"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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Windermere Real Estate Northwest, Inc., Agent Howard Johnson, Broker and Branch Manager Loretta Larson, Sued for Violation of the Washington State Securities Act (WSSA), Negligence, Negligent Misrepresentation, Negligent Supervision (Against Windermere and Larson), Breach of Fiduciary Duty, Violation of Washington's Consumer Protection Act
(Above L to R) Steven Kieburtz, CEO and Owner, Windermere Real Estate/Northwest; April Kieburtz, President, Designated Broker, and Owner Windermere Real Estate/Northwest; and Loretta Larson, Manager and Broker, Windermere Real Estate/Northwest
Complaint in case number 10-2-30838-5 SEA, filed August 27, 2010, in King County Superior Court.
Under “I. PARTIES” the Complaint in part states:
2. Defendant Windermere Real Estate/Northwest, Inc. (“Windermere”) is a corporation doing business in King County, Washington. The Windermere branch at issue is located in King County, Washington.
3. Defendant Howard Johnson (“Johnson”” is a Washington resident, and was an agent or broker formerly registered of affiliated with Windermere at all relevant times.
4. Defendant Loretta Larson (“Larson”) is a Washington resident, the branch manager of Windermere ant at all relevant time acted in a managerial and/or supervisory capacity over defendant Johnson.
6. On information and belief, each defendant was acting as the agent of each of the other defendants in committing the acts and/or omissions alleged herein, and each of the defendant’s acts and/or omissions were either committed within the course and scope of that defendant’s agency or were subsequently ratified by each of the other defendants.
Under “III. Facts”” the Complaint in part states:
9. In 2007, Simmons invested roughly $554,00 in a tenant-in-common interest in real property and improvements (“TIC”), issued by SCI Real Estate Investments, LLC or one of its affiliates (“SCI”). The investment was essentially an interest, made with co-investors, in a student housing project near the University of Southern Mississippi, for which Simmons was to receive monthly interest payments, in addition to retaining an interest in the underlying subject property.
10. The SCI investment is a security under Washington law, pursuant to RCW 21.20.005 of the Washington State Securities Act (“WSSA”) and/or common law.
11. The SCI investment was made through and at the recommendation of Johnson, who at the time was, and then represented himself to Simmons to be, an agent or broker for Windermere.
12. Pursuant to a written agreement between SCI and Windermere, Windermere was paid a commission or other fee, attributable to Simmons’ SCI investment.
13. Windermere and Johnson divided the commission or fee received from SCI in connection with Simmons’ investment in some manner between themselves and possibly others.
14. None of the named Defendants is a licensed securities broker or licensed securities broker-dealer.
15. The SCI investment was never registered under applicable securities laws, including without limitation, the WSSA.
16. Simmons is informed and believes that the SCI investment was not and is not exempt from registration under applicable securities laws, including without limitation, the WSSA. Since the SCI investment was never registered, Defendants have the burden of proving a valid exemption under applicable securities laws.
17. All named Defendants were substantial contributing factors in connection with Simmons’ SCI investment.
18. Windermere and Johnson were “sellers” of the SCI investment to Simmons under the WSSA and common law.
19. Windermere and Larson were “control persons” of Johnson under the WSSA with respect to Simmons’ SCI investment, pursuant to RCW 21.20.430 and common law.
20. Windermere and Larson had the power to control Johnson’s offers or sales of products to the public and Larson was the branch manager, charged with monitoring and managing the activities of the agents and brokers affiliated with such branch, including Johnson.
21. In connection with the SCI investment, Johnson misrepresented material facts to Simmons or omitted to state material facts necessary to make Johnson’s other material representations, in light of the circumstances under which they were made, not misleading.
36. Also in 2007, Simmons invested roughly $250,000 in a TIC issued by Sun Roper, LLC or one of its affiliates, (“Sun Roper”), through and at the recommendation of Johnson, who at the time was, and the represented himself to be, an agent or broker of Windermere. The investment was essentially an interest, made with co-investors, in a business center located in South Carolina, for which Simmons was to receive monthly interest payments, in addition to retaining an interest in the underlying subject property.
