"We are committed to: The highest ethical standards. Uncompromising honesty and integrity." —The Windermere Mission Statement "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." —Windermere CEO Geoff Wood's Public Affirmation
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"DUAL AGENCY IS PERILOUS..." SAYS COURT.
"...we remand for trial the Lunsfords' claim that Windermere failed to disclose a material fact." ....
... "And Windermere did not advise the Lunsfords that it would present the Thomas offer...
... Given this dispute over a material issue, summary judgment for either party on the breach of Windermere's common law disclosure duty is inappropriate. ...
... nominal damage award to the Lunsfords for Windermere's breach of fiduciary duty..."
DOWNLOAD A PDF COPY OF LUNSFORD V FRALEY HERE
______________________________
Lunsford v. Fraley
No. 37303-0-I
Washington Court of Appeals
April 4, 1997
D. S. LUNSFORD AND LINDA LUNSFORD, HUSBAND AND WIFE, APPELLANTS,
v.
HARRY FRALEY AND THERESA FRALEY, HUSBAND AND WIFE, AND THE MARITAL COMMUNITY COMPOSED THEREOF, AND;
JOHN DOE THOMAS AND JANE DOE THOMAS HUSBAND AND WIFE; WINDERMERE REAL ESTATE/EAST, INC., A WASHINGTON CORPORATION; AND KATH HAWKES AND JOHN DOE HAWKES, HUSBAND AND WIFE; AND DON RILEY AND JANE DOE RILEY, HUSBAND AND WIFE;
AND SUSAN JONES AND JOHN DOE JONES, HUSBAND AND WIFE; AND AUDREY LILY AND JOHN DOE LILY, HUSBAND AND WIFE, DON DEASY AND JANE DOE DEASY, HUSBAND AND WIFE, RESPONDENTS.
HARRY FRALEY AND TERESA FRALEY, HUSBAND AND WIFE, AND THE MARITAL COMMUNITY COMPOSED THEREOF, THIRD-PARTY APPELLANTS, V. BETTY CHANDLER AND ROBERT L. CHANDLER, HUSBAND AND WIFE, AND THEIR MARITAL COMMUNITY; THIRD-PARTY RESPONDENTS.
[6] Appeal from Superior Court of King County. Docket No: 93-2-06026-2. Date filed: 08/18/95.
[7] For Appellants: Stephen T. Araki, 500 108th Avenue NE # 900, Bellevue, WA 98004-5500.
[8] For Defendants: John W. Demco, John Demco P.s., 5224 Wilson Ave. S., Seattle, WA 98118. John C. O'Rourke, P.o. Box 98741, Des Moines, WA 98198. Richard D. Bozarth, Attorney At Law, 1124 S 274th Pl, Des Moines, WA 98198. Anthony C. Johnson, Johnson & Spurr, 1417 4th Ave Ste 201, Seattle, WA 98101-2219. Emily J. Tsai, PO Box 98741, Des Moines, WA 98198.
[9] For Respondents: John W. Demco, John Demco P.s., 5224 Wilson Ave. S., Seattle, WA 98118.
[10] Authored by Walter E. Webster. Concurring: Ann L. Ellington, Mary K. Becker.
[12] WEBSTER, J. -- This breach of fiduciary duty action concerns an agent's common law duty to disclose a material fact in a residential real estate transaction. Here, the Lunsfords were trying to buy the Fraleys' home. Windermere Real Estate Company represented both, and the three of them signed a dual agency addendum. During the negotiations an agent learned from the Fraleys that a third party would make an offer on the house. The parties dispute whether the agent told the Lunsfords. After the Fraleys accepted the other offer, the Lunsfords sued Windermere, alleging that it should have disclosed the other offer. Because a reasonable jury could find that the Lunsfords might have changed their bargaining position had they known of the new offer, it could be a material fact that Windermere should have disclosed. Further, nothing in the dual agency addendum excused Windermere from disclosing information about another offer that it learned about from the Fraleys. Hence, the trial court erred in granting summary judgment to Windermere, and we reverse.
[13] FACTS
[14] Theresa and Harry Fraley wanted to sell their home, so they listed it with Juliet Tuck, a Windermere real estate licensee. Tuck worked in Windermere's Bellevue West office. D. S. and Linda Lunsford wanted to buy a house, and Betty Chandler, a real estate licensee associated with Windermere Real Estate/East, Inc. represented them.
[15] When the Lunsfords decided to make an offer for the Fraley's home, Windermere gave each of them a Consensual Dual Agency Addendum. Under that addendum, the Fraleys and Lunsfords recognized that Chandler and Tuck were "Consensual Dual Agents" who would represent both parties. Still, the addendum limited the disclosure of confidential information by Windermere to one or the other:
[16] Except for known material defects or other specific disclosures required by law, Seller and Buyer agree that the salesperson shall not be liable to either party for refusing or failing to disclose confidential or privileged information without permission which in the sole discretion of the salesperson could harm one party's bargaining position including, but not limited, to financing information, motivation, price, terms, negotiating strategies or other private matters. The Fraleys and the Lunsfords consented to the addendum, and waived "any claims they may have arising from this [dual agency] relationship."
[17] Although the parties subsequently agreed on price, they had difficulty resolving issues arising from the Fraleys' earlier remodeling that was done without permits. The parties made written counteroffers, but never signed an identical purchase and sale agreement. During this process, the Lunsfords understood that Windermere would show the house to potential buyers.
[18] While the Fraleys and Lunsfords negotiated, Kath Hawkes, another Windermere real estate licensee, showed the property to the Thomases. The Fraleys told Chandler that they expected to receive a higher offer from another buyer. Chandler alleges that she told the Lunsfords about the Thomas offer, but the Lunsfords deny it. Nevertheless, the Lunsfords believed that they had a binding agreement with the Fraleys. The Thomases offered to buy the home, and the Windermere agents, in conjunction with a Windermere broker, decided that the Fraleys and the Lunsfords had no binding agreement, and that Hawkes would present the Thomases' offer. And Windermere did not advise the Lunsfords that it would present the Thomas offer. The Fraleys sold to the Thomases.
