Judge Mohun bails on hearing MLT v. Winter case
Well, the honeymoon period lasted a whole week.
It hasn’t been an auspicious beginning for new Mono County Superior Court Judge Gerald Mohun.
He recused himself from a scheduled Thursday hearing pitting Mammoth Lakes Tourism v. Dirk Winter, citing a conflict of interest.
He did so at 4:45 p.m. Wednesday.
Despite the storm, attorneys for both parties had made special arrangements to be in Mammoth in anticipation of the hearing.
Mohun provided no reason for his recusal.
A best guess: He is a former member of the Board of Directors of the Mammoth Lakes Chamber of Commerce (although not within the last several years), which is affiliated with and bankrolled by Mammoth Lakes Tourism.
He also, until recently, provided some legal counsel for the Chamber, related to structure and by-laws.
Now there is hardly crossover between MLT and the Chamber on operations or strategy, but Mohun, as a new judge, is undoubtedly trying to get off on the right foot, and avoid even the slightest hint of compromised ethics or integrity.
Of course, this isn’t realistic.
Everybody around here has conflicts of interest, and it’s both inconvenient and expensive to call in visiting judges every time there is a perceived conflict.
When I went to court to get The Sheet adjudicated as a newspaper of legal record, I remember Judge Ed Forstenzer basically looking at both sides and ticking off a litany of conflicts that he had – including the fact that his wife had served as my then-fiancee’s realtor. Both sides agreed to proceed.
Didn’t help me. Lost that first case on a technicality. And then waited three years until I could try again. And won the second time around. Forstenzer was fair and consistent on both occasions – though I admired his decision-making much more the second time.
I think Mohun would be best served taking the Forstenzer approach going forward.
Not sure why it would take until 4:45 p.m. the day before a hearing to recuse oneself. Even then, Mohun should have convened the hearing, laid out his conflict, and let both sides decide whether they’d like to proceed.
As it stands now, it could take several months to get another judge in (especially during winter with uncertain travel conditions) to hear this case.
If Mohun had heard the case, this is what he would have contemplated.
In short, Dirk Winter sought to bring his “Christmas Market” concept to Mammoth, a concept he has pioneered successfully in other towns, notably Cambria, CA.
He saw that Sam’s Wood Site was for sale, and believed that he could maintain the four-acre property as an events venue, something which the Town of Mammoth Lakes desired.
As encouragement for Winter to make the deal, Mammoth Lakes Tourism offered to provide him $300,000, with the understanding that the money would be used for infrastructure improvements on the site.
Winter believed that MLT gave him the money with the understanding that yes, he would ultimately make infrastructure improvements, but initially, the $300,000 would be used in property acquisition.
Since Winter acquired the property in 2017 for $3.95 million, he has since had a change of heart, abandoned the Christmas Market idea, and wishes to sell the property. His asking price is $5.9 million.
MLT cried foul and filed a lawsuit. In essence, said MLT Attorney Timothy Sanford in a court filing, if Winter is allowed to flip the property for substantial profit, the net effect of the transaction was that MLT provided Winter a real estate loan.
Sanford contends that Winter shouldn’t be able to realize a gain from what he characterizes as a wrong-doing.
“Winter made a promise for the use of the money that he did not intend to keep,” wrote Sanford.
“MLT wants the property,” said Sanford. “Not only to remain an event site, but to own the property. They didn’t intend on buying it, but they did.”
Translation: if MLT’s money was used for the down payment, MLT believes it owns the property.
But what was interesting to me about the court filings was that they included more information about Winter’s side of the story.
MLT’s lawsuit creates an issue for him, a “Lis Pendens” it’s called. Basically, it flags the property’s title report which is a discouragement to any potential buyer, so Winter is pretty keen on getting this suit resolved.
His declaration is revealing in that he does not dispute that MLT’s money was to be used for the down payment. In fact, he was very up front about it. In three separate emails sent by either Winter or his realtor Cheryl Wood, it is indicated that he needed the $300,000 up front to do the deal.
In an August 19, 2016 email to MLT Executive Director John Urdi, Winter writes, “To make this work we have determined that we need $300,000 for a portion of the down payment.”
In a Dec. 21, 2016 email, Cheryl Wood tells Town Manager Dan Holler, “Dirk needs $300,000 from the town resources to go to escrow … however it is worded, for amenities or improvements pre-paid in order to close.”
So they’ve got this issue that they never quite resolved, and for the sake of getting along, conveniently sort of let it slide and let the deal go through. Upon closure of the deal, MLT hands Winter $300,000, and as Winter’s attorney David Poole points out, “Winter’s clear and reasonable understanding was that everyone knew that the funds would be made available for the closing.” And that if MLT had a different understanding, why didn’t MLT hold some of the money back or only allow disbursal when actual improvements were made? They didn’t.
“If Mr. Urdi had a different understanding, he could have submitted a sworn declaration to that effect [that the $300,000 would not go towards the closing],” argues Poole. “No such declaration was provided.”
So here’s an analogy for you. Both sides desperately want to get married, but they’ve got this one little disagreement about who’s going to fix the house once they’re hitched.
Now this is an old-fashioned marriage, so MLT has to provide a dowry. MLT suggests the dowry should go towards buying a house that Dirk would fix up.
Dirk kept saying, “Hey, let’s buy the house first, and then worry about the fixing.”
MLT kept saying, “Won’t get married unless you promise to fix it.”
So they create this pre-nup where it says two different things. One part of the pre-nup says if Dirk doesn’t fix the house, they’ll get an annulment and Dirk will return MLT’s dowry with interest. But it’s still his house. His name’s on the title.
In another part, it says Dirk has to use the dowry to fix the house, but it doesn’t really say what should happen if he doesn’t.
So now, MLT is suggesting it owns the house, or at least some part of the house.
A status conference is scheduled for February 21, at which time Mono County will hopefully have found a visiting judge to hear the case. It is unclear how long it would that judge to get up to speed or set a hearing date.