37. The Sun Roper investment is a security under the WSSA and/or common law.
38. Pursuant to a written agreement between Sun Roper and Windermere, Windermere was paid a commission or other fee, attributable to Simmons’ Sun Roper investment.
39. Windermere and Johnson divided the commission or fee received from Sun Roper in connection with Simmons investment between themselves, and possibly others, in some manner.
40. The Sun Roper investment was never registered under applicable securities laws, including without limitation, the WSSA.
43. Windermere and Johnson were “sellers” of the Sun Roper investment to Simmons under the WSSA and common law.
44. Windermere and Larson were “control persons” of Johnson under the WSSA with respect to the Sun Roper investment, pursuant to RCW 21.20.430 and common law.
45. In connection with the Sun Roper investment, Johnson misrepresented material facts to Simmons or omitted to state material facts necessary to make Johnson’s other material representations, in light of the circumstances under which they were made, not misleading.
48. Prior to his purchase of the Sun Roper investment, no one informed Simmons of any of the misrepresentations or omissions of material facts in any of the offering or related documents presented to Simmons in connection with this Sun Roper investment.
49. It now appears that Simmons’ investment in the Sun Roper investment is worth much less than his initial investment.
50. In addition to being worth much less, the promised interest payments on Simmons’ Sun Roper investment have ceased.
53. None of the Defendants informed Simmons that it was unlawful to conduct transactions in Washington as a securities broker-dealer or salesperson unless being: (i) registered to do so; (ii) exempt from registration; (iii) a salesperson who satisfies certain requirements of the Securities Exchange Act of 1934; or (iv) or a salesperson effecting transactions in open-end investment company securities sold absent sales charges.
62. Windermere sold interest in a number of TICs issued by SCI, Sun Roper and/or other issues, through Johnson and possibly other agents or brokers, to at least 10 other Washington residents.
63. Defendants engaged in an act, practice or course of business which operated or would operate as a fraud or deceit on a person in connection with Simmons’ SCI and Sun Roper investments.
Under “IV. Legal Claims” the Complaint further states in part:
A. Violations of the WSSA, RCW 21.20.010 (Against All Defendants)
65. Johnson’s and Windermere’s conduct violated RCW 21.20.010
67. Johnson and Windermere are primarily liable to Simmons pursuant to RCW 21.20.430(1), and Larson and Windermere are jointly and severally liable for Johnson’s conduct, pursuant to RCW 21.20.430(3).
B. Violation of WSSA, RCW 21.20.140 (Against All Defendants)
69. Johnson’s and Windermere’s conduct violated RCW 21.20.140
71. Johnson and Windermere are primarily liable to Simmons pursuant to RCW 21.20.430(1), and Larson and Windermere are jointly and severally liable for Johnson’s conduct, pursuant to RCW 21.20.430(3).
C. Negligence (Against All Defendants)
73. Even though not licensed salespersons and/or broker dealers, Defendants engaged in the business of such licensed individuals and entities by selling the securities at issue. Such conduct is unlawful since none of the statutory exemptions to registration under RCW 21.20.040 are applicable to Defendants under the circumstance.
D. Negligent Misrepresentation (Against All Defendants)
78. Defendants negligently represented and omitted certain material facts to Simmons in connection with his SCI and Sun Roper investments.
E. Negligent Supervision (Against Windermere and Larson)
83. Windermere and Larson had a duty to properly supervise Johnson, who worked primarily from his home.
84. Windermere and Larson breached their duty of supervision, proximately causing damage to Simmons in connection with his SCI and Sun Roper Investments, in an amount according to proof at trial.
F. Breach of Fiduciary Duty (Against All Defendants)
92. Defendants’ conduct was grossly reckless and they breached one or more fiduciary duties to Simmons.
G. Violation of Washington’s Consumer Protection Act (Against All Defendants)
H. Breach of Contract or Quasi-Contract (Against All Defendants)
Read the Windermere Defendants Answer here.
