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Lawsuit--ours is over but it can happen to you

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MARKETVALUE

Thread Starter
Sophomore Member
Joined
Feb 11, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Hey gang-

Wanted to share a 'little' legal experience my partner and I have endured for almost a year. Its scary as hell, we were completely innocent but came days away from being in front of a jury, that place you never want to be.

Will try to keep it to the salient details but bear with me.

A little background. February of 2001, my office is conacted by a home owner wanting to know 'what my property is worth' because he is 'thinking about selling my home'. Slam dunk appraisal, easy three sales with spread in sales price heavily documented by realtor notes for appropriate condition adjustments. Solid $260k. Done. Thank you for your check at the door, please dont ever call me again to explain an appraisal to you.

So, July 2001, I receive certified mail in my office matching the regular mail my man in blue is giving me. As a general practice, I dont sign for certified and I didnt, and I had the regular same mail piece in front of me.
Open a three page letter from an attorney letting me know how generous he is for offering me a settlement of $25k made payable to his client. I search our database for his client, it isnt there. Finally search the address and find the appraisal, not the guy who is suing me. A couple of days go by and i walk down the hall to an attorney in our building who does us favors every know and then. He calls the attorney of the guy suing us, and we find out that Mr. Caveat Empor bought the home, painted it, recarpeted it, and tried to sell it for $290k but moved it for $230k for a net loss (after the $15k he claimed he put in it, for what I havent got a clue) of $45k.

They want $25k out of me, $25k out of the seller and $25k out of another appraiser who appraised the property (for $278k I might add). I guess the extra $30k is for pain and suffering for being a jack ***.

Privity of contract! I have no relationship with this guy! My client is defined as Mr homeowner! Read my limiting conditions! Etc., Etc. Tell it to the judge.

Our E&O company sets us up with a big time law firm (Dont fret I know what our premiums get spent on). January 2002 we sit down with our attorney for 4 hours and go over every single detail of the appraisal with him, no stone underturned. He lets us know what really is going on.....Mr. sue happy used to be business partners with the seller and had an interest in the property. The seller had owed the buyer $150k business loan and instead of cash just gave him the condo at a 'discount'. Cash purchase based on two appraisals, ours and the $278k. None of this was known nor disclosed to us.

Buyer/sue boy cleans the place up and tries to flip the property. Well guess what, the condo market aint what is was in spring of 2001 compared to the peak in the fall of 2000. He cant move the place and is left holding the bag and takes a loss. Bad business decision? Should've got my own appraisal? Nope, lets just sue the appraisal the seller hired, he must be in cahoots and reek of fraud.

Feel for me here. We have done nothing wrong. Nothing. But yet this damn lawsuit because of two ex business partners who hate each other will not go away. Depositions get taken, the plantiff brings in experts to debunk us, shouting matches ensue, a car bomb explodes, a food fight breaks out, you name it. In all the appraisal joints, in all of the world, why in the hell did this guy pick me out of a phone book?

Our guys file for summary dismissal based on no case law to support our involvement in such a frivolous lawsuit. The judge was to rule in mid may, she extends the period for the plaintiff to line up somemore BS. Last week i get the call. We are released from the suit. Vindication indeed, yet bitterness as to how we found ourselves in this position.

INTERESTING.....in the eyes of the court, Mr. Litigator was a 'foreseeable user' of our product, therefore we are liable for its use by him. Can you say scary? yes. We were released based on the following taken during the depositions:

My $300 an hour lawyer: "Mr. expert appraiser, can you see anywhere on the appraisal form where my client deviated from standard and accepted appraisal practice?"

Plantiff's expert certified appraiser: "No"

Thats what it boiled down to. The good guys won this time, but I shake my head at how it got this far. Amazing.

Interesting life sucks note to the story: My attorneys who represent not only me but the interest of the E&O company as well, offered to settle for $5k. The other attorney told us to 'go to hell'. So I'm not guilty then why are we offering settlements...because sue rookie its cheaper for us to settle than to go to court to defend you. So you are telling me regardless of my innocence we settle, yes.......that hurts...

Early last summer we stopped doing individual homeowners. Mainly beacuse of what a pain in the neck they are but twinged with litigation fear derived from the above situation. Other than that I asked our attorney what we could have done to prevent this whole thing. His answer 'Nothing'.

In the words of Cliff Clavin "its a dog eat dog world and im wearing milkbone underwear." be carefull outthere...

as someone stated earlier, its not the one you think that bites you later.

Hope this monolouge helped somebody.

have a great weekend.

MRM
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Ah our wonderful legal system. :oops: At least you were let out of it finally. And you can breath again.

My wife was in a car accident a few years ago. Unlicensed, Uninsured driver ran red light and hit her while waiting to turn left. She got spun around a little and limped the car over to the curb. By the time she got out, the occupants of the other car were nowhere in sight. A fire truck came, and finally some people showed back up, then a cop came. One claimed to be hurt (arm I think). they put on a bandage, towed the cars.

One Year later get served with a suit. :evil: Ended up with the same BS, depositions etc. Finally went to arbitration. After the hearing I thought wife's attorney shredded their BS story. But when the arbitrator made his ruling they got a settlement. :x The insurance company decided to settle, their business decision. That I can understand, but I don't like it. What a freakin joke. :evil:
 

MARKETVALUE

Thread Starter
Sophomore Member
Joined
Feb 11, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
LEE-

You feel guilty as hell and like you cant control your own fate. It is a biz decision, but its there own damn fault for setting the precedent.

