H.B. 1300 had passed and was now law in Colorado. This bill was introduced to help the State handle the backlog of cases that it created for itself and to provide some remedy for landowners. It shifted the hearing of the cases from the Department of Revenue to District Courts (which we hoped would be less biased).
IRS
Moye & White continued to press forward with our cases against the IRS in 2011. By July they had negotiated and we had received a general settlement offer from the IRS, but it ended up having to be negotiated on a case-by-case basis. As you may recall, we originally had 15 cases against the IRS. Then the State had, for reasons unknown to us, absolved us and reinstated one of our Conservation Easements. With that re-instatement, we only had 14 outstanding cases with the IRS. But, the settlement agreements could only be reached by treating each one as separate and distinct, so it was painstakingly slow. We hoped to have it done by the end of 2011.
State
The conservation easement scandal had blossomed into such a disaster in Colorado the State could not handle the mess they had created. With so many cases looming, legislation was passed to help the state slog its way out of the mire. Here is an excerpt from a letter we wrote to our partners on July 28, 2011, describing the situation:
H.B. 1300 passed and is now law in Colorado. This bill was introduced to help the State handle the backlog of cases that it created for itself and to provide some remedy for landowners. It shifted the hearing of the cases from the Department of Revenue to District Courts (which we hope will be less biased) and all landowners who want to use this remedy must file their notice by October 1. [We had already taken care of this for our partners -- Moye & White filed the cases.] The litigators at Moye/White really like the legal points that Stan and Marsh have outlined for them. We will keep you posted on those developments. We still have tremendous exposure if we must pay back the tax credit purchasers, but there is no other course of action available except to let this work its way through district court.
Here are the Pros and Cons of the going through the District Court: While we firmly believe the Department of Revenue erroneously denied our tax credits, and have very strong evidence to support our various claims against the State, there are only a few cases supporting such actions. If we win we could be entitled to have our tax credits honored and even recover some damages from the State--perhaps even enough to pay the IRS settlement. But, the decision will be made by a judge who must appreciate fully the arguments and the equity of the matter, and if made negatively, the only recourse would be a full-fledged appeal to the Colorado Court of Appeals.
It is possible that the filing of our District Court actions will trigger settlement discussions with the State. The Attorney General might hope to resolve our cases in order to avoid having the other 600+ donors take the same approach.
And, it is also possible that many of the 600 will take the same approach and the judges will be more reluctant to summarily dismiss the claims against the State.
Or, the claims could be rejected from the onset and encourage the State to go for all it can get in every case.
The District Court cases are our best hope of reducing our losses. If we do not protest and fight these cases in the District Court, we will most certainly be assessed the full loss. So, these cases are not optional.
The Department of Revenue valued them (the donations) at nothing, and our lawyers are confident we will get a value at close to what our expert has determined. We have well-stated claims, counterclaims and damages against the State, but there is no assurance we will be able to assert them, let alone win them. After all, sovereign immunity is a tough hurdle to get over in litigation.
So, in the fall of 2011, we filled our 14 cases against the Colorado Department of Revenue in District court as specified in HB1300. We now officially had 30 cases going on: 14 against the iRS, 14 against the state, 1 malpractice case, and Stan and I personally had a case against the company who installed our solar arrays on the retreat center – we discovered their errors after the fire.
Post-Fire Mitigation and Reconstruction
Our post-fire mitigation and reconstruction continued. It was grim, hard work, but thank God (a million times over) our insurance company honored the claim without batting an eye. The bad news was that we had had a “builder’s risk” policy, not homeowner’s insurance, so they did not cover the “stuff” that we lost (our clothing and personal things). But, their engineers examined structural components of the house and agreed it was a huge, expensive task to rebuild, and the reconstruction was covered fairly by insurance.
