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A subsidiary of Warren Buffett’s Berkshire Hathaway is attempting to have a seller commission lawsuit known as Gibson transferred from Missouri to its home state, Iowa.
Des Moines-based Berkshire Hathaway Energy, the parent company of HomeServices of America, filed a motion on Monday to transfer the case from the Western District of Missouri to the Southern District of Iowa. This follows a March 27 request from fellow defendant Howard Hanna to have the court reconsider its motion to transfer the case to the Western District of Pennsylvania, where Howard Hanna is based.
In an affidavit, Natalie Hocken, BHE’s senior vice president, general counsel, and corporate secretary, told the court that BHE doesn’t have any offices, own real estate, have employees, do business or file tax returns in Missouri. Hocken also stated that BHE doesn’t operate in the real estate industry or been a real estate broker or franchisor, either in Missouri or anywhere else.
“BHE has never transacted with consumers, made offers of cooperative compensation, set pricing or commissions, or employed Realtors,” the filing states. “BHE does not provide real estate services.”
She added that only one of BHE’s direct subsidiaries, HomeServices, “invests in companies that provide real estate brokerage services” but that HomeServices has no real estate franchises.
Moreover, she said, “BHE has never belonged to, managed, or overseen any local Realtor association,” including the National Association of Realtors, and “has never been a member of a multiple listing service” in Missouri or elsewhere.
“BHE has never encouraged or mandated its subsidiaries, or their subsidiaries, specifically to join NAR,” Hocken said.
“It has never adopted and has never required or encouraged its subsidiaries to adopt NAR tules and has never caused its subsidiaries to require or encourage their subsidiaries or franchisees to adopt NAR rules. BHE has never attempted to influence anyone’s decisions to affiliate with or join NAR or to adopt, implement, or enforce any NAR rules.”
She stressed that BHE and HomeServices are separate corporate entities, that BHE plays no role in HomeServices’ daily operations, and that the two companies have separate boards of directors that operate independently of each other. She did acknowledge that two BHE executives, Scott Thon and Charles Chang, are on HomeServices’ three-person board of directors.
Regarding BHH Affiliates, a residential real estate franchisor “indirectly” owned by HomeServices, Hocken said, “BHE does not supervise or intervene in the affairs of any of HomeServices’ subsidiaries or of BHH’s franchisees. BHE does not exert influence over any major decisions of any of HomeServices’ subsidiaries or of BHH’s franchisees.”
Lastly, Hocken emphasized that none of the BHE employees with knowledge relevant to the case live in Missouri while most work from or live near BHE’s headquarters in Iowa, which is also where the company stores its documents.
” These include hard copies of documents that have not been digitized,” Hocken said. “BHE does not store any documents Missouri.”
At the same time as BHE and Howard Hanna are attempting to have the Gibson suit moved, the two firms are also calling for Judge Stephen R. Bough, who has been overseeing the case in Missouri, to recuse himself from the case over political donations the plaintiffs’ attorneys made to Bough’s wife’s previous city council campaigns. Bough also oversaw the predecessor to the Gibson case, Sitzer | Burnett, which was filed in 2019 and went to trial in 2023.
Also on Monday, the firms continued to argue that the donations gave “the appearance of impropriety” and that refusing to recuse would also create such an appearance.
“[T]his Court’s expertise from ‘five long years of intensive litigation’ is not a basis for ignoring its duty to recuse,” attorneys for the firms wrote in a legal filing.
“Considerations of expertise and judicial resources come into play only after a court concludes that its impartiality could not reasonably be questioned.”
