SOTHEBY'S INTERNATIONAL REALTY

Our experience with the brokers at FFFP, now operating solely as Sotheby’s and still employing these same brokers, was and continues to be painful. The reprehensible conduct of their brokers and decision-makers at the agency forced us into a legal battle that, although the court decided in our favor on all counts, was stressful, frustrating, and extremely expensive. They sued us, their customers, in 2009 to strong-arm us into solving a problem with another client on an adjacent lot that began prior to our purchase. FFFP/Sotheby s helped cause this problem, hid it from us at the time of purchase, and expected us to bear the burden with no consideration or fair compensation. They forced the issue to trial by an unwillingness to engage in any reasonable settlement discussion. The district court judge found their agents’ testimony not credible, that their commission was obtained through material misrepresentation, and that our broker, Neil Lyon, wanted no liability for his conduct as a broker. They are still abusing us through the legal process. Most recently they appealed to delay or deny our ability to recover our significant legal costs awarded by the court--around $250,000—as well as other damages. The detailed facts below are documented in Judge George Eichwald's court decision which was filed in the County of Santa Fe's District Court Clerk's Office on September 27, 2012 by Stephen T. Pacheco, MRN. We purchased our Santa Fe home on 35 acres in 2005 in which French & French Fine Properties/Sotheby’s agents represented both the buyers and sellers. The agents disclosed that there were covenants attached to the land with several restrictions, most notably that subdivision of the property as well as adjacent properties be no less than 5 acres until 2020, a feature of particular value and significance to us. What they failed to disclose was that a building contractor and client of FFFP/Sotheby's had illegally subdivided an adjacent lot in 2004, with FFFP/Sotheby's knowledge and assistance. There were other lots illegally subdivided yet not built upon, also adjacent to the property. They also failed to disclose that there was an active lawsuit on those illegal subdivisions involving FFFP/Sotheby's and other neighbors. They further failed to disclose that the seller of our property had signed a waiver and/or amendment to those restrictions generated by FFFP/Sotheby's which would prevent us, as new owners, from enforcing the covenants in the manner that the agents had marketed to us. The lawsuit between FFFP/Sotheby's, the building contractors Joe & Linda Gammon, and the neighbors attempting to uphold the covenants finally came to a settlement agreement in 2008. Also involved in the lawsuit was Dr.Goldstein, who had purchased the spec home the Gammons' built on half of the illegally split lot, a sale FFFP/Sotheby's received a commission for. We were unaware of what was going on until the judge ordered that since we owned the adjoining property, we had to sign off on the settlement before he would officially rule on it. The parties in that lawsuit were operating under the belief that we were bound by the waiver signed by the previous owner and not disclosed to us, which gave up our rights to enforce the covenants. One aspect of their proposed settlement was that our land be restricted to 5-acre parcels while the illegal 2.5-acre parcels adjoining our property be allowed. Another aspect of their proposed settlement was that the neighbors (plaintiffs), none of which have property adjoining the illegal lots as we have, would be financially compensated although we would receive no financial compensation. FFFP/Sotheby's lawyer first contacted us in 2008, at the behest of the judge, asking that we either sell 5 acres to solve the Gammons' illegal lot problem or agree to waive the covenants with no compensation. They refused to entertain any proposal for reasonable value for the sale of one of our lots and we declined to consent to the waiver for no compensation. So they filed suit against us, requiring us to retain counsel in order to protect our interests as a direct consequence of the original non-disclosure. Thereafter, to no avail, we tried to negotiate a reasonable settlement for allowing other property owners to realize the financial gain of dividing lots into 2.5 acres while enjoying the 5-acre restriction that our land offers. To illustrate: the Gammons paid under $300,000 for the 5-acre parcel. They split it into two 2.5-acre parcels, built a spec home on one, sold it, and valued the remaining lot at $225,000. Thus they realized a financial gain of $150,000. The covenant violation was discovered when they began building a second spec home. As you can see, in their proposed settlement the 2.5-acre property owners would enjoy the low lot density development that our adjacent property offers with the 5-acre restriction. Yet we would not enjoy the same privilege of low lot density, nor could we realize a $150,000 gain on each of our 6 vacant lots. There were 12 years remaining for them to enjoy that advantage. We asked that the covenants stand and Gammons and Goldstein operate as tenants in common, or we offered to sell a lot at fair market value. Or they could pay $175,000 as compensation, little more than 1/6 of our possible gain if our lots were sub-dividable into 2.5 acres and sold. Additionally we would have relinquished our rights to enjoy low density construction to the east of us. We felt that our offers were more than fair, some things we did not really want to do, but we offered as a courtesy. They did not even counter our offer. They again made no attempt to negotiate reasonably and responsibly during the court-ordered mediation to avoid trial. They offered to "rent" a 5-acre parcel--a loophole that would tie our hands from selling, if necessary, and the pittance they offered wouldn't even cover the taxes. Plus our mortgage company in all likelihood would not have allowed it. They forced the issue to trial. When the suit was filed and we first learned about the waiver, we called Neil Lyon, our broker, to get a better understanding of what was going on. He said he knew nothing about the waiver or the amendment, leading us to believe that he was operating on our behalf, which led us further into legal entanglement. During the trial Lyon reversed his position on the witness stand and testified that he had disclosed the waiver to us. The selling agents echoed his assertions. The judge found their testimony not credible. As an actual witness to the events, I will say that they lied outright. There was no documentary trail that the waiver or other relevant information had been disclosed to us or the lawyer we hired to oversee the transaction. Also, during the trial, we discovered that Neil Lyon had checked a box on a document after we signed it. Our copy was not checked. Lyon also broke New Mexico Real Estate Commission law by intentionally withholding information regarding the nature of the broker relationship. The judge also ruled that the brokers avoided disclosure to ensure we would purchase this home, not one of the significantly lower-priced homes we were also considering, and so they would receive a $190,800 commission. The judge's decision stated that they deliberately placed their own interest in securing the commission over our interest without giving the disclosure required by law. He also found that their negligent misrepresentation and legal pursuit caused us to suffer damages far in excess of what we originally asked as compensation to consent to the waiver. There are many more details to the judge's unfavorable ruling against FFFP/Sotheby's that are too numerous to mention. FFFP/Sotheby's, the brokers, and the Gammons had multiple opportunities to solve the problem they created without forcing us to carry the burden. They allowed the situation to get totally out of control, torturing us for over 3 years. Suing someone is like declaring war, economically and emotionally, particularly in a David & Goliath situation such as this. They were unwilling to compensate us fairly for our sacrifice but have been willing to rack up hundreds of thousands of dollars, if not millions, in legal fees on all sides. This has been a nightmare. We intended our savings for our kids' college tuition, retirement, a safety net for difficult economic times, or something enjoyable, certainly not legal battles with corporate bullies. Although if people don't occasionally stand up to bullies, they will prevail. I hope this experience and my sharing it helps someone else.