Honorable v. Easy Life Real Estate System, Inc.

182 F.R.D. 553, 1998 U.S. Dist. LEXIS 15872, 1998 WL 704293
CourtDistrict Court, N.D. Illinois
DecidedSeptember 29, 1998
DocketNo. 97 C 6009
StatusPublished
Cited by11 cases

This text of 182 F.R.D. 553 (Honorable v. Easy Life Real Estate System, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Honorable v. Easy Life Real Estate System, Inc., 182 F.R.D. 553, 1998 U.S. Dist. LEXIS 15872, 1998 WL 704293 (N.D. Ill. 1998).

Opinion

MEMORANDUM OPINION AND ORDER

BUCKLO, District Judge.

The individual plaintiffs and the South Austin Coalition Community Council (“SACCC”) filed this action against the defendants, The Easy Life Real Estate System, Inc. (“Easy Life”), Ace Realtors, Inc. (“Ace”), Richard Nelson, and Louis Prus, alleging that they engaged in a scheme to defraud and a scheme to discriminate against the individual plaintiffs in violation of federal and state laws. The individual plaintiffs move to certify their case as a class action. The defendants move to dismiss all claims against them. For the reasons set forth below, the motion for class certification and the motion to dismiss are granted in part and denied in part.

Background

The plaintiffs allege that they are victims of the defendants’ scheme to defraud and scheme to discriminate against the residents of the overwhelmingly minority Austin community. The individual plaintiffs, all African American, claim that they purchased poorly rehabilitated and overpriced homes from the defendants and that hundreds of other residents have also purchased homes from the defendants under similar circumstances. SACCC, a nonprofit organization in the Austin community, alleges that it has been collecting complaints against the defendants and has incurred significant costs in responding to those complaints.

The plaintiffs allege that the facts behind the scheme to defraud and the scheme to discriminate are as follows: Mr. Prus is the President of Easy Life and Ace, both real estate agencies. Mr. Nelson is an officer, director, and registered agent of Easy Life and is an agent for Ace. Beginning in 1986 and continuing to the present, Mr. Nelson and Mr. Prus, both white, have purchased houses in Austin that are fire-damaged, abandoned, and/or in foreclosure. Subsequently, they have made cosmetic repairs to hide substantial defects before marketing the houses for resale through Easy Life or Ace. Easy Life or Ace place advertisements in the Chicago Sun Times and the Austin Voice for the sale of “renovated”, “newly rehabbed” homes to “first time home buyers.” The advertisements promise that homes can be purchased with down payments as low as $500 to $1,000.

The individual plaintiffs all allegedly responded to these advertisements and were told that they could qualify for the homes. They claim they decided to purchase their homes through Easy Life or Ace based on the false representations in the advertisements and the similar false representations of Easy Life or Ace agents. They say the agents then prepared a contract with inflated prices for the homes and did not permit any price negotiation. At that time, they paid a down payment of $500 to $1,000.

Prior to closing, Easy Life or Ace agents allegedly told the individual plaintiffs that they did not need an independent inspection of the property and discouraged them from inspecting the property. The individual plaintiffs say that the agents told them that they did not need to procure their own attorney but that Easy Life or Ace would provide them with an attorney for the closing. They also claim the agents selected the banks through which they could obtain mortgage loans secured either by the Federal Housing Administration (“FHA”) or the Department of Housing and Urban Development (“HUD”). They state that they were not advised that financing was available elsewhere.

At the closing, Mr. Nelson or Mr. Prus, as sellers of the properties, allegedly signed documents certifying to the banks and HUD that they had not given the buyers any part of the cash down payment. The plaintiffs claim that the statements were false as Easy Life or Ace had previously told the individual [558]*558plaintiffs that more money was needed for the down payment to obtain a FHA loan. An agent of Easy Life or Ace allegedly accompanied a relative or Mend of the individual plaintiffs to a bank and gave the individual plaintiffs cash to deposit into the relative’s or Mend’s account. The relative or friend then immediately withdrew the funds in the form of a certified check payable to Easy Life or Ace for the additional down payment. The agents often required the relative or friend to execute a gift letter.

When the individual plaintiffs moved into their homes, they say they discovered that the condition of the properties was not as represented in the print advertisements or verbal statements of the defendants. They claim the properties were not rehabbed or renovated but had numerous defects such as total lack of insulation, faulty plumbing, leaky roofs, faulty furnaces, faulty electrical wMng, and inadequate heating. They state that they complained to the defendants and were assured that the homes would be repaired but that the defendants never made any repairs. Consequently, they claim they expended large sums of money to repair their homes and that because of these expenses, they risk falling or have fallen behind on their mortgages and risk losing their homes through foreclosure.

Based on these facts, the plaintiffs brought suit alleging that the defendants violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., 42 U.S.C. §§ 1981 and 1982, the Fair Housing Act, 42 U.S.C. § 3604(b),1 the Illinois Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”), 815 ILCS 505/2, various sections of the Illinois Real Estate License Act of 1983, 225 ILCS 455/18(h)(2), (3), (12) and (16), and committed common law fraud. They seek injunctive relief and declaratory relief as well as monetary damages.

Class Certification

The individual plaintiffs move to certify their case as a class action. In considering a motion for class certification, the court takes the plaintiffs’ allegations in support of certification as true and does not examine the merits of the case. Riordan v. Smith Barney, 113 F.R.D. 60, 62 (N.D.Ill. 1986) (citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974)). The burden is on the plaintiffs to establish their entitlement to class certification. Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584, 596 (7th Cir.1993).

As an initial matter, the court must determine whether the class definition is proper. See Alliance to End Repression v. Rockford, 565 F.2d 975, 977 (7th Cir.1977) (agreeing that Rule 23 implicitly requires that class members be identifiable).

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Bluebook (online)
182 F.R.D. 553, 1998 U.S. Dist. LEXIS 15872, 1998 WL 704293, Counsel Stack Legal Research, https://law.counselstack.com/opinion/honorable-v-easy-life-real-estate-system-inc-ilnd-1998.