Believing without a doubt that we had been the victims of fraud and that fraud was a criminal offense, I contacted the Sutter County Sheriff’s Office.  I was told the District Attorney’s Office had to bring charges before the Sheriff’s Office could take any action.  I contacted the Sutter County District Attorney’s Office and was told to have my attorney contact them with the specific code numbers of the laws that had been violated.  When I informed them I didn’t have an attorney, I was told that when I got an attorney to have my attorney call them.

After paying off all our debts to qualify for the loan and replacing the roof on the house we sold, we had only enough money for a five percent (5%) down payment on this house. Our loan-to-debt ratio, with no other credit expenses, was maxed.  Had we known the property needed repairs, we would have known we could not afford to purchase it; and, furthermore, the lender would not have financed the purchase. We did not have money to fix the damages, and we could not qualify for another loan to fix the damages. We were in a financial bind and needed help.

Due to the arbitration clause in the Real Estate Purchase Contract, I contacted the Yuba-Sutter Association of Realtors and was told that arbitration was out of question due to the dollar amount of damages. I contacted the California Structural Pest Control Board (SPCB) and the Department of Real Estate.  Each said they can take action against a licensee but cannot guarantee any restitution. Neither even said they would attempt to obtain restitution for us.

In their report, Parish Termites had noted that a prior inspection tag had been posted by Ray’s Termite Control two years prior to our purchase (which Terminix failed to note). To see if any of the damages Terminix had failed to report existed at the time the seller purchased the house, I asked the Structural Pest Control Board for a copy of the Ray’s Termite Control report.  I was told that the Board only retains reports for two years; therefore, there was no way they could provide it.

The SPCB sent a complaint form and a pamphlet, which informed us what information must be included on a pest inspection report, how long a report is valid, and what recourse a consumer has if dissatisfied with the services of a pest control company.  The booklet stated:

The Structural Pest Control Board will first try to mediate your complaint.  If this does not result in a satisfactory solution and further investigation is warranted, the property may be inspected by a Board specialist.  However, even if an investigation results in a license suspension or revocation, the Board cannot guarantee that you will receive any restitution.  You may still have to take civil action.

From reading the SPCB pamphlet, it was my understanding that the only thing the SPCB could do was to go after Terminix's license. That would not help us at all. Past experience with a State agency (the Department of Motor Vehicles) taught us that when the State finds fault with someone, they impose a penalty in the form of a fine; however, the person damaged receives no restitution. Our objective was not to punish Terminix or the real estate agents/brokers by causing them a problem with their licenses or to increase revenue to the State.  Our only objective was to have the damages fixed that they had neglected to report.

We needed restitution as we were financially unable to replace the leaking roof or repair the dry rotted bathrooms and family room.  I consulted with an attorney -- for a fee, of course.  Following his advice, I proceeded to get estimates for repairing the nondisclosed damages. I then learned that three major amenities represented to be present and operable were deliberate misrepresentations. The solar heater for the household water supply was totally irreparable and had been professionally rerouted, the pool never had a solar heater, and the automatic sprinkler system was irreparable and needed to be completely replaced.

The estimates I received to bring the property to the condition we had been deceived into believing we were purchasing -- to the appraised value and the conditions represented and contractually guaranteed -- was over $40,000!

The attorney refused to take the case. I later learned he was the attorney for the Sutter Yuba Association of Realtors, of which both the seller’s agent and “our” agent were members; and his law partner had dated “our” agent.  I believe he refused the case because it would have been a conflict of interest for him to represent us. I also believe it was a conflict of interest that he had agreed to the consultation after I had told him who the parties were, that he met with me, and that he reviewed my documentation.

I contacted another attorney who refused the case because he had previously represented the seller’s agent.  He advised that because Yuba City is such a small community that I find an attorney outside the area. All the other attorneys I contacted in the area stated it was cost prohibitive to go to court and refused the case.

Hoping to avoid a civil suit, we retained an attorney outside the area (who had informed us he was not a trial attorney) and asked him to just send letters to the seller, real estate agents/brokers, and Terminix.  After reviewing our documentation, he sent a letter to the seller and the two real estate agents/brokers, informing them of the numerous damages they had failed to disclose. He put forth an offer of a combined settlement of $20,000.

The seller filed bankruptcy. The seller's agent did not respond.  The agent we had mistakenly believed was representing us, who later testified she represented both the buyers and the seller, sent a non-responsive letter.

The attorney sent a letter to Terminix, dated April 15, 1992, informing them of the defects their pest inspection failed to report and of the items discovered by Parish Termites. The letter further stated:

We have advised the Virgas that Terminix is liable to them in the sum of $16,742.00 in damages by virtue of Terminix’s negligence in failing to conduct a proper structural pest control inspection.

(The total to correct the damages Terminix failed to report was actually more than $20,000!)

My clients have indicated a strong desire to proceed with suit against Terminix if their claims cannot be resolved amicably. Please be advised that my clients are prepared to file litigation to obtain all necessary and appropriate damages to rectify the harm that they have suffered. In order to avoid the time and expense of litigation, however, my clients are willing to accept the sum of $7,500.00 from Terminix in complete settlement of this dispute.