WINDERMERE-VESTUS FORECLOSURE GROUP CASES:
KING COUNTY SUPERIOR COURT OF WASHINGTON—CASE NO. 12-2-08537-4 SEA
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." DOWNLOAD THE FULL COMPLAINT HERE; JUMP TO THE DEFENDANTS' ANSWER HERE
CASE HISTORY
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.
(Left to right) Chelle Nelson, Managing Broker, Windermere Real Estate East, who says on her Windermere web page "I hope you'll consider me a valuable educator and resource for all your real estate questions and needs." Lew Mason, Branch Manager of Windermere Real Estate East; and Windermere Real Estate East Manager/Broker, Dennus Baum, who states on his Windermere web page "As the Broker/Manager of Bellevue East, I am committed to providing our clients with the highest level of real estate service and expertise. Over my 30 years of experience, in an ever changing real estate market, I can provide a valuable resource for both clients and agents so that you receive the experience you deserve with one of the most important decisions of your life."
DOWNLOAD A PDF COPY OF THE COMPLAINT HERE
READ THE VESTUS/WINDERMERE REAL ESTATE EAST and CHRISTOPHER HALL ANSWER HERE
KING COUNTY SUPERIOR COURT OF WASHINGTON
Hartley McGrath
Plaintiff,
VESTUS LLC; WINDERMERE REAL ESTATE/EAST, INC., and CHRISTOPHER HALL and JANE DOE HALL and the Marital Community of CHRISTOPHER
AND JANE DOE HALL,
Defendants.
NO. 12-2-08537-4 SEA
COMPLAINT
Plaintiff Hartley McGrath, by way of Complaint, alleges
1. Hartley McGrath at all times material is a resident of Seattle, King County, Washington.
2. Defendant Vestus, LLC ("Vestus") is a Washington limited liability corporation doing business in King County Washington. Vestus, LLC is also a trade name for Defendant Windermere Real Estate/East, Inc
3. Defendant Windermere Real Estate/East, Inc. ("Windermere") is a Washington corporation doing business in King County Washington. Vestus LLC is a trade name for Windermere.
4. Christopher Hall ("Hall") and Jane Doe Hall and the marital community of Christopher and Jane Doe Hall are residents of King County Washington. The acts of Christopher Hall concerning the subjects of this Complaint were for the benefit of the marital community.
5. Vestus, Windermere, and Hall (“Defendants") acted in concert and the separate acts of each complained of herein were acts for the benefit of all.
6. The acts of Defendants complained of herein occurred in King County Washington making jurisdiction proper in King County.
7. Defendants provide real estate brokerage services as defined by RCW 18.85.011, by counseling, consulting, and advising buyers and acting for buyers in connection with real estate transactions.
8. Windermere and Hall are real estate licensees as defined by RCW 18.85.011. Vestus holds itself out as a licensee.
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.
11. Vestus promises to make all the information it has compiled available to its Client.
12. Vestus requires persons who utilize Defendants' services to execute a Compensation/Confidentiality Client Agreement ("Client Agreement"). The Client Agreement provides for a payment of a commission to Vestus for its services.
13. Hartley McGrath executed the Client Agreement on March 22, 2011 relying upon Vestus' advertised expertise and diligence, and upon its promise to provide her with accurate and complete information.
14. On the evening of April 7, 2011, Hartley McGrath met with Christopher Hall to discuss properties scheduled for foreclosure auction the next day. Hall provided McGrath information and recommendations on properties. Based upon Hall's recommendations, McGrath selected four properties for bidding.
15. On the morning of April 8, 2011, Hall bid on the properties selected by McGrath. His bid on the Property was the successful bid.
16. McGrath discovered after the purchase that the foundation of the building on the Property was cracked and settling.
17. Evidence of foundation movement was observable from public property outside the Property. A reasonably competent observer driving by the property for Vestus would have seen the settling issues.
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.
20. But for Defendants' failure to disclose settling issues, McGrath would not have purchased the Property.
21. McGrath was compelled to repair the foundation problems at great expense.
22. The actions of Defendants violate the Client Agreement between Vestus and McGrath.
23. The actions of Defendants violate the laws intended to protect parties in real estate transaction, including Chapters 18.85 and 18.86 RCW.
