Shelby sifted through her notes, looking for her list of questions for Charese, then appeared to change her mind, as if it was wrong of her to assume that Charese wouldn’t be able to take a more active role in the case. “Actually, forget the questions. Maybe the best way to do this is for you to read what I’ve drafted so far—it’s the factual summary of your case—and give me your comments. Tell me where I’ve missed things or where I’m off base.”
Shelby handed Charese a pen, and Charese sat down across from her and began reading through the document, filling in blanks and making occasional notes in the margins. As the day wore on, Charese took the time to study the law student further. Dazzling blue-green eyes, understated features, bouncy light hair, cut short but stylish. Her self-assuredness was tempered by a softness, a grace that Charese guessed served to disarm other women. She looked like the type of woman who fifteen years ago would have graduated from college and become a top advertising or retailing executive rather than a lawyer.
Charese also noticed that, although Shelby was polite to Reese, her demeanor toward him was reserved and businesslike. Though Reese was Shelby’s supervisor, Charese didn’t get the sense that Shelby was inclined to defer to him. Charese wondered if Reese had come on to her; in her mind she pictured a cumbersome, leering Reese shrugged off—almost condescendingly—by the sophisticated law student.
By the end of the day, Shelby had completed a 17-page complaint alleging that Roberge had agreed to pay for Charese’s sex change operation, to marry her, and to support her as his wife. Charese was pleased with the result—her position seemed so compelling and justified in the well-reasoned complaint. Could any juror doubt that Charese Galloway had been treated shabbily? And she was glad to see the pictures were not attached to the complaint. “What happens next?” she asked. “I mean, how long will this whole process take?”
Reese answered. “Tomorrow, Shelby will file the complaint with the court and have a deputy sheriff serve a copy of the complaint in person on Roberge at his office. Shelby, you got his work address from Charese, right?”
“Yes. He works as a curator at the Museum of Fine Arts.”
Reese continued. “After that, we wait to see what their answer is.” He put on his extra-serious face, swallowed, and moved closer to Charese. “But I’ve battled Krygier and his type before, and they won’t roll over easily. Are you ready for a fight?”
There was something in his tone that made Charese feel like she was being spoken to like a child. But she nodded nonetheless. Reese continued. “Good. I’m proud of you. Besides, we have those pictures if things get nasty.” Reese chuckled softly, his eyes focusing past Charese on some distant point beyond the confines of the room.
Charese glanced over toward Shelby, hoping to see her react in some way to Reese’s comment. But Shelby had already turned away to pick up a gum wrapper that had been lying on the floor for the past three hours, and did not make eye contact with Charese.
CHAPTER 9
[September 21, 1989]
A month had passed since Pierre uncovered the Baron’s bogus sales operation, and if anything the September real estate market was even worse than the August one. Pierre spent the time further researching the Baron’s empire. It was better than sitting in the office waiting for the phone to ring.
Using tax assessor records, he compiled a list of people who purchased units from the Baron. He then rollerbladed through Boston, from building to building, comparing the name of the unit owner to the name of the resident listed on the mailbox. Pierre found that entire buildings—and in some cases, entire neighborhoods—were owned by individual condominium investors who did not live in their condos.
Pierre had enough experience with condominiums to know that this was a recipe for disaster. The idea of the condominium form of ownership was that all of unit owners would work together for the benefit of the entire building. If the building needed a new roof or a new furnace, the cost of the improvement would be shared by all. But when none of the unit owners actually lived in the building, the collective spirit vanished. A new roof—which seems like a necessity to the owner-occupant who is being dripped on as he sleeps—is less critical to the investor living twenty miles away who would rather spend his money on a vacation in Florida.
And, of course, the situation would only get worse in a slumping economy. Rents would go down, tenants would move out, and not only would the investor owners not contribute to the new roof, they would likely stop paying their mortgages and condominium fees as well.
If Pierre was right, it was only a matter of time before the banks foreclosed on the units. It would be a classic house of cards: the banks would flood the market with the condos they foreclosed on, which would drive prices down even further, which in turn would depress the entire real estate market and lead to more foreclosures.
Pierre reacted by making a number of decisions. First, with Carla’s assent, he immediately placed their Brookline condo on the market for sale. Three months ago, he had guessed the unit—totally modernized and in an upscale neighborhood near the subway line—was worth $240,000. He priced it at $214,000 and was prepared to accept any offer that began with a “2.” He and Carla could rent for a year or two, then buy a nice house in the suburbs after the prices had fallen and before Valerie had a sibling.
Second, he cut way back on his overhead. He canceled the third phone line in the office, reduced his advertising by 60 percent and subleased the back part of his office to a young insurance agent looking for a Beacon Street address. He didn’t bother to lay off any of the other four brokers in his office since they worked on a commission basis anyway. He guessed they would soon leave voluntarily.
Finally, Pierre bit off his nose to make it easier to look at his face in the mirror every morning. He had always believed that loyalty and honesty were valuable commodities in the business world that, eventually, would yield high dividends. He hoped he was right. He dialed a phone number in California, realizing that it was only eight in the morning there, but knowing that Howie would already be in his office.
