How would you cope? You just spent $100K defending your estate from California's DIR and you lost.

It’s called get the F out of California. Seriously the state can’t keep doing things like this and expect anyone with any sense to stay. I’m sorry they are stealing from you

I’d like to know who this DIR is and why they are even involved? Why do you need or have to sell the bldg? I would be sitting with my atty’s seeking their counsel as to why you/they lost and what are the chances of the appeal working. I would think most of the docs are already prepared so the expensive work is already done. File for an appeal and demand the lawyers don’t leave a page unturned during the appeal. Good luck

Obviously none of us knows the details of the case, why you were sued by the state or the specifics of the claim, the actions that you took (or didn’t take) to cause it in the first place, or anything about how the case went in front of the judge. We also don’t know the financial details of your equity in the building, the likely market value if you could sell on your own schedule and terms, your stake and work to acquire that equity, nor anything else about your net worth and cash situation. And not asking, either!

However, it does not seem on its face as if this will leave you destitute. So while I certainly sympathize with your plight, at least we won’t have to worry about your being able to find a next meal.

Which is not to say that I agree with the state just because “they won the case”. If you can afford the appeal, then I think that strategically I would probably recommend it. (I realize from your posting about this issue that you and I are worlds apart in a financial sense; I’m nowhere near your league in such things. This advice is just “how I feel”, because I can’t even dream of having the option to do or not-do as you can here.) But I would recommend the appeal – as long, drawn-out and costly (for the state) as you can possibly make it, to at least have them counter with a better deal for you. Under that scenario you would still lose, but on terms that you might find more favorable.

And you might even win. I would hope so. You might even make an arrangement with the attorneys to take the appeal on a contingency basis: if you can afford it, you might offer them an attractive ownership stake in the property, should you manage to win the appeal (as well as any subsequent appeals that the state might make).

It isn’t Internal Relations, it is Department of Industrial Relations,

Is ypur building a hazardous worksite? Or is this an asset being seized to mitigate fines and hazards at another location? Why is the state suing you?

Thank you all for your input.

@Cruiser and @zenvelo OK here you go but it’s far more complex than this:

At one time my brother-in-law and my wife owned the apartment building (they inherited it). My brother-in-law sold his half to us in 2010 for a reasonable price at the time.

My broth-in-law is being sued for $7million by the DIR for not providing Workman’s Comp at his ranch where an employed man was hurt very badly by a horse (he’ll require very expensive medical care for life). And the DIR claim that my brother-in-law was hiding assets by selling his half of the apartment building to my wife and I. That is absolutely wrong.

Sounds like you Brother in Law has screwed you.

Was the deed transfer/sale of interest properly recorded with the City of San Francisco? And why is you BIL’s assets being seized?

Yes the proper paper work was filed in San Francisco. He can’t pay $7million so the DIR is taking everything he has including his ranch, beautiful home, two bowling alleys, etc.

If I won this case I was thinking about making some kind of arrangement with my BIL and his wife to let them live in one of the apartments. Even though he has borrowed close to $700K from us over the years and even forged our signatures on a $300K loan, I don’t want them to be homeless or go to jail. But now I just didn’t give a damn about the poor SOB.

Move on.

Did the sale of the building to you and your wife occur before or after the accident?

This really sucks. I probably wouldn’t be sleeping at night if I were you, but I would be wishing I could just get over it and move forward. I torture myself too often with this state of unrest I am all too often, because when life feels unfair I don’t handle it well.

It does sound like your BIL was possibly unloading his assets if he sold to you after the accident. Even if he wasn’t, I can see why the government perceives it that way, since they are inclined to do so.

1. Are you most bothered by losing half the profit on the sale? Or, losing the building?

2. When you sell (if it comes to that) are you basically losing the money you paid for your BIL’s half? It seems to me, to make things really fair for you, he would have to give you back the money you paid for his half, by it doesn’t sound like that is going to happen.

3. You say the DIR is suing your BIL, but will the man who was hurt get all the money? Shouldn’t it be his? Did the man sue your brother?

