text:
"We are committed to: The highest ethical standards. Uncompromising honesty and integrity." —The Windermere Mission Statement "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." —Windermere CEO Geoff Wood's Public Affirmation
Windermere Real Estate Maple Valley's Petition for Determination of Fair Value of Shares of Dissenting Shareholder--RCW 23B.13.300
"...the sale and redemption of CW Title shares and redemption of Windermere Mortgage series for approximately $50,000, and to authorize completion and execution of the purchase and sale documents, consulting agreement, sale and redemption of CW Title shares and redemption of Windermere Title series."
"4. The Company was incorporated in 1999. Its shareholders are Rich Menti, Jim Nelsen, Rick Menti, Michael Ratcliffe, and John Jacobi [at left, respectively]. The company operated as a Windermere real estate brokerage business.
5. On approximately October 10, 2012, the Company negotiated an Asset Purchase and Sale Agreement (the "APSA") pursuant to which the Company agreed to sell substantially all of its assets to Davies Management, Inc.
8. On October 31, 2012, the Company's shareholders held a special meeting. Present at the meeting were shareholders Rich Menti, Jim Nelsen, and Rick Menti, who were also authorized to vote the shares of John Jacobi by proxy. Ratcliffe was absent from the meeting. At the shareholder meeting, the Board of Directors meeting minutes were read, including the Board of Directors' recommendation that the APSA be approved and substantially all of the Company's assets be sold under the terms therein.
10. At the conclusion of the October 31, 2012 shareholder meeting, all present shareholders, including proxy votes, voted in favor of a motion to approve the sale of substantially all assets of the Company through the asset sale and consulting arrangement with Davies Management Inc. as provided in the purchase and sale documents and consulting agreement, the sale and redemption of CW Title shares and redemption of Windermere Mortgage series for approximately $50,000, and to authorize completion and execution of the purchase and sale documents, consulting agreement, sale and redemption of CW Title shares and redemption of Windermere Title series. The shareholders who voted to authorize the execution of the APSA and sale of substantially all of the Company's assets held in excess of 78% of the then outstanding shares.
12. On December 6, 2012, Ratcliffe sent the Company a demand letter, requesting payment for 100% of his shares of the Company."
WINDERMERE REAL ESTATE/MAPLE VALLEY, INC., a Washington corporation,
MICHAEL RATCLIFFE, an individual,
No. 13-2-18255-6 KNT
Petitioner Windermere Real Estate/Maple Valley, Inc. alleges as follows:
1. Petitioner Windermere Real Estate/Maple Valley, Inc. ("Company"), is a Washington corporation with its principal place of business in Maple Valley, Washington.
2. Respondent Michael Ratcliffe ("Ratcliffe") is an individual who, on information and belief, resides in Auburn, Washington.
3. This Court has jurisdiction over the parties and subject matter of the action, and venue is proper in King County, Washington pursuant to RCW 4.12.010 and RCW 4.12.025.
4. The Company was incorporated in 1999. Its shareholders are Rich Menti, Jim Nelsen, Rick Menti, Michael Ratcliffe, and John Jacobi. The company operated as a Windermere real estate brokerage business.
5. On approximately October 10, 2012, the Company negotiated an Asset Purchase and Sale Agreement (the "APSA") pursuant to which the Company agreed to sell substantially all of its assets to Davies Management, Inc.
6. Notice of a shareholder meeting was sent to all shareholders pursuant to Company's Articles of Incorporation and Bylaws on October 10, 2012. The notice stated that the Company's shareholders would vote on the proposed sale of substantially all of the Company's assets and informed them of their right to assert dissenters' rights as required under RCW 23B. 13.200.
7. On October 31, 2012, the Company held a Board of Directors meeting. Present at the meeting were Board members Rich Menti, Jim Nelsen, and Rick Menti. Ratcliffe was absent from the meeting. At the meeting, each member of the Board of Directors who was present spoke in favor of the APSA and each voted in favor of recommending to the Company's shareholders that the APSA be executed and there be a sale of substantially all of the Company's assets.
8. On October 31, 2012, the Company's shareholders held a special meeting. Present at the meeting were shareholders Rich Menti, Jim Nelsen, and Rick Menti, who were also authorized to vote the shares of John Jacobi by proxy. Ratcliffe was absent from the meeting. At the shareholder meeting, the Board of Directors meeting minutes were read, including the Board of Directors' recommendation that the APSA be approved and substantially all of the Company's assets be sold under the terms therein.
9. During the October 31, 2012 shareholder meeting, each participating shareholder expressed their desire to no longer participate in the business operations of the Company, noted the absence of any participation by shareholder Ratcliffe, and identified Davies Management, Inc. as the only viable purchaser of the Company's assets.
10. At the conclusion of the October 31, 2012 shareholder meeting, all present shareholders, including proxy votes, voted in favor of a motion to approve the sale of substantially all assets of the Company through the asset sale and consulting arrangement with Davies Management Inc. as provided in the purchase and sale documents and consulting agreement, the sale and redemption of CW Title shares and redemption of Windermere Mortgage series for approximately $50,000, and to authorize completion and execution of the purchase and sale documents, consulting agreement, sale and redemption of CW Title shares and redemption of Windermere Title series. The shareholders who voted to authorize the execution of the APSA and sale of substantially all of the Company's assets held in excess of 78% of the then outstanding shares.
11. On November 8, 2012, a Notice of Corporate Action Creating Dissenter's Rights was sent to Ratcliffe. The Dissenters' Notice notified shareholders of the corporate action taking place on October 31, 2012, and that the corporate action created dissenters' rights under RCW 2313.13.020. It also supplied a form for demanding payment and informed dissenting shareholders where to send the demand and deposit share certificates. The Dissenters' Notice set December 8, 2012, as the date by which demands must be received by the Company. It also included a copy of chapter 13, RCW 2313, as required under RCW 23B. 13.220.
12. On December 6, 2012, Ratcliffe sent the Company a demand letter, requesting payment for 100% of his shares of the Company.
13. On January 3, 2013, the Company sent a letter to Ratcliffe estimating the fair value of his shares at zero dollars. The Company explained that the estimate was based on Company earnings from 2009-2012 and an asset/liability analysis. Enclosed with the letter were detailed financial statements and records supporting this analysis. The Company's letter further noted that, as a result of the ASPA, the Company may be entitled to future payments and the Company would assign Ratcliffe his pro rata share of such payments. Finally, the Company's letter advised Ratcliffe that, if he was dissatisfied with the Company's offer, he had the right to demand payment under RCW 23 B. 13.280.
14. On January 31, 2013, Ratcliffe's counsel sent an email to the Company demanding payment for his shares. The email states:
Pursuant to RCW 23B.13.280, Michael Ratcliffe hereby notifies Windermere Maple Valley, Inc. ("Corporation) that he rejects the Corporation's valuation of his shares as being zero. Mr. Ratcliffe estimates the value of his shares at $150,000 without interest. Interest on the value of his shares is calculated at the legal rate of 12% from the closing date of the Corporation's sale of it assets.
15. Ratcliffe's demand for payment pursuant to his counsel's January 31, 2013 email did not provide a financial analysis or other support for the estimate that his shares of the Company were valued at $150,000.
16. Based on historical earnings, an asset/liability analysis, and the terms of the ASPA, the Company has correctly valued Ratcliffe's shares at $0, subject to his right to a pro rata share of future payments to the Company arising under the ASPA.
17. On March 15, 2013, Ratcliffe and his counsel requested and the Company agreed to an extension of 30 days as to the deadline to file an action to determine the fair value of Ratcliffe's shares pursuant to RCW 23B.13.300.
18. Pursuant to RCW 23B.13.300, this Court has plenary and exclusive jurisdiction to determine the fair value of Ratcliffe's shares and accrued interest.
WHEREFORE, the Company requests:
A. That the Court determine the fair value of those shares of stock Ratcliffe owns to be $0, or, if the Court should not so determine, that the Court fix the fair value of those shares;
B. That to the extent that the Court may find that Ratcliffe's refusal to accept the Company's offer to receive his pro rata share of future payments arising from the ASPA and his separate demand for payment of $150,000 were arbitrary, vexatious, and not in good faith within the meaning of RCW 23B. 13.310, it award the Company the costs and expenses of these proceedings, including reasonable attorneys' fees, to be assessed against the respondent; and
C. That the Court award such other and further relief as the Court deems just and proper.
DATED this 29th day of April, 2013.
By s/ Christopher M. Wyant
Derek Crick., WSBA #28759
Christopher M. Wyant, WSBA #35561
925 Fourth Avenue, Suite 2900
Seattle, WA 98104
Phone: (206) 623-7580
Fax: (206) 623-7022
E-mail: firstname.lastname@example.com
Attorneys for Petitioner Windermere
Real Estate/Maple Valley, Inc.
Homestreet Bank Review • Windermere Mortgage Services Series LLC Review
SUPERIOR COURT STATE OF WASHINGTON FOR THE COUNTY OF PIERCE—Case No. 12-2-15705-2
Allegations against Homestreet Bank, Windermere Real Estate Services Company, Windermere Real Estate South, and Windermere Mortgage Services Series, LLC., all named as Cross-Claim Defendants:
"WSC tracks loan and Title referrals by WRE office and individual agent. ... It is believed that WRE agents are generally ignorant that their "legal fund" is a profit center for the WRE office in which they work. ... 57. John Jacobi [left], majority owner of WSC is also 70% owner of voting shares of stock in WRE South."
"52. It was likely any suit against the Escrow Company would result in a counterclaim against WMSS South and WRE South. 53. Demco did not pursue any claim against the Escrow Company."JUMP TO THE COMPLETE CROSS-CLAIMS HERE
In response to Plaintiff Homestreet Bank's boilerplate Judicial Foreclosure Complaint against former Windermere Franchise Owner and Defendant Michael M. Ratcliffe, Ratcliffe's estranged wife, Co-Defendant and 3rd Party Plaintiff, Joyce M. Feeley, blows the lid off the Windermere / Homestreet partnership in her Answer, Counter-Claims and Cross-Claims, which in part allege:
"44. The WMIA fund runs a substantial surplus each year in excess of $500,000 that is distributed to the WRE office owners. 45. It is believed that WRE agents are generally ignorant that their "legal fund" is a profit center for the WRE office in which they work."
"...Mr. Bennion exerted substantial pressure through Windermere Mortgage Services Series and Mr. Ratcliffe to compel Ms. Feeley to return and re-sign the deed of trust without any qualifier."
1. VIOLATION OF FIDUCIARY DUTIES. Homestreet Bank violated its fiduciary duties when its agent, RICHARD BENNION, overstepped his role as a managing board member and assumed the role of the lender. Homestreet committed this violation when its agent, RICHARD BENNION, assumed the responsibility of making the final decision to fund the Milton property loan despite the numerous underwriting and processing shortcomings of that loan..." (Emphasis added.)
2. RESPA VIOLATIONS. Because WMSS and Homestreet Bank reimburse WSC and discrete WRE offices in relation to the volume of loans they refer, those payments CONSTITUTE AN IMPROPER KICKBACK in violation of CFR 3500.14. ..." (Emphasis added.)
3. CONSPIRACY TO COMMIT BRIBERY. Because WMSS, Homestreet Bank, and the other crossclaim defendants profited from unlawful bribery and the conspiracy to commit such acts, they have acted in violation of 18 U.S.C. 1962 (a) and (c). ..." (Emphasis added.)
DOWNLOAD A COMPLETE COPY OF JOYCE M. FEELEY'S ANSWER, COUNTER-CLAIMS and CROSS-CLAIMS HERE
The Tragic and Predatory Social Conduct Shared by Windermere Real Estate and San Diego City Ex-Mayor Bob Filner: Subjecting Female Employees to an Abusive Work Environment.
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT—D.C. No. CV-98-01184-RSL
Appeals Court Declares that Windermere "...condoned a rape by a business colleague..."In Little v. Windermere Relocation, the Court stated: "In sum, taking the facts in the light most favorable to Little, because her [Windermere] employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career[ ]."
(Left to right) Windermere CEO Geoff Wood (far left) is listed as a Governing Person of Windermere Relocation. Peggy Scott (second from left), also a Governing Person of Windermere Relocation, "... did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint..." Windermere attorney Paul Stephen Drayna (third from left) is listed as the registered agent of RELO LLC, the entity name of Windermere Relocation. Windermere Founder John W. Jacobi (fourth from left) along with Gayle Glew (far right) are listed as Governing Persons of Windermere Relocation during the Little case. Glew told Ms. Little he did not want any "clouds in the office," and after she would not accept a pay cut, that she should "...clean out her desk."
In Irene McCormack Jackson v City of San Diego; Robert ("Bob") Filner, Plaintiff Jackson's Complaint for Damages, Employment Discrimination and Sexual Harassment, alleges at ¶ 19 that her boss, San Diego Mayor Robert Filner (left), said to her in sum or substance, "you know you are beautiful. I have always loved you. Someday I know that you are going to marry me. I am so in love with you. Wouldn't it be great if you took off your panties and worked without them on?" Plaintiff was aghast and pushed him away. Defendant Filner then stated "Come on. Give me a kiss."
And Ms. Jackson further alleges at ¶ 35:"... (1) Plaintiff McCormack Jackson was an employee of Defendant City of San Diego; (2) Plaintiff McCormack Jackson was subjected to unwanted harassing conduct because she is a woman; (3) the harassing conduct was severe or pervasive; (4) a reasonable woman in Plaintiff McCormack Jackson's circumstances would have considered the work environment to be hostile or abusive; (5) Plaintiff McCormack Jackson considered the work environment to be hostile or abusive; (6) Defendant Filner participated in the harassing conduct;" READ THE ENTIRE COMPLAINT HERE
Guilty Plea to Criminal Charges: San Diego Ex-Mayor Bob Filner Pleads Guilty to Felony False Imprisonment and Battery In the same California Jurisdiction where Windermere Real Estate Operates its San Diego Windermere Homes & Estates Santaluz Franchise
San Diego Ex-Mayor Bob Filner pleaded guilty to a felony charge of false imprisonment by violence, fraud, menace and deceit, stemming from an incident where he forcibly overcame a woman's resistance at a fundraiser, violating her liberty. Filner also pleaded guilty about two misdemeanor counts of battery, one from an incident where he kissed a woman on the lips during one of his "Meet the Mayor" events; and another incident wherein Filner improperly touched a woman's posterior while posing for a photo.
Jackson v City of San Diego; Robert ("Bob") Filner Complaint here.
Defendant City of San Diego's Answer to Complaint here.
Defendant City of San Diego's Cross-Complaint Against Robert Filner here.
Jump to the Court's full Opinion for Little v. Windermere Relocation here.
Click to the Windermere Real Estate Santaluz San Diego page here
Windermere Real Estate Auburn, Inc., sued by employee for Constructive Discharge, Hostile Work Environment, Negligence, Intentional Infliction of Emotional Distress and Civil Conspiracy in Pierce County, Washington, Complaint. Owner of Windermere Real Estate Auburn and Windermere Real Estate Lake Tapps, Thomas Tollen, sued for Civil Assault and Battery, Trespass, Invasion of Right to Privacy, Civil Stalking and other charges—Pleads guilty to related criminal counts.
Complaint alleges Windermere Auburn and Lake Tapps owner, Thomas Tollen, told employee: "You're nothing without me! We don't date, you don't have a job! ... Tollen grabbed Clark and threw her against garbage cans. She fell. While she was lying on the ground Tollen kicked her at least ten times, yelling 'You're a piece of shit! You're nothing without me! You won't have a job!'"
Complaint for Declaratory Relief, Damages and Foreclosure of Landlord's Lien against Windermere Real Estate/Auburn, Inc., and Windermere Real Estate/Cascades Group, Inc. Judgment for Plaintiff: $128,105,63, costs of $342.80 and attorney's fees of $7,420.00 CASE HERE
Windermere Charged with Financial Elder Abuse—AGAIN.
(Download Complaint here.)
Windermere Real Estate Coachella Valley, Palm Desert, Portola Agent Faith Messenger (left), and Windermere Real Estate SoCal (Owners Bennion & Deville, left respectively) Sued for Breach of Fiduciary Duty, Fraud and Deceit, Negligence, Negligent Misrepresentation, Financial Elder Abuse, Intentional Infliction of Emotional Distress, Negligent Infliction of Emotional Distress and Breach of Contract, in Complaint Alleging:
"Dr. Glancz is informed and believes that the misrepresentations, concealments, and non-disclosures of Messenger and all other wrongful acts alleged in this complaint were carried out within the course and scope of her duty as an agent for Windermere. Furthermore, Windermere contracted directly with Dr. Glancz and assigned Messenger to work for Dr. Glancz and had a duty and responsibility to oversee Messenger's conduct. As a consequence, Windermere is responsible for Messenger's conduct and is directly liable to Dr. Glancz not only for Windermere's failures, but for Messenger's failures and wrongful conduct under principles of agency and because Messenger's conduct is imputed to Windermere under the doctrine of respondeat superior," and;
"Dr. Glancz is informed and believes and thereon alleges that Defendants' conduct constituted oppression, fraud, and malice in the commission of financial abuse, and Dr. Glancz is entitled to recover damages for the sake of example and by way of punishing Defendants for financial elder abuse pursuant to California Welfare and Institutions Code section 15657.5 and California Civil Code section 3294."
READ THIS WiNDERMERE ELDER ABUSE CASE NEXT — WASHINGTON APPEALS COURT, DIVISION 1—NOS. 58439-9-I, 58531-2-1: WINDERMERE AGENTS' ABUSE, UNDUE INFLUENCE and EXPLOITATION OF A VULNERABLE ADULT AT WINDERMERE ATTORNEY JOHN DEMCO'S SOUTH WHIDBEY ISLAND FREELAND WINDERMERE FRANCHISE.
"In fact, the copy of the Repair Recommendations forwarded by Mr. Freed HAD BEEN MANIPULATED TO CONCEAL the portion of the repair recommendations which informed the Boyers that the drain field piping was collapsing and needed to be replaced." (Emphasis added.)
WINDERMERE BONNEY LAKE-LAKE TAPPS and OWNER / DESIGNATED BROKER KEN FREED (left), SUED FOR FRAUD, FRAUDULENT CONCEALMENT, BREACH OF FIDUCIARY DUTY, NEGLIGENT MISREPRESENTATION, BREACH OF CONTRACT, CPA VIOLATION and RESCISSION. Update 8/22/13: Plaintiffs' attorney files Stipulation for and order of dismissal of Freeds and Windermere Lake Tapps
WINDERMERE AGENTS' ABUSE, UNDUE INFLUENCE and EXPLOITATION OF A VULNERABLE ADULT AT WINDERMERE ATTORNEY JOHN DEMCO'S SOUTH WHIDBEY ISLAND FREELAND WINDERMERE FRANCHISE: Windermere mother-and-daughter agents Saul and Gabelein take advantage of an elderly woman: "Emma has sold property to members of the Gabelein family for a fraction of its value, jeopardizing her ability to remain in her home for the remainder of her life." (Demco, Saul and Gabelein above.) READ THE COURT'S SHOCKING OPINION HERE.
MORE INNOCENT AND UNSUSPECTING LIVES RUINED BY THE COST OF CHASING WINDERMERE CROOKS THROUGH THE COURTS: Windermere Real Estate Allen & Associates Agent Lance Miller's Deliberate Non-Disclosure of Home's Prior Use as Pot Farm and Methamphetamine Laboratory
Eva and Eddie Bloor relocated to Longview, in Washington State, and purchased a home from Charmaine and Robert Fritz through Lance Miller at Windermere Real Estate/Allen & Associates, who served as dual agent for both parties. The Fritzes and Miller both opted to withhold their knowledge that the one-time rental property had been a site for marijuana farming and methamphetamine production. Windermere and Miller were cognizant of the property's prior use because Windermere staff managed the rental home months earlier when a drug raid occurred, and they subsequently issued a notice of eviction on the tenants after learning of their illicit operation. Locals all herd the news, including the Fritzes, who conversed about it with others. (At left, Lance Miller of Windermere Allen & Associates.) CLICK TO THE COURT'S OPINION HERE.
WINDERMERE BELLEVUE COMMONS ASSOCIATE BROKER DICK PELASCINI'S FORECLOSURE RESCUE RIPOFF SCAM: "...When Pace-Knapp signed further documents at the closing agent's office, she first realized she had sold her house to the Pelascinis. Nevertheless, she proceeded with the sale. As a result of this transaction, the trustee's sale did not proceed... She lived in the house under lease agreements with the Pelascinis for two and a half years, during which time she paid rent to the new owners. She was evicted when the Pelascinis declined to renew her lease a third time." CLICK HERE TO THE COURT'S OPINION.
U.S. DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA—CASE NO. EDCV-01242 JGB (OPx)
Coldwell Banker Sues Windermere Services Southern California for Lanham Act Trade Dress Infringement, Common Law Trade Dress Infringement, and Common Law Unfair Competition in Federal Complaint Alleging:
"23. On or about March 2013, Windermere's Counsel indicated that Windermere would take immediate steps to change the formatting of its WINDERMERE@HOME magazine to alleviate Coldwell. Banker's concerns of trade dress infringement. 24. As of the filing of this Complaint, Windermere has not taken any steps to change the formatting of its WINDERMERE@HOME magazine and continues to incorporate the VIEW Trade Dress in the WINDERMERE@H0ME magazine." DOWNLOAD THE COMPLAINT HERESimilar lawsuit from another Windermere competitor: U.S.DISTRICT COURT—NO. SACV10-01589 JVS (ex): JOSEPH R. DEVILLE, BOB BENNION, BENNION & DEVILLE FINE HOMES [WINDERMERE COACHELLA VALLEY], A&L PARTNERS, ANDREA MARQUEZ, SUED FOR TRADEMARK INFRINGEMENT
Similar lawsuit: U.S. DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE—CIVIL ACTION NO. 12-cv-271: WINDERMERE REAL ESTATE COMPANY AND SEATTLE-WEDGWOOD BROKER, CARISSA TURBAK [SAFFEL], SUED FOR COPYRIGHT INFRINGEMENT, FALSE DESIGNATION OF ORIGIN AND UNFAIR COMPETITION—VIOLATION OF THE LANHAM ACT—BY FINITO SERVICES LLC, DBA SUNSPOT INNS, RESORTS & VACATION RENTALS
Similar lawsuit: U.S. DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA—NO. CV-05401: WINDERMERE REAL ESTATE BAINBRIDGE ISLAND AND ASSOCIATE BROKER DEBBIE NITSCHE SUED FOR COPYRIGHT INFRINGEMENT, VIOLATION OF THE LANHAM ACT, AND UNFAIR COMPETITION.
PARALLEL PROCEEDINGS: WINDERMERE COACHELLA VALLEY/BENNION and DEVILLE FINE HOMES AGENT, PEGGY SHAMBAUGH, CHARGED IN CONCURRENT CIVIL AND CRIMINAL CASES
FEDERAL INDICTMENT No. CR 12 00441: Windermere Coachella Valley Indian Wells, Bennion & Deville Fine Homes Agent Peggy Anne Shambaugh and Husband, Attorney Gary Edward Kovall (left), Indicted on Federal Bribery, Conspiracy and Money Laundering Charges in Palms Springs Region Spotlight 29 Casino Kickback Scheme. Also named are Paul Phillip Bardos and David Alan Heslop. Click here to read or download a .pdf copy of the complete indictment.
Federally Indicted Windermere Coachella Valley Indian Wells Agent Peggy Shambaugh, Windermere Coachella Valley and Owner Bob Deville, Charged by Spotlight 29 Casino Owner Indian Tribe with Breach of Conract, Breach of the Implied Covenant of Good Faith and Fair Dealing; Shambaugh, Deville, Windermere Coachella and Windermere Services, Charged with Breach of Fiduciary Duty, and Professional Negligence; Windermere Coachella, Bob Deville and Windermere Services Charged with Unfair Trade Practices in $30 Million-Plus Deal—Complaint Alleges Windermere Services is an Unlicensed Entity.
SHAMBAUGH, BENNION & DEVILLE, WINDERMERE COACHELLA, WINDERMERE SERVICES and JOSEPH R. DEVILLE SETTLE BEFORE TRIAL: Notice of Ruing & Entry of Judgment— "PLEASE TAKE NOTICE that the Motion for Good Faith Determination filed by Moving Parties PEGGY SHAMBAUGH, BENNION & DEVILLE FINE HOMES, INC. dba WINDERMERE REAL ESTATE COACHELLA VALLEY, WINDERMERE REAL ESTATE SERVICES COMPANY and JOSEPH R DEVILLE ("SETTLING PARTIES") came on for hearing on January 14, 2013, at 9:00 a.m., in Department 07 of the above-reference court, located at 4050 Main Street, Riverside, California. Cheryl D. Davidson, Esq. appeared for SETTLING PARTIES. Gordon Bosserman, Esq (appearing telephonically) and Scott Spolin, Esq. appeared for Plaintiffs. Connie Anderson, Esq. appeared telephonically for David Alan Heslop and Diversification Resources. [¶] The Court, after considering the moving papers and the lack of opposition thereto, found that the proposed settlement was within the ball park of SETTLING PARTIES' proportionate share of liability and was reasonable and equitable pursuant to the terms of Tech-Bilt, Inc. vs. Woodward-Clyde and Associates (1989) 38 Cal.3d 488. The court found no evidence of collusion or conduct aimed to injure the interests of the non-settling parties. The Court granted the Motion for Good Faith Settlement…"
(L to R: (1) Joseph R. "Bob" Deville and (2) Bob Bennion of Windermere Services Southern California, Bennion & Deville Fine Homes, Inc., and Windermere Real Estate Coachella Valley. (3) Peggy Shambaugh, Realtor at Windermere Real Estate Coachella Valley, Indian Wells office. (4) Current Windermere Services Company governing persons John W. Jacobi, (5) Geoffrey P. Wood, (6) Jill Jacobi-Wood, (7) John O'Brien "OB"Jacobi, (8) attorney Paul Drayna—WSBA# 26636.
"..FAIR MARKET VALUE, AT THE TIME PLAINTIFF PURCHASED IT, WAS ONLY $80,000, OR $230,000 LESS THAN PLAINTIFF HAD PAID FOR IT, ON THE ADVICE OF WINDERMERE." (emphasis added)
BENNION & DEVILLE FINE HOMES, DBA WINDERMERE REAL ESTATE COACHELLA VALLEY, SUED FOR CONSTRUCTIVE FRAUD AND OTHER CLAIMS, ALLEGING: "...10. As Plaintiff's real estate broker, Windermere owed an affirmative obligation to Plaintiff to exercise the utmost care, integrity, honesty and loyalty to Plaintiff. Despite the recognition and acknowledgment of this relationship, Windermere never disclosed the fact that Heslop had a preexisting and ongoing financial arrangement with Windermere, through Shambaugh and her then boyfriend, now husband, Gary Kovall ("Kovall"), or the fact that the Tribe was paying substantially more than the market value for the Baseline Property..."
Complaint alleges, " ...the purchase price was raised to $31 million, apparently to compensate for the reduction in the percentage of the commission to Windermere and Shambaugh." Nada L. Edwards, Gary E. Kovall, Robert A. Rosette, Rosette & Associates PC, Monteau & Peebles LLP, Fredericks & Peebles LLP, Fredericks Peebles & Morgan LLP, sued in case referencing Windermere Coachella Valley's Peggy Shambaugh, officially listed as an "Interested Party."
CASE UPDATE: Following his federal indictment on bribery and conspiracy charges, the Court has granted a stay of this civil action against Defendant Gary Kovall, based on his assertion of his Fifth Amendment right against self-incrimination.
"We are still experiencing cash flow issues...." —Windermere Controller Marie D. Wooten
JUDGMENT AGAINST BENNION & DEVILLE FINE HOMES INC., DBA WINDERMERE REAL ESTATE COACHELLA VALLEY, SUED FOR RENT PAID LATE AND UNPAID RENT: Documents in evidence state: "Late Fees which have accumulated for the last ten months total: $10,937.10... Rent has been delinquent January thru November. With the exception of a late fee paid for September... Please remit balance due of: $33,904.96 ..."
Windermere Real Estate Services Company, Windermere Coachella Valley Agent Charles Stewart Smith (left), Bennion & Deville Fine Homes Inc., dba Windermere Real Estate Coachella Valley, Sued for Breach of Implied Warranty of Fitness, Statutory Failure to Make Written Disclosures, Fraud: Fraudulent Concealment and Failure to Disclose, Fraud: Intentional Misrepresentation, Fraud: Negligent Misrepresentation, and Constructive Fraud.
Windermere Coachella agent Charles Stewart Smith says on his Windermere web page that he has "... a track record of proven sales and outstanding client service results."
Charles Stewart Smith review from the WindermereWatch e-mailbag: "...This guy is trouble. I interviewed him to sell my home. I researched his background after we met. I did not hire him. I learned that he does not use his real name Charles Smith. And the guy and his real estate partner Patrick Jordan were in foreclosure and did not notify the DRE. It turns out that there is a reason agents can't use nick names with out notifying clients. You don't find much under Stewart Smith."
Bennion & Deville Agent Scott Palermo (left), individually; Bennion & Deville Fine Homes, Inc. a California corporation, dba Windermere Real Estate Coachella Valley; Louise Hampton, individually; HLH Enterprises, Inc., a California corporation dba Prudential California Realty, sued for General Negligence.
U.S. DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA—CASE NO. EDCV-01242 JGB (OPx)
Coldwell Banker Sues Windermere Services Southern California for Lanham Act Trade Dress Infringement, Common Law Trade Dress Infringement, and Common Law Unfair Competition.
U.S. DISTRICT COURT NO. SACV10-01589 JVS (ex)
A&L Partners, Andrea Marquez, Joseph R. Deville, Bob Bennion, Bennion & Deville Fine Homes, Sued for Trademark Infringement.
OOPS!!! WINDERMERE'S DAVID CARDEN AND DALE MAGUIRE (at left respectively); RE/MAX SPECIALISTS, BOB STALLINGS and PIERRE BALLARD; and SUBJECT PROPERTY OWNER RONNY THARPE, SUED BY SALES PROSPECT WHO FELL INTO OPEN, UNFENCED and ALMOST EMPTY SWIMMING POOL. READ THE ANSWER OF DEFENDANTS BENNION & DEVIILE FINE HOMES, AGENTS CARDEN AND MAGUIRE HERE
Windermere Real Estate [Coachella Valley], Broker Chris Anderson DRE #01400606 and Agent Tony Otten DRE #01400038 (at left, respectively), Sued for Comparative Indemnity and Apportionment of Fault; and Total Equitable Indemnity, in Capitis Southeby's International Realty Cross-Complaint Alleging "...Windermere, Mr. Anderson, and Mr. Otten owed a duty of honest dealing to Plaintiff..." DOWNLOAD THE SECOND AMENDED COMPLAINT IN THE CASE HERE; DOWNLOAD THE COMPLETE CROSS-COMPLAINT HERE.
Second Amended Cross-Complaint alleges: "...Stephen LoCascio and Michael Russell lived together as legally married spouses... the escrow under which Mr. LoCascio would buy the Subject Property was supposed to close on or about June 26, 2012... The Addendums allowed the buyer, Mr. LoCascio to rent the Subject Property and to take possession of the Subject Property, under the Addendums, on April 5, 2012, as a tenant, three months before the close of escrow... the truth was that Mr. LoCascio and Mr. Russell had no place to live...
While in sole possession of the Subject Property, Mr. LoCascio and Mr. Russell committed waste, in that inter alia they ripped large holes in the walls and ceiling, took down a wall, removed all the landscaping, including mature trees, either urinated or allowed their two dogs to urinate throughout the house on the carpeting, changed and damaged electrical wiring, damaged wallpaper, damaged the ceiling and custom made drapery, damaged the plumbing system,, and otherwise committed acts of destruction and waste to the Subject Property, physically rendering the house uninhabitable, and substantially lowering the fair market value...
...Mr. Anderson was the real estate broker and Mr. Otten the real estate agent for Mr. LoCascio and Mr. Russell... Windermere, Mr. Anderson, and Mr. Otten breached the duties owed to Plaintiff when they failed to disclose to Plaintiff that LoCascio/Russell's property has been foreclosed upon and that they did not have the finances to purchase Plaintiff's home..."
A customer of Andrea Turnage (left) from the now-defunct Windermere Real Estate, Indian Wells, California, says: "One of the worst experiences in real estate I've ever had..." and "...extremely unprofessional and unethical..." READ ANDREA'S REVIEW HERE
Aaron Shriner Seattle Real Estate Review: Former Owner / Managing Broker of the now defunct Windermere Real Estate SCA Redmond, Aaron Shriner, has become a Seattle Realogics Sotheby's International Realty Agent! Astute realty service consumers have the right to know Mr. Shriner's Windermere history before enlisting his services at Sotheby's:
CASE #1: Windermere SCA Redmond was proud home to certified Windermere swindler, Paul Stickney, officially adjudged by Washington courts (Click to the Court's Opinion here) as having a conflict of interest and failing to disclose it to his Windermere SCA clients. Download the $1,030,627.00 judgment against Windermere Real Estate SCA and Paul Stickney here.
CASE #2: Windermere Chairman John W. Jacobi's Washington Loan Company, Windermere Real Estate SCA Redmond and agent Christopher Judd, sued for Intentional Misrepresentation and other claims in alleged "...unlawful scheme to enrich themselves at the expense of plaintiffs and others..." Click to the full Complaint in the case here. (Shriner and Stickney at above left, respectively.)
Windermere City Group maintaining "...the highest ethical standards..."
Despite Two Washington State Criminal Counts for First Degree Theft in Realty Transactions, Windermere Spokane City Group Employed Accused Agent Ryan S. Bishop (left), and Exposed Unsuspecting Realty Service Consumers to Bishop's Predatory Ethics.
Shortly after John L. Scott, Spokane, terminated his employment for inappropriate conduct when his clients' transaction file was mysteriously not found by management, Spokane Realtor Ryan S. Bishop went to work the next three years at Windermere City Group, Spokane, and even continued working for Windermere City Group several months after Washington State officially charged Mr. Bishop with two counts of First Degree Theft in realty transactions.
Count #1 arose from the John L. Scott case "…by color and aid of deception, by means of failing to reveal essential information regarding a real estate transaction," where Bishop allegedly manipulated loan documents to have himself paid an "assignment fee" of $196,435.00 from his clients' loan proceeds. The clients didn't learn of the scheme until March of 2012, when they reviewed the complete and final HUD-1 Settlement Statement. Count #2 from the same case pertains to "...deception, by means of misappropriating rent money, with intent to deprive" the same clients of rent proceeds from the newly-purchased residence while they had yet to relocate and occupy it. Further, "…the defendant used his or her position of trust, confidence, or fiduciary responsibility to facilitate the commission of the current offense, as provided by 9,94A.535(3)(n)."
Although the criminal charges were filed in Spokane Superior Court on October 1, 2012, records indicate that Bishop was still employed by Windermere City Group, Spokane, well into 2013. A total of two civil actions plus the aforementioned criminal charges were pending against Bishop during his employment at Windermere City Group, where owner Joe Garst (left) states on his Windermere web page, "I will represent your best interest and be attentive to your needs, maintain the highest ethical standards, and conduct myself with integrity and honesty." Bishop's criminal trial is set for 02-03-2014 in Spokane, and his real estate license is now reported as "Delinquent" by DOL. Incredibly, Bishop is currently listed on Linkedin as an Adult Family Home Administrator at Legacy Gardens of Spokane Adult Family Home. DOWNLOAD THE COMPLETE RYAN S. BISHOP SPOKANE SUPERIOR NO. 12103480-1 CHARGING INFORMATION HERE
March 13, 2012: Vestus LLC, Windermere Real Estate East, and "Investment Specialist & Foreclosure Expert" Christopher Hall, Sued for Negligent or Fraudulent Misrepresentation, Violation of Washington Real Estate Law, including Chapters 18.85 and 18.86 RCW, and Violation of the Washington State Consumer Protection Act, Chapter 19.86 RCW, in Complaint Alleging:
"9. The Defendants hold themselves out as experts in the purchase of foreclosing real property. Defendants provide training and information on purchasing foreclosing property, and facilitate the financing and acquisition of foreclosing properties. 10. Vestus advertises that it gathers "real time market data" on foreclosing properties, "mines" the data, physically drives to the properties in order to ensure the accurate analysis of each property, and rigorously and carefully analyses the information it has collected.... 18. Information readily available to real estate professionals, but not to the public, included agents' remarks that the foundation of the Property had settling issues. 19. The Defendants did not disclose the settling problems to McGrath."