24. The actions of Defendants constitute either negligent or fraudulent misrepresentation.
25. The actions of Defendants violate the Consumer Protection Act, Chapter 19.86 RCW.
Wherefore Hartley McGrath prays for the following relief against Defendants:
1. For an award of all damages caused by Defendants' failures;
2. For her attorneys fees and expenses;
3. For increased damages as provided in RCW 19.86.090; and
4. For such further relief as law and equity warrant.
DATED: March 12, 2012
REAUGH OETTINGER & LUPPERT, P.S.
By: ____________________________
Sylvia Luppert, WSBA 14802
Attorneys for Hartley McGrath
DOWNLOAD A PDF COPY OF THE COMPLAINT HERE
JUMP TO THE ORIGINAL COMPLAINT IN THIS CASE HERE
FROM THE ANSWER AND AFFIRMATIVE ANSWERS OF VESTUS LLC, WINDERMERE REAL ESTATE EAST, INC., and CHRISTOPHER HALL:
"15. Admit that a qualified person associated with Vestus bid on the property on that date and that the bid was successful. As of this writing, IT IS NOT KNOWN WHICH INDIVIDUAL CONDUCTED THE BID." (emphasis added)
"Plaintiffs' claims are barred or diminished by assumption of risk, waiver, estoppel, ACT OF GOD... (emphasis added)
DOWNLOAD A PDF COPY OF THE VESTU/WINDERMERE REAL ESTATE EAST and CHRISTOPHER HALL ANSWER HERE
IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR THE COUNTY OF KIN
HARTLEY McGRATH
Plaintiff
v
VESTUS LLC; WINDERMERE REAL ESTATE/EAST, INC., and CHRISTOPHER
HALL and JANE DOE HALL and the Marital Community of CHRISTOPHER AND JANE DOE HALL,
Defendants.
NO. 12-2-08537-4 SEA
ANSWER AND AFFIRMATIVE DEFENSES
Defendants, through their counsel of record, answer the Complaint as follows. Paragraph numbers correspond to those of the Complaint. "Insufficient knowledge" is an abbreviation for "responding defendants have insufficient knowledge and information upon which to form an answer and therefore deny."
1. Insufficient knowledge.
2. Admit.
3. Admit.
4. Admit Christopher Hall, a single man, is a resident of King County, Washington. Otherwise, deny.
5. Admit that Christopher Hall's activities as a real estate licensee have been for the benefit of Vestus and Windermere and that there is cooperation among the three, but otherwise deny.
6. Admit King County jurisdiction and venue, without admitting the acts complained of.
7. Admit.
8. Admit.
9. As to the first sentence, admit that defendants hold themselves out as having the expertise of real estate brokers with respect to the purchase of foreclosure property, but otherwise deny. As to the second sentence, admit defendants conduct such activities, but only with respect to matters within their expertise as real estate brokers, and otherwise deny.
10. Admit that some of the phrases quoted appear in Vestus's advertising but deny inasmuch as all of Vestus's materials, statements, and documents must be considered as a whole in order to properly consider them.
11. Deny.
12. Admit.
13. Admit Hartley McGrath executed the Client Agreement on March 22, 2011. Otherwise, insufficient knowledge.
14. Admit.
15. Admit that a qualified person associated with Vestus bid on the property on that date and that the bid was successful. As of this writing, it is not known which individual conducted the bid.
16. Insufficient knowledge.
17. Deny that evidence of foundation movement was "observable" by defendants from where they made their observations, and deny that any observer without special training in structures or soils "would have seen the settling issues". Whether there was some "public property" vantage point from which someone could have seen evidence of settling, or whether someone with expertise in structures or soils or some other discipline might have seen evidence of settling from driving by or by observing "from public property" is not currently known to defendants.
18. Deny as applied to this case since the agent remarks concerning the subject property were readily available to plaintiff.
