A Missouri judge ruled this week that Crye-Leike Real Estate Services will not be covered by the commission lawsuit settlement agreed to by the National Association of Realtors (NAR), rejecting the brokerage’s argument that it is six independent companies and not one.
The $418 million settlement offers brokerages that closed less than $2 billion in 2022 protection against future litigation related to blanket offers of compensation to buyer agents on NAR-affiliated multiple listing services (MLSs).
According to data from RealTrends Verified, Crye-Leike closed about $7 billion in sales volume in 2022, which would prevent it from being included in the settlement. If it was ruled to be six different companies, they would be included.
The six companies are Crye-Leike Inc., Crye-Leike of Arkansas, Crye-Leike of Mississippi, Crye-Leike of Nashville, Crye-Leike South and Adaro Realty. The companies are all owned by Harold Crye, but he argues that they are independent companies with separate management and accounting.
The ruling is in the Gibson commission lawsuit, one that was filed hours after the guilty verdict in the Sitzer/Burnett that led to the landmark NAR settlement. The Gibson suit is generally the same as Sitzer/Burnett; the plaintiffs argue that NAR and brokerage defendants conspired to artificially inflate commission rates for buyer agents, and both suits were brought in Missouri.
The Gibson suit had more defendants than Sitzer/Burnett. Two of them — Weichert ($8.5 million) and eXp ($34 million) — have settled a similar case in Georgia and are waiting for preliminary approval of the terms, which will affect the Gibson suit as well.
Judge Stephen Bough — who presided over Sitzer/Burnett and is currently overseeing Gibson — came under fire this week from defendant Howard Hannah Real Estate Services, which alleges that Bough has a conflict of interest and should recuse himself from the case.
Matthew Dameron, an attorney for the plaintiffs, made a donation to then-Kansas City, Missouri City Council candidate Andrea Bough, who is Judge Stephen Bough’s wife. Howard Hannah says that Judge Bough offered to recuse himself in Sitzer/Burnnet for the reason and should do so for the Gibson suit given Dameron is a plaintiff’s attorney in both cases.
He did recuse himself in a suit against a gun manufacturer over the donations, which Howard Hannah has seized on as evidence Bough knows he has the appearance of a conflict of interest.