[19] Although the Lunsfords sued the Fraleys, the Thomases, Windermere, its agents, and its broker, it soon nonsuited the Fraleys and the Thomases, and eventually nonsuited all defendants save Windermere. The Lunsfords and Windermere then participated in a mandatory arbitration. That produced a $200 nominal damage award to the Lunsfords for Windermere's breach of fiduciary duty; the arbitrator also awarded them attorney fees. When Windermere filed for trial de novo, the parties stipulated to the facts and filed cross motions for summary judgment. The trial court granted Windermere's motion for summary judgment and for attorney fees, then granted the Fraleys' motion for attorney fees. The Lunsfords appeal both awards.
[20] Discussion
[21] Fiduciary Duty Cause of Action
[22] The Lunsfords assert two breaches of fiduciary duty: (1) failing to disclose the Thomas offer to them, and (2) actively promoting the interests of the Thomases over their interests, resulting in a conflict of interest. *fn1
[23] A principal and an agent create an agency relationship by consenting to it. *fn2 Likewise, two principals can consent to the agent's request to simultaneously serve them, even though they have adverse interests in a transaction. *fn3 If both principals consent, the agent's relationship with each principal is characterized as a dual agency. *fn4 Although it may increase the agent's remuneration, dual agency is perilous. *fn5 For the agent owes each principal the duties of utmost good faith, loyalty, and disclosure. *fn6 Despite having two principals, the dual agency must disclose information relevant to the affairs entrusted to the agent. *fn7 But an agent need not disclose confidential information of one principal to the other principal. *fn8
[24] Failing to Disclose
[25] Thus, under the common law, Windermere had a duty to disclose it if the information was material to the transaction, but not if it was confidential. Usually, materiality is a factual issue. *fn9 But if all reasonable minds could only reach one Conclusion, the issue can be decided as a matter of law. *fn10 The Restatement offers one measure of materiality, focusing on whether the agent should know that the information will affect the principal's actions:
[26] An agent may have a duty to act upon, or communicate to his principal or to another agent, information which he has received, although not specifically instructed to do so. The duty exists if he has notice of facts which, in view of his relations with the principal, he should know may affect the desires of his principal as to his own conduct or the conduct of the principal or of another agent. *fn11 Some reasonable people would agree that the existence of another offer (for more money) is material to a principal attempting to purchase a house. As a result, because Chandler learned from the Fraleys of another offer, a jury could find she breached her duty if she didn't disclose it.
[27] Mr. Lunsford's declaration unequivocally states that "I was not advised of the existence of the Thomases offer and had no knowledge that the offer was to be presented that evening of Friday, the 19th of February." But Chandler's declaration states that she called Mr. Lunsford and informed him of another offer, but he responded that he believed he had already bought the house. When she told him that the new offer would not make the sale contingent on permits, he responded that he would never buy the house without the permits. CP 96-97. On the other hand, Windermere stipulated that "the Lunsfords were not advised that the Thomases' offer would be presented." *fn12 The Lunsfords' general knowledge -- "that the property might be shown to other buyers while they negotiated with the Fraleys"-- is not synonymous with Windermere's knowledge of the existence and terms of the Thomas offer. Given this dispute over a material issue, summary judgment for either party on the breach of Windermere's common law disclosure duty is inappropriate.
[28] Nevertheless, Windermere seeks summary judgment by contending that the dual agency addendum is "the central document to this case," *fn13 from which it argues:
[29] the addendum limits its duty of disclosure to "material defects and other disclosures required by law." Resp. Br. at 14-15.
[30] it says that the Lunsfords had no right to be informed of submission of another offer by another buyer. Resp. Br. at 21.
[31] Windermere proceeded in the only way it could and it acted to protect the interest of all the parties in accordance with the written agency agreements. Resp. Br. at 22-23 (emphasis supplied) (this implies a fact not shown in the record: that Windermere, the Fraleys, and the Thomases also signed a dual agency addendum).
[32] Windermere's handling of the transaction was completely consistent with the addendum. Resp. Br. at 23-24.
[33] Thus, in Windermere's eyes, the agreement describes the full scope of its disclosure duty, and did not require it to disclose the Thomas offer.
[34] On the one hand, the addendum between Windermere, the Lunsfords, and the Fraleys limits Windermere's duties. For example, the agreement recognizes that "Buyer and Seller have different interests." And it describes salespeople as facilitators who will "do their best to see that both parties are treated fairly and honestly." Its concluding paragraph contains a broad waiver: buyer waives "any claims they may have arising from this relationship." Yet the agreement also conveys the idea that Windermere continues to represent both the buyer and the seller. Hence, it is titled "Consensual dual agency Addendum." (emphasis supplied). It states that then agents can "no longer serve as an exclusive representative for the Buyer or the Seller." (emphasis supplied). Further, it comes right out and states that Windermere "will represent both of you." The agreement does not disclose Windermere's relationship with the Thomases, nor did the Lunsfords agree to it.
[35] As regards Windermere's disclosure duties, the agreement allows Windermere to remain mute only if the confidential or privileged information would harm one party's bargaining position:
[36] Except for known material defects or other specific disclosures required by law, Seller and Buyer agree that the salesperson shall not be liable to either party for refusing or failing to disclose confidential or privileged information without permission which in the sole discretion of the salesperson could harm one party's bargaining position including, but not limited, to financing information, motivation, price, terms, negotiating strategies or other private matters. The first clause ("except for known material defects") excludes liability when Windermere discloses confidential information if the disclosure is required by law. The remainder of this paragraph excludes liability when it fails to disclose "confidential or privileged information . . . which . . . could harm one party's bargaining position." In other words, the Lunsfords can recover for breach of Windermere's disclosure duty when the alleged disclosure is (1) material, and (2) not confidential information which would harm the other principal's bargaining position. We have already concluded that a reasonable juror could find the information material.
