Ummel VS ReMax
Back track mentally to 2004 and the market boom.
Meet Vernon and Mary Ummel (ages 71 and 60, respectively), San Francisco area residents.
Enter Mike Little, agent with ReMax Associates in Carlsbad, California, the destination market for the Ummels and their relocation plans. Toss in Geoff Mountain, a co-owner and Broker of the firm.
Fast forward to purchase contract executed by the Ummels in the amount of: $1.2 million.
Add a twist…Mr. Little also managed the mortgage piece for the Ummels.
Factor this…the seller was a real estate agent.
Throw this into the soup: The Ummels claim no comparables were shown to them prior to contract and that better values were available at the time they purchased and the appraisal amount was not disclosed in writing prior to close.
There’s more. The Ummels have already settled part of their suit with the mortgage company and the appraiser. Translation: Errors and Omissions insurance paid off the Ummels..
The claim by the Ummels is that they were duped, so to speak, into buying a home that was not the best bargain in the neighborhood, since others, they claim, were being sold for close to $175k less. The agent didn’t exercise fiduciary, so they claim.
On Monday, the lawsuit lands in Superior Court.
Imagine a jury of peers judging this one…most of whom will own properties in California that are probably not worth what they once were. Ouch!
All the earmarks are here. Agency, disclosure, price opinions, ABAs, RESPA and more.
Is the class action blame-game lawsuit trend about to evolve, complete with vulnerable adult statutes in play and treble damages? Lawyers are no doubt salivating and Errors and Omissions companies shaking in their boots.
According to other news outlets, Mike Little calls Ms. Ummel a “nut job.” Hmmm…not nice. Mike, here’s some advice from REALonomics; if you did say that, shut up.
This puppy could go either way, not because of the validity of the suit but because the consumer (remember them?) (a) loathes the industry; (b) wants to blame the industry for the decline in values; and (c) jurors may be sympathetic for self-serving reasons (their own property values).
Our opinion: The suit, if properly contested with adequate counsel, will fail and we hope the brokerage firm does not settle, which could open a pandora’s box to E&O claims.
Keep an eye on this.
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I request permission to re-print this article for use in legal training for the NRT Pittsburgh and Harrisburg Metros.
Terrence D. Wright, Esq.
NRT LLC
9600 Perry Highway, Suite 200
Pittsburgh, Pennsylvania 15237
412.512.4454
terrence.wright@pittsburghmoves.com
Yes, of course you may reprint the REALonomics post with source credit, please. -REALonomics
What was that noise? Did I just hear the premium on my E&O policy double???
Cha…Ching! Cha…Ching! Cha…Ching! Yes, more costs added to the already heavy burden being carried by owners. -REALonomics
LAWSUITS LIKE THIS CAN TURN INTO A NIGHTMARE FOR A REAL ESTATE AGENT AND A BROKER. IT’S NOT ABOUT WHO IS RIGHT IT’S ALL ABOUT THE JURY AND WHAT THEY BELIEVE. HOPE THIS AGENT HAS A GREAT ATTORNEY–HE WILL NEED ONE THIS OUT COME COULD AFFECT ALL OF US IN THE REAL ESTATE INDUSTRY!
See the Ummel’s Today Show interview that just aired today (1/25/2008).
There must be more to the story as Realonomics does not feel this case is valid, and “it can go either way” because of consumerism? However, the article does not read well for the firm and agent. There is no mention of any documentation of Agency Disclosure, Services, Price Opinions or RESPA. A complete file is their only hope.
Ralph - You’re absolutely correct. The idea of complete paper trail with adequate disclosures is vital. REALonomics cannot address whether the documentation is complete and the purpose of our post is to simply flag issues we see that can impact the industry, whether negative or positive. Like you, we hope “a complete file” exists. -REALonomics
Does anytone have an update? What happened at trial?
Steve - We don’t have an update. The case was supposed to go to trial trial in the north county division of San Diego Superior Court on Monday, January 28, 2008. You might be able to Google up some information from the San Deigo newspapers. We will do the same. REALonomics
We hope the Ummel’s win. In January 2006, we moved to Missouri. We were referred to an “excellent” realtor. After spending two days with her(about four hours total) she told us we had to sign a buyer broker agreement. We questioned that….we had never had to sign one of these before….we did not see the need. She told us, “It’s against the law in the state of Missouri to go out with a real estate agent without a buyer broker agreement. I have been taking you around illegally for the past two days as a favor to you and as a favor to your friends who are my friends.” We didn’t know the laws in the state of MO. We trusted her because she was the “professional.” We didn’t want to break Missouri laws…..that was her first big lie. The contract said she would look out for our best interest with full fidelity and integrity. When we found out she was not showing us true comps for neighborhoods, we called her on it. We asked that she release us from this agreement because she was not telling us the truth. It was a two year nightmare. We heartily agree with the NY Times bestseller “Freakonomics” which compares real estate agents to the Klu Klux Klan. So true. We hope in this economic downturn you all are starving to death. Real estate agents like Mike Ummel of ReMax and Brenda J. Shores of Realty Executives don’t seem to know the meaning of honesty, fidelity and integrity. Maybe some day you will learn. “What goes around, comes around.” You will all get your just due.
J. Smith - There is a lot of emotion, anger and bitterness in your comments. Like all industries, the real estate industry has varying degrees of expertise when it comes to brokers/agents. Although we are not familiar with Missouri requirements with respect to agency related disclosure and buyer-broker agreements, it’s important to stress that your comment “we trusted her because she was the ‘professional’,” is telling. The public must have trust in real estate professionals and real estate professionals must prove worthy of trust. REALonomics, this blog, advocates more transparency and more consumer partnership in the real estate transaction. What might your experience been if the Broker had a list of his/her agents, showing their experience levels with sellers and buyers, number of complaints, professional designations and total satisfactory transactions completed in the past 24 months? These are the types of things REALonomics advocates. We wish you well in the future and hope you are able to sort out the negative repercussions of your experience. -REALonomics.
Yes, you are right. There are all levels of ability. But when we complained to Brenda J. Shores broker at Realty Executives in Gladstone, MO, Mr. Larry Leonti, and asked him to release us from this contract because of Ms. Shores dishonesty, his comment was, “Why Brenda Shores is one of our finest real estate agents. I will never release you.” If Ms. Shores was one of their finest, then what is their worst real estate agent like? Brenda Shores was the finest at being a smooth dishonest scoundrel in a myriad of ways with her clients. And we have a terrific paper trail. It appears the Ummel’s realtor was also considered one of the “finest”….at being an A+ cheat! The Ummel’s trusted him as we were trusting Ms. Shores. If you haven’t read “Freakonomics,” I highly recommend it to all. It describes real estate agents as Klu Klux Klanmen perfectly! Don’t ever sign a buyer broker agreement with any realtor. The only thing the buyer broker agreement does is lock you in to working with a dishonest scoundrel. Then you have no way out. Furthermore, avoid all realtors. The only thing they are looking out for is their own pocketbook and commissions. We applaud the Ummel’s for standing for the right! More people should follow their outstanding example!
REALonomics will have no further comment on this situation. We wish you well, however.
I would love to watch this..but nothing has been “posted”. This is also a good reason to avoid negotiating the sale and negotiating the loan. It’s just not worth the extra money.