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Estimates are Opinions, Not Fact and Not Actionable

The internet has unquestionably provided unparalleled access to information to the public, both consumers and businesses, not seen since Johannes Gutenberg invented the printing press.  One such benefit of the access the internet has provided is in real estate.  Several websites now allow users to get estimates on almost every property imaginable.  Zillow is one of these websites which provides “Zestimates.” Although this knowledge can be useful to potential purchasers, some owners may take issue with these valuations.  This exact situation occurred in Patel v. Zillow, Inc.

In Patel v. Zillow, Inc., the United States Court of Appeals for the Seventh Circuit reviewed the dismissal of a lawsuit brought by homeowners who took issue with Zillow’s “Zestimate” of their property that they were trying to sell.  Before the lawsuit was filed, they learned that Zillow’s “Zestimate” of their property was below their asking price.  Zillow’s “Zestimate” listed the property at approximately $160,000 less than Plaintiffs’ listing.  Plaintiffs contended that the “Zestimate” scared away potential buyers.  Plaintiffs asked Zillow to increase the “Zestimate” or to remove them from the database.  Zillow declined.  Plaintiffs filed their lawsuit.

Plaintiffs brought suit under the Illinois Real Estate Appraiser Licensing Act contending that Zillow was appraising real estate without a license.  Plaintiff also filed claims under the Illinois Uniform Deceptive Trade Practices Act and under the Illinois Consumer Fraud and Deceptive Business Practices Act.  Plaintiffs argued that Zillow’s “Zestimate” was unfair and misleading.  The District Court (the trial court) dismissed all of Plaintiffs’ claims.

The Seventh Circuit upheld the trial court’s decision.  The Seventh Circuit noted that the Illinois Real Estate Appraiser Licensing Act did not create a cause of action for a private citizen.  More importantly, as to Plaintiffs’ claims under the Deceptive Trade Practices and Consumer Fraud Acts, the Court stated that these acts deal with statements of fact and that Zestimates are opinions, not fact.  Accordingly, where a valuation is explicitly labeled as an estimate, there is no deception.

If your business has current litigation, including claims under the Illinois Uniform Deceptive Trade Practices Act or Illinois Consumer Fraud and Deceptive Business Practices Act, or your business would like a complimentary business “check-up” to help spot any potential liability under those acts, please contact Roenan Patt. (312) 368-010;  rpatt@lgattorneys.com or any of our business attorneys.

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