragmatists.” I suspect pragmatists know no local government will ever house everyone living on the streets within their community’s boundaries. Pragmatists also know that the incremental cost of attempting to punch the ball the last 10 yards to achieve 100% housing isn’t optimal use of municipal resources.
There are a few categories of homeless persons who will remain homeless. Recidivists are those who cannot cope with confinement within organized or independent housing, for a variety of reasons. Intransigents at one time were called “hobos,” folks who traveled the country at low costs, surviving by whatever means they could devise – including doing hard work at times. Intransigents want to come and go on their schedules. They don’t want your housing; living under a bridge is fine, thanks. They don’t want to be driven out of your community, either. They just want independence except from those from whom they seek aid.
How you understand and express your motivations informs what solutions to homelessness are implemented. Motivations color your approach to street planning. Such urban planning is what social scientists call a “wicked” problem involving many stakeholders with competing interests asserting claims to finite municipal resources. Competing interests are susceptible to no single right answer but endless debating over differing versions of value. For some, solutions implicate zero-sum outcomes – not reserved to the abortion rights debate. Homelessness solutions, properly conceived and implemented, don’t have to set off zero-summing competitions. The answer likely lies in a suite of solutions that address a variety of motivations.

Origination of the Lawyer Species

February brought on interesting claims of high-tech advances in loan origination and closing. The question for attorneys is whether the advances step on their professional toes. Two first quarter 2020 events trigger these observations:

On February 5, Docutech, which brings you the platforms of eSign and eClose digital technology announced that it would partner with Origence. The Origence lending platform, according to  hype on Business Wire, is a “ground-breaking, end-to-end system that combines powerful point-of-sale and loan origination system tools that accelerate a lender’s loan production and reduce process cycle time while significantly reducing costs,” by streamlining workflow for generating, distributing, and signing loan documents.

On February 21, the Phoenix Business Journal reported that First American Financial, which provides title insurance and settlement services to the mortgage industry, has purchased Docutech. So, what is the net result of this consolidation that we’re told will offer better digital mortgage experiences to consumers? Is this rollup intended to make execution and delivering of loan documents streamlined and no more? Otherwise put, is it kosher from the legal industry’s perspective? Courts, prodded by Bar Associations, have been a bit particular in regulating exactly who can engage in law practice. In Arizona, Rule 31 of the Rules of the Supreme Court defines the practice of law as “providing legal advice or services to another by preparing a document in any medium intended to affect or secure legal rights for a specific person or entity.” Aren’t loan documents intended to secure legal rights to both parties to the lending transaction – borrowers and lenders – by defining the rights and obligations of each?

There are exceptions to this definition. Title Companies, for one entity, have long been permitted to prepare certain “closing documents” connected with transactions as to which those companies will be selling a title insurance product. Secondly, per the Arizona Code of Judicial Administration § 7-208, Certified Legal Document Preparers may provide general factual information pertaining to legal rights, procedures, or options available to a person in a legal matter when that person is not represented by an attorney. UPL Advisory Opinion No. UPL 06-02 (April, 2006).

But it remains to be seen if First American Financial has stepped on a landmine. In 1961, the Arizona Supreme Court in State Bar of Arizona v. Arizona Land Title & Trust Co., 90 Ariz. 76, 96, entered an order stating:

It is further ordered, adjudged, and decreed that: the defendant title companies are engaging in unauthorized practice of law when they: (a) prepare by drafting or filling in blanks, deeds or conveyances of any kind, forms of notes, mortgages, satisfactions of mortgages, assignments of mortgages, contracts for sale of real estate, or assignments thereof . . .. (emphasis added)

So, if a borrower goes to a First American branch and signs finished loan documents (that is, with all blanks completed, including the loan amount, dates for each payment due, and so on) tendered by a First American Title employee, has that employee engaged in law practice? Were we in Nebraska, that question has been answered by the state’s Commission on Unauthorized Practice of Law, in its Title Insurance Advisory Opinion 2010-001, ¶5 – with a resounding “yes” in response – a title insurance agent cannot prepare a deed of trust or mortgage, even if it is just to fill in the blanks. That is considered conducting the unauthorized practice of law in Nebraska.

In 1985, the State Legislature repealed the Arizona statute prohibiting the unauthorized practice of law – without, of course, impacting the judge-made law. And in 2000, the Supreme Court indicated: “We are quite aware of the social, technological, and economic changes that have taken place since our decision in Arizona Land Title.   In some situations, these changes may require us to reexamine our broad definition of the practice of law.” (In Re: A Former Member of The State Bar of Arizona, Frederick C. Creasy, Jr., Respondent, 2000.) Are we on the cusp of examining anew, in Arizona anyhow, that law practice definition? Is the legal profession overprotective, trying merely to keep its monopoly on billings? Well, what happens when Consumer Clive asks the escrow officer at the signing table what “defeasance” or “due on transfer” means in Clive’s Deed of Trust, and the escrow officer doesn’t know the answer but has a wiring cutoff deadline to get signed documents? Whose ox is being gored has much to say about the rigidity built in to notions of unauthorized practice. 