[37] Thus, we must determine whether the existence and terms of a different buyer's offer was privileged or confidential information which could harm one party's bargaining position. But we need not decide whether the second offer was "confidential" if disclosure was not harmful to the Fraleys.
[38] Disclosing the existence of a second offer potentially helps the Fraleys -- who might benefit from a bidding war. And it would assist the Lunsfords in deciding whether to submit a new offer. Thus, even if the information was confidential, the addendum does not excuse Windermere's failure to disclose because it would not harm one party's bargaining position. We thus find the addendum to be superfluous, rather than central, to Disposition of this case. It does not define the scope of Windermere's duties, but only excludes a few particularized confidences from disclosure.
[39] We need not consider Windermere's relationship with the Thomases. For here, Chandler learned of the Thomas offer from the Fraleys, not the Thomases' agent. Moreover, Windermere never disclosed its representation of the Thomases to the Lunsfords, or sought their consent to that agency. Rather, the addendum promised that Windermere will "represent both of you" [Lunsford and Fraley]. Thus, Windermere cannot fairly contend that its failure to disclose was necessitated by its duties to the Thomases.
[40] In Conclusion on the duty to disclose a material fact, the trial court erred in granting summary judgment to Windermere.
[41] Conflict of Interest/Promoting Other Interests The other fiduciary claim alleged by the Lunsfords focuses on the circumstances surrounding Windermere's presentation of the Thomas offer.
[42] Yet this claim of fiduciary duty breach, as it implicates Windermere's duties to the Fraleys, differs substantially from the previous claim. Importantly in this regard, the "Lunsfords understood that the property might be shown while they negotiated with the Fraleys." *fn14 And Windermere, as the latter's agent, had a duty to present them with all written offers. *fn15 After all, the dual agency agreement recognizes the different interests of buyer and seller. As we noted in the previous section, the addendum limits Windermere's duties. It would be unreasonable to read the agreement as requiring Windermere to refuse to present other offers to the seller. What is more, we reject the invitation to apply the conflict rules from the Rules of Professional Conduct to the relationship between real estate agents and their joint principals. *fn16 Consequently, we do not agree with the Lunsfords when they assert that presentation of the Thomas offer created an irreconcilable conflict of interest.
[43] Nor have the Lunsfords established breach of fiduciary duty by Windermere at a meeting attended by Chandler (their agent), Bruce Downs (a broker in Chandler's office) and Don Riley (broker for the Windermere office that had received the Thomas offer). After a meeting lasting less than an hour, Riley consulted with Windermere's attorney, concluded that the Fraleys and Lunsfords had no binding agreement, and that Windermere would present the Thomas offer. The record does not demonstrate the disclosure of any confidential information at the meeting. Nor does it establish that Windermere promoted the interests of one prospective buyer over another. Windermere simply presented a written offer already received by one of its agents. Although that offer competed with the Lunsfords offer, the Lunsfords recognized that Windermere would continue to represent the "different" interests of the Fraleys. The trial court correctly granted summary judgment as to this allegation of breach of fiduciary duty.
[44] Damages
[45] Windermere briefly asserts that "even if plaintiffs had a liability claim, they have no damages. In fact, plaintiffs have now resorted to a claim for 'nominal damages.'" *fn17 Still, Windermere does not argue that the purported absence of compensatory damage is an alternate basis upon which to affirm the trial court. Consequently, it is unnecessary for us to address damages, and we decline to do so.
[46] Attorney Fee Award To The Fraleys
[47] The Lunsfords contest the trial court's attorney fee award to the Fraleys. They argue that the Fraleys lacked standing to recover fees because they did not participate in the mandatory arbitration or subsequent trial de novo.
[48] A prevailing party only recovers attorney fees when authorized by contract, statute, or recognized ground in equity. *fn18 Unsurprisingly, a party who seeks contractual attorney fees must generally rely upon a binding contract. *fn19 Because the Lunsfords "never reached a binding agreement with the Fraleys," *fn20 and the dual agency addendum (which is binding) does not include an attorney fee provision, the Fraleys cannot recover fees under the general rule. *fn21 Of course that rule has an exception: a defendant who successfully defends a breach of contract lawsuit by proving the absence of an enforceable contract is entitled to the benefit of the attorney fee provision in the alleged contract.*fn22 Here, the Lunsfords sued the Fraleys for specific performance. Because the Fraleys prevailed after being sued for enforcement, they are entitled to the benefit of the contractual attorney fee provision. The Lunsfords argue however, that the Fraleys lacked "standing" *fn23 to seek fees because they did not participate in the arbitration or summary judgment proceeding. "Standing is a requirement that the plaintiffs have been injured or been threatened with injury by governmental action complained of, and focuses on the question of whether the litigant is the proper party to fight the lawsuit." *fn24 It does not apply to the Fraley's motion for attorney fees. The civil rules, on the other hand, allow a prevailing party to move for fees and costs no later than fifteen days after the court takes action to dispose of all claims of all parties. *fn25 Because the Lunsfords did not designate the judgments entered below, we cannot determine whether the Fraleys complied with CR 54(d). *fn26
[49] Because we find no basis for reversal, we affirm the attorney fee award to the Fraleys. As we reverse the trial court's judgment in favor of Windermere, we decline to address the substantive arguments relating to that attorney fee award.
[50] We reverse the summary judgment (and concomitantly, the attorney fee award) in favor of Windermere. We affirm the judgment for attorney fees in favor of the Fraleys. And we remand for trial the Lunsfords' claim that Windermere failed to disclose a material fact. Affirmed in part, reversed in part.
[51] WE CONCUR
[52] Ann L. Ellington,
[53] Mary K. Becker.
Opinion Footnotes
[54] *fn1 App. Br. at 18.
