The United States Court of Appeals for the Sixth Circuit has issued an opinion affirming the September 14, 2000 Order issued by Judge James Gwin of the United States District Court for the Northern District of Ohio enforcing against Realty One, Inc. a settlement agreement which had been reached between it and RE/MAX International, Inc. and certain northeast Ohio RE/MAX franchisees.

The settlement was to have brought to an end nearly seven years of litigation over the practice of imposing adverse commission splits against RE/MAX franchises by Realty One and Smythe Cramer Co., another large northeast Ohio area real estate brokerage company. The Court of Appeals found that the record in the case demonstrated “that Realty One stubbornly refused to cooperate” in finalizing the settlement agreement, which the parties had agreed to complete while in court on July 13, 2000. The Court of Appeals also rejected each and every one of Realty One’s objections to the provisions in the district court’s enforcement order limiting Realty One’s ability to impose adverse splits against RE/MAX franchises. The monetary terms of the settlement, which called for Realty One to pay the RE/MAX plaintiffs nearly $6.7 million, also remained undisturbed.

Dave Liniger, chairman of the board of RE/MAX International expressed satisfaction with the Court’s ruling, “We are pleased that the Court has finally put this issue to rest. All that we were seeking was to enforce our settlement agreement which required Realty One to treat RE/MAX brokers and agents fairly and equally. With the Court of Appeal’s decision, we have accomplished that objective. Real estate agents of all companies should also welcome this result as it will allow them to best serve the interests of buyers and sellers without the negative incentives created by adverse splits.”

Lead counsel for the RE/MAX plaintiffs, Stephen Squeri of Jones Day in Cleveland commented, “It’s been a long, hard fought battle. We are very pleased that the Court of Appeals affirmed the action taken by Judge Gwin. It was absolutely crucial for our clients to have a clear agreement, and now a court order, ending the years of discrimination against RE/MAX franchises and agents through the imposition of adverse commission splits. In addition, this will allow those agents who believe that the RE/MAX system is the most efficient and effective way to sell real estate to opt for RE/MAX without fearing discriminatory imposition of adverse splits. We believe that this is also good news for Northeast Ohio consumers who will enjoy the benefits of a more competitive marketplace.”

Published: November 12, 2001

Use of this article without permission is a violation of federal copyright laws.