19. Deny.
20. Deny.
21. Insufficient knowledge.
22. Deny.
23. Deny.
24. Deny.
25. Deny.
BY WAY OF FURTHER ANSWER, INCLUDING AFFIRMATIVE DEFENSES, defendants state as follows:
Plaintiffs' claims are barred or diminished by assumption of risk, waiver, estoppel, Act of God, failure to mitigate alleged damages, contributory negligence and/or comparative fault, and because the risks concerning the quality and condition of the subject property were allocated to plaintiff by contract. Without limiting the foregoing, the factual basis of the foregoing affirmative defenses includes provisions in the contract signed by plaintiff and the availability of pertinent information to plaintiff.
WHEREFORE, defendants ask the court to dismiss plaintiff’s claims with prejudice; to award them costs and attorneys' fees to the extent authorized by pertinent legal authority; and for such other relief as the court may deem just, equitable, or otherwise appropriate.
DATED this l8th day of May, 2012.
DEMCO LAW FIRM, P.S.
By ____________________________________
Lars E. Neste, WSBA#28781
Philip T. Mattern, WSBA #16986
Attorneys for Defendants
_________________________________
SUPERIOR COURT, STATE OF WASHINGTON, COUNTY OF SPOKANE—No. 13200611-6
_________________________________
"...so what if we are off $20,000 sometimes."
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."
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." DOWNLOAD THE COMPLETE CLASS ACTION COMPLAINT HERE; JUMP TO THE VESTUS ANSWER HERE.
CASE UPDATE 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.
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."
DOWNLOAD A COMPLETE COPY OF THE COMPLAINT HERE
SUPERIOR COURT, STATE OF WASHINGTON, COUNTY OF SPOKANE
CARYL HELLER,
Plaintiff,
vs.
VESTUS, LLC, a Washington Limited Liability Company; BRIAN SANDUSKY and JANE DOE SANDUSKY, individually and the marital community comprised thereof; and AARON CUNNINGHAM and JANE DOE CUNNINGHAM, individually and the marital community comprised thereof,
Defendants.
NO. 13200611-6
COMPLAINT FOR VIOLATIONS OF CONSUMER PROTECTION ACT
CLASS ACTION CERTIFICATION PENDING
Plaintiff CARYL HELLER, by and through her attorney of record, Breean Beggs of Paukert & Troppman PLLC, make the following claims for relief:
I. INTRODUCTION
Plaintiff, Caryl Heller, brings this lawsuit on behalf of herself, individually, for the Defendants individual and collective violations of her rights under Washington's Consumer Protection Act. In addition, Plaintiff brings this lawsuit on behalf of herself and others similarly situated, seeking rescission and monetary damages against only the Defendant VESTUS, LLC for violations of Plaintiff s, and other similarly situated individuals, rights under Washington's Consumer Protection Act for implementing and collecting upon a fee/compensation structure that is unfair and/or deceptive.
II. PARTIES
1.1 At all relevant times, Plaintiff Caryl Heller was and remains a resident of the County of Spokane, State of Washington.
1.2 At all relevant times, Defendant Vestus, LLC is a Washington Limited Liability Corporation operating in the County of Spokane, State of Washington. Vestus, LLC employs or controls as agents the co-defendants Brian Sandusky and Aaron Cunningham. All acts complained of herein occurred within Spokane County, Washington.
1.3 Upon belief, Defendant Brian Sandusky was and is a resident of Spokane County, Washington, at all relevant times and if married, he and Jane Doe Sandusky constitute a marital community residing in Spokane County. All acts hereinafter alleged of Defendant Brian Sandusky were done on his own behalf and on behalf of his marital community.
1.4 Upon belief, Defendant Aaron Cunningham was and is a resident of Spokane County, Washington, at all relevant times and if married, he and Jane Doe Cunningham constitute a marital community residing in Spokane County. All acts hereinafter alleged of Defendant Aaron Cunningham were done on his own behalf and on behalf of his marital community.
II. JURISDICTION AND VENUE
2.1 Plaintiff alleges all matters set forth in paragraphs 1.1 to 1.4 above.
2.2 The plaintiff files this Complaint and institutes these proceedings under the provisions of the Consumer Protection Act, RCW 19.86.
