Problem w/certification 25?

[Abzntminded]

Last year I took 4 days of courses taught by a Jerry Thorton from W. Virginia. A lot of the more interesting material (off topic, of course) amounted to a depressingly steady drum beat of "lawsuit, prison, lawsuit, prison".
("What are the 6 most important words in appraising?"
"Yes, your honor/ No, your honor.")

He spoke at length about Fannie's 2003 revamp of the URAR and how Fannie didn't seem to want any appraiser feedback whatsoever even though they gave lip service to the idea. Needless to say, he was very unhappy w/the new form, which I've found to be a near universal point of view for appraisers.

He seemed to reserve his greatest disgust for certification #25 - where the appraiser states that, "Any intentional or negligent misrepresentation contained in this report may result in...(lawsuit, prison, etc.)" His point was that even something as minor as a typo could be construed as "negligent misrepresentation".

He said before this was set in stone he had a law firm take a look at this statement. Their opinion was that they knew of no other profession (doctor, lawyer, engineer, etc.) where this kind of certification was signed, and that anyone who signed this would be extremely vulnerable. Naturally, this didn't make the 4-day course any less depressing, and that seems to be the struggle these days.

My question is: Does anyone know of an appraiser that actually lost a court case, or was fined or sanctioned or sued over a "negligent misrepresentation" as opposed to something legitimately illegal or unethical?

Does anyone else have misgivings about cert #25? Or have Mr. Thorton's concerns not become an issue?

 

[Elliott]

I'll let $300K of E&O worry about it. Also remember that the 'clause' has never
been tested all the way to the Supreme Court....could be it could conflict with
one or two Bill of Rights provisions and declared excessively vague or declared
unconstitutional.

 

[Terrel L. Shields]

I pretty much quit secondary market before then...we do very few reports on the new URAR and those are for a local bank who puts their own money where their mouth is..

 

[rbrienza]

I dont know the answer to that question but, Does anyone know the name of the lawsuit that changed the From - value of a property as a fact --- to --- it is the Appraiser's Opinion of value?

Thanks

 

[Mztk1]

A type won't do it. From law.com:

"In making a claim for damages based on an allegation of another's negligence, the injured party (plaintiff) must prove: a) that the party alleged to be negligent had a duty to the injured party-specifically to the one injured or to the general public, b) that the defendant's action (or failure to act) was negligent-not what a reasonably prudent person would have done, c) that the damages were caused ("proximately caused") by the negligence. An added factor in the formula for determining negligence is whether the damages were "reasonably foreseeable" at the time of the alleged carelessness

 

[Mike Boyd]

A type won't do it. From law.com:

"In making a claim for damages based on an allegation of another's negligence, the injured party (plaintiff) must prove: a) that the party alleged to be negligent had a duty to the injured party-specifically to the one injured or to the general public, b) that the defendant's action (or failure to act) was negligent-not what a reasonably prudent person would have done, c) that the damages were caused ("proximately caused") by the negligence. An added factor in the formula for determining negligence is whether the damages were "reasonably foreseeable" at the time of the alleged carelessness

That is the THEORY, anyway....but a court and/or a jury might interpret otherwise. Appeals are costly and another judge is often reluctant to go against another judge's findings. Be careful out there!

 

[Restrain]

This was prior to Cert 25, but....

In Houston, an appraiser did an exterior of a home, which was subsequently foreclosed on. The interior found a gutted kitchen, etc. Lender sued the appraiser for negligence. Appraiser relied on a defense that the client wanted an exterior and he had sufficient disclaimers. Case actually went to the US Supreme Court. Appraiser LOST! High dollar loss to his pocket book and E&O provider.

This proves that negilgence is in the eye of the user, courts, and state licensing boards.