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Lawsuit alleges real estate agent duped elderly homeowner into signing over property

insurancenewsnet.com | November 10, 2014

By Phaedra Haywood

Nov. 09--An 86-year-old Santa Fe man has filed a complaint in state District Court claiming he asked a friend in the real estate business to help him sell his family's adobe home in the heart of Santa Fe's east side, but instead the man tricked him in to signing over ownership of the home and never paid him for the property.

The real estate agent later mortgaged the property and collected rent on it for about a decade without the knowledge of the original homeowner, according to court documents filed in September.

Porfirio Chavez says in his complaint that he helped build the home for his parents and inherited it from them in 1949. It's a tiny, flat-roofed adobe with blue-trimmed windows on Don Miguel Place, a dead-end dirt road not far from Johnny's Cash Store and Acequia Madre Elementary School.

In 2001, Chavez wanted to sell the home, he says in the complaint. But because he had never bought or sold any property, he decided to enlist the help of Gilbert Ortiz, whom he had known "from a breakfast group that met at McDonald's restaurant," the complaint says, adding that Chavez believed Ortiz was a reputable businessman.

But instead of listing the property, the complaint says, Ortiz directed Chavez to sign a quit claim deed, transferring ownership to Ortiz and his wife, a practice sometimes used among family members.

Chavez signed the deed.

"No monies were paid to Mr. Chavez at the time the deed was signed, nor have any monies ever been paid to Mr. Chavez ... for the property," the complaint says. "After the quit claim deed was signed ... Ortiz continued to represent to Mr. Chavez that he would sell his home but no sale of the property has ever occurred."

In 2005, the complaint says, Ortiz asked Chavez to meet him at a local credit union. Chavez thought Ortiz meant to finally pay him for the home. Instead, Chavez said, Ortiz "falsely" advised him that a quiet title action was necessary to sell the property and asked him to sign more documents. The papers included a special warranty deed that transferred the title of the property from Chavez to Ortiz and his wife, Helen C. Ortiz, and a memorandum of agreement stating that upon successful completion of the quiet title suit, Ortiz would pay Chavez $100,000, minus costs such as surveying expenses, attorneys fees, insurance and closing costs.

"Mr. Chavez was not made aware of by the Defendant nor did he understand the legal effects of these documents," according to his complaint.

But he signed them.

For the next five years or so, the complaint says, Ortiz continued to assure Chavez that he would sell the house and pay him for the property.

"Mr. Chavez waited patiently but never received any information from Defendant about the sale of the property," the complaint says.

Nearly a decade later, in 2010, Chavez finally hired an attorney to look into the matter.

"To his surprise and dismay," the complaint says, Chavez learned that Ortiz had taken out a $150,000 mortgage on the property in 2005, and that the title had been transferred to Ortiz's company, Gil. A. Ortiz Properties.

That same summer, Chavez learned that Ortiz had been collecting rent on the property for years.

Chavez's niece Nicole Morales said around that time, her uncle talked to her about the situation. "He stated that he had sold the property to a man and it's been quite some time that he didn't have any money," said Morales, who described her uncle as a trusting man.

Once Chavez's family learned what had transpired, Morales said, they tried to regain control of the property lien-free. They threatened to sue Ortiz if he didn't "clear up" the property deed within 60 days and pay Chavez seven years worth of back rent.

Morales told The New Mexican that Ortiz -- whom she described as a very nice and gregarious guy -- "seemed genuinely sorry" and "acted like it was a mistake. He admitted what he did was wrong," she said, but he told the family he didn't have the money to pay them back.

Instead, Ortiz had his lawyer send the Chavez family a letter asserting that Chavez and Ortiz had struck a deal that Ortiz would pay Chavez $80,000 for the property ($100,000 minus expenses), but that the property hadn't sold yet.

"Of course, if you take further action," the letter states, "Mr Ortiz is prepared to defend himself, but sees no necessity to 'rattle swords' or otherwise engage in threats or recrimination."

"My poor uncle," Morales said. "He is really old. You have to understand he is nearing 90 years old. I could tell he felt a little bit embarrassed that he was duped. He told Mr. Ortiz, 'I trusted you.' "

Morales said she had considered buying the property herself. The little home, which she calls the "sugar shack," and the one-eighth-acre lot it sits on are valued at $125,637 by the county assessor.

But she can't purchase the property because it is now encumbered by a mortgage, she said.

"It was built by our family by their own hands decades ago, when my great-grandparents moved here," she said. "It was a family property. We really just kind of wanted it back."

Ortiz did not respond to phone messages seeking comment for this story, but on Nov. 3 he filed a response to the complaint denying most of the allegations.

In his response, he does, however, admit that he received $150,000 when he mortgaged the property and that he never paid "a penny" to Chavez.

It's a tragic situation," said Chavez's attorney, Gary Friedman. "You gotta really feel a lot of empathy for Mr. Chavez. It's very clear he was an elderly person who was taken advantage of by someone who was far more sophisticated than he was. We're hoping Mr. Ortiz will do the right thing and remedy his wrongdoing. It's always my hope that we can work something out and that both sides can come to a resolution."

 

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