Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
NAR and Mauricio Umansky spar over decade-old fraud allegation
In a long-running lawsuit filed by listing startup PLS.com against the National Association of Realtors® (NAR), allegations of “unprofessional” conduct and “improper” demands are flying as NAR is seeking documents and communications related separate lawsuits accusing PLS.com founder Mauricio Umansky of fraud.
Umansky, who also co-founded the American Real Estate Association (ARA) as a start-up alternative to NAR, was sued multiple times over the 2017 sale of a mansion seized by the United States government, where Umansky represented the seller but then allegedly worked secretly to buy the property himself and flip it for a huge profit.
NAR is asking for internal communications related to those allegations, claiming that the issues are related to the NAR rules that Umansky’s company PLS.com has allegedly violated antitrust laws.
Along with Compass agent Jason Haber, Umansky founded ARA as an alternative real estate association to NAR in early 2024 as the Realtor® brand was in turmoil over the commission lawsuit and sexual harassment scandals. The new association has grown quickly, including a new partnership announced with Compass just last month.
According to NAR, Umansky’s side was “unprofessional from the start” with negotiations going back to November. NAR claims an attorney representing Umansky’s brokerage (not a party to the lawsuit) accused it of “harassing” the company, and “abruptly” ended a scheduled call to seek a compromise.
“Having exhausted efforts to resolve this dispute through good-faith negotiations, NAR now moves to compel (Umanksy’s brokerage) to produce documents,” NAR wrote in a court filing.
According to Umansky’s attorneys, the brokerage business has nothing to do with the PLS.com litigation, which is focused on the Clear Cooperation policy and allegations that NAR sought to limit competition from listing service startups. Attorneys for Umansky said they “tirelessly” explained that the requests were “burdensome, improper and disproportionate,” with the brokerage already producing other documents.
They also argue that any documents could be obtained from PLS.com, or NAR can ask Umansky directly when they depose him in September.
Both parties are asking for a hearing on Aug. 28 to present their arguments in front of a judge.
Keller Williams, REMAX win buyer settlement approval
The buyer commission lawsuits, which ran parallel to the original Burnett lawsuits, appear to be resolving—on at least two somewhat distinct paths, however.
NAR and several other big brokerages recently opted into a copycat lawsuit known as Tucorri, despite litigating for years in a larger lawsuit known as Batton. Those settlements still need court approval, as the Batton plaintiffs object to the process which they have described as an “end-run” to save money on settlements.
Two companies chose to settle in the Batton case, paying a little under $30 million collectively. Those settlements received quick approval, meaning Keller WIlliams and REMAX no longer have to worry about those claims, which had threatened billions more dollars in damages. Third parties have asked an appeals court to allow Batton plaintiffs to intervene in the Tucorri case, potentially complicating the process.
Burnett case legal administrator slams ‘special master’ as biased
JND Legal, a company that oversees class action settlement administrative work and has billed $36 million from the Burnett settlements, is asking a judge to disqualify one of the auditors appointed to scrutinize its work in the case amid allegations the company has run kickback schemes.
Back in late July, U.S. District Judge Stephen R. Bough has appointed two “special masters”—third parties granted significant authority over witnesses, evidence and testimony—to audit JND billing in the original commission lawsuits against the National Association of Realtors® (NAR) and big brokerages, capping months of scrutiny over the settlement administrator’s finances.
Late last year, JND was accused in a consolidated federal lawsuit of participating in a kickback scheme with banks in order to maintain dominance of the lucrative settlement administration market. The company has denied those allegations.
But JND is claiming that one of the special masters—Chris Hellums—is biased and unfit to oversee the audit based on his, asking Bough to disqualify him based on a lack of “impartiality.”
According to JND, Hellums homed in on JND as a “local facilitating counsel” in an unrelated case, with JND asserting that Hellums followed “an unfounded hunch” to spend months questioning JND’s billing practices.
JND also claimed that Hellums did not disclose to the judge aspects of his previous working relationship with JND as a “claims administrator.”
“A person apprised of all the facts would reasonably question Mr. Hellums’ impartiality to oversee and shape an audit in this action into the same issues that were the subject of his attacks against JND in (the other case),” JND wrote.
Bough had not yet ruled on the request at press time.
