Seventh International Contracts Conference Kicks Off at Thomas Jefferson in San Diego

The conference starts on Friday, March 2d. There is a great lineup of speakers and stimulating
topics.

Of especial note, our esteemed colleague Professor Melvin Eisenburg will be the recipient of the 7th ICC Life Achievement Award. Professor Omri Ben Shahar will also receive an award for the best contracts paper published in 2011.

With the weatherman promising nice weather (sunny with highs of 63 and 68 on Friday and Saturday) and great food in store, it doesn't get much better than this. If an interlude in the sun with great food for scholars and practitioners of contracts law to mingle while doing what they love most: taking about contracts sounds good to you, well, its not too late to register - go to http://www.tjsl.edu/conferences/international-conference-on-contracts.

Sorry to say that I cannot attend this year, but sounds like fun!

- JSM

Update on Moorpark Highlands - The Pinnacle

Update on Moorpark Highlands Communities

The Pinnacle

The Pinnacle is a small hillside community of beautiful upscale homes tucked away behind two separate, private gated entries. Located off Ridgecrest Drive just North of Moorpark is this latest Moorpark Highlands development.

The original KB development was a bit of a non-starter. It began as a Pardee Homes community with four models of homes approved though the City of Moorpark. Pardee sold the development and the city approved home designs to KB Homes. KB built three model homes which simply sat unsold. They were nice homes, but the market simply wasn’t there.

Toll Brothers purchased the property and the city approved plans for four of the Pardee Home Models. Working with the City of Moorpark, Toll Brothers had three additional floor plans approved and the development re-plotted to accommodate these models. Toll Brothers rebuilt one of the model homes to the luxury standards they are known for, and simply sold off the other two older KB model homes. A new Toll Brothers “San Miguel” model home was constructed and opened to the public last September.

Sales were slow to begin until buyers began to realize the quality and value inherent in these new homes. That sounds like a sales pitch, but my personal opinion is that Toll Brothers had some real challenges to overcome with public perception until the reality of what was being built here became apparent. I’m told sales are steady now. There simply is nothing new in Ventura County being built in this price range to this quality standard.

The price list for these seven models show prices ranging from roughly $855,000 for a Santa Susana model up to about $1,040,000 for a Chateau version of the Isla Vista Model. These are Feb 1, 2012 prices and will likely rise as sales continue to improve.

Homes are built from 7 available floor plans which include both single and 2- story homes. Currently there are 17 home lots released for sale out of a total of 132 lots in The Pinnacle. Three additional homes are in escrow and 18 homes have already sold. By my count, that means that presently there are 111 lots left to sell. Homes take 7 to 9 months to build and according to their onsite sale manager – Kathleen Martin – they expect to sell about 40% of them as single story models.

I like these homes. They come with many options, including extra rooms, balconies, wet bar or fireplaces. You can choose from 5 types of granite for your kitchen counters, different marbles for the bathrooms or standard tile. Kitchen cabinets are self-closing so you don’t need to fear bruising your side on sharp edges while you bustle around the kitchen with your hands full. Kitchen Aid appliances are standard for the kitchens.

Kohler tub and plumbing fixtures come standard in the bathrooms. Master bathrooms are lavish with jetted tubs and separate shower enclosures. They include double basin Pullman cabinets and often come with a little makeup counter. Count on a large walk-in closet for Mom, but Dad will have to share or he’s on his own. (Some plans have his/hers walk-in closets).

These homes offer $20,000 multi-slide patio doors which slide right into wall recesses, 2 or 3 zone air conditioning and options for pre-installed recessed solar panels that will offer considerable energy savings over the years. These solar panels are well executed and blend in with the contours of the homes instead of looking like a high school science project gone bad. Solar panels are an option who’s time has come. They just make good sense in Ventura County.

Solar panels come with a 20 year lease from Sun Run - a major solar provider - for $45/month. Since most home sizes average 4,000 to 5,000 square feet I’ll leave it to the reader to imagine how much this could save in heating and air-conditioning costs. Also, solar power is an option that allows the use of tankless water heaters, thereby eliminating the costs of continuously heating 75 gallons of water in the standard water heater installed here.

Lot sizes run from about 31,000 sq ft to as much as 47,000 sq ft for lots fronting the arroyo on the West side of the development. I’d say more typical lot sizes range from 14,000 to 20,000 ft for more central properties. Landscaping, pools with Jacuzzi and lavish BBQ areas highlight the spectacular views that many of these homes enjoy.

Imagine sipping something cold and delicious while sitting comfortably in your favorite patio chair on a stonework patio shaded by a wooden beamed framework. Your spouse grills nearby on a permanent BBQ with maybe a mini-bar and gas warmers. Your kids and your neighbors’ kids splash around in the pool or play down the street at the Moorpark Highlands 7 acre park with tennis and basketball courts.

After dinner when the kids are in bed, you and your spouse can share some time in the Jacuzzi and admire the marvelous hillside views.

It’s not my intention to try to list all the wonderful features of these homes – go online to http://www.thepinnacleatmoorparkhighlands.com/ call Kathleen Martin or Diane Valenza at (805) 532-2007 or call me for more in depth information or to schedule a private viewing.

My bottom line impression is simply that these homes start with a high standard of quality and build additional enhancements to your taste.

