DiMare v. RealtyTrac, Inc.

Citations: 714 F. Supp. 2d 199; 2010 U.S. Dist. LEXIS 28499; 2010 WL 1223793Docket: Civil Action 07-12238-FDS

Court: District Court, D. Massachusetts; March 25, 2010; Federal District Court

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The case involves plaintiff Donna M. DiMare suing defendant RealtyTrac, Inc. for negligence and infliction of emotional distress due to the erroneous listing of her property on RealtyTrac's website as being subject to foreclosure, despite her filing for bankruptcy which halted the sale. DiMare owns a residential property in Burlington, Massachusetts, and experienced difficulties after falling behind on mortgage payments, leading to foreclosure proceedings initiated by her lender in 2006. Following her bankruptcy filing on December 15, 2006, which stayed the foreclosure sale scheduled for January 2, 2007, RealtyTrac still published her home as a foreclosure listing, resulting in unwanted attention, inquiries from strangers, and a trespasser on her property. DiMare claims these incidents caused her extreme emotional distress. The court considered RealtyTrac's motion for summary judgment and a motion to strike an affidavit by DiMare's attorney. Ultimately, the court granted the motion to strike in part and granted summary judgment in favor of RealtyTrac. The factual background includes DiMare's home purchase, mortgages, and the timeline of foreclosure and bankruptcy events leading up to the lawsuit. RealtyTrac is described as a leading online marketplace for foreclosure properties, aggregating data from over 2,200 U.S. counties and updating its listings frequently.

RealtyTrac offers a platform that lists homes in foreclosure and provides access to a national network of over 5,000 affiliated real estate professionals to assist users in purchasing properties. While RealtyTrac does not act as an agent or broker for direct property sales, users can find local agents through its RealtyTrac Agent Network to guide them, especially first-time homebuyers. The website outlines that contacting an agent is free, but users should inquire about any commission fees. 

For properties in pre-foreclosure, RealtyTrac advises users to contact the owner to discuss potential resolution options, such as paying off debts or selling the property. Users can reach out to the property's listed trustee or attorney for updated foreclosure status. The site suggests methods for contacting the owner, including sending postcards or attending auctions, though caution is advised if users lack experience in direct owner contact.

On July 3, 2007, RealtyTrac listed DiMare's property as subject to foreclosure, indicating a "Sale Pending" status with a sale date noted as January 2, 2007, which was incorrect. The listing included a standard disclaimer stating that the information is for informational purposes only and does not constitute an offer, along with a warning that the accuracy of property information should be independently verified.

On August 17, 2007, Yahoo! Real Estate listed DiMare's property as "a Judgment of Foreclosure Sale," scheduled for a public auction on January 2, 2007, and indicated that more details could be accessed through a link to RealtyTrac. At that time, only RealtyTrac and Yahoo had listings for DiMare's property in preforeclosure status. During the summer of 2007, DiMare and her neighbors observed increased traffic around her property, including individuals taking photos and parking nearby, although no trespassers were confirmed. DiMare sensed potential trespassing when she found her doors ajar and noticed cars in her driveway. 

She confronted a man on her property who claimed he found her home listed on RealtyTrac and had been advised by a real estate agent that the property was "abandoned." On September 7, 2007, DiMare initiated legal action against RealtyTrac. In early January 2008, she discovered her doors wide open, prompting her to begin locking them. Around the same time, a local store owner refused to accept a check from her due to rumors about her financial difficulties. RealtyTrac removed the listing of her property after August 22, 2007, but reinstated it on March 14, 2008, labeling it as "Pre-foreclosure." Subsequently, on March 27, 2008, DiMare received a call from a stranger interested in purchasing her home, claiming to have seen it online, and noticed three vehicles parked outside her property that day. DiMare has a history of fibromyalgia, diagnosed around 1997.

Symptoms for the plaintiff, DiMare, have intensified due to stress and lack of sleep, worsened by RealtyTrac's actions that led to third parties intruding on her property and privacy. She experiences nausea, vomiting, insomnia, loss of appetite, headaches, and anxiety, fearing for her granddaughters' safety when she is not home. Despite being prescribed sleep medication, her pain and stress hinder her ability to sleep. 