[55] *fn2 Costco v. World Wide Licensing, 78 Wash. App. 637, 645, 898 P.2d 347 (1995).
[56] *fn3 Investment Exchange Realty, Inc. v. Hillcrest Bowl, Inc., 82 Wash. 2d 714, 717, 513 P.2d 282 (1973).
[57] *fn4 82 Wash. 2d 714, 717, 513 P.2d 282.
[58] *fn5 Brandt v. Koepnick, 2 Wash. App. 671, 674, 469 P.2d 189 (1970).
[59] *fn6 Meerdink v. Krieger, 15 Wash. App. 540, 543-44, 550 P.2d 42 (1976); cmt., Dual Agency in California, 21 U.S.F. L. Rev. 81, 88 (1986).
[60] *fn7 Restatement (Second) of Agency 381.
[61] *fn8 Restatement (Second) of Agency 392, cmt. b, (1958).
[62] *fn9 Brandt, 2 Wash. App. 671, 675, 469 P.2d 189.
[63] *fn10 Cogan v. Kidder, 97 Wash. 2d 658, 666, 648 P.2d 875 (1982) (seeming to hold that failing to disclose dual agency role was material as a matter of law).
[64] *fn11 Restatement (Second) of Agency 381, cmt. a, (1958).
[65] *fn12 Stipulated Fact no. 33, CP 70.
[66] *fn13 Resp. Br. at 13.
[67] *fn14 Stipulated Fact no. 16.
[68] *fn15 WAC 308-124D-020(1).
[69] *fn16 Cf. Hizey v. Carpenter, 119 Wash. 2d 251, 259, 830 P.2d 646 (1992).
[70] *fn17 Resp. Br. at 28.
[71] *fn18 Dempere v. Nelson, 76 Wash. App. 403, 406, 886 P.2d 219 (1994) rev. denied, 126 Wash. 2d 1015, 894 P.2d 565 (1995).
[72] *fn19 See Seattle-First National Bank v. Washington Insurance Guaranty Assoc., 116 Wash. 2d 398, 412-13, 804 P.2d 1263 (1991).
[73] *fn20 Resp. at 12.
[74] *fn21 Chan v. Smider, 31 Wash. App. 730, 737, 644 P.2d 727 (1982).
[75] *fn22 Resp. at 12.
[76] *fn23 Herzog Aluminum, Inc. v. General American Window Corp., 39 Wash. App. 188, 197, 692 P.2d 867 (1984).
[77] *fn24 App. Br. at 33.
[78] *fn26 CR 54(d), cf. CR 54(b)
[79] *fn25 Black's Law Dictionary 1260 (5th ed. 1979).
National Real Estate Fraud Center Windermere Real Estate Case History:
Windermere Freeland Agents Saul and Gabelein’s Abuse of a Vulnerable Adult
(Above L to R) 1: Utterly shameless liar and bully John W. Jacobi, Windermere founder and chairman who promotes "We are committed to... The highest ethical standards. Uncompromising honesty and integrity," but in reality—despite being presented hard evidence of dishonest, unethical Windermere misconduct—forces damaged and defrauded Windermere victims through years of ruinous, bankrupting litigation. When victims do indeed speak out, Jacobi falsely sues them for trade libel and defamation, tries to coerce the defendant into a "dark clause" settlement agreement through fear and intimidation, continues to prosecute the bogus action for years at enormous cost to the parties, then runs away and voluntarily dismisses his own lawsuit under Civil Rule 41, just prior to trial when the honest, innocent victim persists in refusing to sign away their speech rights. 2: Windermere general counsel, Paul S. Drayna, who spearheads illegal efforts to strip damaged Windermere clients of their speech rights. 3: Attorney John Demco of Windermere's Demco Law Firm, which prosecutes Windermere's anti-speech cases and unabashedly defends the most outrageous Windermere Realtor misconduct—no matter what it is. Demco is also a multi-franchise Windermere owner who defended his one-time mother-and-daughter Windermere Freeland/Whidbey agents, Samantha Saul and Linda Gabelein, about whom the court stated "...the Sauls and Gabeleins unduly influenced and exploited Emma."
(Above L to R) 4: Windermere-Demco Law Firm's lying lawyer, Matthew F. Davis—click here for review of Mr. Davis—who lies to courts and legal opponents alike in an all-out effort to win at any cost. In one particular case of note, Davis served a Windermere victim a lawsuit for libel and defamation, then emailed the victim not to hire an attorney! 5: L'Nayim Shuman-Austin, past Demco Law Firm attorney, ENDICOTT v. SAUL. 6&7: Samantha Saul and Linda Gabelein. 8: Barbara Mearing, current Windermere Freeland employee who got a $7500 commission from the sale of Emma's land: "Ms. Mearing testified that she was aware that the $150,000 sale price was low, but ‘not horribly low’. She also testified that the assessor’s values are not “spot on” and that sometime property sells for less or more than the assessed value. She said that it is always hard to estimate value but that she respected the fact that the seller gets to choose the price that he or she wants." The court later stated,"The court gives Ms. Mearing's testimony little weight." Click here for highlights from the original Findings of Fact & Conclusions of Law.
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The Windermere Real Estate Relocation Rape Case:
Court Declares that Windermere "...condoned a rape by a business colleague..."
Editorial Preface: The incredibly violent and insidious psychological ramifications of rape, connected through an “abusive work environment” serves as an unfortunate yet credible subtext for the way in which Windermere Real Estate treats employees and damaged customers alike: Windermere’s application of aggressive, wasteful and mendacious litigation to stall and ruin innocent consumers, serves as the coercive metaphor of corporate power and arrogance: Windermere has no concern for the social damage it has done to people or communities. It cares only about how to manipulate the law and the courts to avoid any legal responsibility.
