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Small Victories

Even small wins are celebrated!

Story quick jump:
Introduction | Sometimes Judges Take the Time to Read the Papers | Immunity Shields an Appraiser from a Sore Loser


When a lawsuit is filed, one of the first questions asked is how long the case will be pending before it gets resolved. That is not often a question that can be answered with any degree of certainty.

Although it is rare, some lawsuits are resolved in trial. Other matters are concluded if the parties agree to a settlement. Both of those resolutions could take years.

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Earlier in the life of a lawsuit, counsel for the appraiser insured might have a chance to file a motion asking the Judge to dismiss the case. This would be an option if the facts, and the law, are clear. The motion explains to the Judge that no matter how the lawsuit might develop, those key facts, and the applicable law, could not be changed. Rather than waste the time of the parties, and of the court, it would be appropriate to simply end the case.

Unfortunately, these motions are often ignored. Judges want to give the parties (most often the plaintiffs) a chance to develop the case, even when it seems unlikely, they could manipulate the facts in their favor.

Some Judges don’t want to take the time to read the papers and to consider the arguments. They don’t want to make the “hard” call to end a case in its very early stages. We will hear Judges say they think the case should be decided by a jury, even though every Judge knows the odds of a case lasting that long are pretty slim.

Despite the odds not being in our favor, we never stop trying. Once in a while the right facts, good law, our hard-working defense counsel, and a strong Judge come together and one of our motions will be granted and the case gets dismissed. We call these our “small” victories and are case by case. It doesn’t make “new law” that can be used as a basis for argument in other lawsuits. There are no published opinions, but it’s still a win if the decision ends a lawsuit.

Everyone likes a good story, especially when it has a happy ending. No insured wants to be sued and the stress of a lawsuit can be difficult. Every “small” victory is a big relief for the appraiser involved in the case.

Sometimes Judges Take the Time to Read the Papers

In recent years, sellers have been frequent filers of licensing board complaints against appraisers. The reason for the complaint is that the appraisal, done for the lender working with a prospective buyer, did not value the home equal to or above the contract price. In some cases, the seller has to negotiate their contract price downward. In other cases, the deal falls through and the property must be relisted. Last year an insured appraiser was sued by the seller after the prospective buyer’s appraisal came in at about $35,000 below the negotiated contract price. These lawsuits are rare.

In response to this complaint, local defense counsel filed a motion to dismiss arguing the appraiser hired by a lender working with a prospective buyer owes no duty to the seller. The motion referred to language in the appraisal about the intended use and intended user.

Plaintiff filed an opposition citing one old case from another state that held the borrower could rely on the appraisal. He then took the leap and tried to convince the Judge that if the appraiser owes a duty to the borrower then it is reasonable to ask the court to assume the appraiser also owes a duty to the seller. Plaintiff’s counsel said since there was no case law on point in the state where the action was filed, it was appropriate for the Judge to look for guidance in case law from other states.

Typically, a Judge will only look at case law from the state where the case is pending. Since plaintiff’s counsel opened this door, we worked with defense counsel and sent him cases from numerous other states that hold there is no duty owed to the borrower by the appraiser hired by the lender. In addition, we sent counsel copies of the only cases we know that specifically ruled the appraiser retained by a buyer’s lender owes no duty to a seller.

To assist the Judge, counsel copied seven cases from other states and attached more than 50 pages to the reply to plaintiff’s opposition. The goal was to make it as easy as possible for the Judge.

Most Judges would have never taken the time to read the additional materials. It would have been very easy to say that he had to rule in favor of the plaintiff because there was no case law on point in that state. To our surprise the Judge in our case did the opposite. He did read all the cases and he ruled in favor of the insured.

The Judge said, despite the lack of case law in his state, he could not ignore the fact that a number of Judges facing this question ruled an appraiser owed no duty to a borrower. If that was the case, then it was only reasonable to find there was no duty owed to the seller. He granted the defense motion and dismissed the case.

Counsel for the seller at first said he would appeal but then he decided not to do so. We presume he read the cases also and decided it would be an uphill battle to make contrary law.

Trial court Judges have busy calendars and they have to rule on numerous motions every court day. It is sometimes obvious from comments and questions that the Judge didn’t read what was filed. It is pretty uncommon for a Judge to take the time to read through not only the motion papers but also more than 50 pages of additional materials. Based on prior experience, the insured was told that his chances of a dismissal were low. No one was more pleased when the motion was granted.

The steps taken by this Judge were unique to this case and to this motion. His ruling cannot be used to persuade other Judges. This was another small victory but it was very rewarding and it reinforced our collective resolve to keep fighting for each and every victory, no matter how small it might be. ◈

Immunity Shields an Appraiser from a Sore Loser

A hard-fought lawsuit had been pending, for over a year, between a property owner and their tenant. The tenant had exercised an option to purchase contained in the lease agreement. To determine a purchase price, the parties were first supposed to mutually agree upon the retention of an appraiser. It quickly became apparent there would be no agreement.

In the absence of an agreement, both parties were to retain their own appraiser to determine value. The tenant secured an appraisal for $550K. The property owner secured an appraisal for $700K. Despite the appraisal, the property owner claimed he had received an all-cash offer for $750K from a neighbor who was most anxious to purchase the property. The owner maintained he would sell for no less than $750K.

After a few attempts at negotiation, the tenant filed a lawsuit asking the court to order the owner to sell the property for $550K.

The lease provided that if the parties could not reach an agreement, even after securing two appraisals, then the court would appoint an appraiser to determine value. After the tenant lawsuit was filed, the Judge hired the insured to prepare an appraisal of the subject property. That appraisal estimated value to be $560K. The Judge then ordered that the property be sold to the tenant for that amount.

The property owner did not appeal the Judge’s decision. The property was sold for $560K. Almost two years later, the property owner filed a lawsuit against the insured appraiser, alleging his appraisal caused damages of $190K. He was forced to sell the property for $560K. He believed it was worth $750K.

We thought this lawsuit was ridiculous and without merit. Local defense counsel was hired and he filed a motion seeking to dismiss the case. It was argued that the insured appraiser was hired directly by the Judge in the landlord/tenant lawsuit. As a result, the appraiser had immunity. The appraiser only owed a duty to the Judge that retained him. He owed no duty, whatsoever, to this disgruntled property owner. Further, it was the Judge’s order that the property be sold for $560,000 that caused the owner’s “loss.” If the owner did not agree with that decision, he should have filed a timely appeal.

We were pleased when the motion was granted and the lawsuit was dismissed. The Judge who granted the motion wrote a strong decision that chastised the plaintiff/ property owner for filing such a baseless lawsuit. The decision was appreciated as it probably helped convince the plaintiff not to file an appeal.

The case was over about 2 months after it was filed. ◈

Story quick jump:
Introduction | Sometimes Judges Take the Time to Read the Papers | Immunity Shields an Appraiser from a Sore Loser

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