BAM Key Details:

  • A video shown by plaintiffs’ attorney Michael Ketchmark in the Sitzer/Burnett trial is now hurting HomeServices of America’s motion for summary judgment in the Nosalek case.
  • Nosalek plaintiffs cite the Allan Dalton video, with his f-bomb-laden response to a client asking him to lower rates, as further evidence of a conspiracy among defendants to inflate commissions. 

Almost four months after HomeServices of America filed a motion for summary judgment in the Nosalek commission lawsuit, the plaintiffs have finally responded. 

Unfortunately, the response is to oppose the motion, citing a video shown by plaintiffs’ counsel in the Sitzer/Burnett trial—the notorious “ambush video”—as evidence of the conspiracy among the defendants to inflate commissions. 

As to HomeServices’ argument that the plaintiffs “have no evidence of a conspiracy as to any HSD to create, implement, or enforce the [Buyer-Broker Commission] Rule,” the plaintiffs are now using the infamous Allan Dalton video, taken (out of context) from a Tom Ferry podcast episode, to argue the contrary. 

Here’s what we know so far. 

What has been seen cannot be unseen.

During the Sitzer/Burnett trial, plaintiffs’ attorney Michael Ketchmark played a segment of the September 2019 episode of the Tom Ferry Podcast, featuring Allan Dalton, the CEO of Real Living Real Estate and the senior vice president of Berkshire Hathaway HomeServices. 

In the video, Dalton was heard repeating a script used to respond to clients asking if the agent would lower their commission. 

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.

Allan Dalton

CEO of Real Living Real Estate and Senior vice president of Berkshire Hathaway HomeServices

Ketchmark played the video as evidence, without presenting it during the discovery period or including it on evidence lists. HomeServices then filed a motion for a mistrial, which was subsequently denied by Judge Stephen R. Bough

The judge did order the video stricken from the record and told the jury to disregard it. But at that point, it was too late. 

Time will tell whether the video will come up during the Sitzer/Burnett appeal or what further damage it will do in other commission lawsuits where HomeServices of America is named as a defendant. 

Other evidence cited by the Nosalek plaintiffs

While it certainly didn’t help, the “ambush video” wasn’t the only thing working against HomeServices. 

The Nosalek plaintiffs’ opposing motion also highlighted the following: 

  • HomeServices’ agent training videos, including videos from CEO Gino Blefari
  • HomeServices’ 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.”

Regarding the former, plaintiffs’ referenced a video in which Blefari is discussing commission negotiations with trainees: 

[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.’

Gino Blefari

CEO of HomeServices of America

Regarding HomeServices’ franchise agreement, the plaintiffs argue that, in requiring NAR membership for franchisees, HomeServices was, by extension, requiring franchisees and affiliated agents to practice cooperative compensation

The plaintiffs are arguing that this, in itself, makes HomeServices part of the alleged conspiracy to inflate agent commissions. 

Based on all the evidence mentioned above, the opposing motion argues that HomeServices does, in fact, control its franchisees and agents when it comes to fixing (minimum) commission rates and the practice of cooperative compensation. 

It’s complicated.

This is just one development of many recent complications in the Nosalek commission lawsuit:

We’ll know soon enough whether Judge Patti Saris will approve HomeServices’ motion for a summary judgment or allow the Nosalek lawsuit to progress to a jury trial, as demanded in the plaintiffs’ initial complaint. 

Stay tuned for updates. And bookmark the BAM Lawsuit Watch to stay on top of new developments as they come.