A jury has awarded $2.2 million to John Foltz, the former president and designated broker of Realty Executives Inc., in a defamation suit Foltz filed against the company’s owners, Rich Rector and his wife, Robyn Lee Dependahl.
Realty Executives sued Foltz in 2010, claiming he or employees under his charge prepared false financial statements, failed to monitor and reduce expenses in the face of declining revenue, mismanaged cash and trust funds, and left the company’s general ledger “out of balance by more than $4 million for a period of several years.”
Gavel image via Shutterstock.
The Phoenix, Ariz.-based brokerage filed for Chapter 11 bankruptcy reorganization the following year. The company’s bankruptcy plan was approved that fall, and last year the brokerage was ranked by Real Trends as the nation’s 23rd largest by 2012 transaction sides, down from 11th in 2009.
(The brokerage’s franshisor, Realty Executives International, was not a party to the bankruptcy proceeding.)
Realty Executives’ lawsuit accusing Foltz of fiduciary misconduct and breach of conduct is still pending, as is Foltz’s counterclaim seeking damages for slander, the Phoenix Business Journal reports.
Foltz’s more recent defamation suit, which did not name Realty Executives, was filed in 2012. The lawsuit alleged that Rector thwarted his attempts to land a job with another brokerage, telling an executive at the company that Foltz had embezzled from Realty Executives.
In a statement issued after the jury’s verdict in his favor, Foltz said Rector has told “terrible lies” about him and that “no one should be allowed to falsely damage someone else’s reputation.”
Rector called the verdict in the defamation case “disappointing,” telling the Phoenix Business Journal that he did not feel the outcome “accurately depicts the realities of the case.”