January 11, 2013: After Windermere/Demco's FIRST Summary Judgment Motion, Judge orders that Plaintiff's claims for Breach of Contract, Fraudulent Concealment, Negligent Misrepresentation, CPA and violation of RCW 18.86 agency statute will remain. Windermere Vestus Demco Motion for Partial Reconsideration is DENIED. Plaintiff files jury demand. Vestus Foreclosure Group, Windermere Real Estate East, and Christopher Hall to stand trial for Fraudulent Concealment and other charges on August 12, 2013.
June 21, 2013: Vestus, Windermere East, Christopher Hall and Demco lawyers lose big again. Court denies SECOND Motion for Summary Judgment. DOWNLOAD THE COMPLETE SECOND SUMARY JUDGMENT MOTION HERE; AND THE ORDER DENYING IT HERE
From Plaintiff's Response to Defendants' Second Motion for Summary Judgement: "Well before the April 7, 2011 meeting, Vestus acquired an Agent Detail Report on the Property. On March 13, 2011, Hugh Stewart, one of Vestus' principals, pulled the Agent Detail Report from the MLS site. Hall Dep 21-22. At about one third of the way down the page contains the words, "Partial Slope." At the bottom, in a section called "Agent Only Remarks," is "settling issues"... The Agent Detail Report is not available to the public. Hall, Dep 63-64 ("Can ordinary citizens go on the MLS site and get the agent remarks, the agent-only remarks?" "No; because it is agent-only remarks."). The Agent Detail Report for the Property WAS NOT IN the Auction Packet Vestus distributed on April 7,2011." (Emphasis added.)
July 22, 2013: Just 2 weeks before trial, a Stipulation and Order to Amend Complaint to Remove Claim and Parties has been filed with an Amended Complaint that removes Hall and the Fraudulent Concealment charge. The newly Amended Complaint names defendant parties as Vestus LLC, and Windermere Real Estate East, Inc., and states in part: "...Hall provided McGrath information and recommendations on properties... Information readily available to real estate professionals, but not to the public, included agents' remarks that the foundation of the Property had settling issues... Defendants did not disclose the settling problems to McGrath."
After Stipulation and Amended Complaint, Trial to Proceed against Vestus Foreclosure and Windermere East for Breach of Contract, Negligent Misrepresentation, violation of the Consumer Protection Act, and Breach of Statutory Duty, on August 12, 2013.
Plaintiff's Trial Brief: "Since the hearing on Vestus' motion, [Plaintiff] McGrath has notified Vestus' attorney that she intends to drop her claim for fraudulent concealment. She has decided to drop Christopher Hall as a defendant. She has filed a motion to amend to reflect these changes in a stipulation and order agreed upon by defendants' attorney." Plaintiff's Proposed Jury Instructions and Proposed Special Verdict Form
Defendants' Trial Brief: "...Vestus does not guarantee the accuracy or completeness of information it makes available..." Demco Doubles Down: Vestus/Windermere East Proposed Jury Instructions and Proposed Special Verdict Form. Defendants' Motions In Limine.
Pre-Trial Updates: Joint Statement of Evidence; Defendants' Admissible Docs Notice, ER 904; Mediation Compliance: "The mediation did not resolve the dispute." Joint Confirmation of Trial Readiness, also filed on July 22, states trial is estimated to take 5 days. Defendants' Notice of Admissible Docs, Evidence Rule 904; Notice of Mediation Compliance: "The mediation did not resolve the dispute."
August 8, 2013: Notice Of Settlement Filed.
Windermere Real Estate East and Agent Stephen C. Hender (left) Sued in Complaint Alleging Negligent Breach of Duty, Unauthorized Practice of Law, Violation of the Consumer Protection Act and Claim for Injunctive Relief, by Plaintiff Charging Irretrievable Loss of $100,000.00 Earnest Money Deposit to Steven D. Smith Construction of Redmond. MORE HERE
Complaint alleges: "...Plaintiffs' aforesaid irretrievable loss and legal forfeiture of Plaintiffs' aforesaid One Hundred Thousand ($100,000.00) Dollar earnest money deposit was proximately caused by Defendant Hender's aforesaid tortious conduct of practicing law in violation of RCW 2.48.170-190..." and "...Plaintiffs allege that the unauthorized practice of law tortious actions of Defendant Hender and related negligent supervision of Defendant Windermere East are of such nature that other consumers are likely to be harmed by the Defendants' joint and several ongoing and continued repetition of such unauthorized practice of law." DOWNLOAD THE FULL COMPLAINT
" Judgment is hereby entered in favor of Ivan G. Popchoi and Varvara M. Popchoi and against Csaba Kiss (left) in the total amount of $44,885,39, ... "On October 17, 2006, Melanie A. Leary, an attorney with the Demco Law Firm, P.S., sent Mr. Williams a written response to his October 6, 2006 letter. Ms. Leary advised Mr. Williams that she represented Mr. Kiss and relayed Mr. Kiss's position that the Popchois were not entitled to the protection of the warranties provided by the Statutory Warranty deed executed by Mr. Kiss. Ms. Leary's letter notified Mr. Williams that Mr. Kiss was "far more inclined to let a court decide" the Popchois' warranty rights "than to spend money to settle" the Popchois warranty claim."
SUPERIOR COURT STATE OF WASHINGTON, COUNTY OF SPOKANE—No. 13200611-6
"...so what if we are off $20,000 sometimes."
Vestus LLC and Windermere Spokane City Group agents Brian Sandusky and Aaron Cunningham (at left respectively) Sued in Class Action Complaint (Certification Pending) for Violation of the Consumer Protection Act, Alleging "...Vestus was not a licensed real estate brokerage firm." 10/18/2013: Previously litigated in lower court where plaintiff's claims were dismissed. Court awards summary judgment based on collateral estoppel.
Spokane Class Action against Windermere's Vestus Foreclosure alleges Plaintiff "...lost a significant amount of money... on her purchase of the Liberty Lake property based on the representations made by Vestus," and that Vestus Defendant Cunningham stated: "...so what if we are off $20,000 sometimes." Allegations further state that Cunningham told the Plaintiff that he requested another Vestus client bidder to refrain from bidding as a "favor" to the Plaintiff.
The Class Action Complaint's Prayer for Relief Includes: 4. That it be declared that Vestus' fee/compensation structure is unfair and/or deceptive in violation of Washington's Consumer Protection Act; 5. That the Court rescind the contracts between Defendant Vestus and Plaintiff and other similarly situated individuals; 6. That Defendant Vestus be held liable to Plaintiff and other similarly situated individuals for any commissions or fees paid pursuant to rescinded contracts."
July 17, 2013:Stipulation and Order of Dismissal of Certain Claims Against Defendants Sandusky and Cunningham: "...Plaintiff, and Defendants Sandusky and Cunningham, through their respective counsel of record and hereby stipulate and agree that all claims against Defendants Sandusky and Cunningham in § IV of Plaintiff's Complaint for Violations of Consumer Protection Act, including ¶¶ 4.1 - 4.8 thereunder, may be dismissed without prejudice and without costs. UPDATE 8/29/2013: Trial scheduled for Monday, August 14, 2014, at 9:00 a.m.
Download the complete Class Action Complaint here. Jump to the Vestus Answer here. September 9, 2013: Answer, Affirmative Defenses, Counterclaim and Cross-Claim of Defendants Sandusky and Cunningham. September 13, 2013: Defendant Vestus LLC's First Motion for Summary Judgement.
REALTY PREDATOR and WINDERMERE CHAIRMAN (left) JOHN W. JACOBI'S HUGE and HORRIFIC LEGACY OF GREED, LOSS, DISTRESS and FINANCIAL RUIN FOR WASHINGTON STATE HOMEBUYERS: THE COMPLETE WINDERMERE WASHINGTON LITIGATION HISTORY in comprehensive listings of Windermere Real Estate lawsuits from KING and PIERCE and SNOHOMISH counties, and all Washington counties where Windermere cases have been filed:
Benton • Chelan • Clallam • Clark • Columbia • Cowlitz • Franklin • Grant • Grays Harbor • Island • Jefferson • Kitsap • Kittitas • Lewis • Mason • Pacific • Pend Oreille • San Juan • Skagit • Spokane • Stevens • Thurston • Wahkiakum • Walla Walla • Whatcom • Whitman • Yakima • Download the complete Windermere litigation history from ALL Washington counties here.
IS HE AMERICA'S MOST UNETHICAL LAWYER? Lying to judges and knowingly filing false complaints and other fraudulent documents in their courts. Violating defendant civil rights and attempting to coerce illegal, unjust settlement agreements through intimidating emails, excessive legal expense and intentionally inflicted emotional distress. Running away and voluntarily dismissing his own company's phony and process-abusive lawsuits on the eve of trial. He'll even try deliberately subverting a previously demanded and paid jury proceeding by surreptitiously ordering a bench trial. Is Windermere General Counsel, Lying Lawyer and Legal Process Cheat, Paul Stephen Drayna (left), the nation's most obtuse, unscrupulous and dishonest corporate attorney?
"A good reputation is more valuable than money." —Publilius Syrus
ARE YOU CONSIDERING A WINDERMERE FRANCHISE? CONSIDER CAREFULLY: Does franchiser Windermere Services Company disclose the Windermere network's pervasive professional misconduct, countless lawsuits and vast PR troubles to renewing and prospective Windermere franchisees? Under Federal Trade Commission Rules, Part 436, Disclosure Requirements, any franchiser has a legal duty to disclose: "16 CFR 436.2 (5)(n) ...any fact, circumstance, or set of conditions which has a substantial likelihood of influencing a reasonable franchisee or a reasonable prospective franchisee in the making of a significant decision relating to a named franchise business or which has any significant financial impact on a franchisee or prospective franchisee."
Windermere Real Estate Northwest, Inc., Agent Howard Johnson, Broker and Branch Manager Loretta Larson, Sued for Violation of the Washington State Securities Act (WSSA), Negligence, Negligent Misrepresentation, Negligent Supervision (Against Windermere and Larson), Breach of Fiduciary Duty, Violation of Washington's Consumer Protection Act
(Above left to right) President April Kieburtz, Designated Broker and Owner, Windermere Real Estate/Northwest; the generic silhouette head of Steven Kieburtz, CEO and Owner, Windermere Real Estate/Northwest; and Loretta Larson, Manager and Broker, Windermere Real Estate/Northwest.
ALLEGATIONS FROM THE COMPLAINT: "19. Windermere and Larson were "control persons" of Johnson under the WSSA with respect to Simmons' SCI investment, pursuant to RCW 21.20.430 and common law... 20. Windermere and Larson had the power to control Johnson's offers or sales of products to the public and Larson was the branch manager, charged with monitoring and managing the activities of the agents and brokers affiliated with such branch, including Johnson... 21. In connection with the SCI investment, Johnson misrepresented material facts to Simmons or omitted to state material facts necessary to make Johnson's other material representations, in light of the circumstances under which they were made, not misleading." Read the complete report here
Case Updates: MOTION REGARDING PRETRIAL MATTERS: Windermere Northwest argues that the Court should not allow expert testimony interpreting the Securities Act: "The Court Should Exclude Witnesses from the Department of Financial Institutions." Parties stipulate to trial on June 4, 2012. Notice of Settlement dated 6/1/2012 filed on 6/5/2012.
Montana Supreme Court Reverses the Partial Summary Judgment of Windermere Helena Broker Rick Ahmann's (left) "Acquiron" Real Estate and Business Brokerage After Elderly Victim Seeks Damages of $4,635,485.51, Claims Unlawful Sale of Securities, Negligence and Fiduciary Breach: "The examiner found that DBSI was running a Ponzi scheme."
Are you considering LISTING YOUR HOME with Windermere, or BUYING A HOME LISTED by Windermere? Despite Windermere's false promotion of "Uncompromising honesty and integrity," if anything goes wrong in your Windermere home deal, WINDERMERE WILL FORCE YOU TO SUE. Before you buy or sell with Windermere, focus on the risk of Windermere's well-documented history of unethical misconduct in home transactions:
PAUL STICKNEY WINDERMERE REAL ESTATE'S (A.K.A. STICKNEY TEAM) MILLION-DOLLAR FAILURE TO DISCLOSE A CONFLICT OF INTEREST: Plundering Paul Stickney (left) was officially adjudged by Washington courts as having a conflict of interest and failing to disclose it to his Windermere SCA clients—Mark and Carol DeCoursey—when he sold them a house in Redmond, Washington, and then recommended a remodeling company to the DeCourseys. But Stickney neglected to mention he was AN OWNER of the remodeling company he was recommending, which absolutely ruined their home. Stickney testified that he DID NOT KNOW he was named as the remodeling company's VP until AFTER the DeCoursey's lawsuit began. STORY HERE.
SNEAKY: When the Craig Shriner family's former Windermere Redmond office became Windermere Redmond/East, conflict-of-interest swindler Paul Stickney was deleted from its roster, his listings tendered in the name of Windermere Redmond East agent Patricia "Patty" Ennis (left). But Ms. Ennis' email address was listed as "email@example.com," and her "Cell/Direct: (206) 954-6475" was Paul Stickney's number. CONSUMERS BEWARE. Jump to the Court's Opinion on Mr. Stickney here.
In King County Superior Case No. 13-2-17465-1 SEA, Stickney, who literally destroyed the home and finances of his Windermere Redmond SCA clients (story here), has been SUED FOR MONIES DUE AND OWING OF $5688.06 BY AMERICAN EXPRESS BANK. (Read the Amex Stickney Complaint here; and the Amex Motion for Default here.) Perhaps Predator Paul is tasting the same distress and disgrace that he and Windermere have provided to so many others.
After thoroughly wrecking his unsuspecting clients' lives for nearly six years, Windermere Redmond crook Stickney now whines to the court: "...Although innocent, I was found guilty of things I never did, by a jury that did not hear the other sides of the story at trial... Further, to add insult to injury, the on-line attacks have become supported by judicial credibility..." and "...I am now behind on my house payments, I owe money to the IRS, and I have four other debts that are in arrears. I have been paying on the debts until I could pay no more. This ordeal has exhausted my assets and I am barely hanging on." —Click here for Paul Stickney's complete response to Plaintiff American Express. Update: Amex Motion to Strike Stickney's Answer as "...immaterial or impertinent..." Order Granted on Motion to Strike Portions of Defendant's Answer. 9/26/2013 Order of Dismissal.
Windermere Founder John W. Jacobi's Washington Loan Company, Craig and Rosalie Shriner's Windermere Real Estate S.C.A. Redmond, and its Agent Christopher Judd, Sued for Intentional Misrepresentation and Other Claims in Alleged "...unlawful scheme to enrich themselves at the expense of plaintiffs and others..."
(Above, left to right) Governing Persons of the Washington Loan Company: 1) Windermere Founder John W. Jacobi is listed as President of the Washington Loan Company; 2) Kendra Vita, Manager of franchiser Windermere Services Company is listed as Secretary of the Washington Loan Company; 3) franchiser Windermere Services Company General Counsel, attorney Paul S. Drayna—WSBA #26636—is listed as Registered Agent of the Washington Loan Company; 4) Don Riley, Washington Loan Company manager; 5) Windermere Real Estate S.C.A. Redmond owner Craig Shriner; 6) Windermere Redmond SCA managing broker Aaron Shriner; 7) Windermere Redmond SCA agent Christopher Judd.
From Yahoo Reviews... Comments for Aaron Shriner—Windermere Real Estate: "This office represented the buyer of our home, the agent failed to communicate information in a timely manner, nearly missed several deadlines to extend the offer, and when we expressed our frustration to the broker, we were met with a condescending response, lacking even the semblance of an apology. Find another office to work with - the customer service in this office is VERY poor."
Typical Windermere Network Office Scams: A Windermere Redmond Review That Every Realty Service Consumer Should Read
THE GRUELING HUMAN TOLL OF CHASING WINDERMERE CROOKS THROUGH THE COURTS: $311,304.67 IN LEGAL FEES, 5 YEARS DISTRESSING LITIGATION, and DEMOLITION OF THE HOUSE TO BUILD A NEW ONE...
COURT SAYS WINDERMERE CAMANO ISLAND'S SONYA EPPIG "...DID NOT SO UNEQUIVOCALLY SET FORTH THE PERMITTING AND INSPECTION PROBLEMS..." and "...[WINDERMERE] CAMANO LEARNED ABOUT THE PERMITTING AND INSPECTION PROBLEMS BUT DID NOT INFORM THE RUEBELS."
(Left) Sonya Eppig, still producing commissions for Windermere Real Estate/CIR Owner, Marla Heagle, and for franchiser Windermere Services Company.
"...Eppig did not tell the Ruebels about the addendum Nelson prepared disclosing that the engineering work was not complete and that the building plans did not meet the UBC requirements. Instead, Eppig helped draft a revised addendum that did not so unequivocally set forth the permitting and inspection problems. And when Camano Realty listed the Hovis property for approximately two years, Camano learned about the permitting and inspection problems but did not inform the Ruebels....
... Eppig did not tell the Ruebels that the Building Department had suspended the building permit. Sometime after May 6, Eppig obtained some engineering information from Preview Realty and requested building plans from Hovis' architect.... On May 7 or 8, Eppig sent the Ruebels an extension until May 15 for the feasibility study and assured them that there was no problem with complying with the Building Department's request for the engineering information.... Contrary to Eppig's assurances, VanDuine testified that he told Eppig the engineering data she provided was inadequate...
...Rather than proceed with remodeling, the Ruebels decided it was less costly to demolish the house and build a new house."
PRUDENT LEGAL MANAGEMENT: Consider Adding Franchiser Windermere Services Company To Your Windermere Complaint...
Attention Attorneys and Windermere Fraud Victims: Forced by outrageous ethical breach into suing a local Windermere franchise, broker or agent? Windermere advertises "The highest ethical standards. Uncompromising honesty and integrity," but in truth runs away from its own unethical misconduct and forces damaged Windermere fraud victims to sue and endure years of legal expense, distress and strategic delay.
Opinions state that Franchiser Windermere Services Company has a bona fide legal fiduciary interest in every local Windermere office transaction because it gets money from those transactions: When local Windermere franchises are sued and Complaints name "Windermere Real Estate Services Company," as a party, franchiser Windermere Services claims it has been "erroneously sued" and aggressively seeks its own dismissal from the lawsuit—but don't let that happen. If you're forced to sue your local Windermere franchise, remember: Franchiser Windermere Services Company HAS ALREADY PROFITED on your unethical Windermere transaction through its local franchise, and it therefore shares potential liability for your damages and attorney fees.
LEGAL PRECEDENT: Windermere Services Company has previously argued affirmatively in King County Superior Court No. 05-2-3443 SEA that it is in privity with its Windermere franchisees: In its duplicitous pleading to escape counterclaims, Windermere Services Company ACTUALLY PREVAILED in a Partial Summary Judgment Motion that states it is in "privity" with a Seattle Windermere franchisee because, "...as the owner of the Windermere tradename, it is in privity with Windermere Real Estate/Northeast." Privity is defined as: a.) A relation between parties that is held to be sufficiently close and direct to support a legal claim on behalf of or against another person with whom this relation exists. b.) A successive or mutual interest in or relationship to the same property.
FOR MAXIMUM POSSIBLE RECOVERY, PRUDENT LEGAL MANAGEMENT DEMANDS WINDERMERE FRAUD VICTIMS and THEIR COUNSEL SHOULD CONSIDER ADDING FRANCHISER WINDERMERE SERVICES COMPANY TO ANY COMPLAINT THEY FILE. Access Windermere Services Company's Partial Summary Judgment Privity Motion & Order here.
Franchiser Windermere Services Company suing
and competing against its own franchisees:
THE SAGA OF WINDERMERE PUYALLUP CANYON ROAD (WPCR) IS A REALTY FRANCHISE OWNER'S ULTRA-NIGHTMARE: Franchiser Windermere Services Chairman "...Jacobi decided to open another Windermere office in the territory in which WPCR was operating."
"From the time that the Cross-Complainants exercised their contractual right to terminate the Franchise License Agreement, and while Cross-Complainants were still operating as Windermere franchisees, [Windermere Services] Cross-Defendants engaged in a pattern of unlawful and predatory acts designed to specifically harm Cross-Complainants and destroy their businesses as Windermere franchisees and their future business endeavors."
Attention agents: Considering a business
association with Windermere Real Estate?
IN THE COURT OF APPEALS STATE OF WASHINGTON DIVISION 1—No. 65159-5:
"In Retaliation Windermere Sought to Make the Litigation as Expensive and Time Consuming as Possible to Dissuade Mr. Rodriguez and other Agents from Asserting Claims against Windermere."
"The trial court's award of reasonable attorney's fees and costs to Mr. Rodriguez was both appropriate and necessary pursuant to Washington law and its public policies. A finding otherwise would have validated a unilateral fees clause and resulted in the precise inequity the statute intends to remedy. This Court should disregard Windermere's attempt to truncate the relevant contractual language and misconstrue the law, and affirm the trial court's award of attorney's fees award to Mr. Rodriguez. Likewise, the trial court's award of prejudgment interest at 18%, as the parties had agreed was the reasonable rate of interest between them, was correct and should be affirmed."
SUPERIOR COURT, STATE OF WASHINGTON, COUNTY OF SPOKANE—No. 13201539-5
Complaint Alleges: "Durheim and Groves told Solerno not to inform the [buyer] Mitchells of this fact."
Husband and Wife Windermere Spokane Agents Greg Durheim and Carol Groves (left) and Windermere Manito Spokane (Joseph K. Nichols, Windermere Manito Owner, 2nd from left) Sued for Breach of Contract, Breach of Statutory Duties and Negligent Misrepresentation in Complaint Alleging that Durheim and Groves Told Co-Defendant "...not to inform..." Plaintiffs that Mortgage Lender Would Not Agree to Partial Release of Property.
"Sometime in the fall of 2011, Solerno told Durheim and Groves that his mortgage lender would not agree to a partial release of his property and that the closing on the Solerno property could not happen. Durheim and Groves told Solerno not to inform the Mitchells of this fact." DOWNLOAD A COMPLETE COPY OF THE COMPLAINT HERE
Motion for default of defendants Windermere and Groves: " ...More than twenty (20) days have expired since service of process, and Defendants have failed to file or serve an Answer to Plaintiff's Complaint, and are now wholly in default... He told me that an Answer would be filed no later that May 29, 2013. May 29, 2013 has come and gone without any Answer having been filed or served."
Defendants Windermere and Groves finally file an Answer on June 14, 2013: "...Windermere admits contacting Solernos at Plaintiff's request, to seek Solerno's participation in a boundary line adjustment but denies that the adjustment was to operate a commercial dog kennel."
SUPREME COURT OF THE STATE OF WASHINGTON EN BANC—No. 83660-4
Windermere Himlie Shelton Review: Nearly seven years litigation all the way to the Washington Supreme Court, and still going: Windermere's "The highest ethical standards. Uncompromising honesty and integrity," brings unsuspecting waterfront homebuyers...
An Interminable Windermere Himlie Legal Ordeal in Shelton, Mason County, Washington
"The Court of Appeals correctly reversed the trial court's dismissal of the Jackowskis' claims for breach of statutory fiduciary duties. The Court of Appeals also properly acknowledged that chapter 64.06 RCW does not bar common law rescission, and it properly reversed the trial court's dismissal of the Jackowskis' causes of action relating to fraud concerning the fill issue. For the reasons stated above, we affirm the Court of Appeals and remand to the trial court for further proceedings."
"The trial court permitted the Jackowskis to amend their complaint against Hawkins Poe and Johnson to include an allegation of failure to meet statutory duties under 18.86.050(1)(c) and against the Borchelts, Windermere Himlie, and Conklin for fraud and fraudulent concealment of cracks in the basement."
(At left) Vince Himlie, owner and designated broker of Windermere Himlie, who states that he has been honored as "Realtor of the Year." And Windermere Himlie agent Jef Conklin, whose Windermere web page states, "Jef has the experience to make sure your transactions go as smoothly as possible," and "With Jef and Windermere in your corner you can`t help but come out a winner."
SUPERIOR COURT, WASHINGTON STATE, COUNTY OF PIERCE—Case No. 12-2-15705-2
Allegations against Homestreet Bank, Windermere Real Estate Services Company, Windermere Real Estate South, and Windermere Mortgage Services Series, LLC., all named as Cross-Claim Defendants:
"WSC tracks loan and Title referrals by WRE office and individual agent. ... It is believed that WRE agents are generally ignorant that their "legal fund" is a profit center for the WRE office in which they work. ... 57. John Jacobi [left], majority owner of WSC is also 70% owner of voting shares of stock in WRE South."
"52. It was likely any suit against the Escrow Company would result in a counterclaim against WMSS South and WRE South. 53. Demco did not pursue any claim against the Escrow Company."JUMP TO THE COMPLETE CROSS-CLAIMS HERE
In response to Plaintiff Homestreet Bank's boilerplate Judicial Foreclosure Complaint against former Windermere Franchise Owner and Defendant Michael M. Ratcliffe, Ratcliffe's estranged wife, Co-Defendant and 3rd Party Plaintiff, Joyce M. Feeley, blows the lid off the Windermere / Homestreet partnership in her Answer, Counter-Claims and Cross-Claims, which in part allege:
"44. The WMIA fund runs a substantial surplus each year in excess of $500,000 that is distributed to the WRE office owners. 45. It is believed that WRE agents are generally ignorant that their "legal fund" is a profit center for the WRE office in which they work."
"...Mr. Bennion exerted substantial pressure through Windermere Mortgage Services Series and Mr. Ratcliffe to compel Ms. Feeley to return and re-sign the deed of trust without any qualifier."
1. VIOLATION OF FIDUCIARY DUTIES. Homestreet Bank violated its fiduciary duties when its agent, RICHARD BENNION, overstepped his role as a managing board member and assumed the role of the lender. Homestreet committed this violation when its agent, RICHARD BENNION, assumed the responsibility of making the final decision to fund the Milton property loan despite the numerous underwriting and processing shortcomings of that loan..." (Emphasis added.)
2. RESPA VIOLATIONS. Because WMSS and Homestreet Bank reimburse WSC and discrete WRE offices in relation to the volume of loans they refer, those payments CONSTITUTE AN IMPROPER KICKBACK in violation of CFR 3500.14. ..." (Emphasis added.)
3. CONSPIRACY TO COMMIT BRIBERY. Because WMSS, Homestreet Bank, and the other crossclaim defendants profited from unlawful bribery and the conspiracy to commit such acts, they have acted in violation of 18 U.S.C. 1962 (a) and (c). ..." (Emphasis added.)
DOWNLOAD JOYCE M. FEELEY'S ANSWER, COUNTER-CLAIMS and CROSS-CLAIMS HERE
GERACI v. HOMESTREET BANK: Is HomeStreet Bank a socially responsible financial institution?
SUPERIOR COURT OF WASHINGTON FOR KING COUNTY—No. 08-2-34857-1 SEA
$1,278,418.00 JUDGMENT DEBTOR—WINDERMERE AFFILIATED COMPANY COMMONWEALTH LAND TITLE COMPANY OF PUGET SOUND—IS NOW "CW TITLE" OF BELLEVUE AFTER A QUICKIE NAME CHANGE. SHOULD THE PUBLIC TRUST INCOMPETENT WINDERMERE SUBSIDIARY COMPANIES LIKE CW TITLE? Read the original Complaint in the case here. Read the Third-party Answer and Counterclaim here. Read the "$1,278,418.00 plus interest" Agreed Order against Defendant Commonwealth here.
As prior counsel to Plaintiff Seawest Investment, and then later as counsel for Defendant Commonwealth—IN THE VERY SAME CASE—Windermere-Demco lawyer Matthew F. Davis (left) is deposed as a WITNESS: Read his amazingly evasive and equivocal 80-page deposition in which he states, "I was not involved with this transaction at the time that it was negotiated. And as a result, I assumed that a disclosure statement was provided in connection with the initial contract formation... And it, because I was involved so much later than contract formation, IT SIMPLY DID NOT OCCUR TO ME AS A POSSIBILITY IT WOULD NOT HAVE BEEN PROVIDED." (Emphasis added.) Mr. Davis is also well-known for lying to the court and a defendant, and for abusing process through intimidation and coercion in another Windermere case.
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF IDAHO—CASE NO. 1:09-cv-00522-CWD
WINDERMERE REAL ESTATE/CAPITAL GROUP of BOISE, IDAHO, SUED FOR VIOLATION OF THE FAIR HOUSING ACT—TITLE VIII of the CIVIL RIGHTS ACT of 1968. WINDERMERE AGENT MARY LIESE ALLEGED TO HAVE TOLD AN IFHC TESTER, "WE PREFER PEOPLE 55 AND OVER."
Complaint Charges: "The Defendants have engaged in coercion, intimidation..." CASE UPDATE 07/19/2011: Stipulation of Dismissal filed by Intermountain Fair Housing Council. Defendants Steve Osburn and Mary Liese are now listed as employees at Windermere Boise—Access Realty.
U.S. DISTRICT COURT WESTERN DISTRICT OF WASHINGTON, SEATTLE—CIVIL ACTION NO. 12-cv-271
Windermere Real Estate Company and its Seattle-Wedgwood Office Broker, Carissa Turbak [Saffel], Sued for Copyright Infringement, False Designation of Origin and Unfair Competition—Violation of the Lanham Act—by Finito Services LLC, dba Sunspot Inns, Resorts & Vacation Rentals. The Complaint Alleges: "Without the permission of Sunspot, Defendants selected, modified and published no fewer than 53 Sunspot photographs in their real estate marketing materials on multiple Internet websites..." Above left: Windermere Real Estate Company Owner John "OB" Jacobi; Windermere Real Estate Company Seattle-Wedgwood Broker Carissa Turbak Saffel.
WINDERMERE FRANCHISE OWNERS' BANKRUPTCY and TAX WARRANTS; MISCELLANEOUS WINDERMERE LEGAL, CREDITOR and DISCIPLINARY ACTIONS:
BK Petition of Windermere Real Estate Capital Group, Inc., Owner Steven Alan Osburn: Total Assets of Steven Alan Osburn (left) $25,804.12; Total Liabilities, $1,368,534.85. Creditor Holding Unsecured Nonpriority Claim, Windermere Services Company, $130,000.00. Download the Osburn Bankruptcy Petition here. Mr Osburn is currently a real estate agent at 43 Forty Three Degrees North Real Estate, Boise, Idaho; M2 Idaho, LLC. Osburn's Windermere Capital Group was sued for Violation of the Fair Housing Act.
BK Petitions of Windermere Real Estate Commencement Associates Owners Dick Beeson and David Sinding: Total Assets of (left) Richard E. Beeson—aka Dick Beeson—and Robin L. Beeson, $556,426.00; Total Liabilities, $2,795,696.00. Download the Beeson Bankruptcy Petition here. Petition States Beeson is Currently a Real Estate Broker at RE/MAX Professionals, Tacoma. Total Assets of (2nd from left) David C. Sinding, $482,600.00; Total Liabilities, $1,952,497.00.
STATE WARRANT FOR UNPAID TAXES #167188A: CATALYST COMMERCIAL PARTNERS INC (a corporation) WINDERMERE COMMERCIAL. Catalyst President Robert Regan (left) was "...Broker/Owner of Windermere Commercial/Metro and the Director of Commercial Real Estate for all of Windermere Real Estate throughout the Western United States..."
WINDERMERE REAL ESTATE BONNEY LAKE - LAKE TAPPS Owner Tom Tollen's Highmark Homes WARRANT NO. 13-00771-SC For Unpaid Construction Compliance Penalties, An Unregistered Contractor, Infraction No. NSLOD00507, Compliance Penalty, Interest, Filing Fees and Surcharges, $3070.00. Satisfaction of Warrant No. 13-00771-SC. Click to Windermere Bonney Lake - Lake Tapps lawsuits here.
Complaint alleges that "…Windermere Real Estate/West Campus, Inc. and Dan Dennis SUPPLIED FALSE INFORMATION to AMERCO in its business transaction…" (Above left and right) Windermere Defendant Dan Dennis, the generic silhouette head of John A. Tidwell, Manager, Owner and Designated Broker of Windermere West Campus.
Windermere Real Estate West Campus Federal Way; Agents Dan Dennis and Cheryl Crutcher Sued by Newport Village Condominium Owners Association for Misrepresentations and/or Omissions of Material Fact, Fraudulent Concealment, and Violation of the Consumer Protection Act.
(Above left to right) Windermere Real Estate/West Campus Federal Way Defendants Broker Dan Dennis and Salesperson Cheryl Crutcher. The generic silhouette of John A. Tidwell, Owner and Designated Broker of Windermere West Campus Federal Way. Complaint alleges "... intentionally and/or negligently failed to disclose facts regarding known defects and physical hazards..."
SUPERIOR COURT STATE OF WASHINGTON, COUNTY OF PIERCE No. 09-2-08369-5
Tacoma, Gig Harbor, Federal Way Agent John Siridakis, Sued for Misrepresentation and Violation of RCW 18.86.030(1)(a)(b)(d).
The Complaint in part alleges: "...Defendant John Siridakis knew prior to closing that the City of University Place would not allow the property to be subdivided into additional building lots and knew that Plaintiff were [sic] making the purchase with the express understanding that such subdivision would be allowed..."
From the WindermereWatch e-mailbag: Selling a home the Windermere Way, through bullying female clients with threats, harassment and intimidation...
Windermere Tacoma, Gig Harbor, Federal Way West Campus Agent John Siridakis Review: "Trying to get me and my two young (age 6&7) "kicked out" of our house..."
"This is my third experience with four Windermere agents, three in Gig Harbor and one in Tacoma. These people truly have zero professionalism and worse than that, feel they are entitled to treat their clients as if we work for them not the other way around."
John Siridakis of Tacoma, Gig Harbor, and Windermere Federal Way West Campus, emails HIS OWN CLIENT, HIS OWN CLIENT'S LAWYER, AND HER EX-HUSBAND'S LAWYER to demand "...It is now VERY OBVIOUS that Mrs Seller feels as if she is going to not only Run the ship but steer it as well!..." and "...She needs to be removed from the property via the courts..." CLICK HERE FOR MORE DETAILS
"In Retaliation Windermere Sought to Make the Litigation as Expensive and Time Consuming as Possible to Dissuade Mr. Rodriguez and other Agents from Asserting Claims against Windermere"
The peril in being a Windermere agent: Read ex-Windermere agent Roberto Rodriguez's respondent's brief here.
"On April 4, 2005, without explanation, Mr. Jacobsen terminated Mr. Rodriguez's agency with Windermere. CP 92. As part of the termination agreement, Mr. Jacobsen reviewed the files for five pending transactions and agreed that Mr. Rodriguez was entitled to one half of the listing commission on those transactions...
In November 2005, however, before the Brady transaction closed, Mr. Jacobsen unilaterally changed the commission disbursement form in a way that eliminated Mr. Rodriguez's share of the listing commission. CP 92; TE 14. Neither Mr. Jacobsen nor Ms. Thompson ever told Mr. Rodriguez of the change or that he would not receive his $16,800 share of the commission from the Brady transaction. CP 94." Windermere Wall Street's Richard "Jake" Jacobsen (shown left).
WINDERMERE'S PREDATORY and UNETHICAL FRANCHISING PRACTICES:
A REAL ESTATE FRANCHISE OWNER'S ULTRA-NIGHTMARE: "...Jacobi decided to open another Windermere office in the territory in which WPCR was operating..."
Third Party Complaint Alleges, "Despite Jacobi's contractual obligation to personally guarantee WPCR obligations to Bank of America and demands by WPCR members to do so, Jacobi failed and refused to sign personal guarantees of these obligations," and "On September 14, 2010, Maxwell heard from a real estate agent working at WPCR that the agent had received an email from WSC [franchiser Windermere Services Co.] notifying him WPCR's franchise had been terminated. This notice was sent to WPCR's real estate agents before Maxwell learned of the termination of WPCR's franchise." (Windermere founder John Jacobi, left.)
WINDERMERE SERVICES COMPANY v. MAXWELL (FORMER WINDERMERE PCR OWNER) UPDATE: VOLUNTARY DISMISSAL OF CLAIMS FILED
WINDERMERE SERVICES LITIGATION with DISGRUNTLED FORMER FRANCHISEES
24 Former Windermere California Offices Drop the Windermere Brand
DEALING WITH WINDERMERE-DEMCO LYING LAWYERS and LEGAL PROCESS CHEATS, PAUL STEPHEN DRAYNA and MATTHEW F. DAVIS?
DON'T EXPECT HONEST, AVERAGE LEGAL COMPETENCE—OR EVEN COMMON DECENCY: Opposing counsel and legal professionals should take note of Windermere Services Company and Demco Law Firm Lying Lawyers and Legal Process Cheats, Paul Stephen Drayna and Matthew F. Davis (shown left, respectively).
