Statistics in the News: Chapter 22 Quality
MINITAB Helps Homeowner Save $5,000
The following story, slightly edited here, appeared in the
June 2002 issue of MINITAB News:
In the ruthless world of real estate, selling one's home can
be stressful enough without the buyer suing for the cost of
repairs he encounters after closing. Defending oneself against
such claims is often time-consuming, and can even demand more
money from a previous owner than he made on the sale of the
Unless, perhaps, he has MINITAB.
Jay Bronec, a Chicago homeowner and MINITAB reseller, knows
firsthand what it's like to be slammed with just such a lawsuit
and - thanks to [the MINITAB] software -- come out unscathed.
Here is an account of how MINITAB helped him win his day in
Prologue. Most quality professionals know MINITAB can
save their company buckets of money when they use it to implement
quality initiatives, but few realize it can be the best friend
a homeowner has when confronted with a civil lawsuit. Jay Bronec
is one of them.
ACT I - No Good Deed Goes Unpunished. Anyone who has
ever bought or sold a house knows that there are unseen forces
that can drive the deal through the pearly gates or off a
cliff. In indigenous cultures like urban America, these forces
are known as the Gods of Real Estate. In May 2001, Jay Bronec
and his wife, Katie, put their house near Chicago on the market,
and by mid-summer they found a buyer: a buyer whose conduct
was so far removed from the conduct of most buyers that for
the purposes of this story he will henceforth be referred
to as the Outlier. Now the Outlier was enthusiastic about
the Bronecs' property but he also was a seller's nightmare-a
hard-nosed negotiator who easily found fault with everything.
But the Bronecs were anxious to move their family into their
new home before the school year began, so they tried to be
as generous as possible, persevered, and eventually the two
parties signed a sales agreement.
The ink was hardly dry, however, when the Gods of Real Estate
decided to step in and toy with the Bronecs by sending them
an offer from another buyer for $11,000 more. Tempting though
it was to find a way to accept it, the Bronecs resisted the
sirens of profit, honored their contract with the Outlier,
and closed the deal in early September.
That's when the Gods began to play hardball. In late October,
an irate Outlier called the Bronecs and told them that heavy
rains had caused the basement of the house to flood, and that
when a contractor had removed a portion of the wall he saw
indications of prior water damage. The Outlier hotly demanded
that the Bronecs split the cost of the damage, claiming that
the problem was present while they owned the house, that they
therefore must have known about it, and were thus responsible
for a share of it.
Both Jay and Katie were stunned to learn the basement leaked.
Even with a heavy rain during their final month in the house,
they never experienced any problems; and neither the Outlier,
nor his home inspector, nor his real estate agent who joined
him on the final walk-through, noted any damage before closing.
Also, as they explained to the mulish Outlier, they had no
way of knowing there had been an existing problem because
the wall that concealed the previous damage had been in place
when they bought the house, and given that they had sold the
house for $11,000 less than they could have, they simply couldn't
agree to pay for damages.
Needless to say, the Bronecs' decision infuriated the Outlier,
and in March 2002 he filed a notice to sue them. He wanted
$5,000 in damages, charging that they "had prior knowledge
of recurring leaking and/or flooding."
For the Bronecs, proving that they had no knowledge of previous
damage was fairly simple. Jay was able to obtain from the
owner who preceded him pictures of the basement wall which
clearly showed that it was this owner, not Jay, who had covered
the walls. Proving that they never experienced any leaking
while they lived there, however, was more difficult, and after
exhausting every angle they could think of, both the Bronecs
and their attorney were wishing they had some hard evidence
to strengthen their case. And the Gods smiled slyly as the
court date neared.
ACT II - Just the Facts, M'am or Statistics Don't Lie.
Enter MINITAB. As president of QualiFine, Inc., an authorized
MINITAB reseller, Bronec had always been a big fan of the
statistical software and a friend and close associate of J.P.
Mulley, Minitab's Product Manager. Bronec mentioned his predicament
to Mulley, who happened to know that the National Oceanic
and Atmospheric Administration tracks data on precipitation
and makes it available to the public for free. Mulley suggested
that Bronec collect data on the amount of rain that fell in
the area during the entire time they lived in the house and
enter it in MINITAB, then run a control chart to determine
if the amount that occurred around the time they were selling
it was significantly greater than what they had experienced
in the years preceding it. If it was, they could show that
they wouldn't have known about a problem with leaking or flooding
because they would never have encountered it, and that the
heavy rains that occurred after closing had probably caused
an entirely new structural problem and the resulting damage.
Bronec took Mulley's advice and analyzed the monthly rainfall
from August 1995 through December 2001 and sure enough, the
data points for August and October 2001-the months immediately
preceding and following the sale of their home-were out of
control. Rainfall those months were 12.25 and 8.54 inches
respectively, between three and four times the mean for the
entire 65-month period they had owned the house. See Exhibit
Exhibit A: MINITAB Balances the Scales of Justice
Note: Exhibit A was copied from http://www.minitab.com/virtualpressroom/articles/ExhibitA.
Clearly the Bronecs had no occasion to experience flooding
in their basement for most of their tenure in the house. And,
if the heavy rains in August hadn't resulted in damage or
flooding that was evident at closing, chances were good that
a new structural problem occurred because of the rains in
October-after the house belonged to the Outlier.
This MINITAB control chart quickly became the key to the
Bronecs' defense, and on May 7, 2002, Judge John W. Demling
of the DuPage County Small Claims Court ruled in the Bronecs'
favor, dismissing the Outlier's claim that they had concealed
prior knowledge of the problem and saving them $5,000. The
Outlier was rebuked, the Bronecs were vindicated, and the
Gods of Real Estate bowed to the truth of statistics.
Sources: Adapted from Minitab News, June 2002 (Minitab
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