2.3 The Defendants have engaged in the conduct set forth in this Complaint in Spokane County, State of Washington. This Court has subject matter jurisdiction over this matter.
2.4 Venue is proper in Spokane County pursuant to RCW 4.12.020 and RCW 4.12.025.
III. FACTUAL ALLEGATIONS
3.1 Plaintiff alleges all matters set forth in paragraphs 1.1 to 2.4 above.
3.2 Defendants are now, and have at all times relevant to this lawsuit, been engaged in trade or commerce within the meaning of RCW 19.86.020 by directly or indirectly advertising and engaging in real estate services with the general public in the State of Washington.
3.3 On or about November, 2007 plaintiff Caryl Heller (hereinafter "Caryl") met codefendant Aaron Cunningham, who was advertising the services of co-defendant Vestus, LLC, (also known as/formerly known as The Foreclosure Group) which specialized in assisting clients with the purchase of homes in foreclosure. Mr. Cunningham requested that Caryl attend a meeting to inquire about the services available.
3.4 Vestus (also known as, formerly known as, and/or operating under The Foreclosure Group) advertises that they are the largest foreclosure buying service in the Northwest and are considered to be "the experts" in their field. The focus of their business is to provide in-depth training and property tracking and background on all properties (title, liens, postponements, values, opening bids, etc.) scheduled for auction each week in the Pacific Northwest. Vestus advertises that with their assistance, the investor (their client) has all the tools necessary to purchase properties below fair market value with confidence. In addition, Vestus advertises state of the art technology that provides the investor (their client) with real time data and updates on each property, as well as a very detailed value of each property (CMA) complete with charts, graphs, and statistics that will give the client accurate figures.
3.5 To benefit from the information and expertise advertised and offered by the Defendants, an investor has the opportunity to attend a Thursday night "workshop and strategy meeting." Every Thursday evening at 5:30 p.m., investors arrive at the Spokane Vestus office, where they are presented with Vestus' "top picks" of the week. The representatives of Vestus purport to present all of the relative information to the investors, including the "Comparative Market Analysis" ("CMA") for each property that is scheduled for auction the next morning. A Vestus representative classifies each property as "fair," "good," or "excellent" investment based on their evaluation of the property. The representatives indicate that they are providing investors with their "expertise" when evaluating each property.
3.6 Co-defendants Brian Sandusky and Aaron Cunningham, at all times relevant hereto, held themselves out as representatives and/or principles of Vestus for Spokane County and each of them participated in the meetings attended by Plaintiff through some means. Each of the individual co-defendants is believed to be a licensed broker and/or real estate agent. However, at all times relevant hereto, Vestus was not a licensed real estate brokerage firm.
3.7 On or about December 6, 2007, Caryl attended a new investor meeting for Vestus at Windermere North, in Spokane, Washington. At that meeting, Caryl signed an agreement with Vestus (also known as/formerly known as The Foreclosure Group). Caryl attended a Vestus investor meeting on or about January 16, 2008. At that meeting, she was required to sign a second agreement with Vestus and so she could continue to utilize the services for which they advertised. Caryl was required to sign a third agreement with Vestus sometime in May 2008. Plaintiff requested a copy of the executed agreement but Defendants refused to provide her with a copy.
3.8 The "Compensation/Confidentiality Client Agreement" in effect at all times relevant hereto provided that as a fee for services rendered, Caryl was to pay Vestus and/or the codefendants as brokers 3% of her purchase price or of the most recent assessed value, whichever is higher, of any home purchased by Caryl within six (6) months after receipt of information from Vestus. The minimum commission due on any single property was $3,000.
3.9 In 2008, Caryl bought and sold one home utilizing the information received from Vestus. Caryl was not a seasoned home purchaser and she was pleased with the information she received. She thanked the brokers for their assistance and paid Vestus and the co-defendants the required commissions.
3.10 On or about February 12, 2009, Caryl attended the 5:30 p.m. Vestus investor meeting, where co-defendant Sandusky discussed a number of homes to be sold the next morning at the foreclosure auction. Mr. Sandusky classified each home into a "fair," "good," or "excellent" category in terms of the homes [sic] return on investment. Each home presented was evaluated by presenting the fair market value, or "Comparative Market Analysis," produced by Vestus and its representatives, with the anticipated opening bid and estimated fix-up/repair costs. Aaron Cunningham was also at the meeting.
