A bitter feud between two local Realtor groups in California, which has already spawned a lawsuit, continues to escalate.

The Silicon Valley Association of Realtors announced this week that it has filed a complaint with the National Association of Realtors, charging that a neighboring local Realtor group, the Santa Clara County Association of Realtors, “has violated crucial clauses” of the national trade group’s policy.

In its complaint to the national Realtor group, the Silicon Valley group contends that the Santa Clara association “made false or misleading representations about other Realtor associations, engaged in false, deceptive or misleading advertising or marketing practices as well as illegal business practices, and knowingly violated local, state or national Realtor policies.”

Kent Westerberg, a lawyer for the Silicon Valley association, said in a statement, “The complaint was filed in order to prevent (the Santa Clara Association) from further attempts to discredit my client through deliberate, or at the very least, negligent and/or reckless misstatements.”

In early August, the Santa Clara Realtor group filed a lawsuit in Santa Clara County Superior Court against the Silicon Valley group, alleging that it violated a contract and plotted to steal away the Santa Clara group’s members.

The flap between the two groups grew out of a contract by the Santa Clara group to use an online property documents system operated by a subsidiary of the Silicon Valley association.

When the Santa group cancelled its participation in the system because of rising costs, the Silicon Valley group reportedly attempted to lure away its members using contact information obtained through the contract, the lawsuit alleges.

The Silicon Valley association, which has disputed the allegations in the lawsuit, announced today that it plans to file a court motion to dismiss Ron Rossi, a lawyer who is representing the Santa Clara association, from the litigation between the groups because of an alleged conflict of interest.

Rossi said he represented a predecessor group to the Silicon Valley association about 10 years ago but he does not have a conflict in representing the Santa Clara County association. He also said that the Santa Clara association hasn’t received a copy of the Silicon Valley association’s complaint that reportedly was sent to the national Realtor group.

Rossi said the Silicon Valley association hasn’t yet responded to the lawsuit, and representatives for the group initially expressed interest in mediation but there have not yet been any negotiations to resolve the dispute.

Janet Case, executive officer for the Silicon Valley association, said National Association of Realtors policy states that when two associations have a dispute they are supposed to enter into a mediation process.

“(The national association) has a business practices doctrine or guideline that suggests that if you can’t resolve your differences, file a complaint with (the national association). The solution shouldn’t be a lawsuit,” she said.

The lawsuit alleges that the Silicon Valley Association of Realtors solicited members from the larger Santa Clara County Association of Realtors “to change their primary real estate board membership, or board of choice,” to the Silicon Valley group.

The Silicon Valley association, through a subsidiary known as PRDS, offers specializedreal estate property forms to its own members, and the Santa Clara association had paid for a contract that allowed all of its members to access these forms.

According to the lawsuit, the price to access these forms increased dramatically, and the Santa Clara association decided not to renew the system because of this price increase. Meanwhile, the Silicon Valley association provides its members free access to the forms service as a membership benefit.

The lawsuit also alleges that the Santa Clara group had furnished a list of contact information for its members to the Silicon Valley group specifically for the purpose of allowing access to the PRDS online real estate forms system, and that the Silicon Valley group “made a conscious decision to misappropriate (this) membership list and the e-mail addresses of its members and to falsely solicit those members through misleading advertising and materials.”

The lawsuit seeks a restraining order and permanent injunction relating to the use of the Santa Clara association’s member names and e-mail addresses, and other damages.

In its announcement this week, the Silicon Valley group stated that members of the Santa Clara association had about 1,252 active transactions in the PRDS online forms system when that group decided not to renew its usage contract.

Willi Krauss, president for the Silicon Valley association, said in a statement, “We believe (the Santa Clara association) is trying to blame (our association) for the member losses that followed from their business decision to drop the forms service.”

The lawsuit states that the National Association of Realtors changed its policy about 10 years ago that essentially put local trade associations in competition with one another for members. Local Realtors are also members of the state and national Realtor groups.

There are about 8,000 members in the Santa Clara association and about 3,600 members in the Silicon Valley association.


Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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