New Mexico has a long history of conflict over Spanish and Mexican land grants. Who can forget the violence and turmoil which arose out of Reies Lopez Tijerina's 1967 raid on the Rio Arriba courthouse? Spanish and Mexican land grants have a long history in the state. Under Spanish rule the Governor of New Mexico made private land grants to individuals for their service to the crown or for other reasons. This practice continued under the Mexican Government (an individual grant). A second type of land grant, the community grant, was made to communities, town, colonies or pueblos or to individuals for the purpose of founding a town or community. When the United States defeated Mexico in the Mexican-American war, the 1848 Treaty of Guadalupe Hidalgo sought to preserve the land grants ownership by a system of private land claims courts. The results were mixed. For example the famous Beaubien Miranda Grant (better known as the Maxwell Land Grant) allegedly grew from a few thousand acres to a vast holding of several hundred thousand acres (now owned by Ted Turner).
The most recent chapter in the land grant wars is occuring in Taos and is bringing real estate transactions, lending on real estate collateral and the real estate business in Taos to an almost total halt. Two old Spanish land grants are involved. The Cristobal de la Serna grant is about 22,000 acres and covers much of the town of Taos. The other grant is the Arryo Hondo grant, which occupies an area to the North and West of the town. Because of its location, I will deal principally with the Serna grant. In late 2010 an individual granted to the Trustees of the Serna grant and to the heirs of grantees of the Serna grant, a warranty deed and quit claim deeds which purports to convey the Cristobal de la Serna grant to the Trustees and the heirs. Similar action occurred on the Arryo Hondo grant.
The town's two title companies began issuing commitments which excepted claims by the trustees or heirs to the two grants. Bank lending on real estate within the town boundaries and within the Serna grant effectively ceased. Several transactions for sale of Taos proprieties were terminated.
On April 14 the Town of Taos filed suit against the grantor of the Serna warranty deed and quitclaim, the five trustees of the Serna grant and "the Heirs of the La Merced de la Serna, Diego Romero and their assigns." The suit seeks a declaratory judgment that the deeds are void and should be set aside. Most interestingly, the person who signed and recorded the deeds and the five trustees have all signed waivers of service and consent to the declaratory judgment as sought by the Town.
Is it over? No. There are several hurdles ahead, most likely all navigable with skill, but consider the following factors. The judge assigned to the case, Judge Sanchez has resigned under pressure from the N.M. Supreme Court. The alleged "heirs of Serna and Romero and their assigns" must be served in manner acceptable to New Mexico rules and court precedent. Service upon those people, whoever they are, may not effective unless care is taken. A hearing date must be set for those heirs to appear and contest the Taos complaint and then the judge must be satisfied. One bright spot: in 1984 a respected Taos judge held that the Serna grant was a private grant and the trustees or heirs had no standing to make any claim against the then owners. Whether that decision will have any impact in the present dispute cannot be assured.
Will the title companies be satisfied? A recent quote in the April 25 Taos News quoted one of the title company management as being unsure, depending on how the heirs responded and the procedures used. And as every banker and businessman knows if the title companies will not change their attitude toward this dispute, the freeze on real estate transactions will continue. Even it the title companies are satisfied, the course of serving the heirs in person or by publication, the hearing and final decision could take months.
Land grants are mainly a feature of the Spanish colonization down the Rio Grande and therefore the Taos land grant battle is not likely to have any direct impact on real estate lending in other parts of the state. However, when an important art and tourist center of the State is effectively put in a situation where normal commerce cannot go forward, all of the state suffers.
This Blog was written with the assistance of Paula Cook and Michael R. Comeau , partners in Comeau, Maldegen, Templeman and Indall, LLP. Ms/ Cook (pcook@cmtissantafe.com) practices extensively in complex real estate and title matters and Mr. Comeau (mcomeau@cmtissantafe.com) is a litigator in bank and complex litigation.
Marshall G. Martin
Comeau, Maldegen, Templeman and Indall, LLP
(505) 982 4611
mmartin@cmtisantafe.com
Tuesday, April 26, 2011
Friday, April 15, 2011
Emails, Harry Truman and a Free Form
I realized when I reviewed the last few blogs that they might not fulfill the pledge that this Blog would have "forms, tips and some funny stories". I will try to meet my promise here.
You may ask what Harry S. Truman has to do with e-mails. One of the most controversial , but funny events in the Truman presidency, demonstrates the risks of unreviewed e-mails sent on the spur of the moment. Truman's public gaffe came at the darkest days of the Korean war-- his approval ratings plummeting. Truman was an enthusiastic piano player, concert goer and devoted to his young daughter Margaret, who was a classically trained singer bent on an operatic career. She began a tour, starting with Washington's Constitutional Hall. She sang Mozart, Shubert and others and was applauded. The next day the Washington Post's music critic wrote a scathing review of Margaret's performance. Harry Truman reacted with a father's emotion writing to the critic that the critic was a "frustrated old man" (Truman was 68 and the critic 38) and hoped for a personal meeting at which the critic would "need a new nose, a lot of beefsteak for black eyes, and perhaps a supporter below". Harry sent the letter. Truman had a history of firing off intemperate letters to people who offended him but a system was in place in which such letters were intercepted by a long time friend. The aide had died just days before the famous "music critic" letter. The letter appeared on the front page of the Post. The event--which we might now consider understandable and funny, especially in the era of Obama and Bush, caused a big controversy. (The Truman letter events are set out in David McCullough's 1992 book on Truman.)
