Risk, what risk?

Posted August 22nd, 2007 by Joe Kaiser

We know whenever we enter the overage arena we're going to be faced with the nonsense that goes along with it.

Dear Rob,

I’m absolutely stupefied.

That’s the only word I can think of to explain my feelings when I read Cheryl’s pronouncement about the risks involved with overage plays . . .


Low risk?

Errrrr, not exactly, Cheryl.

The reality

It makes me wonder if reality will ever enter into this investigation.

Seriously, is your staff free to just make it up as they go and totally ignore the facts of the case that don’t fit their story?

Or are they simply unable to recognize the facts in front of them?

Either way, that ain’t good and leads to this sort of thing . . .

Overage transactions are low risk transactions — Cheryl Kringle, former AAG
5/9/2007 Settlement Proposal

Low risk?

Good grief, Rob, that is nuts.

Overage plays are HIGH RISK transactions. They are on the EXTREME end of the high risk scale. There’s nothing we do, in terms of risk, that is more challenging or difficult.

Yet former AAG Cheryl Kringle, after years of investigating me and my overage plays, can’t recognize this simple and obvious fact?

Even worse, she reaches the exact opposite (and completely wrong) conclusion.

Low risk?

I’m stupefied.

The risks

The risks of transacting in an overage play are many and have little to do, generally, with the amount of money paid to a seller to purchase his property.

Cheryl, clearly, has no comprehension of anything other than the $200.00 we invested when we did the deal.

Pssst . . . it’s so not about the $200.00.

In fact, in most instances (but certainly not all), the money we paid to the seller is of little consequence. I believe your office has referred to it as “nominal,” and for argument’s sake that’s close enough.

Still, it completely missed the point.

Understand, it’s not the out-of-pocket expenses that trouble us, Rob, it’s what comes with it that makes us sit up and take notice.

The effort

Overage plays require a tremendous amount of work.

That includes requesting public records through the Public Records Act, (the PRA fiasco not withstanding), researching all the properties in the sale, locating owners, making contact and with luck, coming to terms.

None of that happens without an office and a staff . . . and that doesn’t come cheap.

Sure, while it looks to Cheryl like we’ve only got $200 invested in an overage play, if it’s the one deal we’ve been able to put together that month, the real out-of-pocket number for that overage play is closer to $10,000.

That means that one deal can make or break an entire month’s worth of work. If we come up with nothing, or worse, if we manage to make a decent profit only to lose it to some dishonest seller, trust me, it’s not the money we paid to the seller that bothers us.

Bulls-eye on my back

But the risks of an overage play go well beyond the money invested or the funds spent to have my staff put it together. Truly, the money invested is just a small part of the bundle of risks we assume when we play in this arena.

The fact I’m here today defending myself in a multi-million dollar lawsuit documents exactly how much risk is involved.

And what about county treasurers, misunderstanding the law, telling sellers they’ve been scammed and we’re to blame?

You don’t think that brings in all kinds of other risk?

And let’s not forget county prosecutors doing whatever it takes to put an end to our overage plays so they can be free to work their own.

In 2002, Bob Dick sent the Pierce County Sheriff out to talk to everyone who did overage deals with us. They were all told the sheriff was there to investigate our “possible fraudulent activity.”

You don’t think that brings all kinds risk to the table?

So don’t get it

Cheryl made the ridiculous demand we return the 1.2 million dollars we received from the overages deals we’d participated in over the last few years.

Ugh, we didn’t collect $1.2 million, Cheryl.

Oh, sure, we created that amount and we should have collected it, but with the counties’ efforts to make sure those profits didn’t end up in our pockets, we actually received less than 25% of that.

So, it was more like $300k.

What do you call it when you only collect a quarter of your profits and actually getting it requires you to sue (and spend thousands in attorney fees) to collect, Cheryl?

And all the while become targets for government agencies bent on sticking it to you?

“Low risk?”

Ugh, no.

The overage arena

Here’s how it actually works . . .

We know whenever we enter the overage arena we’re going to be faced with all the nonsense that goes along with it.

That includes the grief from the county telling people they’ve been scammed, the problems with actually collecting the money and the almost certainty of fighting county prosecutors in court who are determined to run interference every step of the way.

Yes, we realize the overage arena is not pretty and can be a messy way to earn a living, but that’s the choice we made.

And while it’s a lot of things, “low risk” is not one of them.

“Overage transactions are low risk transactions.”

Good grief, Rob.


Joe Kaiser

2 Responses to: “Risk, what risk?”

  1. spyboy responds:
    Posted: August 23rd, 2007 at 9:36 pm


    Overage plays seem to be HIGH risk in WA., since the State, or County, may actively interfere with your private contractual arrangement with the homeowner / seller.

    The more I study it the more it seems to be that if a third party conciously, intentionally, actively “interferes” with a legitimate two party contract, which results in one of the two parties suffering a substantial loss because of the interference, that it is a viable “tortitous interference” claim.

    An excellent and relevant study relating to this is a recent WA Court Of Appeals ( division 2 ) case;
    # 3458-0-II,
    New Horizon Christian Center
    Billy J Ensley and “Jane Doe” Ensley; Adams-Hodson & Robinsin Inc dba A H R Engineers Inc.

    Maybe one could turn the high risk around; make it high risk for the govt. official !

    Strategically speaking, based on the limited facts as I know them, if it was me, I would likely initiate a civil legal action for breach of contract against the homeowner who did not fulfill their contract to disburse the surplus proceeds, and use the discovery process in that action to accumulate evidence to support an action against the AG employee ( or county employee, whoever it was ) personally ( in their personal capacity ) who initially contacted that homeowner.

    In such a personal action against a State or County employee, the determinative fact might be whether said employee was acting within or without their designated bounds of authority, and in compliance with or out of compliance with the office policies /
    procedures. Additionally, it would be relevant as to whether that employees supervisor approved of the initial contact, or not.

    The key would be creating a viable claim that would survive an expected affirmative defense claim of “qualified immunity”.

    Of course, I’m not an attorney or a lawyer, so what do I know about the law, the “code”, litigation and courtroom procedure ?

    Thank You.

  2. Davido responds:
    Posted: August 24th, 2007 at 7:09 pm

    Spyboy, your post makes good sense to me. Joe you can win battles by defending. However, if you want to win the war, then sooner or later the offfense must be taken. Here is an idea, you might not have considered. A suit, seeking monetary damages for tortious interference, could be brought quickly and cheaply in small claims court ($4000 max). Such a suit would not only move at lightening speed (comparetively) but would also greatly level fhe playing field because legal representation is not allowed in small claims court. The government official being sued would therefore have to defend him or herself.

    Unfortunately, it is likely that for the first such small claims suit or two, a government attorney would appear in small claims court to request that the case be removed to the superior court in order to resolve an issue of public interest?

    As to the matter of immunity. My understanding is that there is no qualified immunity for governmetal actions which deny a well established constitutional right. I suppose that is another way of saying it depends on the judge.

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