Consumer Class Action Against RealtySouth Goes Forward

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The Federal District Court for the Northern District of Alabama issued an opinion on Wednesday evening upholding the certification of a consumer class action against RealtySouth.

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this case is a textbook example of the proper use of the class action mechanism to protect consumers. The dollars at stake for any individual consumer are less than the filing fee for an individual lawsuit, effectively preventing individual suits.

The Federal District Court for the Northern District of Alabama issued an opinion on Wednesday evening upholding the certification of a consumer class action against RealtySouth. The lawsuit alleges that RealtySouth charged consumers an “ABC fee” at closing for which no service was provided. The Court’s decision will allow the case to proceed toward notifying the class members and setting the case for trial.

The class includes more than 25,000 people who were charged $149 by RealtySouth at their real estate closing for the so-called “ABC Fee.” Class attorneys Scott Powell, Don McKenna, Jamie Moncus and Bruce McKee of Birmingham firm Hare, Wynn, Newell & Newton LLP say that RealtySouth implemented the ABC fee in 2003 and included it as a separate line item fee on the HUD-1 settlement statement. The suit alleges that RealtySouth performed no specific service for the fee in violation of the Real Estate Settlement Procedures Act known as “RESPA.” RESPA was enacted to protect consumers from unnecessarily high settlement charges caused by abusive settlement practices. The Act specifically prohibits charging a fee for which no service is provided.

Former RealtySouth CEO Tommy Brigham has already given sworn deposition testimony that no specific service is provided in exchange for the ABC fee. Current RealtySouth CEO, Ty Dodge has given an affidavit in a related case stating that the ABC Fee was not intended to cover any specific service. Former RealtySouth agents have also testified that no service was performed for the ABC Fee and that the ABC Fee was a “junk fee.” Now that the Court has ruled the case may proceed as a class action, notice will sent to the class members and the case will be prepared for trial. The class action lawyers at Hare, Wynn say that “this case is a textbook example of the proper use of the class action mechanism to protect consumers. The dollars at stake for any individual consumer are less than the filing fee for an individual lawsuit, effectively preventing individual suits.” Under RESPA, RealtySouth may be liable for up to three times the actual ABC Fees charged to over 25,000 consumers.

When written notice of the certified class action lawsuit is approved by the Court, it will be mailed to individuals who paid the fee and will also be posted on class counsels’ website at http://www.hwnn.com. The case is styled Vicki V. Busby v. JRHBW Realty, Inc. d/b/a RealtySouth, 2:04- CV-2799-VEH. The lawsuit is pending in the United States District Court for the Northern District of Alabama, Southern Division.

About HARE, WYNN, NEWELL & NEWTON, LLP HARE, WYNN, NEWELL & NEWTON, LLP, is the oldest existing plaintiff's law firm in the State of Alabama. In 1991, the firm entered its second century of practice. The firm's philosophy is based upon a dedication to protecting and preserving the dignity and rights of all individuals. Representing the rights of all citizens with the same degree of service previously available only to the corporate community, the firm stands today as an enduring testament to the original vision and ideals of its founder in providing quality representation for individuals and businesses requiring legal services. The firm specializes in representing plaintiffs in commercial and business litigation, as well as handling more traditional cases involving catastrophic personal injury and wrongful death. For more information the firm’s website is http://www.hwnn.com. "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers."

Contact:

SCOTT A. POWELL
DON McKENNA
JAMES R. MONCUS
HARE, WYNN, NEWELL & NEWTON, LLP
(205) 328-5330
scott (at) hwnn.com

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Scott A. Powell
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