Preview
FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
---------------------------------------.------------------------){
PAMELA GOLDSTEIN, ELLYN & TONY BERK,
as Administrators of the Estate of Winifred Berk,
and PAUL BENJAMIN, on behalf of themselves
and all other similarly situated, Index No. 60767/2018
Plaintiffs,
Hon. Linda S. Jamieson
-against-
HOULIHAN/LAWREN CE INC.,
Defendants.
----------------------------------------------------------------){
APPENDIX OF EXHIBITS
TO REPORT AND RECOMMENDATION
OF DISCOVERY REFEREE
DATED SEPTEMBER 11, 2019
William P. Harrington, Esq.
Bleakley Platt & Schmidt, LLP
One North Lexington Avenue
White Plains, NY 10601
(914) 949-2700
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EXHIBIT 1
(REPORT AND RECOMMENDATION OF DISCOVERY REFEREE
DATED SEPTEMBER 11, 2019)
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SUPREME COURT OF THE STATEOF NEW YORK
· COUNTY OF WESTCHESTER
-.- .-. -...---·
.· .. ~>--- ·.
--- .-. --- .-:--- ·... ---. -.---. -..:X
----. ---. -
PAMELA GOLDSTEIN~
BLINN & TONY BB~ as A,dlmnistrafo~:s SUBPOENA DUCES TECOM
of the Estate ofWiriifred Berk, and PAUL
BENJAMIN, on behalf of themselves · Index No, 60767/2018
Afl!l all others siinilarlysituated,
Hon; Liµda S; Jamieson
Plaintiff's,
..against.,
HOULIHAN/LA WR.ENCE INC.,
Defendant.
:· --··· - .x
·.. -· ...'. ::-;. ........ ,. . - .. :"'!- ·.·.·- . . . . . . . . . . . - - - - - - - - .... ___ .. -- .......... · -
:···;..·_'
The :Pe9ple ofthe State of 1:-Jew Yo.rk
TO: Rubenstein Publ1c Relations, inc.
1~0 LAveri:ue of the .A:niericas, 13th Flop:i;
New York, NY l00l9
c/oLoeh & Lo·eb LLP
345 ParkAvertue .
NewYor~NY 10154-()037
. .
GREETING-: .·
·w:m·col\iMAN)) YOU, that!lijbµsip:ess and. excuses beingla1dp.side,youarid e~c11 of
you produce;
:.
on July·.
·.
3t 2019 .at2:0(), p.m;, it1 the..
,.. .·
aftempon,
. . . .
pursuant to· CPLRArticle 3 La11d
. -.
C:PLR:,A.tticle23, atth~ offic~s ofJ:,oeb ~ Loeb LLP, ·~>45 Park A..ven~e,N"e\vYork, NY 10154;.
0037, c(m,1plete and accurat~ copies of the following; documents:
L Docurrients. 'corn,e11i1ng or related tcdp:e alleg_ations in the Complaii1t fifod by
Prunela ·Goldstefo in the above'.'referencyd matter, includfog without limitation ah
commi;ini~tkins vvith Pamela Goldstein, het co~insel. or invdlvlrig any Rubenstein agent or
employee.
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2.. Documents related to or teferencing the Coinplaint filed by P~mela Goldstein in:
the a,bove~tefere11ced 1natte1\
3. DocumeJ.'lts r~lat~d ·to or r~ferench1g the lawsuit Gaptioned Goldstein v.
·Houlihari/La,111·ence In(,Jndex.Na.~ 60767/201,8 (Sup.Ct, Westcl~esfo!' CoUllty):
4~ ·Documents reh1ted to oi' reforehc;:ing,~idton111mnicatiohs concerning, any.press
release concerning the lawsuit ,captiot1ed ·Goldstein v; Rqulihan/L4wre11ce Inw~ 111.dex. No;
60767/2018 (~up'. Ct.;·Westchester Cpunty),
Bu.siness :record~ produced _pursuant to this Subpo~na must be accompanied by the
11ecessaryC1,rtificatfon of Business Records requfred 1:,y CPLR Rule J 122~a1 and in conformance
ther¢with; mtl1¢ forni aun,exeg hereto a~ Exhil;iitA.
