Article Courtesy of The SUN SENTINEL

By Joe Kollin
Published November 11, 2005

Nearly 1,300 owners who received letters threatening foreclosure of their condos and homes must wait two more weeks to find out whether they will receive a $30 check from the Lauderhill law firm accused of sending them the warnings in violation of federal and state fair debt collection laws.

U.S. District Judge William P. Dimitrouleas in Fort Lauderdale on Thursday was scheduled to approve a settlement in a class-action lawsuit against the firm, Katzman & Korr, that included paying each owner $30. But the judge said he couldn't accept one provision of the proposed settlement, a new letter that the firm would use in future collections to replace the threatening one that instigated the lawsuit.

Dimitrouleas said he couldn't approve the letter because he doesn't have the authority to make it binding in any future debt collection cases.

If Dimitrouleas refuses to accept the letter, then the law firm will reject the proposed settlement, said its attorney, James M. Kaplan of Miami.

The judge gave Kaplan until Nov. 23 to persuade the judge to accept the new letter. If he isn't persuaded, the settlement agreement could be scrapped, and the 2-year-old case would go to trial.

The lawsuit alleges the original letter from Katzman & Korr violated the federal Fair Debt Collection Act and the Florida Consumer Collection Practices Act.

The letter is significant because the law firm represents about 400 condo and homeowner associations in Broward, Palm Beach and Miami-Dade counties.

Attorneys Blane Carneal of Fort Lauderdale and O. Randolph Bragg of Chicago brought the suit for Ramsey Agan, Grace Agan, Sherry Ann Spies and Nancy J. Bochicchio, all owners in the Plaza East Condominium at 4300 N. Ocean Blvd., Fort Lauderdale. The suit seeks damages and an order prohibiting the firm from continuing its collection practices.

Because the firm sent the letter to thousands of other owners, the judge last year declared the suit a class action.

Katzman & Korr earlier this year agreed to settle for $250,000 and use a new form letter. The settlement would give the four main plaintiffs $5,000 each and their attorneys $135,000 and $20,000 for expenses, including the task of locating all recipients of the letters.

Based on Katzman & Korr's initial estimate that 2,500 owners received the threatening letter, each unnamed plaintiff would get $30. Because the number of owners who have admitted getting the letter turned out to be less, the judge will decide what to do with the extra money, about $36,000.

The suit stems from a 1999 special assessment by the Plaza East association to pay for restoration of concrete balconies.

Katzman & Korr sent Ramsey Agan a letter saying he owed $356.40. Agan said he had already paid. The law firm filed a lien for $1,001, including attorney fees, on his apartment and threatened foreclosure.