In June I mysteriously lost my job, which troubled me for many different reasons. But, it suddenly opened up my schedule to assist more with the reconstruction. We were still displaced and not “allowed” to be at the construction site, but we started sneaking in, staying on cots. We rigged up one long electric cord from the outside power pole (where all the crews were getting electricity for their work) for a lamp, a mini-fridge, and a microwave. We lived on corn flakes, deli meats, and frozen dinners. We had a hose for water and eventually got one shower working (cold water only) in the guest room where we were staying. As the dry-wall crew moved through, we had to keep moving our little temporary bedroom. We had many different crews working on the house. Some wanted to arrive early, before we were up, and some wanted to stay until midnight, so there was almost round-the-clock noise and confusion.
On August 19th, after seven months of being displaced, we moved back into our master bedroom, and we had a new certificate of occupancy a couple months later.
Interrogatories (Malpractice)
Mike Callahan never missed a beat in moving our malpractice case forward against Goliath.
Meanwhile, in the midst of the our post-fire chaos, we were entering into the period of “discovery” in the malpractice case, which meant that we – and all our donating partners – had to answer interrogatories and dish up tens of thousands of documents. The problem with this particular document production was that certain documents are “privileged” and do not have to be turned over to opposing counsel. So, unlike our previous production of documents where we could just hand over boxes and boxes to our own attorneys without reviewing them, we now had to scrutinize every single piece of paper that we – and all our partners – possessed. This mind-boggling exercise brought our email system to a crashing halt and we had to start using Dropbox and larger email systems to store all the data.
At the same time, one of the worst food-borne-illness outbreaks in CDC’s records occurred, resulting in 30 deaths and 147 total confirmed cases between the first recorded case on July 31, 2011 and the last on December 8, 2011. The listeria that caused this was linked to Jensen Farms in Holly, CO, one of Mike Callahan’s clients. (Can you guess where this story is going?)
So, as we closed out 2011, up to our eyeballs in documents, Mike was up to his eyeballs working on the listeria case and it became even more urgent to find a larger firm to represent us in the malpractice case.
About the third week in January of 2012, two significant things happened simultaneously. First, Robinson, Water’s, & O’Dorisio (RWO) agreed to represent us in the malpractice case. We were thrilled. Second, Stan and I separated. We were devastated. ©Sharon Cairns Mann.
Moye & White continued to press forward with our cases against the IRS in 2011. By July they had negotiated and we had received a general settlement offer from the IRS, but it ended up having to be negotiated on a case-by-case basis. As you may recall, we originally had 15 cases against the IRS. Then the State had, for reasons unknown to us, absolved us and reinstated one of our Conservation Easements. With that re-instatement, we only had 14 outstanding cases with the IRS. But, the settlement agreements could only be reached by treating each one as separate and distinct, so it was painstakingly slow. We hoped to have it done by the end of 2011.
State
The conservation easement scandal had blossomed into such a disaster in Colorado the State could not handle the mess they had created. With so many cases looming, legislation was passed to help the state slog its way out of the mire. Here is an excerpt from a letter we wrote to our partners on July 28, 2011, describing the situation:
H.B. 1300 passed and is now law in Colorado. This bill was introduced to help the State handle the backlog of cases that it created for itself and to provide some remedy for landowners. It shifted the hearing of the cases from the Department of Revenue to District Courts (which we hope will be less biased) and all landowners who want to use this remedy must file their notice by October 1. [We had already taken care of this for our partners -- Moye & White filed the cases.] The litigators at Moye/White really like the legal points that Stan and Marsh have outlined for them. We will keep you posted on those developments. We still have tremendous exposure if we must pay back the tax credit purchasers, but there is no other course of action available except to let this work its way through district court.
Here are the Pros and Cons of the going through the District Court: While we firmly believe the Department of Revenue erroneously denied our tax credits, and have very strong evidence to support our various claims against the State, there are only a few cases supporting such actions. If we win we could be entitled to have our tax credits honored and even recover some damages from the State--perhaps even enough to pay the IRS settlement. But, the decision will be made by a judge who must appreciate fully the arguments and the equity of the matter, and if made negatively, the only recourse would be a full-fledged appeal to the Colorado Court of Appeals.
