Buyer suing after 3 years - Posted by Deanne

Posted by JohnBoy on July 02, 2001 at 10:47:49:

I understand your point. She also said her attorney stated he seen no basis for this suit. So I wonder what the buyer’s attorney would do if her attorney was to call the buyer’s attorney and inform that this lawsuit has no basis and after his client wins this suit she has full intentions of filing a frivolous suit, not only against his client, but also against him for taking on such a frivolous suit that had no basis to begin with! Now what will that attorney do? Who knows, but if everything is pretty much the way the story has been told here one would think any attorney would have enough sense to know that this case was without basis and if thinks the other attorney is willing to file a frivolous suit, well, who knows??? He might just get his client to drop the case. What can it hurt to try?

Buyer suing after 3 years - Posted by Deanne

Posted by Deanne on July 01, 2001 at 24:58:15:

Buyer is suing me and my corporation for a flip that occurred over 3 ago stating that they overpaid on the house.
The party had refinanced the property at a much higher market value than the original purchase. I had nothing to do with the refinancing other than my loan was paid off.\

This lawsuit is costing me a lot of time and money. Any ideas??? I am right in the thick of it all with my interrogatories. I have all my ducks in line, I feel, including the fact that I revealed that I was not the owner of record at the time of sale.

Re: Buyer suing after 3 years - Posted by JohnBoy

Posted by JohnBoy on July 01, 2001 at 03:05:47:

I don’t completely understand your post.

You say you had nothing to do with the refinancing other than your loan was paid off. Then you say you revealed that you were not the owner of record at the time of sale. If you weren’t the owner of record then what loan did you have that was paid off?

You say the party refinanced at a much higher value than the original purchase price. Who’s original purchase price?

Are you saying they refinanced at a higher market value than your original purchase? Or are you saying the purchased the property from you, then afterwards they applied for refinancing and refinanced for more than what they paid you for the property?

Your post is confusing. Can you be more specific in regards to the chain of events that took place?

Re: Buyer suing after 3 years - Posted by Deanne

Posted by Deanne on July 01, 2001 at 09:41:08:

In regards to the abovepost, here is a more complete explanation of what happened. I had an option on a piece of property that I sold to a Buyer for more money. I had a double closing at the time.

The Buyer knew I was buying it at a price below what she was paying for it. At time of sale she secured financing through a national lender and the property was appraised. She received 75% LTV and I carried back the difference along with the prior owner in two different notes.

The Buyer refinanced about 1 1/2 yr. later. The appraisal at this time was about 33% higher than what the Buyer bought it from me. She secured the refinancing lender on her own. As a result, the refinancing lender created enough cashflow to pay off all notes.

Since posting this, I just found out through the MLS that the house was sold either foreclosed upon, or outright sold. I imagine it was foreclosed on as she sold it for about $7000 less than what she bought it from me for. Of course, it was sold for much less than her refinancing. It was on the market for almost 275 days.

All of this was done through my corporation although she is suing both my corporation and myself.

Johnboy, don’t you ever sleep ?? - Posted by JT - IN

Posted by JT - IN on July 01, 2001 at 09:13:55:

The time of your post is 3:05am, when do you go to bed? Or do you just live on this RE adrenalin thing?
At least take a nap, and stop keeping Schmitty out so late, he needs to earn a living… LOL


Re: Buyer suing after 3 years - Posted by JohnBoy

Posted by JohnBoy on July 01, 2001 at 11:17:39:

Was the buyer required to refinance within a certain time frame to pay off any of the notes you or the seller agreed to carry back or did the buyer just take it upon themselves to get refinanced to pay you off?

It appears the buyer may have also recieved some cash out from refinancing. Is that correct?

Basically, what I’m understanding here is that the buyer obtained a new loan for 75% LTV when they purchased the property from you. You and the original seller had agreed to carry back some paper for the remaing equity. I assume the 1st seller carried a second and you carried a 3rd?

A 1 1/2 later after occupying and owning the property the buyer takes it upon themselves to get refinanced at which time they paid off the second held by the seller 1 and paid off the third held by you as seller 2. The buyer may have also put some cash back in their pocket from the refinancing they obtained?