RealtyTrac has filed a motion to strike an affidavit from Barbara Santiano, the plaintiff's representative, which responds to an affidavit from Caleb Cobbs, RealtyTrac's CFO. Cobbs asserts that RealtyTrac has no Massachusetts offices or employees, does not make property representations beyond listings on its website, and has not communicated with any realtor regarding the property at 19 Alcine Lane, Burlington, MA, nor would advise anyone to enter a property without the owner's permission.

Santiano's affidavit details multiple conversations with RealtyTrac member agents, who allegedly provided insight into the case despite being unable to submit signed documents by the filing deadline. One agent expressed that RealtyTrac's information is often outdated, while another indicated that RealtyTrac agents handle inquiries themselves without passing them to member agents. Santiano claims there were four inquiries about DiMare's property, though names of the inquirers have not been provided.

The court must consider the accuracy of RealtyTrac's property listing for summary judgment, but Santiano's testimony regarding the agents' statements is primarily hearsay unless it can be shown to fall outside the hearsay definition or meet an exception, such as those in Fed. R. Evid. 801(d)(2)(D) concerning statements made by an agent within the scope of their employment.

No evidence establishes that the unidentified individual was a RealtyTrac employee, as Cobbs's affidavit confirms RealtyTrac has no employees in Massachusetts, and the plaintiff has not provided contradictory evidence. The central issue is whether these individuals qualify as "agents" of RealtyTrac under Rule 801. The plaintiff bears the burden to show that the statements meet the criteria for admissibility under Rule 801. The only indication of an agency relationship is the company's claim of a "network" of "affiliated" real estate professionals, but this does not inherently imply an agency relationship. Mere affiliation does not satisfy the requirements of Fed. R. Evid. 801(d)(2)(D).

The plaintiff argues that the evidence is not offered for its truth but to challenge Cobbs’s credibility. However, the evidence only undermines Cobbs’s credibility if taken as true, indicating it is indeed offered for its truth and cannot be admitted due to hearsay objections. Consequently, the Santiano affidavit, which includes hearsay from unidentified "member agents," will be partially struck down, with the defendants' motion granted in part.

In terms of summary judgment, it is appropriate when the records show no genuine material fact issue and the movant is entitled to judgment as a matter of law. Rule 56(c) necessitates that a party must demonstrate the existence of essential elements of their case, which they will prove at trial. The court views the record in a light favorable to the nonmovant, drawing reasonable inferences in their favor.

The complaint alleges negligence and infliction of emotional distress, asserting that the defendant failed to update the property listing to reflect a stay in foreclosure proceedings. This failure allegedly caused third-party actions such as trespassing and inquiries, resulting in significant emotional distress for the plaintiff.

The plaintiff has not alleged that the defendant intended to cause harm, indicating a lack of claim for intentional infliction of emotional distress. Instead, her claims will be interpreted as negligent infliction of emotional distress, as the only injury asserted is emotional distress, with no claims of physical injury or property damage. The court will consider the separate claims of negligence and infliction of emotional distress as one under negligent infliction of emotional distress. To succeed, the plaintiff must prove negligence, emotional distress, causation, physical harm demonstrated by objective symptoms, and that a reasonable person would have experienced emotional distress in similar circumstances. Emotional distress must be foreseeable, and the plaintiff must show that the defendant was aware of any special factors affecting her response.

The plaintiff's claims can be categorized into those based on third-party trespasses and other events, such as unwanted calls and photographing her property. The trespass claims fail due to insufficient evidence of causation linking the defendant to the third-party acts. While the court assumes certain events (photography, calls, and trespass) were caused by an incorrect property listing, claims of trespass lack adequate evidence. The plaintiff's testimony about finding doors open and encountering a trespasser is circumstantial and insufficient. The only evidence linking the trespasser to the defendant's website is the plaintiff’s account of a conversation relayed from the trespasser, which does not conclusively establish liability.

