MARKETVALUE
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
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