Thursday, May 24, 2012

Mom's Lawsuit

No articles today. Just a lesson to teach everyone to go through escrow whenever a piece of property they own changes hand. If not you can get yourself and your family involved in a confusing scenerio.

Tomorrow I meet with my friend Ted about Mom's lawsuit. Here is the lawsuit and what happened a long the way.

Mom, Dad, and their friends Dick & Bernice bought an apartment complex in 1986 (Dad and Dick have since died) that is in the not so good part of town. Most of the tenants were elderly and living on tight budgets so tight at times they would go without eating. Mom and Dad got all of the tenants on HUD so that their rents would be paid for them and then they would have money for the necessities of life. The tenants loved Mom, Dad, Dick, & Bernice. They bought the property from the L Trust. After four or five years it became to much work to keep up and it was sold to buyer A on a contract, Three months later buyer A gave the property back to Mom, Dad, Dick, and Bernice. They came to my parents house and dumped all the papers on their kitchen table. Our group kept the property three months and sold it to George C. on contract After a couple of years George C gave the property back to our group. It was then sold again to a buyer no longer in the picture due to death and no remaining heirs. Once that group died the property sat vacant and the property taxes weren't paid for several years.

Our groups' mistake was not recording the deeds properly every time the property was given back to us and then sold later. They didn't go through escrow. Because of that failing everyone remained on the title.

In May of 2011 we got a letter from the county, as did everyone else still on the title, that we could have the property if we paid the fifteen grand in back property taxes. We went to look at the property and it was awful. It would have required a tremendous amount of work and expense to make it livable. We didn't want to do the work or pay the money so we just moved on.

In August Lou, a representative of the original trust that our group bought the property from, came to Mom's and stated that the trust wants to buy the property but wants clear title. For use to give them a deed in lieu of foreclosure they would give us twenty-five hundred bucks. We didn't want the property and it kind of sounded like found money. As part of us signing the dead we and Bernice obtained a hold harmless agreement. That basically means we can't lose any money ever on the property. We may have to sue someone to force them to reimburse us for attorney fees, for example.

All people on the deed except George C took the money and ran. George C ignored all correspondence and all filings. So the trust sued to obtain clear title by default. The default title was granted. George C then all of sudden started paying attention (this is after the trust had performed several repairs on the property thinking they had clear title) and sued the trust, Bernice, Mom and anyone on the deed for fraudulently kicking him off of the title. As part of that lawsuit George C asked for and got an overturn of his default.

R.P. is Lou and the trust's attorney. Because of the hold harmless agreement she accepted a tender of defense and agreed to be our attorney. She filed a strong answer to George C's complaint. She asserted the following six affirmative defenses: Laches (which basically means that a George C waited so long to sue that it puts Mom and Bernice at a disadvantage so great that they can't effectively answer the complaint), Statue of Limitations (that he waited to long to sue), Unclean hands (he is in the shape he is in due to his own doing), Fraud (he lied in his complaint), He didn't state realistic damages in his complaint, and finally the Statue of Estoppels & Waivers (it prevents inconsistent filings and once a claimant files an inconsistent claim he waives some of his rights). She also filed a counterclaim against George C. for not living up the agreement he had with Mom and Bernice for an amount not to exceed $134K.

During this saga Lou the man that knows all the history of the property became ill and it was determined he had two active cancers. Right now he is so ill that he can't talk or write. Because of his illness the court put the trial on abatement until July 12. The only action that can take place between now and then is discovery. For R.P. to continue to be our attorney Lou has to give his permission for R.P. to represent us. He can't do that. What that does is create a conflict of interest for R.P. because we may have a claim against Lou for attorney fees and other expenses. She did what a good attorney would do, advise us to get an attorney until Lou is able to confirm her tender of defense of us.

Ted is a high profile attorney. If I named some of his clients everyone in Oregon would know who they were. It is interesting how an inconsguential act can cement a friendship. A group of us meet every Sunday during football season for breakfast. At first everyone would just assume he would pay because he was wealthy. About the third week in I kind of thought this was unfair. I went to over the waitress without him knowing it and gave her my credit card. Told her to refuse his money at all costs, that day it was on me. He later told me "Nobody has ever done that for me." Talk about a small act putting a powerful man on your side, here is our conversation yesterday:

Hi, Ted this is Bill Dahn.

Long time no hear from.

I'm like one of those children that only calls when he wants something.

Name it. Anything you want.

Mom might need an attorney.

Can you be here today?

How about Friday?

See you then.

So that is Mom's lawsuit. Nothing is going to happen for a while. We have a strong friend on our side. And pray or send good vibes for Lou.

Comment Away.


Pat said...

Lots of good vibes coming for Lou to recover. I have to admit that even with this apparently complete explanation, this situation still baffles me. I sort of get the bare bones of it, but I'm really glad I don't have to deal with it myself, and I'm sorry for you and your mom that you do have to.

It's so interesting, though, that such a simple gesture should resonate that much with Ted. Just goes to show how fairness pays off sometimes, doesn't it?

William J. said...

Hi Pat

I am sure Lou appreciates the good vibes. The lawsuit kind of baffles us to. I am surprised that George C could get an attorney to take his case. I think it is an attorney that just wants money.

Although the chances are slim that Mom will get a time if by the one in million chance that she gets the 134K I will be happy to be baffled.

Fairness pays off more often than we think. I've always wanted to pay my way even if I was having lunch with Bill Gates I'd want to pay my share.