“Thermotics, Howie Plansky speaking.”
“Hey, Howie, it’s Pierre. Got a minute?”
“Of course.” Howie raised his voice. “Hey, Betty Jane, get off your knees and clean yourself up, I gotta take this call.”
Pierre had never been comfortable with Howie’s raunchy sense of humor, and after six years still hadn’t decided whether Howie employed it to shield feelings of insecurity or because he truly was a raunchy person. Forced to choose, Pierre would guess the former—Howie was short and plump and pasty, and probably used the dirty jokes as a way of interacting in the blond, tan, hip world of southern California. Pierre laughed politely, then smiled as a song from one of Valerie’s Winnie the Pooh cartoons popped into his head: I am short, fat, proud of that….
“Listen, Howie, I want to talk to you about that deal you’re doing.” Pierre was referring to the purchase of a 28-unit apartment building in Brighton. Howie was paying $1.8 million, and the closing was only eight days away. Howie had actually reached agreement on the deal back in June, but had delayed the closing until October 1 to accommodate some tax planning the seller was doing. “Have you got a copy of the Purchase and Sale Agreement in front of you?”
“Hold on, Pierre. I’ll get it.” Pierre was the broker in the deal, and should have been given a copy of the Purchase and Sale Agreement by the seller’s attorney once the parties signed it. But it was not uncommon for the broker to be treated as little more than a messenger service by the attorneys, and Pierre never received a copy.
Pierre noticed his hands were getting sweaty, and he wasn’t surprised. What he was about to do was pretty bizarre.
Under the archaic rules of real estate brokerage, Pierre technically worked for the seller of the property. Even though Pierre had never actually met the seller. Even though the seller had listed the property with and communicated exclusively through another broker who was also collecting a $45,000 co
mmission. And even though Pierre had a six-year business and personal relationship with Howie. In other words, Pierre was legally required to do whatever he could to advance the interests of the seller in the transaction, and to simply ignore the fact that Howie was a valued client and long-time acquaintance.
Pierre was about to violate that legal requirement. Whether that was causing the sweat, or whether it was the imminent loss of his $45,000 commission, Pierre wasn’t sure.
“Got it. What do you need?”
“What’s the latest date you can back out of the deal?”
Howie flipped through pages. “Well, I can terminate the deal up until September 25 if we don’t get our mortgage. I think that’s the only reason, though. We’ve already done our inspections, and everything’s fine. So September 25. Next Monday.”
“Did the bank approve the mortgage yet?”
“No, not yet. But they said everything looks fine and I should get a commitment letter later this week. They just need a few things from me. Why? What’s up?”
“Listen, Howie, I’ve been doing a lot of thinking lately, and I don’t think you should buy any real estate right now.” Pierre related to Howie his activities over the past month. He also gave Howie objective evidence of the softening sales market and decreasing rents. Howie hadn’t interrupted, so he continued: “Bottom line: the market’s dead right now. The last time things were this quiet was when Carter was President and interest rates were, like, 18 percent. It just seems to me that the market’s going down big time during the next year or so. I think there’s going to be some great opportunities to buy stuff cheap—at foreclosure sales, maybe—but it doesn’t make sense to be buying stuff at full price right now.”
Howie let out a low whistle. “Holy shit, Pierre. You know I’ve made a lot of money with you, and I trust your opinion.” Pierre nodded to himself. Using a $50,000 inheritance, Howie had purchased and sold—“flipped” was the word used in the real estate industry—eight or ten properties over the past six years and had made close to $400,000 in profits. Not a bad nest egg for an engineer. It was this $400,000 that he was using as a down payment on the apartment building, taking six years of profits and “letting it ride.”
Howie continued. “But are you sure about this? I mean, you’re the one who sold me on this property in the first place.” Howie stopped suddenly. “Shit. Of course you’re sure—you’re walking away from your commission. Forty-five grand, right?”
Pierre grunted. It would have been his third largest commission ever, and if he was right about the direction of the real estate market, there wouldn’t be many more like it in the future. “Look, Howie, the way I see it is that your $400,000 will still be there, and that you’ll trust me next time when I call you and tell you I’ve found a good deal. Hopefully we can both make a lot of money over the next few years.” Hope triumphing over reality? Pierre hoped not. “For now, though, how are we going to get you out of this deal without losing your $100,000 deposit?”
“I don’t know. I had my family attorney out here review the Purchase and Sale Agreement before I signed it, but I don’t think he’s going to be able to help me break the contract. He doesn’t really do much real estate law. Do you know an attorney I can use in Boston?”
Pierre knew many attorneys, but they were all “deal makers,” not “deal breakers.” Over the years, the brokerage community had developed an unofficial network of attorneys (as well as building inspectors and mortgage lenders) who received referrals from brokers in exchange for a tacit understanding that they would do everything they could to make sure the deal closed. None of the attorneys would want to risk his place in this network by working to kill Howie’s deal at the last minute, especially in this economy.
