 This is an excerpt from "Buyer Beware," an article by Jennifer
Vogel which originally appeared in the DEC/JAN 1998-1999 issue of Washington Law &
Politics. It is published here with permissionA Trio of Lawsuits Tingvall's doggedness often pays off. He says that only between four and six consumer disputes go to court every year and he wins A fair number of the ones that do-though he sometimes has to appeal all the way to the Supreme Court to find success. Lately, however, his luck hasn't been so good. Three. cases have come up in recent years that John L. Scott has lost, at least so far (one is still on appeal). The details have drawn a lot of attention because it appears that in each instance Tingvall has taken an arch position over a fairly small amount of money. Tingvall defends his actions, saying the cases are about more than money-they're about principle, about being in the right. One case involved Cora E. Edmonds, a first-time home buyer who was looking -for a home with a dry basement for an office. She was in the process of purchasing a home with a known water leakage problem through John L. Scott, but wanted the leak fixed before closing. She made the sale contingent on the sellers hiring a contractor to fix, the basement and giving her a warranty, which they did. The contractor was unsuccessful in fixing the leak, however, so Edmonds pulled out of the sale at the last minute. Tingvall determined that Edmonds had signed a contract that guaranteed her not a dry basement but a warranty from a contractor. Relying on this legal fine point, he declared her in default and divided her $5,001 earnest money deposit between the sellers and the John L. Scott agents involved. Edmonds sued to get her money back. The courts sided with Edmonds, ruling that John L. Scott breached its fiduciary duty when it dispersed the earnest money, that its agent hadn't adequately protected Edmonds' interests, and that the company committed two violations of the Consumer Protection Act. Tingvall, who unsuccessfully appealed the case to the Supreme Court, complains that "The court is not supposed to rewrite the contract for the parties and put them in a better position than what they bargained for." He says the case set a negative precedent that will send more earnest money disputes to court. Others say there was no such principle at stake and that the case is an example of John L. Scott's overzealousness-the case involved a mere $5,001 but racked up around $100,000 worth of attorney's fees for Edmonds alone, fees that John L. Scott will now have to pay. When asked whether Windermere Real Estate would have handled the case the same way, Windermere attorney Demco said, "When you look at the result, we would have probably handled it differently. We would not have fought over $5,000 in earnest money. It's probably not the best business decision." |
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