The refinancing took place 1 1/2 years after they purchased the property from you. They filed suit against you 1 1/2 years after they obtained the refinancing?

You say the property recently sold for $7k less than what they purchased it from you for. The house sat on the market for 275 days before selling. This means the house would have been put on the market approx. 9 months after they obtained their refinancing. This would appear that they may have went into foreclosure right after they obtained the refinancing, appearing that they may have never made a payment on the new loan they obtained. That’s assuming the property was foreclosed on like you suspect.

What doesn’t make sense is that if the buyer felt they were ripped off by over paying on the property, WHY did they wait a 1 1/2 AFTER owning and living in it, WHY did they go out and obtain another loan for more money and pay off the second and third, WHY did they wait another 1 1/2 after THAT, to decide they over paid where you took advantage of them??? That doesn’t make any sense to me.

Did you have any part in the buyer getting refinanced or was this something they took upon themselves to do without you being involved in any way other than to furnish their lender with a pay off amount on the paper you were holding?

Assuming you weren’t involved with the refinancing part and/or had anything to do with the appraisal or appraisor, I don’t see where they would a case against you.

It doesn’t matter how much you sold them the property for, even if it was above market value. You can sell any property for any amount you and your buyer agree on, as long as there isn’t any fraud involved with deceiving the lender in any way for obtaining more financing against the property. There is no limit as to how much profit one can make on a property. As long as you had nothing to do with the appraisal where it was “inflated” to deceive the lender, or had anything to do with making false statements on any loan app. you should have nothing to worry about.

The fact that the buyer had refinanced and obtained a new appraisal through their own lender should clear you of any wrong doing from the first appraisal that was obtained since the second appraisal came in 33% higher than the one obtained when you sold the property. That would prove there was no foul play in regards to creating a phony second for the purpose of getting the lender to loan a higher dollar amount against the property.

Assuming you had nothing to do with the second appraisal done and weren’t involved with the refinancing in any way, I don’t see a case against you.

The problem is any one can sue any one for anything. Whether they have a legitimate case or not doesn’t matter. You need a GOOD attorney on this and I would seriously be looking at wanting to file a counter suit for frivolous to compensate for all the cost and anguish this has caused you.

It sounds like the buyer may have read something about all the flipping scams going on around the country and decided to target you as one of those scam artists that took advantaged of them because they couldn’t make the payments on their loan after they refinanced.

Up until they refinanced a 1 1/2 later, where they paying you and the seller on the notes during that time?

Re: Suit and Appraisals - Posted by JT - IN

Posted by JT - IN on July 01, 2001 at 10:33:05:


It appears to me, that there are two key pieces of information involved here.

  1. The appraisal, when the original purchase, (sale to the buyer), took place. Did the property appraise for an amount equal to, or greater than the sale price? Who was the Appraiser? What were the qualifications of appraiser and who selected the appraiser? Hopefully, not you! Do you have a copy of that appraisal? If not, get one!

  2. The appraisal, when the buyer refied, 1 1/2 yrs later. All the same questions and info, as above.

It would appear to me, that if these appraisals were at arms length, meaning above board, by a qualified/certified appr., then this alone, as thelargest single piece of evidence, should indemnify you from any liability.

Do you have a RE Atty, advising you on this matter? It would seem esential that you should, as well representation throughout this process. I would think that it could be inline, assuming the appraisals are valid, substantiating the FMV at the time of the sale, tht you could have your Atty request a dismissal, based upon that alone.

I do not think that you could/would be successful at any claim for frivilous actions, on the part of the Buyer, so I would not recommend that course of action. Unfortunately, we live in a very litigous society today, with people looking for someone else to blame EVERYTHING on, and the courts can to often be sympathetic to thepoor consumer, as if they are a 3 YO, being taken advantage of. You will certainly be out the expense and time of defending yourself, without any hope of recovering from a deadbeat, who just went through forclosure.

