Brokers are impacted by a myriad of rules and regulations that govern how they can conduct their business. A breach of fiduciary duty claim is a difficult one to overcome because of the level of responsibility the law places on a brokerage in the representation of its clients. Just like the pitfalls a brokerage can fall into in conducting its business, insurance carriers have land mines they can be run into as well. It’s risky business to deny a claim, but many carriers bet on the brokers and agents not having either the money or the energy to sue to get the coverage they paid for. After all, the courtroom is not for the faint of heart.
Stepping into a courtroom is, for many, one of the most terrifying experiences they will ever go through. There are differences between a demurrer and a motion “in limine,” or a summary adjudication motion and a motion for judgment on the pleadings. Each has a time, and a place, in the process. But for most of our clients, who have never been sued before, it’s all Greek. (Or, Latin, as the case may be…)
It’s serious business, when your business is at stake. We make the process understandable. We outline each step. We prepare regular status reports. We collaborate with our clients on strategy. For them, and for us, it can’t be a spectator sport.
If you have E&O coverage, I can often come in as independent counsel (called “Cumis counsel”) and defend the agent and brokerage at the E&O carrier’s expense, if or when that’s appropriate.
I also know how to get a brokerage/agent’s customer to a settlement a claim by assigning the claim against the brokerage/agents E&O company if the carrier denies the claim.
We’ve gone from battling the ever-changing world of short sales, and meeting the disclosure and representation obligations for banks or buyers in REO or foreclosure transactions to multiple all cash offers. It can be a full-time job for a brokerage or agent just keeping up with all the changes. Most try hard to meet those obligations. Some don’t. When it isn’t done, and a client is injured, I can often step in minimize the damage.
No one is perfect, and the DRE is out there watching.
In fact, new legislation has changed the DRE’s mandate to consumer protection—and there are many, many, more DRE audits and DRE accusations being filed against brokerages and agents today than ever before. We have an active DRE compliance program as well. I’ve regularly defended agents and brokerages from the threat of license suspension or even revocation.