It is possible that the filing of our District Court actions will trigger settlement discussions with the State. The Attorney General might hope to resolve our cases in order to avoid having the other 600+ donors take the same approach.
And, it is also possible that many of the 600 will take the same approach and the judges will be more reluctant to summarily dismiss the claims against the State.
Or, the claims could be rejected from the onset and encourage the State to go for all it can get in every case.
The District Court cases are our best hope of reducing our losses. If we do not protest and fight these cases in the District Court, we will most certainly be assessed the full loss. So, these cases are not optional.
The Department of Revenue valued them (the donations) at nothing, and our lawyers are confident we will get a value at close to what our expert has determined. We have well-stated claims, counterclaims and damages against the State, but there is no assurance we will be able to assert them, let alone win them. After all, sovereign immunity is a tough hurdle to get over in litigation.
So, in the fall of 2011, we filled our 14 cases against the Colorado Department of Revenue in District court as specified in HB1300. We now officially had 30 cases going on: 14 against the iRS, 14 against the state, 1 malpractice case, and Stan and I personally had a case against the company who installed our solar arrays on the retreat center – we discovered their errors after the fire.
Post-Fire Mitigation and Reconstruction
Our post-fire mitigation and reconstruction continued. It was grim, hard work, but thank God (a million times over) our insurance company honored the claim without batting an eye. The bad news was that we had had a “builder’s risk” policy, not homeowner’s insurance, so they did not cover the “stuff” that we lost (our clothing and personal things). But, their engineers examined structural components of the house and agreed it was a huge, expensive task to rebuild, and the reconstruction was covered fairly by insurance.
In June I mysteriously lost my job, which troubled me for many different reasons. But, it suddenly opened up my schedule to assist more with the reconstruction. We were still displaced and not “allowed” to be at the construction site, but we started sneaking in, staying on cots. We rigged up one long electric cord from the outside power pole (where all the crews were getting electricity for their work) for a lamp, a mini-fridge, and a microwave. We lived on corn flakes, deli meats, and frozen dinners. We had a hose for water and eventually got one shower working (cold water only) in the guest room where we were staying. As the dry-wall crew moved through, we had to keep moving our little temporary bedroom. We had many different crews working on the house. Some wanted to arrive early, before we were up, and some wanted to stay until midnight, so there was almost round-the-clock noise and confusion.
On August 19th, after seven months of being displaced, we moved back into our master bedroom, and we had a new certificate of occupancy a couple months later.
Interrogatories (Malpractice)
Mike Callahan never missed a beat in moving our malpractice case forward against Goliath.
Meanwhile, in the midst of the our post-fire chaos, we were entering into the period of “discovery” in the malpractice case, which meant that we – and all our donating partners – had to answer interrogatories and dish up tens of thousands of documents. The problem with this particular document production was that certain documents are “privileged” and do not have to be turned over to opposing counsel. So, unlike our previous production of documents where we could just hand over boxes and boxes to our own attorneys without reviewing them, we now had to scrutinize every single piece of paper that we – and all our partners – possessed. This mind-boggling exercise brought our email system to a crashing halt and we had to start using Dropbox and larger email systems to store all the data.
At the same time, one of the worst food-borne-illness outbreaks in CDC’s records occurred, resulting in 30 deaths and 147 total confirmed cases between the first recorded case on July 31, 2011 and the last on December 8, 2011. The listeria that caused this was linked to Jensen Farms in Holly, CO, one of Mike Callahan’s clients. (Can you guess where this story is going?)
So, as we closed out 2011, up to our eyeballs in documents, Mike was up to his eyeballs working on the listeria case and it became even more urgent to find a larger firm to represent us in the malpractice case.
About the third week in January of 2012, two significant things happened simultaneously. First, Robinson, Water’s, & O’Dorisio (RWO) agreed to represent us in the malpractice case. We were thrilled. Second, Stan and I separated. We were devastated. ©Sharon Cairns Mann.
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