Why did I receive a notice in the mail?

What is the background on this case?

What is a class action?

What does “Customer Acquisition Offset” mean?

What does “Pending Transaction” mean? 

Who is covered by the Class Settlement? 

Who are the Class representatives in this class action? 

Who are the attorneys representing the Class? 

What are the terms of the proposed settlement? 

How much money is in the Settlement? 

How will the attorneys be paid? 

What will the Class Representatives receive for their participation in the case? 

How will the amount I am eligible to receive from the Proposed Settlement be calculated? 

What do I give up by participating in this Settlement? 

What are my options as a Class Member? 

How do I remain in the Settlement Class and Participate in the Claims Process? 

What do I do if I want to remain in the Settlement Class but want to object to the Settlement? 

What do I need to do if I want to be excluded from the Settlement Class (to “Opt Out”)? 

When is the hearing on the Proposed Settlement? 

Where can I find additional information? 

Who can I call if I have questions regarding the Settlement? 

What should I do if I have a change of address?  

Why did I receive a notice in the mail?
The Notice is to inform you of a proposed settlement of a class action lawsuit brought by four former real estate sales agents against ZipRealty, Inc (“ZipRealty”).  The Notice was sent to you because ZipRealty’s records indicate that you are a member of the class (“Class Member”) affected by this lawsuit. 

What is the background on this case?
David Lubocki, Monika Setyan, Ameen Sbitani, and Gilbert Bolden (“Representative Plaintiffs”) have filed a putative class action lawsuit against ZipRealty entitled Lubocki, et al. v. ZipRealty, Inc., Case No. CV 07 2959 SJO (JCX) (C.D. Cal.).  In general terms, the lawsuit sought damages, injunctive relief, and declaratory relief in connection with unlawful practices allegedly engaged in by ZipRealty in denying certain current and former real estate sales agents (1) reimbursement of business expenses and/or (2) commissions on sales that were pending but not yet final at the time the agents stopped working for ZipRealty.  The original complaint alleged causes of action for Reimbursement of Business Expenses, Breach of Contract, Common Count, Unfair and Unlawful Business Practices, Unjust Enrichment, Quantum Meruit, Declaratory Relief, Failure to Pay Wages, Non-Payment of Minimum Wages, and Failure to Compensate for Hours Worked. 

The Representative Plaintiffs believe that the claims asserted in the lawsuit have merit and that the evidence developed to date supports the claims.  However, counsel for the Representative Plaintiffs (“Class Counsel”) recognize the expense and length of continued proceedings necessary to prosecute the action against the defendants through trial and through appeals.  Class Counsel also has taken into account the uncertain outcome and the risk of any litigation, especially in complex actions, as well as the difficulties and delays inherent in such litigation. Class Counsel also are mindful of the inherent problems of proof under, and possible defenses to, the claims asserted in this action, including the defenses asserted by ZipRealty in various legal documents filed in the action.  Accordingly, Class Counsel consider it to be in the best interests of the putative class to settle this lawsuit in accordance with the terms of the settlement described below and believe the proposed settlement is fair, just and adequate. 

ZipRealty has denied, and continues to deny, liability for the claims asserted by the Representative Plaintiffs.  ZipRealty denies that its practices and/or agreements were unlawful, unfair, or unconscionable.  ZipRealty contends that the two challenged policies were legal under the governing law.  ZipRealty is only settling as a compromise.  The Court has not yet determined whether Representative Plaintiffs’ or ZipRealty’s contentions are correct.  The Representative Plaintiffs and ZipRealty desire to settle their differences, and have agreed to the terms of a settlement. 

What is a class action?
A class action lawsuit is when one or more people called class representatives sue on behalf of people who have similar claims. All these people together constitute a plaintiff class. This is a class action because one court resolves all class-wide issues for all people who meet the class definition, except for those who exclude themselves from the class. 

What does “Customer Acquisition Offset” mean?
Customer Acquisition Offset (“CAO”) means the $750 monthly CAO applied by ZipRealty to certain real estate agents prior to October 1, 2005. 