4. Can you pay the DIR ½ market value, and keep your building?

As an outsider looking in and not knowing every detail I think if you don’t care about owning the building, accept a really shitty thing has happened and take what you can get. I would take some solice that you received the building for “free” although I would still feel I was losing something that is mine unfairly.

The person who was hurt was unlucky in the worst way possible. Your BIL should have had insurance, but it just really is a horrible turn of events that it has come back to haunt him in this way. I guess the ranch was in his personal name and so was the building he owned with you? This sort of thing is so unsettling to me. I really understand why you are twisting and turning from it.

I have to assume that the accident did indeed precede your BIL selling you his part otherwise I doubt the State would have won this case. You could look at it 2 ways….easy come easy go and move on with your life. Or if you have the wherewithal is to give up the money you got from BIL and keep the building if your pockets are deep enough to hold on to the property plus mortgage money is still crazy cheap right now. In either case you really should wash your hands of BIL and his problems. You have done enough for him and he has taken more than a chunk of your hide in the process.

I feel badly for the BIL, it really is an awful circumstance, but he shouldn’t be taking money from his sister and you. So much money too. His life has been devastated I would guess. Hard to deal with I’m sure.

I’m thinking if the brother had not sold you half the building, you would be in the same spot. The government would be seizing his property.

I don’t think you can fight it :(. I think your lawyers made a bunch of money, that’s what I think. I’m curious, why did the lawyers think you could win?

@stanleybmanly The injured ranch worker was stepped on by a hose in 2009. He will likely never recover as he must live in an assisted living home. Poor guy.

@JLeslie I’m most hurt by losing the building. In my mind it belongs to my wife’s family. My wife’s Mother intended it to stay in the family and be passed down through generations to come. My wife’s will indicates that the building will go to our nieces and nephews (we don’t have kids).

The money that we paid my BIL is gone. He’s penniless. He has borrowed and stole from us hundreds of thousands of $’s from 2000 to 2011.

I think that injured man will simply continue to receive medical coverage for the rest of his life from Workman’s Comp. I don’t know if he’s also seeing my BIL.

At the beginning of the trial the DIR made an offer to settle for an undisclosed amount of money. But our attorneys suggested that we define the offer. The DIR may still be willing to accept some sort of cash payout.

@Cruiser Yes I’m done with my BIL. I use to worry about him and his poor wife. I think that he may commit suicide. I really don’t care anymore. If he killed himself now I won’t bother to go to his funeral. I doubt if anyone else would go either.

Ah, well those were pretty pertinent details to leave out of the account. And we still don’t know the timeline on the sale of the apartment building to you vis-à-vis the uninsured accident. (And my sympathies to that unfortunate individual, too.)

It sounds like your BIL was a pretty competent – but unscrupulous – businessman, and yes, he certainly has screwed you over. It’s one thing to make “bad business decisions”, any honest man can do that, but it’s another thing to skirt laws that are in place to protect others from the consequences of some of his business decisions, and quite beyond the pale for him to be forging your signature/s for loans to help him try to avoid the consequences of his earlier bad decisions.

Unfortunately as well, then, you’ve been roped into his bad business. Again, without any knowledge of details of the case – or any other missing and possibly additionally damaging details – this now seems to be a very different case from what was first presented. Since your BIL operated his business without sufficient Workmen’s Comp insurance and benefited from that evasion of the law, he’s now being forced to liquidate assets to cover the loss to the injured employee and the state. And you’re in that business now, too. (Possibly through your own lack of due diligence, or possibly the court saw enough from the case to conclude reasonably that you were aware and were part of a collusion to evade responsibility and shield assets.)

So my advice now is to be compliant. Suck it up, count it as an expensive lesson learned, and move on.

@gondwanalon I misunderstood. I thought there wasn’t any workman’s comp and that was the problem.

If you want to keep the building see if you can still negotiate a settlement. Do you think the court believes you didn’t understand your BIL was selling off assets to avoid the state seizing them? That you were taken advantage of also?

@JLeslie BIL didn’t have any kind of insurance for his ranch workers.