You give some people a perfectly good opportunity, like you afforded this buyer, and they will screw it up, by their own devices and greed; such as this cash-out refi that did them in. Good Luck in your trials and tribulations, but I think you shouldn’t have much down side here.

Just the way that I view things…


Re: Johnboy, don’t you ever sleep ?? - Posted by JohnBoy

Posted by JohnBoy on July 01, 2001 at 11:21:23:

Ahhhhh, the benefits of being young! LOL

BTW, what IS that thing sleep everyone speaks of anyway??? LOL

Re: Johnboy, don’t you ever sleep ?? - Posted by Mike Schmidt (IL)

Posted by Mike Schmidt (IL) on July 01, 2001 at 11:00:31:

Hey I was napping on the porch acting like an “Old Dog” last night =)

Re: Buyer suing after 3 years - Posted by Deanne

Posted by Deanne on July 01, 2001 at 16:01:35:

Thanks so much to all of you that have given me advice.

Let me tell you that first of all, I do have an attorney. I was served in January 2001 and then it sat forever. I imagine the reason was that the Buyer ran out of money. Obviously, if she went into foreclosure as I suspect, she has no money.

I also want to say that she is married and the first lender did not want the husband because of his credit. I understand though that the refi lender did take the husband. He signed my notes, but did not appear on the lawsuit.

I am now in the middle of interrogatories. My attorney sees no rhyme or reason for this lawsuit. He feels I have done a real careful job on my part. Believe me I have everything documented.

As far as the appraiser, I think I will let them prove that the appraiser was a fraud.

I had nothing to do with the refi. Although, she is accusing me of such and even questioning my involvement with the mortgage company. Like I could tell them what to charge her. She got the refi on her own and I am not certain if she came out with extra money in her pocket.

Also, in her lawsuit she claims psychological damage. So, I came back asking her in the interrogatories of the name of her psychiatrist if she had been to one.

Again, thanks all.

Re: Suit and Appraisals - Posted by Deanne

Posted by Deanne on July 01, 2001 at 10:44:05:

JT -IN Thanks for your comments. The loan Broker ordered the appraisal. I knew of him and he had appraised several houses of mine before. The house did appraise for the sale price. I do not have a copy of it. How easy is it to acquire an appraisal? The second appraisal was done without my knowledge. I don’t even know the appraisal but it seems like a large company. What does YO mean in your post JT?

Re: Buyer suing after 3 years - Posted by JohnBoy

Posted by JohnBoy on July 01, 2001 at 16:11:23:

I would get with your attorney about filing a countersuit for friviolous and mental anguish that she is causing you. Chances are that once she gets served with the countersuit she will be quickly advised to try and settle by dropping her suit in exchange for dropping yours. What can you lose? You could actually prevail in the end getting her suit dismissed and you getting awarded for the damages she has caused you if it ends up going to court.

I would also tell your attorney to file a frivolous suit against your buyer’s attorney for even taking and filing a frivolous suit against you!

Talk to your attorney about this.

Re: Suit and Appraisals - Posted by JT - IN

Posted by JT - IN on July 01, 2001 at 11:03:26:


Your Atty needs to subpeona/depose the Appraiser, of the first appraisal, with a copy of same, and the Mtg. Co. that refied the original loan, and have them provide the name and info on the 2nd Appraiser, and subpeona him, with the same data. If the Appraisers are all licensed, and all things proceeded above board, their documentation should be golden here. Case closed ! (if I was the Judge).

YO stands for 3 years old, as in I’m 51 YO; grey beard.

Good Luck in this matter. This is only a knat, that needs to be squashed, and then you can get on with the next money making opportunity.


Re: Buyer suing after 3 years - Posted by Deanne

Posted by Deanne on July 01, 2001 at 16:34:05:

Dear JohnBoy:

I appreciate your response. I have talked to my attorney regarding a nuisance lawsuit. I assume nuisance and frivolous are one in the same. His advice is that you can not file a nuisance lawsuit until the first lawsuit is decided in your favor. Outside of that he pretty well agrees with you that there is nothing else to sue for when they are peniless. If you have knowledge that a frivolous suit can be filed as a countersuit,I will seek another attorney because I like your plan of attack.