What does “Pending Transaction” mean?
“Pending Transaction” means a real estate sale transaction where there is an accepted purchase and sale contract between the buyer and seller but the transaction is not yet a closed transaction. 

Who is covered by the Class Settlement?
The Court has ruled that, for purposes of this settlement only, a class is conditionally certified as follows: 

(A)  All current and former ZipRealty real estate sales agents who worked for ZipRealty outside of the State of  
California, from whom ZipRealty deducted a CAO charge from May 4, 2003 through September 30, 2005; and

(B)  All former ZipRealty real estate sales agents whose employment terminated in the period between May 4, 2003 and August 31, 2007, who had a pending transaction at the time their employment terminated that subsequently closed, but who were not paid the same commission on that pending transaction as they would have received had they remained employed at the time the pending transaction closed.   

Together, these two categories of claimants shall be referred to as the “Settlement Class.”  If the proposed settlement is not finally approved, this conditional certification will be null and void. 

Who are the Class representatives in this class action?
The Court has ruled that this action is conditionally certified as a class action, with David Lubocki, Monika Setyan, Ameen Sbitani, and Gilbert Bolden as Representative Plaintiffs.  The Court’s ruling is not a decision about the merits of the case. 

Who are the attorneys representing the Class?
The following firms are appointed as counsel for the Class: The Baweja Law Group and Law Offices of Ernest J. Franceschi, Jr. 

What are the terms of the proposed settlement?
ZipRealty shall pay Three Million Five Hundred Fifty Thousand Dollars ($3,550,000) (hereinafter, “Settlement Payment”) to the proposed Settlement Class. 

This Settlement Payment shall be the full extent of ZipRealty’s monetary obligations under the proposed Class Action Settlement Agreement.  ZipRealty shall not be liable for any additional amounts including, but not limited to, any pre- or post-judgment interest, any attorneys’ fees, expenses, or costs incurred by counsel for the proposed settlement class (including any costs of Notice or administration of the proposed settlement), any expenses incurred by any third-party claims administrator, any expenses incurred by any member of the proposed settlement class in making a claim or otherwise participating in the proposed settlement (including any incentive awards to the Representative Plaintiffs), or any taxes or penalties (including any “employer” payroll tax contributions) owed by any person in connection with the proposed settlement. 

How will the attorneys be paid?
Class Counsel shall be paid from the Settlement Payment.  Class Counsel is requesting fees of up to twenty-five percent of the Settlement Payment in addition to costs of litigation and fees paid to experts hired for the benefit of the class action.  The actual amount awarded will be determined by the Court. 

What will the Class Representatives receive for their participation in the case?
If approved, incentive awards will also be made from the Settlement Payment to the Class Representatives for their time and efforts in bringing and prosecuting this case on behalf of and for the benefit of the Settlement Class up to the following requested amounts:  David Lubocki, $10,000; Monika Setyan, $7,500; Ameen Sbitani, $5,000; and Gilbert Bolden, $1,500.  Said amounts are being requested from the Court, which has ultimate final approval.  The costs for administering the Settlement Class Members’ claims will also be deducted from the Settlement Payment. 

How will the amount I am eligible to receive from the Proposed Settlement be calculated?
Deductions from the Settlement Payment will be made to cover attorneys’ fees, litigation costs, expert fees, administration costs incurred on behalf of the Representative Plaintiffs and Class, and payments to the Representative Plaintiffs.  After such deductions, the “Net Settlement Amount” will be available to pay all valid and timely filed claims.

To receive money from the Net Settlement Amount, you must complete the personalized Claim Form sent to you, sign it, and send it to the Claims Administrator by March 24, 2008.  Your Claim Form identifies the applicable amount of any CAO deductions and/or Net Transaction Revenue on your pending transactions, which are used to calculate the amount you are eligible to receive from the Net Settlement Amount (“Eligible Amount”).  The Net Settlement Amount will then be allocated among all authorized claimants proportionately according to their Eligible Amount compared to the aggregate claims of all authorized claimants.  The Claims Administrator will then determine your pro rata share of the Net Settlement Amount based upon your Eligible Amount, which will be distributed to you. 

