Editor’s Note: This story was updated Wednesday at 4:30 p.m. with information on the HomeServices’ motion for summary judgment.
HomeServices of America, one of the defendants in the landmark Burnett class-action lawsuit that alleges broad antitrust behavior and conspiracies involving commissions, is demanding a mistrial after the plaintiffs showed a surprise video clip yesterday of a Berkshire Hathaway HomeServices (BHHS) executive talking about commission negotiations, which attorneys for the defendant described as “vulgar.”
“Plaintiffs’ ambush with the highly-prejudicial video is just the most recent event in a series of violative actions. Each and all of them result in the inescapable conclusion that this case has been mistried,” wrote Robert MacGill, lead attorney for HomeServices of America in a court filing this morning.
MacGill also requested that, if Judge Stephen R. Bough, who is presiding over the case, does not declare a mistrial, the jury should still be instructed to “put (the video) out of your mind” and “give it no weight,” acknowledging the fact that the plaintiffs failed to produce the video when asked four years ago, and that showing it was “not authorized.”
The video clip, taken from an appearance by BHHS SVP of Research and Development Allan Dalton on a podcast in 2019, featured Dalton illustrating a technique for commission negotiations that included telling clients who asked to negotiate commissions that they are treating their agent like a prostitute, and encouraging the use of expletives.
Dalton overtly discouraged agents from negotiating their commissions in the video, something that plaintiffs have seized on and showed evidence of other real estate executives advocating for earlier in the trial.
Defense attorneys were not made aware of the video, MacGill claimed, and had no chance to review or prepare for it, which he said was a clear violation of court orders. This incident, along with other alleged violations of court rules, is enough to merit starting the trial all over again, MacGill wrote.
“(Ketchmark’s) conduct and limited decorum is deteriorating. It is not improving. The HomeServices Defendants are increasingly prejudiced each day that the Court permits this conduct to continue,” MacGill wrote.
In a letter to Bough dated yesterday, Scott McCreight, another lawyer for the plaintiffs, defended the use of the video, claiming that it was a direct response to defendants’ questioning of Ron Peltier, founder and chairman of HomeServices of America, who said that “we don’t train people to intimidate people” and that “there is nothing in the history of HomeServices of America that has not been done with the highest of integrity, honest and sincere.”
“Defendants let the entire video play without objecting,” McCreight noted.
McCreight also claimed that the video did not need to be disclosed because it was only used for impeachment or rebuttal—that is, the plaintiffs would not have shown it if not for Peltier’s testimony for the defense. He also claimed it did not qualify for specific document requests cited by MacGill.
So far, the Burnett trial has played out dramatically and pugnaciously, with Ketchmark accused of pushing the boundaries of court rules, and both lawyers warned by the judge against referencing each other during witness examination.
But this latest development appears to be a new high point in the tensions, with MacGill also pointing to Ketchmark’s leverage of the media—both in the courtroom and outside of it. Ketchmark was admonished by the judge for repeated references to Inman coverage of the trial, claiming that Ketchmark has been “giving nightly press conferences,” which make it harder for the jury to ignore press coverage of the trial (which Bough has repeatedly instructed them to do).
Particularly, MacGill objected to Ketchmark introducing a particular Inman article into evidence in which he, Ketchmark, was a primary source and was quoted in the article’s subhead.
MacGill also accused Ketchmark of breaking other court rules, including referencing a Department of Justice investigation with similar antitrust accusations focused on the National Association of REALTORS® (NAR), and partially revealing NAR executive salaries to the jury.
“Plaintiffs’ conduct has become worse each day. It has irrevocably contaminated the Jury,” wrote MacGill.
MacGill noted that Bough had previously admonished Ketchmark for improperly using Inman articles to attempt to impeach witnesses.
McCreight denied that anything improper has taken place.
“HomeServices’ accusations of discovery violations are without merit. To the extent that HomeServices asks the Court to strike testimony (or for any other relief), that request should be denied,” McCreight concluded.
At press time, Bough had not ruled on the motion.
However, later Wednesday afternoon, Bough did rule on a previously filed, separate motion by HomeServices asking for summary judgment in the case, which had argued the plaintiffs had failed to present compelling evidence of their allegations and urged Bough to rule immediately in favor of HomeServices.
Bough denied that motion, allowing the case against HomeServices to continue and leaving the final verdict in the hands of the jury.
Stay tuned to RISMedia for more updates from the court room.
William Schmidt contributed to this reporting.