These two princes of process abuse file false, prevaricating lawsuits merely to intimidate Windermere victims, coerce unjust settlements, and bankrupt innocent defendants—then they run away and voluntarily dismiss their own action under CR41 just before trial when they fail at forcing an innocent defendant to sign away their speech rights. For proof, click here to read one of the Drayna/Davis/Windermere proposed "settlement" agreements that terminate speech rights, accompanied by Windermere's specious Trade Libel & Defamation Complaint and its CR41Voluntary Dismissal.
Holding lawyers in low esteem has become a national pastime, and absolutely craven characters like Drayna and Davis are just a couple of the many reasons why: They will lie to courts and opposing parties. They will file fallacious and erroneous documents with the court. They will email an opposing party telling them not to hire a lawyer when they have just served that party a lawsuit. They will call a judge's chambers and request more time without informing an opposing party. They'll even file an order for a bench trial when they know a jury trial has been demanded and paid for. Their poor reputations proceed them at court—and consequently—also reflect on those whom they represent before judges and courtroom personnel.
Windermere-Demco must often be compelled by courts to provide or participate in discovery—as in this example. For greater detail on Drayna-Davis misconduct—click here. information on Windermere Services Company's privity with franchises—click here.
Jury Finds Windermere's "Affiliated Service" Business, Commonwealth Land and Title Company of Puget Sound, Negligent, Awards Third-Party Plaintiffs $1,190,000.00...
...Don't risk a sloppy, incompetent home transaction, or a concealed Windermere agent/broker insider referral scam. Commonwealth Land and Title Company of Puget Sound changed its name to "CW Title" as of September 1, 2011: CW Title is just Commonwealth Land and Title Company of Puget Sound by another name. Don't Trust CW Title with your home!
CW TITLE REVIEWS: "I'm still waiting to close on my property because of her lies."
Windermere's Commonwealth Land Title of Puget Sound—AKA CW Title—Sued for Slander of Title and CPA Violation: Dismissal Update
BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, a Texas Limited Partnership; NORTHWEST TRUSTEE SERVICES CORPORATION, a Washington Corporation; COMMONWEALTH LAND AND TITLE OF PUGET SOUND, LLC, a Washington Limited Liability Company; FEDERAL HOME LOAN MORTGAGE CORPORATION, a United States Government Sponsored Enterprise, sued for Wrongful Foreclosure, Violation of the Consumer Protection Act, and other claims.
Complaint alleges: "This is a violation of the Trustee's duty of good faith as provided by statute and a violation of federal statutes."
CO-OWNER OF WINDERMERE MOUNT VERNON/SKAGIT VALLEY AND WINDERMERE ANACORTES PROPERTIES, NATE SCOTT; ALSO SALES MANAGER COLLEEN CRAIG, AND AGENT MEREDITH LAWS OF WINDERMERE ANACORTES PROPERTIES (left, respectively), SUED FOE FRAUD IN MYSTERIOUSLY APPEARING "2ND LISTING" CASE
DELIBERATELY AND KNOWINGLY CONCEALING TOXIC RAT INFESTATION IN A RUINED HOME DECEPTIVELY PAINTED-UP WITH FRESH "MARTHA STEWART COLORS," AND THEN LYING ABOUT IT, TOO. WINDERMERE REAL ESTATE NORTHEAST KIRKLAND'S INCREDIBLE PREDATORY LIARS, GEORGE RUDIGER AND JOAN WHITTAKER: THE WORST OF THE WINDERMERE WORST. (At left, George Rudiger and some of his concealed rats; lying Realtor Joan Whittaker photo unavailable.)
Current Windermere Real Estate Chino Hills King Realty Group Owner, Richard Michael King, had real estate license "...revoked; provided, however, a restricted real estate broker license shall be issued..." by Department of Real Estate, State of California, when previously operating as Century 21 King Realtors...
...From "In the Matter of the Accusation..." filed by the Department of Real Estate, State of California, June 11, 1998: "The overall conduct of Respondent KING [left], constitutes a failure on his part, as officer designated by a corporate broker licensee, responsible for the supervision and control over the activities conducted on behalf of MDR by its officers, managers and employees as necessary to secure full compliance with the provisions of the Real Estate Law including the supervision of the salespersons licensed to the corporation in the performance of acts for which a real estate license is required.
This conduct is cause for the suspension or revocation of the real estate license and license rights of KING pursuant to the provisions of Sections 10159.2 and 10177(d) of the Code." Mr. King's license was reinstated on August 13, 2002.
Windermere Affiliated Business OLD REPUBLIC HOME PROTECTION COMPANY SUED IN FEDERAL NATIONWIDE CLASS ACTION COMPLAINT alleging, "This case pertains to defendant's uniform, nationwide practice of charging home warranty premiums in connection with the settlement or closing of home mortgage loans in a manner that violates RESPA, specifically Section 8(a), which prohibits, among other things, the giving or accepting of fees in exchange for the referral of any "service involving a federally related mortgage loan" to "any person."
THE "AFFILIATED" BUSINESSES THAT PAY PUBLIC PREDATOR WINDERMERE REAL ESTATE, ITS EMPLOYEES AND/OR AGENTS—WHO HAVE A DIRECT OR INDIRECT OWNERSHIP INTEREST AND MAY RECEIVE A FINANCIAL BENEFIT—TO STEER HOME BUYERS AND SELLERS TO THEIR SPECIFIC SETTLEMENT SERVICES: Is it unethical?
WINDERMERE AGENTS and BROKERS COMPEL SELLERS and BUYERS TO SIGN A FORM: Windermere SoCal's "Affiliated Business Arrangement" in part states:
"This is to give you notice that Windermere Real Estate SoCal has a business relationship with Old Republic Home Warranty, GeoAssurance, Orange Coast Title Company, The Escrow Source, imortgage.com and Mortgage Capital Partners. Windermere Real Estate SoCal and/or certain owners, employees and/or agents of Windermere Real Estate have a direct or indirect ownership interest in Old Republic Home Warranty, GeoAssurance, Orange Coast Title Company, The Escrow Source, imortgage.com and Mortgage Capital Partners. Because of these relationships, this referral may provide a financial benefit to Windermere Real Estate SoCal, its employees and/or agents. DOWNLOAD A PDF COPY OF THE WINDERMERE SOCAL "AFFILIATED BUSINESS ARRANGEMENT" HERE
GERACI v. HOMESTREET BANK: Is HomeStreet Bank a socially responsible financial institution?
UNABASHED PROFIT ON WINDERMERE AGENTS and BROKERS WITH LEGALLY ADJUDICATED HISTORIES OF UNETHICAL MISCONDUCT, and EXPENSIVE, INTIMIDATING, PHONY LAWSUITS FILED TO TERMINATE THE SPEECH RIGHTS OF DAMAGED WINDERMERE FRAUD VICTIMS...
PUBLIC PREDATORS: Windermere Founder and Chairman, John W. Jacobi (left), and Windermere Services General Counsel, attorney and Jacobi yes-man, Paul Stephen Drayna—a University of Wisconsin Law School alumnus (right)—ruin damaged Windermere customers with marketing lies and the costly, mendacious lawsuits they file against defrauded Windermere victims who speak publicly.
Jacobi and Drayna falsely sue an outspoken party for trade libel and defamation, try to coerce the defendant into a "dark clause" settlement agreement through fear and intimidation, continue to prosecute the bogus action for years at enormous cost to the parties, then run away and voluntarily dismiss their own lawsuit under Civil Rule 41, just prior to trial, when the honest, innocent victim persists in refusing to sign away their speech rights. Is Windermere Real Estate one of Washington's most respected brands?
Windermere Real Estate Bellevue Commons Sued for Unlawful Removal and Exclusion of Plaintiff from the Residence, Negligence, Breach of Statutory Duty, Conversion, and Violation of the Consumer Protection Act. Windermere Bellevue Commons Sales Associate Tony Ferrelli's Alleged Response when Informed of Plaintiff's Missing Personal Property was "Not my problem." The Windermere Bellevue Commons Answer here.
(Left to right) Windermere Bellevue Commons associate Tony Ferrelli, associate Marcus Crane, and Windermere Bellevue Commons owners Courtney Adams, and Amy Adams, whose Windermere web page states "I strongly believe that everyone should be treated with kindness, fairness, caring, and honesty." But does Ms. Adams' definition of honesty include informing the Bellevue Commons clients of Dick and Cecilia Pelascini about their violation of the consumer protection act?
Maria Kalafatich of WINDERMERE PROFESSIONAL PARTNERS, Tacoma, Sued for Negligent Misrepresentation, Fraud and Fraudulent Concealment, Rescission, Violation of the Washington Consumer Protection Act, Professional Negligence / Violation of RCW 18.86.030.
Leslie Walters of WINDERMERE COMMENCEMENT ASSOCIATES, Tacoma, Sued for Professional Negligence /Violation of RCW 18.86.030. Defendants WINDERMERE PROFESSIONAL PARTNERS, LLC, and WINDERMERE COMMENCEMENT ASSOCIATES, INC., Sued for Vicarious Liability Under RCW 18.85.155 as Liable for the Tortius Conduct of Defendants Kalafatich and Walters.
(Left to right) : Windermere Professional Partners' Maria Kalafatich, who states on her Windermere web page that "My clients appreciate my integrity..." Windermere Commencement Associates' Leslie Walters, Windermere Commencement Associates owners David Sinding and Dick Beeson. Windermere Professional Partners owner Michael Robinson.
WINDERMERE REAL ESTATE/WALL STREET—Where Windermere Founder John W. Jacobi is listed as Director—PROFITS ON LOAN-CON SCAMMER CHERYL JONET
Recently deceased Windermere Real Estate/Wall Street agent Cheryl Jonet was a judgment debtor and defendant in many legal actions involving lawsuits for mishandling earnest money, the breach of promissory note agreements, and unlawful detainer. Peter Doorish was selling a home in February of 2005, and Jonet was a buyer's agent. Jonet represented her buyer as being a lawyer, when in reality, the buyer was in fact a clerical employee and the single mother of four children.
Jonet convinced Doorish to provide the buyer a $50,000 loan, with assurances that Windermere lawyers would generate the proper paperwork. But Jonet actually kept the Doorish loan for herself... (Shown left to right) Rich Gangnes is an owner and also the designated broker of Windermere Real Estate / Wall Street; Jake Jacobsen is the managing broker at Windermere Wall Street where both were on duty for the Doorish and Jonet cases; Windermere chairman and founder, John W. Jacobi. CLICK TO THE FULL REPORT HERE.
Windermere Real Estate Bainbridge Island and Associate Broker Debbie Nitsche (left) Sued for Copyright Infringement, Violation of the Lanham Act, and Unfair Competition:
"Without permission of Plaintiff Lawrence, Defendants selected, modified and placed Plaintiff's photograph as modified in the "Walkthrough Media" video... As part of their video and/or website services, Defendants Clark, Nohre and/or GraphicalData sold and distributed the video to various real estate agents, including without limitation, Debbie Nitsche..."
Washington State Representative Marcie Maxwell is a Windermere Associate Broker who never revealed her knowledge of a home's septic system defects:
Once again, Windermere escapes the legal responsibility for damages based not upon the merits of a case, but by exploiting our dysfunctional courts; and also through the disingenuous machinations and legal gymnastics of its ethically-challenged and crafty Demco counsel. (Left) Washington State Representative and Windermere Associate Broker, Marcie Maxwell. CLICK HERE TO THIS REPORT
Windermere Agent Recommends Rookie Inspector Who Misses Toxic Mold. (Left) Judy Bigelow, agent for Windermere Real Estate / West Sound, Silverdale. RCW 18.86.030: "Regardless of whether the licensee is an agent, a licensee owes to all parties to whom the licensee renders real estate brokerage services the following duties, which may not be waived: (a) To exercise reasonable skill and care; (b) To deal honestly and in good faith."
Windermere Real Estate Oak Tree and Broker Steve Laevastu Sued for Negligent Misrepresentation and Violation of the Consumer Protection Act. "Defendants Laevastu, on behalf of himself, Windermere and other defendants, misrepresented the history and quality of the Stationhouse to the current owners of Units A, B, and C prior to their purchase of a unit at Stationhouse. These buyers reasonably relied on the representations of Laevatsu and Windermere when they decided to purchase their units." (Left) Broker Steve Laevatsu of Windermere Real Estate / Oak Tree.
UNITED STATES SENATOR MARIA CANTWELL TAKES A WHOPPING $49,200 IN CAMPAIGN CONTRIBUTIONS FROM PUBLIC PREDATOR WINDERMERE REAL ESTATE! (Left) Senator Maria Cantwell, Democrat from Washington State, whose website says she "...is driven by her duty to serve the people..."
After Nearly 7 Years Producing Commissions for Windermere Services and Windermere Spokane Valley Owner Cate Moye, Convicted Robbery Felon and Shotgun-Shootout Windermere Agent, Nicholas Granly, Mysteriously Disappeared from the Windermere Roster—just as Owner Moye is Nominated for Vice Chair of Washington's Real Estate Commission.
Did Ms. Moye ever advise ANY of her unsuspecting clients that Mr. Granly might be showing their homes—or grant them the opportunity to deny Windermere agent Granly access to their homes? (Shown left to right) Cate Moye, Owner Windermere Real Estate/Valley, Spokane; Washington State Governor Chris Gregoire; Washington State Department Of Licensing's Director Liz Luce; and Windermere Real Estate/Valley, Spokane's Agent Nicholas Granly.
Bennett Homes (examples left) of Bellevue is Generating Commission Revenue for Public Predator Windermere Real Estate: FOR THEIR OWN PROTECTION, consumers are urged to refuse seeing—OR BUYING—Bennett Homes represented by Windermere Real Estate and Windermere Bellevue Commons. PROTECT YOUR RIGHT to ETHICAL CONDUCT in REAL ESTATE TRANSACTIONS.
National Real Estate Fraud Center—Windermere Real Estate Case Histories:
SOUND BUILT HOMES V. WINDERMERE REAL ESTATE SOUTH: "Accordingly, Sound Built is now entitled to a judgment against Windermere..."
"DUAL AGENCY IS PERILOUS" says Court. "...Windermere did not advise the Lunsfords that it would present the Thomas offer." LUNSFORD v. FRALEY
EARNEST MONEY FORFEITURE: Court rules "...plain language of RCW 64.04.005 does not allow substantial compliance..." CHRISP v. GOLL
Important Washington Real Estate Court Cases:
Svendsen v Stock: Washington Consumer Protection Act Applies to Real Estate Brokers
SOUND BUILT HOMES V. WINDERMERE REAL ESTATE SOUTH: "Accordingly, Sound Built is now entitled to a judgment against Windermere..."
"DUAL AGENCY IS PERILOUS" says Court. "...Windermere did not advise the Lunsfords that it would present the Thomas offer." LUNSFORD v. FRALEY
EARNEST MONEY FORFEITURE: Court rules "...plain language of RCW 64.04.005 does not allow substantial compliance..." CHRISP v. GOLL
An important message to University of Washington administrators, staff and regents about The Windermere Cup, social responsibility, and the University's relationship with John Wood Jacobi and Windermere Real Estate
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT—D.C. No. CV-98-01184-RSL
Court Declares that Windermere "...condoned a rape by a business colleague..."
The incredibly violent and insidious psychological ramifications of rape, connected through an "abusive work environment" serves as an unfortunate—yet credible—subtext for the way in which Windermere Real Estate treats employees and defrauded, damaged customers alike. Windermere's application of aggressive, wasteful and mendacious litigation to stall and ruin innocent consumers serves as the coercive metaphor of corporate power and arrogance: Windermere has no genuine concern for the damage it has done to families or society, It cares only about how to manipulate the law and the courts to avoid any legal responsibility—and about how to deflect bad PR with disingenuous promotion like "Building Communities" and "The Windermere Foundation."
(Left to right) Windermere CEO Geoff Wood (far left) is listed as a Governing Person of Windermere Relocation. Peggy Scott (second from left), also a Governing Person of Windermere Relocation, "... did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint..." Windermere attorney Paul Stephen Drayna (third from left) is listed as the registered agent of RELO LLC, the entity name of Windermere Relocation. Windermere Founder John W. Jacobi (fourth from left) along with Gayle Glew (far right) are listed as Governing Persons of Windermere Relocation during the Little case. Glew told Ms. Little he did not want any "clouds in the office," and after she would not accept a pay cut, that she should "...clean out her desk."
All citizens who abhor such treatment of women in the workplace should recall Maureen Little v. Windermere Relocation when choosing real estate services. WindermereWatch visitors will also want to read the United States District Court of Appeals Ninth Circuit's Order and Amended Opinion from the Little case.
THE COURT STATED: "In sum, taking the facts in the light most favorable to Little, because her employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career[ ]."
... "When Little told Glew of the rape, which, according to Glew, was the first he had heard of it, Glew's "immediate response was that he did not want to hear anything about it." He told Little that she would have to respond to his attorneys. Glew then informed her that he was restructuring her salary from $3,000 monthly to $2,000 monthly plus $250 per closed transaction. The pay reduction was effective immediately and non-negotiable. Bellisario, who was present at that portion of the meeting, appeared "surprised and upset" to Little" ... (COURT'S QUOTE HERE)
... Little found the pay cut unacceptable, and Glew told her to go home for two days to think it over "because he did not want any `clouds in the office.' " When Little still found the pay cut unacceptable two days later, Glew told her it would be best if she moved on and that she should clean out her desk.
... In sum, taking the facts in the light most favorable to Little, because her employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career[ ]." (COURT'S QUOTE HERE)
No. 99-35668
WINDERMERE RELOCATION, INC., a Washington corporation,
Appeal from the United States District Court for the Western District of Washington Robert S. Lasnik, District Judge, Presiding
Argued and Submitted March 6, 2001--Seattle, Washington
Opinion Filed September 12, 2001
Amended January 23, 2002
Before: Harry Pregerson, Sidney R. Thomas and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Thomas
D.C. No. CV-98-01184-RSL
Marilee Erickson and Danielle A. Hess, Reed McClure, Seattle, Washington, for the appellant. Patrick N. Rothwell, Abbott, Davis, Rothwell, Mullin & Earle, P.C., Seattle Washington, for the appellee.
The opinion filed on September 12, 2001, is hereby amended. With the amendments, the panel has voted to deny the petition for rehearing and to reject the suggestion for rehearing en banc.
The full court has been advised of the suggestion for rehearing en banc, and no judge of the court has requested a vote on the suggestion for rehearing en banc. Fed. R. App. P. 35(b).
The petition for rehearing is denied and the suggestion for rehearing en banc is rejected.
THOMAS, Circuit Judge:
Maureen Little ("Little") appeals from an order granting summary judgment on her claims of hostile work environment and retaliation in violation of Title VII, and wrongful dis- charge in violation of Washington state law. Because genuine issues of material fact exist on these claims, we reverse the judgment of the district court. We affirm the dismissal of her state law claim of negligent infliction of emotional distress.
Taking the facts in the light most favorable to the plaintiff, as we must in evaluating the propriety of a grant of summary judgment, see Ellison v. Brady, 924 F.2d 872, 873 (9th Cir. 1991), the events leading up to this lawsuit occurred as follows:
Little was employed by Windermere Relocation Services, Inc. ("Windermere") as a Corporate Services Manager, a position that required her "to develop an ongoing business relationship and relocation contacts with corporations in order to obtain corporate clients needing relocation services for their employees." Until she was terminated, she received only positive feedback from her supervisors. Windermere's records confirm that during the relevant period, Little had the best transaction closure record of all corporate managers by a large margin.
Unlike the other managers, Little's employment contract provided that Little would receive $2,000 monthly, plus a $1,000 monthly override and $250 per closed sale. The over-ride was based on the assumption that Little would close four transactions per month, with a provision for rollover when she did not make target. According to Windermere President Gayle Glew, the other managers had not received the $1,000 override.
One of Windermere's clients was the Starbucks Corporation. Some time in 1997, Little performed some relocation services for Starbucks Human Resources Director, Dan Guerrero, on a contract basis, and she learned from him that Starbucks was dissatisfied with its primary relocation provider. Glew told Little that he would "do whatever it takes to get this account" and that Little should "do the best job she could." Thus, Little believed that, as part of her job, she was to build a business relationship with Guerrero to try to get the Starbucks account, and she had at least two business lunches with Guerrero toward this end.
On October 14, Little accepted Guerrero's invitation to discuss the account at a restaurant. After eating dinner with Guerrero and having a couple of drinks, Little suddenly became ill and passed out. She awoke to find herself being raped by Guerrero in his car. She fought him off and jumped out of the car, but again she became violently ill. Guerrero put her back in the car and took her to his apartment, where he raped her again. Little fell asleep, and when she awoke he was raping her again. Afterward, he showered and drove her to her car.
Little was reluctant to tell anyone at Windermere about the rape because, in her own words, "I knew how important the Starbucks account was to Mr. Glew. Mr. Glew would ask me on a consistent basis the status of the account and I was afraid that if I told him about the rape, he would see me as an impediment to obtaining the Starbucks account." This belief was reinforced when, a few days after the rape, Little reported the rape to Chris Delay, Director of Relocation Services (apparently not one of Little's supervisors), and Delay advised her not to tell anyone in management. Little believed that Delay feared "what might happen to [Little] if [she] did tell."
On October 23, about nine days after the rape, Little reported it to Peggy Scott, the Vice President of Operations, who was designated in Windermere's Harassment Policy as a complaint-receiving manager. Little described Scott's response:
She came out around the desk and I could tell she was upset and she just gave me a hug and said she wished there was something she could do. She didn't understand what I was going through. She asked me if I was in therapy. Then she proceeded to tell me she wouldn't say anything to [Glew] unless I proceeded to seek legal action [against Dan Guerrero].
Scott told Little that "[s]he thought it would be best that [Little] try to put it behind [her] and to keep working in therapy," and that she should discontinue working on the Starbucks account. She did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint or any follow-up interview with Little. Scott testified in her deposition that, because the rape occurred outside the "working environment," she believed that it fell outside the scope of Windermere's Harassment Policy.
Despite Little's supposed removal from the Starbucks account, Glew continued to ask her about the status of the Starbucks account during the next six weeks. "[As of December 2,] Gayle was asking me questions about Starbucks . . . a couple of times every month to see what the status was." Concerned by Glew's questions, Little told her immediate supervisor, Linda Bellisario, the Vice President of Sales and Marketing, on December 2, 1997, about the rape. Little had been reluctant to tell Bellisario because she "felt that [Bellisario] would immediately go to Gayle and Gayle would terminate my position. . . . I knew how much this account meant to him. He said he would do whatever it took to get this account." Bellisario told Little to inform Glew of the incident.
When Little told Glew of the rape, which, according to Glew, was the first he had heard of it, Glew's "immediate response was that he did not want to hear anything about it." He told Little that she would have to respond to his attorneys. Glew then informed her that he was restructuring her salary from $3,000 monthly to $2,000 monthly plus $250 per closed transaction. The pay reduction was effective immediately and non-negotiable. Bellisario, who was present at that portion of the meeting, appeared "surprised and upset" to Little.
She told me [later] that she had no idea Mr. Glew was going to cut my salary. It did not appear he had talked with her about my pay structure prior to his making his decision . . . . [She] was crying and she was upset, she said she had no idea that Gayle was going to talk about this at all. And she had no idea he was going to reduce my pay. And that she didn't want me to leave and she didn't know what to do. And she was pretty upset about the whole thing.
Little found the pay cut unacceptable, and Glew told her to go home for two days to think it over "because he did not want any `clouds in the office.' " When Little still found the pay cut unacceptable two days later, Glew told her it would be best if she moved on and that she should clean out her desk.
Little brought suit against Windermere, alleging unlawful discrimination and retaliation in violation of Title VII, 42 U.S.C. § 2000(e), and the Revised Code of Washington § 49.60; wrongful discharge in violation of public policy; and intentional, reckless, and/or negligent infliction of emotional distress. The district court granted summary judgment in favor of Windermere on all four claims. We review the district court's grant of summary judgment de novo . Ellison, 924 F.2d at 873.
Little alleges that Windermere's response to the rape created a hostile work environment in violation of Title VII and the Washington Law Against Discrimination, Rev. C. Wash. § 49.60.180(3). Because Washington sex discrimination law parallels that of Title VII, see Payne v. Children's Home Society of Washington, Inc., 892 P.2d 1102, 1105 (Wash. Ct. App. 1995), it is appropriate to consider Little's state and federal discrimination claims together.
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., prohibits sex discrimination, including sexual harassment, in employment. 42 U.S.C. § 2000e-2(a)(1); Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 65-66 (1986).
When evaluating a claim of sexual harassment based on a hostile work environment, we must determine two things: whether the plaintiff has established that she or he was subjected to a hostile work environment, and whether the employer is liable for the harassment that caused the environment. See Faragher v. City of Boca Raton, 524 U.S. 775, 787-89 (1998); Nichols v. Azteca Rest. Enters., Inc. , 256 F.3d 864, 871-75 (9th Cir. 2001). Both present mixed questions of law and fact that we review de novo. See Id. at 871, 875.
To establish that she was subjected to a hostile work environment, a plaintiff must prove that "1) she was subjected to verbal or physical conduct of a sexual nature, 2) this conduct was unwelcome, and 3) this conduct was sufficiently severe or pervasive to alter the conditions of . . . employment and create an abusive working environment." Fuller v. City of Oakland, 47 F.3d 1522, 1527 (9th Cir. 1995) (internal quotations and citation omitted). There is no doubt that Little was subjected to unwelcome physical conduct of a sexual nature; the dispute here centers around the third element: whether the conduct was sufficiently severe or pervasive to create an abusive or hostile work environment. The district court did not make any findings on the severity or pervasiveness of the conduct, but rather found that liability could not be imputed to Windermere, and granted summary judgment on that basis. However, Little does not seek relief based on imputed liability for the rape. Rather, her claim is about whether Windermere's reaction to the rape created a hostile work environment.
Under the third element, to determine whether an environment is sufficiently hostile or abusive to violate Title VII, we look "at all the circumstances, including the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." Clark County Sch. Dist. v. Breeden, _______ U.S. _______, 121 S. Ct. 1508, 1510 (2001) (internal quotation marks and citations omitted); see Nichols, 256 F.3d at 872. Moreover, "the work environment must both subjectively and objectively be perceived as abusive," Fuller, 47 F.3d at 1527 (citation omitted), and the objective portion of the claim is evaluated from the reasonable woman's perspective. Ellison, 924 F.2d at 879-80.
Little has tendered sufficient evidence to preclude summary judgment on her hostile work environment claim. Guerrero's rape of Little was "severe." Under the circumstances, it would have made a reasonable woman feel that her work environment had been altered: The nature of Little's employment extended the work environment beyond the physical confines of the corporate office. Having out-of-office meetings with potential clients was a required part of the job. The rape occurred at a business meeting with a business client. However, more significantly, Windermere's subsequent actions reinforced rather than remediated the harassment. Although she had no further contact with Guerrero, Little was not effectively removed from responsibility for the account. She was informed that reporting the rape would probably result in an adverse employment action, even to the point of jeopardizing her career. When she reported the rape to the President, he immediately decreased her compensation and referred her to corporate lawyers. Windermere disputes the significance of many of these events. However, viewing the facts in the light most favorable to Little, Windermere's failure to take immediate and effective corrective action allowed the effects of the rape to permeate Little's work environment and alter it irrevocably. Thus, genuine issues of material fact exist as to whether the "conduct was sufficiently severe or pervasive to alter the conditions of . . . employment and create an abusive working environment" for Little. Fuller, 47 F.3d at 1527.
The tendered evidence stands in contrast to the circumstances of Brooks v. City of San Mateo, 229 F.3d 917, 924 (9th Cir. 2000). In Brooks, we held that a"single incident" of harassment that was not "severe" and that was followed by immediate corrective action by the employer was not sufficiently "severe or pervasive" to create a hostile work environment. Id. at 925-26. Here, in contrast to the single instance of fondling in Brooks, Little was victimized by three violent rapes. In Brooks, the harassing employee was fired; here, not only was there no remediation, the harassment was arguably reinforced by Little's employer.
A single "incident" of harassment -- and we assume arguendo that three rapes in the course of one evening constitutes a "single" incident -- can support a claim of hostile work environment because the "frequency of the discriminatory conduct" is only one factor in the analysis. See Harris v. Forklift Systems, Inc., 510 U.S. 17, 23 (1993) (noting that "no single factor is required"). Conduct is actionable if it is either "sufficiently severe or pervasive." Meritor, 477 U.S. at 67 (emphasis added). Indeed, the Supreme Court recently noted that an isolated incident can amount to a "discriminatory change[ ] in the `terms and conditions of employment' " when the incident is "extremely serious." Breeden, _______ U.S. _______, 121 S. Ct. at 1510 (citation omitted). Other circuits have come to a similar conclusion. See, e.g., Tomka v. Seiler Corp., 66 F.3d 1295, 1305 (2d Cir. 1995) (noting that "even a single incident of sexual assault sufficiently alters the conditions of the victim's employment and clearly creates an abusive work environment for purposes of Title VII liability"); Guess v. Bethlehem Steel Corp., 913 F.2d 463, 464 (7th Cir. 1990) (holding that a single incident where supervisor picked up plaintiff and forced her face against his crotch impliedly considered to create hostile environment); cf. DiCenso v. Cisneros, 96 F.3d 1004, 1009 (7th Cir. 1996) ("[Although this single incident was insufficient, we do not] hold that a single incident of harassment never will support an actionable
Rape is unquestionably among the most severe forms of sexual harassment. Being raped by a business associate, while on the job, irrevocably alters the conditions of the victim's work environment. It imports a profoundly serious level of abuse into a situation that, by law, must remain free of discrimination based on sex. Being raped is, at minimum, an act of discrimination based on sex. See Brock v. United States, 64 F.3d 1421, 1423 (9th Cir. 1995) ("Just as every murder is also a battery, every rape committed in the employment setting is also discrimination based on the employee's sex."). Thus, the employer's reaction to a single serious episode may form the basis for a hostile work environment claim.
In sum, taking the facts in the light most favorable to Little, because her employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career[ ]." See Harris, 510 U.S. at 22.
Having determined that Little has presented a triable issue of whether she was subjected to a hostile work environment, we must decide whether Windermere can be liable for the harassment. See Nichols, 256 F.3d at 875; see also Meritor, 477 U.S. at 70-72 (noting that a Title VII plaintiff must also provide a basis for holding her employer liable for the harassment). "The relevant standards and burdens pertaining to employer liability vary with the circumstances." Nichols, 256 F.3d at 875.
In this circuit, employers are liable for harassing conduct by non-employees "where the employer either ratifies or acquiesces in the harassment by not taking immediate and/or corrective actions when it knew or should have known of the conduct." Folkerson v. Circus Circus Enters., Inc., 107 F.3d 754, 756 (9th Cir. 1997); see also Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1073 (10th Cir. 1998) (adopting Folkerson standard). The Equal Employment Opportunity Commission Guidelines endorse this approach: "An employer may also be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action." 29 C.F.R.§ 1604.11(e) (emphasis added). Thus, if Windermere ratified Guerrero's rape of Little by failing to take immediate and effective corrective action, it is liable for the harassment.
Windermere's precise remedial obligations are defined by Ellison v. Brady:
[T]he reasonableness of an employer's remedy will depend on its ability to stop harassment by the person who engaged in harassment. In evaluating the adequacy of the remedy, the court may also take into account the remedy's ability to persuade potential harassers to refrain from unlawful conduct.
924 F.2d at 882 (footnote omitted). In addition,"[i]f 1) no remedy is undertaken, or 2) the remedy attempted is ineffectual, liability will attach." Fuller, 47 F.3d at 1528-29.
As discussed above, Windermere's response to the rape was equivocal at best. Construing the facts in the light most favorable to Little, she was informed that she should "do anything" to get the account; she was advised by a co-worker not to report the incident to top management because it would damage her career; when she reported the rape to her supervisor, she was not effectively removed from the account; and, when she finally reported the incident to the President, she was demoted and terminated. There is no evidence that Windermere took steps to prevent contact between Little and Guerrero, such as effectively removing Little from the account or informing Starbucks that it must replace the contact it used with Windermere. Because of Windermere's failure to take appropriate remedial measures, Little has raised sufficient genuine issues of material fact as to whether Windermere ratified or acquiesced in the harassing conduct, and we reverse the district court's contrary conclusion.
In sum, Little has raised genuine issues of material fact as to whether Windermere's actions (or inactions) subsequent to Guerrero's rape of Little subjected Little to a hostile work environment. Windermere will be liable for the hostile work environment created at Windermere after Guerrero's rape if a jury finds that it ratified or acquiesced in the rape by failing to take immediate corrective action once it knew or should have known of the rape. Therefore, the district court erred in granting summary judgment on this claim.
Little also alleges that Glew reduced her pay and terminated her in retaliation for reporting the rape in violation of Title VII and the Revised Code of Washington § 49.60.210. Because Washington courts look to interpretations of federal law when analyzing retaliation claims, we again consider Little's state and federal claims together. See Graves v. Dept. of Game, 887 P.2d 424, 428 (Wash. Ct. App. 1994). Genuine issues of material fact preclude summary judgment on this claim.
To establish a prima facie retaliation claim under the opposition clause of 42 U.S.C. § 2000e-3(a), Title VII, Little must show 1) her involvement in a protected activity, 2) an adverse employment action taken against her, and 3) a causal link between the two. See Brooks, 229 F.3d at 928. Title VII provides, in relevant part, that "[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by this subchapter. " 42 U.S.C. § 2000e-3(a). It is unnecessary that the employment practice actually be unlawful; opposition thereto is protected when it is "based on a `reasonable belief ' that the employer has engaged in an unlawful employment practice." Moyo v. Gomez, 40 F.3d 982, 984 (9th Cir. 1994) (emphasis in original, citation omitted).
A prima facie case may be based on direct or circumstantial evidence. Id. "Once a prima facie case has been made, the burden of production shifts to the defendant, who must offer evidence that the adverse action was taken for other than impermissibly discriminatory reasons." Id. The plaintiff can rebut this by producing "specific, substantial evidence of pretext." Bradley v. Harcourt, Brace & Co., 104 F.3d 267, 270 (9th Cir. 1996). Pretext, too, may be shown by circumstantial evidence, see Wrighten v. Metropolitan Hospitals, Inc., 726 F.2d 1346, 1354 (9th Cir. 1984), but it must consist of "more than a mere refutation of the employer's legitimate reason and [a mere assertion] that the discriminatory reason be the cause of the firing," Wallis, 26 F.3d at 890 (citation omitted).
Little established a prima facie case. The district court correctly found that Little could have reasonably believed that, in reporting the rape to Scott, she was opposing an unlawful employment practice. See Moyo, 40 F.3d at 985. Given Lit tle's belief that her relationship with Guerrero was strictly business, and that she met with him because it was part of her job as a Windermere employee, her belief that Windermere was required to take action in response to his assault of her was eminently reasonable. See, e.g., Fuller, 47 F.3d at 1528-29 (holding that an employer must remedy situation of sexual harassment).
Second, Glew's reduction of her guaranteed monthly base salary from $3,000 (including the override) to $2,000 constituted an "adverse employment action." An "adverse employment action" is "any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter the charging party or others from engaging in a protected activity." Ray v. Henderson, 217 F.3d 1234, 1244 (9th Cir. 2000) (citing EEOC Compliance Manual Section 8, "Retaliation, " ¶ 8008 (1998)). This definition includes actions "materially affect[ing] compensation, terms, conditions, or privileges" of employment. 42 U.S.C. § 2000e-2(a)(1); Kortan v. Cal. Youth Auth., 217 F.3d 1104, 1109 (9th Cir. 2000). A cut in base pay is clearly such an adverse action, despite, as the district court noted, Little's "hopes and expectations [of her sales and bonuses] for coming months or years." See Ray, 217 F.3d at 1241 (9th Cir. 2000) (noting that "adverse employment action" is defined broadly); see, e.g., Hashimoto, 118 F.3d at 676 (holding that the dissemination of a negative job reference constitutes an "adverse employment action"). And, of course, termination of employment is an adverse employment action; Little has presented triable issues of fact that she was, indeed, fired.
