REAL ESTATE CLAIMS CONTINUE TO TROUBLE LAWYERS
By Sally E. Anderson, Director of Risk Management and Claims,
Wisconsin Lawyers Mutual Insurance Company (WILMIC)

Claim comes out of the blue

Lawyer represented a landlord in an eviction action which went well. The client was satisfied with the outcome and with the lawyer's work. Four years later, the evicted tenant sued the lawyer in federal court. The tenant claimed names had been switched on some copies of the writ the judge signed in the eviction action. He also named the landlord/client, the judge and the sheriff as defendants in the suit. While the matter ultimately was dismissed, the lawyer needed a defense in the federal court action.

All in the family farm

Lawyer helped an elderly farm couple sell their farm and dairy herd to two adult sons. Sales documents included a note, financing statement and security agreement. The transaction concluded successfully and payments began. After three years, the sons decided to pay the note off early and the parents asked the lawyer for a payoff number.

In preparing an amortization schedule, the lawyer used a closing date that was one year earlier than the actual closing date and so the sons paid less than was actually owed. When the parents discovered their loss and made their claim, it was suggested the "loss" be recouped from the sons, who received the cattle at less than the agreed price. This idea was rejected out of hand and the claim pursued against the lawyer for his error in using the wrong date on the amortization schedule.

Sold to the earliest bidder

Lawyer represented sellers of a highly desirable home in a hot real estate market. Knowing they could virtually "write their own deal," the lawyer sent counteroffers, signed by the sellers, to interested parties with the three best purchase offers. The lawyer advised the clients to complete the sale with the earliest received counteroffer. When the second "buyer" learned the deal was being closed based on an earlier offer, he sued the sellers, who then sued their lawyer.

Gas station cleanup in question

Lawyer was hired by an out-of-state bank to foreclose on a Wisconsin property that had been a gas station. The foreclosure was completed but three years later, the bank was informed by the State of Wisconsin that it had environmental cleanup liability.

The bank asserted that their lawyer assured them they had no environmental liability if they took ownership pursuant to foreclosure. Prior to concluding the foreclosure, the lawyer had obtained a letter from the State Department of Natural Resources stating a lender who forecloses on a property is not responsible for remediation.

Good result, wrong county

Lawyer filed a judgment he obtained in favor of his client in the county where the lawsuit had been tried. Several years later, the client called to tell the lawyer he had heard the defendant had sold her property and asked why no one had contacted him. The lawyer then discovered the property owned by the defendant was not located in the county in which the litigation had taken place. Therefore, no judgment lien was docketed against the property when it was sold.

Reprinted with permission of WILMIC, Spring 2002

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