What do I give up by participating in this Settlement?
Unless you opt-out pursuant to Section V(3) in the Notice, you will be bound fully by the terms of the proposed settlement.  Specifically, all claims asserted in this litigation will be dismissed with prejudice and you will be deemed to have generally released any known or unknown claims, causes of action, liabilities, damages, demands, rights or equitable, legal or administrative relief, of any basis or source, that were, have been, or could have been asserted or alleged in, or which arise from the same transactions or occurrences at issue in, the action entitled Lubocki, et al. v. ZipRealty, Inc., Case No. CV 07 2959 SJO (JCX) (C.D. Cal.) including, but not limited to, all claims regarding, relating to, or arising from breach of contract, expense reimbursement, deductions from wages, calculation and/or payment of commissions, minimum wage and overtime. 

The release will cover these claims even if you were not aware of the claims at the time of the settlement.  You waive any and all rights or benefits under California Civil Code section 1542, which provides: 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 

What are my options as a Class Member?
As a Class Member, you have three options available to you at this time: 

(1) remaining in the Settlement Class and participating in the reimbursement program created by the proposed settlement by filing a Claim Form; 

(2) remaining in the Settlement Class and objecting to the settlement; or  

(3) excluding yourself from the Settlement Class and not participating in the settlement (i.e. “opting out”). 

If you do NOTHING, even if you have a pending lawsuit against ZipRealty or any other Released Person relating to the reimbursement of expenses, you will automatically be included in the Settlement Class, your Claim will be deemed resolved, released and terminated under the rule of res judicata.  However, you will NOT receive any settlement benefits unless you return a timely Claim Form. 

All choices have certain consequences, which are discussed in the following questions below.  If you desire to obtain additional information, please refer to the Notice. 

How do I remain in the Settlement Class and Participate in the Claims Process?
If you wish to remain in the Class and claim money under the Settlement, you must sign the Claim Form and return it by mail to the Claims Administrator at the following address:  

Lubocki, et al. v. ZipRealty, Inc.
                c/o The Garden City Group, Inc.
                P.O. Box 9224
                Dublin, OH 43017-4624 

Your Claim Form must be postmarked no later than March 24, 2008.  If your Claim Form is not postmarked by that date, you will not receive any payment but you will be bound by the Release and all other terms of the Settlement.  If you remain in the Settlement Class, you will receive settlement benefits as described in the Notice.  However, you will not be able to separately file any action or proceeding against ZipRealty or the Released Parties for any additional amounts you believe you are owed.  The Settlement provided herein is your sole relief against the Released Persons for any of the Released Claims. 

What do I do if I want to remain in the Settlement Class but want to object to the Settlement?
A hearing at which the Court will consider whether to approve the proposed settlement with respect to you and other newly identified class members has been scheduled before The Honorable S. James Otero, United States District Court Judge, on March 10, 2008 at 10:00 a.m. in Room 880.  If the proposed settlement is approved by the Court, all Class Members who have not timely opted out of the Class will be bound by its terms.  At the hearing, you will be represented by the attorneys acting on behalf of the Settlement Class.  If you wish to enter an appearance through another attorney or to appear on your own behalf you should notify the Clerk of the Court at:  

Clerk of the Court
U.S. District Court, C.D. Cal.
312 N. Spring Street
Los Angeles, CA  90012 

The hearing will be held at the above address.  At the hearing, Settlement Class Members who have not opted out of the Settlement Class may be heard orally in support or in opposition to the settlement, provided such persons file with the Clerk by February 18, 2008 a written notification of their desire to appear personally, briefly indicating, if in opposition to the settlement, the nature of their objection. 

IF YOU REMAIN IN THE SETTLEMENT CLASS AND OBJECT TO THE SETTLEMENT, YOU HAVE A RIGHT TO ASK THE COURT TO REJECT THE SETTLEMENT.  YOU ALSO HAVE A RIGHT TO BE HEARD IN PERSON OR THROUGH COUNSEL AT THE HEARING SCHEDULED ON MARCH 10, 2008.  IN ORDER TO HAVE YOUR OBJECTIONS CONSIDERED, YOU MUST FOLLOW THE INSTRUCTIONS GIVEN BELOW. 

