California Broker says: “Disclosure Source (DS) is the Most Unprofessional Company in Real Estate”

Bob Stickney, a Century 21 broker, made this comment “DS is the most unprofessional company in real estate”, on our site when we covered the ongoing litigation between a Century 21 agent and Fidelity’s Disclosure Source. We’ve had many readers ask if there has been a resolution to this situation. Apparently the parties are now settling.
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For those of you that missed this story, in May 2012 buyers of a home in Palmdale, California sued Century 21 agent, Kirk Swirczynski, when they discovered that the Mello-Roos assessment on their home was almost $1,700 more per year than had been disclosed by Fidelity’s wholly-owned subsidiary Disclosure Source. Bob Stickney is the broker for Century 21 who ended up having to defend his agent in this suit.

Rather than accepting responsibility for the incorrect Mello-Roos disclosures ordered by Swirczynski for the seller, Disclosure Source responded to Swirczynski’s cross-complaint with 29 affirmative defenses accusing Swirczynski of negligence for relying on their inaccurate report.

You can read the full story here.

FYI – the lawsuit is entitled Thomas and Alexandria Massari, and Randall Hayes vs. Kirk Swirczynski, in the Superior Court of the State of California, Los Angeles County – CASE NO: MC 023500.

As we all know, there are always two sides to any legal battle and we’d like to share some additional insight we uncovered about this suit following our initial story.

Recently, we received a letter signed by Billy Jensen, President and CEO of Disclosure Source, from one of our readers. You can read that letter in its entirety here:

Jensen of Disclosure Source claims that the Century 21 agent, “chose to hire a lawyer and sue us rather than call us to discuss the problem.” Bob Stickney of Century 21 says that just isn’t so.

Further, Bob Stickney added, “An agent expects to be protected and defended for using a company’s data should any complaint develop into legal action. The costs of having to personally provide legal defense can be catastrophic to an agent and/or his company.”

“After being named in the lawsuit and contrary to what Mr. Jensen states in his letter, I had tried numerous times to contact any attorney at D/S without success. DRE or the insurance commissioner didn’t seem to have any oversight with NHD companies and pretty much said I was on my own.”

“So, in addition to my own frustrating efforts, I enlisted the help of anyone who would listen to me: Fidelity HPP and Chicago Title & Escrow. I got no help through Fidelity. I did get Mr. Jensen’s name and phone number from Chicago Title. I was able to talk with Mr. Jensen twice over about 5 weeks and did not receive any worthwhile help or commitment to protect us.”

“Because the court required a response and none was going to be forthcoming from D/S on our behalf, I had no choice but to hire my own attorney.”

“My attorney needed to represent us in all of our required responses over the next 9 months because D/S would not even indicate that they were going to cover our legal expenses or indemnify us. My attorney ran into the exact same communication problems with Mr. Jensen as I had previously during this period.”

Jensen of Disclosure Source also claims that, “Once we understood the problem we offered to indemnify the Realtor from any loss.” Again, Bob Stickney of Century 21 says that just wasn’t the case.

According to Bob Stickney of Century 21, “After about 9 months of having to deal with this and over $14,000 in attorney’s fees, Mr. Jensen stepped up to the plate and signed an indemnification letter and is in the process of reimbursing our attorney’s fees.” Now, over two years since the lawsuit began, most of Stickney’s attorney’s fees have been recovered.

“Although this turned out as it should have, I am very disappointed that it wasn’t handled properly from the beginning. My time and risk to my company are very real concerns and I will not knowingly put myself in this situation again.”

“An agent expects to be protected and defended for using a company’s data should any complaint develop into legal action. The costs of having to personally provide legal defense can be catastrophic to an agent and/or his company.”

As Bob Stickney points out — neither the California Insurance Commissioner nor the DRE were able to help him with this dispute – ergo a lawsuit. Does this mean you’re on your own here?

What are your thoughts on this issue? How was it handled by Disclosure Source and the agent & broker? We’d like to hear from you!