Coldwell Banker Pays Homeowners $872,000 Over Deceptive Condominium Sale

FOR IMMEDIATE RELEASE

Coldwell Banker Pays Homeowners $872,000 Over Deceptive Condominium Sale

BOSTON, MA (February 7, 2012) -- After six years of litigation over a deceptive real estate transaction, a Cambridge couple has forced the broker in the deal, NRT New England Inc. d/b/a Coldwell Banker Residential Brokerage (Coldwell Banker), to pay them $872,000 in attorneys' fees, litigation costs, and interest. The $872,000 payment comes on the heels of a December 13, 2011 decision of the Massachusetts Appeals Court that affirmed the trial judge's fee award to these first time homebuyers pursuant to the Massachusetts consumer protection statute, chapter 93A. The couple, Oleg Batishchev and Alla Batishcheva, had previously received favorable chapter 93A findings and a damages award of $576,385 (including costs and interest) against other defendants involved in the transaction.

In early 2005, victimized by what the trial judge later called a "preposterous fraud" and an "intricate, dishonest scheme [that] bamboozled the plaintiffs into purchasing the condo unit,"the plaintiffs hired trial lawyer Jonathan W. Fitch of the Boston firm Fitch Law Partners LLP to represent them. The fraudulent transaction had resulted in the plaintiffs paying $683,385 for a condominium unit different from the one marketed to them that had, in the words of the Appeals Court, "such substantial and egregious workmanship defects as to render [it] virtually uninhabitable."

The plaintiffs' lawyers filed suit in Middlesex Superior Court in November of 2005 against the corporate seller, its lawyer and her law firm, Coldwell Banker and its agent Brenda Cote, and the plaintiffs' own lawyer who represented them in the failed purchase, among others. The case proceeded through a two-week liability phase jury trial, followed by a one-week trial on damages.

The trial evidence established that, during the marketing phase of the sale, the corporate seller and Coldwell Banker's agent kept these first-time homebuyers in the dark as to workmanship defects and latent flaws which seriously undermined the unit's structural elements. In addition, together with the seller and its lawyers, these defendants provided false information as to the true location of the unit being sold. The misrepresentations found their way into the closing documentation, leading the plaintiffs to believe they were purchasing a particular newly renovated condominium unit on the building's right front (as viewed from the street) when in fact, due to those deliberate machinations and also against the plaintiffs' expressed wishes the plaintiffs actually closed on an unfinished and badly damaged unit situated on the building's left front. After the closing, still in the dark as to the bait and switch, the plaintiffs moved into the recently refinished unit that was shown to them only to find out, on Christmas of 2004, that it was owned by somebody else. The plaintiffs' problems increased exponentially when, after a heavy rain, they discovered that the lower level living spaces in the entire building had severe flooding problems. The couple contended at trial that the water penetration stemmed from hidden holes in the foundation and shoddy structural work that effectively lowered the ground floor into the local water table.

In deciding the chapter 93A claims the trial judge concluded that Coldwell Banker's agent had falsely assured the homebuyers that "the building had no water infiltration problems" when she knew otherwise. He found that the seller's realtor and attorneys had "conspired to mislead the plaintiffs with the intention of having them close on the unit" and that the defendants' combined wrongdoing "convinced plaintiffs to go through with the closing . . . ." In addition to an earlier finding of chapter 93A liability against the seller's attorneys, and a substantial damages award against the buyer's own counsel for her negligence, the trial judge awarded $25 in statutory damages, $488,829 in attorneys' fees, plus costs and interest against Coldwell Banker and its agent.

In 2008, Coldwell Banker and its agent appealed the Superior Court's award of attorneys' fees arguing, among other things, that they had not caused the plaintiffs' damages and therefore could not be liable for the plaintiffs' fees under chapter 93A. The Appeals Court disagreed, affirmed the trial court's liability finding, and also awarded the plaintiffs their appellate attorneys' fees under chapter 93A. However, the Appeals Court remanded the case to the trial court for further findings to support the amount of its fee award.

After the remand, the trial judge increased his fee award to $511,595 and found that it was not necessary for him to apportion the plaintiffs' attorneys' fees among the various responsible defendants. He explained that the Coldwell Banker defendants could be held responsible for all of the fees because the actions of the chapter 93A defendants "were all inextricably intertwined and were part and parcel of the same intricate, dishonest scheme."

The trial judge also found that the attorney time spent on the case was necessary and reasonable and that the hourly rates charged by the plaintiffs' lawyers "were also reasonable for attorneys of their experience and excellent abilities."

The Coldwell Banker defendants took a further appeal as to the amount awarded after the remand. On December 13, 2011, the Appeals Court affirmed the fee award in its entirety, ruling that the trial judge did not abuse his discretion and that "the amount of attorney's fees awarded to the plaintiffs was reasonable and in proportion with the amount of damages recovered." The Appeals Court again awarded appellate attorneys fees to the plaintiffs. According to the plaintiffs' lawyer Jonathan Fitch, Coldwell Banker's payment of $872,000 brings their clients' home buying and litigation odyssey to a just and much deserved conclusion.

Case Reference:
Oleg Batishchev et al. v. Brenda Cote and NRT New England Inc. d/b/a Coldwell Banker Residential Brokerage et als.:

Middlesex Superior Court, C.A. No. 05-4074E

  • Appeals Court No. 2008-P-2015
  • Appeals Court No. 2011-P-0143

Contact:

Jonathan W. Fitch, Esq

Fitch Law Partners LLP
One Beacon Street, 16th Flr.
Boston, Massachusetts 02108
Tel. 617-542-5542
Attorneys for the plaintiffs