3.11 At the meeting, co-defendant Brian Sandusky presented 23905 E. First Ave., Liberty Lake, Washington (hereinafter "Liberty Lake property") as a top pick of the week, giving it an "excellent" rating. Caryl was told by co-defendant Sandusky that the fair market value (or CMA value) for the property, which was obtained through software owned by Spokane Relators [sic] Association and is only available to members of the MLS, was $300,000, and that this was the figure to rely upon when deciding whether she could earn a profit purchasing that home. Caryl was told by Vestus representatives that their information supported a value of $300,000 for the Liberty Lake property. Caryl was enticed into bidding on the property based on the high fair market value/comparative market analysis. The opening bid on the property was $192,000.
3.12 Co-defendant Sandusky presented Caryl with a form, which had Vestus listed at the top, with details about the Liberty Lake property. The form included a photo of the property, the property address, and a Vestus identification number. Also included on the form was a box titled "title details," which stated that the minimum opening bid was $192,000 (however, this was handwritten in) and that the fair market value ("FMV") of the property was $300,000.
3.13 Caryl attended the trustee sale the next morning at 10 am at the Spokane County Courthouse. One other Vestus client was also prepared to bid on the Liberty Lake property. However, co-defendant Cunningham told Caryl that he requested the other bidder to refrain from his bidding as a "favor" to Caryl.
3.14 Based on the information presented at the Vestus investor meeting, Caryl bid on and acquired the Liberty Lake property for $192,001. She then proceeded to pay the Defendants $6,945.00 in commissions, which is 3% of the last assessed value on the home which was $231,500.
3.15 Only after purchasing the Liberty Lake property did Caryl realize that the fair market value of the property was substantially less than $300,000 as indicated by the Defendants. Caryl was significantly misled by Vestus and its representatives.
3.16 The CMA value presented to Caryl on February 12, 2009 was patently misleading. The CMA showed four houses as representative of the $300,000 fair market value presented by Vestus for the Liberty Lake property. However, two of the homes listed were not actual sales, but rather were listings, so they did not support a comparable value. The remaining two homes were sales, however one sale was approximately seven months prior to Vestus' valuation while the other was approximately four months prior and they were both significantly larger in size.
3.17 The CMA report also failed to include three closings that occurred within 2-3 months of Caryl's purchase of the Liberty Lake property.
3.18 Caryl contacted the Defendants, specifically Aaron Cunningham, to tell him that Vestus overvalued the Liberty Lake property. Caryl sought financial assistance from Vestus to assist in her loss based on their over-valuation. Defendant Cunningham's response was "so what if we are $20,000 off sometimes." Defendant Cunningham told Caryl that the Defendant's did not have any duty to act in Caryl's best interests because there is no agency relationship between the parties. After this conversation, Caryl was cut off from access to Vestus' website. When Caryl asked why she was cut off from the website, defendant Cunningham responded that "we don't' [sic] want you questioning all our values."
3.19 Caryl reasonably relied upon the information presented by Vestus and its representatives. Had the Defendant's presented accurate information at the meeting, Caryl would have seen that the property was worth substantially less than $300,000. Caryl would never had purchased the Liberty Lake property but for the Defendant's unsupported representations/information.
3.20 Caryl also discovered that the appraisal report on the Liberty Lake property which was provided by Defendant's was done by co-defendant Sandusky who was unsupervised and was licensed less than two years, both of which appear to be violations of Washington law.
3.21 Based on the Defendant's business model, Caryl had no opportunity to research the property on her own. The investor meetings take place at 5:30 p.m. on a Thursday and usually run 2-3 hours long. The foreclosure sales are conducted at 10 a.m. the next morning. In addition, only Vestus representatives, licensed realtors, and members of the MLS have access to the MLS service, which the Defendant's [sic] used to generate the comparable sales reports. Caryl justifiably relied on the Defendant's representations that they were the "experts" in this field and that they supply the best, most accurate and up-to-date information on the properties up for sale.