Loser pays would solve everything................

MRM
 

RHM

Sophomore Member
Joined
Jan 28, 2002
Professional Status
Certified General Appraiser
State
Florida
I got rearended by a fellow in a stolen car full of guns he had also stolen. The cops were chasing him and he hit the rear of my full size chevy truck.

I in turn, was pushed into the small car in front of me. Now my truck took the brunt of the crash, it rammed the bed into the cab. I wasn't hurt but I was "stoved" up for a day or two.

Anyway, I get out of my truck and walk up to the car I had been forced into. The guy was screaming like you had stuck a hot poker in his eye. he was grabbing his neck and hollering to high heaven. His car sustained minor injury. His bumper was bent just a little.

I call my office and get a ride. In about an hour I get a call from my wife. We had a call on the answering machine from the most prominent PI law firm in town wanting the "details" on the wreck. Seems as though the guy in the small car had already sought counsel. I am somewhat ornery and couldn't believe this moron in the small car was going to sue me when there was no way in hell it was my fault.

After the guy rearended me he hit a ditch and there were about 10 cops on him in a flash with guns drawn. I am darn glad they were there. I could imagine me getting out of my truck and confronting this fellow with the stolen car/guns.

Anyway, I had plenty of cops that witnessed the crash and here is this clown trying to sue me. After I spoke with the scumbag PI lawyer, that was the end of that. The guy had absolutely no case at all.

It just blew me away that within 2-3 hours after the wreck I am fielding a call from a lawyer fishing for bucks. I suppose that is the nature of the PI lawyers though. To me, 99% of them are parasites. I don't dislike all lawyers..I have had to engage one from time to time in business ventures but those that try to claim damage for paper cuts are pure slime and we have plenty of them here in Florida.

RHM
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Who was it said, "first thing we do, we kill all the lawyers" ? :wink:
 

BarbaraNJ

Junior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
New Jersey
MV----

Your story is sad but true......I have been involved in a few of these situations throughout my lifetime, mostly outside of appraising but one or two in the business. All have turned out (so far) in my "favor" so to speak, but as you detailed so well, by the time you get done with attorney fees, loss of wages due to court appearances, depositions, lawyer conferences, etc not to mention the constant pain in the gut (or head), it seems that even being Right is Wrong.

P. S. for Lee---I think the quote is from Shakespeare, believe it or not. Can you imagine being in a profession that has been hated for centuries?


______________________

The Harder I Work, The Luckier I Get
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
King Henry in Shakespeare I believe

>>INTERESTING.....in the eyes of the court, Mr. Litigator was a 'foreseeable user' of our product, therefore we are liable for its use by him. Can you say scary? <<
Which proves Statement 9 is worthless on the face of it. I could only argue that we need state legislation at least to explicitly exempt appraisers from lawsuits brought by anyone except an intended user or client. And a real statues of limitation to limit our liability to 2 years. If you cannot complain within that time limit, then shut up.
>>My attorneys who represent not only me but the interest of the E&O company as well, offered to settle for $5k...why are we offering settlements...regardless of my innocence we settle, yes.......that hurts... <<
Again, have you really "won" if you admit some sort of guilt (at least it looks that way when you settle) and perhaps only have to turn around and face the state board? Do you really think the state cannot pick apart your report on issues wholy unrelated to the lawsuit AND argue that you must be guilty of something or YOU would not have settled, like you are going to have any control over the insurer making that judgment.

Again, my opinion is that a judge is comparable to a playing poker against a pro and hoping you have a good run of luck and a jury trial is like playing Russian Roulette with 3 cylinders empty and 3 cylinders full. USPAP be damned, the real world USPAP will be continually reshaped by the courts.

Terrel, waiting my turn months from now
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Intender user includes assigns, of course.

Insofar as the seller believes that an appraisal done for him is "attached" to the property and passes it along to the buyer, I suppose that qualifies as an assign --

NOT REALLY,.. but if the seller had a very recent appraisal done and used it as an exhibit to induce a buyer to buy, that would probably qualify.

I'm open to that.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
A close friend of mine has a construction business and one of her employees fell asleep behind the wheel in a company truck. His vehicle hit another and the driver of the car that he hit was slightly injured. Obviously it was entirely my friends' employees fault, and of course the other driver filed a major lawsuit. The other driver had a legal advantage. Due to another accident several years before he had sustained a closed head injury, so he was able to really make a case that his new injuries would leave him permanently disabled. At the time he was working as a custodian in one of the public schools. Yes, the man had been injured, but it wasn't THAT bad.
Long story short, my friend's insurance company settled out of court at the last minute for $1,000,000 before it went to a jury trial. What really stinks is that the driver's prior closed head injury was due to a drunk driving incident (he was the drunk)in which he killed two other people.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
MV;

first off I have no idea what car insurance suits have to do with your/this scenerio :?: Totally different animal :!:

Interesting, that your attorney or you did not bring up the issues regarding the Federal/Bank- requirement 120 day period for "Re-Cert of Value/Update Appraisal"; 2) Business partners did not "disclose" their situation, would appear to me to be misrepresentation (as thru your description it is a business problem-not fully disclosed to you) on their part and in my mind would warrant a "countersuit" for misleading. Sometimes you need to hire your own attorney to represent YOUR interest.

8)
 
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