A federal judge has dismissed a “negligent misrepresentation” claim in a lawsuit brought by a Marin City couple who claimed their home’s assessment was lower than market value because of their race.
The ruling Monday by U.S. District Judge Maxine M. Chesney stripped the lawsuit of the claim against a San Rafael appraiser. The judge ruled that the plaintiffs, Paul Austin and his wife, Tenisha Tate-Austin, failed to show how their reliance on the alleged misrepresentation guided their decisions in seeking a mortgage based on that valuation .
The Austins, who are black, sued appraiser Janette Miller of Miller and Perotti Real Estate Appraisers in federal court for alleged racial discrimination after a February 2020 appraisal of their home returned $455,000 less than an appraisal performed in March 2019.
The negligent misrepresentation claim stemmed from the couple’s allegation that appraisers falsely stated they were providing an unbiased valuation of the home and that the Austins had reasonably relied on the statements in an attempt to obtain a loan mortgage on favorable terms.
The judge disagreed, saying there was nothing to suggest that “the Austins believed the representations in defendants Miller’s appraisal report to be true,” Chesney wrote in the ruling.
The Austins requested the appraisal because they wanted to take advantage of lower interest rates and additional financing to complete the home renovations.
Miller, who conducted the second appraisal and is named as a defendant in the suit with AMC Links LLC, which hired her to do the work at the request of the Austins’ mortgage broker.
Paul Austin has said he intends to go through with the deal.
“There are eyes on this story,” he said. “Despite their best efforts to try and throw it all away.”
Liza Cristol-Deman, a Bay Area attorney representing the Austins, said there are still six pending claims. The Austins argued that the appraisal violated the Fair Housing Act, the California Fair Employment and Housing Act, the Civil Rights Act of 1866, the California Unruh Act, which protects against discrimination, and the law of unfair competition.
“We disagree with the judge’s decision on the negligent misrepresentation claim, but we are committed to pursuing our primary claims of housing discrimination,” she said. “These claims remain in play.”
The case is scheduled for a settlement conference on Sept. 14, Cristol-Deman said.
A representative from Janette Miller’s office said she declined to comment.