You must file your objection in writing with the Clerk of the United States District Court, Central District of California postmarked no later than February 18, 2008.  Your objections should refer to Lubocki, et. al. v. ZipRealty, Inc., Case No. CV 07 2959 SJO (JCX) (C.D. Cal.).  In addition to submitting your objections to the Clerk of the Court, you must mail copies of your objections to the attorneys listed below postmarked no later than February 18, 2008. 

If you intend to object to the Settlement but wish to receive your share of the Net Settlement Amount if it is approved, you must submit a timely and valid Claim Form.  If you do not timely file a written objection and remain a member of the Settlement Class, you will be deemed to consent to the Settlement Agreement and to have waived any right to appeal therefrom.  

What do I need to do if I want to be excluded from the Settlement Class (to “Opt Out”)?
Should you desire to be excluded from the Settlement Class, you must submit a signed and dated request in writing to the Claims Administrator at Lubocki, et al. v. ZipRealty, Inc., c/o The Garden City Group, Inc., P.O. Box 9224, Dublin, OH 43017-4624.  Your request for exclusion must identify the case name and state your full name, address and telephone number.  In addition, it should include a statement that clearly sets out your intention to exclude yourself (i.e., “I wish to be excluded from the Settlement Class in Lubocki, et al. v. ZipRealty, Inc., Case No. CV 07 2959 (SJO) (JCX) (C.D. Cal.).  I understand that by excluding myself from the Settlement Class, I will not receive money from the Settlement.”). Your request must be postmarked no later than February 18, 2008.  Any Class Member who does not make a timely request for exclusion will be deemed to be subject to and bound by the Class Action Settlement Agreement. 

By electing to be excluded from the Settlement Class: 

You will NOT participate in the settlement. 

You will NOT be entitled to appear at the settlement hearing or to object to the settlement. 

You will, however, retain the claims, if any, that you have against ZipRealty and the other Released Parties as described in the Class Action Settlement Agreement. 

When is the hearing on the Proposed Settlement?
A hearing to determine whether the proposed settlement is fair and reasonable and should be finally approved will be held on March 10, 2008 at 10:00 a.m. in Court Room 880 of the U.S. District Court, Central District of California, unless the Court changes that date. 

You are welcome to attend the hearing, but it is not necessary for you to be there.  If you wish to be represented at the hearing by your own attorney at your own expense, your attorney must notify the Clerk of the Court, and Class Counsel and ZipRealty’s Counsel in writing at the addresses provided in the Notice, and such notification must be filed with the Court and mailed to all counsel, by February 18, 2008. 

Where can I find additional information?
The pleadings and all other records of this litigation may be examined and copied any time during regular office hours in the Office of the Clerk at 312 N. Spring Street, Los Angeles, California 90012.  Other than by filing an objection, or by notifying the Court and appearing at the scheduled hearing, please do not address any inquiries to the Court.  If you wish to obtain further information about this case, the proposed settlement, or your rights, you may address your inquiries to Class Counsel, or to the Claims Administrator at the following addresses: 

DO NOT TELEPHONE THE COURT.  THE CLERK IS NOT ABLE TO PROVIDE ANY INFORMATION OR ADVICE. 

Who can I call if I have questions regarding the Settlement?
If you have any questions about the proposed settlement or the Notice, you may call Class Counsel or the Claims Administrator at: 

What should I do if I have a change of address?
It is important for the parties to have your current address in order to send you other mailings regarding the lawsuit.  To report any change of your address, you should write to: Lubocki, et al. v. ZipRealty, Inc., c/o The Garden City Group, Inc., P.O. Box 9224, Dublin, OH 43017-4624.  Failure to report a change of address may result in you not receiving certain benefits of the settlement.  When writing, include your first name, last name, old address, new address and the claim number from the Claim Form if it is available to you.