Local couple fights for legal fees after winning lawsuit against
real estate agent, former homeowner
Morgan Hill – A few months after Bill Corbin and Vera Dalton moved into their dream house, they woke up to a yard full of excrement.
“In the spring, I noticed there was a wet area,” Corbin said recently. “I didn’t know it was a sewer problem until it got hot.”
And a $500,000 sewer problem at that.
Five years after Corbin and Dalton moved into their $630,000 home above Anderson Lake, the couple has spent $71,000 in construction fees, lost more than $100,00 in equity and rang up $375,000 in legal fees.
All because their San Jose Realtor, Joanie Francis, of Century 21 Alpha, checked the wrong box on a disclosure document, leading Corbin and Dalton to believe they were connected to city sewer services, when in fact their house was sitting on top of a damaged septic system.
The couple sued Francis for fraud and won last spring, but they might have been better off had they never called a lawyer. Seven months after winning their trial against Francis, Corbin and Dalton haven’t received a penny and are terrified they’ll be on the hook for legal fees they can’t begin to afford. Rarely have two people who’ve won a lawsuit felt more defeated.
“We’ve been playing this waiting game since April,” Dalton said. “When you go through a jury trial and it comes out in your favor, that should be the end of it.”
Corbin and Dalton moved from Fremont to Morgan Hill in December 2000 because they liked the area and wanted to be closer to their jobs at EDO Reconnaissance and Surveillance Systems.
Francis was their agent for both houses and had a personal relationship with Diane Renee Lambert, and her mother, Diana Hop Lambert, the previous owners of the house Corbin and Dalton purchased in Morgan Hill.
Both Lamberts have serious illnesses. The mother has Lupus, and Diane Renee Lambert suffered two strokes at age 30 that left her unable to speak; she communicates with a hand-held electronic device. The Lamberts, who now live in Ohio, could not be reached for comment.
It was the daughter, unable to speak, who filled out the standard disclosure forms with Francis. At the fraud trial, in which the Lamberts and the Realtors were both defendants, the younger Lambert testified that she told Francis she didn’t know whether the house was on sewer or septic, an important distinction because it changes the value of the house and the cost of maintaining the property.
“When we went into this, I didn’t know who to believe,” Corbin said. “But when we got to court, it all made sense. The real estate agent was trying to cover up.”
The jury agreed, finding that Francis claimed the house was on sewer without investigating to make sure. According to local real estate experts, it’s an easy mistake to make. Disposal systems in that neighborhood change from house to house. But it’s a mistake equally easy to avoid, with a single phone call to the city’s public works department. Francis declined to comment for this article, citing pending legal proceedings.
After Francis helped them sell their Fremont home, Corbin and Dalton moved to Morgan Hill two days after Christmas 2000.
The next fall, they had to tear up their yard and driveway, remove the old septic tank, install more than 300 feet of sewer pipe and build a new retaining wall on the slope behind the house. They couldn’t wait because the septic system was damaged and the property was in danger of being declared uninhabitable.
The couple made the repairs and went back to Francis and the Lamberts to be reimbursed. They were unsuccessful, and late in 2002 hired their first attorney. There was little progress. For a year, the Lamberts and Century 21 Alpha refused requests for mediation.
“I tried to take care of this without getting lawyers involved,” Dalton said, “but they were ignoring us.”
In fall 2003, the couple hired San Jose real estate attorney Dean Rossi. After a mediation, they sued, alleging that the seller and agent committed fraud by representing the home was on sewer services.
More mediation followed, but nothing was resolved. At a settlement conference just before the April 2005 trial, the defendants offered to settle for the cost of repairs.
“Unfortunately, by that time we had incurred several hundreds of thousands in legal fees and costs,” Rossi said.
And after a 12-day trial, the jury found Francis and her company to be 100 percent responsible for Corbin and Dalton’s damages.
Santa Clara County Superior Court Judge Socrates Manoukian ruled the couple deserved $85,000. But now the couple is caught in the vagaries of contract law.
Because their agreement to buy the house is with the Lamberts and not Century 21 Alpha, there’s no legal theory under which Rossi can recover costs and fees from the agent. For Rossi to get paid, Corbin and Dalton must sue the Lamberts, who in turn must recover from the real estate agency or the company’s insurer.
Rossi will be in court next week to get a clarification on how much his firm is entitled to. He said that Corbin and Dalton may not ultimately win fees and costs.
“There is a chance because this area of the law is not as clear as you would like,” he said. “This could make law because whomever loses will appeal. You would think that because all of this was caused by the agent, she or her insurance company will have to pay.”
Regardless of how the fee arguments play out, the real estate license Francis has held since 1979 could be in jeopardy.
Tom Pool, of the California Department of Real Estate, said a successful civil complaint is a strong basis for disciplinary action against an agent that could result in a license suspension or revocation.
For that to happen, someone would have to file a formal complaint against Francis, who has no history of discipline with the state. Pool said he could not reveal whether she was currently being investigated, but Corbin and Dalton said they have no intention of reporting her.
“That is not something I want to see happen,” Corbin said. “It wasn’t intentional on her part. She just didn’t do her job. She didn’t take time to protect me, and I feel abandoned.”