Case update:
In Defendants' Motion Regarding Pretrial Matters, Windermere argues
"The Court Should Exclude Expert Testimony Interpreting the Securities Act.
DOWNLOAD A COMPLETE PDF COPY OF THE MOTION HERE
I. INTRODUCTION
This is a securities act case set for trial in June 2012. The parties are mediating the case on February 28, 2012 and have opposing views on a number of matters relating to the scope of the trial. Determination of those matters before mediation would greatly increase the likelihood of settlement.
II. RELIEF REQUESTED
Defendants request that the Court grant an order in limine excluding certain proposed witnesses and areas of testimony and requiring plaintiff to make an election of remedies before trial commences.
III. FACTUAL BACKGOUND
Defendant Howard Johnson is a long-time friend and real estate broker of plaintiff Paul Simmons. Johnson has represented Simmons in several real estate investments over many years. In 2007, Johnson introduced Simmons to a number of national companies selling tenancy in common ("TIC") interests in larger projects, and Simmons ultimately purchased two such interests. Johnson was compensated by the sellers as a real estate broker. Like many real estate investments made in 2007, the TICs purchased by Simmons have not done well.
In this action, Simmons is suing Johnson and his brokerage, Windermere Real Estate/Northwest, Inc., alleging violations of the Washington State Securities Act, a number of other common law claims, and violation of the Consumer Protection Act.
IV. ISSUE PRESENTED
1. Should the Court exclude expert testimony on the issue of whether the TICs were securities under the Securities Act and whether the defendants violated the Act?
2. Should the Court exclude witnesses from the Department of Financial Institutions who have no personal knowledge of the relevant facts?
3. Should the Court require plaintiff to elect between rescission and damages?
A. The Court Should Exclude Expert Testimony Interpreting the Securities Act.
In his Disclosure of Possible Additional Witnesses, Simmons identified Mark McCloskey as an expert witness to testify "as to whether the TIC investments at issue are securities under Washington la and/or whether any or all Defendants violated such laws." Exhibit 1 to Davis Declaration. It would be hard to more clearly designate an expert witness's testimony as inadmissible.
Whether the TIC investments were securities is a matter of interpretation of the statutory definition. RCW 21.20.005(17(a) defines securities as:
any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral certificate; preorganization certificate or subscription; transferable share; investment contract; investment of money or other consideration in the risk capital of a venture with the expectation of some valuable benefit to the investor where the investor does not receive the right to exercise practical and actual control over the managerial decisions of the venture; voting-trust certificate; certificate of deposit for a security; fractional undivided interest in an oil, gas, or mineral lease or in payments out of production under a lease, right, or royalty; charitable gift annuity; any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities, including any interest therein or based on the value thereof; or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or, in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any security under this subsection. This subsection applies whether or not the security is evidenced by a written document.
Statutory definitions present a question of interpretation for the Court, not a subject for expert testimony. E.g. Brin v. Stutzman, 89 Wn.App. 809, 833, 951 P.2d 291, 304 (1998) (definition of "investment advisor" in Securities Act is question of law); State v. Walls, 106 Wn.App. 792, 794, 25 P.3d 1052,1054 (2001).
It is black letter law that expert testimony is not admissible on questions of law, including statutory definitions.
Finally, Blue Cross argues that even if this court finds that the statute encompasses partial mastectomies and applies to the consequences, complications, and aftereffects of cosmetic surgeries, there are genuine issues of material fact in this case that preclude summary judgment. In support of this argument, Blue Cross relies on the statements of their medical expert, Dr. Grauman, that mastectomies must involve the intent to remove all breast tissue and that anything less would be considered a lumpectomy or tylectomy. However, Dr. Grauman's expert opinion is not authoritative on the legal definition of mastectomy as used in RCW 48.44.330. See Cowiche Canyon Conservancy v. Bosley, 118 Wash.2d 801, 814, 828 P.2d 549 (1992) (stating that the meaning of a statute's term is a question of law and is therefore not amenable to resolution based on trial testimony). As previously discussed, we find as a matter of law that "mastectomy" as used in RCW 48.44.330 includes a partial mastectomy that leaves the breast deformed to a degree that a licensed physician deems that reconstruction is medically necessary for the patient's complete recovery.