Pierre thought back to the foreclosure sale he had attended the day before. The attorney had given Pierre his card. He seemed like a good guy, and he worked for one of the fancy downtown firms. The big firms were definitely not part of the referral network; on the contrary, they usually took such a hard-line position in contract negotiations that many of their deals never closed. In fact, some brokers refused to represent clients who used the big firms.
Pierre described the attorney. “I think he might be a little young, but he seemed like a good guy and he knew real estate law. Plus, he might be able to help us down the road if we want to buy foreclosure properties—I told him I was working with some West Coast investors, and he said he had a lot of foreclosure sales coming up. Want me to call him for you?”
“Yeah, would you? I’ve got a crazy day here. And Pierre, I owe you big time.”
SAVING FOR A BIGGER BOAT
CHAPTER 10
[September 21, 1989]
Bruce picked up his messages from the reception area and quietly handed a birthday card to the receptionist. She blushed and shyly stammered a thank you, and Bruce realized that he was one of the few people who took the time to read the birthday list in the firm newsletter. For an investment of $1.95 and a three minute detour to the drug store, he had gained an ally. She would champion him to the other support staff, and maybe someday one of them would help Bruce out in a crunch. And the gesture had put a smile on her face.
On the way to his office, he knocked lightly on the corner office door of Bertram Puck, Jr., the son of the firm’s namesake. Five or six seconds passed, then he heard a gruff response. “Enter.”
He took two steps into the office and stopped. A mixed aroma greeted him—pipes, wet wool, leather. “I found some good case precedent for the eminent domain matter, sir. I spent four hours researching it at the law library, but I think it’ll be worth it for our client.” Actually, it had only taken Bruce half an hour to find the cases, but the great thing about legal research was that it was impossible to predict how long it might take, and therefore difficult for the client to question when the bill arrived. On the other hand, Puck probably would have preferred that it had taken Bruce eight hours so that he could have charged the client even more. Bruce had settled on four as a happy compromise.
Puck grunted but never looked up from his desk. “Brief the cases for me and have a memo on my desk by noon tomorrow.”
“Thank you,” Bruce said, in a tone that he hoped conveyed: “Thank you for allowing me to brief the cases for you, sir.”
Bruce settled into his office and began dictating a memo into a microcassette recorder. A senior associate had asked Bruce for a short summary of the foreclosure sale he had conducted the day before in the Fenway neighborhood of Boston:
“On September 20, 1989, I conducted a foreclosure sale on behalf of our client, Yankee Bank, on the property known as Unit 50-6, 50 Queensberry Street, Boston, Massachusetts. Other than the auctioneer and myself, there was only one other person in attendance at the sale. That gentleman did not present the necessary deposit to qualify as a registered bidder. On behalf of Yankee Bank, and as per their instructions, I entered a single bid of $124,350, and executed a Memorandum of Sale accordingly.”
He thought about the man at the sale—his name was Pierre, Bruce remembered. He had asked Bruce a number of questions, said that he was interested in buying properties at foreclosure sales. He had also said he had access to a lot of money, which was why Bruce spent twenty minutes with him answering his questions.
Bruce finished dictating the memo and brought the cassette to his secretary. “Just put it in draft form. I’ll edit it and put it in final form tonight after you leave.” Bruce could tell she was surprised—few attorneys were willing to even put a letter in an envelope by themselves, much less actually do their own typing. But Bruce wanted to establish a pattern of doing some of his own word processing work, a pattern that he hoped would allow him to escape scrutiny when on future occasions he needed to prepare a particularly private document.
He returned to his office, closed the door and pulled out his billing sheet. He spun his chair around and looked out through his office window at the city below. The exposure was to the west, which gave him a clear view of
the Massachusetts Turnpike, the firm’s client in the eminent domain matter. On his time sheet, he entered 4.5 hours under the Turnpike’s client code, and wrote the following description: “Legal research on issue of valuation standards for eminent domain takings. Also, travel to and from law library.” Bruce smiled to himself at the travel entry, and gave the firm credit for its business sense. Why pay to maintain an extensive law library when your attorneys can simply walk a few blocks to the public law library? An extra half hour billed to the client, and untold thousands saved on library costs.
On the next line of his time sheet, he entered 1.7 hours under the client code for Yankee Bank and wrote the following: “Review title records at Registry of Deeds for upcoming foreclosures on Campos, Bluras, Parker, Valentine.” Bruce had actually spent only twenty minutes at the Registry of Deeds on this matter on his way back from lunch. But he couldn’t afford to fall behind on his billing, and lunch and a Swan Boat ride in the Public Garden had taken up a good chunk of time.
But time well spent. Marci, the real estate broker who had helped him find his new Beacon Hill apartment, was a fountain of information on Boston real estate. And she was happy to share this knowledge with a young, single lawyer, especially a tall one with jet-black hair and a shy smile.
Marci was lively and vivacious, and Bruce—unattached since he had ended a college romance out of fear that his girlfriend would discover his hobby of collecting art—had enjoyed the outing. But he didn’t lie to himself. It was Marci’s knowledge of Boston real estate that he found most attractive.
[Boston Law 01.0] Unlawful Deeds Page 6