3.22 After spending approximately one year remodeling, upgrading, and marketing the Liberty Lake property, Caryl was finally able to sell the home for $267,000 on February 1, 2010. As part of the sale, Caryl agreed to provide the sellers with approximately $7,000 as closing costs, making the effective sales price $260,000 or less. In order to sell the price even at this substantial discount from her expectations, Caryl was required to spend several thousand dollars in improvements. After the cost of labor and materials for the improvements as well as the carrying costs, Caryl lost a significant amount of money in an amount to be proven at trial on her purchase of the Liberty Lake property based on the representations made by Vestus.
3.23 Caryl relied upon the advertising and representations made by Vestus and its representatives when she purchased the Liberty Lake property. Caryl's reliance on these representations caused her to lose a significant amount of money in an amount to be proven at trial because said representations were based on false and misleading information.
IV. CLASS ACTION ALLEGATIONS
4.1 Ms. Heller brings this action on behalf of herself, and all others similarly situated, pursuant to WA CR 23(a) and WA CR 23(b)(2)(3). The Plaintiff provisionally proposes the following class definition:
Individuals who paid commissions to Vestus, LLC ("Vestus"), predecessor or successor entities of Vestus, and/or agents or principals of Vestus between February 12, 2009 and the date this matter is fully resolved, where the commission was based on a written agreement with one or more provisions that violated the Washington Consumer Protection Act as unfair and/or deceptive.
4.2 This is an appropriate class action because the proposed class is so numerous that joinder of all members is impracticable.
4.3 There are questions of law and fact common to the class, including whether Defendant's fee/compensation structure was unfair and/or deceptive in violation of Washington's Consumer Protection Act.
4.4 Questions of law or fact common to class members predominate over any questions affecting only individual members, and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.
4.5 The claims of the Plaintiff are typical of the claims of the class.
4.6 The named Plaintiff will fairly and adequately protect the interests of the class.
4.7 The Plaintiff has available competent counsel with experience in Consumer Protection Act claims who are willing and able to protect the interests of the class.
4.8 The Defendants have acted or refused to act on grounds generally applicable to the class, thereby making declaratory relief, injunctive relief and an award of monetary damages appropriate, with respect to the class as a whole.
V. CAUSE OF ACTION - CONSUMER PROTECTION ACT
5.1 Plaintiff alleges all matters set forth in paragraphs 1.1 to 4.8 above.
5.2 The actions of the Defendants, as set forth in this Complaint, were conducted in a commercial setting for the general public. These actions constitute clearly established violation of the Consumer Protection Act for consumers to be free from unfair methods of competition and unfair or deceptive acts or practices. The Defendants, both individually and collectively, made false and misleading representations to Plaintiff, upon which she relied. The Defendant's official policy of advertising themselves as "the expert" in their field, but then disclaiming a duty of care as well as all of the information they provide to consumers, violates Plaintiffs rights under the Consumer Protection Act.
5.3 Additional unfair and/or deceptive acts or practices committed by the Defendant's include, but are not limited to, the following:
(a) Defendant Vestus, LLC was not a licensed real estate firm at all times relevant hereto;
(b) Defendant Vestus, LLC advertised itself as a real estate licensee, when in fact they were not licensed as advertised;
(c) The Defendant's property appraisal reports were conducted by an individual who was unsupervised and licensed less than two years; and,
(d) Defendants charged an unreasonable fee for foreclosure buying services, while afterwards maintaining that customers should not rely on the information provided as those services.
The above acts had, and continue to have, the capacity to deceive a substantial portion of the purchasing public.
5.4 The Defendant's [sic] deceived Caryl, and other members of the Vestus investor group, by presenting unfounded and inaccurate market values of homes up for foreclosure, including but not limited to the Liberty Lake property. The Defendant's acts and practices induced the Plaintiff into purchasing a home, from which she suffered significant damage. The Defendant's method of advertising and presenting material to its investors had, and continues to have, the capacity to deceive a substantial portion of the public. The Defendant's acts and practices have the potential for repetition if they are not stopped.