Can v. Blue Cross of Washington & Alaska, 93 Wn.App. 941, 953-954, 971 P.2d 102, 108-09 (1999).
We view Mr. Beckman's testimony as giving improper legal conclusions. Under ER 704, a witness may testify as to matters of law, but may not give legal conclusions. See Hyatt v. Sellen Constr. Co., Inc., 40 Wash.App. 893, 899, 700 P.2d 1164 (1985); Everett v. Diamond, 30 Wash.App. 787, 791-92, 638 P.2d 605 (1981). Improper legal conclusions include testimony that a particular law applies to the case, or testimony that the defendant's conduct violated a particular law. Hyatt, 40 Wash.App. at 899, 700 P.2d 1164. Furthermore, [e]xperts may not offer opinions of law in the guise of expert testimony. Stenger v. State, 104 Wash.App. 393,407,16 P.3d 655, review denied, 144 Wash.2d 1006,29 P.3d 719 (2001).
State v. Olmedo, 112 Wn.App. 525, 532,49 P.3d 960,963 - 964 (2002).
Permitting McCloskey's proposed testimony that the TIC investments at issue were "securities under Washington law" and that defendants "violated such laws" would be reversible error and intrude on both the court's role with respect to questions of law and the fact finder's role with regard to the facts. The Court should exclude such testimony.
B. The Court Should Exclude Witnesses from the Department of Financial Institutions.
In the Disclosure of Possible Additional Witnesses, Simmons identifies numerous officials and employees from the Department of Financial Institutions ("DFI"), all of whom "may testify regarding Washington state securities regulations, statutes, laws and related administrative code sections and how these all relate to the TIC investments at issue and/or one or more Defendants' conduct in connection therewith." Exhibit 1 to Davis Declaration. In effect, Simmons would make DFI the judge and jury for securities violations.
For context, the Court should be aware that DFI has had no involvement of any kind with either the TIC investments at issue in this case or with Simmons' complaint. None of the DFI witnesses have any testimonial knowledge regarding the facts of this case. Simmons wants to call them for their ad hoc interpretation of the statute. Just as he would have his expert witness replace the Court's role as the interpreter of the statute, he would ask that the executive branch agency charged with enforcing the statute be permitted to give unofficial interpretations.
It is true, of course, that DFI is the agency charged with interpreting and carrying out the Securities Act. RCW 21.20.450. However, agencies can only interpret statutes by rulemaking in interpretive statements in conformance with the Administrative Procedure Act, RCE Chapter 34.05. Specifically, rules must be adopted in compliance with RCW 34.05.328, and interpretive statements in compliance with RCW 34.05.230. It should come as no surprise that agencies may not have secret internal interpretations of statutes, but instead must make them publicly available. RCW 34.05.230. Simmons has identified no rules or interpretive statements about TIC investments.
DFI necessarily makes ad hoc interpretations of the Securities Act in its enforcement role when it investigates a complaint and decides whether to take action under RCW 21.20.110 and 21.20.120. But DFI does not adjudicate complaints. Instead, charges by DFI are subject to a hearing before an administrative law judge. The decision in such a hearing is subject to judicial review. RCW 21.20.395(4); RCW 34.05.542(2). In other words, DFI investigates complaints and makes charges as part of the executive branch of the government, but administrative law judges and the courts decide those complaints as part of the judicial branch.
Simmons' attempt to have DFI representatives testify about what the statute means (statutory interpretation) or whether defendants violated the law (a judge or jury question) is wholly improper. Those witnesses should be excluded from trial unless they have relevant factual knowledge.
C. The Court Should Require an Election of Remedies.
In this lawsuit, Simmons simultaneously seeks rescission and damages. While he certainly is free to plead inconsistent causes of action (CR 8)(e)(2)), he is not entitled to seek double redress for a single wrong. Birchler v. Castello Land Co., Inc., 133 Wn.2d 106, 112, 942 P.2d 968,971 (1997); CHD, Inc. v. Boyles, 138 Wn.App. 131,140,157 P.3d 415,419 (2007).