(Above L to R) Windermere CEO Geoff Wood (far left) is currently listed as a Governing Person of Windermere Relocation. Peggy Scott (second from left), also a current Governing Person of Windermere Relocation, "... did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint or any follow-up interview with Little." Windermere General Counsel, attorney Paul Drayna (third from left) is listed as the registered agent of RELO LLC, the current entity name of Windermere Relocation. Windermere Founder John W. Jacobi (fourth from left) along with Gayle Glew (far right) are listed as Governing Persons of Windermere Relocation during the Little case. Glew told Ms. Little he did not want any "clouds in the office," and subsequently, after she would not accept a pay cut, that she should clean out her desk.
All citizens who abhor such treatment of women in the workplace should recall Maureen Little v. Windermere Relocation when choosing real estate services. WindermereWatch visitors will also want to read the United States District Court of Appeals Ninth Circuit's Order and Amended Opinion from the Little case.
Summarized and excerpted from a decision by the U.S. Court of Appeals
Maureen Little was employed by Windermere Relocation Services (“Windermere”) as a Corporate Services Manager, a position that required her “to develop an ongoing business relationship and relocation contacts with corporations in order to obtain corporate clients needing relocation services for their employees.” Until she was terminated, she received only positive feedback from her supervisors. Windermere’s records confirm that during the relevant period, Little had the best transaction closure record of all corporate managers by a large margin.
Unlike the other managers, Little’s employment contract provided that Little would receive $2,000 monthly, plus a $1,000 monthly override and $250 per closed sale. The override was based on the assumption that Little would close four transactions per month, with a provision for rollover when she did not make the target. According to Windermere President Gayle Glew, the other managers had not received the $1,000 override.
One of Windermere’s clients was the Starbucks Corporation. Some time in 1997, Little performed some relocation services for Starbucks Human Resources Director, Dan Guerrero, on a contract basis, and she learned from him that Starbucks was dissatisfied with its primary relocation provider. Glew told Little that he would “do whatever it takes to get this account” and that Little should “do the best job she could.” Thus, little believed that, as part of her job, she was to build a business relationship with Guerrero to try and get the Starbucks account, and she had at least two business lunches with Guerrero toward this end.
On October 14, Little accepted Guerrero’s invitation to discuss the account at a restaurant. After eating dinner with Guerrero and having a couple of drinks, Little suddenly became ill and passed out. She awoke to find herself being raped by Guerrero in his car. She fought him off and jumped out of the car, but again she became violently ill. Guerrero put her back in the car and took her to his apartment, where he raped her again. Little fell asleep, and when she awoke he was raping her again. Afterward, he showered and drover her to her car.
Little was reluctant to tell anyone at Windermere about the rape because, in her own words, “I knew how important the Starbucks account was to Mr. Glew. Mr. Glew would ask me on a consistent basis the status of the account and I was afraid that if I told him about the rape, he would see me as an impediment to obtaining the Starbucks account.” This belief was reinforced when, a few days after the rape, Little reported the rape to Chris Delay, Director of Relocation Services (apparently not one of Little’s supervisors), and Delay advised her not to tell anyone in management. Little believed that Delay feared “what might happen to [Little] if [she] did tell.”
On October 23, about nine days after the rape, Little reported it to Peggy Scott, the Vice President of Operations, who was designated in Windermere’s Harassment Policy as a complaint-receiving manager. Little described Scott’s response:
She came out around the desk and I could tell she was upset and she just gave me a hug and said she wished there was something she could do. She didn't understand what I was going through. She asked me if I was in therapy. Then she proceeded to tell me she wouldn't say anything to [Glew] unless I proceeded to seek legal action [against Dan Guerrero].
Scott told Little that "[s]he thought it would be best that [Little] try to put it behind [her] and to keep working in therapy," and that she should discontinue working on the Starbucks account. She did not give Little any advice about going to the police, and she did not conduct an investigation of Little's complaint or any follow-up interview with Little. Scott testified in her deposition that, because the rape occurred outside the "working environment," she believed that it fell outside the scope of Windermere's Harassment Policy.
Despite Little's supposed removal from the Starbucks account, Glew continued to ask her about the status of the Starbucks account during the next six weeks. "[As of December 2,] Gayle was asking me questions about Starbucks ... a couple of times every month to see what the status was." Concerned by Glew's questions, Little told her immediate supervisor, Linda Bellisario, the Vice President of Sales and Marketing, on December 2, 1997, about the rape. Little had been reluctant to tell Bellisario because she "felt that [Bellisario] would immediately go to Gayle and Gayle would terminate my position.... I knew how much this account meant to him. He said he would do whatever it took to get this account." Bellisario told Little to inform Glew of the incident.
When Little told Glew of the rape, which, according to Glew, was the first he had heard of it, Glew's" immediate response was that he did not want to hear anything about it." He told Little that she would have to respond to his attorneys. Glew then informed her that he was restructuring her salary from $3,000 monthly to $2,000 monthly plus $250 per closed transaction. The pay reduction was effective immediately and non-negotiable. Bellisario, who was present at that portion of the meeting, appeared "surprised and upset" to Little.
Little found the pay cut unacceptable, and Glew told her to go home for two days to think it over "because he did not want any `clouds in the office.'" When Little still found the pay cut unacceptable two days later, Glew told her it would be best if she moved on and that she should clean out her desk.
Little brought suit against Windermere, alleging unlawful discrimination and retaliation in violation of Title VII, 42 U.S.C. § 2000e, and the Revised Code of Washington § 49.60; wrongful discharge in violation of public policy; and intentional, reckless, and/or negligent infliction of emotional distress. The district court granted summary judgment in favor of Windermere on all four claims.
Little appealed dismissal of her claims, and the appeals court reversed in part, and ruled:
In sum, taking the facts in the light most favorable to Little, because her employer effectively condoned a rape by a business colleague and its effects, Little was subjected to an abusive work environment that "detract[ed] from [her] job performance, discourage[d] [her] from remaining on the job, [and kept her] from advancing in [her] career[]."