Third, Little has presented evidence that the adverse employment action occurred within minutes of her reporting the rape to Glew. This close timing provides circumstantial evidence of retaliation that is sufficient to create a prima facie case of retaliation. See Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 507 (9th Cir. 2000) (noting that causation can be inferred from timing alone); see, e.g., Miller v. Fairchild Indus., 885 F.2d 498, 505 (9th Cir. 1989) (stating that a prima facie case of causation was established when discharges occurred forty-two and fifty-nine days after EEOC hearings); Yartzoff v. Thomas, 809 F.2d 1371, 1376 (9th Cir. 1987) (stating that sufficient evidence existed where adverse actions occurred less than three months after complaint filed, two weeks after charge first investigated, and less than two months after investigation ended).
As required in a retaliation case, Windermere has properly rebutted Little's prima facie case with evidence of a legitimate, non-discriminatory motive for altering Little's pay structure. Glew testified and declared that he had grown increasingly dissatisfied with and concerned by Little's failure to make four closings per month, as contemplated in her employment agreement. Scott and Glew both testified that they met in November to discuss Little's lower-than-expected performance. Glew declared that, after considering the options, he decided to restructure Little's compensation to conform to the base that had been previously given. His decision to terminate her was consistent with his decision to restructure her pay. This evidence establishes a legitimate, non-discriminatory reason for the pay cut.
However, Little has tendered sufficient evidence, in addition to the proximity of events, to rebut this alleged reason. Little testified that, until the pay cut and termination, she had received only positive feedback, and that she never knew of the four-deal-per-month requirement; although her employment contract states so explicitly, she may have received verbal assurances that she believed were superceding. Little averred that it took time to establish business relationships, making it difficult to close four deals per month in her first year as a Corporate Services Manager, and that her supervisors knew that. Further, the data showing Little's superior performance, in addition to Little's belief that her work was more than satisfactory, cast doubt on Glew's decision to cut the pay of the most successful corporate caller Windermere apparently had yet employed, and particularly to make the cut non-negotiable. Little's description of Bellisario's surprise and concern at the pay cut supports this interpretation -- as Little's direct supervisor, Little believed that Bellisario would have been involved in that decision. These facts, together with the proximity in timing, suffice to create a question of fact regarding Windermere's motive in cutting Little's pay and ultimately terminating her employment. "[A] prima facie case is insufficient to preclude summary judgment, a plaintiff need produce `very little evidence of discriminatory motive to raise a genuine issue of fact' as to pretext." Strother v. Southern California Permanente Medical Group, 79 F.3d 859, 870 (9th Cir. 1996) (citations omitted). Thus, summary judgment was inappropriate on this claim.
In addition to her federal discrimination claims, Little has alleged that Windermere wrongfully discharged her in violation of Washington law. Under this Washington tort claim, Little must establish four elements: 1) the existence of a clear public policy (the clarity element); 2)"that discouraging the conduct in which [she] engaged would jeopardize the public policy (the jeopardy element)"; 3) that her public-policy-linked conduct was a substantial factor in (i.e. the cause of) Windermere's decision to discharge her (the causation element)"; and 4) that employers generally do not have an "over-riding justification" for wanting to use the activity as a factor affecting the decision to discharge (the absence of justification element). Ellis v. City of Seattle, 13 P.3d 1065, 1070 (Wash. 2000) (en banc) (quoting Gardner v. Loomis Armored Inc., 913 P.2d 377 ( Wash. 1996) (en banc)); see also Lins v. Children's Discovery Centers of America, Inc., 976 P.2d 168, 172 (Wash. Ct. App. 1999). Genuine issues of material fact preclude summary judgment on the elements of the claim, as well as whether Little resigned or was discharged.
First, Little has established the clarity element required by Washington Law Against Discrimination, Revised Code of Washington § 49.60. In analyzing this element, "courts should inquire whether the employer's conduct contravenes the letter or purpose of a constitutional, statutory, or regulatory provision or scheme." Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1089 (Wash. Ct. App. 1984).
In general, it can be said that public policy concerns what is right and just and what affects the citizens of the State collectively . . . . Although there is no precise line of demarcation dividing matters that are the subject of public policies from matters purely personal, a survey of cases in other States involving retaliatory discharges shows that a matter must strike at the heart of a citizen's social rights, duties, and responsibilities before the tort will be allowed.
Dicomes v. State, 782 P.2d 1002, 1006 (Wash. Sup. Ct. 1989) (en banc) (citation omitted). Little argued that Windermere discharged her because she made a complaint about sexual harassment. The Washington Supreme Court held recently that Revised Code of Washington sections 49.12.200 and 49.60.010 embody a clearly articulated public policy condemning sex discrimination in employment. See Roberts v. Dudley, 140 Wash. 2d 58, 69, 993 P.2d 901, 907 (2000) (en banc) (holding that discharging an employee because she was on maternity leave would violate that policy). Relatedly, discharging an employee because of his opposition to a practice in violation of a public policy forms a cause of action for wrongful discharge. See Ellis, 13 P.3d at 1070. Thus, Little has articulated a clear public policy -- against sex discrimination in employment -- that Windermere's action may have
Little tendered sufficient evidence concerning the second element, namely, that she was "engaged in particular conduct" that "directly relate[d] to the public policy, or [that] was necessary for the effective enforcement of the public policy." Gardner, 913 P.2d at 377 (emphasis in original). In Ellis, after noting that a retaliation claim exists under § 49.60.210, the court found that "the jeopardy prong . . may be established if an employee has an objectively reasonable belief the law may be violated in the absence of his or her action. " 13 P.3d at 1071. As discussed previously, Little has established a reasonable belief that Guerrero had sexually harassed her and that her reporting to Windermere could prevent further harassment. She has therefore established the jeopardy prong of Gardner. Accord Ellis, 13 P.3d at 1071 (firing fireman "for raising questions about the legality of what he was told to do jeopardizes the public policy of following the fire code").
Little has raised a genuine issue of fact as to the third element, namely, whether Windermere's termination of her employment was in retaliation for her report of the rape -- that is, whether her report was a "substantial factor" in Windermere's decision to terminate her.
Finally, Windermere has offered -- and cannot offer -- any general overriding justification for using an employee's report of sexual harassment as a reason to discharge that employee. Cf. Lins, 976 P.2d at 173 (stating that employers have no "overriding justification" for wanting to consider employee's refusal to perform an unlawful order). In fact, Windermere's sexual harassment policy encourages employees to report such behavior and provides a mechanism by which Windermere can correct such behavior.
In sum, Little has established the first two elements of her wrongful discharge claim, and she has raised questions of fact regarding the second two elements. Thus, summary judgment was not appropriate on this claim.
The district court correctly entered summary judgment against Little on her claim for negligent infliction of emotional distress in violation of Washington state tort law. To establish this cause of action, Little "must show (1) that her employer's negligent acts injured her, (2) the acts were not a workplace dispute or employee discipline, (3) the injury is not covered by the Industrial Insurance Act, and (4) the dominant feature of the negligence claim was the emotional injury." Snyder v. Med. Srv. Corp. of Eastern Wash., 988 P.2d 1023, 1028 (Wash. Ct. App. 1999). Like all negligence claims, a negligent infliction of emotional distress claim requires duty, breach, proximate cause, and injury. Hunsley v. Giard, 553 P.2d 1096, 1102 (Wash. 1976). Little also must show objective symptoms of emotional distress. See Corrigal v. Ball & Dodd Funeral Home, Inc., 577 P.2d 580, 582 (Wash. 1978) (citing Hunsley, 553 P.2d at 1103).
However, Washington courts "[do] not recognize a claim against an employer for negligent infliction of emotional distress . . . `when the only factual basis for emotional distress [is] the discrimination claim.' " Robel v. Roundup Corp., 10 P.3d 1104, 1113 (Wash. 2000) (quoting Chea v. Men's Wearhouse, Inc., 932 P.2d 1261 (Wash. 1997)). Here, Little's only factual basis is that "Windermere failed to investigate Ms. Little's complaint, then cut her pay and terminated her employment." This argument formed an integral part of her discrimination claim and the emotional injury she alleges is compensable in her discrimination action. This cause of action is therefore not cognizable under Washington law and the entry of summary judgment was appropriate.
In sum, we reverse the grant of summary judgment and remand for trial Little's claims of hostile work environment and retaliation in violation of Title VII and Washington's Law Against Discrimination and her claim for wrongful discharge in violation of public policy. We affirm the dismissal of her claim for negligent infliction of emotional distress in violation of Washington state tort law.
AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings consistent with this opinion. The parties shall bear their own costs.
National Real Estate Fraud Center Windermere Real Estate Case History: Windermere Freeland Agents Saul and Gabelein's Abuse of a Vulnerable Adult
(Above L to R) 1: Utterly shameless liar and bully John W. Jacobi, Windermere founder and chairman who promotes "We are committed to... The highest ethical standards. Uncompromising honesty and integrity," but in reality—despite being presented hard evidence of dishonest, unethical Windermere misconduct—forces damaged and defrauded Windermere victims through years of ruinous, bankrupting litigation. When victims do indeed speak out, Jacobi falsely sues them for trade libel and defamation, tries to coerce the defendant into a "dark clause" settlement agreement through fear and intimidation, continues to prosecute the bogus action for years at enormous cost to the parties, then runs away and voluntarily dismisses his own lawsuit under Civil Rule 41, just prior to trial when the honest, innocent victim persists in refusing to sign away their speech rights. 2: Windermere general counsel, Paul S. Drayna, who spearheads illegal efforts to strip damaged Windermere clients of their speech rights. 3: Attorney John Demco of Windermere's Demco Law Firm, which prosecutes Windermere's anti-speech cases and unabashedly defends the most outrageous Windermere Realtor misconduct—no matter what it is. Demco is also a multi-franchise Windermere owner who defended his one-time mother-and-daughter Windermere Freeland/Whidbey agents, Samantha Saul and Linda Gabelein, about whom the court stated "...the Sauls and Gabeleins unduly influenced and exploited Emma."
(Above L to R) 4: Windermere-Demco Law Firm's lying lawyer, Matthew F. Davis—click here for review of Mr. Davis—who lies to courts and legal opponents alike in an all-out effort to win at any cost. In one particular case of note, Davis served a Windermere victim a lawsuit for libel and defamation, then emailed the victim not to hire an attorney! 5: L 'Nayim Shuman Austin, past Demco Law Firm attorney, ENDICOTT v. SAUL. 6&7: Samantha Saul and Linda Gabelein. 8: Barbara Mearing, current Windermere Freeland employee who got a $7500 commission from the sale of Emma's land: "Ms. Mearing testified that she was aware that the $150,000 sale price was low, but 'not horribly low'. She also testified that the assessor's values are not "spot on" and that sometime property sells for less or more than the assessed value. She said that it is always hard to estimate value but that she respected the fact that the seller gets to choose the price that he or she wants." The court later stated,"The court gives Ms. Mearing's testimony little weight."
ENDICOTT v. SAUL
Ronald ENDICOTT and Donald Endicott, Respondents, v. Robert and Samantha SAUL, husband and wife, and Linda and Vernon Gabelein, husband and wife, Appellants. Emma Endicott, Appellant, v. Ronald Endicott and Donald Endicott, Respondents.
Nos. 58435-9-I, 58531-2-I.
February 04, 2008
John W. Demco,, Demco Law Firm PS, Matthew F. Davis, Attorney at Law, Seattle, WA, H. Clarke Harvey, Attorney at Law, Clinton, WA, for Appellants. Carolyn Cliff, Attorney at Law, Langley, WA, for Respondents. Michael Mert Waller, Zylstra Beeksma & Waller PLLC, Oak Harbor, WA, for Guardian Ad Item Clarke Harvey, Attorney at Law,Clinton, WA, for Other Parties.
¶ 1 Emma Endicott (Emma), Samantha and Robert Saul (the Sauls), and Linda and Vernon Gabelein (the Gabeleins) challenge the trial court's decision to establish a limited guardianship for Emma under the Guardianship Act, chapter 11.88 RCW, and to issue a protective order under the Abuse of Vulnerable Adults Act (AVA), chapter 74.34 RCW. After a ten-day bench trial that took place over the course of three months, the trial court concluded clear, cogent, and convincing evidence established that Emma was at significant risk of personal and financial harm and that the Sauls and the Gabeleins unduly influenced and exploited Emma. Because substantial evidence supports the trial court's determination that Emma is incapacitated as to her person and as to her estate, that Emma is a vulnerable adult under the AVA, and that the Sauls and the Gabeleins exploited and unduly influenced Emma to sell her Whidbey Island view property to them for significantly below fair market value, we affirm.
¶ 2 Emma Endicott is an 80-year-old woman who has lived almost her entire life on Whidbey Island and was married to Orvel "Shorty" Endicott for 43 years. Emma has two sons from an earlier marriage, John Earl (Earl) Fisher and Robert (Bob) Fisher. Shorty and Emma had twin sons, Ronald (Ron) Endicott and Donald (Don) Endicott. Ron and Don lived with Emma and Shorty for most of their lives. Emma's son Earl lives with his family in Seattle. Bob and his spouse Sandy live nearby in the house built by Emma's father.
¶ 3 Emma and Shorty lived in a small neighborhood on Whidbey Island that has scenic views of Mutiny Bay. In 1947, Shorty inherited 24 acres of view property overlooking Mutiny Bay. In 1976, Emma inherited five acres and a one-third interest in her parents' house that is located in the same general area.
¶ 4 During their 43-year marriage, Shorty managed and controlled all the finances and Emma and Shorty lived an extremely frugal life. Emma has never had a checking account or a credit card. Emma also never obtained a driver's license and, until shortly before the trial in this case, did not have a telephone.
¶ 5 Shorty died in 1998, leaving Emma the family home, the 24 acres of view and waterfront property, $114,000 in savings, and $556 per month from his pension benefits. Emma took over managing the finances and the property. After Shorty died, friends described Emma as devastated, lonely, and lost.
¶ 6 Initially, Emma relied on Ron and Don. But increasingly, Emma came to rely on Linda Gabelein and Samantha Saul. Linda is married to Vernon Gabelein. Emma's brother is married to Vernon Gabelein's sister. Linda has two daughters from a previous marriage, Samantha Saul and Dina Thompson. Samantha is married to Robert Saul, who grew up on Whidbey Island with Ron and Don. Linda Gabelein and Samantha Saul own homes in the same neighborhood as Emma and are both real estate agents with Windermere Real Estate (Windermere). Emma testified that Linda is like a daughter to her and that she worships Linda. Emma was also very close to Samantha. In June 2003, Emma executed a durable power of attorney, giving Samantha the authority to make all decisions on her behalf.
¶ 7 It is undisputed that Emma wants to live on her own in her house on Whidbey Island for the rest of her life. When Shorty died, Emma's childhood friend, Frank Robinson, offered to purchase a 445-foot beachfront portion of her property for $660,000. A long-time neighbor, Ray Lotto, later offered to buy most of Emma's property for $1.5 million and give Emma a life estate in her residence. Instead, in three separate real estate transactions, Emma sold the majority of her property to Dina Thompson and her spouse, to the Sauls, and to the Gabeleins. After the three real estate transactions with the Gabelein family members, Emma was left with 13.77 acres, but over a third of it was swamp and marshland.
¶ 8 In September 2001, Emma decided to sell the five acres she inherited from her parents after Earl and Bob Fisher were unable to agree on how to pay expenses for the property.1 After unsuccessfully attempting to sell the property by putting up a for sale sign, Emma asked Samantha, who had recently acquired her real estate license, to list the property for sale.
¶ 9 The assessed value for the five-acre parcel was $82,326. Samantha originally listed the property for sale at $69,500. After two months, Samantha lowered the price to $64,500. When Dina Thompson and her spouse offered to buy the property for $52,000, Samantha acted as a dual agent for her sister and her brother-in-law and Emma. Emma relied on Samantha's advice and accepted the offer of $52,000. The court rejected Samantha's testimony that she did not suggest a price to her sister as not credible. Emma received $45,000 from the sale. Bob and Sandy Fisher were extremely upset that Emma sold the five acres and as a result were estranged from Emma for a number of years.
¶ 10 In February 2002, Emma sold another five acres of waterfront view property to Samantha and Robert Saul for $80,000. The 2001 assessed value of the property was $195,524. Samantha initially denied that she suggested the sales price of $80,000. But at trial Samantha admitted that she did. After purchasing the five acres, the Sauls invested $40,000 to $100,000 in improvements. When the Sauls applied for a home construction loan in July 2004, according to a bank appraisal, the five acre view property was valued at $400,000.
¶ 11 After the Sauls bought the property from Emma, Roy Lotto told Samantha he was willing to pay $1.5 million for the rest of Emma's property and would give Emma a life estate in her residence. Lotto said Samantha told him that she would be able to get the property for him. But in June 2004, Emma signed a purchase and sale agreement with Linda and Vernon Gabelein to sell five acres of prime view property next to the five acres Emma sold to the Sauls for $150,000. There is no dispute that the property was worth $324,000. The "Vacant Land Purchase and Sales Agreement" states that a five-acre parcel will "be created by Buyer paid short plat" with "all other expenses paid by Buyer" and a net purchase price of $150,000. The Addendum states that the "Seller may be selling the property substantially below market value as the property has not been exposed on the open market." The Addendum also states that because the buyer is a Windermere real estate agent, the agreement was "conditioned on review and approval by Sellers [sic] attorney." Because Emma's attorney was representing the Gabeleins in another real estate matter, Linda Gabelein arranged for Emma to meet with another attorney about the agreement. Emma's meeting with the attorney lasted approximately 20 to 30 minutes.
¶ 12 In September 2004, Emma and the Gabeleins signed another addendum to the Purchase and Sale Agreement that allowed the Gabeleins to assign their interest in the property to the Sauls and obtain a boundary line adjustment. It is undisputed that the purpose of the boundary line adjustment was to avoid the public notice requirement for a short plat and prevent Ron and Don from learning about the sale before it closed. According to an unchallenged finding, the Sauls and the Gabeleins acted with "deliberate secrecy" throughout this real estate transaction. Before signing the Addendum, Emma met with the same attorney again for about 20 to 30 minutes. Following the boundary line adjustment, Emma was left with a parcel of approximately nine acres, more than half of which is swamp and marshland. The sale closed on May 16, 2005. There is no dispute that, at closing, the property was worth $427,000.
¶ 13 During the evening of June 14, 2005, Emma fell down. Ron drove to Bob Fisher's house to call 911. When the paramedics arrived, Emma refused to go to the hospital. On the morning of June 16, Don found Emma on the floor and halfway under her bed. Ron and Don drove Emma to the hospital. Don said his mother's eyes were glazed, she was confused, and she did not know where she was. When they arrived at the hospital, the hospital personnel determined Emma was not competent to refuse hospitalization. The court concluded it was not likely that Ron and Don would have called 911 if Emma had not fallen, as they claimed. The trial court also concluded that Emma's memory was suspect and "she is suggestible to the memories of others, especially as to what happened the night before she went in to the hospital in June 2005."
¶ 14 At some point, Samantha notified the hospital that she had the power of attorney for Emma. Samantha also told the hospital social worker that Emma said Ron and Don hit her and that was why she was in the hospital. Samantha was present when the social worker interviewed Emma. Emma told the social worker that she did not remember why she was in the hospital, but that Ron and Don yelled at her a lot, that they were controlling, and they would not let her watch television. That same day, Emma filed a petition for a domestic violence protection order against Ron and Don. The court entered a temporary restraining order requiring Ron and Don to move out of the house.2 When Emma was released from the hospital, she went to live with Bob and Sandy Fisher. Emma lived with the Fishers until December.
¶ 15 On July 11, 2005, Ron and Don filed a petition to establish a guardianship for Emma and for her estate, to obtain a protective order for Emma as a vulnerable adult under the AVA, and to rescind the May 2005 real estate transaction with the Sauls and the Gabeleins. Ron and Don alleged that Emma was incapacitated as to her person and as to her estate, that the Sauls and the Gabeleins exerted undue influence over Emma, and that the Sauls and Gabeleins financially exploited her.
¶ 16 Prior to trial, Emma, the Sauls, and the Gabeleins filed a motion to bifurcate the request to rescind the May 2005 real estate transaction. The Sauls and the Gabeleins also filed a motion to exclude evidence relating to alleged undue influence concerning the 2005 real estate transaction. The court granted the motion to bifurcate the request to rescind the 2005 real estate transaction, but denied the motion to exclude testimony about undue influence related to the transaction.
¶ 17 A ten-day bench trial began in December 2005 and concluded in March 2006. During the course of the trial, the court heard testimony from 36 witnesses and admitted more than 75 exhibits. At the conclusion of the trial, the court issued a 55-page written opinion consisting of 94 separate findings of fact and 26 conclusions of law. The court concluded that Emma was incapacitated as to her person and as to her estate, that Samantha and Linda had a confidential and fiduciary relationship with Emma, that Emma was a vulnerable adult under the AVA, and that the Sauls and Gabeleins unduly influenced and financially exploited Emma. The court appointed Emma's son Earl as a limited guardian with the "goal of allowing Emma to live in her house for as long as possible" 3 and entered a protective order under the AVA prohibiting the Sauls and the Gabeleins from transferring or encumbering the property Emma sold in May 2005.
¶ 18 On appeal, Emma, Samantha and Robert Saul, and Linda and Vernon Gabelein challenge the trial court's determination that Emma is incapacitated as to her person and as to her estate. Emma, the Sauls, and the Gabeleins also contend the trial court erred in shifting the burden to Samantha and Linda to prove lack of undue influence and finding Emma was a vulnerable adult
under the AVA.
Standard of Review
¶ 19 We review the trial court's decision following a bench trial to determine whether the findings are supported by substantial evidence and whether those findings support the conclusions of law. Dorsey v. King County, 51 Wash.App. 664, 668-69, 754 P.2d 1255 (1988). Substantial evidence is the quantum of evidence sufficient to persuade a rational fairminded person the premise is true. Wenatchee Sportsmen Ass'n v. Chelan County, 141 Wash.2d 169, 176, 4 P.3d 123 (2000). In determining the sufficiency of evidence, an appellate court need only consider evidence favorable to the prevailing party. Bland v. Mentor, 63 Wash.2d 150, 155, 385 P.2d 727 (1963). In evaluating the persuasiveness of the evidence, and the credibility of witnesses, we must defer to the trier of fact. Burnside v. Simpson Paper Co., 123 Wash.2d 93, 108, 864 P.2d 937 (1994). "[C]redibility determinations are solely for the trier of fact [and] cannot be reviewed on appeal." Morse v. Antonellis, 149 Wash.2d 572, 574, 70 P.3d 125 (2003). Unchallenged findings of fact are also verities on appeal. In re Estate of Jones, 152 Wash.2d 1, 8, 93 P.3d 147 (2004); RAP 10.3(g). We review questions of law de novo. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wash.2d 873, 879-880, 73 P.3d 369 (2003).
¶ 20 The clear, cogent and convincing burden of proof contains two components: (1) the amount of evidence necessary to submit the question to the trier of fact or the burden of production, which is met by substantial evidence; and (2) the burden of persuasion. As to the burden of persuasion, the trier of fact, not the appellate court, must be persuaded that the fact in issue is "highly probable." Colonial Imports, Inc. v. Carlton Northwest, Inc., 121 Wash.2d 726, 734-735, 853 P.2d 913 (1993).
¶ 21 In determining whether the evidence meets the "clear, cogent and convincing" standard of persuasion, the trial court must make credibility determinations and weigh and evaluate the evidence.
Bland, 63 Wash.2d at 154, 385 P.2d 727.
What constitutes clear, cogent, and convincing proof necessarily depends upon the character and extent of the evidence considered, viewed in connection with the surrounding facts and circumstances. Whether the evidence in a given case meets the standard of persuasion, designated as clear, cogent, and convincing, necessarily requires a process of weighing, comparing, testing, and evaluating-a function best performed by the trier of the fact, who usually has the advantage of actually hearing and seeing the parties and the witnesses, and whose right and duty it is to observe their attitude and demeanor. Bland, 63 Wash.2d at 154, 385 P.2d 727.
¶ 22 Thus, the appellate court's role is limited to determining whether substantial evidence supports the trial court's findings of fact. Bland, 63 Wash.2d at 154, 385 P.2d 727. It is for the trial court, and not this reviewing court, to determine whether the evidence in a given case meets the standard of persuasion designated as "clear, cogent and convincing." Id.
Limited Guardianship
¶ 23 Emma, the Sauls, and the Gabeleins challenge the trial court's conclusion that Emma is incapacitated as to her person and as to her estate. The standard of proof in a guardianship proceeding is clear, cogent, and convincing evidence. RCW 11.88.045(3). In determining incapacity as to the person, the court must determine whether the individual is at significant risk of personal harm "based upon a demonstrated inability to adequately provide for nutrition, health, housing, or physical safety." RCW 11.88.010(1)(a). In determining incapacity as to the estate, the court must decide if there is a significant risk of financial harm based upon a demonstrated inability "to adequately manage property or financial affairs." RCW 11.88.010(1)(b). The guardianship statute authorizes the superior court to appoint a guardian for an incapacitated person.
¶ 24 RCW 11.88.010 provides in pertinent part:
(1) The superior court of each county shall have power to appoint guardians for the persons and/or estates of incapacitated persons, and guardians for the estates of nonresidents of the state who have property in the county needing care and attention.
(a) For purposes of this chapter, a person may be deemed incapacitated as to person when the superior court determines the individual has a significant risk of personal harm based upon a demonstrated inability to adequately provide for nutrition, health, housing, or physical safety.
(b) For purposes of this chapter, a person may be deemed incapacitated as to the person's estate when the superior court determines the individual is at significant risk of financial harm based upon a demonstrated inability to adequately manage property or financial affairs.
¶ 25 Under RCW 11.88.010(1)(c), the determination of incapacity "is a legal not a medical decision, based upon a demonstration of management insufficiencies over time in the area of person or estate. Age, eccentricity, poverty, or medical diagnosis alone shall not be sufficient to justify a finding of incapacity." In making this determination, the trial court considers evidence from all sources, not just experts. In re Guardianship of Stamm v. Crowley, 121 Wash.App. 830, 841, 91 P.3d 126 (2004).
¶ 26 Here, the trial court concluded clear, cogent, and convincing evidence established that Emma is at a significant risk of personal harm "based on a demonstrated inability to adequately provide for her nutrition, health, or physical safety."
The court concludes, based on clear, cogent, and convincing evidence, that Emma is at significant risk of personal harm based on a demonstrated inability to adequately provide for her nutrition, health, or physical safety. In the court's opinion, the professionals who have concluded otherwise have not had all of the information that was provided to this court during the trial, having based their opinions primarily on short interviews done months ago.
¶ 27 Substantial evidence supports the trial court's conclusion that Emma is incapacitated as to her person. The trial court found that the unbiased testimony of Emma's neighbors, Don Gulliford and Janet Lotto, was more credible than the testimony of other witnesses. According to the unchallenged testimony of Don Gulliford, he found Emma wandering along a roadside ditch in the summer of 2003, holding a toothbrush. When he stopped to help her, Emma did not appear to know where she was going and "seemed confused and [in need] of assistance." When Janet Lotto brought Emma food in November 2004 and in December 2004, Emma appeared confused and told Lotto to whisper "because she did not want Vernon Gabelein to know about the food." And according to the testimony of other witnesses, there were multiple occasions in 2005 when Emma did not recognize people she had known for decades. In addition, the court relied on Frank Robinson's undisputed testimony about Emma. Robinson was a friend of Emma's since childhood and regularly visited her. According to Robinson, in the summer of 2005 and at trial, Emma did not recognize him and acted agitated and confused when he spoke to her.
¶ 28 It is also undisputed that when Emma was hospitalized in June 2005, the hospital personnel determined she was not competent to refuse medical care because she "was disoriented" and confused. Before Emma was admitted to the hospital in 2005, Emma had not been to a doctor or had any medical care for over thirty years.
¶ 29 There is also no dispute that "Emma does not cook, and relies on others for her meals." And on the occasions when Emma cooked, she burned or undercooked the food or cooked spoiled meat. Emma would also turn the stove on and sometimes forget to turn it off and often dropped her lit cigarettes on the floor without noticing. In addition, the trial court's finding that Emma continued to go through "the garbage at the county boat ramp, even after being advised that it was dangerous because needles from illegal drug use had been discarded there" is unchallenged.
¶ 30 The court considered but expressly rejected the opinion of the psychologist, Dr. Janice Edwards, that Emma did not need a guardian, because the opinion was based on a "short interview[ ] done months ago."
The court has struggled with these opinions because the court has respect for these professionals. But Dr. Edwards' impressions reflect a two-hour visit at the end of September of 2005.[Her] impressions are widely divergent from what the court observed of Emma over a period from December of 2005 through March 2, [2006], through ten days of trial. Even the guardian ad litem, who testified after Emma, acknowledged that if she were looking at Emma solely based on Emma's testimony in court, that she too might have doubts as to whether Emma needed a guardian.
The court is also mindful that the professionals based their opinions on information gathered when Emma was staying with Bob and Sandy Fisher. But the court concludes that things have changed since Emma moved back into her home alone on December 1, 2005... The court concludes that Emma appears to have gone downhill since she started living alone on December 1, 2005.
In evaluating Dr. Edwards' opinion, the trial court expressly "credit[ed] the information elicited on cross-examination."
Dr. Edwards is a forensic psychologist who has done over 100 guardianship evaluations. However, the court credits the information elicited during her cross-examination: that she was not aware of much of the evidence provided to the court in this trial. For example, Dr. Edwards was not aware ? that Emma had not been to a doctor in over 30 years until she was hospitalized in June of 2005, that Emma had no preventative checkups or any well health care until the guardianship petition was filed, that Emma had refused emergency medical care, or that Emma was considered not competent to refuse hospitalization when she was admitted to the hospital in June of 2005.
¶ 31 During cross examination, the GAL also admitted that before her investigation was complete and before talking to "Earl Fisher, Emma's oldest son and the proposed guardian; Janet Lotto[; or] Emma's [siblings]," she had already decided that she would not recommend a guardianship.
¶ 32 Emma's trial testimony also supports the trial court's conclusion of incapacity. For instance, Emma's description about what she said when Janet Lotto brought food to her was incoherent:
Q. And you were in court when Janet Lotto described bringing food to you after Thanksgiving and Christmas?
A. Yes.
Q. And you told her to whisper and not to tell Vernon about it. Do you remember Janet saying that?
A. What? No. I know what that was all about. I don't know if I should tell it or not. But she got scared one night and she come up and I should have went with her. I told her afterwards, too, I said, Janet, I should have went with you. Because it was not at night, it was in sort of the afternoon.
And Emma often had difficulty answering simple questions during the trial. For example, when asked "[h]ow long have you had that microwave?" she replied "[s]ince I've been-and you should see the house. They're painting the house inside. Inside. Linda and Sandy, my daughter-in-law, well, Linda, there's-and we were talking about it the other day, we're going to finish painting the inside." When asked "[w]hat did you believe that the property was worth when you agreed to sell it?" Emma replied "No, I sold it because there was so much junk up there." Asked about the property that she sold for $150,000 that was worth $427,000, "Emma scoffed and said, 'It's just sand'."
¶ 33 The court found Emma was "frail, confused, unsteady, disoriented, childlike, and oftentimes belligerent." According to the court, while it is not unusual for a person of Emma's age to be forgetful, "Emma's forgetfulness had another element to it. It is not that Emma could not remember something; it is that Emma refused to believe certain things had happened at all. On other occasions, Emma asserted certain information as if it was the truth when she clearly had no memory of the event." The trial court also clearly rejected the argument that an infection in February caused Emma's sometimes incoherent testimony.4
¶ 34 Emma, the Sauls, and the Gabeleins rely on Elston v. McGlauflin, 79 Wash. 355, 140 P. 396 (1914), to argue the trial court impermissibly relied on its own observations of Emma's behavior at trial as evidence of incapacity in violation of ER 605. Emma, the Sauls, and the Gabeleins specifically challenge findings of fact 76, 92, and 93, claiming they were unable to challenge the court's observations that were not made part of the record.
¶ 35 Finding of fact 76 states:
If Emma did not agree with the testimony from other witnesses, she would make faces of astonishment or bafflement, indicating clearly her disagreement with the testimony. She continued to talk in court, at times so loudly that she would have to be reminded by the court to be quiet. In December of 2005, during the testimony of her sister-in-law, Ruth Gabelein Ohm, Emma laughed, smiled, talked, and looked around as if she was at a social gathering. Emma's attorney frequently had to tell her to be quiet. The court understands that a guardianship proceeding is a difficult time for anyone. But Emma's behavior in court was dramatically different from anyone else that the court has observed in ten years on the bench.
¶ 36 Finding of fact 92 states:
As Ron was testifying, Emma was saying to her attorney, loudly enough for anyone in the courtroom to hear, "That's not true! That's not true!"
¶ 37 Finding of fact 93 states:
In reaching its decision in this case, the court has carefully considered the opinions of the professionals described above: i.e., that Emma is fine. But it is the court's strong impression, and the court finds, that Emma is not, in fact, fine but rather that she is incapacitated. Emma has not appeared to be fine to this court, or to many people who are part of her family or otherwise knowledgeable about her and who have nothing to gain from their testimony about their concerns.
¶ 38 Under ER 605 "[t]he judge presiding at the trial may not testify in that trial as a witness." In Elston, during the trial in an action to recover damages allegedly caused by negligent construction of an apartment building on a steep slope, the judge visited the site without the knowledge of the parties or counsel. Elston, 79 Wash. at 357, 140 P. 396. On appeal, the court held that the trial court's independent investigation impermissibly denied the parties a fair trial. Elston, 79 Wash. at 359, 140 P. 396. "The court unwittingly became a witness in the case and in some degree, at least, based his judgment upon his own independent experience and preconceived opinion." Id. Here, unlike in Elston, the trial judge did not conduct an independent investigation or make a decision based upon independent experience and preconceived opinions. And in deciding the incapacity and competency of a witness, the trial court is entitled to draw on its observations of the witness. See Day v. Santorsola, 118 Wash.App. 746, 765, 76 P.3d 1190 (2003); State v. Avila, 78 Wash.App. 731, 735, 899 P.2d11 (1995).
¶ 39 The record also shows that on numerous occasions, the judge noted Emma's inappropriate courtroom behavior. For example, the court admonished Emma "to not make comments out loud during" the testimony of other witnesses. And as finding of fact 93 makes clear, the trial court considered but expressly rejected the expert opinions offered and primarily relied on the trial testimony of disinterested witnesses such as Don Gulliford, Janet Lotto, and Frank Robinson in reaching the conclusion that Emma is at significant risk of personal harm "based on a demonstrated inability to adequately provide for her nutrition, health, or physical safety." 5
¶ 40 Substantial evidence also supports the trial court's conclusion that "Emma is at significant risk of financial harm based upon a demonstrated inability to adequately manage property or financial affairs." There is no dispute that Emma wishes to remain in her home as long as possible, but that "Emma is not able to protect her resources to meet her future needs" and her "uni[n]formed decisions will have an enormous impact on her" ability to do so. The parties also do not challenge the finding that Emma "has absolutely no idea of property values or financial planning" or that after months of litigation about the value of the properties she sold "Emma is unaware of the market value of the property that she sold and does not even care." Although Emma insisted "I know what I sold," when she finally understood that she was being asked how much the property was worth, she admitted "I don't know. I don't know all that. Jeepers." Emma also testified that "I forget how many acres I've got left. I had 24 but I don't have that much now. I don't know what all I have."
¶ 41 In addition, the evidence establishes Emma has difficulty paying bills and is unaware of her finances.6 Emma relies on the bank tellers to make entries in her check register and could not account for the withdrawal of money. Emma did not recognize entries in her checkbook and could not explain the withdrawals from her account in 2004. And according to one of the court's unchallenged findings, "[i]n addition to having unaccounted withdrawals from her savings, Emma has little understanding of 'investments,' which also leaves her vulnerable to others."
¶ 42 Because substantial evidence supports the trial court's findings, we conclude the court did not err in appointing a limited guardianship for Emma to allow her to meet her medical and day-to-day needs and assist her in managing her finances and property.
Abuse of Vulnerable Adults Act Protection Order
¶ 43 Emma, the Sauls, and the Gabeleins also contend that the trial court erred in concluding Emma was a vulnerable adult and entering a protective order under the Abuse of Vulnerable Adults Act (AVA), chapter 74.34 RCW. Relying on former RCW 74.34.110(2),7 Emma, the Sauls, and the Gabeleins assert that the court had to find by clear, cogent and convincing evidence that Emma was a vulnerable adult when she signed the purchase and sale agreement with the Gabeleins in 2004 and the evidence does not support finding Emma was a vulnerable adult in 2004.8
¶ 44 Statutory interpretation is a question of law we review de novo. Western Telepage, Inc. v. City of Tacoma, 140 Wash.2d 599, 607, 998 P.2d 884 (2000). The court's primary goal is "to ascertain and give effect to legislative intent." State v. Pac. Health Ctr., Inc., 135 Wash.App. 149, 158-59, 143 P.3d 618 (2006). Legislative intent is determined primarily from the statutory language, viewed "in the context of the overall legislative scheme." Collection Servs. v. McConnachie, 106 Wash.App. 738, 741, 24 P.3d 1112 (2001). If the statute's meaning is plain on its face, we give effect to that plain meaning. Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash.2d 1, 9-10, 43 P.3d 4 (2002).
