COURT REPORT: Dismissal and Stay in Whaley vs. NAR; Keller Williams Fraud Lawsuit Develops

In the post-Burnett world, commission lawsuits continue to evolve across the industry. Cases such as Whaley vs. NAR, Gibson vs. NAR and Willsim Latham vs. Metrolist have all seen recent developments ranging from motions to stay, amended complaints and voluntary dismissals.

While the commission issues pursue, a fraud lawsuit previously filed against Keller Williams sees an update in a filing for holding the plaintiff in contempt.

Here’s what happened in the real estate legal sphere this past week:

Whaley vs. NAR sees a dismissal and a stay

The case had two major developments as of late: a notice of dismissal and a motion to stay.

Opendoor has been voluntarily dismissed without prejudice from the case by plaintiff Nathaniel Whaley as of March 6. The iBuyer had been named in the case as part of an alleged conspiracy “to keep commissions artificially inflated at 4.5% to 6% and have sellers pay costs that would typically fall on a buyer, based on rules specifically put in place by NAR,” as RISMedia previously reported.

In regard to the motion to stay, the plaintiffs and the defendants (NAR, Nevada REALTORS®, Sierra Nevada REALTORS®, Incline Village REALTORS® and Northern Nevada Regional Multiple Listing Service) have requested a pause in proceedings until “after the U.S. Judicial Panel on Multidistrict Litigation rules on the pending motion to transfer.”

The Keller Williams fraud lawsuit develops

Keller Williams is requesting that the court hold former CEO John Davis in contempt and wants the lawsuit to be arbitrated in their filing on Mar. 8.

Almost a year ago, Davis sued his former employer for racketeering, fraud and self-dealing, alleging that the company and co-founder Gary Keller engaged in a broad range of misconduct affecting franchise owners and agents. He also claimed that his former boss used a sexual harassment lawsuit to smear him years after he was separated from Keller Williams.

The company claims in their filing that since Davis filed the fraud suit in another district, the Western District of Texas, instead of going to arbitration he should be held in contempt. Davis claims, however, that the Texas case consisted of “wholly different claims and different defendants” and therefore doesn’t apply to the defendants claims to arbitration.

On March 8, Davis filed a brief response, asking the new judge in the case to delay or deny the contempt motion, “in the interest of preserving judicial resources.”

Davis has also claimed that Keller Williams leadership was aware that the allegations of sexual misconduct against him by franchisee Inga Dow—which have now been settled—were fabricated. Dow also officially retracted her accusations.

Plaintiffs amend complaint in Gibson vs. NAR

In the amended complaint, the plaintiffs now name Berkshire Hathaway Energy Company as a defendant.

BHHS Energy owns HomeServices of America and subsequently Berkshire Hathaway HomeServices, which the filing states “wholly owns numerous real estate brokerages and franchises in Missouri and nationwide.”

The amended complaint states that HomeServices of America of BHHS, under BHHS Energy, have participated in the alleged conspiracy with the other defendants to inflate commissions under the “participation rule.”

Willsim Latham vs. Metrolist grants motion to stay

The defendants RE/MAX, Keller Williams and AnywhereRE’s motion to stay has been granted as of March 1.

Pending settlements in the Burnett and Moehrl cases prevent members of the settlement class from prosecuting any actions against any of the three companies.

This is one of several cases experiencing a stay due to the pending settlements for these companies, such as Grace vs. NAR and Nosalek v. MLS PIN. 

The plaintiffs will update the court within 30 days of the approval of the settlements.

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