ph: (312) 368-0100 | fx: (312) 368-0111
180 North LaSalle Street, Suite 3200 | Chicago, Illinois 60601

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.

Please follow and like us:

When Silence Is Not Golden, A Cautionary Tale For Brokers

Under the “Carmack Amendment,” a motor carrier (i.e. an entity providing transportation of cargo) is generally strictly liable for damages incurred during the interstate shipment of goods.  Alternatively, a broker (i.e. an entity who arranges for the transportation of cargo) is ordinarily not liable under the Carmack Amendment so long as it does not hold itself out to the public to be a motor carrier. 

On April 19, 2019, the United States Court of Appeals for the Third Circuit issued an opinion in Tryg Insurance et al. v. C.H. Robinson Worldwide, Inc. that should serve as a cautionary warning to brokers.  Specifically, the Third Circuit found C.H. Robinson (a well-known broker), to be liable under the Carmack Amendment because it did not make it clear to the shipper that it was only providing brokerage services.  

In Tryg, Tom’s Confectionary Group (“TCG”) contracted with C.H. Robinson (“CHR”) to transport a shipment of chocolate from Pennsylvania to New Jersey.  CHR brokered the load to a motor carrier to transport the chocolate.  The chocolate melted during transit and TCG filed a claim under the Carmack Amendment against CHR.  CHR denied liability and contended that it was a broker and that liability for the damage to the cargo did not extend to brokers under the Carmack Amendment.  TCG argued that CHR was a “motor carrier” under the Carmack Amendment and the trial court agreed. 

In affirming the trial court’s decision, the Third Circuit held that “if a party has accepted responsibility for transporting a shipment, it is a carrier.”  In coming to the conclusion that CHR was a motor carrier, the Third Circuit noted that CHR never made it clear to TCG that it was acting only as a broker.  Thus, CHR’s silence in failing to notify TCG of its role in the transportation of the chocolate was not golden.

As shippers increasingly look for additional avenues of recovery on Carmack claims, brokers must be more careful not to assume the liability of a motor carrier.  Brokers should affirmatively state to shippers the scope of their services (i.e. that they are merely agreeing to locate and hire a third party to transport goods) to avoid the same situation that occurred in Tryg

For more information regarding cargo litigation, please contact:

Roenan Patt at: (312) 368-0100 or rpatt@lgattorneys.com

Please follow and like us: