Authentic estate franchisor RE/MAX is suing a single of its have franchisees, alleging the broker recruited 41 brokers to eXp Realty while even now under contract with RE/MAX.
In a complaint submitted Tuesday, RE/MAX accused James E. Dulin II and his Carmel, Indiana-centered organization, The Hamilton Team, of violating the conditions of four franchise agreements for RE/MAX workplaces in Indiana operating under the title RE/MAX Means Plus.
“In apparent violation of these continuing obligations, Dulin is actively competing versus his RE/MAX franchises and all Indiana RE/MAX franchisees by aligning with and endorsing plaintiffs’ competitor, eXp Realty LLC and improperly steering his RE/MAX product sales associates to eXp — proficiently destroying the incredibly franchise companies he is demanded to boost,” lawyers for RE/MAX wrote.
“Dulin is also infringing on [RE/MAX’s] logos and unfairly competing with plaintiffs by enabling eXp agents to work out of at the very least one of his RE/MAX franchise areas, thus making sizeable purchaser confusion in the Indianapolis marketplace about the (non-existent) affiliation among the RE/MAX brand name and eXp.”
In accordance to the complaint, Dulin and 7 customers of the management workforce at RE/MAX Means Furthermore held their yearly organization retreat in Arizona in late April. There, Dulin and his staff allegedly attended a conference at the home of eXp brokers Chuck and Angela Fazio and Dulin allegedly requested his team to commit to signing up for eXp.
If Dulin named just one of the Fazios as his eXp sponsor and Dulin’s profits associates then joined and named Dulin as their sponsor, then both equally the Fazios and Dulin would be compensated less than eXp’s profits share prepare, according to the grievance.
Citing the sworn testimony of Dave Conord, eXp’s head of U.S. advancement, the complaint alleged Dulin told eXp that he was fascinated in signing up for eXp with his group, but eXp explained to Dulin that he could not simply because he remained less than deal with RE/MAX.
According to the complaint, Dulin’s settlement with RE/MAX for the West Clay, Indiana, office expires on Friday, when the arrangement for the Carmel place of work expires Sept. 25. The other two agreements, for the Lafayette and Lebanon workplaces, don’t expire right up until August 2023 and November 2024, respectively.
“Mr. Dulin was in a bind (of his very own making),” the criticism reported. “He experienced now begun encouraging his RE/MAX Ability Furthermore profits associates to convert to eXp. But if he could not sign up for eXp, his gross sales associates could not title him as their eXp sponsor, and he would not obtain Earnings Share Strategy payment for changing them.
“Mr. Dulin then tried out to do indirectly what he could not do specifically.”
Dulin allegedly experienced his wife, Tammy Dulin, who was also on his administration team, consider to be part of eXp to profit from his brokers becoming a member of eXp through her. But eXp declined her ask for because of Dulin’s franchise agreements with RE/MAX, according to the criticism.
Dulin then allegedly manufactured a deal to have Brooke Stines-Broady, RE/MAX Ability Plus’s operations supervisor, join eXp although naming just one of the Fazios as her sponsor and then having RE/MAX Potential Plus’s revenue associates be part of eXp naming Stines-Broady as their sponsor. Stines-Broady would then allegedly transfer payment she obtained below eXp’s profits share plan to Dulin.
At meetings on July 30 and Aug. 2, Dulin allegedly explained to his agents that he would not be renewing his Carmel franchise agreement with RE/MAX and that he planned to be part of eXp when the Lafayette settlement expired in 2023.
“Dulin’s strategy ignores defendants’ obligations beneath the Lebanon franchise agreement, which operates right until November 2024,” the grievance claimed.
“Dulin is also obligated to endorse the business of his Lafayette and Lebanon places of work during their respective terms. This obligation contains recruiting and retaining income associates, who are the primary resource of earnings for those places of work.
“But at the August 2 assembly, Dulin did not stimulate his product sales associates to keep with him at his RE/MAX offices in Lafayette or Lebanon. As a substitute, he disparaged RE/MAX and inspired them to be part of eXp.”
The criticism alleges that Dulin also facilitated an eXp presentation from the Fazios to his agents and is now permitting his previous agents to do enterprise for eXp out of his RE/MAX business office in Carmel, “in violation of his non-compete and business advertising obligations below the franchise agreements.”
The criticism alleged that about 19 RE/MAX Ability Moreover agents joined eXp on the day of the Aug. 2 assembly and an additional 22 joined eXp in the subsequent three months.
“These 41 former RE/MAX Ability In addition income associates characterize a loss of about 50 per cent of Dulin’s income associate head count at each individual of his Carmel, Lafayette, and Lebanon workplaces,” the criticism said. “On details and perception, extra profits associates are anticipated to abide by accommodate.”
Dulin also allegedly stopped having to pay the franchise costs owned less than his franchise agreements with RE/MAX and owes $16,267 in charges for June and July, according to the criticism.
The criticism alleges breach of agreement, federal trademark infringement and unfair opposition. RE/MAX is also trying to get declaratory reduction — an purchase from the courtroom saying the Lebanon franchise agreement is nonetheless in result and obligating Dulin to abide by it. The franchisor is suing for damages, disgorgement of sick-gotten earnings, attorney’s fees and charges and long-lasting injunctive aid implementing the terms of the franchise agreements.
Dulin did not react to an emailed request for remark. Neither eXp nor any of its agents are defendants in the go well with.
RE/MAX and eXp lately settled a lawsuit over agent recruiting. In that certain fit, RE/MAX accused eXp of targeting RE/MAX franchise house owners to abandon their franchises, arguing that eXp was seeking to recruit men and women who could not legally be recruited. Asked for comment on the Dulin accommodate and whether the carry out alleged was an case in point of the carry out the eXp suit was referring to, a RE/MAX spokesperson declined to remark.
“We truly feel the grievance speaks for itself,” the spokesperson explained.
E mail Andrea V. Brambila.