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May 29, 2005 ! www.News-Herald.com ! $1.50

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Leftovers Serve Charities: Unclaimed cash from lawsuits go a long way to help out

Curt W. Olson, Staff Writer

When three more children are granted wishes this year from the Make-A-Wish-Foundation of Northeast Ohio, they can thank people who didn’t claim their money. And when Greater Cleveland Habitat for Humanity completes about a dozen homes in Cuyahoga County this year, they can likewise give some thanks to people who didn’t claim their money. And those who bring smiles to the faces of Special Olympians in Ohio this year can give some thanks, yes, to people who didn’t take steps to claim their money.

That’s right.

Dozens of people were owed money but did not claim it.

This stems from the settlement of a recent class-action lawsuit, with about $149,000 going to six charities. The settlement requires that 50 percent of any unclaimed money from the case be donated to specific charities.

A class-action lawsuit is brought by one or more plaintiffs on behalf of a large group with a common interest.

The pool of $148,822.99 has been directed to the following charities: Greater Cleveland Habitat for Humanity, Greater Columbus Habitat for Humanity, Habitat for Humanity of Summit County, Special Olympics of Ohio, Make-A-Wish Foundation of Northeast Ohio and Make-A-Wish Foundation of Central Ohio.

The six charities did not each receive equal portions of the $148,822.99, said Patrick J. Perotti, a partner with Dworken & Bernstein of Painesville. The law firm made the case that the single plaintiff and others were injured.

Make-A-Wish foundation of Northeast Ohio received $15,000, agency Executive Director Jody Curry said.

"Three local children will have their wish granted,"Curry said. "To get this money gifted to us - we’re really thrilled. We truly are deeply grateful." The children who will get their wishes have not been identified yet, Curry said.

Greater Cleveland Habitat for Humanity received between $25,000 and $30,000, Executive Director Jeffrey Bowen said. "It certainly will be money well-spent,"Bowen said. The money will be poured into existing projects; he said.

Many defendants attempt to recoup unclaimed money, Perotti said. But the company should not have had it in the first place, which is why this alternate use of unclaimed money is pursued, he said. "We strive to make sure defendants don’t get back any of the money," Perotti said. "We try to ensure the money goes to the broadest amount of people."

This is not a situation unique to Northeast Ohio - millions of dollars nationwide are directed to charities each year from settlements in class-action lawsuits that go unclaimed, Perotti said. The American Bar-Association published findings several years ago on what judges are allowed to do with unclaimed funds from class-action lawsuits. Many federal and state courts have distributed funds to colleges and universities or charities.

Perotti said the goal is to match details in the class-action lawsuit with charities that have a similar mission.

In this case, Lawyers Title Insurance Co. stood accused in a civil case of overcharging on some of the fees associated with closing costs. The attorney said the settlement was more than $500,000. "It’s fertile ground for people to toss in an extra $20 here for $14 there," Perotti said.

If a business thought it was cheated out of money, it would send its team of attorneys to court to try and recoup their money, Perotti said. In a situation like this, it was many people who didn’t have the money to hire attorneys to try to get their $15 or $20 back, he said. "It’s more likely they’re going to get away with it, " Perotti said.

For, say, a 68-year old widow, this money is important, and one of the few ways it would be captured is through a class-action lawsuit, he said. "The nature is no one is going to challenge them," Perotti said.

There were 19 payouts from the case heard in Cuyahoga County Common Pleas Court. People had about two months to make claims when the case was settled last fall. The last legal action regarding the fund occurred in March.

He said the goal is to deter the business that hurt individuals in some way from engaging in such practices again. But some of the money tends to go unclaimed. Perotti said there are various reasons why money goes unclaimed:

# Someone is deceased.

# Someone moves and cannot be located.

#Someone receives a notice of the suit in the mail, -but doesn’t check it.

#Someone receives the mailing with information on how to, claim money, but doesn’t follow through with it.

When money is left in a class fund after all the claims have been paid, it is known as a "cypre" or "reversion." The goal is to get the business or businesses to acknowledge liability.

Perotti said class-action lawsuits clearly have received some scrutiny by federal and some state lawmakers. When money is directed to charities that don’t expect the windfall, it shows there is a positive aspect to these legal actions, he said. "This way, the class action not only benefits the class members who wee injured by the assertedly wrongful conduct, it also directly benefits the community," a news release by Perotti states.