Actual estate franchisor RE/MAX is suing just one of its have franchisees, alleging the broker recruited 41 agents to eXp Realty though still underneath deal with RE/MAX.
In a complaint submitted Tuesday, RE/MAX accused James E. Dulin II and his Carmel, Indiana-dependent company, The Hamilton Team, of violating the terms of 4 franchise agreements for RE/MAX offices in Indiana operating less than the name RE/MAX Capacity Additionally.
“In very clear violation of these continuing obligations, Dulin is actively competing towards his RE/MAX franchises and all Indiana RE/MAX franchisees by aligning with and marketing plaintiffs’ competitor, eXp Realty LLC and improperly steering his RE/MAX revenue associates to eXp — properly destroying the quite franchise organizations he is expected to market,” lawyers for RE/MAX wrote.
“Dulin is also infringing upon [RE/MAX’s] emblems and unfairly competing with plaintiffs by enabling eXp brokers to perform out of at minimum 1 of his RE/MAX franchise places, therefore creating significant consumer confusion in the Indianapolis current market regarding the (non-existent) affiliation between the RE/MAX brand and eXp.”
In accordance to the grievance, Dulin and seven customers of the administration staff at RE/MAX Means Furthermore held their annual enterprise retreat in Arizona in late April. There, Dulin and his team allegedly attended a assembly at the residence of eXp brokers Chuck and Angela Fazio and Dulin allegedly questioned his team to commit to becoming a member of eXp.
If Dulin named a single of the Fazios as his eXp sponsor and Dulin’s product sales associates then joined and named Dulin as their sponsor, then both equally the Fazios and Dulin would be compensated underneath eXp’s income share program, in accordance to the criticism.
Citing the sworn testimony of Dave Conord, eXp’s head of U.S. expansion, the criticism alleged Dulin explained to eXp that he was interested in joining eXp with his workforce, but eXp explained to Dulin that he could not because he remained underneath deal with RE/MAX.
According to the complaint, Dulin’s arrangement with RE/MAX for the West Clay, Indiana, workplace expires on Friday, whilst the settlement for the Carmel place of work expires Sept. 25. The other two agreements, for the Lafayette and Lebanon workplaces, really don’t expire till August 2023 and November 2024, respectively.
“Mr. Dulin was in a bind (of his very own generating),” the complaint claimed. “He experienced already started encouraging his RE/MAX Means Plus sales associates to transform to eXp. But if he could not join eXp, his gross sales associates could not title him as their eXp sponsor, and he would not receive Earnings Share System compensation for changing them.
“Mr. Dulin then attempted to do indirectly what he could not do right.”
Dulin allegedly had his spouse, Tammy Dulin, who was also on his administration staff, try to sign up for eXp to benefit from his agents becoming a member of eXp through her. But eXp declined her request due to the fact of Dulin’s franchise agreements with RE/MAX, according to the grievance.
Dulin then allegedly built a deal to have Brooke Stines-Broady, RE/MAX Skill Plus’s operations supervisor, join eXp although naming a single of the Fazios as her sponsor and then having RE/MAX Potential Plus’s income associates be a part of eXp naming Stines-Broady as their sponsor. Stines-Broady would then allegedly transfer compensation she been given beneath eXp’s revenue share prepare to Dulin.
At conferences on July 30 and Aug. 2, Dulin allegedly told his agents that he would not be renewing his Carmel franchise arrangement with RE/MAX and that he prepared to join eXp when the Lafayette arrangement expired in 2023.
“Dulin’s strategy ignores defendants’ obligations below the Lebanon franchise arrangement, which runs until November 2024,” the grievance explained.
“Dulin is also obligated to encourage the organization of his Lafayette and Lebanon places of work through their respective terms. This obligation incorporates recruiting and retaining revenue associates, who are the principal supply of revenue for people offices.
“But at the August 2 meeting, Dulin did not encourage his gross sales associates to remain with him at his RE/MAX offices in Lafayette or Lebanon. As an alternative, he disparaged RE/MAX and encouraged them to be a part of eXp.”
The grievance alleges that Dulin also facilitated an eXp presentation from the Fazios to his brokers and is currently allowing his previous brokers to do business for eXp out of his RE/MAX workplace in Carmel, “in violation of his non-contend and office environment marketing obligations less than the franchise agreements.”
The criticism alleged that about 19 RE/MAX Capability Additionally brokers joined eXp on the day of the Aug. 2 conference and a different 22 joined eXp in the subsequent three weeks.
“These 41 previous RE/MAX Capacity Plus gross sales associates symbolize a reduction of roughly 50 percent of Dulin’s product sales associate head depend at every single of his Carmel, Lafayette, and Lebanon offices,” the criticism explained. “On data and belief, extra income associates are anticipated to comply with fit.”
Dulin also allegedly stopped having to pay the franchise charges owned less than his franchise agreements with RE/MAX and owes $16,267 in costs for June and July, in accordance to the criticism.
The grievance alleges breach of deal, federal trademark infringement and unfair levels of competition. RE/MAX is also seeking declaratory relief — an get from the court stating the Lebanon franchise agreement is still in effect and obligating Dulin to abide by it. The franchisor is suing for damages, disgorgement of unwell-gotten income, attorney’s charges and prices and permanent injunctive aid implementing the conditions of the franchise agreements.
Dulin did not reply to an emailed request for comment. Neither eXp nor any of its agents are defendants in the suit.
RE/MAX and eXp not too long ago settled a lawsuit in excess of agent recruiting. In that unique match, RE/MAX accused eXp of focusing on RE/MAX franchise house owners to abandon their franchises, arguing that eXp was striving to recruit people today who could not lawfully be recruited. Asked for comment on the Dulin fit and irrespective of whether the perform alleged was an illustration of the carry out the eXp match was referring to, a RE/MAX spokesperson declined to remark.
“We experience the complaint speaks for by itself,” the spokesperson reported.
Electronic mail Andrea V. Brambila.