Incredibly, Windermere asked for a rehearing, but "...the panel has voted to deny the petition for rehearing and to reject the suggestion for rehearing en banc.
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WINDERMERE: AMERICA'S PREDATORY REAL ESTATE ENTERPRISE
Consumer advocates, legal experts and elected lawmakers all agree that the American real estate industry demands greater regulation to protect consumers from the human disaster of real estate fraud perpetrated by unethical realtors employed at companies like Windermere Real Estate. Windermere manipulates our clogged, inundated courts and the justice system to stall, wear down and financially exhaust victimized consumers, many of whom are wiped-out by the cost of pursuing civil justice in a process where innocent victims must CHASE perpetrators of real estate fraud through the courts AFTER a fraudulent offense has been committed. Acts of fraud are so common and widespread throughout the Windermere real estate network, that the defense of real estate fraud has become has become just another bottomline expense on the Windermere balance sheet. And the litigation nightmare of real estate fraud can happen to anyone who deals with Windermere Real Estate. It could happen to you. Windermere is by far the most unethical, deceitful, and culturally toxic real estate company operating in the United States. Windermere knowingly, deliberately, and unabashedly profits on corrupt franchise owners, brokers and agents with proven histories of fraud and ethical misconduct, many of whom are profiled in the pages of WindermereWatch.com. Despite Windermere's well-documented assault on victim speech rights, more and more unconscionable cases of Windermere fraud continue emerging.
Windermere is headquartered in Seattle, at franchiser Windermere Services Company. It was founded by John W. Jacobi, and he has kept the company a private, family-owned enterprise, eluding the transparency and ethical accountability required by stockholders. For decades, Windermere has harnessed the art of positive PR, affixing itself—however superficially—to community art events, the homeless, and even an annual college rowing competition which opens Seattle's boating season—the Windermere Cup—irresponsibly promoted by, and in conjunction with, the University of Washington. But those are the disingenuous and cynical sideshows created by an adept market manipulator, shown only briefly to the public, to obscure and obfuscate Windermere's true predatory nature.
FRANCHISER WINDERMERE SERVICES' MANAGEMENT TEAM AND DESIGNATED GOVERNING PEOPLE: EXPERTS IN MARKETING FRAUD, ABUSE OF THE LEGAL PROCESS, AND AT COERCING DAMAGED WINDERMERE CLIENTS INTO SILENCE BY SUPPRESSING THEIR SPEECH RIGHTS
The shameless greed and repugnant ethics of Seattle's Jacobi family, deliberately profiting on the loss and suffering of Windermere victims through commissions on the fraudulent home deals and unlawful misconduct of dishonest Windermere agents, brokers and franchise owners. Forget human decency, commercial reputation or social responsibility—it's all about the money.
Before turning the business over to his children and son-in-law, Windermere founder John W. Jacobi (left) simply ignored any complaints of fraud from Windermere victims, sending them straight to the lawyers. Yet despite claims of retirement, Jacobi is still indeed quite active at franchiser Windermere Services Company:
In Complaint 10-2-36192-8 SEA, filed in King County Superior Court on October 12, 2010, Windermere Services Company has sued former Windermere Puyallup Canyon Road owner Joe Maxwell for default on an “Unconditional Guaranty of Payment” promissory note. The Maxwell Answer and Counterclaims state that the “Plaintiff's [Windermere Services Company] claims are barred by Plaintiff’s fraud, duress, and unclean hands,” and alleges $4,000,000 in damages and violation of Washington's Franchise Investment Protection Act; and also that "The alleged Note and Guarantee are unconscionable and unenforceable." Maxwell's Counterclaims state "6. The WPCR Operating Agreement contains a provision granting Jacobi a special veto power which among other things, states that the company shall conduct its business and manage its affairs in accordance with the directions of Jacobi and all management decisions are subject to Jacobi’s review," and "13. In early 2006, WSC and Jacobi decided to open another WSC office in the territory in which WPCR was operating, despite the objections of Maxwell. As a result of the opening of this new WSC office, WPCR lost a significant number of its real estate agents and revenue that transferred to the new office in Graham, Washington," and "14. As a direct result of these actions taken by WSC and Jacobi, WPCR was left with a large debt burden and overhead, and WPCR’s revenue was significantly reduced... 22. On September 14, 2010, Maxwell heard from a real estate agent working at WPCR that the agent had received and email from WSC notifying him WPCR’s franchise had been terminated. This notice was sent to WPCR’s real estate agents before Maxwell learned of the termination of WPCR’s franchise." Read the complete report on this case here.
Jacobi's Washington Loan Company is also currently being sued for Intentional Misrepresentation—read that report here. And the Windermere affiliated service company, Commonwealth Land Title Company of Puget Sound, has recently been found negligent by a jury who awarded the third-party plaintiffs $1,190,000. Read the Commonwealth report here.
Current Governing Person and Windermere Services Company CEO Geoffrey P. Wood (left) is married to John W. Jacobi's daughter, Jill Jacobi-Wood. Wood is the chief architect of Windermere marketing fraud, inducing business volume through—among other fraudulent promotion—an express warranty of "The highest ethical standards. Uncompromising honesty and integrity." When called upon to honor his company's warranty, Wood instructs Demco lawyers—led by Matthew F. Davis–to sue vocal victims for libel and defamation. Wood is also a Governing Person of Windermere Relocation, the subject enterprise of Windermere's employee rape case. He was briefly a real estate sales person in 1994, but that license was CANCELLED in 1995, and Wood currently has no real estate license of any kind that WindermereWatch can find.
Governing Person Jill Jacobi-Wood (left), Windermere Services President, is a licensed real estate broker in Washington State, and as such is subject to the statutory condition of RCW 18.86.030 "(d) To deal honestly and in good faith." For her part in Windermere's marketing fraud and malfeasance, Jacobi-Wood's RE license should be cancelled by the Washington State DOL's real estate division. By promoting honesty and integrity—while in reality—she is suing and coercing Windermere victims to shutup about their Windermere experience, Jacobi-Wood is hardly dealing honestly and in good faith.