— Mike

About Coaching

A recent conversation I had with some friends led me to think more about coaching. Why do athletes at the top of their game have coaches, and why are the coaches not as good as the person they are coaching? Why do people in varied industries have coaches that don’t know much about how the industry works?

As many of you know, I have worked as part of the leadership team at Tony Robbins events for many years, coaching and working with people from every walk of life. So I have a little bit of insight into coaching. Also, Robbins basically created the coaching industry, and has various models for how to work with people to improve their lives and/or performance.

Often we enlist a coach to get better at something – golf, tennis, day trading, real estate — whatever we want to improve in our lives. But the coaching only seems to work well for a very few people. Partly I think this is because there are many coaches who are not equipped to help some clients, and there are uncoachable clients, and the spectrum in between all that.

Malcom Gladwell, in the book Outliers, talks about how we learn. Maybe he doesn’t say that specifically, but when I read it, that’s what I get out of it. That we need to learn stuff at the subconscious level to master it (that’s a Robbins thing) but when we have learned it this way, then we really have no idea, consciously, of what the “secret sauce” is that makes us successful; as a result, we have problems when we try to coach others to have the same success that we have.

For example, if you want to learn to day trade, you can be taught by the very, very best. And they will in all sincerity tell you how they trade. And you will follow exactly what they tell you, and you will lose.

Why? They are good at what they do because they are in the flow; their subconscious mind is doing the work, trained by thousands of hours of failing and ultimately succeeding. Their conscious mind thinks it knows what they do – they will tell you they know exactly what they do – but in reality they are wrong! Their subconscious knows what to do.

Gladwell talked to a bunch of tennis players, I forget the specific details now, but he asked them how they hit their best forehand shots. And they told him how they hit the ball, how they swung the racket, etc. And so Gladwell used a high speed motion camera and filmed them making the shots.
None of them made the shots in the way they described. They do not know exactly what they do. But a good coach knows, he has watched them and others like them until the coach figured out what was happening.

I have a great example from my personal story. When I was 30 (yes 30…) I decided I wanted to be a gymnast. Now at 6’2″ and 220 pounds this did not bode well, but I got into the greatest shape of my life, and over 5 years I got pretty decent, I had a floor routine and I could do giant swings on the high bar, I could do some rings, I pretty much accomplished what I set out to do. It was VERY hard but massively rewarding.

What I learned was that when little kids learn, the barrier between the conscious and the subconscious is thin – the filters and meta programs have not developed. So little kids have no problem learning the skills, they see them, they do them. But as an adult, oh boy. I practiced. I read books. I watched videos. It was brutally difficult.

It doesn’t help that as a little kid you have no idea about mortality and getting hurt, but as an adult, contemplating spinning in the air above the ground… And kids weigh, what, 70 pounds? Try missing something when you are 225 or so and having everyone in the gym stop and stare to see what the loud noise was when you smashed onto the mat.

One particular example was trying to learn to do a back extension roll. This is where you do a backwards summersault and, when upside down, you pop up into a handstand. It looks easy. (And it is…) But I could not make it work. My coaches, one of whom was a national champion gymnast, said, “It’s just timing”. Others said I was not strong enough (right, I could do 20 handstand pushups…)

So one day I asked one of the coaches if he would spend 20 minutes and do a bunch of them, right in front of me. And I watched. And then finally I saw what he was doing, which was not in any way what I had been told. As soon as I saw what he was doing, I had the trick. Like in that moment. None of those coaches had any idea how to do the trick. They thought they did, but they didn’t. And while timing is a factor, it had nothing to do with how the trick works.
I am really good at coaching older kids and adults in gymnastics. Because I had to figure out how the tricks actually work, because it was never in my subconscious.

So if you have been trying to teach someone a skill and it isn’t working, try getting someone who has never done it to watch – and ask questions. It can be eye-opening.


Lighting for a Murphy bed

Last year I built a murphy bed for an AirBnb property. It was a fun project, and I am a decent woodworker, so it came together in about a week, and for a fourth the price I might have paid to buy one.

But, there was a problem. Since the bed folds up into the wall, the sides stick out a foot or so, and then the bedside tables don’t really work for lighting because the side of the bed is in the way.

Mine is like this, but without the shelves on the sides.

So you can see how it might be interesting to get reading lamps on each side. So I started looking for lamps that might work, that had a narrow focus, and I found one on Amazon that was very expensive and could be focused – overkill, but would work well. Then I found one on AliExpress that was inexpensive, bright, ran on 12 volts, and had a 30 degree beam — perfect!

These are less than $10 each,12 volt, and are tiny!

But I needed a small switch. Looking on eBay, there are some little 12v controllers that let you turn them on and off, and dim – so that’s what I got, and installed them on the inside edges of the bed where they were easy to get to – and they work great! Just hook up a 12v power supply and you are all set.