The judge thinks that my BIL didn’t intend to sell the apartment building to my wife and I and that we are all in cahoots. Also the payment to my BIL was too low even though a local property assessor calculated the payment was a fare one at the time of the transaction. Also the payment method to my BIL was questionable (I wonder what part of four $100K cashier’s checks paid by Vanguard on the same day don’t they understand?). I sat through the many hours in court detailing tedious legal dissections of the minutest detail thinking that this is madness!

Anyway I must accept some responsibility for this mess. When my BIL and wife inherited the building it was my intension to stay out of it as I looked at it as something that my wife inherited not me. So I signed a quit claim deed right away. I’m embarrassed to admit that I purposefully made myself a bystander who was not paying attention. Huge mistake. However things changed when when my wife and I bought my BIL out. I had to sign the deed and for a new loan (My wife needed my resources to qualify for the loan). By then I learned that my BIL’s empire was crumbling. He had two apartment building on a cliff that were condemned. He (BIL) had a sexual assault charge and the accident at the ranch. At that point I worried about my BIL. He was always the big shot charismatic and powerful millionaire. Guys like that can’t handle just being one of the minions like me. One way or another I don’t expect him to live much longer. He’e 68 and now penniless. And no matter what, I’ll now give him another dime!

This is such a despicable and weird story of backstabbing and deceit that maybe I could sell it to a novel writer how’ll make a fortune. HA!

It’s another little lesson on life’s deceits.

But I’m a bit perplexed that the state satisfied a judge that it had met the burden of proof regarding the supposed collusion. Clearly, such a cabal only makes sense if it is assumed that you and the wife lack the sense to understand that the state would hunt down the money.

But then again, this scheme of forcing the sale and splitting the proceeds can be argued as the state merely confiscating the BIL’s cut. But there are intriguing issues yet to be addressed. For example, should the state and Fed be permitted to slap you with the capital gains liabilities from the forced sale the state engineered?

Next time @gondwanalon do stuff like this inside a Foundation with your name on it and if anything weird ever goes down you may be found to have done things improperly and stupidly but the DA won’t have enough to bring charges or levy judgements.

But it appears the state skirted the issue of criminal liability altogether. They want the money. And posing this as simply confiscating the BIL’s share of the building gives them a convenient out.

@Cruiser In the future I will not scratch my but without consulting my attorney.

@stanleybmanly Oh I’m sure that we’ll get hit hard with capital gains. I’ll ask my attorney if we can stuff some of the funds into Roth IRAs.

Speaking of criminal actions. The DIR wants money not to put people behind bars which costs money. We didn’t bring this up at the trial and don’t plan on it but my BIL forged my wife’s and my signatures for a $300K loan that we just absorbed into a refinance of the above mentioned apartment building. I was pretty pissed when I found that out but what can I do? What good would it do to hurt an man that is financially so weak and perhaps psychologically feeble. Just recently I found out that he swindled his other sister out of her retirement cabin in Tahoe. This is not the nice guy that I use to think he was. Gives me the creeps to be around him anymore. During a break at the trial my BIL’s wife was saying what a good man her husband is. Good thing that I had an empty stomach. I felt a powerful urge to vomit.

I doubt whether you can use capital gains to fund an IRA, whether Roth or traditional. My understanding has always been that only “earned income” (by which is meant “wages or salary”) are used to fund those instruments. But I have not kept current with changes in the law since Roths became a thing, so the rules may have changed since I cared and needed to know them.

If you come out of this with a capital gain you should consider yourself lucky. Again, the timeline to the accident and sale of the property to you are crucial, as well as the fact that on its face this does not appear to have been an arm’s length transaction. It was a property sold within the family, which hints at collusion (and regardless of price, you could always find experts who will say that it was a fair price, so that testimony may be easily rebutted). If the news also came up during the trial that your brother-in-law had defrauded you of $300K (or forged instruments in your name to acquire that money) and you had subsequently declined to assist in a prosecution, then that also tends to show – to a dispassionate and disinterested observer – that you are in tacit agreement with his tactics.

Obviously, one can’t pick all of one’s family, but one can – and must – be careful in dealing with some of them.