Governing Person John O'Brien "OB"Jacobi (left) is General Manager of franchiser Windermere Services Company and also has many Windermere realty brokerage offices. He's a licensed real estate broker who is also called upon by statutory law to "Deal honestly and in good faith." But John "OB" Jacobi instead promotes fraudulent claims of honesty and integrity, and falsely sues victims of Windermere misconduct for libel and defamation to intimidate them and coerce their silence. Then this junior Jacobi runs away and voluntarily dismisses his own mendacious lawsuit when a victim refuses to sign Windermere's dark clause settlement agreement that has cost the victimized party so much distress and money and to defend.
Windermere Services Governing Person and attorney—WSBA# 26636—Paul Drayna (left) has even more stringent ethical requirements placed upon him through his collateral professions of Lawyer and Notary Public; and Drayna is also bound by the Model Rules of Professional Conduct. But Mr. Drayna is not just practicing marketing fraud at Windermere. As Windermere in-house counsel, Drayna oversees Windermere's legal strategy of abusing process by falsely suing victims for libel and defamation, and then attempting to intimidate and coerce those victims out of their speech rights and into Windermere's Dark Clause silence agreement. When victims WON'T sign the Windermere Dark Clause, Drayna runs away too, and voluntarily dismisses his own company's lawsuit under Civil Rule 41—but only after first costing the victim thousands to defend the phony lawsuit. Drayna is even copied on the mendacious, Demco-authored settlement documents meant to quash speech rights and be signed by Windermere victims.
WINDERMERE'S DEMCO LAW FIRM: ESCHEWING ETHICS and DOING WHAT OTHER LAWYERS JUST WON'T DO
Attorney and multi-office Windermere broker John Demco (left) is the ethically-elastic Windermere kingpin lawyer who operates Demco Law, Windermere’s in-house legal firm, whose primary job is to stall and outspend small fry consumers damaged by dishonest Windermere brokers, agents and franchise owners. When an innocent real estate consumer has the misfortune to suffer one of Windermere’s many bad apples, Demco Law Firm will refuse to settle the matter forthrightly, no matter what conspicuously unlawful or offensive conduct the agent or broker has committed. Demco and Windermere will force the aggrieved party to sue or swallow their damage and go away—standard Windermere operating procedure.
WindermereWatch has compiled voluminous evidence that Windermere-Demco attorney Matthew F. Davis (left), WSBA# 20939, is the kind of lawyer about which jokes are coined. Davis is franchiser Windermere Services' frontline bully—the guy in the legal trenches actually wrecking lives, making threats, and suing victims who speak out. When Shakespeare was recommending "The first thing we do, let's kill all the lawyers," in Henry the Sixth, Part 2, he was talking about egomaniacal lawyers like Matt Davis.
Attorney Matt Davis of Windermere's Demco Law Firm is so unethical, so deceitful and intimidating, that he's famous in law circles. As Windermere-Demco's lead attorney, Matthew F. Davis is renown for his dishonesty, dubious legal tactics, lack of decency and disrespect for the rules of professional conduct. He will do absolutely anything to win—without regard for truth or justice. He will lie to courts and opposing parties. He will file fallacious and erroneous documents with the court. He will email opposing parties telling them not to hire a lawyer when he has just served them a lawsuit. He will call a judge's chambers and request more time without informing the opposing party. He will file orders for a bench trial when he knows a jury trial has been demanded and paid for. He will trick, stall, coerce, menace and threaten. He will invent and extend mendacious Windermere litigation and abuse the legal process for no other reason than to exhaust an opponent’s pocketbook. If he can, he will get YOUR attorney to quit—a favorite tactic.
Windermere, Davis and Demco Law will push a $5 cat poop case all the way to the state supreme court just to avoid paying damages—because it’s all in the Windermere operating budget. And in the end, Windermere and Davis will try to coerce silence about your Windermere experience by trying to make you sign a "settlement" agreement that terminates your speech rights, so you can't ever inform the public about your Windermere debacle. What if you DON'T sign that you'll shut up, and then SPEAK UP instead? Windermere-Demco's Matt Davis will sue you for libel and defamation, then run away and dismiss his own lawsuit on the eve of trial—because after all—you're telling the truth.
Windermere's Clear and Overt Marketing Fraud:
"THE HIGHEST ETHICAL STANDARDS. UNCOMPROMISING HONESTY AND INTEGRITY."
—The Windermere Real Estate Mission Statement
Windermere widely promotes its deceptive express warranty in sales documents and on the internet which states "We are committed to... The highest ethical standards. Uncompromising honesty and integrity." In other Windermere promotion, like the Puget Sound Business Journal, Windermere CEO Geoff Wood is quoted as saying "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." The article goes on to say, "Geoff oversees marketing, legal, financial and internet development services throughout the Windermere network..." Mr. Wood claims absolute dominion over both Windermere legal and internet strategy, making him chief architect of Windermere marketing fraud.
Effective reportage can be harsh in recounting facts, but it must be said in consideration of all the Windermere victims profiled here who truly sought Windermere's vaunted honesty and integrity, that Windermere Services CEO Geoffrey P. Wood is simply lying when he states his company's utterly false and fraudulent commitment to honesty and integrity. He both lies and deceives again when he says that "In the real estate business somebody's word is very important. If you say you're going to do something, you've got to do it." Wood clearly doesn't do what he says he's going to do—be committed to uncompromising honesty and integrity. Wood himself is indeed IN the real estate business and his word is absolutely no good at all. He sues victims of Windermere misconduct for trade libel and defamation to shut them up, and then he tries to use the legal system to suppress victims' speech rights when they ask him to actually perform on the warranty he promotes. As this website proves, Mr. Wood does anything BUT what he says he's gonna do. Far from providing victimized Windermere customers a commitment to high ethical standards, honesty and integrity, Wood and Windermere run away and hide behind their lawyers when innocent consumers are ruined by their Windermere experience.
