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Published by OREP, E&O Insurance Experts | Dec. 15, 2011 | Vol. 239

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According to the attorneys bringing suit on behalf of a group of appraisers against FNC/AppraisalPort for alleged false advertising and data mining, the suit has settled quietly and its terms prohibit them from comment.
 

FNC Data Mining Lawsuit Settles Quietly
By David Brauner, Editor

According to the attorneys bringing suit on behalf of a group of appraisers against FNC/AppraisalPort for alleged false advertising and data mining, the suit has settled quietly and its terms prohibit them from comment.

As you may recall, a group of appraisers
accused FNC of "intentional misrepresentation, negligent misrepresentation, conversion, misappropriation, breach of bailment and breach of implied contract."  Specifically, they claim FNC built a national database of information about properties using appraisers' information and now competes with them at their own expense.
 


FNC denied the claim in court and in a Working RE story (Fall 2007), “
Federal Suit Alleges Misuse of Appraisers' Data by FNC.”

In February of this year, the United State Court of Appeals Fifth Circuit, reversing a lower court decision, allowed the lawsuit to continue. Recently, the suit settled.

The following detail of allegations is excerpted from the February 24, 2011 Court’s Opinion, allowing the lawsuit to continue (WorkingRE.com, Sidebars: FNC Lawsuit Settles): “The plaintiffs in this case have prudential standing primarily because of the zero-sum competitive relationship that exists between them and FNC in the field of real-estate-valuation services. Lenders who use the National Collateral Database would otherwise use the plaintiffs’ appraisal services, FNC was able to create the National Collateral Database only because it stole the plaintiffs’ work product, and FNC’s taking of the plaintiffs’ work product was made possible by the false advertisements FNC ran touting the confidentiality of AppraisalPort. But for the false advertisements FNC targeted at the plaintiffs, the National Collateral Database would not have been able to compete effectively with the plaintiffs’ appraisals. It is the inextricable linkage between FNC’s false advertisements and the plaintiffs’ diminished opportunity to sell appraisals that brings this case within the ambit of §43(a).”

Neil Olson, FNC Chief Legal Officer said, “FNC is delighted that the lawsuit has been resolved and excited to continue to serve our clients to the best of our abilities. We are unable to comment on the terms of the suit as they remain confidential and we respect those terms for both parties involved.”

The firm representing the appraisers is Marzouk & Parry, located in Washington, D.C.

Read the February 2011 Court’s opinion (click FNC Lawsuit Settles).


About the Author

David Brauner is Editor of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 49 states (OREP.org). He has covered the appraisal profession for over 16 years. He can be contacted at
dbrauner@orep.org or (888) 347-5273. Calif. Insurance Lic. #0C89873. 
 

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