Article
Courtesy of The SUN SENTINEL
By
Joe Kollin
Published March 22, 2005
A
Plantation law firm has agreed to settle a federal class-action lawsuit over its
filing of liens and foreclosures against homeowners for debts that may not even
exist.
The suit accused Katzman & Korr, which represents 400 condo and homeowner
associations in South Florida, of violating state and federal debt collection
and deceptive trade practice laws.
The
number of unit owners who could benefit by the settlement is estimated at more
than 1,100, but whether they collect damages will be determined later.
Details of the settlement were not released because it won't be presented to
U.S. District Judge William P. Dimitrouleas in Fort Lauderdale for preliminary
approval until late April.
If the judge agrees, details will be sent to each member of the class, who then
will be given the chance to opt out.
The suit began in 2002, when the board of the Plaza East condo in Fort
Lauderdale accused unit owners Ramsey and Grace Agan of not paying $356.43, part
of a special assessment for replacing concrete balconies.
The Agans said they owed nothing and refused to pay. Katzman & Korr filed a
lien on their unit for $1,001.01, which included the initial debt plus
attorneys' fees and costs. The apartment would be foreclosed, the law firm
warned, if the lien wasn't paid.
Angry, the Agans filed the federal lawsuit on behalf of themselves and other
owners in condo and homeowner associations represented by Katzman & Korr
whose homes had liens placed on them. Three years later, as part of the
negotiations for the settlement, it was proven the Agans never owed anything,
said their attorney, F. Blane Carneal.
Will the proposed settlement affect the way the law firm handles collections?
"If the settlement process is completed, our litigation objectives will be
met and we'll have the opportunity to move on with our lives and conduct our
business," said James M. Kaplan of Miami, attorney for Katzman & Korr.
Agan's situation is not unusual.
At public hearings during the past two years, an often-heard complaint by owners
was that lawyers representing their associations would demand payment for
amounts as low as $25 in late fees. The lawyers would add their fees, and when
owners objected more fees were added. The lawyers then would file liens.
In an attempt to halt such activities, state Sen. Gary Siplin, D-Orlando,
earlier this month filed a bill in the Legislature to make it more difficult to
collect small debts. His proposal would require an owner owe at least $2,500,
not counting attorney's fees and costs, before a lien could be filed.
Association attorneys and directors oppose the proposal because they say in
cases where monthly assessments are only $100 a month an association might have
to wait years to enforce a debt. When an owner doesn't pay, all other owners
must pick up their tab.
Ramsey Agan, a retired mortgage banker, said he hopes the class-action suit will
do some good.
"My action was to help people," he said.
The Agans and the association last month settled the foreclosure suit at a
cost to Plaza East unit owners of more than $100,000, Ramsey Agan said.
"I never owed these people anything, and suddenly I found my house being
foreclosed," he said. "Katzman & Korr ended up paying my
attorneys' fees, my expenses, and they said they would change their way of doing
business."
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