KANSAS CITY—HomeServices of America, one of the defendants in the Burnett commission trial, today filed a motion for summary judgment—a ruling in its favor without any further proceedings—just as the plaintiffs are about to rest their case, claiming that no evidence has been presented to show they conspired together on rules or commissions.
The plaintiffs’ case hinges on convincing a jury that the major corporate brokerages conspired with the National Association of REALTORS® (NAR) on rules that limited competition and harmed consumers, focused specifically on buyer agent compensation.
As the court recessed for lunch, attorneys on both sides sparred in front of Judge Stephen R. Bough, who took a much lighter tone, claiming that both sides had been given due process.
“I was hoping you would say, ‘Hell yeah,’” Bough joked with both sides from the bench.
That was not the tone in the courtroom this morning from several key witnesses, whose testimony was shown on pre-taped video to the jury.
After the plaintiffs chose at the last minute not to present the testimony of RE/MAX Co-founder Dave Liniger, instead a handful of local real estate leaders and policy makers got their turn in the spotlight, grilled on commissions, antitrust policy and compliance.
Despite many of the stark revelations around commissions and some less than flattering testimony, the defendants keyed in on one central point: the alleged conspiracy between the major brokerages and NAR.
“Lacking any direct or circumstantial evidence of an actual conspiratorial agreement to follow and enforce the (buyer agent compensation rule), Plaintiffs have instead focused their case on red herrings,” wrote Robert MacGill, lead counsel for HomeServices of America.
Bough already dismissed a joint motion for summary judgment by the defendants way back in December of 2022. In a separate filing today, MacGill said HomeServices of America also would join a separate motion from NAR (which had not formerly been filed at press time) and “any separate written motion filed by Keller Williams…and any oral motion made by any Defendant.”
In court today, plaintiffs presented testimony by Rosalie Warner, senior vice president, Network Services at HSF Affiliates; Kevin Goffstein, an executive at two local HomeServices of America affiliates; Darrell King, executive director of franchise systems at Keller Williams; and Clifford Niersbach, former associate general counsel for NAR.
Niersbach’s testimony focused on an earlier witness, Linda O’Connor, a “whistleblower” who served on an NAR committee focused on the code of ethics, and back in 2012 described certain NAR policies as “the ultimate form of restraint of trade and price fixing.”
Niersbach testified that he didn’t recall whether he told O’Connor that her concerns needed to be passed on to a different committee, only that they “never got that far.”
He also was shown an email where he said a change from $0 in buyer commission to $1 would be “unlikely to generate a lot of interest.”
Later on, King was shown being grilled on the subject of Keller Williams’ compliance, including on commission negotiation. He was also asked about a specific Keller Williams’ manual that said commissions are negotiable only under “extreme conditions.”
King also testified that he thought it was “totally fine” for Keller Williams Co-founder Gary Keller to talk about commission averages at an event that included competitors.
“We don’t violate antitrust laws,” King said.
Goffstein, president/broker of Berkshire Hathaway HomeServices Alliance Real Estate and ReeceNichols, was shown an email exchange between him and a Coldwell Banker broker, who he admitted “could be” a competitor, in which they discussed an upcoming vote on MLS rules.
“I believe I was asking her thoughts on the topic; I don’t remember what this was,” Goffstein said.
Goffstein was also shown a policy manual from 2014 that said members must join NAR, and that “membership is important to your success.”
Warner’s testimony focused on a 6% rate, which HomeServices of America President and CEO Gino Blefari advocated for in training videos.
She also admitted that she was not aware of any real estate company that does not list properties on the MLS—a key counterpoint to an argument NAR has made, which is that sellers who don’t want to work with a REALTOR® can simply find another licensed agent who is not affiliated with them.
In his request for summary judgment, MacGill claimed all of these choices and policies were “unilateral decision(s)” made by independent companies, and characterized the 6% training materials as “example or illustrative (of) real estate commission (that) is ubiquitous in the United States.”
MacGill characterized additional evidence alleging that HomeServices of America requires participation in or collaboration with NAR as unrelated to commissions, or lacking substance.
“Without any such evidence, no reasonable jury could find in Plaintiffs’ favor on their conspiracy claim,” MacGill wrote.
Bough had not ruled on the motion at press time.
Stay tuned for ongoing updates from the courtroom during the trial in Kansas City.
William Schmidt contributed to this story.
