Condo lawsuit payout rejected

Judge sets trial date on debt collection

Article Courtesy of The SUN SENTINEL

By Joe Kollin
Published November 24, 2005


The check isn't in the mail for nearly 1,300 South Florida home and condo owners.

A federal judge in Fort Lauderdale on Wednesday rejected a proposed settlement in a class action suit between a Lauderhill law firm and the home and condo owners, setting a trial date for next year instead.


The decision means the owners will not, at least for the time being, get the $30 checks that were part of the settlement proposal worked out by the law firm, Katzman & Korr, that the suit claims violated state and federal fair debt collection laws.

U.S. District Judge William P. Dimitrouleas set the trial for June 5.

What soured the deal was about $35,000 originally included in the payout for 2,500 owners who received allegedly illegal debt collection letters from the law firm. Only 1,300 of the 2,500 owners joined the lawsuit.

Blane Carneal, the Fort Lauderdale attorney for the four Fort Lauderdale owners who brought the suit, wanted to divide the money among the 1,300, giving each about $57 instead of $30. Or, if the judge preferred, Carneal agreed to give the extra money to Broward County Legal Aid or to a state consumer protection program.

But the law firm wanted to keep the money.

"No funds should go back to the defendants," Carneal told the judge.

"There's no way you can split the baby?" the judge asked.

When they couldn't, Dimitrouleas nixed the deal.

Carneal and attorney O. Randolph Bragg of Chicago brought the suit two years ago for four owners in the Plaza East Condominium at 4300 N. Ocean Blvd., Fort Lauderdale. They are Ramsey Agan, Grace Agan, Sherry Ann Spies and Nancy J. Bochicchio.

Their suit argued that Katzman & Korr violated the federal Fair Debt Collection Act and Florida Consumer Collection Practices Act with letters sent between December 2001 and December 2003 demanding payment of debts allegedly owed their condo association.

The firm told Ramsey Agan that he owed $356.40 for a special assessment for balcony repairs. The letter sent by the firm demanded $1,001, including attorney's fees and costs. The letter also threatened to foreclose if the money weren't paid.

James M. Kaplan of Miami, the attorney for the law firm, called the letters "dunning notices."

Agan found that others in the building had received the same kind of letter, and they filed the federal suit. Later they learned that the law firm used the same letter to collect alleged debts on behalf of other associations and asked the judge to make the case a class action. Dimitrouleas agreed.

The two sides agreed to settle for $250,000 rather than go to trial, with $5,000 going to each of the four main plaintiffs, $135,000 to their attorneys and $20,000 for expenses. Each of the 2,500 potential members of the class who received the letter during the two year period would get $30, for a total of $75,000.