According to Chris Bagley, an attorney with the Law Offices of James Scott Farrin, a court case filed last week in Dare County Superior Court currently has only two named plaintiffs, but the outcome could impact many more.
Bagley said the focus of the civil action is to reclaim all the rental charges collected by Surf or Sound Realty paid for vacation rentals between March 11 and May 15 of this year. It was between March 17 and May 15 that all visitors to Dare County were prohibited and access blocked by law enforcement checkpoints, which effectively canceled every mid-March through mid-May vacation that was scheduled.
Court documents show Melissa Bachman, an Ohio resident, reserved a house in Rodanthe through Surf or Sound Realty for the week of May 3 and Cory Cantrell, a Missouri resident, reserved a Hatteras Village house through Surf or Sound Realty for the week of April 25.
Although many people bought vacation travel insurance, their claims were turned down since policies did not cover travel restrictions imposed by a governmental authority.
According to Laird Sager with Red Sky Travel Insurance in Kitty Hawk, vacation rental insurance was never intended to cover government actions other than mandatory evacuations due to a possible hurricane strike. It came into existence to cover acts of God and uncontrollable family emergencies.
He then added that within the insurance industry, acts of God are limited to weather-related events.
Soon after Dare County travel restrictions went into place, the NC Real Estate Commission issued an opinion that property managers must refund the money.
Bagley said Surf or Sound did not issue a refund and his clients are both seeking relief, individually and on behalf of others similarly affected, making it a class action suit.
Although the Real Estate Commission opinion is not binding on the court, it is likely to be referenced by one or both sides of the case.
“We believe the North Carolina Vacation Rental Act requires a full refund for all advance payments,” said Bagley.
He went on to say that while there are only two plaintiffs, any number of plaintiffs can represent the entire class and the action could be filed with one, 10 or 20 plaintiffs. While the number of people involved is not readily known, Bagley estimated that there could be about 500 affected.
When asked how any other parties could be included in the case, Bagley said the court has to approve it as a class action case, but that people do not have to do anything to be included.
“A class member can take himself or herself out of a class,” Bagley explained. “It’s not a complicated procedure. The complaint is worded so that anyone who negotiated a resolution on their own is automatically excluded.”
Although formally representing only the two main plaintiffs, Bagley said several people have called in, and the law firm may end up representing other people as clients, but regardless of whether any particular class person is a client, the court is being asked to refund the money.
“That’s what a class action is,” he continued. “A way to allow someone to be compensated without having to come into court and go through the litigation process.”
Court cases are known to rush along at a snail’s pace. Typically, nothing happens in a civil court case until the defendant is served, and then they have between 30 and 60 days to file an answer before a trial date is scheduled.
That response generally includes a rebuttal of any or all allegations. In addition to an answer, it is not unusual for defendants to file a motion to dismiss on any number of legal issues.
While this may not be a recognized landmark court case, the ruling could potentially have a substantial impact on vacation rentals.
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