5.5 The actions of the Defendants set forth in this Complaint, both collectively and individually, proximately caused Plaintiff to incur significant damages, in an amount to be proven at trial.
5.6 Further, Vestus charges a significant fee for a service and/or information which is misleading and unreliable. In addition Vestus charges a significant fee for a service and/or information and at the same time contracts that they owe their clients no duty of care. The compensation structure implemented by Vestus, LLC is unfair and/or deceptive in violation of Washington's Consumer Protection Act. Victims of these acts are therefore entitled to rescission and refunds of fees paid.
V1. DAMAGES
6.1 Vestus, LLC's unfair and/or deceptive practices in violation of Washington's Consumer Protection Act proximately caused Plaintiff, and other similarly situated class members, damages in amounts to be proven at trial. Said damages are for commissions paid to Vestus, LLC based on a written agreement with one or more provisions that violated the Washington Consumer Protection Act and other economic damages.
V11. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray for judgment and relief against the Defendants as follows:
I . That the Court adjudge and decree that the Defendants have engaged in illegal conduct complained of herein;
2. That the Court adjudge and decree that the conduct complained of constitutes unfair or deceptive acts and practices and an unfair method of competition and is unlawful in violation of the Consumer Protection Act, RCW 19.86;
3. That Defendants be held liable to Plaintiff for all damages suffered by Plaintiff in amounts to be proven at the time of trial;
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.
7. That Defendants be liable for increased damages pursuant to RCW 19.86.090;
8. For costs, disbursements and attorney's fees incurred herein as permitted by RCW 19.86.090 and other applicable law;
9. For such other and further relief as the court deems just and equitable.
DATED this 11th day of February, 2013.
PAUKERT & TROPPMAN, PLLC
____________________________________
BREEAN BEGGS, WSBA #20795
____________________________________
ANDREA L. ASAN, WSBA #35395
Attorneys for Plaintiff
THE ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANT VESTUS
DOWNLOAD A PDF COPY OF THE ANSWER HERE
FILED
MAY 06 2013
THOMAS R. FALLQUIST
SPOKANE COUNTY CLERK
Judge Linda G. Tompkins
IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON
IN AND FOR THE COUNTY OF SPOKANE
CARYYL HELLER,
Plaintiff
v.
VESTUS, LLC, a Washington Limited Liability Company; BRIAN SANDUSKY and JANE DOE SANDUSKY, individually and the marital community comprised thereof; and AARON CUNNINGHAM and JANE DOE CUNNINGHAM, individually and the marital community comprised thereof,
Defendants
NO. 13-2-00611-6
ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANT VESTUS, LLC
Defendant Vestus, LLC (hereinafter "Vestus"), through counsel, answers the plaintiff's Complaint as follows. Paragraph numbers of the Answer correspond to those of the Complaint. "Insufficient knowledge" is an abbreviation for "defendant Vestus has insufficient knowledge and information upon which to form an answer and therefore denies."
1.1 Insufficient knowledge.
1.2 Admit first sentence. As to second sentence, admit defendants Brian Sandusky and Aaron Cunningham are agents of Vestus. As to third sentence, Vestus does not admit to all acts alleged by plaintiff but does admit that the circumstances and events the subject of this lawsuit are such that Spokane County venue is appropriate.
1.3 Insufficient knowledge inasmuch as the allegation pertains to matters within the personal knowledge of defendant Brian Sandusky, who is represented by another attorney.
1.4 Insufficient knowledge inasmuch as the allegation pertains to matters within the personal knowledge of defendant Aaron Cunningham, who is represented by another attorney.
2.1 The foregoing is realleged.
2.2 No response necessary,
2.3 - 2.4 Without admitting the conduct alleged, defendant Vestus stipulates to the jurisdiction and venue of this court.
3.1 The foregoing is realleged.
3.2 Admit that Vestus is and has been engaged in "trade or commerce" as popularly understood and as defined by dictionaries, and has advertised and made its real estate services available to the general public of the State of Washington. Vestus does not admit to the legal conclusion alleged in this paragraph of the Complaint but defers to applicable Washington State law.
