Monday, March 2, 2009

Drama Queens Among Us, Wright & Hanson


“Social order rests upon the stability and predictability of conduct of which keeping promises is a large item.” Roscoe Pound

Mitchell Wright and Kent B. Hanson are attorneys. Thomas and Cheryl Hanneman went to see them in Counselor Wright and Counselor Hanson’s capacity as attorneys. They chose Counselors Wright and Hanson because Counselor Wright advertised himself as a real estate attorney, and Counselor Hanson is a former Nevada State Deputy Attorney General for the Nevada Real Estate Division. According to the Hanneman’s, when they showed up for their appointment, Counselor Hanson told them “the secretary had just walked out.” Counselors Wright and Hanson offered to trade their legal services for Mrs. Hanneman immediately starting as their secretary. The Hannemans accepted. Counselors Wright and Hanson immediately hired an independent real estate expert for a written review.
The Hanneman’s soon found out why the former secretary had walked out. Counselors Wright and Hanson are Mormons. Here again is another example of that average Mormon IQ of a room temperature 68. Counselor Wright and his Mormon wife were having an on-going “drama.” Counselor Wright’s wife is Karen Wright, a Realtor with Prudential Nevada Real Estate . What is it with the off-the-wall character of real estate agents Prudential Nevada Real Estate hires?

Instead of Counselors Wright and Hanson doing as they had promised, legal services for the Hannemans, they were involved in a high drama. That drama was tearing apart their lives, destroying their legal practices, and endangering the safety of the tenants and visitors to the building where their offices are at.
Mrs. Wright drove by the front of the legal offices in their truck. Mr. Wright saw that and he went running out the front door. Mrs. Wright parked the truck in back and came in the back door. She went directly to her husband’s office and started packing up stuff. Mr. Wright walked in and their yelling and swearing at each other was heard throughout the building and parking lot. Mrs. Wright got into the driver’s seat of their truck and started the engine. Her husband tried to open the door but found it locked. He reached in through the open window trying to unlock the door. Mrs. Wright closed the window trapping her husband’s arm. She drove off with her husband trotting along side while they continued yelling and swearing at each other. That was quite the site as Counselor Wright wears ill-fitting dark suits as he has a bit of a stomach, and very high-heeled cowboy boots. Counselor Hanson then came running out the backdoor yelling for Mrs. Hanneman and the receptionist “to call 911!” He then went running after the truck dragging his colleague. By that time, most of the neighborhood heard and saw what was going on. Counselor Wright then fell as his arm was released. Counselor Hanson helped him back to the office. Counselor Wright was swearing “what a sick bitch she is” and Counselor Hanson was urgently asking, “Mitch, Mitch where are your guns?! What about your guns?!”

This drama in various forms continued. Counselor Wright missed filing deadlines and court dates. Guns were waved around. A divorce was out there. A restraining order was out there. Any client of Counselors Wright and Hanson or any other attorney in the building that came in for their cases only heard about Mitch and Karen’s drama. The receptionist and other tenants in the building complained to the landlord. The landlord was forced to threaten eviction of Counselors Wright and Hanson.
Then Counselor Wright was observed with his pants down, on top of his wife on top of his desk. Seems they were either going for each other’s throats or their crotches.

In the meantime, the independent reviewer hired was working on the report but never completed as was never paid for.

Contracts: The noted legal scholar Roscoe Pound once said that “{t}he social order rests upon the stability and predictability of conduct of which keeping promises is a large item.” Contract law deals with, among other things, the formation and keeping of promises (in Latin, pactia sunt servanda - “agreements shall be kept”). The law encourages competent parties to form contracts for lawful objectives. Promises that are considered to be contrary to public policy are legally void . If a promise goes against the interests of society as a whole, it will be invalidated.
RemCor Realty failed to comply with NRS 645 , NAC 645 and Title 18, United States Code, Section 1014 regarding Mortgage Fraud in their 8485 Mohawk Lane, Reno, NV 89506 transaction with the Hannemans. There are also elements of Realtor, Escrow Company and Investor Fraud, Coercion , Bad Faith , Conspiracy , Mail Fraud , Unconscionable , Promissory Estoppel (reliance to ones detriment), Unclean Hands , Unjust Enrichment , and Extortion . RemCor Realty and First American Title were unethical , grossly negligent and repeatedly dealt deceitfully with several parties to this real estate transaction willfully breaching their fiduciary duties to specifically the Hanneman and two lenders, the Hannemans lender, and the investor’s lender, in manner that is deceitful, fraudulent and dishonest. They failed to do their utmost to protect the public against fraud, misrepresentation and unethical practices related to real estate. There was Unequal Bargaining. There was never a contract as contract is void on the face of it. The contract should have been set aside as unconscionable and due to title/escrow company, escrow officer, real estate Broker’s, real estate agent’s and Dugan’s Unclean Hands and their practicing law without a license.

