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Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Wednesday, January 23, 2008

Allocating Contract Liability after the Bubble Bursts

The New York Times had an article yesterday about a woman who is suing her real estate agent for persuading her and her husband to pay perhaps 10-15% too much for their $1.2 million house in San Diego.  The case is pretty ordinary, which leads one to think there's plenty more where this one came from.  Marty Ummel claims that she and her husband trusted their real estate agent, who assured them that they were getting a good price.  Soon after moving in, the Ummels learned that similar houses in their neighborhood had sold for as much as $175,000 less.

According to the Times, the defendant, Mike Little did not respond to the Ummels' requests to see the appraisal that he ordered.  Mr. Little has expert witnesses who will argue that they were thus harmed, if at all, by their own inadequate due diligence.  The Ummels have already settled for modest amounts with the appraiser and the mortgage broker, but Mr. Little is unrepentant.  "The lady's a nut job.  I didn't do anything wrong," Mr. Little is quoted as saying.  He should expect a call shortly from central casting. 

The Times reports that Ms. Ummel has already spent $75,000 on attorneys fees.  Her own appraiser contends that the property was worth $1,050,000 at the time she purchased it, so it's hard to see how damages could possibly exceed $150,000.  Ms. Ummel denies being obsessive-compulsive, but she did picket Mr. Little's ReMax offices on weekends for a year and describes herself as "114 pounds of absolute perseverance." 

[Jeremy Telman]

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