Property ManagementJudge Says Pay Up in Adverse Commission Case
The United States Court of Appeals for the Sixth Circuit has issued an
opinion affirming the September 14, 2000 Order issued by Judge James Gwin of
the United States District Court for the Northern District of Ohio enforcing
against Realty One, Inc. a settlement agreement which had been reached between
it and RE/MAX International, Inc. and certain northeast Ohio RE/MAX franchisees.
The settlement was to have brought to an end nearly seven years of
litigation over the practice of imposing adverse commission splits against
RE/MAX franchises by Realty One and Smythe Cramer Co., another large northeast
Ohio area real estate brokerage company. The Court of Appeals found that the
record in the case demonstrated “that Realty One stubbornly refused to
cooperate” in finalizing the settlement agreement, which the parties had agreed
to complete while in court on July 13, 2000. The Court of Appeals also
rejected each and every one of Realty One’s objections to the provisions in the
district court’s enforcement order limiting Realty One’s ability to impose
adverse splits against RE/MAX franchises. The monetary terms of the settlement,
which called for Realty One to pay the RE/MAX plaintiffs nearly $6.7 million,
also remained undisturbed.
Dave Liniger, chairman of the board of RE/MAX International expressed
satisfaction with the Court’s ruling, “We are pleased that the Court has
finally put this issue to rest. All that we were seeking was to enforce our
settlement agreement which required Realty One to treat RE/MAX brokers and
agents fairly and equally. With the Court of Appeal’s decision, we have
accomplished that objective. Real estate agents of all companies should also
welcome this result as it will allow them to best serve the interests of buyers
and sellers without the negative incentives created by adverse splits.”
Lead counsel for the RE/MAX plaintiffs, Stephen Squeri of Jones Day in
Cleveland commented, “It’s been a long, hard fought battle. We are very
pleased that the Court of Appeals affirmed the action taken by Judge Gwin. It
was absolutely crucial for our clients to have a clear agreement, and now a
court order, ending the years of discrimination against RE/MAX franchises and
agents through the imposition of adverse commission splits. In addition, this
will allow those agents who believe that the RE/MAX system is the most
efficient and effective way to sell real estate to opt for RE/MAX without
fearing discriminatory imposition of adverse splits. We believe that this is
also good news for Northeast Ohio consumers who will enjoy the benefits of a
more competitive marketplace.”