Collusion occurs when more than one person is involved in cooperation for a fraudulent purpose, here First American/Sher LeGault, RemCor, Zane and Scott & Feather Dugan engaged in mortgage fraud.

Fraud involves the intentional misrepresentation of the truth to deceive the owner, here the First American/Sher LeGault, RemCor, Zane and the Dugans intentional misrepresentation of the truth that the Dugans were buying the property with a lease-back rather than lending the Hannemans money in second position.

Larceny is the theft of assets with the intent to convert them into cash without the consent of the lawful owner. There was the theft of the Hanneman’s home, without their consent, by the Dugans, with the intentional assistance of RemCor Realty and First American Title. The Hanneman’s equity paid RemCor several thousands of dollars for RemCor’s illegally and unethically earned real estate commission and First American Title’s illegally earned fees.

Another result of the larceny was the unjust enrichment of RemCor, First American and the Dugans.

Consideration: Any promise made by parties must be supported by legally sufficient and bargained for consideration (something of value received or promised, such as money, to convince a person to make a deal). If a party is already bound by contract to perform a certain duty, that duty cannot serve as consideration for a second contract. The agreement is not enforceable because it is not supported by legally sufficient consideration. Buyers have a preexisting legal duty to complete the contract.

Fraudulent Misrepresentation: Fraud, a tort, affects the genuiness of the innocent party’s consent to the contract. The Hannemans, the innocent party can either rescind the contract and be restored to their original position, or enforce the contract and seek damages for any injuries resulting from the Dugan’s fraud. Relying on the fraud of the Dugans and their agent, the Hannemans were induced by the Dugans and their agent to make a contract with misrepresentations and therefor the contract is voidable by the Hannemans.

The Hannemans were injured. The misrepresentations of the Dugans through their agent is in words and actions and involved material facts involving concealment to the Dugan’s lender, the Hanneman’s lender, as well as concealment to the Hannemans. The Hannemans were not aware that is a material fact to conceal information to the Dugan’s lender or their lender. The agent, Alan Zane, and his Broker, Magi Bird, as purported professionals, did know via their required duties under their realty licenses under NRS 645 and their Realtor Code of Ethics.
The investors, Dugans, acted with intent to deceive. There was scienter or “guilty knowledge”. Scienter exists because the Dugans recklessly made statements in writing without whether it was true or false. In the Dugan’s misrepresentation, it is not necessary for the Hanneman’s to prove fault. The Hanneman’s must only prove that the Dugan’s misrepresentations were false, without regard to the Hanneman’s state of mind. The Hannemans, the deceived party, justifiably reliance on the misrepresentation of facts as made by them to their agent who was in a dual agency relationship with the Dugans and Hannemans.

The Hannemans did not know the true facts and had no way of finding them out beyond their agent. Therefor they were justified in relying on the statements of their real estate agent, Allan Zane. Mr. Zane though, had breached his fiduciary duties to his clients, the Hannemans, by not informing them. He also used his undue influence in his agency relationship arising out of the special circumstances of his clients, the Hannemans. The result was an unjust enrichment of Mr. Zane, his broker and the Dugan’s whom Mr. Zane and his broker were also representing in a dual agency relationship, and First American Title that Mr. Zane choose.

The Hannemans’ were under the undue influence of a persuasive nature of their real estate agent Alan Zane as well as duress as the Dugan’s assent to loan them money as it later turned out was not genuine. Mr. Zane and his broker, RemCor Realty, forced via intentional trickery, their clients, the Hannemans, to enter into a contract with their investors. The resulting contract exacted as the price by the RemCor thus created the need. That meets the definition of economic duress.