¶ 45 The stated purpose of the AVA is to protect vulnerable adults from abuse, financial exploitation, and neglect. RCW 74.34.110. Under the AVA, the court shall conduct a hearing on a petition for an order of protection and can enter an order to protect the vulnerable adult from exploitation, "not to exceed one year." Former RCW 74.34.130.
¶ 46 Former RCW 74.34.110(2) provides that: A petition shall allege that the petitioner is a vulnerable adult and that the petitioner has been abandoned, abused, financially exploited, or neglected, or is threatened with abandonment, abuse, financial exploitation, or neglect by respondent.
¶ 47 A "vulnerable adult" is defined as a person "[s]ixty years of age or older who has the functional, mental, or physical inability to care for himself or herself" or is "[f]ound incapacitated under chapter 11.88 RCW" Former RCW 74.34.020(13). The AVA establishes an action for the protection of vulnerable adults in cases of "abandonment, abuse, financial exploitation, or neglect." The AVA definition of "abuse includes exploitation of a vulnerable adult." Former RCW 74.34.020(2). "[E]xploitation" is defined as "an act of forcing, compelling, or exerting undue influence over a vulnerable adult causing the vulnerable adult to act in a way that is inconsistent with relevant past behavior." Former RCW 74.34.020(2)(d). According to the statutory definition of "exploitation," exploitation can only occur when the adult is vulnerable. Under the plain language of the AVA, we conclude the court must find an individual is a vulnerable adult at the time of the alleged exploitation.
¶ 48 Relying on the opinion of Dr. Edwards and the fact that the GAL did not recommend a guardianship, Emma, the Sauls, and the Gabeleins contend the evidence does not support the trial court's conclusion that Emma was a vulnerable adult under the AVA in 2004 when she signed the purchase and sale agreement. Since her husband died in 1998, Emma has been vulnerable to others, who have taken advantage of her desire to please those persons she perceives as being her friends or looking out for her best interests, such as Linda Gabelein and Samantha Saul. Emma has sold property to members of the Gabelein family for a fraction of its value jeopardizing her ability to remain in her home for the remainder of her life.
¶ 49 The testimony of Dr. Edwards and the GAL about Emma's mental capacity "presents one source of information among many, credibility is the province of the judge, and the judge can cast a skeptical eye when called for." Stamm, 121 Wash.App. at 841, 91 P.3d 126. And the court rejected the opinion of Dr. Edwards as based on spending very limited time with Emma while she was being taken care of by and living with Bob and Sandy Fisher.
¶ 50 In addition, Emma, the Sauls, and the Gabeleins argue that Emma was not a vulnerable adult under the AVA because the GAL "concluded Emma was not an exploited vulnerable adult." They mischaracterize the GAL's testimony. While the GAL testified that she did not believe the Gabeleins had "purposely done something to hurt" Emma, the GAL's report states that "[n]one of this means that Emma has not been unduly influenced."
¶ 51 Evidence concerning Emma's incapacity under chapter 11.88 RCW also supports the trial court's conclusion that Emma was a vulnerable adult when she entered into the purchase and sale agreement with the Gabeleins in 2004.9 For instance, in 2003, the same year that Don Gulliford found Emma wandering along a ditch, disoriented and confused, Emma gave Samantha Saul a durable power attorney apparently without realizing it was effective immediately. Emma told Dr. Edwards that "she had made a power of attorney over to Samantha Saul [that] is not in effect, but will become active if she is unable to handle her own affairs." 10 And as previously described, it is undisputed that by 2004 Emma could not independently manage her finances or take care of herself. And Ron testified that he stopped accepting out-of-town jobs in 2004 because his brother could no longer care for Emma by himself.
¶ 52 On this record, substantial evidence supports the trial court's conclusion that Emma was a vulnerable adult in 2004 under the AVA when she sold the property to the Gabeleins.
¶ 53 Emma, the Sauls, and the Gabeleins also challenge the trial court's conclusion that the Sauls and the Gabeleins exploited Emma by exerting undue influence over her by inducing her to sell her property to them in 2004 at a price far below the market value. They argue that Emma was not exploited because she met with an attorney about the 2004 purchase and sale agreement. But the trial court's unchallenged finding that Emma had "absolutely no idea of property values" supports the court's conclusion that Emma was exploited despite meeting with an attorney. And the unchallenged finding that Emma did not understand the effect of selling her property on her ability to live independently in her home for the rest of her life also supports the conclusion that Emma was exploited, despite meeting with an attorney.
¶ 54 Next, Emma, the Sauls, and the Gabeleins contend the property sale was not a gift and the trial court erred in relying on White v. White, 33 Wash.App. 364, 655 P.2d 1173 (1982), to shift the burden to the Sauls and Gabeleins to prove lack of undue influence. The trial court ruled that Emma made a gift to the Sauls and the Gabeleins. "By selling her property as far below its market value as she has, Emma has, in essence, made gifts to the Sauls and the Gabeleins of substantial value, based on the difference between the sales price and the fair market value of each property."
¶ 55 As a general rule, the party seeking to set aside an inter vivos gift has the burden of showing the gift is invalid. Lewis v. Estate of Lewis, 45 Wash.App. 387, 388, 725 P.2d 644 (1986). But if the recipient has a confidential or fiduciary relationship with the donor, the burden shifts to the donee to prove "a gift was intended and not the product of undue influence." Lewis, 45 Wash.App. at 389, 725 P.2d 644; White, 33 Wash.App. at 368, 655 P.2d 1173.11 "[E]vidence to sustain the gift between such persons must show that the gift was made freely, voluntarily, and with a full understanding of the facts. If the judicial mind is left in doubt or uncertainty as to exactly what the status of the transaction was, the donee must be deemed to have failed in the discharge of his burden and the claim of gift must be rejected." McCutcheon v. Brownfield, 2 Wash.App. 348, 356, 467 P.2d 868 (1970). The donee's burden of proof is clear, cogent, and convincing evidence. Pedersen v. Bibioff, 64 Wash.App. 710, 720, 828 P.2d 1113 (1992). Whether a legal fiduciary relationship exists is a question of law, which we review de novo. S.H.C. v. Lu, 113 Wash.App. 511, 524, 54 P.3d 174 (2002). Whether a confidential relationship exists is a question of fact. McCutcheon v. Brownfield, 2 Wash.App. 348, 356-57, 467 P.2d 868 (1970).
¶ 56 The Sauls and the Gabeleins dispute the trial court's conclusion that Samantha and Linda had a confidential or fiduciary relationship with Emma. "A confidential or fiduciary relationship between two persons may exist either [in law] because of the nature of the relationship between the parties or the confidential relationship between persons involved may exist in fact." McCutcheon, 2 Wash.App. at 356-57, 467 P.2d 868. A confidential relationship exists when one person has gained the confidence of the other and "purports to act or advise with the other's interest in mind." McCutcheon, 2 Wash.App. at 357, 467 P.2d 868.
¶ 57 The power of attorney Emma executed in June 2003 that gives Samantha "all of the powers of an absolute owner over [Emma's] assets and liabilities," including the authority to "[l]ease, sell, release, convey, exchange, mortgage, and release any mortgage on land, and any interest therein," establishes Samantha had a legal fiduciary relationship with Emma. While Emma, the Sauls, and the Gabeleins argue that Samantha's fiduciary role is irrelevant because she did not purchase the property in 2004, the trial court's finding that her role was critical to the sale is unchallenged-"[t]he Gabelein transaction would not have occurred without the Sauls' participation in a boundary line adjustment."
¶ 58 Substantial evidence also supports the court's findings that both Samantha and Linda had a confidential or fiduciary relationship with Emma and exerted undue influence over her. It is undisputed that Samantha was involved in all three real estate transactions and, for each transaction, "Emma thought the property was worth a substantial amount less than it was." Samantha gained Emma's confidence and purported to act in Emma's best interest as her friend, giving advice based on her superior knowledge. For example, Samantha testified that in the 2002 sale, she rejected Emma's proposed price of $52,000 as "too low," then showed Emma "comparable" property sales records demonstrating that $80,000 was a fair market value.12 But the trial court found $80,000 was a "bargain" price and below fair market value.13
¶ 59 Linda also gained Emma's confidence and purported to advise Emma as her friend and act with Emma's best interests in mind, using her superior knowledge. In the 2004 property transaction, Linda rejected Emma's price as "too low" but told Emma that comparable sales data showed $150,000 was "in the ballpark" of a reasonable price. Yet on appeal, there is no dispute that the property is "some of the best view property on Whidbey Island" and was worth $324,000 in June 2004 and $427,000 when the sale closed in May 2005.14 It is also undisputed that Linda was the listing agent for a house on a small lot in the same neighborhood that sold for only $150,000 around the same time. The trial court noted that this sale also showed that Linda's claim that $150,000 was "in the ballpark" was not credible.
¶ 60 Citing conclusions of law 10 and 17, the Sauls and the Gabeleins also claim the court erred by imposing a fiduciary duty on Samantha and Linda contrary to the laws governing real estate agents.15 Conclusion of law 10 states: Given Emma's age, her lack of sophistication in financial matters, and her almost childlike trust in Samantha and Linda, each of them should have insisted upon getting appraisals and paying fair market value in purchasing property from Emma.
¶ 61 Conclusion of law 17 states:
Samantha had an obligation to advise Emma about the fair market value of the property that Samantha purchased from her before the purchase. Linda had an obligation to advise Emma about the fair market value of the property that Linda purchased from her before the purchase.
¶ 62 It is undisputed that neither Linda nor Samantha acted as Emma's real estate agent for the 2004 real estate transaction. In context, it is clear that the crux of conclusions of law 10 and 17 is not the role Samantha and Linda played as real estate agents but rather their responsibility, because of their close relationship with Emma and Emma's unequivocal trust in and reliance on them, to use their superior knowledge in Emma's best interest.
¶ 63 Because the trial court correctly concluded that Samantha and Linda had a confidential relationship with Emma, as a matter of law they have the burden to prove a gift was not a result of undue influence. In a number of cases, Washington courts have held that below-market sales are gifts. In the Matter of the Estate of McLeod, 105 Wash.2d 809, 814, 719 P.2d 88 (1986) (in the context of the inheritance tax, "the excess of the fair market value above the [amount paid] was a gift"); Glorfield v. Glorfield, 27 Wash.App. 358, 359, 617 P.2d 1051 (1980) (for community property purposes in a dissolution, "sales which were substantially below fair market value" were characterized as gifts). Emma, the Sauls, and the Gabeleins cite no case to the contrary.
¶ 64 The only authority Emma, the Sauls, and the Gabeleins cite to support their argument that the 2004 transaction was not a gift is the introduction to the Washington Administrative Code (WAC) provision regulating taxation of real property transfers. WAC 458-61A-201(1)
Generally, a gift of real property is not a sale, and is not subject to the real estate excise tax. A gift of real property is a transfer for which there is no consideration given in return for granting an interest in the property. If consideration is given in return for the interest granted, then the transfer is not a gift, but a sale, and it is subject to the real estate excise tax to the extent of the consideration received.
But a later example in WAC 458-61A-201(6)(b) explains that the value transferred in excess of the consideration received is a gift:
(ii) Keith and Jean, as joint owners, convey their residence valued at $200,000 to Jean as her sole property. There is no underlying debt on the property. In exchange for Keith's one-half interest in the property, Jean gives Keith $10,000. Keith has made a gift of $90,000 in equity, and received consideration of $10,000. Real estate excise tax is due on the $10,000.
¶ 65 We conclude the trial court did not err in concluding that Emma's sale for well below market value was a gift and in shifting the burden to the Sauls and the Gabeleins to prove undue influence.16
¶ 66 According to one of the court's unchallenged findings of fact, "Emma did not have any idea of the value of the property that she sold to the Gabeleins and still does not." Emma's lack of expertise in real estate and financial matters is also undisputed. Because Emma never had a full understanding of the facts, the claim of gift must be rejected.
¶ 67 Even if the Sauls and Gabeleins did not have the burden to prove undue influence, substantial evidence supports the court's conclusion that clear, cogent, and convincing evidence establishes "Emma has been exploited by the Sauls and the Gabeleins." Undue influence can exist "when highly unreasonable consideration is coupled with other inequitable incidents." Lewis v. Estate of Lewis, 45 Wash.App. 387, 391, 725 P.2d 644 (1986). "Even though no directly false statements are made, if there appears to be a studied effort to produce a false impression upon the mind of the party from whom land is being purchased, this, together with inadequacy of price, will be sufficient to authorize relief." Downing v. State, 9 Wash.2d 685, 689-90, 115 P.2d 972 (1941).
¶ 68 Here, Samantha and Linda convinced Emma that they were looking out for her best interests by telling Emma her price was "too low," then suggesting prices that were still egregiously low. Emma was also given misleading "comparable" property sales to lead her to believe that the bargain sale prices were reasonably close to market value.
¶ 69 After the first sale to the Thompsons, the Sauls asked Emma to sell them property.17 While Emma offered to sell the property to the Sauls for $52,000, they agreed to buy it for $80,000. Before trial, Samantha took the position that Don or Emma suggested $80,000 as the purchase price. But at trial, Samantha admitted that she proposed $80,000. However, she claimed that $80,000 was "in the range of what was reasonable" for five acres with a marine mountain view, despite the undisputed evidence that the property was assessed at $195,524 the previous year. And when the Sauls applied for a loan two years later, the bank appraisal valued the property at $400,000.
¶ 70 A few months after the sale to the Sauls, Linda Gabelein testified that she approached Emma about buying another five-acre parcel. During the transaction, Linda also purported to act in Emma's best interest by insisting on paying more than Emma initially offered but then agreeing to a price that was still far below market value. Sometime after the 2004 purchase and sale agreement, an addendum was executed. Linda brought the boundary line adjustment paperwork to Emma to sign. Emma signed at least two versions, including one that lacked a legal description or a map. In the boundary line adjustment that was finally approved, all of the less-desirable marsh and swampland was excluded from the five acres the Gabeleins purchased. The Sauls and the Gabeleins also took steps to ensure Ron and Don did not learn about the 2004 real estate transaction until after closing. Linda Gabelein told a fellow real estate agent that the sale was "hush-hush" and "a really good deal."
¶ 71 There was also testimony that both the Sauls and the Gabeleins told others they were able to influence Emma. According to one unchallenged finding, Samantha told Ray Lotto that "she was working on Emma, by being nice to her and taking her on trips to Costco, so that she could get a listing on Emma's property that Lotto wanted to buy." Ray Lotto testified that Samantha thought "given enough time [she would] be able to get this property for" him. Emma's daughter-in-law Sandy Fisher testified that Vernon Gabelein told her that he "could talk Emma into giving Bob Fisher and Earl Fisher her remaining five-acre parcel of property?" 18 And according to the GAL, Linda and Samantha could "get Ms. Endicott to change her mind." The unchallenged findings also show that Samantha's influence over Emma extended beyond real estate. For instance, when Ron and Don questioned "the prudence of Emma's purchase of a 30-year annuity in 2002, she would not believe that their questions were valid until she had Samantha Saul check out the situation." And it is undisputed that during Emma's testimony, she "volunteered, '[i]f Sam told you that, that's the truth.' ? As Emma said, if Samantha Saul says it, that's the truth for Emma."
¶ 72 Substantial evidence also supports the trial court's finding that the undue influence of the Sauls and the Gabeleins over Emma caused her "to act in a way that is inconsistent with relevant past behavior." 19 Many witnesses testified that Emma was extremely frugal. Emma used to dig through trash to find can labels she could turn in for fifty cents or a dollar. Emma has always worn secondhand clothes she got for free. She did not replace her 50-year-old broken dentures because she did not want to spend the money. Before Shorty's death, the couple had never conveyed any property except when Emma gave her favorite sister Annie the one-third interest she inherited in their parent's home.20
¶ 73 On this record, we conclude the trial court did not err in ruling Emma is a vulnerable adult under the AVA and issuing a protective order preventing the Sauls and the Gabeleins from transferring or encumbering the property she sold to them in 2004.
¶ 74 We affirm the trial court's decision establishing a limited guardianship for Emma and issuing an order of protection for her as a vulnerable adult under the AVA. Substantial evidence supports finding that Emma is incapacitated as to her person and as to her estate, and that the Sauls and the Gabeleins unduly influenced and exploited Emma. As the prevailing parties on appeal, upon compliance with RAP 18.1, Ron and Don are entitled to attorney fees on appeal under RCW 11.96A.150 and RCW 220.127.116.11
1. There was an understanding in the family that Earl and Bob would inherit Emma's five acres.
2. The court later entered an order of protection against Don because of an unrelated incident a year earlier.
3. The court selected Earl Fisher because he would act in his mother's best interest, he was impartial, and he was not interested in obtaining Emma's money or property.
4. "The court does not attribute Emma's behavior during trial solely to the urinary tract infection. The court observed Emma's behavior for three full days in December of 2005 and two full days in January of 2006, and her behavior was as described above. There is no suggestion that Emma was suffering from a urinary tract infection then. Even if she was suffering from a urinary tract infection, the antibiotics prescribed for her on February 8, 2006, would have been completed on February 13 or 14. Emma's disorientation cleared up with 24 hours when she was at the hospital in June of 2005 for the same condition. The difference between June of 2005 and February of 2006 is that Emma was no longer living with anyone who monitors whether she was taking her medication. Samantha, who took her to the hospital on February 8, testified that she did not know if Emma had finished her medication. Because Emma was diagnosed with two urinary tract infections in such a short period of time, the court questions whether she took all of her antibiotics as prescribed."
5. And because substantial evidence supports finding Emma incapacitated, any error is harmless.
6. At some point Emma inadvertently let her homeowners' insurance lapse and apparently she often paid bills even when the statements showed a credit balance.
7. In this opinion, the statutory citations to the AVA refer to the version in effect in 2004 and 2005. Effective July 22, 2007, some sections of the AVA were amended in ways that do not affect this appeal.
8. Ron and Don contend the Sauls and the Gabeleins argue for the first time on appeal that the court erred in not addressing whether Emma was a vulnerable adult at the time of the Purchase and Sale Agreement in 2004. But below the Sauls and the Gabeleins took the position that the AVA required proof that Emma was vulnerable when she was allegedly
exploited in 2004.
9. Emma, the Sauls, and the Gabeleins assert the relevant time period was when the purchase agreement for the third sale was signed on June 15, 2004. Ron and Don assert the last exploitation occurred at the closing on May 16, 2005. Because substantial evidence supports finding Emma incapacitated before June 2004, we need not resolve the parties' disagreement about the relevant time period.
10. The court expressly found the psychologist's report of Emma's statement credible.
11. Emma, the Sauls, and the Gabeleins also contend that only the donor may challenge the transaction and that White only applies to a rescission action. But the holding in White is not limited to actions by donors to rescind. See Matter of Estate of Eubank, 50 Wash.App. 611, 619-20, 749 P.2d 691 (1988); Lewis, 45 Wash.App. at 388-89, 725 P.2d 644.
12. Samantha's testimony also supports the challenged finding that Samantha knew Emma did not know the value of the property.
13. This challenged finding is supported by substantial evidence. The property was assessed at $195,524 in 2001, and an appraisal showed the land alone was worth at least $300,000 two years after the Sauls bought it.
14. The court's finding that the appraisal Ron and Don submitted was more credible is unchallenged. According to that appraisal, the five acres was worth $324,000 in June 2004.
15. Because the findings, conclusions, and protective order only relate to the 2004 real estate transaction, we need not address challenges to the findings and conclusions related to the first sale to Dina Thompson and her spouse, who are not parties to this action nor subject to the protective order.
16. The White court also distinguished inter vivos gifts from will contests. In will contests, the initial burden is on the party challenging the testamentary gift. By contrast, with an inter vivos gift the donor "strips himself of that which he can still enjoy and of which he may have need during his life." White, 33 Wash.App. at 371, 655 P.2d 1173 (quoting Whalen v. Lanier, 29 Wash.2d 299, 312, 186 P.2d 919 (1947)).
17. The court rejected the testimony that Emma approached the Sauls. The trial court relied on Emma's statement to the psychologist that the Sauls asked her to sell them property and "she agreed?" And in the protection order hearing, Emma again stated that the Sauls "c[a]me and asked" about buying the property.
18. Because the trial court found Sandy Fisher's testimony about the sale in 2004 noncredible, Emma, the Sauls, and the Gabeleins assert substantial evidence does not support the trial court's finding that the conversation occurred. But while the court rejected Sandy Fisher's testimony that Emma was not exploited in the 2004 sale as not credible, the court expressly found her testimony about the conversation with Vernon was credible.
19. Former RCW 74.34.020(2)(d).
20. Emma, the Sauls, and the Gabeleins argue that because Shorty always controlled the finances, Emma never had a chance to sell anything or give expensive gifts before he died. But for at least the first three years after Shorty died, Emma continued to live very frugally and did not sell any property. The largest gift Ron remembered Emma ever giving was $75 to her sister Annie on her 75th birthday in 2000.
21. Because we affirm, we also conclude the trial court did not abuse its discretion in awarding Ron and Don attorney fees under RCW 11.96A.150 and RCW 74.34.130.
WE CONCUR: APPELWICK, C.J., and BECKER, J.
Windermere Bellevue Commons Associate Brokers Dick and Cecilia Pelascini's Foreclosure Rescue Ripoff Scam
(L to R) Windermere Bellevue Commons Associate Broker Dick Pelascini and wife Cecilia Pelascini: Still generating commissions for Windermere.
Vila Pace-Knapp owned a home where she resided for many years, but eventually became delinquent on her payments, and started getting written notices of default and pending foreclosure that her home would be sold at an upcoming trustee's sale. She sought to stave off the trustee's sale through bankruptcy, but the bankruptcy court dismissed all of her petitions. The attempts at bankruptcy, however, did manage to postpone the scheduled trustee's sale for many months, but the bankruptcy court's final order of dismissal prevented her from filing additional petitions.
At about the period of Pace-Knapp's initial notices of foreclosure, Windermere Associate Broker Dick Pelascini, and Thomas Boboth of Pacific Shoreline Mortgage, individually approached her at her home. She knew neither of the men, but they were clearly aware of her pending foreclosure. They offered to collaborate with Pace-Knapp in an effort to save her home. Pelascini and Boboth each proffered business cards, identifying each respectively as a broker at a real estate company, and the president of a mortgage company. The pair visited many times over the ensuing weeks, continually offering to help her. Neither man ever stated they wanted to buy her house, or offer her a loan. Pace-Knapp declined their offers of help.
On an evening before the actual trustee's sale, Pace-Knapp met Pelascini at his real estate office and signed a purchase and sale agreement for her home, a residential lease agreement, and an option to purchase the property from the Pelascinis, two years down the road. The documents were clearly labeled, but Pace-Kanpp did not read them, including the titles. She didn't realize she'd sold her house to the Pelescinis until signing documents at the closing agent's office, but still went ahead, and the trustee's sale did not occur.
Pace-Knapp commenced living in the house under the new lease agreement with the Pelescinis for two and a half years, during which she paid the new owners rent. Then the Pelascinis declined to renew her lease a third time, and subsequently evicted her. She sued Dick and Cecilia Pelascini, Windermere Real Estate Bellevue Commons and Thomas Boboth and Pacific Shoreline Mortgage, for unconscionability, fraud, CPA violations, and intentional infliction of emotional distress. She also sought relief from the sale and attorney fees. The trial court found that Pelescinis were liable for fraud and CPA violations. It ordered rescission of the contract and attorney fees and costs under the Consumer Protection Act. In typical "stalling-the-damage-award-style," Windermere and the Pelescinis moved for reconsideration, which the trial court denied, so they appealed.
The appeals court said, "The Pelascinis' argument rests on the false premise that they ' …did help plaintiff save her house,' Simply stated, the point is that they saved her home for themselves so that they would not have to bid at the rescheduled trustee's sale. The Pelascinis' practice of preying on this and other vulnerable home owners on the eve of foreclosure is the type of practice likely to deceive future distressed owners in the same manner…. The trial court found that Pelascini and Boboth habitually work together to buy houses on the eve of foreclosure and that they did so in this case… essentially harassing her until she relented and accepted their offer to 'help.' …Pelascini and Boboth are likely to repeat this approach and have done so in the past."
Both Cecilia and Dick Pelascini still work for Windermere. Here is the Court's opinion:
No. 59321-8-I
FILED: March 17, 2008
DICK PELASCINI and CECILIA PELASCINI, husband and wife and their martial community; WINDERMERE
REAL ESTATE/BELLEVUE COMMONS, INC.; THOMAS BOBOTH; and PACIFIC SHORELINE MORTGAGE, INC.,
Cox, J. — A plaintiff claiming a violation of the Consumer Protection Act (CPA) must establish (1) an unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) public interest impact, (4) injury to plaintiff in his or her business or property, and (5) causation.1 Here, the trial judge's unchallenged findings of fact support its conclusion that Dick and Cecilia Pelascini, Thomas Boboth, and Pacific Shoreline Mortgage, Inc. (collectively, "the Pelascinis") violated the act. However, the trial court's determination that Vila Pace-Knapp was entitled to rescission for fraud in the inducement of a sale of her property cannot be sustained. We affirm in part, reverse in part, and remand for a determination of damages and attorney fees under the CPA.
1 Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105
Wn.2d 778, 780, 719 P.2d 531 (1986).
Pace-Knapp owned and resided in her home in Bellevue for many years. In early 2001, she became delinquent in making payments on the loan that was secured by her property. In June 2001, she received written notices of default and foreclosure indicating that her home would be sold at a trustee's sale in the near future. She attempted to avoid foreclosure by filing for bankruptcy three times, but the bankruptcy court dismissed all of her petitions. The bankruptcy filings delayed the scheduled trustee's sale from June to October 2001. In the final order of dismissal, the bankruptcy court prohibited her from filing additional petitions.
Around the time of the initial foreclosure notices, Pelascini and Boboth individually approached Pace-Knapp at her home. She did not know either of them, but they were aware of the pending foreclosure proceedings. They offered to work together to help her "save her home." Each gave her a business card showing that they were, respectively, a broker at a real estate company and the president of a mortgage company. They visited her many times over the next few weeks and continually offered to help her. They never stated they wanted either to buy her house or to help her by offering her a loan. Throughout this period, she declined their offers of help.
The evening before the final rescheduled trustee's sale, Pace-Knapp went to Pelascini's real estate office and signed several documents: a purchase and sale agreement for her home, a residential lease agreement, and an option to purchase the property from the Pelascinis in two years. Although they were plainly labeled as such, she did not read any portion of the documents, including the titles. When Pace-Knapp signed further documents at the closing agent's office, she first realized she had sold her house to the Pelascinis. Nevertheless, she proceeded with the sale. As a result of this transaction, the trustee's sale did not proceed.
She lived in the house under lease agreements with the Pelascinis for two and a half years, during which time she paid rent to the new owners. She was evicted when the Pelascinis declined to renew her lease a third time.
Shortly thereafter, she commenced this action, alleging unconscionablility, fraud, CPA violations, and intentional infliction of emotional distress. She sought relief from the sale and/or damages as well as attorney fees.
At a bench trial, the trial court found that defendants' representations led Pace-Knapp to reasonably believe they were planning a refinance of her home loan. The trial court also found her competent to enter into the contracts that she signed. Nevertheless, the trial court decided that the Pelascinis were liable for fraud in the inducement and CPA violations. It ordered rescission of the contract and attorney fees and costs under the CPA. It appears that the Pelascinis moved for reconsideration, which the trial court denied.
The Pelascinis appeal.
The Pelascinis argue that the trial court erred in concluding that they violated the Consumer Protection Act. Based on the unchallenged findings of fact and the relevant law, we disagree.
The elements of a private CPA claim are:
(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; [and] (5) causation.[2]
We liberally construe the CPA to serve its beneficial purposes of protecting the public and fostering fair and honest competition.3
The Pelascinis do not challenge any of the trial court's findings of fact. Therefore, they are verities on appeal.4 We review issues of law de novo.5 We draw reasonable inferences from the facts in favor of the trial court's determination.6
Unfair or Deceptive Practice
Citing no case law, the Pelascinis argue that they did not engage in an unfair or deceptive practice. We disagree.
An act is unfair or deceptive if it had the capacity to deceive a substantial portion of the public.7 Proof of intent to deceive is not required.8 For example, a defendant engages in an unfair or deceptive practice if he or she sells a house
2 Hangman Ridge, 105 Wn.2d at 780.
4 Perry v. Costco Wholesale, Inc., 123 Wn. App. 783, 792, 98 P.3d 1264
5 Id.
6 Henry v. Bitar, 102 Wn. App. 137, 142, 5 P.3d 1277 (2000).
7 Hangman Ridge, 105 Wn.2d at 785.
8 Id.
with prior knowledge of a defect and fails to disclose that defect to the buyer.9 When the facts are not in dispute, we determine whether a practice was unfair or deceptive under the CPA as an issue of law.10
The Pelascinis' argument rests on the false premise that they "did help plaintiff save her house." The trial court found that Pace-Knapp reasonably interpreted the Pelascinis' promises to mean that they would refinance her home, which means she would continue to own it. Taking the unchallenged findings as true, we conclude that the Pelascinis deceived Pace-Knapp when they promised her that they would help her "save" her home and implied that they would refinance her loan. Simply stated, the point is that they saved her home for themselves so that they would not have to bid at the rescheduled trustee's sale. They did not help her save her home for her, as suggested. The Pelascinis' practice of preying on this and other vulnerable home owners on the eve of foreclosure is the type of practice likely to deceive future distressed owners in the same manner.
In the Course of Trade or Commerce
The Pelascinis do not dispute that they were acting in the course of trade or commerce. Yet they argue that such a finding is incompatible with the trial court's finding that Pace-Knapp thought they were acting as altruists — not in the course of their trade. In fact, the CPA applies to "every person who conducts
9 Burbo v. Harley C. Douglass, Inc., 125 Wn. App. 684, 700, 106 P.3d
258, review denied, 155 Wn.2d 1026 (2005).
10 Indoor Billboard/Washington, Inc. v. Integra Telecom of Washington,
Inc., 162 Wn.2d 59, 84, 170 P.3d 10, 22 (2007).
unfair or deceptive acts or practices in any trade or commerce."11 And "[r]eal estate sales clearly constitute 'trade' or 'commerce' for purposes of [the CPA]."12 Thus, it is clear from the facts of this case that the Pelascinis were acting in the course of trade or commerce by purchasing real estate. The fact that they hid their commercial intent from Pace-Knapp does not contradict this finding.
Impact on the Public Interest
The Pelascinis also argue that their actions did not have an impact on the public interest. We again disagree. Plaintiffs must show an impact on the public interest from a private transaction based on an analysis of the following non-exclusive factors:
(1) Were the alleged acts committed in the course of defendant's
business? (2) Did defendant advertise to the public in general?
(3) Did defendant actively solicit this particular plaintiff, indicating
potential solicitation of others? [and] (4) Did plaintiff and defendant
occupy unequal bargaining positions?[13]
For example, in Sign-O-Lite Signs, Inc. v. DeLaurenti Florists, Inc., this court determined that a public interest impact existed when a sign company solicited a store owner and deceptively convinced the owner to sign an agreement that required the owner to pay substantially more for a sign than she had orally agreed.14 This court held that there was a public interest impact because the company acted within the course of its business, actively solicited
11 Hangman Ridge, 105 Wn.2d at 785 (quoting Short v. Demopolis, 103
Wn.2d 52, 61, 691 P.2d 163 (1984)).
12 Edmonds v. John L. Scott Real Estate, Inc., 87 Wn. App. 834, 846, 942
P.2d 1072 (1997).
13 Hangman Ridge, 105 Wn.2d at 790-91.
14 64 Wn. App. 553, 825 P.2d 714 (1992).
the store owner, and routinely solicits other business.15
Similarly here, the trial court found that Pelascini and Boboth habitually work together to buy houses on the eve of foreclosure and that they did so in this case. They actively solicited Pace-Knapp by approaching her at home a number of times, offering to help her, and essentially harassing her until she relented and accepted their offer to "help." The court found that although Pace-Knapp was able to contract, they are real estate professionals, while she "is an unsophisticated homeowner whose ability to reason clearly during this period was obviously impaired."16 Finally, although the trial court did not make a finding that Pelascini and Boboth advertise to the public, the court concluded that this type of transaction has an adverse effect on the public interest because it has the potential for repetition and evidence in this case showed that Pelascini and Boboth have "engaged in this approach before."17
Given these unchallenged factual findings, we conclude that Pace-Knapp satisfied the public interest element. Pelascini and Boboth are likely to repeat this approach and have done so in the past. Such a business practice impacts the public interest by targeting and harming vulnerable individuals.
Injury / Damages / Attorney Fees Below
The Pelascinis argue that Pace-Knapp was not injured by the transaction
15 Id. at 562-63.
16 Clerk's Papers at 247 (Finding of Fact 14).
17 Clerk's Papers at 250-51 (Conclusion of Law 5). Although this
statement was contained in a conclusion of law, the portion regarding
Appellants' past practice is a finding of fact.
and that she has the burden to prove "actual damages." They also argue that attorney fees were inappropriate because the court did not award damages under the act. Identical arguments were rejected by the supreme court in Mason v. Mortgage America, Inc.,18 and we reject them here.
In Mason, as in this case, the trial court had ordered rescission of the contract in question and also found a violation of the CPA. The supreme court reiterated that injury and damages under the CPA are distinct. The loss of title to real property is "obviously" an injury under the CPA because it is a diminution of money or property.19 Because each element of a CPA claim, including injury, was met in that case, the supreme court held that attorney fees and costs were appropriate, even though there were no money damages in light of the rescission.20
Here, Pace-Knapp was injured because she lost the equity in her home. There are, potentially, other damages to which she is entitled as well. Accordingly, attorney fees were proper because each element of the CPA was met.
Again citing no case law, the Pelascinis argue that Pace-Knapp did not prove causation because her own acts caused her alleged injury. We disagree. The issue of causation under the CPA is an issue of fact for the trial
18 114 Wn.2d 842, 792 P.2d 142 (1990).
19 Id. at 854-55.
20 Id. at 855.
21 Indoor Billboard, 162 Wn.2d at 84.
court.21 But the Pelascinis do not challenge any of the trial court's findings of fact on appeal. The trial court found that Pace-Knapp was induced through fraud into selling her home and concluded that their actions were the cause of her injury.
The Pelascinis' only possible challenge with regard to this element, then, is whether the trial court applied the proper law. Nothing in the record suggests that it did not.22 We will not presume otherwise.
The Pelascinis raise several arguments regarding Pace-Knapp's claim of fraud in the inducement and the trial court's chosen remedy of rescission. We conclude that the remedy of rescission was not appropriate under the facts and law that control this case.
Fraud: Misrepresentation of Fact
The Pelascinis argue that the trial court erred in concluding that they made a misrepresentation of existing fact. We agree and hold that the trial court's findings of fact do not support its conclusion of fraud.
To prevail on a claim of fraud, the plaintiff must prove with clear, cogent, and convincing evidence that the defendant made a material misrepresentation of existing fact.23 Fraud in the inducement is fraud that induces the transaction
21 Indoor Billboard, 162 Wn.2d at 84.
22 Neither the trial court briefs nor the prior dispositive motions were made part of the record on appeal.
23 The nine elements of fraud are: (1) a representation of existing fact, (2)that is material, (3) and false, (4) the speaker knows of its falsity, (5) intent to induce another to act, (6) ignorance of its falsity by the listener, (7) the latter's
by misrepresentation of "motivating factors such as value, usefulness, age, or other characteristic of the property."24 Misrepresentations include "half-truths calculated to deceive," 25 and inferences from the words used.26 A promise of future performance is not a representation of existing fact.27
Here, the trial court specifically found that the Pelascinis had not made a
misrepresentation of existing fact, but rather that the misrepresentations "were in the nature of intentions."28 Yet the court concluded that all elements of fraud in the inducement were met in part because Pace-Knapp relied on them to "do as they promised."29 This was an error of law because promises of future performance are not representations of existing fact. Thus, there is no basis to conclude that fraud in the inducement exists here. Absent fraud, there is no basis for the remedy of rescission.
