It has been an eventful and drama-filled 24 hours in Kansas City, Missouri, for the Sitzer/Burnett class-action antitrust buyer broker commission lawsuit.
On Tuesday afternoon, after the National Association of Realtors finished its defense, HomeServices of America took the floor.
HomeServices’ lead attorney Robert MacGill called Ron Peltier, the former CEO of Berkshire Hathaway HomeServices of America, to testify.
During his cross examination of Peltier, Michael Ketchmark, the lead attorney for the plaintiffs, played a video of a Tom Ferry podcast in which Allan Dalton, the CEO of Real Living Real Estate and senior vice president of Berkshire Hathaway HomeServices, said he’d never cut his commission.
In the podcast, which is from September 2019, roughly five months after this lawsuit was filed, Dalton claimed that he shared “the most effective commission-cutting technique” with the audience, which he claimed was also shared “at our events.”
This “technique” is a script Dalton claimed to use in response to a seller asking him to cut his commission.
“There’s no bleeping bleeping way I’m going to cut my bleeping bleeping commission,” Dalton said on the podcast. He went on to say, “What do you think, I’m a bleeping bleeping hooker standing outside the Lincoln Tunnel at three o’clock in the morning giving bleeping bleepings to sailors? If 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.”
Ketchmark asked Peltier if the comments Dalton made on the podcast reflect HomeServices’ values and if Dalton should have been fired.
“I’m not speaking for him. He’s not speaking for us. He’s on a podcast,” Peltier replied. However, he also noted that he did not consider Dalton’s comments “acceptable behavior.”
Plaintiff not “honoring discovery obligations”
After the jury was dismissed for the day, Timothy Ray, an attorney representing Keller Williams, told Judge Stephen Bough that playing the podcast recording “was completely inappropriate and highly prejudicial to us” and that “Mr. Ketchmark knows better.”
Ray said Ketchmark’s actions, which also included bringing before the jury an Inman article about NAR’s decision to deem $0 commission offers as acceptable, were making it “increasingly difficult for defendants to get a fair trial.”
MacGill said that his team has “very specific concerns about what Mr. Ketchmark did” and that Ketchmark wasn’t “honoring discovery obligations” by not producing the video earlier.
MacGill also said that he believed the podcast video should be stricken for its “prejudice to us” and that the jury should be instructed to disregard it, to which Bough said they would discuss things on Wednesday.
Regarding the Inman article presented, Bough said that he did not think the article was inaccurate, but he did not believe Ketchmark’s use of it as evidence constituted “proper impeachment.”
The drama continues on Wednesday
After a night to think it over, HomeServices of America filed a motion for a mistrial, claiming that the Tom Ferry podcast, which the filing refers to as the “ambush video,” is “extraordinarily prejudicial.”
According to the filing, the video was not produced during discovery or placed on the Exhibit List.
In addition to the video, which the filing describes as “vulgar,” several other pieces of evidence that were presented by the plaintiffs’ counsel are cited in the filing.
Other items listed in the 115-page filing include an Inman article about NAR’s acceptance of $0 offers of compensation, references to the Department of Justice’s investigation of NAR in front of the jury, partially revealing the salary of NAR’s executives to the jury, and the plaintiffs deleting portions of the defendants’ counter-designated deposition testimony when playing their deposition videos for the jury, as well as other items.
The filing also takes issue with comments attributed to Ketchmark in articles published by Inman News, including statements that MacGill was trying to “trick” and “fool” the home seller plaintiffs in his questioning. HomeServices also claims that by informing the jury of these articles and comments, Ketchmark has “revealed to the jury how to access this information, and the fact that an Inman Reporter is in the courtroom.”
The filing goes on to state that this is “extremely prejudicial” and that the jury is not to be given access to outside press reports about the trial, “especially when Plaintiffs’ counsel is giving nightly press conferences to Inman.”
Prior to playing the so-called “ambush video” Bough had already warned Ketchmark that he was to disclose all witnesses, evidence and exhibits ahead of time.
HomeServices claims that the plaintiffs’ “conduct has become worse each day. It has irrevocably contaminated the Jury.”
Due to this, HomeServices state the court should declare a mistrial. If a mistrial is not granted, HomeServices is asking the “ambush video” and all questions related to it, as well as all references to Inman, the DOJ, the residence of NAR’s counsel, NAR executives’ salaries, and actions by regulatory authorities be stricken.
On Wednesday afternoon, Bough did agree to strike references to Inman’s article about NAR allowing $0 offers of compensation, as Ketchmark is quoted in the article as saying the policy change was a “stunning admission of guilt.”
BHHS CEO Gino Blefari took the stand soon after.
Keller Williams, the final defendant in the suit, is expected to make its case later this week, with jury deliberation potentially beginning as early as Monday.
Editor’s note: Keep checking HousingWire.com for ongoing, live coverage from Kansas City from our editorial team on the commission lawsuit trial.