Because it was impossible for the Hannemans to obtain real estate and legal representation at the 11th hour, Mr. Zane threatened to withdraw his and his broker’s services and take his investors loan of their money elsewhere. That despicable tactic meant that the Hannemans were forced to sign the contract prepared by Mr. Zane or lose their home and damage their credit rating. Therefor there was no genuineness of assent by the Hannemans. The investors, Dugans, with the help of Mr. Zane and his Broker, RemCor Realty, had an overwhelming bargaining power. Put the way it was to the Hanneman’s, the Hannemans must agree to those terms or go without the services of RemCor.
This behavior by RemCor Realty created an adhesion contract between RemCor Realty and their clients, the Hannemans. The dominant part, RemCor Realty, presented to their client, the Hannemans, a contract with no opportunity for the Hannemans to negotiate. The result is the contract is unconscionable , and therefore unenforceable. First American Title meeting with the Hanneman’s on a Sunday, and their several escrow instructions amendments they prepared after conveyance, is prima facie evidence of the before lack of ability to negotiate by the Hannemans.

Legality: The contract’s purpose must be to accomplish some goal that is legal and not against public policy. Contracts that require a party, here the Hannemans, to commit a civil wrong, mortgage fraud, USC Title 18, a tort, are illegal.

Contrary to public policy: Contracts that require a party, here the Hannemans, to commit a civil wrong, mortgage fraud, USC Title 18, a tort, are contrary to public policy.

Detrimental reliance: The Hanneman’s justifiably relied on investor Dugan’s offer to loan money to their detriment therefor the Dugan’s promise is irrevocable. That is a classic example of Promissory Estoppel. Of course, once the performance is complete, a unilateral contract exists. In this case, performance was not complete.

Doctrine of unjust enrichment: Arose centuries ago in England, reflects the ethical considerations that justice should be done, even in the absence of a contractual cause of action.

Past considerations: Promises made with respect to events that have already taken place are unenforceable. Past consideration is no consideration.

Valid Contract: a valid contract that the elements necessary to entitle at least one of the parties to enforce it in court. In the Hanneman’s case, the alleged contract is not valid as it fails the legal purpose element. Therefore, the contract is void. Therefor, there was never any lawful authority for any eviction or trespass actions against the Hannemans.

Void: The purpose of the contract prepared by RemCor Realty was is illegal. Therefor the contract is void.

Voidable: Contracts entered into under fraudulent conditions are voidable at the option of the defrauded party. The Hannemans repeatedly exercised this legal option once brought to their attention. It was ignored.
In a unilateral contract, the contract comes into existence at the moment the promises are exchanged. Hence a unilateral contract is a “promise for an act.”

In violation of NRS 645.252, RemCor Realty was knowingly engaged in conduct in violation of their State of Nevada real estate license and failed to supervise their real estate agent Allan Zane. Mr. Zane acted as the Hanneman’s real estate agent and failed to disclose a soon as is practicable any material and relevant facts, data or information by which he knows, or which by the exercise of reasonable care and diligence he should have known, relating to the property which is the subject of the transaction; when he failed to disclose that he was acting for more than one party to the transaction and failed to exercise reasonable skill and care with respect to all the parties to the transaction.
In violation of NRS 645.300 that RemCor Realty was knowingly engaged in conduct in violation of their State of Nevada real estate license and failed to supervise Mr. Zane when Mr. Zane failed to give the Hanneman’s a copy of the contract he had prepared for me for the Mohawk property.

In violation of NRS 645.3205 that RemCor Realty was knowingly engaged in conduct in violation of their State of Nevada real estate license and failed to supervise Mr. Zane when Mr. Zane dealt with the Hannemans in a manner that was deceitful and dishonest for the Hannemans.

(Nevada Revised Statues) NRS 645 govern Nevada real estate licensees.
NRS 645.252 Duties of licensee acting as agent in real estate transaction. A licensee who acts as an agent in a real estate transaction:

1. Shall disclose to each party to the real estate transaction as soon as practicable:
(a) Any material and relevant facts, data or information which he knows, or which by exercise of reasonable care and diligence he should have known, relating to the property which is the subject of the transaction.

