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October 2017

Gordon & Rees Team Obtain Summary Judgment for $3.8 Million for World’s Largest Franchisors of Real Estate Brokerages

Gordon Rees Scully Mansukhani Los Angeles partners Calvin Davis and Aaron Rudin, along with Denver associate Christine Kroupa, as well as a significant contribution by New Jersey partner Ron Giller, prevailed in a hard fought battle between a major franchisor and a multi-state real estate brokerage over failure to pay franchise fees and amounts owed under a promissory note.

Gordon & Rees's attorneys represented one of the world’s largest franchisors of real estate brokerages.  The defendant was a significant franchisee with brokerages located in California, Colorado, Nevada and Florida. The defendant had fallen millions of dollars behind on royalty payments owed to the plaintiff for homes it had sold using the plaintiff’s trademark as well as monies loaned.

After numerous efforts to resolve the dispute failed, the plaintiff filed actions for breach of contract in Los Angeles Superior Court and Denver State Court.  In the Los Angeles action plaintiff successfully moved for a writ of possession against all of defendant’s real estate listings, bank accounts, furniture, fixtures and equipment.  This essentially devastated the defendant’s ability to conduct business there and the California entity filed for bankruptcy and worked out a transfer of all of their assets to another franchisee of the plaintiff’s parent company.

Simultaneously, Gordon & Rees's attorneys filed case against the defendants’ Colorado entity proceeded.  Attorney Christine Kroupa was primarily responsible for drafting a Motion for Summary Judgment against the defendant’s Colorado entities seeking a judgment on all claims.  On the eve of trial, while the parties were in settlement discussions, the court granted the plaintiff’s Motion for Summary Judgment in full for $3.8 million. This lead to all cases being resolved for, among other things, a stipulated judgment in favor of the plaintiff for a total of $9.5 million.

Gordon & Rees's client is very pleased by this outcome as it demonstrated both to this franchisee, as well as others, that it takes the obligations owed to it very seriously and will not hesitate to enforce its rights in any court necessary.

Calvin E. Davis
Ronald A. Giller
Aaron P. Rudin