Judge grants class action to Century 21 suit

"The money was supposed to be used for the benefit of Century 21," said Patrick Joseph Bartels, an attorney for the franchisees. "We believe the money was actually used for various Cendant expenses that were not permitted under the agreement." He estimated that damages total "hundreds of millions of dollars."

http://www.nj.com
August 19, 2010

Judge grants class action to Century 21 suit
Venuri Siriwardane/The Star-Ledger

Century_21.jpg

STAR-LEDGER FILE PHOTO

A state Superior Court judge granted class action status this week to an 8-year-old lawsuit claiming Century 21 Real Estate and its parent firm misused franchise funds.

The plaintiffs now include those who were Century 21 franchisees at any time between August 1995 and April 2002. They allege Century 21 and its parent firm Cendant, based in Parsippany, misappropriated fees paid by franchisees into a national advertising fund, failed to provide support services and engaged in other activities that violated franchise agreements.

"The money was supposed to be used for the benefit of Century 21," said Patrick Joseph Bartels, an attorney for the franchisees. "We believe the money was actually used for various Cendant expenses that were not permitted under the agreement."

He estimated that damages total "hundreds of millions of dollars."

Century 21 is now managed by Realogy, a Cendant spinoff. In a statement, the firm said the charges are "without merit, and remain so today."

"We will aggressively defend against these erroneous claims," Realogy said, adding it has "capably managed the Century 21 brand," since Cendant acquired it in 1995. The lawsuit was filed in 2002 on behalf of five franchisees in New Jersey, Florida, Michigan and Arizona. The class could total 7,000 franchisees nationwide, said Bartels, adding that state-by-state figures are not yet available.

Bartels said the judge’s decision is significant, since it is difficult to obtain certification for a class action suit alleging consumer fraud.

http://www.nj.com/business/index.ssf/2010/08/judge_grants_class_action_to_c.html


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