Article
Courtesy of The SUN SENTINEL
By
Joe Kollin
Published June 9, 2005
An
estimated 2,500 South Florida homeowners threatened with foreclosure by a
Lauderhill law firm for not paying alleged debts soon could get a $30 check in
the mail.
Some of the debts the firm tried to collect were for as little as $25.
Katzman & Korr, which represents 400 homeowner and condo associations in
Broward, Miami-Dade, Palm Beach and Monroe counties, has agreed to settle a
federal class-action lawsuit that accused it of violating the federal Fair Debt
Collection Practices Act and the Florida Consumer Collection Practices Act.
If a deal is approved by U.S. District Judge William P. Dimitrouleas, the firm
would settle the 2003 suit for $250,000 and promise not to continue using the
type of letter it sent to thousands of owners.
The settlement agreement calls for four residents of Plaza East in Fort
Lauderdale -- Ramsey Agan, Grace Agan, Sherry Ann Spies and Nancy J. Bochicchio
-- to get $5,000 each. Their attorneys, J. Blane Carneal of Fort Lauderdale and
O. Randolph Bragg of Chicago, would get $135,000. Another $20,000 would be used
for expenses.
The remaining $75,000 would to go to the estimated 2,500 members of the class,
for about $30 each. Owners considered part of the class will be notified by mail
and will have the right to opt out and deal with the firm individually.
The two sides filed their settlement agreement this week. Dimitrouleas hasn't
yet set a date to consider it.
The larger issue in the case -- foreclosure threats by attorneys for small or
nonexistent debts -- affects everyone who owns a residence in an
association-controlled community.
The problem has drawn increased scrutiny from state officials. State legislators
failed to come up with measures this year to address the issue but are expected
to try again next year.
The lawsuit hinged on the legal issue of the form of collection letters. It
alleged the Katzman & Korr letters were illegal because they didn't give
owners specifics about the debts, such as when a payment was due and how much.
Rather, the letters gave total amounts. Consumer protection laws require
complete information.
In its settlement, Katzman & Korr said members of its firm "do not
admit or concede (but, to the contrary, expressly deny) any wrongdoing,
liability or improper conduct of any nature" in connection to the
allegation in the lawsuit.
The attorney for the firm, James M. Kaplan of Miami, said he is pleased to end
the "potentially costly" lawsuit.
The settlement, if approved, "would clarify the acceptable way to collect
from those who don't pay" their bills, he said, and "there could be no
dispute that the letters Katzman & Korr will be using comply with the letter
of the law in every respect."
Dimitrouleas last year declared the case a class-action lawsuit representing all
unit owners who received collection letters similar to those received by the
four Plaza East unit owners. The settlement says owners must have received the
collection letters between December 2001 and Jan. 12, 2005.
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