It has long been the law that affirmance of a contract and an action for damages is repugnant to an action for rescission. Melby v. Hawkins Pontiac, Inc., 13 Wn.App. 745, 749, 537 P.2d 807, 810 (1975).
Mr. Wilkinson's argument for lost profits and mental distress under the rescinded contract cannot be supported. The concept of election of remedies has as its sole purpose the prevention of double redress for a single wrong. Lange v. Woodway, 79 Wash.2d 45, 49, 483 P.2d 116 (1971). The doctrine provides that if two or more remedies exist which are inconsistent with one another, a party will be limited to the one chosen. Melby v. Hawkins Pontiac, Inc., 13 Wash.App. 745, 749,537 P.2d 807 (1975). "Affirmance of the contract and a demand for damages has been held inconsistent with a disaffirmance of the contract and a prayer for rescission." Melby, supra at 749, 537 P.2d 807.
Wilkinson v. Smith, 31 Wn.App. 1,13, 639 P.2d 768, 774 - 775 (1982).
In the specific context of the Securities Act, a court of Appeals decision holds that the Act does not preempt other remedies, but that decision was made in the context of claims pled in the alternative.
Plaintiff brought this action to recover damages arising from her purchase of securities from the defendants. Her complaint contains three causes of action based upon (1) a violation of the Washington Securities Act, RCW 21.20; (2) a violation of the Consumer Protection Act, RCW 19.86; and as an alternative to the foregoing causes of action (3) a claim against defendant Kirkingburg alleging that by fraud and misrepresentation he had breached his fiduciary duty to her and that he was a constructive trustee of her moneys.
Kittilson v. Ford, 23 Wn.App. 402,404, 595 P.2d 944,946 (1979). The Securities Act claim was barred by the statute of limitations, and the trial court held that the plaintiff was barred from pursuing her alternative claims for damages. The Court of Appeals disagreed:
The adoption by the trial court of the defendant's position is inconsistent with the liberal construction given the Act by the courts and does not square with the underlying protective purpose of that Act. Moreover, plaintiffs civil remedy for fraud under the Act is different, and, in some ways, more restrictive than her potential choice of remedies at common law. RCW 21.20.430 provides only for rescission of the transaction and the award of interest; or, if the purchaser no longer has the security, he may recover damages in the amount of the purchase price less its value on the date of the disposition, plus interest. The Act does not allow the purchaser to keep the security and recover damages as he may do in a common law action for fraud or misrepresentation. Mclnnis & Co. v. Western Tractor & Equipment Co., 67 Wash.2d 965, 967,410 P.2d 908 (1966). Sigman v. Stevens-Norton, Inc., 70 Wash.2d 915, 921, 425 P.2d 891 (1967). On the other hand, the court may award *408 attorney fees under the Act; whereas, attorney fees generally would not be allowed in an action based upon common law fraud or misrepresentation.
In view of the difference between the statutory remedy and the common law remedy, there is no reason why the two causes of action cannot co-exist. See Detwiler v. Glavin, 311 Mich. 1, 138 N.W.2d 336, 339 (1965). Indeed, it would be incongruent with the protective purpose and remedial nature of the Securities Act to hold that the Act restricted a defrauded plaintiff to the remedy contained therein. We think that the legislature intended to provide additional remedies to a plaintiff, not to eliminate existing remedies compatible with the Act. Those other remedies continue to be governed by their own statutes of limitation. Consequently, we hold that the trial court erred in applying the limitation provisions of the Securities Act as a bar to the plaintiffs second and third causes of action.
Id. at 946-47 (footnotes omitted). Simmons likewise could pursue his damage claims as an alternative to rescission under the statute, but he cannot pursue both at the same time because to do so would be seeking a double recovery. The Court should require Simmons to make an election of remedies at or before trial.
