HomeServices: It is too soon for a ruling in Sitzer/Burnett

In a filing earlier this week, HomeServices of America asked Judge Stephen Bough, who is overseeing the Sitzer/Burnett commission lawsuit, to deny the plaintiffs motion for entry of judgement.

In their mid-March filing, the Sitzer/Burnett plaintiffs asked the court to order HomeServices of America, the sole remaining defendant in the suit, to pay $4.7 billion in damages. This is 88% of the trebled damages award by the Missouri jury in October.

HomeServices of America called the plaintiffs’ motion premature, noting that the court has yet to approve the four other settlement agreements reached by the other defendants in the lawsuit. The date for the final approval hearing for the settlement agreements in this suit is set for May 9, 2024.  

The brokerage firm argued that if these settlements are rejected or challenged, the math for the final judgement amount would change. In their motion, the plaintiffs said they reached the damages amount by trebling the initial damages award and then subtracting the total amounts of the settlements.

“Plaintiffs’ penciled-in numbers for the amount by which the jury’s award should be offset by settlements are provisional because the settlements are subject to objection from the absent class members and judicial scrutiny prior to approval by this court in order to ensure that the settlements comply with due process,” HomeServices’ filing states. “Plaintiffs’ attempt to treat the settlement amounts as effectively final ignores the fact that courts commonly reject class-action settlements when reviewing them for fairness, reasonableness, and adequacy.”

Additionally, HomeServices wrote that it does not expect the approval process for the settlement agreement to be smooth.

“These purportedly nationwide settlements were negotiated with attorneys representing only a fraction of the nationwide class of people who would be affected by the settlements,” the filing states. “And the Department of Justice has already objected to settlements of similar claims in other cases. Thus, the judgment Plaintiffs seek for this court to enter would necessarily be provisional because of its relation to contested issues.”

In their motion, the plaintiffs also noted that they are seeking an award of the attorneys’ fees and costs of the suit and interest on the damages amount at a yearly rate of 5.4% starting Nov. 1, the day after the verdict. In its filing HomeServices wrote that the interest on the damages amount should begin accruing on the date Judge Bough enters his final judgement.

The HomeServices filing also notes that the law requires the plaintiffs to “demonstrate a danger of hardship if its request is not granted,” which HomeServices says they failed to do.

“Plaintiffs point to no hardship or prejudice that they will suffer if judgment is not entered until all claims against all parties in this case are fully resolved,” the filing states. “Nor can they in light of the fact that, by the parties’ mutual agreement and as subsequently ordered by the Court, any judgment cannot be executed until thirty days after the court has resolved all post-trial motions, briefing for which is still not complete. Even then, Plaintiffs could not execute a judgment with an uncertain damages amount — each of the settlements must receive final approval first.”

The filing also stated that HomeServices doesn’t see what the reason for the plaintiffs’ desire to rush the final judgement, noting that they “don’t have an appeal that they seek to hasten” or that HomeServices does not feel they will be “prejudiced by having withheld money owed to them by HomeServices because they would not be entitled to receipt of those funds unless HomeServices’ appeal rights were exhausted without success.”

In addition, the brokerage firm noted that it does not have an immediate interest in appeal as they are still dealing with their post-trial motions.

Besides its post-trial motions, HomeServices is also waiting to hear about a writ of certiorari it filed in February. In its filing, HomeServices petitioned the U.S. Supreme Court and asked for a review of an August 2023 ruling by the Eight Circuit Court, which found that HomeServices could not enforce arbitration agreements signed by seller clients of its franchisees. The appeals court said that this was because the contracts signed by the sellers were not directly signed by HomeServices.