John W. Jacobi, Geoff Wood, his wife Jill Jacobi-Wood, and governing cohorts John O'brien "OB" Jacobi and attorney Paul Drayna have gone to the absolute ends of the earth in stonewalling, ignoring, denying and fleeing any and all responsibility for Windermere wrongdoing and misconduct. When called upon by victimized Windermere consumers to make good on its warranty of honesty and integrity, Windermere even states in legal pleadings that Windermere agents are NOT agents of Windermere at all—but independent contractors. As the legally-designated Governing People and top managers of the Windermere empire who drive policy, ethics and market promotion, it demands repeating that John W, Jacobi, Geoff Wood, Jill Jacobi-Wood, John OB Jacobi and attorney Paul Drayna are all clearly lying when they promise high ethical standards and uncompromising honesty to the public and consumers of real estate services.
Protect your life, home, family and future by cancelling or not renewing your Windermere listing. Don't risk doing business with Windermere Real Estate, the brand built on lies, fraud and ruined lives. Refuse to fund public predator Windermere Real Estate with commission from the sale of your home.
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Is WindermereWatch.com of social benefit to consumers and the public? You decide:
Windermere Real Estate is one of our country’s largest real estate companies and widely promotes a fraudulent express warranty that states “We are committed to... The highest ethical standards. Uncompromising honesty and integrity.” The definition of an express warranty from Black's Law Dictionary is: "A warranty created by the overt words or actions of the seller. • Under the UCC, an express warranty is created by any of the following: (1) an affirmation of fact or promise made by the seller to the buyer relating to the goods that becomes the basis of the bargain."
But when customers are victimized by dishonest Windermere brokers and agents, and complain in writing through legal counsel to franchiser Windermere Services Company, it is absolutely silent in the face of clear and convincing evidence, and forces the customer to sue or go away. In many cases, unsuspecting consumer lives are thrown into complete chaos through costly litigation; and also because the subject homes may actually be uninhabitable or unserviceable for reasons about which Windermere knew and had a legal obligation to disclose—but did not. For some victims, the long and expensive litigation forced upon them even results in bankruptcy and homelessness. Despite their clear evidence, many victims go on to lose in court because they can't afford attorneys or have no legal experience, and Windermere exploits those impediments to endless advantage—lives, homes, and personal finances are ruined forever. And Windermere expects those victims to just go away without their lives and homes, merely for buying a house through Windermere Real Estate, innocently.
Although such irrefutable evidence of Windermere broker/agent misconduct has been presented to franchiser Windermere Services Company, it knowingly continues collecting commissions from dishonest agents and brokers by deliberately passing them on to other unwitting consumers. Just one example is Windermere S.C.A. Redmond's Paul Stickney, who received a $522,200 court judgment for not disclosing a conflict of interest, but is still producing commissions for his Windermere SCA franchise, and Windermere Services Company. Is that the "Highest ethical standards. Uncompromising honesty and integrity?" You may want to search and visit more websites about Windermere's predatory business conduct.
When victims use the media to report their Windermere experiences honestly, Windermere sues them for libel and defamation through false lawsuits to intimidate, silence, and hush bad PR—read one of those lawsuits here. It then tries to coerce victims into signing a “dark clause settlement agreement” that permanently terminates their speech rights—read some of those "settlement" agreements here. Through an expensive and emotionally distressing roller coaster ride with Windermere's nasty Demco lawyers, a victim of Windermere fraud is told they will be taken all the way to trial on trumped-up libel and defamation charges, and if they don't sign the dark clause, their life and future will be ruined. When a victim persists in refusing to sign, Windermere voluntarily dismisses its own lawsuit under Civil Rule 41, just before trial, after costing the victim years and yet thousands more to defend against the false action. This predatory legal tactic is known as abuse of process or malicious prosecution. In one example cited below, franchiser Windermere Services Company served an outspoken victim a lawsuit for libel and defamation, and then immediately sent them an email instructing that they "...need not hire an attorney," and further stating, “…we will try to resolve this directly and outside the legal system.”
Every Windermere office in every state is legally tied to franchiser Windermere Services Company's fraudulent express warranty, false advertising, predatory conduct and policies through privity and its pecuniary franchise agreement. Some legal observers believe that Windermere's conduct has RICO and Civil Rights violation implications. If you have recently purchased a Windermere franchise without having been disclosed Windermere's falling brand value, PR decline, and its adverse website problems, click here for its duty of disclosure under Federal Trade Commission rules. Proof that Windermere Services Company knew about WindermereWatch.com in March of 2007 is in this document.
Windermere Real Estate is a textbook corporate predator who operates franchises in Washington State, Oregon, California, Arizona, Nevada, Utah, Idaho, Montana, Hawaii and British Columbia. Windermere repeatedly makes the false claim that it has offices in Wyoming, but it does not. If you’re buying or selling property through ANY Windermere office, a percentage from your transaction will be used by franchiser Windermere Services Company to silence and financially ruin innocent parties who’ve encountered Windermere fraud. Windermere won't pay legitimate damages or acknowledge wrongdoing, and will stall settlement of cases all the way to state supreme courts, a legal strategy that Windermere routinely employs to bankrupt victims and exhaust their resources.
We believe the information presented here is of profound social benefit to consumers and the community, and we are dedicated to providing it.
THROUGH FEES AND COMMISSIONS PAID TO FRANCHISER WINDERMERE SERVICES COMPANY, EVERY WINDERMERE NETWORK OFFICE IN EVERY STATE IS AN ENTHUSIASTIC PARTNER AND KNOWING ACCESSORY TO WINDERMERE MARKETING FRAUD AND ITS PREDATORY POLICIES