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The six brokerages owned by Harold Crye are “affiliates” that make up a single entity that should be bound by the terms of the National Association of Realtors’ landmark commission settlement, plaintiffs argued in a court filing Wednesday.
Crye-Leike, a real estate firm founded in Memphis in 1977, argued earlier this month that its six brokerages were independent corporations that were each small enough to be covered by the terms of the NAR settlement.
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In response, homeseller plaintiffs in a federal court case known as Gibson said the NAR settlement included clear language that Crye’s separate brokerages are, in effect, one entity whose sales volume was large enough to make it liable for damages.
“CryeLeike’s Motion misconstrues the terms of the NAR Settlement and ignores relevant Settlement provisions,” the plaintiffs wrote in their Feb. 19 filing. “Those provisions make clear that Plaintiffs’ claims against Crye-Leike are not released.”
The Gibson suit was the first antitrust commission suit filed after an October 2023 jury verdict in the Sitzer | Burnett case awarded billions to a class of homeseller plaintiffs in Missouri.
In March 2024, NAR announced it had negotiated a settlement that included a $418 million payment from the organization and sweeping changes to the way real estate is bought and sold in the U.S. In exchange, brokerages that transacted less than $2 billion in sales volume in 2022 were covered by its settlement agreement.
The settlement also outlined a pathway for brokerages that transacted over $2 billion to negotiate settlement agreements of their own, and brokerages of varying sizes above that threshold have been striking their own settlement agreements in the months that followed.
Crye-Leike is among those still testing their legal avenues to forge a path forward. And earlier this month, the firm opted to test whether previously stated sales volume claims should be interpreted in a way that would cover it by the NAR settlement.
The settlement used the 2023 T360 Real Estate Almanac, which included brokerage’s stated sales volume from 2022, as the metric that would serve as “irrebuttable presumption” of a brokerage’s sales volume. That left over 90 firms uncovered by the settlement agreement, including Crye-Leike, which the Almanac reported transacted $7.019 billion.
According to a motion Crye-Leike filed on Feb. 5, its 2022 sales volume for “Crye-Leike Realtors,” included the total sales volume for six brokerages that are entirely owned by Harold Crye, but which are independent corporations.
Since the Gibson suit named Crye-Leike Inc. as a defendant and Crye-Leike Inc. itself only closed $1.75 billion in residential sales in 2022, the firm said it was covered under the NAR settlement, and it asked the court to stay the case against it.
It argued the Almanac included the combined sales totals from six separate companies, five of which operate under the Crye-Leike brand and are all owned 100 percent by Crye.
“The Crye-Leike Entities are independent corporations: They are not subsidiaries or divisions of one another. Each operates with its own management team and sets policies and goals based on the markets it serves,” the company argued in its Feb. 5 filing. “Each keeps separate accounting records and files its own tax return.”
Crye-Leike wasn’t the first brokerage that purportedly transacted over $2 billion in sales volume in 2022 to ask to revisit the T360 Real Estate Almanac’s figures.
The Real Estate Almanac showed that JohnHart Real Estate, a brokerage based in California, transacted $2.68 billion in 2022. The firm last year argued it transacted far less.
The leaders from two other brokerages, Nebraska Realty and ARC Realty, also told Inman they shouldn’t have been included and should instead already be covered by the NAR settlement for their own reasons.
In their response to Crye-Leike’s request that the case against it be stayed, attorneys for the Gibson plaintiffs wrote that the NAR settlement clearly included all Crye-Leike affiliates as one entity that transacted well over $2 billion.
In their filing, the plaintiffs wrote: “The NAR Settlement broadly defines ‘Total Transaction Volume’ as ‘the aggregate dollar value of all residential home sales and purchases of a real estate brokerage, together with the aggregate dollar value of all residential home sales and purchases of that brokerage’s direct and indirect parents (including holding companies), subsidiaries, affiliates, associates…and of each’s franchisees.’”
