Hagens Berman Sobol Shapiro (HBSS) today announced it has reached a proposed $7.1 million settlement with KB Home (NYSE:KBH) on behalf of California purchasers of new homes. The class-action lawsuit claimed KB Home improperly required customers to use its escrow subsidiary, HomeSafe, for transactions in California. Plaintiff Angela Bates was represented by Hagens Berman and The Law Office of Peter Fredman.
Prior to March 1, 2007, most KB Home purchasers paid a $275 fee for "contract coordination" to HomeSafe. Under the terms of the proposed settlement, everyone who paid the fee will get at least $225 of the fee returned to them. Depending upon the number of persons who paid the fee, the amount customers receive may be $275 or more. Persons who did not pay the fee, but paid their Earnest Money Deposits ("EMD") to HomeSafe, will receive $50.
This proposed settlement requires KB Home to send checks directly to all customers who are reflected in KB Home transaction records as having paid the Contract Coordination fee or their EMD to HomeSafe. All California customers will receive notice of the proposed settlement by mail, and if they are not shown in KB Home's records as having paid the fee(s), they will have an opportunity to show that they did by submitting their HUD-1 Settlement Statement.
Of the $7.1 million settlement, up to $100,000 is allocated to settlement administration costs.
The settlement follows the trial court's granting of Plaintiff's motion for class certification and its denial of KB Home's motion for summary judgment. The case was set for trial on February 14, 2011, and the proposed settlement was reached on February 1, 2011.
"We believed that KB Home was unfairly requiring its customers to pay unauthorized and improper fees," said Steve Berman, managing partner of Hagens Berman Sobol Shapiro. "We are proud of this settlement because it will put those fees directly back in the pockets of consumers."
The proposed settlement will need court approval before it becomes final. A court date for final approval has been set for June 16, 2011. Visit www.hbsslaw.com for more information.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP is one of the top class-action law firms in the nation, with offices in Boston, Chicago, Colorado Springs, Los Angeles, Minneapolis, New York, Phoenix, San Francisco and Washington, D.C. Founded in 1993, we represent plaintiffs in class actions and multi-state, large-scale litigation that seek to protect the rights of investors, consumers, workers and whistleblowers. More information about the firm is available at www.hbsslaw.com.
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