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January 27, 2005: Successful Binding Arbitration Award In Amount Of $121,500.00 On Behalf Of Voit Commercial Brokerage and Grubb & Ellis
Practice Area: Business Litigation/Real Estate Contracts
Arbitrator: AIR
Plaintiffs’ Demand: $121,500
Counsel of Record: Michael T. O’Callaghan, Esq. and Brian C. Merges, Esq.
Case Matter Summary:
Michael T. O’Callaghan, Esq. and Brian C. Merges, Esq. successfully represented Voit Commercial Brokerage and Grubb & Ellis in a commission dispute against Lee & Associates. Following the Binding Arbitration, the AIR Arbitration Panel awarded our clients the $121,500.00 requested during the Arbitration.
This matter arose from the breach of a Commission Split Agreement entered into by the three parties. While attempting to broker the sale of a commercial office complex in Irvine, California, the three brokerages entered into an agreement describing how the brokerage commissions would be divided amongst them under various scenarios. One group of Lee & Associates brokers was representing the seller while another Lee broker was working with Voit Commercial Brokerage and Grubb & Ellis to locate a buyer. After the Lee brokers representing the seller eventually located a buyer and brokered the sale of the property, Lee refused to honor the Commission Split Agreement on the grounds that the agreement applied only to sell-side brokerage commissions and the agent who executed it did not have authority to bind the firm.
During the arbitration hearing, we introduced documents on behalf of our clients, drafted by the Lee brokers representing the seller during the period they were allegedly unaware of the Commission Split Agreement, that referenced a separate written agreement dictating the division of the entire brokerage fees received from the transaction. We also elicited testimony from the Lee agent who executed the agreement that he had received express authority to enter into the agreement from the agents representing the seller. In addition, it was shown that the Lee agent who executed the agreement had apparent authority to bind his firm based upon the practice of Lee & Associates.
Following the hearing, the Arbitration Panel rendered an immediate decision that Lee & Associates was to pay Voit Commercial Brokerage and Grubb & Ellis $81,000 and $40,500 respectively, representing the entirety of the relief requested by our clients.
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