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Friday, January 8, 2021

Boring Blog Gains some steam. Lawsuit!!!

 I think my readership on my blog used to be a lot higher because I used to rant and rave and go a little crazy more often, journaling the trials and tribulations of my learning curve, and what it means to build an ambitious business in the muck of an unambitious locale.  The good the bad and the ugly.

Lucas taking his Friday leisure a little far.

Though come to think of it, the decline in readership is also probably a result of a multiyear phase where little happened on the blog (but a lot in the real world), or what was being written about was generic progress tracking and not the personal voice of the founder, whose perspective drove the interesting nature the effort.

Also the rise of social media created much more competition for attention spans and eyeballs, and the 'long form' blog maybe doesn't fit as well as twitter and instagram.  Tag and fly.

And to be sure, I'm more boring, -less surprised, outraged, disappointed, scared, proud than I used to be.

That doesn't mean less interesting things happen to me - I'm always amazed at the roller coaster of my life.  I get hit along side the head with a 2x4 at least twice a day, have some amazing successes, develop and nuture long term amazing, have-your-back relationships.  You don't grow from $200k of revenue to $12m without a team, a very strong trusted team.

this good looking home in Narrowsburg will sell before long.

The team changes, stays the same, gets better as we weed people out, invite people in.  Most of my best relationships date back to the recession of 2008 when we stayed busy and really great companies were out there looking for work, and we connected and they did their amazing thing and I paid them and here we are 130 homes together.  It's amazing.

My office team. Me and the ladies.

We also deal with a lot of clients, and as anyone knows who makes their living with 'clients', it's always tenuous, cross your fingers, do your best, be consistent, and hope you can meet their reasonable expectations.

And our contracts that guide these relationships are not that complicated.  For what we do - pair land, homes and clients, allow for a lot of personalization for a set price, manage everything from permits to engineering to design to construction to warranty - the eyes ears and everything else for our clients.  No one does what we do - they can be architects, custom builders, spec builders with limited options - but to offer the diversity and selections and on the fly creativity we do is unusual.  That we do it in 6-8 months, over and over, is extraordinary.

That business adage that 20% of your clients take 80% of your time is true, but probably a little wrong.  They don't take 80% of your time, but they might take a lot more of your mental energy than it's worth - disproportionate.

What's great about being 20 years into this and comfortable with my decisions - in fact, kind of amazed at how many very diverse situations across a wide range of issues I deal with successfully each day.  Across the full range of socio-economic persons, with their varied motivations and goals.

So when Charles Nerko and his wife Danielle Nerko who are scheduled to buy Ranch 42 off of Ridgevieew Road in Kerhonkson NY threaten to sue Catskill Farms for 'Deceptive Business' practices because they have a problem with a change order or something, I don't even get that excited.   Of course, Charles Nerko is a lawyer, of which I have dozens or more.  But he's a litigator, and if you know the kind, they don't know how to resolve problems in common sense way - they know how to demand, bully, threaten and sue - that's what they do and it's unfortunate for them that this approach would bleed over to their own personal home that has appreciated $200k while I'm building it.  Who sues someone who is receiving something that has appreciated $200k in 6 months and works perfectly?  I don't think they sued me yet, but they have threatened.

So why, when we are two days away from closing, when the home inspector, building inspector, board of health and the clients have signed off on the house - why would the complicate their transaction with a never-ending legal process - because that's what litigators do.  They don't know another way.

The lawsuit they filed is meant to harass, embarrass, and bully me, by alerting my bank, by having this show up on public records, by claiming $750,000 in damages without any reasonable way of getting to that number - it's all for show, to make me cower and capitulate - over $4000.  And let's just say they are right, and they win this claim, we are talking 3 to 4 years at a minimum, and then they would have to collect it.  It's stupid and its only purpose is to intimidate instead of problem solve.

Thing is, they have no idea who they are dealing with- my relationship with my bank is rock solid, my reputation in a market like this where buyers outnumber sellers 1000 to 1 will survive, and any reasonable person would attest to actually how beautiful the home turned out - it's nice. And if I'm wrong, I'll retire. And now Danielle Nerko and her Husband Charles Nerko are going to get countersued for defamation, aren't moving into their home, and aren't getting any closer to the dream of this getaway.  And their neighbors will be turned off for sure, since they experienced the same process, but successfully.  

So, my rebuttal, my response, is to publish their actions publically.  Notify their neighbors and my followers.  I'm not only comfortable with what we offer and provide, I couldn't be more proud of my team, which numbers in the hundreds.

I mean, in a middle of a pandemic, where people are hanging onto their rentals and livelihoods with everything they have, we have the Nerkos who actually have designed a really nice home which has appreciated $200k in 6 months, threatening to sue.  And this has been going on since July.  I've never seen a worst example of self-defeating behavior.