It bears mentioning that an election of remedies would not preclude Simmons from presenting the legal theories of negligence or negligent misrepresentation. The Securities Act has no scienter element, and one can violate the statute negligently or intentionally. Aspelund v. Olerich, 56 Wn.App. 477, 482, 784 P.2d 179, 182 (1990) ("Scienter is not required in an action for fraud or misrepresentation under The Securities Act of Washington."); Kittilson v. Ford, 93 Wn.2d 223,608 P.2d 264 (1980).
VII. PROPOSED ORDER
A proposed order is attached hereto.
VIII. CONCLUSION
Simmons' claim must be based on the relevant facts that occurred between the parties and the law as determined by the Court. Simmons has two different ways to pursue his claim, but cannot use both simultaneously. The Court should exclude improper witnesses and limit Simmons to a single form of relief at trial.
DATED this 13th day of February, 2012.
DEMCO LAW FIRM, P.S.
By __________________________
Melanie A. Leary WSBA No. 21050
Matthew F. Davis, WSBA No. 20939
Attorneys for defendants
DOWNLOAD A COMPLETE PDF COPY OF THE MOTION HERE
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Windermere Real Estate Northwest and Broker Debbie Heard Sued for Economic Loss of $80,000
Complaint alleges, “Defendant, Debbie Heard was also unprofessional as a Real Estate Agent, in many ways, which possibly cost Plaintiffs a possible acceptable sale of the house. At times it was unclear who she represented, the seller or the buyer.”
(Above) Windermere Real Estate Northwest broker Debbie Heard.
Complaint No. 10-2-26702-6 SEA, filed July 26, 2010, in King County Superior Court.
Under “II PARTIES” the Complaint in part states:
2.2 At the time of the acts, breaches and/or omissions alleged herein, and at all times relevant hereto, Defendant Debbie J. Heard was a resident of King County and a Washington licensed Real Estate Agent and Defendant WINDERMERE REAL ESTATE/NORTHWEST, INC. was a Washington State Licensed corporation.
Under “III FACTUAL ALLEGATIONS” the Complaint in part states:
3.1 Defendant Debbie J. Heard, acting as a Real estate agent for Defendant WINDERMERE REAL ESTATE/NORTHWEST, INC. damaged Plaintiff’s property located at 4414 50th Ave. South, Seattle, WA 98118.
3.2 Because of the damage caused by the Defendants, the house had to be taken off the market and financial resources must now be found before repairs can be made and the house can then be re-listed and sold at optimum price. No repairs were needed prior to defendants involvement.
3.3 Defendants also breached their contract with Plaintiffs and removed window coverings and numerous other breaches of agreement, causing additional financial loss to Plaintiffs.
3.4 Valuable time has been lost, as a result of Defendants actions and recklessness, causing Plaintiffs to not be able to take advantage of the one time offered Federal Tax Credit to home buyers, which expired April 30, 2010. A substantial financial loss to the Plaintiffs has resulted by not being able to have the house on the market, especially during a falling housing market.
3.5 Defendant, Debbie Heard was also unprofessional as a Real Estate Agent, in many ways, which possibly cost Plaintiffs a possible acceptable sale of the house. At times it was unclear who she represented, the seller or the buyer. We understood she was to represent our interests because she was our listing agent, but she often appeared to represent potential buyers instead, and failed to represent our interests.
3.6 Defendant, Debbie Heard also made inaccuracies in the listing of the house which prejudiced the listing of the house and jeopardized the sale of the house. Defendant was unprofessional, neglectful, and inaccurate in marketing the house.
3.7 Defendant, Debbie Heard also harassed plaintiffs by filing a Small Claims suit for out of pocket costs by defendant that were to have been due and paid only when the house was eventually sold and to date it has not been sold.
Under “IV DEMAND FOR DAMAGES AND/OR RELIEF” the Complaint further states in part:
4.1 As a direct and proximate result of the acts alleged herein, Plaintiffs have suffered an economic damage or loss in the amount of $80,000.00.
Read the Windermere Northwest/Debbie J. Heard Answer here.
Read the Windermere Northwest/Debbie J. Heard First Amended Answer here.
The parties filed a Stipulation and Order of Dismissal on January 11, 2011.
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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