REDC Sued for $132 Million

National Home Auction Corporation (NHA), a now-defunct real estate company specializing in the marketing and auction-style sale of lender foreclosed properties, filed a lawsuit against ""Real Estate Disposition Corporation"":http://www.redcgroup.com (REDC) in an Orange County Superior Court on Friday.
The suit cites REDC for trade libel, unfair competition, and intentional interference with contract and prospective economic advantage, and alleges that REDC intentionally drove NHA out of the distressed properties auction business. NHA is seeking more than $132 million in compensatory damages, as well as punitive damages.
According to a statement from NHA, the two companies were direct competitors in the distressed properties sector of the real estate auction business. The suit alleges that REDC undertook unlawful, unfair, and fraudulent actions that put NHA out of business.
NHA has accused REDC of falsely representing to asset sellers throughout the country that NHA was engaging in illegal activity in connection with its auctions, and that a restraining order had been entered against NHA that prohibited it from conducting auctions. The suit also assets that REDC falsely stated that the Federal Trade Commission was investigating NHA, and that asset sellers risked having consumers ""rescind each and every purchase agreement"" concluded through an NHA auction.
The suit asserts that as a result of these written and verbal statements by REDC, asset sellers pulled their properties from NHA auctions and refused to conduct business with NHA.
""Joel Kozberg"":http://www.kozberglaw.com, NHA's attorney, said, ""The suit presents a classic case of anti-competitive trade practices - conduct that is not tolerated in this country. Sadly, this is another example of the 800-pound gorilla snuffing out fair competition.""
A spokesperson for REDC made the following statement in regard to the NHA lawsuit: ""Although REDC has not yet been served, we are aware a lawsuit has been filed by National Home Auction Corporation against REDC. We understand that the claims made are similar to those previously brought by NHA against REDC; claims that were voluntarily dismissed by NHA and then later rejected by the court when NHA tried to reintroduce them during REDC's suit against NHA. We believe any suit by NHA against REDC to be completely without merit and we intend to defend ourselves vigorously.""
According to REDC, NHA made similar allegations in a complaint filed with the state of California last year (Orange County Superior Court case No. 30-2008-00105269-CV-BT-CJC), which was dismissed voluntarily for lack of evidence.
REDC says it, however, did obtain a federal injunction against NHA on May 21, 2008, for unfair and unlawful business practices in directly copying REDC's business model, including copying verbatim content from REDC's Web site.
REDC added that NHA tried to file the ""same frivolous lawsuit"" again in federal court, but that case was thrown out by the judge on January 26, 2009 (case No. CV08-1331 SJO). REDC said since that time, NHA has settled by paying REDC a large undisclosed sum.
""Daniel Callahan"":http://www.callahan-law.com, REDC's counsel, said, ""This is NHA's third attempt to harass REDC because REDC aggressively defended its intellectual property leading to the failure of NHA's business. REDC will request sanctions for this frivolous attempt to misuse the judicial process after NHA's earlier complaints on the same facts were dismissed in both the federal and state courts.""