MARCH 29, 2016 5:05 PM Modesto Bee
Realty firm PMZ’s foes win Round 1 in lawsuit claiming fraud
BY GARTH STAPLEY
A judge refused to dismiss what could become a class-action fraud lawsuit against Modesto’s PMZ Real Estate, but the firm expects to win in the long run, Chief Executive Officer Michael Zagaris said.
The lawsuit says a Concord company gave PMZ kickback payments in exchange for PMZ secretly using the Concord firm for natural-hazard reports in home transactions. PMZ concealed kickbacks by directing clients to deal with another firm – in reality, a shell company run by PMZ, plaintiffs claim.
“Prevailing law holds that a fiduciary’s earning secret profits can constitute constructive fraud,” Contra Costa Superior Court Judge Barry Goode said in a written tentative ruling. If allegations are true, Goode said, “there is ample basis to conclude that one or more (defendants) earned secret profits.”
ACCORDING TO THE (LAWSUIT), VALLEY NHD OWES ITS ENTIRE EXISTENCE TO THE KICKBACK CONSPIRACY. ALL OF ITS FINANCIAL GAINS CAME ABOUT DUE TO THE CONSPIRACY…. by Barry Goode, Contra Costa Superior Court Judge
NEWS JULY 26, 2016 3:09 PM
Published by the Modesto Bee
Lawsuit against PMZ presses on
A judge in Contra Costa County refused for a second time to dismiss what could become a class-action fraud lawsuit against Modesto’s PMZ Real Estate.
Four former PMZ clients from San Joaquin County claim they were played in “a kickback scheme that resulted in PMZ receiving secret profits,” Judge Barry Goode said in a written ruling that the case will go forward.
The former customers say PMZ agents directed them to a shell company run by PMZ for natural-hazard reports in 2009 and 2010 home transactions. That company, Valley NHD, then obtained the reports from a Concord firm, Disclosure Source, which shared profits with PMZ, the lawsuit says.
In theory, hundreds or thousands of PMZ’s former clients from Modesto and beyond could join the lawsuit if Goode eventually deems it worthy of class-action status.
PMZ, the leading property firm in Stanislaus County, has predicted vindication in the long run.
Natural-hazard reports list property risks such as floods, wildfires and earthquakes.