Posted by Peter Bodonyi – President ExamNet Inc.

This is only the second time I have ever felt it necessary to post a blog on SOT. Interestingly enough it was for a similar situation about 2-3 years ago where inaccurate inflammatory comments that border on defamation were posted about me and my company.

 Before I get into the details of our claim – let me take a moment to give you some corporate background. Since 1999 we have processed over 432,000 searches averaging approximately 6,000 searches per month, 55% of those ALTA insured products (refi / purchase through eCom Title) and the balance un-insured (second mortgage / HELOC through ExamNet).

Since that time, I have been subjected to 3 claims that had merit. The first we completely blew the search and filed a claim through our own E&O, the second an abstractor missed a fed tax lien and they covered through their E&O and now this transaction.

 We have never had to “sue” a vendor and in fact I have never found myself in a litigating situation. The fact that we have had only 3 hits is both a little luck but more likely a testament to the overall quality of abstractors that we utilize (some of which we have located through SOT – thank you Robert) as well as through our own grass roots approach to Vendor Management. This stat alone I believe would clear us / me of being a Sue Happy Terrorist – that in my view is a completely unprofessional and unethical term based on current world issues.

 We are aware that your specialized skills are our product. We completely rely on your skill set to provide 1-2 owner searches, 24 month chains et al in a timely manner and based on how the market is going at unfortunately cheaper and cheaper prices. When we come to you with what we even consider insane pricing structures, all of you must understand that the mega lenders and title companies are squeezing every drop of water from the stone – our pricing model has not changed, what has changed is VMC’s like Trans Union Equity Services, and other mega companies like them are driving prices so low that we are all taking a hit.  

 Regarding our paying our bills; we do. Albeit since our inception we have had cyclical times where we have gone 90 days or more – but those that know us, know we pay our vendors. The only time we have made a decision not to pay a vendor has been after what we determined a gross sense of misrepresentation of either their skill set, or level of service including turn times or bait and switch price quoting techniques.

 What we are sometimes guilty of is our vendor management team sometimes will get a bit annoying with ETA requests on exams that are over the stated turn times. What some of you forget to realize, is if we are calling, it is because our phones are melting with lenders screaming at us…..

 The bottom line, we are a vendor management company that pushes paper. We ask for specific turn times, pricing and search criteria. 99% of the time we get it and grow our vendor base with long standing vendor relationships. Some do come and go. Some relationships end poorly and others amicably. Its just business.

 Now to Mr. Martinez:

 ExamNet contracted Mr. Martinez to complete an OE search which he did in a timely manner and by all accounts every other search we received from him was of high quality and turn time. We never and frankly still do not have an issue with the over all quality of his work. It should be noted that he was in fact paid for the search.

Dan Zereski and I stated to Mr. Martinez personally that we had no intention of hurting him, burying his company or even ending the business relationship. At the time of our contact we had approximately 6 searches still in queue with more to send as his geographic location is an area that we are growing substantial business.

 I was both empathetic and conversational with him. I stated sometimes these things happen. It was a mistake, an error that within minutes he sent over the revised report – since he did in fact have the exhibit in the file. The problem is the damage was already done.

 Mr. Martinez accuses us of being litigious, when in fact the truth is; he failed to include one open mortgage exhibit in his chain that he delivered to us. By his own admission both on this BLOG and to Dan Zereski, my in house counsel and Chief Title Officer (not litigation attorney) as well as me, his abstractor did in fact provide the mortgage in her search but somewhere along the line Mr. Martinez’ internal process erred by omitting the mortgage from their fax to us. Let me repeat. They ERRORed and OMITTED the exhibit.

 My lender based on our report took on the loan under the assumption that they would be second position, when in fact they now find themselves in third.

 The lender is now unable to sell the loan on the secondary market – and is incurring a loss of somewhere around $ 15,000-$ 17,000 with that figure climbing each day due to per diems. That is why there is a loss Mr. Franko – there is a loss because the lender’s counsel is suing me because they can’t sell loan. Just because there is no ALTA policy does not mean there is no remedy.  

 Simply stated, it is a human error not much different from that of an auto fender bender. Everyone has auto insurance. No leaves the house with the intention of hitting someone. But it happens. If it does you file claim with your auto insurance carrier. How is this any different? Mr. Martinez made a mistake, an error. It wasn’t intentional or habitual, but it did happen.

 Mr. Martinez is trying to hide under the “I’m just a small independent abstractor” that was paid $ 50.00, and shouldn’t be held responsible and that he is afraid to file with E&O because his premium may go up. There is a possibility that both Mr. Martinez’ or our E&O carrier could kick this as a no claim – if that happens both Mr. Martinez and I will be named and on the hook for the full amount, which is what I am trying to avoid for both of us.

 The bottom line is he has E&O; this is a classic title fender bender. We assured Mr. Martinez that this would not sever the relationship and in fact if he would have stood behind his product, the relationship would have continued to grow. Instead, he told me to F off and that he wouldn’t work with us.

 Mr. Martinez states that we are unethical and sue happy. Interesting comments from someone who had a personal conversation with Dan Zereski on my staff discussing his on-going 3 other lawsuits and him mentioning to Dan “not to use Company Abstract Unlimited owned by Joyce Frelic or Marion Shields – a former employee and con-artist.”

 With that type of exchange taking place, how poorly could have our conversations been with Mr. Martinez. Who is the unethical party here?

 I have had 3 claims since inception, he has adimitted to three current open lawsuits plus a potential ExamNet suit.  Who is the litigious one?

 Mr. Martinez also continues to question the time frame in which it took us to contact him. The question alone raises questions on his actual knowledge of the industry. I am sure many are aware that claims in our business can sometimes take years to surface.

 The bottom line, if this situation goes to the next step, in which the lender files the suit (which will be before year end) Mr. Martinez and ExamNet will be named. If that happens we are both looking at least $ 10,000 in attorney fees. Robb Grandon (OH) wrote a blog on bullying a small independent.  Guess what people; it is a tactic that is used by the big companies. I am not the one pushing this. But as this goes forward I am not going to be the one left holding the bag on Mr. Martinez error because his company is smaller than mine point blank.

Just because your entity is a sole proprietorship, does not mean that you can operate without liability. We are all in a risk management business. The end user of your searches that you provide to the ExamNet’s of the world are mega banks that have in house legal departments that need to justify their existence.

 This should be a lesson to anyone out there operating without Professional Liability or E&O coverage. None of us, big or small can take a hit or multiple hits on a $ 15,000 or worse loan amount because you didn’t want to pay the $ 1,500 premium per year. We all have families, homes etc.

I stated earlier it is only business. I did not wake up and decide to go after Mr. Martinez. Our lender client plans to sue me because they claim to have a loss; the loss was caused by one page of a fax not being sent. It’s an omission – its unfortunate but it happened. It’s a fender bender – file the claim and it goes away. What is truly sad is we were more than willing to continue doing business with him. In a few short months he would have recouped the deductable loss through more business.

 Sorry for the long blog, but I am tired of one sided discussions on this site and the short sided views of a very small percentage of the vendors out there and how they view the clients that actually send them business.

Professionally
Pete Bodonyi
President
ExamNet.

 

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