Now let’s talk about the fine print.

Each home comes with two HOA fees. There is a $95 Moorpark Highlands Master Association Fee and a $145 Pinnacle Association Fee – total $240/month. There is also a very substantial Mello Roos for each property from the City of Moorpark. The local Mello Roos is a 40 year posted bond or city tax. Over the course of the 40 years this adds up to between $50,000 and $70,000 (depending on home size) paid to the City of Moorpark by each home owner.

When you buy a home in the Pinnacle Community, Toll Brothers will pay off your Mello Roos! To my knowledge, no other Moorpark Highlands development has offered its’ buyers this bargain. Of course this begs the question – don’t they just tack that cost on to the home price? The sales office has stated to me that the cost of the Mello Roos is not passed along to buyers. Toll Brothers is serious about selling these homes at a value price.

Some of the other nice things about Toll Brothers homes include what they call a “First Home Buyer Orientation” which is a 300 item checklist that each homebuyer reviews 5 to 7 days before closing on their new home. A “Second Homebuyer Orientation” is completed just before closing to ensure completion of any discrepancies found during the first orientation. This is a very nice way to reinforce buyer confidence in the quality of their new home. A ten-year limited warranty comes with your new home.

These are not exotic mansions and you won’t see many captains of industry helicoptering to and from these homes. Short of that, these are fine homes in a pleasant semi-rural area. Just be aware that there are not many homes in this development. It is a rather special place to raise a family or to retire in comfort.

Just the way I see it,
Mark Thorngren

(805) 504-0228
mark@movewest.com
http://www.markthorngren.com/

Can I pay a "reasonable price" please?

Sure, Article 2 applies to sales of goods. Sure, it provides a flexible approach to commercial transactions by facilitating deals where the parties have failed to provide all terms. Sure, open prices are filled with a "reasonable price." U.C.C. 2-305. I tell my students the virtues of the reasonable price as a saver of deals where the parties just never get around to deciding. After all, who could complain about paying a reasonable price and what seller would complain about receiving one?

So, here's a toast to the reasonable price. The price of the Friday night libation has surely gotten out of hand. Apparently, a Boston lawyer complained at a Cheesecake Factory about the price of a Margarita, which was not disclosed and the waitress could not provide the actual price. (See ABA Journal). This, of course, comes on the heels of the shocked restaurant patron who received a bill for a $275 spaghetti dinner in New York. (See, New York Times).

The sobering reality is that the Cheesecake Factory will now post prices in advance. A wonderful development for those who don't like to be shocked by the bill at the end of the evening. Otherwise, the reasonable price would seem to be all that is due.


- JSM

Pennsylvania DOR Puts Constitutionally-Suspect Affiliate Nexus Interpretation on Hold

On January 27, 2012, the Pennsylvania Department of Revenue delayed until September 1, 2012 the enforcement of its recently announced (and legally questionable) position regarding affiliate nexus.

We have written frequently about state affiliate nexus statutes and proposed legislation, as well as the challenge brought by our client, the Performance Marketing Association (“PMA”), against the Illinois affiliate nexus statute which took effect in July 2011. All of these affiliate nexus laws are of doubtful constitutionality. Indeed, Brann & Isaacson has argued on behalf of the PMA that the Illinois law impermissibly targets Internet performance marketing as a basis for asserting a use tax collection obligation on out-of-state retailers, in violation of both the Commerce Clause of the United States Constitution and the federal Internet Tax Freedom Act (“ITFA”). In an area of law where the authority of the states to expand their taxing power is very much in doubt, every state that has adopted an affiliate nexus law has done so through the legislative process by enacting a statute that purports to require reporting of use tax by remote sellers with no physical presence in the state.

On December 1, however, the Pennsylvania Department of Revenue determined that it did not require a new affiliate nexus statute in order to require use tax collection by Internet sellers advertising online through websites located in Pennsylvania. Instead, the Department issued Sales and Use Tax Bulletin 2011-01, regarding Remote Seller Nexus. The Department asserts in the Bulletin that a variety of activities, if conducted in the state by, or on behalf of, an out-of-state company, already constitute sufficient nexus under the Commerce Clause and state law to require the remote seller to collect Pennsylvania use tax. Some of the activities cited by the Department have been the basis for a finding of nexus for an out-of-state company in prior court decisions around the country (and, presumably, have long been reflected in the Department’s enforcement practice). The Department, however, also included “affiliate nexus” on the list. The Department will now make a finding of nexus for an out-of-state company even if the company’s only activity is merely having a contractual relationship with a person located in Pennsylvania whose website has a link to the remote seller’s website, if the in-state affiliate receives “consideration” for the contractual relationship with the retailer.

The Department’s very broadly-phrased affiliate nexus provision goes even beyond the expansive language of the 2011 Illinois law challenged by the PMA and, in our view, is plainly unconstitutional. The Department’s stated position also appears to be in violation of the ITFA. It remains to be seen if the Department will issue further guidance on affiliate nexus, or step back from its position altogether. For now, the Department press release states that it is delaying the “deadline” on enforcement until September 1, 2012, in order to give Internet retailers and remote sellers more time to comply. We will keep you posted on developments in Pennsylvania and in the area of affiliate nexus more generally.