A settlement in the damage suit against six Montgomery County realtors convicted last fall of conspiracy to fix commissions reportedly is near.
After their criminal conviction, which is now being appealed, the firms and three of their presidents faced civil suits filed by the state and by homeowners claiming injury when commissions were raised from 6 to 7 percent in 1974-75. The amount sought, including treble damages, came to more than $2.5 million.
While the Maryland Real Estate Commission's case has not yet come up, the homeowners' class action will probably be settled out of court, according to lawyers for both sides.
Though details have yet to be worked out and approved by Judge C. Stanley Blair, the proposed settlement appears to follow precedents set in similar cases in prince George's County and Minneapolis.
In 1974 the Prince George's Board of Realtors and 24 brokers, accused in a civil suit of fixing commissions at 6 percent, agreed to settle out of court by granting the injured parties certificates that entitled them to sell their primary residences in the county at 5 percent commission through one of the consenting realtors during a five-year period. Between 250 and 300 individuals opted for the certificates.
The other 2,250 homeowners elected to accept a pro-rata share of a $280,000 settlement fund established by the brokers. Each share amounted to $78. Lawyers fees and costs amounted to about $100,000.
In a 1976 case involving the Greater Minneapolis Area Board of Realtors and 100 firms, $6.5 million in certificates or scrip was awarded to the plaintiffs. The average amount was between $400 and $500. However, if homeowners did not wish to use the scrip to get discounts on other houses, they could trade it.
The sscrip bears a face value up to $200. The Minneapolis newspapers still carry ads from persons seeking to sell their scrip at up to one-half off face value. Buyers are permitted to accumulate as much scrip as they wish, but may only use it in exchange for 15 percent or $1,000, whichever is less, of the commission on a house transaction.
One of the parties to the Prince George's County settlement was Shannon and Luchs, also one of the firms convicted in Montgomery County. The others in the Montgomery case are Jack Foley, Inc., Robert L. Gruen, Inc., Schick and Pepe, Colquitt-Carruthers and Bogley, Inc.
The defendants, who were fined a total of $200,000 in the first trial, reportedly want to avoid a second trial because of the size of potential damages. The law provides for damages of up to three-sevenths of the gross income from commissions on $350 million in residential sales in the county duringthe period in question.