Real estate commissions – and how they’re split – are issues at the heart of a lawsuit brought by four former Coldwell Banker Sea Coast Advantage agents.
The attorney representing the Wilmington-based real estate firm in a class action lawsuit said Monday that the suit “is flawed both legally and factually.”
The lawsuit, filed in New Hanover County Superior Court in February, accuses the firm of an “unfair and deceptive scheme to enrich itself surreptitiously by retaining millions of dollars in real estate commissions” that the suit alleges were owed to agents.
The complaint also claims that the firm charged agents a 6% Coldwell Banker franchise fee and then continued collecting 6% after the fee “was reduced by Coldwell Banker to as little as three percent.” The court documents claim this practice was contrary to the independent contract agreements the plaintiffs entered into with Sea Coast.
The plaintiffs are Jeff Domin, Casey Roman and Jonathan Adcock, all of New Hanover County, and Laura LeFevre, of Brunswick County. According to the complaint, Domin had the longest term of employment as an independent contractor with Sea Coast of the four, from January 2010 to January 2021.
In an email Monday, Sea Coast’s attorney Gary Shipman wrote, “This lawsuit is flawed both legally and factually. Current and former Seacoast brokers have paid everything they were obligated to pay and have received – in return – everything that Seacoast obligated itself to provide.”
According to the complaint filed against Sea Coast, “Under any commonly used definition, a franchise fee is a fee paid by a franchisee of a company to its franchisor.” The document also stated that it’s common practice in the real estate industry for franchisees of national companies to deduct franchise fees from each sales commission and give those to the franchisors. In this case, the plaintiffs expected to receive what remained after that 6%, according to the lawsuit.
“Years ago, Coldwell Banker began lowering the percentage amount of franchise fees that it charges its largest franchisees,” the lawsuit states.
Shipman, of Wilmington-based Shipman & Wright, took issue with the term “franchise fees” saying all current and former brokers for Sea Coast have paid the firm “a fee for the privilege of selling real estate under its Coldwell Banker Franchise. Despite the false allegations to the contrary, no current or former broker can point to any contractual provision that represents that the amount charged to current or former brokers for the privilege of selling real estate under Seacoast’s Coldwell Banker franchise is paid to Coldwell Banker; in fact Seacoast pays a ‘royalty’ and ‘marketing fee’ to Coldwell Banker – not a ‘franchise fee.’”
Reached via email Monday, an attorney for the plaintiffs did not respond to Shipman’s comments.
“At this time, Plaintiffs have no comment beyond the allegations detailed in their Class Action Complaint …,” wrote D. Charles Dukes, an attorney with South Carolina-based firm Rogers, Patrick, Westbrook & Brickman.
Greensboro-based Ward Black Law attorneys are listed as those the plaintiffs want appointed as class counsel in the lawsuit. Neither Ward Black Law nor RPWB attorneys answered questions as of press time Tuesday about how the lawsuit originated.
The lawsuit seeks a jury trial and a judgment against Sea Coast in an amount in excess of $25,000, which is the minimum amount for a case to be handled by the Superior Court Division, according to the N.C. Judicial Branch’s website.
Shipman said a response to the complaint had not yet been filed as of Monday.
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