Waiting for your ZipRealty Settlement? The Case of the Absconding Lawyer

By
Real Estate Agent with Utah Homes 9334967-SA00

This is a very odd case.

Persons who worked for ZipRealty from May 4, 2003 - Sept 30, 2005 were invited to join a class action lawsuit against the company to recover lost commissions and other unreimbursed expenses. The case ended when parties involved settled for $3.55 million. After court costs and fees, the shared settlement amount was reduced to $2.525 million to be shared among just under 1,000 parties.

A few people received settlement checks. Most didn't. I'm sure that many of you who were among those who were awaiting your portion have been making many fruitless phone calls to receive your settlement. It would have made a very nice Christmas present.

Then the letter of explanation came. Sandeep Baweja of the Baweja law group wrote that he had "invested" the settlement funds in an online trading account. From April to December of last year he had managed to lose all but $54K.

He filed a motion to withdraw as counsel in the case and has informed the state bar of his actions. This he explained via a Christmas Eve mea culpa letter that he sent to the parties involved.

If you are among those who have received this letter, you may want to read the following news reports and blogs.

Russell Shaw (via Bloodhound Blog): Unzipped?

Orange Country Register: Irvine attorney admits burning through $2.6 million in fund

Further OC Register Report: Lawyer who misspent $2 million quits Irvine public schools foundation

Wage Law Weblog: He Did WHAT With The Settlement Money?

From this information there appears to be at least two threads to pursue:

  • Check with the State Bar of California. If the attorney is disbarred (which seems highly likely) there might be settlement funds available. (I'm not an attorney- I'm simply passing on information I've read).
  • A comment in the Bloodhound Blog revealed this, "lawyers for Mr. Hoven Garoyan filed a class action against Sandeep Baweja and Ernest J. Franchesi, Jr. and The Garden City Group, Inc. for their failure to distribute to their clients, about 600 former ZipRealty real estate agents, $2.6 millions obtained via a court settlement with ZipRealty for unpaid commissions." The attorneys involved are James Lee at jml@ltlcounsel.com and Luan Tran at klt@ltlcounsel.com (213-612-3737). Their complaint may be downloaded here.

I'm hoping this post may be grabbed by the power of the search engines and reach anyone who has been searching the net for solutions to recovering their portion of the settlement. If you want to re-blog or offer further links that may help the affected parties, please feel to post to the comment section.

On Jan. 26 there will be a hearing before the U.S. District Court in Los Angeles, at which time, Judge Otero will be asked to formally remove Baweja as lead lawyer on the class-action case.

Comments (12)

Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Chuck:  So, basically... you are saying that those who were taken advantage of by this "company" pretty much received "zip."  Not a good plan.

Jan 24, 2009 12:01 PM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Karen- Yes... twice. First by ZipRealty... then by the Attorney in charge of Zip's settlement fund. He and his firm earned close to one third of the settlement in fees... then he bet the rest on the market.

Jan 24, 2009 12:34 PM
Susie Blackmon
Ocala, FL
Ocala, Horses, Western Wear, Horse Farms, Marketing

OMG. Attorneys are such leeches on society... unless you need one. I've worked for them for years and life to them is billable hours... and they don't kiss you before they 'have sex' with you.

Jan 24, 2009 06:57 PM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Susie- In this case it's easy to see who is wearing the black hat. How on earth could a person spend enough time to earn a law degree, earn a respect sufficient to handle large court cases, be placed as treasurer of a government board and then- play the market with someone else's settlement. It just boggles the mind.

Jan 25, 2009 12:16 AM
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes

Very interesting I was hounded by a rep at zip realty to join them. There is something about a company that just gives stuff away for people to work with them just isnt for me.

Jan 25, 2009 01:08 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Heather- Their business model doesn't appeal to everyone for such reasons. There are many though who find it a perfect fit- they find the buyers and sellers and keep a portion of the earnings to go back into their brand- rebates and other such expenses. In this case Zip is in the odd position of having done their part... they paid the settlement. Now the attorney who fought against them felt, apparently, that earning nearly 1/3 of the settlement wasn't enough. It's just, for lack of a better work,  freaky.

Jan 25, 2009 01:28 AM
Kent Simpson
Realty One Group Mountain Desert - Tucson, AZ
Real Estate Is About People

Hmm...my grandpa once gave me some advice to follow:  1.  Never date a girl named Fred, 2.  Keep an extra quart of oil, a gallon of water & some crackers in your car at all times, 3.  Keep your wallet in your front pocket in a big crowd, and, 4.  Never do business with a company whose name is a synonym for "Nothing"

Jan 25, 2009 02:38 AM
Anonymous
Anam


So is this guy still practicing? When is california state bard going to disbarred him? This cannot happen to anyone else.

Jan 26, 2009 03:04 AM
#8
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Kent- Your grandpa was wise... actually... I'm less opposed to ZipRealty in this case... they had their day in court and paid up. It's the lawyer's action that is just hard so hard to fathom.

Anam- I would expect him to be disbarred... first news comes tomorrow I would guess... that's when he goes before the judge. The disbarment procedures are probably in motion to some extent.

Jan 26, 2009 10:44 AM
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Update: The American Bar Association wrote today: "Lawyer Admits Bad Stock Trades Cost Most of $2.7M Class Settlement"

Another commenter added this (I don't know of the validity of the information): "ALL THOSE MEMBERS OF THE CLASS WHO LOST MONEY DUE TO THIS ATTORNEY'S THEFT SHOULD FILE A CLAIM WITH THE CALIFORNIA STATE BAR'S CLIENT SECURITY FUND. YOU ARE PROBABLY ELIGIBLE TO RECEIVE FULL PAYMENT OF YOUR LOSS, UP TO $50,000. YOU DO NOT NEED TO HIRE AN ATTORNEY FOR THIS PURPOSE. CONTACT THE BAR'S CLIENT SECURITY FUND AT (213) 765-1140." If anyone can confirm or reject the validity of this information, please let me know.

Jan 27, 2009 05:28 PM
Anonymous
Darlene

For anyone who isn't aware . . . the State Bar of California has decided to let Sandeep Baweja voluntarily stop practicing law in California.  By taking this action he will NOT be disbarred.  In 5-10 years he can apply to reinstate his license.  What does this mean for those of us who were cheated?  This means that the California Bar Association has closed the case and will not work on behalf of any clients cheated in this debacle.  Their explanation is that they only go after "attorneys."  Since he relinquished his license he is no longer an attorney and they can't continue pursuing the case.

Mind you this guy stole "when he was a practicing attorney."  Now a bunch of attorneys have decided to let him off the hook. . . gee, is anyone surprised?  I filed with the Client Security Fund in January.  I have heard nothing and I would put money on it that they've built in some loop hole to screw us once again.

I realize there are a lot of citizens in the state of california who are good people and just want to live life the best they can. Well, having said that right now I am happy that california is burning and broke and if just one lawyer's house goes up in smoke don't ask me for a donation.  Tell them to pull it from the money their brother(s) have stolen. 

 

May 22, 2009 01:37 PM
#11
Ginger Moore
Wilkinson & Associates Realty - Gastonia, NC

Very interesting. I was considering this company. Don't know if things have changed or not.  thanks for all the info!

Dec 20, 2009 03:14 AM