As expected, the plaintiffs are in opposition to HomeServices’ motion, stating that HomeServices’ claim that the “Plaintiffs have no evidence of conspiracy as to any HSD to create, implement, or enforce the [Buyer-Broker Commission] Rule” is untrue.
In their filing, the plaintiffs highlight HomeServices’ franchise agreements, training videos, as well as the now infamous Allan Dalton video, as evidence of HomeServices enforcing the National Association of Realtors’ Clear Cooperation policy and Participation Rule.
The “ambush video,” as it was referred to by HomeServices of America after it was played as evidence despite not being presented during the discovery period or included on evidence lists, during the Sitzer/Burnett commission lawsuit trial last month, features Dalton, the CEO of Real Living Real Estate and senior vice president of Berkshire Hathaway HomeServices.
During the podcast episode, which is from September 2019, Dalton is asked if he has a technique for when clients ask him to cut his commission.
He tells listeners that he uses the following script: “There’s no bleeping bleeping way I’m going to cut my bleeping bleeping commission[. W]hat do you think[,] I’m a bleeping bleeping hooker standing outside Lincoln Tunnel at 3 o’clock in the morning[?… I]f you think I’m going to cut my bleeping bleeping Commission you can take this home and shove it up your bleeping bleeping and I know that it will fit right.”
HomeServices filed a motion for a mistrial in response to the plaintiff’s attorney playing the Tom Ferry podcast video. Despite the motion not being granted, industry pundits believe the “ambush video” may play a role in the potential appeal of the Sitzer/Burnett suit.
Like the plaintiffs’ attorneys in the Sitzer/Burnett suit, the Nosalek plaintiffs also highlighted various HomeServices’ agent training materials, including training videos from HomeServices CEO Gino Blefari, in its opposition filing.
In the video cited, Blefari discusses commission negotiation with trainees, stating: “[W]hen homesellers saw that I had written a 6% commission into the contract, and would ask, ‘Gino, but aren’t commissions negotiable?’ I would always answer, ‘Yes, commissions are negotiable, but I can only go up from six.’”
The filing also addressed HomeSerivces’ franchise agreement, which requires franchisees “proposing to do business in the Commonwealth of Massachusetts” to “comply with the Code of Ethics of the National Association of Realtors and other appropriate organizations.”
The plaintiffs argue that by requiring franchisees to join NAR and abide by the trade group’s code of ethics, HomeServices is, by extension, requiring franchisees and their agents to engage in cooperative compensation, making them part of the alleged conspiracy to inflate agent commissions.
Based on the items cited in the filing, the plaintiffs assert that HomeServices does, in fact, have control over its franchisees when it comes to commission rates and the practice of cooperative compensation.
There are still many moving parts to the litigation with the settlement agreement reached by defendant MLS PIN and the plaintiffs still up in the air thanks to the Department of Justice‘s involvement in the suit, and the plaintiffs joining the settlement agreements reached by RE/MAX and Anywhere in the Sitzer/Burnett and Moehrl lawsuits.
It remains to be seen if Judge Patti Saris will approve the motion or allow the Nosalek suit to continue on to a jury trial, as the plaintiffs’ demanded in their initial complaint.
HomeServices of America declined to comment on the suit.
Clarification: In some of the commission lawsuits, plaintiffs argue against the NAR’s Clear Cooperation Policy, which requires agents to list a property on an MLS within 24 hours of marketing the property. When a sale closes, that rule triggers what the NAR internally calls the Participation Rule, where a seller’s broker must compensate a buyer’s broker.