To understand how truly absurd it is, you have to understand there is a well-worn legal path to get someone to close a home - you schedule, you ask, you beg, and at last, maybe you can call time is of the essence which even then just starts the clock for 30 days down the road.   As anyone who has ever bought or sold real estate, getting to the closing table is an art, a work of finesse among a lot of diverse parties.  A miracle really.  So these fools think they can just demand it, file a fake lawsuit, and all of a sudden I'll be on my knees begging them to buy my house.  Read the demand letter - not only is it full of false information and misunderstandings (well charge is a lot more components than the cost of the drilling for instance) - who reacts well to be spoken to like that - and now understand this has been going on since July.

Anyone can sue anyone.  Winning is a different matter.   Since he's been threatening to sue me since July, I've insisted he sign a general release, which he is slowly recognizing is going to happen before he moves into that home.  He will acknowledge my team did what we promised.  He won't move in before he does so, his 3-year-old daughter won't experience the wonder of nature and his family won't have the safety and comfort of one of my homes until he does so.  Think about - in this crazy world right now, when a pandemic raging, politics unsafe, trouble swirls - a beautiful house, fully functioning awaits them and yet this is how they choose to end the process, to welcome in this new chapter, this how they choose to celebrate their accomplishment and victory of achieving this grand ambition.  There is little doubt the cost of his lawyer interactions cost more than any minor costing reconciliation we needed to do between builder and client -  so I will say it again because it is so clear, this has nothing with anything other than a person unable to solve a simple problem without a snuggle blanket of litigation.

Sure a little lofty speech for a real estate transaction, but what I think has made us who we are, is we provide more than a home - we are a realization of an idea, an aspiration - that marks a level of personal achievement of our clients and their families.

Sometimes you have to stand on principle, and I don't do it ever, other than one experience when a local retarded little league president asked me to sign a paper that said I was a bad dad, bad coach and bad community member after I challenged him on a very bad decision he made that put kids in danger (Ryan Gillespie).  I've never seen the inside of a courtroom in 20 years, 250 homes, $200m of sales, tens of thousands of subcontracts.  Everyone I work with - the bank, my subs, my employees, municipalities knows I shoot straight, pay my bills and live up to my word.  I may not be the nicest guy, may have sharp elbows and may speak my mind.  But I'm honest.  Say otherwise, and expect a response.

I will post all litigation documents, details, depositions, and decisions (wow, awesome D's).  Sunlight is the best disinfectant.   I've been selling real estate for 20 years, on both sides, and have dealt with thousands of transactions.  The legal theory they are espousing is so unfamiliar to me I'm almost interested in playing this out and seeing the complaint in full.  It goes something like this 'We love our house, we got everything we wanted, a series of inspectors have signed off, the house fully appraised, we have logged no real quality or process complaints along the way, the house is move in ready, the house has appreciated, the builder has offered numerous times to refund our deposits in full, but we are suing for damages we didn't suffer'.    I actually just want to hear what a judge says about this.  

But it's not about a judge, it's about intimidation.  In my experience, the legal route is the absolute worst route to solve a problem.  There's no glory, you lose even when you win, it takes forever, and there is little sense of accomplishment when you are done.  I think that early lesson - of the reality that the law as an ineffective way to resolve problems.  And right now courts are backed up, way backed up, because of the pandemic.  They sue, I countersue for filing a frivolous lawsuit and for defamation, and off we go, into the great wide open of years and years of nothingness.

This year has been a year of trials, black swans, really serious problems, that had to be solved, solved quickly, solved successfully.  It was a year of new problems where the old tools didn't work and new ones had to crafted and forged.  I tell my office I had to come out of semi-retirement this year to keep this ship righted, gave up my 'Mental Health Mondays' and "Site Visit Fridays".  I had to work, solve problems, while managing a lot of day to day business operations driven by the pandemic.  I came out the other side, as tracked by my blog, just a month or two again - drained but with the full realization I'm even better at what I do for those trials then I was going in.  

So this nonsense, in perspective, is barely making it on my radar and in some ways is a real distraction from the mundanity of my daily heavy lift but repetitive problem-solving - while the law sucks for problem solving, on the other hand it's infinitely fascinating.  It's a problem to solve - I hold all the cards (house, deposit, patience) and I have 20 other houses to be validated from that I'm currently building.  If nothing else, I'm aware of a new level of expertise that allows me to approach this with a principled calm that I think will serve me well over the 2nd half of my career of building homes.  And that's without even thinking about that much all my insurance policies that pay for my robust defense.

And like Stephen Cohen, the arch-villian of Hedge Funds when the Feds were trying their best to get him but they just couldn't make the case - go spend some money - in his case he bought a few paintings for $100m+ and then bought the Mets.

I choose a pool -

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