3.3 Admit that Aaron Cunningham was associated with Vestus at the time; that Vestus has been known as The Foreclosure Group; and that Vestus, LLC assists customers with the purchase of homes in foreclosure. Otherwise, insufficient knowledge inasmuch as the other allegations pertain to matters within the personal knowledge of Aaron Cunningham, who is represented by separate counsel.
3.4 Vestus's advertising says what it says, and admit and deny this paragraph accordingly.
3.5 Admit first sentence. As to the second sentence, admit that this is the general practice on most, but not all, Thursday evenings. Deny third sentence. As to the rest of the paragraph, admit that Vestus representatives provide investors with information and advice concerning foreclosure properties based on their knowledge and expertise, but otherwise any characterization of the Thursday evening meetings needs to take into account the totality of what is represented and is dependent on the personal knowledge of defendants Sandusky and Cunningham who are represented by separate counsel; and therefore deny except as specifically admitted in this Answer,
3.6 As to the first two sentences, admit that defendants Brian Sandusky and Aaron Cunningham held themselves out as representatives of Vestus and that they were and are licensed real estate brokers, but otherwise, insufficient knowledge. Deny the third sentence as misleading.
3.7 Insufficient knowledge inasmuch as the allegations pertain to matters within the personal knowledge of plaintiff and defendants Sandusky and Cunningham, who are represented by separate counsel.
3.8 The referenced Agreement states what it states, and admit and deny accordingly.
3.9 Insufficient knowledge.
3.10 - 3.13 Insufficient knowledge inasmuch as the allegations pertain to matters within the personal knowledge of plaintiff and defendants Sandusky and Cunningham, who are represented by separate counsel.
3.14 Admit upon information and belief.
3.15 Deny.
3.16 Deny.
3.17 Insufficient knowledge.
3.18 Insufficient knowledge inasmuch as the allegations pertain to matters within the personal knowledge of plaintiff and defendants Sandusky and Cunningham, who are represented by separate counsel.
3.19 Deny.
3.20 Deny that defendant Sandusky was "unsupervised", and deny Vestus violated any Washington law. Otherwise, insufficient knowledge.
3.21 Deny first sentence. Admit second sentence. As to third sentence, admit most foreclosure sales take place on Friday comings, and many are at 10:00 a.m.; otherwise deny. Admit fourth sentence. Insufficient knowledge as to the fifth sentence.
3.22 Insufficient knowledge as to the first three sentences. Deny the fourth sentence.
3.23 Insufficient knowledge as to the first sentence. Deny the second sentence.
4.1 - 4.8 Admit paragraph 4.7, but otherwise deny.
5.1 The foregoing is realleged.
5.2 As to first sentence, uncertain what is meant by "commercial setting" and therefore deny. Deny the remainder of the paragraph.
5.3 Deny.
5.4 Deny.
5.5 Deny.
5.6 Deny.
6.1 Deny.
Deny that plaintiff is entitled to any of the relief requested from Vestus.
BY WAY OF FURTHER ANSWER, INCLUDING AFFIRMATIVE DEFENSES, defendant Vestus alleges that plaintiff's claims must be dismissed or diminished on the grounds of statute of limitations, laches, waiver, estoppel, assumption of risk, comparative fault and/or contributory negligence, failure to mitigate damages, collateral estoppel, res judicata, and failure to state a claim upon which relief may be granted. Further, defendant Vestus reminds all parties and the court that a defendant does not need to plead as an affirmative defense plaintiff's failure to allege and prove all essential elements of their claims.
WHEREFORE, defendant Vestus seeks the following relief.
1. Dismissal with prejudice of all claims against Vestus.
2. Costs, disbursements, and reasonable attorney's fees as may be found applicable pursuant to contract and/or RCW 4.84.185, 4.84.330, other statutes, court rules, case authority and/or equity; and
3. Such other relief as the court may deem just, equitable, or otherwise appropriate.
DATED this 2nd day of May, 2013
DEMCO LAW FIRM, P.S.
By____________________________
Lars E. Neste, WSBA #28781
Phillip T. Mattern, WSBA #16986
Attorneys for Defendant Vestus, LLC