Great Southern settles repossessed property lawsuit

Springfield-based Great Southern Bank recently agreed to settle a multiyear, class action lawsuit that alleged the company failed to provide proper notice to owners of repossessed property before taking action.

Bolivar-based Douglas, Haun & Heidemann PC filed the case - Sherrell v. Great Southern Bank - in Greene County Circuit Court in 2011. Great Southern was represented by Lathrop & Gage LLP, according to a DHH news release.

The settlement was certified by the county court Oct. 2, and the judgment became final 30 days after, according to Katie Duncan, a spokeswoman for DHH.

Sherrell v. Great Southern Bank alleged the Springfield company failed to send legally required notices informing owners when and where their repossessed cars, trucks and boats would be sold. The suit alleged notices were not sent for over four years, entitling hundreds of borrowers to statutory damages.

“The Missouri legislature provided clear guidance for banks and other financial institutions about the requirements for presale notices. In this case, it was clear to us that Great Southern failed to respect the rights of its borrowers and follow the law. The settlement provides class members with compensation for Great Southern’s failure to follow the law,” DHH attorneys said in the release.

In the October settlement agreement, Great Southern agreed to create a $1.5 million fund for which it would pay 30 percent on a claims-made basis. Class members were paid $115,572 by Great Southern, which also paid attorney’s fees of $450,000, according to the release.

“In addition to the common settlement fund, the (October) settlement also provides class members residing in many states with what plaintiffs estimate to be up to $3.9 million in the form of debt forgiveness and satisfactions of previously entered deficiency judgments,” DHH officials said in the release.

In a statement provided to Springfield Business Journal, Great Southern spokeswoman Kelly Polonus said through the settlement agreement, the company did not admit liability.

“Great Southern Bank is pleased it was able to resolve the dispute in a manner that avoided the costs and uncertainty of the litigation and in a way that was in the best interests of the bank and its customers,” she said in an emailed statement.