Even if Pace-Knapp had proven the elements of fraud in the inducement, case law is clear that she waived her right to the remedy of rescission by her delay in bringing this action.
reliance on the truth of the representation, (8) her right to rely on it, and (9) consequent damage. Pedersen v. Bibioff, 64 Wn. App. 710, 723 n.10, 828 P.2d 1113 (1992).
24 Id. at 722.
25 Ikeda v. Curtis, 43 Wn.2d 449, 460, 261 P.2d 684 (1953); see also id.
("A representation literally true is actionable if used to create an impression substantially false.").
26 Restatement (Second) of Contracts § 159 (1981).
27 West Coast, Inc. v. Snohomish County, 112 Wn. App. 200, 206, 48
P.3d 997 (2002).
28 Clerk's Papers at 249 (Conclusion of Law 3).
29 Clerk's Papers at 250 (Conclusion of Law 4).
Even where a person has been defrauded, he or she may waive the right to seek rescission, or in certain circumstances, damages.30
Generally, a person wishing to avoid a contract has the choice either to continue performing under the contract and sue for damages or to promptly seek to rescind the contract.31 One who opts to rescind a contract for fraud "must act promptly after its discovery" in order to preserve the right to sue for rescission.32 If a party claiming to have been defrauded affirms the contract by entering into new "arrangements or engagements concerning the subject matter of the contract" after discovering the fraud, he has waived his right to sue for rescission.33 Waiving the right to sue for rescission merely by affirming the contract or delaying to seek rescission, however, does not necessarily bar the right to sue for damages.34
For example, in Johnson v. Brado, the purchasers of a home discovered after the sale that the house was not connected to the sewer, contrary to the seller's previous promises.35 The buyers moved into the home and rejected the seller's offer to pay for septic repair. The purchasers sued the seller approximately one year later. The court held that the buyers had waived their right to rescind the contract by moving into the house and affirming the
30 Owen v. Matz, 68 Wn.2d 374, 376-77, 413 P.2d 368 (1966).Salter v. Heiser, 39 Wn.2d 826, 831, 239 P.2d 327 (1951); Johnson v.
Brado, 56 Wn. App. 163, 165-66, 783 P.2d 92 (1989) (citing Weinstein v.
Sprecher, 2 Wn. App. 325, 330, 467 P.2d 890 (1970)).
32 Weitzman v. Bergstrom, 75 Wn.2d 693, 697, 453 P.2d 860 (1969).
33 Id.
34 Id.
35 56 Wn. App. 163, 783 P.2d 92 (1989).
contract.36 But they had not waived their right to sue for damages because no unequivocal act evinced their intention to do so.37
Here, Pace-Knapp waived the right to rescission by remaining in her house for more than two years and signing two lease agreements after she discovered that the Pelascinis purchased her property. Rescission was not an appropriate remedy after Pace-Knapp affirmed the agreement and allowed sufficient time to pass before attempting to repudiate it. Because we hold that Pace-Knapp did not prove the elements of fraud and that the remedy of rescission was not available to her, we need not address the Pelascinis' additional arguments related to fraud.
Citing to Sign-O-Lite Signs, Pace-Knapp seeks attorney fees as the substantially prevailing party on appeal under the CPA.38 She is entitled to such an award, both at trial and on appeal. We remand to the trial court to determine the amount of the fee award.39
We affirm the judgment to the extent of the CPA award and remand for the determination of damages and the amount of attorney fees on appeal. We reverse the fraud in the inducement determination.
36 Id. at 167.
37 Id.
38 64 Wn. App. at 568.
39 See RAP 18.1(i).
Cox, J.
Applewick, C.J.
Grosse, J.
More Innocent and Unsuspecting Lives Ruined by the Cost of Chasing Windermere Through the Courts...
Windermere Allen & Associates (LC Realty) Longview, and Agent Lance Miller's Deliberate Non-Disclosure of Home's Prior Use as Pot Farm and Methamphetamine Laboratory
(Left) Lance Miller from Windermere Real Estate/Allen & Associates also operated LAM Management which handled the subject home a rental prior to its sale to Eva and Eddie Bloor.
Eva and Eddie Bloor relocated to Longview, in Washington State, and purchased a home from Charmaine and Robert Fritz through Lance Miller at Windermere Real Estate/Allen & Associates, who served as dual agent for both for both parties. The Fritzes and Miller both opted to withhold their knowledge that the onetime rental property had been a site for marijuana farming and methamphetamine production. Windermere and Miller were cognizant of the property's prior use because Windermere staff managed the rental home months earlier when a drug raid occurred, and they subsequently issued a notice of eviction on the tenants after learning of their illicit operation. Locals all heard the news, including the Fritzes, who conversed about it with others.
RCW 64.06.020, with its very pertinent and mandatory Seller Disclosure Statement question, "Has the property been used as an illegal drug manufacturing site?" had been checked "No" by Fritz in the presence of Miller, and the form was later conveyed to the Bloors, who occupied the residence and only later learned of their new home's toxic past from neighbors and news stories.
Mrs. Bloor queried the health department as to decontamination, officials concluded the home to be unfit for human habitation, and compelled the Bloors to abandon the place with nothing but what they were wearing at the moment. Mr. Bloor was not even granted brief consideration to retrieve the tools by which made a living. The Bloors filed a complaint against the Fritzes, agent Miller, Windermere and franchiser Windermere Services Company, plus Cowlitz County. With Bloors eventually prevailing, the trial court granted recision—an unwinding of their real estate transaction—and also their damages both jointly and severally on loss of wages and personal property, lost use of the home itself, emotional distress, and ruin of the Bloor's credit.
In typical stall mode, Windermere-Miller parties appealed, but lost again. For the particulars on this incredible, predatory saga, read the following Washington State Appeals Court Opinion:
No. 35740-2-II
EDDIE BLOOR and EVA BLOOR, husband
and wife,
ROBERT A FRITZ and CHARMAINE A. FRITZ, and the marital community comprised thereof; LANCE MILLER, a single person; ALLEN & ASSOCIATES; WINDERMERE REAL ESTATE SERVICE CO., a Washington corporation,
And COWLITZ COUNTY, a political subdivision of the State of Washington, Cowlitz County does not appeal.
Armstrong, J.—Eddie and Eva Bloor purchased a home from Robert and Charmaine Fritz through Lance Miller, an agent at LC Realty, Inc. After learning that the home was contaminated by a methamphetamine lab, the Bloors sued the Fritzes, Miller, LAM Management, LC Realty, and Cowlitz County. The trial court found that the Fritzes negligently
misrepresented the condition of the property and that Miller failed to disclose a known material fact about the property and negligently misrepresented its condition, thereby violating the Consumer Protection Act (the Act). Miller and LC Realty argue that substantial evidence does not support the trial court's findings that Miller knew of the illegal drug manufacturing on the property and failed to disclose it; they also argue that the Bloors failed to prove an Act violation. The Fritzes argue that the trial court erred in (1) failing to dismiss the negligent misrepresentation claim and (2) rescinding the real estate purchase and sale agreement. The Fritzes and Miller both challenge the trial court's damage and attorney fee awards. We hold that the trial court erred in calculating damages in conjunction with rescinding the contract, specifically by granting the Bloors more damages than necessary to restore them to their pre-contract position. Otherwise, we find no error and, thus, affirm.
Robert Fritz owned a home and approximately five acres of land on Spirit Lake Highway in Cowlitz County. He and his wife, Charmaine, moved from the home in 2001 and hired LAM Management, Inc. (LAM) to manage the property as a rental. Lance Miller and Jayson Brudvik are co-owners and operators of LAM. Miller and Brudvik are also licensed real estate agents for LC Realty, Inc.
In January 2004, Jason and Charles Waddington, Pam Jackson, and Sarah Holton occupied the Spirit Lake property under a rental agreement through LAM. On January 30, the Cowlitz-Wahkiakum Joint Narcotics Task Force executed a search warrant at the property. Task force members discovered a marijuana growing operation in the house's basement and implements of methamphetamine manufacturing on and under the house's rear deck and in a hot tub on the deck. Although the task force processed the site as a methamphetamine lab, no one from the task force or any other law enforcement agency notified the Cowlitz County Health Department, the Washington State Department of Health, or any other state agency of the methamphetamine lab. The State charged Jason Waddington with manufacturing marijuana and Charles Waddington with manufacturing methamphetamine.
On January 31, the task force issued a press release that identified the Spirit Lake property as the site of the drug search, identified the people involved, and stated that the task force had removed a marijuana growing operation and implements of a small methamphetamine lab from the property. On February 1, the Longview Daily News published an article that reported the information in the press release.
Charmaine learned of the police activity at the property and contacted numerous law enforcement agencies to find out what had occurred at the property. On February 2, she contacted the task force and spoke with Judy Conner, the support staff specialist. Connor told Charmaine that the police had arrested people on the property and that the task force had confiscated a marijuana grow operation and implements of a methamphetamine lab.
The following day, Charmaine spoke with Detective Darren Ullmann, a member of the task force who had been present at the search. Ullmann told Charmaine that the task force had removed implements of a methamphetamine lab from the property. Charmaine shared this information with Robert. Miller also contacted law enforcement to learn the status of the property and the arrests in the first few days of February.
LAM initiated eviction proceedings against the Waddington tenants, and they left the property in February or March 2004. LAM subsequently re rented the property for a short period of time but evicted those tenants in May 2004. The Fritzes then decided to sell the property.
In preparation for the sale, the Fritzes cleaned the house, painted it, and changed the floor coverings. During this time, Charmaine spoke with John and Jenae Cyr, who lived across the street from the property. Charmaine told the Cyrs that she and her husband felt they were lucky that the Waddington tenants had not cooked methamphetamine inside the house but had cooked it only on the back porch.
Eddie and Eva Bloor moved to Cowlitz County from Missouri in 2004, and began looking for a home to purchase. Brudvik showed them the Spirit Lake property. The Bloors decided to make an offer to buy the property. Miller represented both the Fritzes and the Bloors in the transaction.
Robert completed a seller's disclosure statement in which he represented that the property had never been used as an illegal drug manufacturing site. Miller reviewed the disclosure statement with the Bloors, but he did not disclose that the drug task force had discovered a marijuana grow operation or methamphetamine lab on the property. The Fritzes accepted the Bloors' offer and the transaction closed in August 2004. The Bloors moved into the home shortly thereafter.
In September, the Bloors' son heard from a member of the community that the property was known as a "drug house." Clerk's Papers (CP) at 20. The Bloors began investigating and found an on-line version of the February 1 Daily News article. Eva contacted the task force, where Sergeant Kevin Tate confirmed that the task force had confiscated a methamphetamine lab at the property. She then contacted the Cowlitz County Health Department, where Audrey Shaver confirmed that nobody had reported the lab to the health department and that it would investigate the matter to determine what action it would take.
On October 22, Shaver told the Bloors that the health department had determined that the property was contaminated by the methamphetamine manufacturing and was not fit for occupancy. She told the Bloors that they could not remove their personal property from the house because of the risk of crosscontamination. The Bloors left the residence as instructed, leaving nearly all their personal belongings in the house and garage.
The health department posted an order prohibiting use of the property. The order stated that the Bloors were financially responsible for the cost of remediation, that a certified decontamination contractor would have to perform the remediation, and that use of the property was subject to criminal charges. Occupancy of buildings contaminated by methamphetamine manufacturing is dangerous to the health and safety of occupants.
The Bloors stayed with relatives until they could secure a place to live, eventually moving to Spokane. They had to repurchase clothing, bedding, furniture, and other necessities. They were unable to both support themselves and make their monthly mortgage payments. The Bloors experienced emotional distress and anxiety due to the loss of their home, personal effects, and keepsakes.
The Bloors sued the Fritzes, Miller, LAM Management, LC Realty, and Cowlitz County. After a bench trial, the trial court ruled for the Bloors, awarding them damages jointly and severally against all the defendants for emotional distress, loss of personal property, loss of income, loss of use of the property, and damage to the Bloors' credit. It also awarded the Bloors $10,000 as punitive damages and $13,907.30 for attorney fees against Miller and LC Realty under the Act. It ordered the contract between the Bloors and the Fritzes rescinded, requiring the Fritzes to pay the Bloors' lender the purchase price, accrued interest, late charges, and foreclosure fees, and the Bloors to return the property to the Fritzes. Finally, the trial court awarded the Bloors $18,975.55 in expenses against the Fritzes and, applying a 1.2 multiplier, $125,335.25 in attorney fees against the Fritzes, Miller, and LC Realty; it awarded the Bloors their statutory costs against all defendants.
The trial court dismissed LAM with prejudice.
Miller and LC Realty (collectively Miller) principally argue that (1) insufficient evidence supports the trial court's findings that Miller knew about the meth lab, (2) the trial court erred in finding that he violated the Act, and (3) the trial court erred in awarding attorney fees with a multiplier and all the Bloors' litigation expenses. In addition to joining Miller in several claimed errors, the Fritzes principally argue that (1) the economic loss rule precludes the Bloors from seeking damages for the tort of negligent misrepresentation, (2) the trial court erred in rescinding the contract rather than awarding damages, and (3) the trial court erred in awarding damages for emotional distress, income loss, and injury to the Bloors' credit ratings. We hold that the trial court erred only in awarding the Bloors damages beyond those necessary to restore them to their pre-contract position.
Miller and LC Realty 's Appeal
I. Knowledge Of Methamphetamine Manufacturing
Miller argues that substantial evidence does not support the trial court's findings regarding his knowledge of the methamphetamine manufacturing at the Spirit Lake property.
He assigns error to the following findings of fact:
Jayson Brudvick saw the article published in the Longview Daily News on Sunday, February 1, 2004, and contacted the Fritzes by telephone to notify them and to get instructions on how to proceed with respect to evicting the tenants.
During the first few days of February 2004, Lance Miller contacted law enforcement regarding the status of the Property and the arrests that were made at the Property. During his contact, Lance Miller was informed of the marijuana grow operation and the discovery of the meth lab. The denial by Lance Miller that he was informed of the discovery of the implements used in meth manufacturing on the Property is not credible.
Lance Miller listed the Property and entered it on the multiple listing service. He also showed the Property to another prospective buyer, all without revealing the history of illegal drug manufacturing at the Property. Miller knew of the history of illegal drug manufacturing at the Property from one or all three of his contacts with Jayson Brudvik from his report of the article in the newspaper, from Charmaine Fritz relative to her contacts with the Task Force, and from his personal contact with law enforcement. Miller also knew from his prior involvement with property that had been contaminated by meth manufacture of the danger of contamination with toxic chemicals from such operations. The denial by Miller of his knowledge of the history of illegal drug manufacturing at the Property is not credible.
Miller concealed his knowledge that the Property had been used for illegal drug manufacturing when he announced his listing of the Property, and during his marketing of the Property for the Fritzes. Miller knew of the history of illegal drug manufacturing and of the potential contamination, knew that the Fritzes had not disclosed it on their Disclosure Statement, and failed to disclose his personal knowledge of the history of use of the Property for illegal drug manufacturing, or of the potential contamination of the Property to the public, to a prospective buyer of the Property that was interested in the Property at the same time as the Bloors, or to the Bloors.
The Bloors were damaged by Miller's failure to disclose the history of drug manufacturing at the Property. As shown by the investigation made by Eva Bloor upon receiving information that drug activity had occurred at the Property, Miller's failure to disclose his knowledge of the drug activity on the Property to the Bloors misled the Bloors and deprived them of essential information needed by them to learn of the true condition of the Property. Had Miller revealed his knowledge of the drug activity on the Property, the Bloors would have probably made inquiry to law enforcement and the health department, which they did upon receiving information of the history of such activity at the Property.
CP at 15, 17, 29-31.
Where the trial court has weighed the evidence, our review is limited to determining whether substantial evidence supports the trial court's findings and, if so, whether the findings in turn support the conclusions of law and the judgment. City of Tacoma v. State, 117 Wn.2d 348, 361, 816 P.2d 7 (1991). Substantial evidence is evidence sufficient to persuade a fair-minded person of the truth of the finding. Fred Hutchinson Cancer Research Ctr. v. Holman, 107 Wn.2d 693, 712, 732 P.2d 974 (1987). If the evidence satisfies this standard, we will not substitute our judgment for the trial court's, even though we may have resolved disputed facts differently. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wn.2d 873, 879-80, 73 P.3d 369 (2003).
Miller argues that no evidence supports finding of fact X, that Brudvik read the February 1, Longview Daily News article about the search at the Spirit Lake property. He points out that Brudvik did not testify about the date of the article he read or identify the February 1 article as the article he read. Brudvik testified that he read in the Longview Daily News that there was a "marijuana bust" at the property. 3 Report of Proceedings (RP) at 714. Although he did not recall all the details from the article, he testified that he read the entire article, that he read it over a weekend, and that he recognized the names reported in the article. He testified that he contacted the Fritzes within a couple of days to discuss evicting the tenants. The February 1 article was published on a Sunday and it named the three residents who had been arrested, Jason and Charles Waddington and Sarah Holton. Robert testified that Brudvik called him on Monday, February 2, to discuss the newspaper article. This is substantial evidence to support a finding that Brudvik read the February 1, Longview Daily News article.
As with much of their evidence, the Bloors presented Brudvik's deposition testimony at trial, but they did not call Brudvik to testify.
Miller next contends that no evidence supports finding of fact XVI, that law enforcement told Miller about discovering the methamphetamine lab and that Miller's denial that he received this information was not credible. He argues that law enforcement's failure to report the lab to the health department lends credibility to his assertion that no law enforcement officer told him of the lab. He notes that no law enforcement officer testified about informing Miller, Brudvik, or LC Realty about discovering the lab; nor was there evidence that he received a copy of a police report describing the search and arrests.
Miller testified that he asked a law enforcement officer whether methamphetamine manufacturing had occurred on the property and the officer said it had not. But officers involved in the search testified that they would not have told someone there was no methamphetamine manufacturing on the property when they did in fact find implements of a methamphetamine lab. The trial court, as the finder of fact, determines disputed facts by weighing the credibility of witnesses' testimony. Bartel v. Zucktriegel, 112 Wn. App. 55, 62, 47 P.3d 581 (2002). We will not disturb a trial court's credibility determinations on appeal. Bartel, 112 Wn. App. at 62. The trial court did not believe that a law enforcement officer would deny the existence of a known methamphetamine lab when asked about it directly. The officers' testimony provides substantial support for this finding.
Miller next argues that no evidence supports finding of fact LIX, that Miller knew of the history of illegal drug manufacturing on the property from his contacts with Brudvik, Charmaine, and law enforcement and that his testimony to the contrary was not credible. He again asserts that he did not learn of the methamphetamine manufacturing from law enforcement and that Brudvik did not learn of it from the news article. Miller also argues that there is no evidence Charmaine told him about illegal drug manufacturing, pointing to her testimony that she did not tell either Miller or Brudvik about methamphetamine lab activity on the property.
We have, however, already rejected Miller's challenges to the trial court's findings that Miller and Brudvik learned of the methamphetamine lab in the days following its discovery. And the trial court did not believe Charmaine's testimony that she did not know about the methamphetamine lab. Miller testified that he discussed what Charmaine had learned from the task force with Brudvik. Substantial evidence also supports this finding.
Miller next argues that no evidence supports finding of fact LXI, that he knew the Fritzes did not disclose that the property had been used as an illegal drug manufacturing site in their seller's disclosure statement and did not disclose his personal knowledge to the contrary.
But Miller testified that he saw that Robert had marked "no" in response to the question asking if the property had been used as an illegal drug manufacturing site. RP at 765-66. And he does not challenge the trial court's finding that, when he reviewed the seller's disclosure statement with the Bloors, he did not disclose the history of the task force search or the discovery of the marijuana grow operation and methamphetamine lab implements. Unchallenged findings are verities on appeal. Robel v. Roundup Corp., 148 Wn.2d 35, 42, 59 P.3d 611 (2002). Given the finding that Miller knew of the methamphetamine manufacturing on the property, substantial evidence supports a finding that he failed to disclose this knowledge to the Bloors.
Finally, Miller contends that no evidence supports finding of fact LXII, that his failure to disclose his knowledge of the history of illegal drug manufacturing at the property damaged the Bloors because it misled them and deprived them of information they needed to learn of the property's true condition. He points out that the purchase and sale agreement included a provision for a neighborhood inspection and that information about the task force search and drug arrests was readily available in the public record.
Eva Bloor testified that, if the Fritzes had disclosed the illegal drug manufacturing at the home, she might have changed her mind about buying the property. She would have asked questions about the drug manufacturing, including what the drug was. She also would have inquired with the health department. That the Bloors began investigating the property's history as soon as they learned of the illegal drugs supports a finding that if they had known earlier, they would have investigated before closing the purchase. Again, substantial evidence supports this finding of fact.
II. Failure To Disclose a Material Fact
Miller next argues that the trial court erred in concluding that he failed to disclose his knowledge of the methamphetamine manufacturing as RCW 18.86.030 requires.
Under RCW 18.86.030(1)(d), a real estate agent has a duty to disclose "all existing material facts known by the [agent] and not apparent or readily ascertainable to a party; provided that this subsection shall not be construed to imply any duty to investigate matters that the [agent] has not agreed to investigate." A material fact is "information that substantially adversely affects the value of the property or a party's ability to perform its obligations in a real estate transaction, or operates to materially impair or defeat the purpose of the transaction." RCW 18.86.010(9). But that a property is or was the site of "illegal drug activity . . . not adversely affecting the physical condition of or title to the property is not a material fact." RCW 18.86.010(9).
Miller bases his argument solely on his contention that he did not know of the methamphetamine manufacturing on the property. He does not assign error to the trial court's conclusion that methamphetamine manufacturing is a material fact that a real estate agent has a duty to disclose. Because substantial evidence supports the trial court's finding that Miller knew of the methamphetamine manufacturing on the property, and that finding supports a conclusion that Miller violated his duty to disclose known material facts about the property, Miller's argument fails. The trial court did not err in concluding that Miller violated RCW 18.86.030. 4
III. Negligent Misrepresentation
Miller contends that the trial court erred in concluding that his failure to disclose the history of illegal drug manufacturing on the property was a negligent misrepresentation.
A plaintiff claiming negligent misrepresentation must prove by clear, cogent, and convincing evidence that (1) the defendant supplied information for the guidance of others in their business transactions that was false, (2) the defendant knew or should have known that the information was supplied to guide the plaintiff in his business transactions, (3) the defendant was negligent in obtaining or communicating the false information, (4) the plaintiff relied on the false information, (5) the plaintiff's reliance was reasonable, and (6) the false information proximately caused the plaintiff damages. Lawyers Title Ins. Corp. v. Baik, 147 Wn.2d 536, 545, 55 P.3d 619 (2002).
Miller again relies on his assertion that he did not know of the illegal drug manufacturing on the property to argue that he was not negligent in communicating the false information to the Bloors. Again, as with his argument under RCW 18.86.030, because substantial evidence supports the trial court's finding that Miller knew of the illegal drug manufacturing on the property, and Miller does not claim that he disclosed the drug problem to the Bloors, Miller's argument fails.
Miller also argues that the trial court erred in concluding that he failed to disclose a material fact without making a finding that the manufacture of marijuana is a material fact under RCW 18.86.010(9). Because the court found, however, that the manufacture of methamphetamine is a material fact that Miller failed to disclose, such a finding was not necessary.
Miller points out that, under RCW 18.86.030(2), a real estate agent owes no duty to independently verify the accuracy or completeness of a party's statement unless otherwise agreed. But because Miller actually knew of the illegal drug manufacturing, this standard does not apply. The trial court did not err in concluding that Miller negligently misrepresented a material fact in failing to disclose the illegal drug manufacturing on the property.
IV. Consumer Protection Act
Miller next argues that the trial court erred in concluding that he violated the Consumer Protection Act.
Under the Act, "unfair or deceptive acts or practices in the conduct of any trade or commerce" are unlawful. RCW 19.86.020. To prevail in a private claim under the Act, a plaintiff must establish five elements: (1) unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) public interest impact, (4) injury to plaintiff in his or her business or property, and (5) causation. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). Whether particular actions give rise to a violation of the Act is a question of law that we review de novo. Svendsen v. Stock, 143 Wn.2d 546, 553, 23 P.3d 455 (2001). Miller contends that the trial court erred in concluding that his conduct was unfair or deceptive and that it impacted a public interest. He argues that the Fritzes' home sale was an isolated incident and that his conduct during the sale did not affect anyone other than the parties to the contract.
To show that a party has engaged in an unfair or deceptive act or practice, a plaintiff "need not show that the act in question was intended to deceive, but that the alleged act had the capacity to deceive a substantial portion of the public." Hangman Ridge, 105 Wn.2d at 785 (citing State v. Ralph Williams' N.W. Chrysler Plymouth, Inc., 87 Wn.2d 298, 553 P.2d 423 (1976)). Miller does not dispute that he advertised the property for sale to the public by listing it in the multiple listing service directory and placing a for sale sign on the property. He also showed the property to another prospective buyer before the Fritzes accepted the Bloors' offer. Miller did not disclose the history of illegal drug manufacturing on the property to the Bloors or the other prospective purchaser, or on the multiple listing service directory. Listing and showing the property without disclosing its history of illegal drug manufacturing had the capacity to deceive any member of the public who used the directory or expressed interest in the property.
Miller also argues that the trial court erred in concluding that his conduct impacted the public interest because this is a private dispute with no likelihood that additional plaintiffs have been or will be injured in the same way. But, while it may be more difficult for a plaintiff to show a public impact from a private dispute, a dispute between a real estate agent and a property purchaser may have a public impact.
In Svendsen, the court considered the effect of the seller disclosure statute on a real estate agent's liability under the Act. In that case, the seller's agent knew of flooding problems on the property. Svendsen, 143 Wn.2d at 551-52. Yet she instructed the seller to conceal the problem in the seller disclosure form, and she also fraudulently concealed her own knowledge. Svendsen, 143 Wn.2d at 550-52. The court first noted that several cases decided before adoption of the seller disclosure statute had held that "an agent's failure to disclose a known material defect in the sale of real property is a violation of the [Act]." Svendsen, 143 Wn.2d at 556 (citing McRae v. Bolstad, 101 Wn.2d 161, 676 P.2d 496 (1984); Robinson v. McReynolds, 52 Wn. App. 635, 762 P.2d 1166 (1988); Luxon v. Caviezel, 42 Wn. App. 261, 710 P.2d 809 (1985)). The court concluded that the seller disclosure statute did not change this rule but, instead, preserved a cause of action under the Act where it exists independent of the seller disclosure statement. Svendsen, 143 Wn.2d at 558.
The court then considered whether the buyer had established the public interest element.It addressed the following factors: (1) whether the acts were committed in the course of defendant's business, (2) whether the defendants advertised to the public, (3) whether the defendant actively solicited the plaintiff, and (4) whether the parties occupied unequal bargaining positions. Svendsen, 143 Wn.2d at 559 (citing Hangman Ridge, 105 Wn.2d at 790-91). If present, these factors show a likelihood that additional plaintiffs have been or will be injured in the same manner. Hangman Ridge, 105 Wn.2d at 790-91. No single factor is dispositive, nor is it necessary that a buyer prove all factors. Hangman Ridge, 105 Wn.2d at 791. The Svendsen court concluded that the buyer had established a public interest impact. Svendsen, 143 Wn.2d at 559.
Here, Miller, acting as a real estate agent, failed to disclose a known material fact, a history of illegal drug manufacturing, in the sale of the property to the Bloors. His conduct occurred in the course of his business of offering residential property for sale to the public. He advertised the property for sale to the public by listing it on the multiple listing service directory and placing a for sale sign on the property. And, although he did not actively solicit the Bloors, the record shows that the parties did not occupy equal bargaining positions.
The trial court did not err in finding that Miller's conduct impacted a public interest.
These findings support the trial court's conclusion that Miller violated the Act.
For example, the Bloors' initial offer was below the Fritzes' asking price, but when Miller told them that another party was interested in the property, they agreed to make a full price offer. These findings support the trial court's conclusion that Miller violated the Act.
The Fritzes' Appeal
I. Negligent Misrepresentation
The Fritzes argue that the trial court erred in denying their motion to dismiss the Bloors' negligent misrepresentation claim, asserting that no claim exists for economic loss resulting from the sale of a residence. They assert that the Washington Supreme Court's recent decision in Alejandre v. Bull, 159 Wn.2d 674, 153 P.3d 864 (2007), reversed the Court of Appeals decision that the Bloors relied on below to argue to the contrary and decided this "precise issue." Br. of App. at 15.
The Bloors maintain, however, that the Fritzes did not raise the economic loss rule before the trial court and that, under RAP 2.5(a), we should not consider the issue. They assert that they relied on the Court of Appeals decision in Alejandre only for the proposition that a common law cause of action exists for failure to disclose information in a seller's disclosure statement. The Fritzes respond that they implicitly raised the economic loss rule by arguing in their motion to dismiss that the Bloors had not proved a special relationship between the parties, an element of a negligent misrepresentation claim.
The economic loss rule bars recovery for an alleged breach of tort duties where a contractual relationship exists and the losses are economic. Alejandre, 159 Wn.2d at 683. Economic losses are those losses arising directly from the defect, such as repair costs for defective construction. See Atherton Condo. Apartment-Owners Ass'n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 506, 526, 799 P.2d 250 (1990). But the economic loss rule does not bar recovery for personal injury or damage to property other than the defective property. Alejandre, 159 Wn.2d at 684.
Miller also faults the trial court for concluding that marijuana production is also illegal drug manufacturing and that Miller's denial that it is a material fact he was required to disclose was a threat to the public's health and safety. But because Miller's failure to disclose the methamphetamine manufacturing at the property was an independent basis for finding a consumer protection violation, we do not reach this issue.
Although the Fritzes argued lack of a "special relationship" in their motion to dismiss, nothing in that argument alerted the trial court that Fritzes were also arguing the economic loss rule as a bar to the tort claim. The Fritzes were essentially arguing that the Bloors had failed to prove one element of their negligent misrepresentation claim. That argument did not include the entirely different notion that the Bloors' tort claim might be barred by the economic loss rule. We conclude that the Fritzes waived their economic loss argument by not raising it before the trial court. RAP 2.5(a); Better Fin. Solutions Inc. v. Caicos Corp., 117 Wn. App. 899, 912-13, 73 P.3d 424 (2003).
II. Rescission
The Fritzes next argue that the trial court erred in rescinding the real estate purchase and sale agreement. They maintain that rescission was inappropriate because there was not a complete failure of consideration and the cost to cure the defect was slight compared to the purchase price of the property.
Contract rescission is an equitable remedy in which the court attempts to restore the parties to the positions they would have occupied had they not entered into the contract. Hornback v. Wentworth, 132 Wn. App. 504, 513, 132 P.3d 778 (2006), review granted, 158 Wn.2d 1025 (2007). We review a trial court's decision to rescind a contract for an abuse of discretion. Hornback, 132 Wn. App. at 513. A court sitting in equity has broad discretion to shape relief. Hough v. Stockbridge, 150 Wn.2d 234, 236, 76 P.3d 216 (2003).
In their closing argument, the Bloors stated that they preferred rescission of the contract over contractual damages, and the trial court ordered rescission in its oral decision. When the parties expressed confusion as to how rescission would work, the court directed the parties to work out the details and to advise the court if they could not. The Bloors later told the trial court that the parties had concluded that rescission was not feasible because the Fritzes would be unable to return the purchase price to the Bloors. Accordingly, the Bloors requested damages for the cost of decontamination and restoration of the property instead. The Fritzes agreed with the change. Yet at the next hearing, the Fritzes told the court that they preferred rescission over contractual damages and that they were "willing and able" to go forward with rescission. RP at 1462, 1469-70. The trial court continued the hearing to allow the Bloors to consider whether they were willing to accept rescission as their remedy. The Bloors elected to return to the rescission remedy.
Given the trial court's broad discretion in shaping an equitable remedy, we cannot say that the trial court abused its discretion in ordering rescission. The Fritzes requested rescission after the Bloors had agreed to accept contractual damages, also at the Fritzes' request. Although the Bloors' attorney expressed frustration with the Fritzes' shifting position, the Bloors agreed to return to the rescission remedy. A party cannot set up an error below and then complain of it on appeal. Casper v. Esteb Enters., Inc., 119 Wn. App. 759, 771, 82 P.3d 1223 (2004). Moreover,the Fritzes did not argue before the trial court that there was not a complete failure of consideration or that the cost to remediate the property was not high enough to justify rescission. Rescinding the contract put the Bloors as close as possible to the position they would have been in had they never purchased the property. The trial court did not err in rescinding the real estate purchase and sale agreement.
The Fritzes argue in the alternative that the trial court erred in awarding the Bloors interest on the total purchase price of $149,000 and lender fees as part of the rescission remedy because to do so goes beyond restoring the parties to their original positions. They focus on the fact that the Bloors financed the entire purchase price of the property and made only one mortgage payment before they left the house due to the contamination. The trial court ordered the Fritzes to pay the $149,000 purchase price; $38,555.13 of interest on the purchase price, accrued at the statutory rate of 12 percent per annum from the date the health department posted the property as unfit for habitation; and late charges and foreclosure costs of $9,231.89—a total of $196,787.02—into the court's registry. When payment to the court was complete, the court would order the funds disbursed to the Bloors' lender to satisfy the debt secured by the property with any excess funds going to the Bloors. The court would then enter a decree quieting title to the property in the Fritzes.
Upon completing the contract, the Fritzes received the full purchase price from the Bloors' lender and the Bloors became indebted to the lender for that amount. But the Bloors did not lose the use of $149,000 by financing the purchase. Rather, the Bloors incurred $149,000 of debt to purchase the property. Thus, the Bloors were not entitled to interest on the $149,000 because they would not have had the funds to invest if the purchase had not gone through. See Jones v. Best, 134 Wn.2d 232, 242, 950 P.2d 1 (1998) (purpose of prejudgment interest is to compensate a party for the loss of use of money to which he was entitled). To restore the Bloors to their pre-contract position, the Fritzes must pay the $149,000 debt together with the unpaid interest that has actually accrued, penalties, and foreclosure costs the lender assessed against the Bloors. The Bloors are not entitled to any excess funds. After the Fritzes demonstrate that they have paid all these obligations, they are entitled to an order quieting title to the property.
III. Damages
A. Loss Of Income and Damage To Credit Rating
The Fritzes next argue that insufficient evidence supports the trial court's award of damages for loss of income and damage to the Bloors' credit rating.
They assign error to the following findings of fact:
Due to the financial burden of setting up a new household and reestablishing their lives, the Bloors were unable to make payments on the underlying indebtedness secured by the Property. As a result of the Bloors' inability to pay their loan obligations, the beneficiaries under the Deed of Trust that secured the purchase money loan to the Bloors initiated foreclosure proceedings, which proceedings were suspended on several occasions while this litigation was pending. Additional penalties and interest have accumulated on the debts owed by the Bloors.
When they purchased the Property in July 2004, the median credit score for Ed Bloor was 666 and the median credit score for Eva Bloor was 647. Due to the loss by the Bloors of their home and belongings, and their resulting inability to make the required monthly payments on their loans, as of April, 2006, Ed Bloor's credit score had fallen to 569 and Eva Bloor's credit score had fallen to 552. The cause of the difference between the credit scores in July, 2004 and the credit scores in April, 2006 was the reporting of the Property foreclosure proceedings and other associated debts that were proximately caused by the Bloors' loss of their home and belongings due to the discovery of the meth contamination.
Due to the reduction of the Bloors' credit scores it is reasonably certain that for at least the next ten (10) years the Bloors will suffer economic loss when they apply for credit. A reasonable estimate of the loss they will suffer from the damage to their credit scores can be made based on the increased cost they will likely than not [sic] incur to acquire and pay a home purchase loan. The reduced credit scores the Bloors now have will result in them having to pay approximately one percentage point more in interest on a home loan, which translates to a current loss of $10,000.00, when the added cost of the loan over the normal amortization period of the loan is reduced to present cash value. This loss is reasonably certain and based on reliable statistical data provided by Robert Moss, the Bloor's [sic] economic expert witness.
Ed Bloor was unable to work for at least three months due to the contamination of the Property and the loss of his tools and equipment. His average [monthly] income prior to the discovery of the contamination was $2,500.00. He lost approximately three months income and thus, his income loss due to his inability to work was $7,500.00.
CP at 26-28.
The Fritzes argue that the evidence shows that the Bloors did not have sufficient savings or income to pay their mortgage payments when the health department posted the property as unfit for habitation. They maintain that Ed Bloor's loss of income was due to the fact that he had not yet started working after moving from Missouri. And they assert that the damage to the Bloors' credit ratings was due to their poor financial condition and history of poor financial responsibility.