Evidence presented by the plaintiff is classified as hearsay, with no efforts made to demonstrate that it falls within any exceptions to this rule or outside its definition. The residual exception under Fed. R. Evid. 807 is also not applicable due to a lack of circumstantial guarantees of trustworthiness. The plaintiff noted that a trespasser possessed a print-out from the RealtyTrac website, which indicates but-for causation, linking the erroneous website entry to the trespass. However, this does not establish the defendant's liability for the trespasses, as these were intervening acts that severed the causal connection between the defendant's actions and the plaintiff's injuries. An intervening act becomes a superseding cause if it was not reasonably foreseeable by the defendant. 

Although there are foreseeable outcomes of an inaccurate property listing, such as inquiries or passing by, it is not reasonable to expect that it would lead to deliberate trespassing. The court found no precedent for imposing liability under similar circumstances. The plaintiff failed to provide evidence that any real estate professional involved was an agent of the defendant or that the defendant could have foreseen the trespass resulting from their website listing. Thus, the plaintiff cannot prove the defendant was the proximate cause of the trespass, leading to the dismissal of any claims related to it.

Regarding emotional distress, the plaintiff must demonstrate that a reasonable person in her position would have experienced similar distress. While the defendant could foresee that an erroneous listing might prompt third-party interest, the resultant actions—such as viewing the property or making inquiries—are deemed minor nuisances rather than significant disturbances.

A homeowner in the plaintiff's position is not expected to experience extreme symptoms like severe sleep deprivation, nausea, or headaches due to the defendant's actions. A reasonable homeowner would likely only feel irritation or annoyance. The case does not involve the "eggshell skull" doctrine, as the defendant could not have foreseen such a severe reaction from the plaintiff in response to a minor negligence, specifically an incorrect property listing. To claim negligent infliction of emotional distress, the plaintiff must demonstrate that a reasonable person would have experienced similar distress under comparable circumstances. Since the plaintiff cannot meet this requirement, the claim for negligent infliction of emotional distress fails. Additionally, due to insufficient evidence for the plaintiff's claims, there is no need to consider the defendant's First Amendment defenses. The court grants the defendant's motion to partially strike the affidavit of Barbara Santiano and grants the motion for summary judgment. The plaintiff's complaint contains three counts, but only two claims—negligence and emotional distress—are properly advanced, with the third being a request for relief, not a separate claim. The document also notes the lack of admissible evidence regarding the plaintiff's claims, including hearsay around property listings and the plaintiff's financial troubles. The court clarifies the confusion around the term "agent" in real estate contexts, opting to use "real estate professional" for clarity.

Plaintiff alleges that the defendant intentionally failed to obtain information on bankruptcy filings, but this does not imply intent to cause harm. For a claim of intentional infliction of emotional distress, it is required to show that the defendant intended to inflict such distress or was aware that their actions would likely result in it. Although the plaintiff claims the defendant's actions caused her distress, she fails to demonstrate that the defendant was aware or should have been aware of the potential for emotional harm. Additionally, the defendant's failure to update its website does not constitute extreme or outrageous conduct necessary for such a claim. 

The court assumes, for argument's sake, that strangers parked in front of the plaintiff's property due to an inaccurate listing, although this evidence is weak. The only evidence of trespass comes from the plaintiff's testimony regarding a caller who admitted to entering her home, which is hearsay but may qualify under an exception to hearsay rules. The court does not need to resolve this issue at this stage.

Possible explanations for open doors or gates include simple accidents, like wind or children leaving them open, as the plaintiff acknowledges that she often leaves her doors unlocked. The declarant's statement may be admissible to show the trespasser’s motive but not to prove what the real estate professional said. The identities of both the trespasser and the real estate professional are unknown, hindering the ability for cross-examination.

Liability may arise from a failure to act with reasonable care to prevent harm caused by a third party. An inaccurate property listing could be considered an invitation to trespass, potentially imposing a duty on real estate professionals to protect sellers from trespassers. However, the RealtyTrac website suggests that prospective buyers should respect ownership rights, countering any claim of an invitation. The plaintiff has not made a nuisance claim, and the court does not address the defendant's motions regarding the plaintiff's expert testimony and interrogatories.