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September 2015

Gordon & Rees Team Obtains Dismissal on Behalf of National Real Estate Franchisors

A team of Gordon & Rees attorneys that included senior counsel Brian A. Scotti of Washington, D.C., partner Ronald A. Giller, and senior counsel Michael T. Miano of New Jersey, recently obtained a complete dismissal of a lawsuit on behalf of two national real estate franchisors.

Plaintiff initiated a lawsuit in the Circuit Court for the City of Bristol, Virginia, which was subsequently transferred to the Circuit Court of Tazewell County. Plaintiff sued her real estate agent, the seller’s agent and franchisors for a litany of claims, including breach of fiduciary duty, fraud, conversion, intentional interference with contractual rights, breach of contract and malpractice, stemming from the alleged misappropriation of escrow funds.

The franchisors filed a demurrer arguing, among other things, there was no basis to hold the franchisors vicariously liable for the alleged conduct of the franchisees. Specifically, at the hearing, it was argued that there were no allegations sufficient to demonstrate that the franchisors controlled the actions of the franchisees, nor were there any allegations of prior approval or subsequent ratification of the alleged conduct. At the hearing, Plaintiff’s counsel suggested he could make conclusory allegations, untethered to any facts, then conduct discovery to see if his claims have merit. However, after the franchisors identified the seminal case on Virginia pleading practice that holds directly to the contrary, the Court granted the demurrer in full and admonished Plaintiff’s counsel not to refile against the franchisors unless he had a good faith basis.

The Plaintiff did not refile against the franchisors. Subsequently, the order became final, resulting in the dismissal of the franchisors, with prejudice.

Ronald A. Giller
Brian A. Scotti