LAW: Judgments

No recovery awarded for data error

Matheus v. Sasser Court of Appeals of Texas, Fort Worth, 2005

A Texas appeals court has ruled that a buyer suffered no economic loss and is therefore not entitled to damages from an MLS listing that misrepresented a home’s square footage. Two salespeople submitted a property listing to the MLS on behalf of a seller stating the property had 4,218 square feet. The property actually had 3,593 square feet. The salespeople had added the square footage of the second floor to the total square footage.

The salespeople found a buyer, who, after price negotiations, paid $82.13 per square foot, or $343,225, for the property. An appraisal done by the buyer’s mortgage lender correctly listed the square footage and set the total appraised value at $347,000. The buyer later claimed to have not received a copy of the appraisal report until after closing. At that point, he asked the sellers to make up the difference or to revoke the sale. The sellers refused.

The buyer filed a lawsuit against the salespeople and the brokerage under the state’s Deceptive Trade Practices Act. He claimed that he had based his offer on a price per square foot and was therefore owed damages for the 625-square-foot difference. The salespeople admitted their error but pointed out that the buyer had paid a fair market value for the property. The court found in favor of the salespeople.

The Texas appellate court affirmed the ruling. The court noted that economic damages were defined in the act as “compensatory damages for pecuniary loss.” The court noted that the buyer had no such claim since the appraised value of the home was more than he had paid.

Antitrust suit not a class action

Reifert v. South Central Wisconsin MLS Corp. U.S. District Court, 2005

A Wisconsin federal court has ruled that an antitrust suit in which a real estate practitioner is seeking to participate in the MLS without becoming a REALTOR® isn’t a class-action suit.
Jay Reifert, a member of the REALTORS® Association of South Central Wisconsin Inc., tried to purchase MLS services without joining the association, but the association refused. He became a member but four years later sued, claiming that since he found no benefit from membership other than MLS participation, the requirement that he join just to have access to the MLS was a violation of antitrust law. He also asked that the trial court certify the suit as a class-action suit on behalf of all members of the association.

The U.S. District Court for the Western District of Wisconsin denied the class certification because the plaintiff wasn’t able to define an adequate class whose interests were represented by the suit. Reifert claimed an estimated 30 percent of MLS participants wouldn’t have joined the association without the MLS service. However, he offered no evidence on how he identified this number and was unable to identify any other association member who had joined the group solely for the MLS access. The court ruled Reifert had failed to identify a suitable class.

Because the suit isn’t a class action, the amount of recoverable damages is limited solely to the member’s dues and attorneys’ fees.

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