Truman's letter is similar to many e-mails that one sees produced in litigation; they are either the product of anger, stupidity or plain lack of forethought. Generally all of them suffer from the "Truman Effect"--they were not held and reviewed by the sender or someone else. In most cases if the writer had waited until morning to send the e-mail or had a colleague read the e-mail the e-mail would not be a problem. E-mails are worse than the Truman letter because they are impersonal, easy to compose and rarely read or re-read before sending--experts on e-discovery have observed that people say things in e-mails that they would never say in person,on the telephone or by letter.
Most seriously, in this era of troubled loans and troubled borrowers, a lender's careless e-mails can enable a clever borrower's attorney to claim that the bank has agreed to a renewal of a troubled loan or to terms that were discussed by e-mail but not agreed by the bank This is especially true in New Mexico where our courts virtually ignore our written commitment statute. There is no easy solution but banks should conduct occasional short training sessions on the dangers of e-mails and the minimum statements that must be included in every e-mail to protect the bank. The first topic in any session is "reread and revise". Just a short comment like, "your proposal sounds fair" should be followed by "but any final terms are subject to review by our loan committee"
Now for the promised form. I recommend that all e-mails authored by any lender or work out person contain the following statement which should be separated from the "confidentiality" statement that most bank's use in e-mails. It is important the following statement stand out as an important reminder to the customer.
You may ask what Harry S. Truman has to do with e-mails. One of the most controversial , but funny events in the Truman presidency, demonstrates the risks of unreviewed e-mails sent on the spur of the moment. Truman's public gaffe came at the darkest days of the Korean war-- his approval ratings plummeting. Truman was an enthusiastic piano player, concert goer and devoted to his young daughter Margaret, who was a classically trained singer bent on an operatic career. She began a tour, starting with Washington's Constitutional Hall. She sang Mozart, Shubert and others and was applauded. The next day the Washington Post's music critic wrote a scathing review of Margaret's performance. Harry Truman reacted with a father's emotion writing to the critic that the critic was a "frustrated old man" (Truman was 68 and the critic 38) and hoped for a personal meeting at which the critic would "need a new nose, a lot of beefsteak for black eyes, and perhaps a supporter below". Harry sent the letter. Truman had a history of firing off intemperate letters to people who offended him but a system was in place in which such letters were intercepted by a long time friend. The aide had died just days before the famous "music critic" letter. The letter appeared on the front page of the Post. The event--which we might now consider understandable and funny, especially in the era of Obama and Bush, caused a big controversy. (The Truman letter events are set out in David McCullough's 1992 book on Truman.)
Truman's letter is similar to many e-mails that one sees produced in litigation; they are either the product of anger, stupidity or plain lack of forethought. Generally all of them suffer from the "Truman Effect"--they were not held and reviewed by the sender or someone else. In most cases if the writer had waited until morning to send the e-mail or had a colleague read the e-mail the e-mail would not be a problem. E-mails are worse than the Truman letter because they are impersonal, easy to compose and rarely read or re-read before sending--experts on e-discovery have observed that people say things in e-mails that they would never say in person,on the telephone or by letter.
Most seriously, in this era of troubled loans and troubled borrowers, a lender's careless e-mails can enable a clever borrower's attorney to claim that the bank has agreed to a renewal of a troubled loan or to terms that were discussed by e-mail but not agreed by the bank This is especially true in New Mexico where our courts virtually ignore our written commitment statute. There is no easy solution but banks should conduct occasional short training sessions on the dangers of e-mails and the minimum statements that must be included in every e-mail to protect the bank. The first topic in any session is "reread and revise". Just a short comment like, "your proposal sounds fair" should be followed by "but any final terms are subject to review by our loan committee"
Now for the promised form. I recommend that all e-mails authored by any lender or work out person contain the following statement which should be separated from the "confidentiality" statement that most bank's use in e-mails. It is important the following statement stand out as an important reminder to the customer.
"All discussions, proposals and terms for any loan, extension or renewal of credit are not binding on the Bank or any borrower unless the terms or proposals are approved by the Bank's senior management, loan committee or Board of Directors and contained in a written commitment or similar written agreement signed by the parties to be bound."This is not a panacea for stupid e-mails, but the inclusion of the statement or something like it will assist the bank in dealing with careless e-mails.
Marshall G. Martin
Comeau, Maldegen, Templeman & Indall, LLP
(505) 982 4611
(505) 228 8506
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