Well, that is an awful story. I’m so sorry that you are in this circumstance. The disappointment must be so difficult, especially for your wife, concerning the dishonesty and theft that was committed against you both by her brother.

I don’t see any reason for you to question doing the quit claim in the beginning. It was your wife’s inheritance, and I think that was very good of you actually. Maybe it wasn’t necessary, but I think it was an honorable gesture.

If you can settle for not much more than paying lawyers for an appeal it might be worth it.

The court can’t control how much you sell it for, right? Would the court be able to demand to see every offer submitted? Or, be the entity to supervise the listing? It could take you a year or more to sell. They might rather a bird in the hand. I don’t know. How do they go about that? Or, do they take it and pay you what they decide?

What does your wife want to do?

Also, you mentioned nieces and nephews, would you want to share ownership with them, and let them chip in to pay the state if you can negotiate a deal?

@JLeslie Thank you for your thoughtful comments and suggestions.

How the property is to be sold has not been determined. A complete report is due within 30 days. It would not surprise me if the government has a large manual just to manage these types hostile takeovers.

My wife has had enough.

I haven’t thought about getting other family members involved. That sounds like another can of worms. Don’t want to go there.

There is a good reason that we didn’t accept a settlement deal with the DIR. If we paid the DIR off then that would clear the way for the other people who are suing my BIL for money to come after the apartment. Then we would be write back in court. This way by losing the case there is nothing left for the other circling vultures (not even bones to pick).

Of course winning in court would be the best possible outcome. It would have been so sweet to watch the DIR attorneys craw back to their offices empty handed. Now they can go back and brag how they stole a few bucks form honest citizens for a bloated State corruption. They really gave me the creeps. Real life SOBs.

@gondwanalon So, since you lost in court the other vultures won’t be coming? I’m surprised that makes a difference

The more I think about this, the more I think the government should go after your BIL for the money. That’s how I would feel, to answer your original question. If I sold off property to avoid it being “taken” by the government, and the deal was at arm’s length, I doubt they would go after the new owner. I guess since this deal was not at arm’s length the court looks at it differently. That’s the big difference I can see.

@JLeslie Thanks for your input and kindly responding to my whining.

There’s nothing left in the apartment building for the other’s suing my BIL to go after. The DIR took the half that the DIR (falsely) considered to be owned by BIL. We have no other ties or apparent ties to my BIL.

I concur with you. My BIL is getting what he deserves.

When I first met my BIL I was very impressed with his high level of success. He owned his own contracting company in Sn Francisco and was worth many $millions. In his mid 50’s he sold his contracting business and sat on a huge fortune with a paid off magnificent mansion of a home on a couple acres of land.

That wasn’t good enough for him. Over the next few years he had to buy 2 apartment buildings sitting on a sandstone cliff overlooking the ocean (That quickly became condemned as the cliff crumbled into the sea). He also bought 3 bowling alleys. People don’t bowl anymore so he lost a lot of money on that. Then he bought a horse ranch that lost more money. Through all that he mortgaged everything to the max, borrowed, and swindled money from everyone he could to try to keep his nutty dreams afloat.

I was surprised to see my BIL so up-beat and smiling at the trial. He was his bold charismatic self. He had selective memory and outright lied while he was on the witness stand. I wonder if he suffers from some kind of slight mental disorder where he can’t correlate cause and effect. He also has not apologized to my wife and I or anyone for his wrong doings.

If I was in his shoes, my spirit would be broken from hurting so many people including several family members. His 65 year old wife has to keep working (her IRA’s were spent long ago) to support him.

I hope that I don’t sound like some kind of rich guy. For 38 years I was just a worker bee (Med Tech) in hospital labs. I have relatively large amounts of money because I’ve invested heavily in the stock market consistently (dollar cost averaging mostly in S&P500) since the early 80’s. My wife is simply a dietitian. We are frugal and always on a budget and watch every dime. That’s not hard for us because that’s who we are.

^^He might be slightly sociopathic. Or, maybe he just doesn’t get ruffled by legal matters. There are people like that, they take things in stride.

I wasn’t thinking anything negative about your “wealth.” I was just regretting not having been in the stock market more the last 30 years. I’m glad you did well.