Ed Bloor testified that in the weeks after he moved into the house, he obtained a business license in order to start a siding business and was in the process of obtaining a bond for it. He owned all the tools necessary for siding and stored them in the garage at the Spirit Lake property. While he prepared to start his business, he performed remodeling work, earning a couple thousand dollars. But because the garage where he stored his tools was contaminated, he had to abandon his tools when he left the house and was unable to start a siding business or continue the remodeling work. Ed Bloor obtained employment in April 2005, after moving to Spokane, in a position where he did not need his siding tools. His average monthly income in Spokane was $2,500. Robert Moss, the Bloors' financial expert, testified that the average length of unemployment in Washington is three months. This evidence supports the finding that Ed Bloor lost $7,500 in income due to the contamination of the property.
In addition to leaving behind Ed Bloor's siding tools, the Bloors were unable to remove their clothing, bedding, furniture, cooking utensils, or personal items from the home. They had to replace all these items. Ed Bloor testified that they used the funds they had at the time to "try to get [their] life back to where [they] could live." RP at 370. This evidence, along with the evidence about Ed Bloor's loss of income, supports the finding that the Bloors were unable to make the mortgage payments because of the property contamination.
The Fritzes do not dispute that the Bloors' credit ratings dropped by about 100 points each from the time they bought the house to the time of trial, but the Fritzes attribute that drop to the Bloors' history of poor financial management rather than the loss of the house. Yet the Fritzes do not explain how the Bloors' past financial mismanagement would cause a current drop in their credit ratings. The Bloors' expert testified that a 100-point drop in credit rating would cause a buyer to incur about $10,000 more in interest costs over the first 7 years of a loan. The Fritzes offered nothing to rebut this testimony, which supports the finding that the drop in the Bloors' credit ratings caused the Bloors damages.
B. Emotional Distress
The Fritzes contend that the trial court erred in awarding the Bloors damages for emotional distress, arguing that emotional distress damages are not available for rescission of a contract or breach of a contract and repeating their argument that the economic loss rule bars damages for negligent misrepresentation.
But the trial court specified that it awarded emotional distress damages as a consequence of the negligent misrepresentation, not under a contract theory. And we have already declined to consider the Fritzes' argument that the economic loss rule bars the Bloors' recovery for negligent misrepresentation.
The Fritzes do not challenge the trial court's findings of fact in support of emotional distress damages. These include that the Bloors suffered from anxiety and discomfort as a result of the loss of their home, personal effects, and keepsakes. Ed Bloor experienced symptoms of depression, his sister noticed changes in his personality, and he blamed himself for what had happened and felt like he had let his family down. Eva Bloor also experienced anxiety, resulting in a trip to the emergency room because she thought she was having a heart attack. A doctor diagnosed her with anxiety and panic attacks and prescribed medication to reduce her anxiety. The trial court did not err in awarding emotional distress damages.
C. Litigation Expenses
The Fritzes argue that the trial court erred in awarding the Bloors their litigation expenses beyond the statutory costs allowed in RCW 4.84.010. We review a trial court's award of attorney fees and costs for abuse of discretion. Schmidt v. Cornerstone Invs., Inc., 115 Wn.2d 148, 169, 795 P.2d 1143 (1990).
Under RCW 4.84.010, "there shall be allowed to the prevailing party upon the judgment certain sums by way of indemnity for the prevailing party's expenses in the action, which allowances are termed costs, including, in addition to costs otherwise authorized by law, the following expenses . . . ." And in an action on a contract that specifically provides for the award of attorney fees and costs to the prevailing party, the prevailing party is "entitled to reasonable attorney's fees in addition to costs and necessary disbursements." RCW 4.84.330.
Here, the real estate purchase and sale agreement provided, "If Buyer or Seller institutes suit against the other concerning this Agreement, the prevailing party is entitled to reasonable attorney's fees and expenses." Ex. at 41. The trial court found that the term "expenses" was broader than the term "costs" and that it expressed the parties' intent to allow the prevailing party to recover all of the expenses arising from the breach of the contract or attempts to enforce the contract. The trial court ordered the Fritzes to pay the Bloors $18,975.55 in expenses. This amount included the Bloors' expert witness fees, court reporter fees, travel expenses, mediation expenses, and other expenses.
The Fritzes rely on our recent opinion in Paradiso v. Drake, 135 Wn. App. 329, 143 P.3d 859 (2006), review denied, 160 Wn.2d 1024 (2007), to argue that the language in the real estate purchase and sale agreement entitles the Bloors only to statutory costs as defined in RCW 4.84.010. But we addressed attorney fees only in the unpublished portion of that opinion. Citation to this part of the opinion was improper. GR 14.1. Moreover, the attorney fee section of that opinion does not address any distinction between statutory costs and other expenses.
Our primary goal in interpreting a contract is to ascertain the parties' intent. Paradise Orchards Gen. P'ship v. Fearing, 122 Wn. App. 507, 516, 94 P.3d 372 (2004). The Fritzes do not assign error to the trial court's finding that the parties intended the term "expenses" to include costs other than those that RCW 4.84.010 defines. This finding supports the trial court's award of additional expenses under the contract.
The Fritzes also fault the trial court for failing to apportion the cost of transcribing deposition transcripts based on the portions used at trial. The Bloors' attorney stated, however, that he calculated the percentage of each deposition transcript read into the record at trial and apportioned the costs accordingly. The Fritzes did not object to the Bloors' calculation. The Fritzes cannot now complain that the trial court used the Bloors' calculation.
Attorney Fees
I. Segregation Of Claims
The Fritzes contend that the trial court erred in awarding the Bloors their attorney fees against the Fritzes and Miller jointly and severally, arguing that the trial court should have segregated the fees it awarded for each claim, excluded fees for claims that did not give rise to an award of attorney fees, and excluded duplicative and unnecessary work.
In Washington, a party may recover attorney fees only when a statute, contract, or recognized ground of equity permits recovery. Panorama Vill. Condo. Owners Ass'n Bd. of Dirs. v. Allstate Ins. Co., 144 Wn.2d 130, 143, 26 P.3d 910 (2001). Whether a party is entitled to an award of attorney fees is a question of law that we review de novo. Tradewell Group, Inc. v. Mavis, 71 Wn. App. 120, 126, 857 P.2d 1053 (1993). Whether the fee award is reasonable is a matter of discretion for the trial court, which we will alter only if we find an abuse of discretion. Scott Fetzer Co. v. Weeks, 122 Wn.2d 141, 147, 859 P.2d 1210 (1993).
The trial court found that there was no basis to award attorney fees against Cowlitz County. But contrary to the Fritzes' assertions, the trial court excluded the time the Bloors' attorneys spent exclusively on claims against Cowlitz County from the attorney fee calculation.
A trial court may require a plaintiff to segregate its attorney fees between successful and unsuccessful claims. Kastanis v. Educ. Employees Credit Union, 122 Wn.2d 483, 501-02, 859 P.2d 26, 865 P.2d 507 (1993). If the claims are unrelated, the court should award only the fees attributable to the recovery. Blair v. Wash. State Univ., 108 Wn.2d 558, 572, 740 P.2d 1379 (1987). But where the attorney fees for successful and unsuccessful claims are inseparable, the trial court may award the plaintiff all its fees. Blair, 108 Wn.2d at 572.
Although there is no finding of fact that the Bloors' claims were inseparable, the trial court stated, in considering whether to apply a lodestar enhancement, "The unsuccessful claim against LAM Management, I don't think that can really be segregated too much from what was claimed here. It would be virtually impossible to segregate that out in my view. . . ." RP at 1440. The Bloors' attorney also stated to the court that it would be "almost impossible" to segregate the time spent on the various claims. RP at 1447-48. The claims arose out of the same set of facts and involved interactions between the defendants. The trial court did not abuse its discretion in not segregating the Bloors' attorney fees.
Also contrary to the Fritzes' assertions, the trial court excluded hours that it found to be duplicative or unnecessary, including 13 hours of the time it took to draft the complaint and the hours that a second attorney spent attending depositions.
II. Lodestar Multiplier
Finally, Miller contends that the trial court erred in applying a 1.2 multiplier to its award of attorney fees against Miller and the Fritzes, arguing that the evidence does not support the trial court's findings in support of enhancing the attorney fee award.
Miller assigns error to the following findings of fact relevant to this issue:
The declarations submitted by the Bloors' attorneys show that they expended over 800 hours in the prosecution of the Bloor's [sic] claims. The Bloors did not have the money to hire their attorneys and pay for their representation. The Bloors' attorneys, expecting the defendants to capitulate, accepted the representation on a contingent fee basis and, when the defendants failed to accept responsibility, the attorneys assumed significant business risk that they would not be paid. Although the Bloors paid the filing fee and some of the service fees, they were unable to pay any of the remaining expenses, and had they not prevailed at trial, the Bloors' attorneys faced substantial risk that they would not be paid their fees or the significant expenses and costs they advanced.
The claim of damage to the Bloors' credit was a novel issue presented by the Bloors' attorneys and the claim against Cowlitz County based on its failure to comply with the requirements of reporting under RCW 64.44 et seq., the contaminated properties statute, was unusual and was apparently the first such claim against a governmental entity made under that statute.
Plaintiffs' case was legally complex with multiple legal theories presented against multiple Defendants. Plaintiffs' case was complicated by having to prove that the Fritzes and Miller had knowledge of the use of the Property for illegal drug manufacturing using circumstantial evidence.
The many hours expended on the prosecution of the Bloors' claims necessarily precluded the Bloors' attorneys from other employment opportunities that would have otherwise been available.
Some of the issues involved in the Bloors [sic] claims were novel. Cowlitz County is a member of the task force that conducted the search and arrests leading to the discovery of the meth lab, and task force members failed to report the discovery to the Cowlitz County Health Department, as required by law. Determining that Cowlitz County was the liable entity for such failure required careful investigation and development of the Bloors [sic] claims, and overcoming the defenses claimed by Cowlitz County, including the claim of public duty doctrine. The case was complex in that the Bloors had to prove multiple acts and omissions of the four defendants, and the Fritzes and Miller steadfastly denied their commission of such omissions and acts. The persistent resistance of the Fritzes and Miller to acknowledge liability, the time and labor required to prosecute the claims, the necessity of an expeditious resolution and time sensitivity of the claims required diligent and determined prosecution of the Bloors [sic] claims. The Bloors [sic] claims were also undesirable because of their inability to pay their attorneys, their residence in Spokane, the relative difficulty of communication with them, and the resources the defendants were willing to expend to defend against the claims. These factors, the uncertainty of recovery and the contingent nature of the representation all support an enhancement of the attorney fees to be awarded. An enhancement based on a multiplier of 1.2 should be made to the hourly rates applied to the allowed hours expended by the Bloors' attorneys prior to the date the Court announced its oral ruling.
CP at 32, 35, 37.
Under the lodestar method of calculating an award of attorney fees, the court must first determine that counsel expended a reasonable number of hours in securing a successful recovery for the client and that the hourly rate counsel billed the client was reasonable. Mahler v. Szucs, 135 Wn.2d 398, 434, 957 P.2d 632, 966 P.2d 305 (1998). The court must exclude any wasteful or duplicative hours. Mahler, 135 Wn.2d at 434. The lodestar fee is the reasonable number of hours incurred in obtaining the successful result multiplied by the reasonable hourly rate. Mahler, 135 Wn.2d at 434.
The court presumes that the lodestar amount is a reasonable fee. Henningsen v. Worldcom, Inc., 102 Wn. App. 828, 847, 9 P.3d 948 (2000). But in rare instances, the court may, in its discretion, adjust the lodestar amount up or down to adjust for factors that the lodestar calculation has not already taken into account. Mahler, 135 Wn.2d at 434; Henningsen, 102 Wn. App. at 847. These factors include the contingent nature of success in the case and the quality of the legal representation. Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 593-94, 675 P.2d 193 (1983).
Here, the Bloors requested a 1.5 multiplier on the attorney fee award. The trial court found that the complexity of the case, the fact that it presented novel issues, the contingent nature of success, the high quality of representation, and the loss of other work made an enhancement appropriate. But because several of these factors were not relevant to the claims on which it awarded fees, it concluded that a 1.2 multiplier was appropriate.
Miller argues that there is no evidence, other than a single attorney's declaration, to support the finding that the Bloors presented novel claims and that the declaration is insufficient to support the finding.
The Bloors asked a local attorney with at least 15 years' experience in real estate matters to provide an opinion on the reasonableness of their attorney fee request. He opined that one reason to apply a lodestar multiplier was the novelty of two of the Bloors' claims, the liability of the County for failure to report the methamphetamine lab and the damage to the Bloors' credit rating. The attorney explained that he had no prior experience with either claim. Miller points out that there is no evidence in the record that no other county has been sued for failing to report a methamphetamine lab. But the local attorney's testimony that he had no experience with such claims supports the trial court's finding that the issues were novel. In addition, Miller and the Fritzes admitted to some novelty in the Bloors' credit rating damage claim by challenging its admissibility on the basis that no court had previously allowed such testimony. Substantial evidence supports the trial court's finding.
Miller also challenges the trial court's finding that the case was complex, arguing that multiple defendants and multiple claims do not alone make a case complex. Again, the Bloors' expert opined that the case was complex. And the trial court stated,
This was a complicated case, at least from my perspective. I find it a little unusual that the defense would say this isn't complex now when it was pretty complicated at the time. There were numerous issues here and a liability and damages portion between several parties. I viewed it as a complex case, presenting a number of issues versus different parties.
RP at 1438. The Bloors' attorneys spent more than 800 hours over 24 months to prepare the case; the parties took 6 days to try it. Three hearings were required to complete the findings of fact and conclusions of law. Together, these factors support the trial court's conclusion that the case was complex.
Miller argues that the evidence does not support a finding that recovery was uncertain, asserting that recovery against Cowlitz County was almost certain. But the trial court found that the other defendants were "steadfast in their denial of responsibility," and the lack of direct evidence against Miller and the Fritzes created "significant difficulty" in the case. CP at 32. The trial court also found that the quality of all parties' representation, including Miller's and the Fritzes', was high. Even if recovery against the County was almost certain, substantial evidence supports a finding that recovery against Miller and the Fritzes was uncertain.
Miller also challenges the trial court's finding that the many hours the Bloors' attorneys worked on the case precluded them from other employment opportunities. As noted above, the trial court found that the Bloors' attorneys spent over 800 hours working on the case over 24 months. The trial court noted that this factor takes into account whether an attorney turns down "more sure things or sure-fire payment to accept this case which is not, was not from the beginning a sure thing." RP at 1439-40. The trial court also found that the Bloors' attorneys expected the defendants to concede liability and when they did not, the attorneys had to continue with the case. Miller does not explain how the Bloors' attorneys could have worked on other cases with more certain recovery at the same time they spent over 800 hours on this case. Substantial evidence supports this finding of fact.
The trial court considered appropriate factors in considering whether to adjust the lodestar amount, and it did not abuse its discretion in deciding to apply a 1.2 multiplier.
III. Attorney Fees on Appeal
The Bloors request their attorney fees on appeal under RAP 18.1. Where a statute or contract allows an award of attorney fees at trial, an appellate court has authority to award fees on appeal. Standing Rock Homeowners Ass'n v. Misich, 106 Wn. App. 231, 247, 23 P.3d 520 (2001); Reeves v. McClain, 56 Wn. App. 301, 311, 783 P.2d 606 (1989) (citing W. Coast Stationary Eng'rs Welfare Fund v. City of Kennewick, 39 Wn. App. 466, 694 P.2d 1101 (1985)). The trial court awarded the Bloors their attorney fees under the real estate purchase and sale agreement and the Act. Because they have prevailed on appeal, we award the Bloors their attorney fees under RAP 18.1 in an amount to be set by a commissioner of this court.
We affirm but vacate the damage award and remand for the trial court to enter new judgment for the Bloors consistent with this opinion.
Armstrong, J.
We concur:
Houghton, C.J.
Quinn-Brintnall, J.
COULD IT HAPPEN TO YOU? —THE GRUELING HUMAN TOLL OF CHASING WINDERMERE CROOKS THROUGH THE COURTS: $311,304.67 IN LEGAL FEES, 5 YEARS DISTRESSING LITIGATION, and DEMOLITION OF THE HOUSE TO BUILD A NEW ONE...
...And when Camano Realty listed the Hovis property for approximately two years, Camano [Windermere Realty] learned about the permitting and inspection problems but did not inform the Ruebels."
Left, Sonya Eppig and current Windermere Real Estate/CIR owner, Marla Heagle, who did not own Windermere CIR during the Eppig case, but nonetheless continues to expose the public to Eppig's ethics and collect commission from Eppig transactions: "...Eppig did not tell the Ruebels about the addendum Nelson prepared disclosing that the engineering work was not complete and that the building plans did not meet the UBC requirements. Instead, Eppig helped draft a revised addendum that did not so unequivocally set forth the permitting and inspection problems. And when Camano Realty listed the Hovis property for approximately two years, Camano learned about the permitting and inspection problems but did not inform the Ruebels."
Thomas and Diane E. Ruebel became interested in a Camano Island home being sold by Mike Hovis. The Ruebels had representation by Sonya Eppig of Windermere / Camano Island Realty. Mr Hovis had been remodeling the property since 1995 and the interior was yet to be completed. Unbeknownst to the Ruebels, Hovis had been cited by the Camano Island County Building Department for not having officially approved framing specifications and engineering drawings. An expert testified that the building's structural integrity had been compromised. Hovis had installed wall treatments that hid the problems. Prior to the Ruebels, another buyer determined the home's impediments, at which time Windermere entered in dialog with the County.
During the Ruebels' initial purchase of the property, Eppig was involved in the permit and inspection concerns. Hovis and Eppig both proffered clear misrepresentations to the Ruebels about the status of the property. Through vaguely wording an addendum put into the closing papers, Hovis and Eppig sought to "disclose" the home's impediments without actually revealing them. After closing, the Ruebels found the extent of the property's damage was so severe, the most economical course of action would be to raze it to the foundation and build all over.
DO NOT CITE. SEE RAP 10.4(h).
Court of Appeals Division I
State of Washington
Opinion Information Sheet
Docket Number: 58533-9-I
Title of Case: Camano Island Realty, Et Al., App./cross-resp. V. G. Thomas & Diane E. Ruebel, Resp./cross-app.
File Date: 10/01/2007
Appeal from Island Superior Court
Docket No: 03-2-00516-3
Judgment or order under review
Date filed: 06/08/2006
Judge signing: Honorable Vickie I Churchill
Authored by Ann Schindler
Concurring: Ronald Cox
William Baker
Counsel for Appellant/Cross-Respondent
Jeffrey Paul Downer
Lee Smart Cook Martin & Patterson PS
701 Pike St Ste 1800
Seattle, WA, 98101-3929
Matthew F. Davis
Attorney at Law
5224 Wilson Ave S Ste 200
Seattle, WA, 98118-2587
Counsel for Respondent/Cross-Appellant
John Wentworth Phillips
Phillips Law Group PLLC
315 5th Ave S Ste 1000
Seattle, WA, 98104-2682
[Windermere] CAMANO ISLAND REALTY, INC., a CORPORATION, AND SONYA EPPIG,
No. 58533-9-I
FILED: October 1, 2007
SCHINDLER, A.C.J. Based on the failure to disclose inspection and permitting problems with the house they purchased, Thomas and Diane E. Ruebel (the Ruebels) sued Windermere/Camano Island Realty, Inc. (Camano Realty) and its real estate agent, Sonya Eppig, for breach of fiduciary duty, negligence, fraudulent concealment, misrepresentation, and violation of the Consumer Protection Act, chapter 19.86 RCW (CPA). At the conclusion of a two-week trial, the jury rejected the Ruebel's claim for fraudulent concealment, but found in their favor on negligence, breach of fiduciary duty, and violation of the CPA. The jury awarded the Ruebels approximately $126,300 for the CPA claim and approximately $34,000 for the negligence and breach of fiduciary duty claims, attributing 30 percent of the fault to Camano Realty. Camano Realty and Eppig appeal the trial court's decision denying their motion for judgment as a matter of law on the CPA claim and the court's entry of judgment on the verdict against them. Camano Realty and Eppig also challenge the trial court's award of approximately $311,000 in attorney fees on the CPA claim. In their cross appeal, the Ruebels challenge the court's decision to not include the amount the jury awarded for the negligence and breach of fiduciary duty claims.
Because substantial evidence supports the jury's determination that Camano Realty and Eppig violated the CPA and the jury's decision to attribute fault to Camano Realty and Eppig, we affirm the court's denial of the motion for judgment as a matter of law and entry of the judgment on the verdict. We also affirm the trial court's decision to not include the amount awarded on the negligence and breach of fiduciary duty claims. But because the trial court did not enter findings of fact and conclusions of law to support the award of attorney fees, we reverse the attorney fee award and remand.
Mike and Marilyn Hovis (Hovis) owned a Victorian-style waterfront house on Camano Island with a detached three car garage and loft apartment on a four acre parcel of property. In 1995, Hovis obtained a permit from the Camano Island County Building Department (Building Department) to remodel the main house. Mike Hovis acted as the general contractor for the remodel. In January 1996, the Building Department told Hovis that he needed to address several framing issues and the structural engineering requirements for the two-story house. The Building Department told Hovis he needed to submit approved engineering plans and framing specifications. Without submitting the requested information, Hovis proceeded with the installation of the interior wallboard and exterior siding. In 1997, the building permit expired.
From 2000 to 2001, Hovis listed the property for sale with Windermere/Camano Island Realty (Camano Realty). Camano Realty advertised the property as a Victorian waterfront estate with an unfinished interior. During the two years that Camano Realty listed the Hovis property for sale, two offers were made and then rescinded. In the spring 2001, Hovis, one of the potential buyers, and a Camano Realty agent met with the Building Department about the status of the expired building permit. The Building Department examiner, Ben VanDuine, described the outstanding inspections that still needed to be done, including the framing, plumbing, and electrical inspections. In addition, VanDuine told Hovis, the prospective buyer, and the Camano Realty agent that the work had to comply with the Uniform Building Code (UBC) and approved plans and updated engineering calculations had to be submitted to the Building Department.
In late 2001, Hovis hired a contractor, Stephen Redmond, to finish the remodel. Redmond applied for a new building permit for the remodel. Although Hovis had not obtained the necessary inspections or submitted engineering plans and calculations, in December 2001, the Building Department issued a new building permit to Redmond.
In 2002, Hovis listed the property for sale with Preview Realty and real estate agent Roger Nelson. In early spring, the Ruebels contacted their Seattle neighbor, Rene Stern, a Windermere real estate agent, about their interest in purchasing the Hovis property. Stern agreed to act as the Ruebels? agent for the Seattle house but referred them to Sonja Eppig, a Windermere real estate agent with Camano Realty, for the Hovis property. In April 2002, Eppig met with the Ruebels. At the meeting she gave them a copy of the Real Property Transfer Disclosure Statement for the Hovis Property, Puget Sound Multiple Listing Form 17 (Form 17). In Form 17, Hovis states that they had been remodeling the house since 1996 and all the building permits are current. Hovis also states that they did not know if there were any restrictions on the property that would affect future construction or remodeling or any other material defects affecting the property that a prospective buyer should know about. On April 16, the Ruebels made an offer to purchase the Hovis property contingent on an inspection and study to determine the feasibility of the floor plan and the cost of finishing the remodel.
In the April 27 addendum to the Purchase and Sale Agreement, Hovis represented that: [t]o the best of seller's knowledge, seller states that all work performed to date has passed all inspections. Any work that has not passed inspection will be corrected, reinspected and approved prior to closing at sellers [sic] expense. Purchaser to verify to own satisfaction within feasibility time.
The inspection report raised a number of concerns, including questions about the status of the building permit and inspections for the remodeling work. The report specifically notes that there was no framing inspection certificate and recommended checking with the Building Department.
On April 29, the Ruebels met with Eppig to go over the inspection report. According to Tom Ruebel, Eppig agreed to check with the Building Department on the status of the permit and the inspections. Eppig denied agreeing to check on the status of the permit and the inspections, but admitted that she met with VanDuine and learned that the Building Department needed building and engineering plans.
Hovis' contractor, Redmond, testified that at approximately 11:15 a.m. on May 6, Eppig called to tell him that the Building Department was going to send him a letter suspending the building permit because updated building and engineering plans were never submitted.1 Tom Ruebel testified that Eppig unexpectedly called him on May 6 to recommend extending the deadline for the feasibility study because the Building Department needed some engineering plans, which she agreed to obtain.
On May 6, the Building Department suspended the permit. In the May 6 letter to Redmond, the Building Department states that the permit was erroneously issued. The letter also states that the permit will not be reinstated unless Hovis addressed the issues identified during the framing consultation in 1996 and provided updated engineering plans that complied with the 1997 UBC. Eppig did not tell the Ruebels that the Building Department had suspended the building permit. Sometime after May 6, Eppig obtained some engineering information from Preview Realty and requested building plans from Hovis' architect.
On May 7 or 8, Eppig sent the Ruebels an extension until May 15 for the feasibility study and assured them that there was no problem with complying with the Building Department's request for the engineering information.
Enclosed are copies of the engineers [sic] report. I talked with Ben at County. They are okay. He does want the engineer's stamp and license number, so I will get that. Also included are the signatures from the seller re: the extension of the feasibility study. Sincerely, Sonya.
1 Redmond's phone log was introduced as an exhibit and the log showed an incoming call from Eppig on May 6, 2002, at 11:16 a.m.
Contrary to Eppig's assurances, VanDuine testified that he told Eppig the engineering data she provided was inadequate and that before reinstating the permit, the Building Department needed additional data, including lateral engineering calculations.
Tom Ruebel testified that Eppig called him before May 14 to tell him that the issues with the Building Department were resolved and they could release the feasibility contingency. On May 15, the Ruebels waived the feasibility contingency.
Nelson testified that sometime after May 15, Eppig told him the Building Department had identified problems with the building permit and the required inspections on the house. She asked Nelson to meet with the Building Department because the Ruebels were concerned about the status of the building permit and they were going to refuse to close on June 17 unless the problem was solved.
On June 7, Nelson faxed a proposed addendum to Eppig. According to Nelson, the purpose of the addendum was to notify the Ruebels that the construction was not approved by the Building Department. The addendum states that the engineering work is not complete, the building plans may not meet the 1997 UBC requirements, and the seller is not responsible for meeting the UBC requirements.2 Eppig told Nelson the addendum was unacceptable and helped draft a revised addendum. The revised addendum states that the framing inspection consultation
2 The addendum states:
Seller and Purchaser acknowledge that plan engineering work for Island County Building Dept. is not complete regarding wall sheer and lateral calculations, and the plans may not meet all of 1997 Uniform Building Code (U.B.C.) requirements. Purchaser intends to complete further remodeling before completion, which will require additional/new calculations. Purchaser is responsible to complete such work as part of home completion process. Seller is not required to bring existing improvements on premises to meet 1997 U.B.C.
are not complete according to Island County, and that engineering calculations of structure were still needed, but that Hovis agreed to pay the Ruebels $1,000 for costs related to additional lateral engineering calculations. The revised addendum also notes that intended changes by purchaser . . . may require additional work to comply with current UBC requirements.3
Tom Ruebel testified that Eppig called about the addendum and told him that it would benefit them because Hovis agreed to set aside $1000 at closing for any future engineering necessary in finishing the remodel. But the Ruebels did not see the written addendum until closing on June 17. Tom Ruebel testified that from May 15 until closing on June 17, he was not aware of any permitting or inspection concerns. The Ruebels purchased the property on June 17. The Ruebels signed the revised addendum as part of the paperwork at the closing, but did not carefully read it.
After purchasing the property, the Ruebels' contractor, Richard King, identified a number of problems, including the framing work, which undermined the structural integrity of the house. The Ruebels also learned for the first time that on May 6 the Building Department had suspended the building permit for failure to submit the necessary engineering plans, obtain necessary inspections or comply with the UBC. Rather than proceed with remodeling, the Ruebels decided it was less costly to
3 The revised addendum states:
Seller and Purchaser acknowledge that the framing inspection/consultations are not complete according to Island County. Engineered lateral calculations of structure are needed. Seller and Purchaser agree that closing agent shall hold back $1,000 from seller?s proceeds of closing. This money shall pay for costs related to additional lateral engineering calculations of existing structure and will be returned to seller if not spent within six months from date of closing. Seller and Purchaser acknowledge that the structure, along with intended changes by purchaser as part of the completion process, may require additional work to comply with current UBC requirements. Any future work and engineering costs (excepting the $1,000 described above) to complete the structure, is the responsibility of the purchaser.
demolish the house and build a new house.
In July 2003, the Ruebels sued Hovis alleging negligent and fraudulent misrepresentation and constructive fraud. In April 2004, the Ruebels sued Washington Builders and its owner, Terry Moran for negligent and defective construction. In addition, the Ruebels sued Preview Realty, Nelson, Camano Realty, and Eppig alleging negligent and fraudulent misrepresentation and fraud. The Ruebels also alleged Camano Realty and Eppig breached their fiduciary duty and Preview Realty and Nelson breached their duty of good faith and fair dealing. In an amended complaint, the Ruebels alleged breach of fiduciary duty, negligence, fraudulent concealment, misrepresentation of material facts, and violation of the Consumer Protection Liability Act, chapter 19.86 RCW (CPA), as against Camano Realty and Eppig. Camano Realty denied the existence of an agency relationship with Eppig and denied liability.
Shortly before trial, the Ruebels settled with all the defendants except Camano Realty and Eppig. During the 9-day trial, a number of witnesses testified, including the Ruebels, Eppig, Nelson, Redmond and VanDuine. Contrary to the testimony of Nelson, Redmond, VanDuine, and Tom Ruebel, Eppig unequivocally denied that she knew the building permit was suspended or that she agreed to check on the status of the permits.
At the conclusion of the trial, the jury found that the Ruebels proved an agency relationship between Camano Realty and Eppig. While the jury concluded the Ruebels did not prove fraudulent concealment, the jury found the Ruebels proved a violation of the CPA, breach of fiduciary duty and negligence. As to negligence and breach of fiduciary duty, the jury attributed 10 percent of the fault to Eppig and 30 percent to Camano Realty. Camano Realty and Eppig filed a motion for judgment as a matter of law to set aside the jury verdict on the CPA violation. The trial court denied the motion and the court entered a final judgment on the jury verdict of approximately $145,000. The trial court also awarded the Ruebels $311,304.67 in attorney fees, $3,561.49 in costs, and $10,000 in exemplary damages under the CPA.
Camano Realty and Eppig contend the trial court erred in denying their motion for judgment as a matter of law, arguing that substantial evidence does not support the jury verdict that Camano Realty and Eppig violated the CPA.
Standard of Review
Viewing the evidence most favorable to the nonmoving party, a trial court should grant a motion for judgment as a matter of law when the court concludes there is no substantial evidence or reasonable inference to sustain a verdict for the nonmoving party. Sing v. John L. Scott, 134 Wn.2d 24, 948 P.2d 816 (1997). Substantial evidence exists if the evidence is sufficient to persuade a fair-minded, rational person of the truth of the declared premise. Guijosa v. Wal-Mart Stores, Inc., 144 Wn.2d 907, 915, 32 P.3d 250 (2001) (quoting Brown v. Superior Underwriters, 30 Wn. App. 303, 306, 632 P.2d 887 (1980)). We apply the same standard as the trial court when reviewing a motion for judgment as a matter of law. Guijosa, 144 Wn.2d at 915.
Under the CPA, unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful. RCW 19.86.020. To prove a CPA violation, a plaintiff must establish five elements: (1) an unfair or deceptive act or practice; (2) that occurs in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; and (5) causation. Guijosa, 144 Wn.2d at 917; Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 784, 719 P.2d 531 (1986).
The CPA does not define the term "deceptive," but implicit in that term is the understanding that the actor misrepresented something of material importance. Hiner v. Bridgestone/Firestone, Inc., 91 Wn. App. 722, 730, 959 P.2d 1158 (1998), rev'd on other grounds, 138 Wn.2d 248, 978 P.2d 505 (1999). For an unfair or deceptive act, plaintiff need not show that the act in question was intended to deceive, but that the alleged act had the capacity to deceive a substantial portion of the public. Hangman, 105 Wn.2d at 785. Whether a party committed an unfair or deceptive act is reviewed for substantial evidence. Whether an act violates the CPA is a question of law. Griffith v. Centex Real Estate Corp., 93 Wn. App. 202, 214, 969 P.2d 486 (1998) (citing Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133, 150, 930 P.2d 288 (1997)). It is well established that a real estate agent who knowingly fails to disclose known material defects in the sale of real property violates the CPA. Svendsen v. Stock, 143 Wn.2d 546, 23 P.3d 455 (2001).
Unfair or Deceptive Act or Practice
Relying on Guijosa, Camano Realty and Eppig argue that the jury's rejection of the Ruebels fraudulent concealment claim requires setting aside the jury's CPA verdict because the Ruebels did not allege or prove an unfair or deceptive act or practice other than fraudulent concealment.
In Guijosa, the plaintiffs did not allege or prove any act or practice that violated the CPA other than discrimination. While the jury rejected the plaintiffs' claims for false imprisonment, battery, malicious prosecution, and discrimination, the jury found Wal-Mart violated the CPA. Guijosa, 144 Wn.2d at 912-913. The trial court granted Wal-Mart's motion for judgment as a matter of law to set aside the jury's verdict on the CPA claim because the record presented no substantial evidence or reasonable inference to support the jury's verdict that Wal-Mart violated the CPA.? Id. at 913. On appeal, the supreme court affirmed the trial court's decision to set aside the jury verdict on the CPA claim. While the court concluded the jury instructions did not prevent the jury from finding a CPA violation separate and apart from discrimination, because the plaintiffs only presented evidence of discrimination practice, there was insufficient evidence to support a violation of the CPA.
Here, as in Guijosa, the jury instructions allowed the jury to find that Camano Realty and Eppig violated the CPA by failing to disclose known material problems with the Hovis house separate and apart from fraudulent concealment.4 But unlike in
4 Jury Instruction No. 16 provides:
The Ruebels claim that Ms. Eppig and Camano Island Realty violated the Washington Consumer Protection Act. To prove this claim, the Ruebels must prove by preponderance of the evidence each of the following propositions:
(1) That Ms. Eppig engaged in an unfair or deceptive act or practice;
(2) That the act or practice occurred in the conduct of Ms. Eppig's trade or commerce.
(3) That her act or practice affected the public interest;
(4) That the Ruebels were injured with respect to their property, and
(5) That Ms. Eppig's acts or practices were a proximate cause of the Ruebels' injury.
If you find from your consideration of all of the evidence that each of these propositions has been proved, your verdict should be for the Ruebels on this claim. On the other hand, if any of these propositions has not been proved, your verdict should be for defendants on this claim.
Guijosa, the evidence supports the jury's finding that Camano Realty and Eppig engaged in unfair and deceptive acts that violated the CPA. Both Eppig and Camano Realty knew the necessary inspections and permits were not obtained and failed to disclose that information to the Ruebels. And even though Eppig denied seeing the May 6 letter or knowing that the permit was suspended, her testimony was contradicted by Redmond and Nelson. Redmond testified that Eppig contacted him on May 6 and told him that ?Ben? at the Building Department was going to send a letter suspending the building permit. Nelson testified that Eppig referred to the May 6 letter during conversations with him. Eppig also admitted obtaining and submitting the engineering reports and assuring the Ruebels that the Building Department was "okay." In addition, Eppig did not tell the Ruebels about the addendum Nelson prepared disclosing that the engineering work was not complete and that the building plans did not meet the UBC requirements. Instead, Eppig helped draft a revised addendum that did not so unequivocally set forth the permitting and inspection problems. And when Camano Realty listed the Hovis property for approximately two years, Camano learned about the permitting and inspection problems but did not inform the Ruebels.
Camano Realty and Eppig also argue that, as a matter of law, only the listing agent for the seller has a duty to disclose material facts related to the purchase and sale of property under the CPA. We disagree. The duty also applies to a buyer's agent who knows and fails to disclose material adverse facts.5 Edmonds v. Scott Real
5 Camano Realty's and Eppig's attempt to distinguish Robinson v. McReynolds, 52 Wn. App. 635, 762 P.2d 1166 (1988), is unpersuasive. Here, the evidence supports the jury's finding that Camano Realty and Eppig knew about the problems with the Hovis house.
Estate, 87 Wn. App. 834, 848, 942 P.2d 1072 (1997). In Edmonds, this court held that where the buyer's agent knew the seller's assertions in the property information form were false but failed to disclose that information, as a matter of law, the buyer's agent violated the CPA. Edmonds, 87 Wn. App. at 848-49.