Re: Buyer suing after 3 years - Posted by JohnBoy

Posted by JohnBoy on July 01, 2001 at 16:59:04:

These would be two different things in my opinion. I would disagree if your attorney claims you must first win the lawsuit before filing a frivolous suit. The mere fact the a frivolous suit was file alone should be enough basis to file the counter suit. If the party wins on there suit then I would assume your counter suit would just be dismissed. A frivolous suit would entitle you to sue for all your attoney fees involved. The buyer may not have anything to go after in a frivolous suit, but I’d be willing to bet her attorney does! In my “opinion”, her attorney would be as much liable for taking on a case that had no basis for a lawsuit, which would be a frivolous suit. Your attorney already stated to you he sees no basis for the suit. So slap him out of it and tell him to get it in gear! LOL

Understand, I’m NOT an attorney, so I don’t know the law on this. With a little luck maybe one of the attorneys that visit this site will throw their two cents in on this.

Here is the difinition for frivolous and nuisance:

adj. referring to a legal move in a lawsuit clearly intended merely to harass, delay or embarrass the opposition. Frivolous acts can include filing the lawsuit itself, a baseless motion for a legal ruling, an answer of a defendant to a complaint which does not deny, contest, prove or controvert anything, or an appeal which contains not a single arguable basis (by any stretch of the imagination) for the appeal. A frivolous lawsuit, motion or appeal can result in a successful claim by the other party for payment by the frivolous suer of their attorneys’ fees for defending the case. Judges are reluctant to find an action frivolous, based on the desire not to discourage people from using the courts to resolve disputes.

n. the unreasonable, unwarranted and/or unlawful use of property, which causes inconvenience or damage to others, either to individuals and/or to the general public. Nuisances can include noxious smells, noise, burning, misdirection of water onto other property, illegal gambling, unauthorized collections of rusting autos, indecent signs and pictures on businesses and a host of bothersome activities. Where illegal they can be abated (changed, repaired or improved) by criminal or quasi-criminal charges. If a nuisance interferes with another person’s quiet or peaceful or pleasant use of his/her property, it may be the basis for a lawsuit for damages and/or an injunction ordering the person or entity causing the nuisance to desist (stop) or limit the activity (such as closing down an activity in the evening).

Re: Buyer suing after 3 years - Posted by JPiper

Posted by JPiper on July 02, 2001 at 09:21:31:

Not in my state. See my post above. You must complete the first suit before filing a suit for frivolous action. Maybe your state is different.


Re: Buyer suing after 3 years - Posted by JohnBoy

Posted by JohnBoy on July 02, 2001 at 09:41:26:

You may be right. I also noticed where it said in that definition that judges are reluctant to award frivolous suits to keep from scaring people away from filing lawsuits.

I had an ordeal with a tenant in BK where his BK attorney was jerking around by stalling with the BK court to buy his client more time while living in my property rent free. They had an option that expired. They were then on a month to month lease per state law once a lease expires. They never exercised the option. I never gave them a new lease. After 3 months of being on a month to month they filed BK. Their attorney objected to my motion to lift stay claiming they had an option on the property and also claimed I had no equitable interest in the property! It was MY property. I owned it! I told my attorney that I’m going to sue the %^&$ out that attorney for filing such a frivolous suit! I also said I’m going to sue him for libel for making a written statement claiming I had no equitable interest in the property. Since BK records are of public information I said anyone that was to ever read the file on this guy could see where this attorney made this statement in his objection to the motion to lift stay. That could hurt my reputation if someone were to read that!

I don’t know what my attorney said to my tenant’s attorney, but he suddenly wasn’t handling his case any more! LOL He also dropped the objection and said they would just handle the matter in civil court when we go in for eviction. But evidently he suddenly had second thoughts and dropped the client altogether! LOL

Re: Buyer suing after 3 years - Posted by JPiper

Posted by JPiper on July 02, 2001 at 10:14:45:

Going to prove that you can THREATEN anything you would like…and sometimes it works. But at least in my state you would have to wait to FILE until completion of the suit.