HomeServices takes commissions fight to Supreme Court
The remaining brokerage defendant asserts that Sitzer/Burnett should have gone to arbitration rather than trial.
- In a court filing, HomeServices argues that the Sitzer/Burnett trial should never have taken place because the plaintiffs had signed arbitration agreements.
- In August, however, the U.S. Circuit Court of Appeals ruled the case should go to trial, noting that HomeServices was not directly mentioned in those agreements.
- HomeServices and NAR are the remaining defendants in the case after Keller Williams agreed to a $70 million settlement last week.
While other brokerages have decided to settle in the buyer-broker commissions lawsuits, HomeServices of America has taken its fight to the Supreme Court.
The brokerage company asked the high court to reject the Sitzer/Burnett trial and its $1.8 billion verdict, arguing that the sellers involved had agreed to arbitrate the disputes out of court. The Eighth U.S. Circuit Court of Appeals ruled prior to the trial that the case should be heard before a judge.
"The Eighth Circuit's initial error was to conflate the merits of whether a dispute is arbitrable with the anterior question of who decides those merits," HomeServices attorneys argued in documents submitted to the Supreme Court on Feb. 2.
"That trial should never have occurred because the plaintiffs are required to arbitrate their claims — and their arguments opposing arbitration must be resolved by the arbitrator, not a court."
In its ruling back in August, the Eighth Circuit affirmed a lower court ruling denying HomeServices the option to compel the plaintiffs of Sitzer/Burnett to pursue arbitration, noting that the agreements were made between home sellers and subsidiaries of HomeServices. HomeServices was not directly mentioned in the arbitration agreements.
The Eighth Circuit judges said that "courts — not arbitrators — determine whether a party has waived its right to arbitration through default," and that HomeServices effectively waived its right to arbitrate by actively litigating the case for close to a year before filing its motion.
Chris Kelly, executive vice president at HomeServices, said in an email statement that they are seeking to resolve a fundamental legal question from the Sitzer/Burnett case.
"Our appeal is rooted in the principles of the Federal Arbitration Act, which clearly mandates that arbitration agreements be honored as they are written, including clauses that delegate interpretative authority to arbitrators," Kelly said. "This appeal highlights a substantial inconsistency among circuit courts regarding the interpretation of arbitration agreements and delegation clauses."
HomeServices' goal in arguing its case before the Supreme Court, said Kelly, is "not only to seek a resolution for this specific case but also to ensure the uniform application of the Federal Arbitration Act nationwide."
Latest move comes after KW settlement
HomeServices and the National Association of Realtors are the lone defendants fighting the Sitzer/Burnett verdict after Keller Williams announced last week that it has agreed to a settlement. KW's $70 million nationwide settlement follows similar settlements by Anywhere and RE/MAX that were reached last year.
HomeServices and NAR have pursued other avenues to overturn the $1.8 billion verdict. In January, the defendants filed post-trial motions in the Sitzer/Burnett case, including a motion for judgment, a request for a new trial and decertification of the class action lawsuit.