Public Interest Impact
In the alternative, Camano Realty and Eppig contend that the evidence fails to support the jury's finding that the Ruebels proved an act or practice that impacted the public interest. Specifically, Camano Realty and Eppig assert the Ruebels did not prove that there is a likelihood other buyers would be harmed in exactly the same fashion.
A private dispute has an impact on the public interest where there is a likelihood that additional plaintiffs have been or will be injured in exactly the same fashion. Hangman, 105 Wn.2d at 790. Whether the act complained of has an impact on the public interest is determined based on several nonexclusive factors that are considered in the context in which the alleged acts were committed. Id. at 789-90.
(1) Were the alleged acts committed in the course of defendant's business? (2) Did defendant advertise to the public in general? (3) Did defendant actively solicit this particular plaintiff, indicating potential solicitation of others? (4) Did plaintiff and defendant occupy unequal bargaining positions?
Hangman, 105 Wn.2d at 790-791. None of the factors is dispositive and not all of the factors need be present. The factors represent indicia of an effect on public interest from which a trier of fact could reasonably find public interest impact. Hangman at 791. Consistent with Hangman, the court instructed the jury that:
An act or practice affects the public interest if it is likely that additional plaintiffs have been or will be injured in exactly the same fashion. In deciding whether Ms. Eppig's actions affected the public interest in this case, you may consider, among other things:
(1) whether her acts or practices were done in the course of her business;
(2) whether Ms. Eppig advertises to the public in general;
(3) whether Ms. Eppig actively solicited the Ruebels, indicating potential solicitation of others.
(4) Whether Ms. Eppig and the Ruebels had unequal bargaining positions, which can be shown by inequality of knowledge about the property. In reaching your decision no one factor is decisive; you do not need to find that all factors are present, and you are not limited to considering only these factors.
Camano Realty and Eppig do not challenge the jury instruction. Rather, they assert that the Ruebels did not prove Eppig's acts have an impact on the public interest because the Ruebels did not prove that Eppig did or will commit any similar act. But the instructions do not require the jury to find plaintiffs have been or will be injured in exactly the same fashion before considering the four nonexclusive factors. Here, substantial evidence supports the jury's determination that Eppig's acts impacted the public interest.6 There is no dispute that Eppig's failure to disclose that the building permit was suspended, that inspections were not done, and the information provided to the Building Department was incomplete and inadequate, occurred in the course of business. There is also no dispute that Camano Realty and
6 Camano Realty and Eppig rely on several cases holding the plaintiff failed to establish the public interest element. But because the determination of whether there is a public interest impact turns on the circumstances and facts specific to each case, Camano Realty's and Eppig's reliance on these cases is not persuasive. Sloan v. Thompson, 128 Wn. App. 776, 115 P.3d 1009 (2005), rev. denied, 157 Wn.2d 1003 (2006) (sale of home did not occur within course of seller's business); Cashmere Valley Bank v. Brender, 128 Wn. App. 497, 116 P.3d 421 (2005), aff'd, 158 Wn.2d 655 (2006) (no evidence that bank advertised loans to the public); Goodyear Tire & Rubber Co. v. Whiteman Tire, 86 Wn. App. 732, 935 P.2d 628 (1997) (tire dealer, a franchisee, did not have unequal bargaining power); Pac. Northwest Life Ins. Co. v. Turnbull, 51 Wn. App. 692, 754 P.2d 1262 (1988) (sophisticated land investor did not have unequal bargaining power with real estate agent); and Broten v. May, 49 Wn. App. 564, 744 P.2d 1085 (1987) (no evidence that defendant solicited plaintiff's business and the two parties occupied equal bargaining positions). Eppig advertised to the general public and solicited and obtained referrals through membership in the Windermere referral network.7 And while Eppig knew about the permitting, inspection and engineering problems with the Hovis house, Eppig did not disclose these problems to the Ruebels.8
Apportionment of Fault
Camano Realty and Eppig also claim the jury instructions did not permit the jury to attribute 30 percent fault to Camano Realty and the trial court erred in entering judgment on the jury verdict. Relying on the jury instruction defining vicarious liability, Camano Realty and Eppig argue that was the only basis that allowed the jury to find Camano Realty liable. But Camano Realty's and Eppig's argument ignores the jury instruction on apportionment of fault, the Special Jury Verdict form, and the evidence that supported the jury's attributing 30 percent fault to Camano Realty.
A party has a duty to propose an appropriate verdict form and failure to object precludes consideration of issues concerning the verdict form on appeal. Lahmann v. Sisters of St. Francis of Philadelphia, 55 Wn. App. 716, 723, 780 P.2d 868 (1989); Wickswat v. Safeco Ins. Co., 78 Wn. App. 958, 966-67, 904 P.2d 767 (1995).
Jury Instruction 23 tells the jury that it must apportion fault for the Ruebels negligence and breach of fiduciary duty claim:
7 Citing Jackson v. Harkey, 41 Wn. App. 472, 704 P.2d 687 (1985), Camano Realty and Eppig also argue that this factor requires proof of false advertisement. Because Jackson was decided before Hangman, the court did not expressly consider whether the construction company advertised to the general public. In addition, the act complained of in Jackson was misleading advertisement whereas, here, the act complained of is failure to disclose material facts in a real estate transaction.
8 In supplemental briefing, Camano Realty and Eppig contend that under Alejandre v. Bull, 159 Wn.2d 674, 153 P.3d 864 (2007), the Ruebels CPA claim fails as a matter of law because as a tortbased claim, the economic loss rule bars the Ruebels from recovering economic damages. But here, the CPA is a statutory based remedy that allows a plaintiff to recover damages. See e.g. Griffith, 93 Wn. App. 202; Sign-O-Lite v. DeLaurenti Florists, Inc., 64 Wn. App. 553, 825 P.2d 714 (1992).
If you find for plaintiffs for their claims for negligence or breach of fiduciary duty (other than fraudulent concealment or violation of the Consumer Protection Act), you must apportion fault to other persons who you find are at fault.
First, you must determine the dollar amount of damages caused by Ms. Eppig's negligence or breach of fiduciary duty. The court will provide you with a special verdict form for this purpose.
Before you determine that another person is at fault for such damages, defendants must prove each of the following propositions by a preponderance of the evidence:
First, that the person is at fault; and
Second, that the person's fault was a proximate cause of the plaintiffs? damages.
Third, that those damages are in addition to damages caused by Ms. Eppig's fraudulent concealment or violation of the Consumer Protection Act.
The court will provide you with a special verdict form for this purpose. Your answers to the questions in the special verdict form will furnish the basis by which the court will apportion liability, if any.
Consistent with Instruction 23, the Special Jury Verdict form also tells the jury to determine whether anyone else is at fault for the negligence and breach of fiduciary duty damages and if so, to attribute a percentage of fault. The Special Jury Verdict form states:
QUESTION 5: Did the Ruebels prove their claim for negligence or breach of fiduciary duty?
ANSWER: (Write "yes" or "no") Yes
(INSTRUCTION: If you answered "No" to Question No. 5, then sign this verdict and notify the bailiff. If you answered "Yes" to Question 5, proceed to Question No. 6.[)]
QUESTION 6: What is the total amount of damages proximately caused to the Ruebels by Ms. Eppig's negligence or breach of fiduciary duty?
QUESTION NO. 7: Was any one else at fault and did that fault proximately cause part or all of the Ruebels' damages?
ANSWER: (Write "yes" or "no") Yes
QUESTION NO. 8: Assume that 100% represents the total combined fault which proximately caused the plaintiffs? damages. What percentage of this 100% is attributable to Sonya Eppig and other persons whose fault proximately caused plaintiffs' damages? Your total must equal 100%.
Sonya Eppig 10%
Other (list names and percentage)
Camano Island Realty/Windermere Realty 30%
Rene Stern 5%
Steve Redmond 15%
Watson Mike Hovis 20%
Roger Nelson 15%
Island County Building Division 4%
Thomas and Diane Ruebel 1%
Substantial evidence also supports the jury's finding attributing fault to Camano Realty. Camano Realty was the listing agent for the Hovis property from 2000 to 2001. VanDuine testified that in April 2001 he had a meeting with Hovis, a Camano Realty agent, and the potential buyers. At the meeting, VanDuine described the permitting problems including inadequate framing inspections and incomplete engineering information. The trial court did not err in entering judgment on the jury verdict against Camano Realty.
Attorney Fees
Last, Camano Realty and Eppig challenge the trial court's decision to award approximately $311,300 in attorney fees on the CPA claim because the court did not segregate and deduct the fees incurred on unrelated legal theories and claims and did not enter findings and conclusions to support the award of attorney fees. They also argue the trial court failed to take into account time spent on unsuccessful claims and duplicative and wasted effort.9
9 Specifically, Camano Realty and Eppig contend the trial court failed to properly segregate and deduct fees for time spent (1) prior to amending the complaint in April 2004 and in March 2005; (2) pursuing claims against the other defendants; and (3) pursuing unsuccessful claims against Camano Realty and Eppig.
To reverse an attorney fee award, an appellate court must find that the trial court manifestly abused its discretion. Pham v. City of Seattle, 159 Wn.2d 527, 538, 151 P.3d 976 (2007). The trial court abuses its discretion when it is exercised on untenable grounds or for untenable reasons. Pham, 159 Wn.2d at 538. Trial courts must create an adequate record for review of fee award decisions. Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632 (1998). Findings of fact and conclusions of law are required to establish such a record. Mahler, 135 Wn.2d at 435. Failure to create an adequate record will result in a remand of the award to the trial court to develop such a record. Mayer v. City of Seattle, 102 Wn. App. 66, 79, 10 P.3d 408 (2000).
Under the CPA, a successful plaintiff is entitled to recover reasonable attorney fees and costs. RCW 19.86.090. If attorney fees are only reasonable for certain claims, the court must segregate the time spent on other theories and claims on the record, even if the other theories and claims are interrelated or overlap. Hume v. Am. Disposal Co., 124 Wn.2d 656, 673, 880 P.2d 988 (1994) (quoting Travis v. Washington Horse Breeders Ass'n, Inc., 111 Wn.2d 396, 411, 759 P.2d 418 (1988)). An attorney fee award must properly reflect the segregation of time spent on other claims, except when the trial court finds that no reasonable segregation of successful and unsuccessful claims can be made. Hume, 124 Wn.2d at 672.10 The burden of
10 See also Mayer v. Sto Industries, Inc., 156 Wn.2d 677, 692, 132 P.3d 115 (2006) (not an abuse of discretion when trial court did not segregate based on its finding that the plaintiffs requested CPA fees could not realistically be separated from time spent pursuing their Product Liability Act claims?). But see Loeffelholz, 119 Wn. App. at 692 (holding that the record does not show that the claims were so interrelated as to excuse segregation and the case embodied many claims and issues and an award of nearly half the total fees incurred represents too high a proportion to be reasonable); Mayer, 102 Wn. App. 66 (abuse of discretion when court awarded fees for time spent on discovery that was not relevant to plaintiff's Model Toxics Control Act claim which provided attorney fees).
segregating, like the burden of showing reasonableness overall, rests on the one claiming such fees. Loeffelholz, et. al v. Citizens for Leaders with Ethnic and Accountability Now (C.L.E.A.N), 119 Wn. App. 665, 690, 82 P.3d 1199 (2004); Katanis v. Educ. Employees Credit Union, 122 Wn.2d 483, 501-502, 859 P.2d 26 (1993).
Here in June 2003, the Ruebels sued Hovis for negligent and fraudulent misrepresentation and constructive fraud. In April 2004, the Ruebels added Windermere Real Estate, Camano Realty, Sonja Eppig, Preview Realty, Roger Nelson, Washington Builders and its owner Terry Morgan. In addition to negligent and fraudulent misrepresentation, the amended complaint alleges breach of fiduciary duty against Camano Realty and Eppig, breach of good faith and fair dealing against Preview and Nelson, and negligent and defective construction against Washington Builders and Morgan. Yet the Reubels attorney stated that only approximately $7,200 could be deducted for time spent on the unrelated CPA claims and theories. The trial court agreed but did not enter written findings of fact and conclusions of law in support of the attorney fee award of $311,305.11
Relying on the trial court's oral ruling and a recent supreme court decision, Mayer v. Sto Industries, Inc., 156 Wn. 2d 677, 692, 132 P.3d 114 (2006), the Ruebels argue that the court did not abuse its discretion in deciding segregation was not reasonable. But here, unlike in Mayer, the trial court's oral decision does not provide a clear explanation that the CPA work could not be segregated from the WPLA work,
11 The cases the Ruebels cite to argue that oral findings are sufficient are not persuasive. Neither Goodman v. Darden, Doman & Stafford Assoc., 100 Wn.2d 476, 670 P.2d 648 (1983) nor Malfait v. Malfait, 54 Wn.2d 413, 341 P.2d 154 (1959) address the need for findings to support an award of attorney fees.
Mayer, 156 wn.2d at 693.12
On attorney's fees, there is no challenge to the loadstars being reasonable. The only challenge is to the segregation. I am somewhat concerned about the attorney's fees before Ms. Eppig or Camano Island Realty were included in the -- included in the complaint, however, there was a great deal of work at the time about the damages, about what -- what happened to the house, the house left, and whether or not we were going to have pictures and what that -- would happen. And those were obviously questions and -- and I'm not sure if I'm correct on that. Those -- those things may have come up once the realty defendants were entered into the action. But I can see that it was a record that was being built on this CPA claim. I don't see how these could be segregated myself and I believe that the court cases say that if it's not reasonable to be segregated then it will not be segregated.
Because the trial court failed to enter findings of fact and conclusions of law to support the award of attorney fees, we reverse and remand.13 On remand, the Ruebels have the burden to segregate the time spent on the CPA claim from the time spent on the unrelated legal theories and claims and the court must enter written findings to support an award of attorney fees.
Cross Appeal
On cross appeal, the Ruebels claim the trial court erred by not including the $13,500 the jury awarded for the negligence claim. Specifically, the Ruebels argue that the stipulation to not award negligence damages was void because it was based on misrepresentation and mutual mistake.
12 See also Brand v. Dep't of Labor & Indus., 139 Wn.2d 659, 674, 989 P.2d 1111 (1999) (while the court concluded that the trial court properly refused to segregate the fees attributable to plaintiff's unsuccessful claim, because the trial court failed to enter written findings or to articulate specific reasons supporting the amount of the attorney fees award, the court remanded for it was unable to judge whether the trial court abused its discretion). And in Pham, 159 Wn.2d 527, the trial court entered thirty-five findings of fact justifying its fee award, including the court's reason for segregating and deducting hours that were unproductive or not sufficiently related to the successful claim. Pham, 159 Wn.2d at 539-40.
13 On remand, the court should also consider whether there was any duplicative or wasted effort and the reasonableness of the fee award.
During deliberations, the jury asked whether it should answer Question 5 "Did the Ruebels prove their claim for negligence or breach of fiduciary duty?", if it answered Question 4 "What is the amount of damages proximately caused to the Ruebels by Ms. Eppig's fraudulent concealment and/or violation of the Consumer Protection Act?" The attorney for Camano Realty and Eppig expressed the concern that the jury could award double damages. In response,the Ruebels' attorney agreed that if the jury awarded damages under the negligence claim that were not greater than the amount under the fraudulent concealment and CPA claims, the damages should not be included in the award.
. . . that I only argued one theory of damages, so maybe the best way of dealing with this is to do this. I really do think this is going to be confusing to the jury if we add this double damages stuff because we haven't talked about it and it's not in the instructions.
I agree that if there are any damages that are awarded under the negligence count and they're not greater than the amount under the fraud and Consumer Protection Act counts, then they will be subsumed within the first one, and that will settle the matter, I would think.
Based on the stipulation of Ruebels' attorney, the court responded to the jury question by answering, "yes".
In the Special Jury Verdict form, the jury found the amount of damages proximately caused by Eppig's violation of the CPA was $126,319.51. The jury also found the amount of damages proximately caused by Eppig?s negligence and breach of fiduciary duty was $33,750. Based on the stipulation, the trial court did not include the damages for the negligence and breach of fiduciary claims in the award.
A valid stipulation is binding unless fraud, mistake, or misunderstanding is established. De Lisle v. Fmc Corp., 41 Wn. App. 596, 597, 705 P.2d 283 (1985) (citing Baird v. Baird, 6 Wn. App. 587, 494 P.2d 1387 (1972).
To support their claim that the stipulation is void, the Ruebels cite to a criminal case, State v. Schaupp, 111 Wn.2d 34, 757 P.2d 970 (1988) concerning entry of a plea agreement based on an alleged misrepresentation. In Schaupp, the court rejected the State's claim that the plea agreement was void because there was no evidence of misrepresentation. Schaupp, 111 Wn.2d at 38-39. Here, as in Schaupp, the record does not support misrepresentation. Based on a concern about awarding double damages, Ruebels' attorney agreed with the concern and suggested a means to avoid it.
To support their claim that the stipulation is void based on mutual mistake, the Ruebels cite several cases for the general proposition that contract principles apply to determine whether a stipulation is enforceable.14 But a party with constructive knowledge of the facts giving rise to an alleged mistake cannot claim mistake as a basis to avoid a stipulation. Denaxas v. Sandstone Court of Bellevue, LLC, 148 Wn.2d 654, 668, 63 P.3d 125 (2003). Because Ruebels' attorney had constructive knowledge of the jury instructions, the claim that the stipulation is void based on mutual mistake also fails.
We affirm the trial court's entry of judgment on the jury verdict but reverse and
14 Wm. Dickson Co. v. Pierce County, 128 Wn. App. 488, 493, 116 P.3d 409 (2005) ("Contract principles govern final judgments entered by stipulation or consent."); Haller v. Wallis, 89 Wn.2d 539, 546, 573 P.2d 1302 (1978) (trial court's decision not to vacate a stipulated order under CR 60(b) affirmed where there was no evidence of fraud or collusion and none of the irregularities charged is attributable to the respondent); and Harford v. Harford, 86 Wn. App. 259, 266, 936 P.2d 48 (1997) (trial court's decision to vacate a stipulated order under CR 60(b) reversed where court found only that a unilateral mistake was made).
remand on the attorney fees award. Because the Ruebels prevailed as to the merits of their CPA claim, upon compliance with RAP 18.1, the Ruebels are entitled to attorney fees on appeal. RCW 19.86.090; Sevendson v. Stock, 143 Wn.2d at 250.
PROSPECTIVE COMMERCIAL TENANTS of PLEASANT BEACH VILLAGE SHOULD BEWARE of FUNDING PUBLIC PREDATORS JOHN JACOBI and WINDERMERE REAL ESTATE with THEIR RENT PAYMENTS.
Bainbridge Island Architect Charlie Wenzlau and Tad Fairbank of Fairbank Construction help realty predator Jacobi on community lifestyle center.
"Abandoned Lynwood Center Project "Blossom Hill" is now "Pleasant Beach Village" under the new ownership of John Jacobi, founder of Windermere Real Estate. Members of the Jacobi family have purchased the Blossom Hill development and are working with Jim Laws, Charlie Wenzlau and Tad Fairbank with the goal of turning the Lynwood Center neighborhood into a community lifestyle center.
We look forward to sharing regular updates about this project." (Above left to right) Windermere Founder John Jacobi, Windermere BI Owner Jim Laws, Pleasant Beach Village contact and Windermere Real Estate West Sound Owner/Managing Broker Carter Dotson.. "The completion of Pleasant Beach Village will solidify this neighborhood service center as a vibrant and expansive destination." — Arnie Sturham, Owner, Treehouse Cafe
JUDGMENT DEBTOR WINDERMERE RELOCATION "…ABANDONED AND VACATED THE PREMISES" IN BREACH OF OFFICE LEASE,"…AMOUNT OF ALL DAMAGES IS $168,597.30…" In Complaint No. 09-2-12257-1 SEA, Filed in King County Superior Court on March 12, 2009, Plaintiff Legacy Partners in part states: "1. Defendant Windermere Relocation, Inc., is a Washington corporation, doing business in this state and county.... 5. Defendant leased the Premises from Plaintiff for the purpose of operating a commercial business. 6. Defendant has abandoned and vacated the Premises... The amount of all damages is $168,597,30, as detailed in Exhibit A."
Filed October 27, 2009: ORDER AND JUDGMENT ON ANSWER OF GARNISHEE AND ORDER TO PAY.
Is WindermereWatch.com of social benefit to consumers and the public? You decide:
Windermere Real Estate is one of our country's largest real estate companies and widely promotes a fraudulent express warranty that states "We are committed to... The highest ethical standards. Uncompromising honesty and integrity." The definition of an express warranty from Black's Law Dictionary is: "A warranty created by the overt words or actions of the seller. • Under the UCC, an express warranty is created by any of the following: (1) an affirmation of fact or promise made by the seller to the buyer relating to the goods that becomes the basis of the bargain."
But when customers are victimized by dishonest Windermere brokers and agents, and complain in writing through legal counsel to franchiser Windermere Services Company, it is absolutely silent in the face of clear and convincing evidence, and forces the customer to sue or go away. In many cases, unsuspecting consumer lives are thrown into complete chaos through costly litigation; and also because the subject homes may actually be uninhabitable or unserviceable for reasons about which Windermere knew and had a legal obligation to disclose—but did not. For some victims, the long and expensive litigation forced upon them even results in bankruptcy and homelessness. Despite their clear evidence, many victims go on to lose in court because they can't afford attorneys or have no legal experience, and Windermere exploits those impediments to endless advantage—lives, homes, and personal finances are ruined forever. And Windermere expects those victims to just go away without their lives and homes, merely for buying a house through Windermere Real Estate, innocently.
Although such irrefutable evidence of Windermere broker/agent misconduct has been presented to franchiser Windermere Services Company, it knowingly continues collecting commissions from dishonest agents and brokers by deliberately passing them on to other unwitting consumers. Is that the "Highest ethical standards. Uncompromising honesty and integrity?"
When victims use the media to report their Windermere experiences honestly, Windermere sues them for libel and defamation through false lawsuits to intimidate, silence, and hush bad PR—read one of those lawsuits here. It then tries to coerce victims into signing a "dark clause settlement agreement" that permanently terminates their speech rights—read some of those "settlement" agreements here. Through an expensive and emotionally distressing roller coaster ride with Windermere's nasty Demco lawyers, a victim of Windermere fraud is told they will be taken all the way to trial on trumped-up libel and defamation charges, and if they don't sign the dark clause, their life and future will be ruined. When a victim persists in refusing to sign, Windermere voluntarily dismisses its own lawsuit under Civil Rule 41, just before trial, after costing the victim years and yet thousands more to defend against the false action. This predatory legal tactic is known as abuse of process or malicious prosecution. In one example cited below, franchiser Windermere Services Company served an outspoken victim a lawsuit for libel and defamation, and then immediately sent them an email instructing that they "...need not hire an attorney," and further stating, "…we will try to resolve this directly and outside the legal system."
Every Windermere office in every state is legally tied to franchiser Windermere Services Company's fraudulent express warranty, false advertising, predatory conduct and policies through privity and its pecuniary franchise agreement. Some legal observers believe that Windermere's conduct has RICO and Civil Rights violation implications. If you have recently purchased a Windermere franchise without having been disclosed Windermere's falling brand value, PR decline, and its adverse website problems, click here for its duty of disclosure under Federal Trade Commission rules. Proof that Windermere Services Company knew about WindermereWatch.com in March of 2007 is in this document.
Windermere Real Estate is a textbook corporate predator who operates franchises in Washington State, Oregon, California, Arizona, Nevada, Utah, Idaho, Montana, Hawaii and British Columbia. Windermere repeatedly makes the false claim that it has offices in Wyoming, but it does not. If you're buying or selling property through ANY Windermere office, a percentage from your transaction will be used by franchiser Windermere Services Company to silence and financially ruin innocent parties who've encountered Windermere fraud. Windermere won't pay legitimate damages or acknowledge wrongdoing, and will stall settlement of cases all the way to state supreme courts, a legal strategy that Windermere routinely employs to bankrupt victims and exhaust their resources.
We believe the information presented here is of profound social benefit to consumers and the community, and we are dedicated to providing it.
Consumer advocates, legal experts and elected lawmakers all agree that the American real estate industry demands greater regulation to protect consumers from the human disaster of real estate fraud perpetrated by unethical realtors employed at companies like Windermere Real Estate. Windermere manipulates our clogged, inundated courts and the justice system to stall, wear down and financially exhaust victimized consumers, many of whom are wiped-out by the cost of pursuing civil justice in a process where innocent victims must CHASE perpetrators of real estate fraud through the courts AFTER a fraudulent offense has been committed. Acts of fraud are so common and widespread throughout the Windermere real estate network, that the defense of real estate fraud has become has become just another bottomline expense on the Windermere balance sheet. And the litigation nightmare of real estate fraud can happen to anyone who deals with Windermere Real Estate. It could happen to you. Windermere is by far the most unethical, deceitful, and culturally toxic real estate company operating in the United States. Windermere knowingly, deliberately, and unabashedly profits on corrupt franchise owners, brokers and agents with proven histories of fraud and ethical misconduct, many of whom are profiled in the pages of WindermereWatch.com. Despite Windermere's well-documented assault on victim speech rights, more and more unconscionable cases of Windermere fraud continue emerging.
Windermere is headquartered in Seattle, at franchiser Windermere Services Company. It was founded by John W. Jacobi, and he has kept the company a private, family-owned enterprise, eluding the transparency and ethical accountability required by stockholders. For decades, Windermere has harnessed the art of positive PR, affixing itself—however superficially—to community art events, the homeless, and even an annual college rowing competition which opens Seattle's boating season—the Windermere Cup—irresponsibly promoted by, and in conjunction with, the University of Washington. But those are the disingenuous and cynical sideshows created by an adept market manipulator, shown only briefly to the public, to obscure and obfuscate Windermere's true predatory nature.
The shameless greed and repugnant ethics of Seattle's Jacobi family, deliberately profiting on the loss and suffering of Windermere victims through commissions on the fraudulent home deals and unlawful misconduct of dishonest Windermere agents, brokers and franchise owners. Forget human decency, commercial reputation or social responsibility—it's all about the money.
Before turning the business over to his children and son-in-law, Windermere founder John W. Jacobi (left) simply ignored any complaints of fraud from Windermere victims, sending them straight to the lawyers. Yet despite claims of retirement, Jacobi is still indeed quite active at franchiser Windermere Services Company:
In Complaint 10-2-36192-8 SEA, filed in King County Superior Court on October 12, 2010, Windermere Services Company has sued former Windermere Puyallup Canyon Road owner Joe Maxwell for default on an "Unconditional Guaranty of Payment" promissory note. The Maxwell Answer and Counterclaims state that the "Plaintiff's [Windermere Services Company] claims are barred by Plaintiff's fraud, duress, and unclean hands," and alleges $4,000,000 in damages and violation of Washington's Franchise Investment Protection Act; and also that "The alleged Note and Guarantee are unconscionable and unenforceable." Maxwell's Counterclaims state "6. The WPCR Operating Agreement contains a provision granting Jacobi a special veto power which among other things, states that the company shall conduct its business and manage its affairs in accordance with the directions of Jacobi and all management decisions are subject to Jacobi's review," and "13. In early 2006, WSC and Jacobi decided to open another WSC office in the territory in which WPCR was operating, despite the objections of Maxwell. As a result of the opening of this new WSC office, WPCR lost a significant number of its real estate agents and revenue that transferred to the new office in Graham, Washington," and "14. As a direct result of these actions taken by WSC and Jacobi, WPCR was left with a large debt burden and overhead, and WPCR's revenue was significantly reduced... 22. On September 14, 2010, Maxwell heard from a real estate agent working at WPCR that the agent had received an email from WSC notifying him WPCR's franchise had been terminated. This notice was sent to WPCR's real estate agents before Maxwell learned of the termination of WPCR's franchise." Read the complete report on this case here.
Jacobi's Washington Loan Company is also currently being sued for Intentional Misrepresentation—read that report here—Case Update: Stipulation and Order for Dismissal. And the Windermere affiliated service company, Commonwealth Land Title Company of Puget Sound (recently re-named "CW Title") , has been found negligent by a jury who awarded the third-party plaintiffs $1,190,000. Read the Commonwealth report here.
Current Governing Person and Windermere Services Company CEO Geoffrey P. Wood (left) is married to John W. Jacobi's daughter, Jill Jacobi-Wood. Wood is the chief architect of Windermere marketing fraud, inducing business volume through—among other fraudulent promotion—an express warranty of "The highest ethical standards. Uncompromising honesty and integrity." When called upon to honor his company's warranty, Wood instructs Demco lawyers—led by Matthew F. Davis–to sue vocal victims for libel and defamation. Wood is also a Governing Person of Windermere Relocation, the subject enterprise of Windermere's employee rape case. He was briefly a real estate sales person in 1994, but that license was CANCELLED in 1995, and Wood currently has no real estate license of any kind that WindermereWatch can find.
Governing Person Jill Jacobi-Wood (left), Windermere Services President, is a licensed real estate broker in Washington State, and as such is subject to the statutory condition of RCW 18.86.030 "(d) To deal honestly and in good faith." For her part in Windermere's marketing fraud and malfeasance, Jacobi-Wood's RE license should be cancelled by the Washington State DOL's real estate division. By promoting honesty and integrity—while in reality—she is suing and coercing Windermere victims to shutup about their Windermere experience, Jacobi-Wood is hardly dealing honestly and in good faith.
Governing Person John O'Brien "OB"Jacobi (left) is General Manager of franchiser Windermere Services Company and also has many Windermere realty brokerage offices. He's a licensed real estate broker who is also called upon by statutory law to "Deal honestly and in good faith." But John "OB" Jacobi instead promotes fraudulent claims of honesty and integrity, and falsely sues victims of Windermere misconduct for libel and defamation to intimidate them and coerce their silence. Then this junior Jacobi runs away and voluntarily dismisses his own mendacious lawsuit when a victim refuses to sign Windermere's dark clause settlement agreement that has cost the victimized party so much distress and money to defend.
Windermere Services Governing Person and attorney—WSBA# 26636—Paul Drayna (left) has even more stringent ethical requirements placed upon him through his collateral professions of Lawyer and Notary Public; and Drayna is also bound by the Model Rules of Professional Conduct. But Mr. Drayna is not only practicing marketing fraud at Windermere. As Windermere in-house counsel, Drayna oversees Windermere's predatory litigation strategy of deliberately abusing the legal process by falsely suing victims for libel and defamation, and then attempting to intimidate and coerce those victims out of their speech rights and into Windermere's Dark Clause silence agreement. When victims WON'T sign the Windermere Dark Clause, Drayna runs away too, and voluntarily dismisses his own company's lawsuit under Civil Rule 41—but only after first costing the victim thousands to defend the phony lawsuit. Drayna is even copied on the mendacious, Demco-authored settlement documents meant to quash speech rights and be signed by Windermere victims. Drayna is also listed on the Board of Directors at Seattle Pro Musica, "a world of choral beauty," as being Pro Musica's Corporate Secretary and Legal Counsel. Pro Musica states as part of its mission "Respect/Integrity—a principle of respect and integrity in all our endeavors." So while Mr. Drayna is ruining lives by prosecuting costly, false and mendacious lawsuits that seek to intimidate Windermere victims and terminate their speech rights, he is also promoting "...a belief in the importance of music as a means of connection to each other and the community." Visitors to WindermereWatch.com and responsible citizens alike are urged to boycott Seattle Pro Musica concerts. Visit the boycott Seattle Pro Musica page by clicking here. Read a more in-depth review of Drayna's legal practice here.
ESCHEWING ETHICS and DOING WHAT OTHER LAWYERS JUST WON'T DO
Attorney and multi-office Windermere broker John Demco (left) is the ethically-elastic Windermere kingpin lawyer who operates Demco Law, Windermere's in-house legal firm, whose primary job is to stall and outspend small fry consumers damaged by dishonest Windermere brokers, agents and franchise owners. When an innocent real estate consumer has the misfortune to suffer one of Windermere's many bad apples, Demco Law Firm will refuse to settle the matter forthrightly, no matter what conspicuously unlawful or offensive conduct the agent or broker has committed. Demco and Windermere will force the aggrieved party to sue or swallow their damage and go away—standard Windermere operating procedure.
WindermereWatch has compiled voluminous evidence that Windermere-Demco attorney Matthew F. Davis (left), WSBA# 20939, is the kind of lawyer about which jokes are coined. Davis is franchiser Windermere Services' frontline bully—the guy in the legal trenches actually wrecking lives, making threats, and suing victims who speak out. When Shakespeare was recommending "The first thing we do, let's kill all the lawyers," in Henry the Sixth, Part 2, he was talking about egomaniacal lawyers like Matt Davis.
Attorney Matt Davis of Windermere's Demco Law Firm is so unethical, so deceitful and intimidating, that he's famous in law circles. As Windermere-Demco's lead attorney, Matthew F. Davis is renown for his dishonesty, dubious legal tactics, lack of decency and disrespect for the rules of professional conduct. He will do absolutely anything to win—without regard for truth or justice. He will lie to courts and opposing parties. He will file fallacious and erroneous documents with the court. He will email opposing parties telling them not to hire a lawyer when he has just served them a lawsuit. He will call a judge's chambers and request more time without informing the opposing party. He will file orders for a bench trial when he knows a jury trial has been demanded and paid for. He will trick, stall, coerce, menace and threaten. He will invent and extend mendacious Windermere litigation and abuse the legal process for no other reason than to exhaust an opponent's pocketbook. If he can, he will get YOUR attorney to quit—a favorite tactic.
Windermere, Davis and Demco Law will push a $5 cat poop case all the way to the state supreme court just to avoid paying damages—because it's all in the Windermere operating budget. And in the end, Windermere and Davis will try to coerce silence about your Windermere experience by trying to make you sign a "settlement" agreement that terminates your speech rights, so you can't ever inform the public about your Windermere debacle. What if you DON'T sign that you'll shut up, and then SPEAK UP instead? Windermere-Demco's Matt Davis will sue you for libel and defamation, then run away and dismiss his own lawsuit on the eve of trial—because after all—you're telling the truth.
Windermere's Clear and Overt Marketing Fraud:
—The Windermere Real Estate Mission Statement
Windermere widely promotes its deceptive express warranty in sales documents and on the internet which states "We are committed to... The highest ethical standards. Uncompromising honesty and integrity." In other Windermere promotion, like the Puget Sound Business Journal, Windermere CEO Geoff Wood is quoted as saying "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." The article goes on to say, "Geoff oversees marketing, legal, financial and internet development services throughout the Windermere network..." Mr. Wood claims absolute dominion over both Windermere legal and internet strategy, making him chief architect of Windermere marketing fraud.
Effective reportage can be harsh in recounting facts, but it must be said in consideration of all the Windermere victims profiled here who truly sought Windermere's vaunted honesty and integrity, that Windermere Services CEO Geoffrey P. Wood is simply lying when he states his company's utterly false and fraudulent commitment to honesty and integrity. He both lies and deceives again when he says that "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." Wood clearly doesn't do what he says he's going to do—be committed to uncompromising honesty and integrity. Wood himself is indeed IN the real estate business and his word is absolutely no good at all. He sues victims of Windermere misconduct for trade libel and defamation to shut them up, and then he tries to use the legal system to suppress victims' speech rights when they ask him to actually perform on the warranty he promotes. As this website proves, Mr. Wood does anything BUT what he says he's gonna do. Far from providing victimized Windermere customers a commitment to high ethical standards, honesty and integrity, Wood and Windermere run away and hide behind their lawyers when innocent consumers are ruined by their Windermere experience.
John W. Jacobi, Geoff Wood, his wife Jill Jacobi-Wood, and governing cohorts John O'brien "OB" Jacobi, attorney Paul Drayna have gone to the absolute ends of the earth in stonewalling, ignoring, denying and fleeing any and all responsibility for Windermere wrongdoing and misconduct. When called upon by victimized Windermere consumers to make good on its warranty of honesty and integrity, Windermere even states in legal pleadings that Windermere agents are NOT agents of Windermere at all—but independent contractors. As the legally-designated Governing People and top managers of the Windermere empire who drive policy, ethics and market promotion, it demands repeating that John W, Jacobi, Geoff Wood, Jill Jacobi-Wood, John OB Jacobi and attorney Paul Drayna are all clearly lying when they promise high ethical standards and uncompromising honesty to the public and consumers of real estate services.
Protect your life, home, family and future by cancelling or not renewing your Windermere listing. Don't risk doing business with Windermere Real Estate, the brand built on lies, fraud and ruined lives. Refuse to fund public predator Windermere Real Estate with commission from the sale of your home.