2. Shall exercise reasonable skill and care with respect to all parties to the real estate transaction.
NRS 645.315 Conditions and limitations on certain advertisements; required disclosures; prohibited acts.

1. In any advertisement through which a licensee offers to perform services for which a license is required pursuant to this chapter, the licensee shall:
(b) If the licensee is a real estate broker-salesman or real estate salesman, disclose the name of the brokerage with whom the licensee is associated.

2. If the licensee is a real estate broker-salesman or real estate salesman, the licensee shall not advertise solely under the licensee’s own name when acting in the capacity as a real estate broker-salesman or real estate salesman. All such advertising must be done under the direct supervision of and in the name of the brokerage with whom the licensee is associated.
NRS 645.635 Additional grounds for disciplinary action: Unprofessional and improper conduct relating to real estate transaction. The Commission may take action pursuant to NRS 645.630 against any person subject to the section who is guilty of:

5. Representing to any lender, guaranteeing agency or any other interested party, verbally or through the preparation of false documents, an amount in excess of the actual sales price of the real estate or terms differing from those actually agreed upon. (Emphasis added)
NRS 645.3205 Dealing with a party to real estate transaction in manner which is deceitful, fraudulent or dishonest prohibited. A licensee shall not deal with any party to a real estate transaction in a manner which is deceitful, fraudulent or dishonest. (Emphasis added)
NRS 633
(h) Gross negligence or incompetence in performing any act for which he is required to hold a license pursuant to this chapter.
(i) Any other conduct which constitutes deceitful, fraudulent or dishonest dealing.
NAC 645.605 Consideration in determining certain misconduct by licensee (NRS 645.050, 645.190, 645.633)

In determining whether a licensee has been guilty of gross negligence or incompetence under paragraph (h) of subsection 1 of NRS 645.633 or conduct which constitutes deceitful, fraudulent or dishonest dealing under paragraph (i) of that subsection, the Commission will consider, among other things, whether the licensee:
1. Has done his utmost to protect the public against fraud, misrepresentation or unethical practices related to real estate or time shares.
5. Has kept informed of current statues and regulations governing real estate, time shares and related fields in which he attempts to provide guidance.
6. Has breached his obligation of absolute fidelity to his principal’s interest or his obligations to deal fairly with all parties to a real estate transaction. (Emphasis added)
10. Has acquired knowledge of all material facts that are reasonably ascertainable and are of customary or express concern and has conveyed that knowledge to the parties to the real estate transaction.

NAC 645.610 Restrictions on advertising; use of name under which license is licensed. (NRS 645.050. 645.190)
1. In addition to satisfying the requirements set for in NRS 645.315:
(c) The name of the brokerage firm under which a real estate broker does business or with which a real estate broker-salesman or salesman is associated must be clearly identified with prominence in any advertisement.

Duties Owed By A Nevada Real Estate Licensee

Licensee’s Duties Owed to All Parties

A Nevada licensee shall:

1. Not deal with any party to a real estate transaction in a manner which is deceitful, fraudulent or dishonest.

2. Exercise reasonable skill and care with respect to all parties to the real estate transaction.

3. Disclose to each party to the real estate transaction as soon as practicable:

a. Any material and relevant facts, data or information which licensees knows, or with reasonable care and diligence the licensee should know, about the property.

4. Abide by all other duties, responsibilities and obligations required of the licensee in law or regulation.
Code of Ethics and Standards of Practice of the National Association of Realtors
In the interpretation of this obligation, REALTORS can take no safer guide that which has ben handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that other should do to you, do ye even so to them.”

Duties to Clients and Customers

Article 2

REALTORS shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. (Emphasis added)

Sources are the Washoe County public records, RemCor Realty house flyers, RemCor Realty course material from their classes taught at Reno-Sparks Association of Realtors, Title 18, United States Code, Section 1014, NRS 645, NAC 645, Realtor’s Code of Ethics, e-mails, letters, purchase contract, Hannemans, Wright & Hanson’s receptionist, Hanneman’s independent reviewer, Reno Justice Court public records, Washoe County District Court public records, Nevada State Supreme Court records, Wright & Hanson’s landlord, other tenants in their building, and Reno Police.

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