TI1¢ cirQumstances and reasoi1s why such disdosure i~,.$otight by Defendant,
1 oqtaui
is. to
ooGllments; facts ~11d evidenc~ fo enable pefe11dant to obtain, admissible do~utl'.lents and
testirp.oily to prosec:ute i:lnd defend· tb.is acti.61}, · 4 qopy ofthe pl~~di11gs, p:,ed h!!retg ··B:S I!'.xhibitK
Failurnto.corilpiy with this.subpoena.is punisliablea~.a coiitempt of Cotitt: aud11J}iy· 111ake
you, liable to the pers9n qrt whose behalfiliis subpoena was: is,sued .fot a penalty l:1.oito exoeed
011e li.(!11c1ied Jiftj(dotlars ~nid: aH dama,ges ~ustajried by-reason ofyour.fa,1lm:e t() co1riply,
2
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NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019
Dated: White Plains, New York
July 5, 2019
COLLIERHALPERN & NEWBERG, LLP
By:~····
. .-.fup M, Halpern
AMefu.bet of the Firm
One North Lexington Ave11tie
White Plain$, New Yo:rlc J06Q 1
(914)684-6800
.
.. .. ..
. ..
. . . .
Robert D. MaoGill (Pro Hae Vice}
Jessica M. Lindemann (Pro Eaa Vice).
BARNES·& THORNBURG LLP
11 Sollth Meridfa.11 Street
Incliaiiapoiis,IN 46204
(317) .231~ 7223
:,Atton1eys .f'o1· Defendant
3
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í
ÉXHIBIT A
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SUPREME COURT OF THE STATE OF NEW YORK
COTJNTY OF WESTCHESTER - - -
-- ·--.. -___ . .
-_- ____ -__ -_- _-
___ ·v--·<_- . --
_=_-~< ---~~------_--+X
PAMELA GOLPSTEIN·,
ELLYN & TONY BERK,as Administrators ,
.. .
of the Ei:;tate of Winifred Berk, a.nd PAUL CPLRRUI,E 3122--a
BENJAMIN, 011 l;,ehalr of themselves - CER'IIFICATION OF -
and all others_
. ' . similarly
' .
situated,
. ...
BUSINESS RECORDS
Plahitiffa, - indexNo: 60767/2018
:.agafo.st,
Hon._Linda S. Jamieso11.
Defendant
___ ·:- _______ _,_
----r._ - -__ .~--- ------ .---- , _-~ _ _
-- - ___ -~- ---- --
-X
STATE OF~~~~_.....)
}ss.:
cotJNtYo:F·. ~---~-I
.. . ..
------'--'~----'-----')~.ingdWy $WC>TI\ deposes.and says:
t. I -am the duly authorized custodiaii qf the business records of Rubenstein Public
Relations, iilc. _(lwreinafter '~R.ubenstein''), -and have.authc:frity:,to :tnfikethis certifi9a#on.
.. . .
2; to the b~st of 111.y ktiowieclge; after teasoµablei]'.J,quµy, rc~rtify that the c6pies of
docurhe11ts accon1panyingthis certification.are ac9t1tate yetsion~ dfthe d,ocunwnts responsi-veto
. . . .
the Subpoena Duces Tec;;um dated Jgiy $, 2019, and djrecte4 to gubenst~in (heteihaft~r the
''Subpoemt), ,¥1uch are within-my possessicni, ttistody or contfoL -
3. To the best of my kno~ledgf!;, after reasoJ1ableinqliiry;· I certify th~t-tli~.recci:rds 91'.
copies acccimpanying this certification represent .all tlie dociu11eiits ·descl'.ibed in the Subpi)ena;. or
docuiiients are 111issing arid a reason for their ah,se1ke js as foUbws;
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4. The documetJts c).cCompanyiug.this ·ce1iificati011 :are btJSiness recotdswh:ichwere
made ~Y tlie petsc,nµel of Rubenstein or p~rsons acting midet their contr9l; wete tnad.e in the
regular course of business at fhe time of the a,ct, ttari.sactlcm,. occurrence;.· orevent recorded
therein; or vii.thin ai'~sollable time thereafter; al\d it was the regular course qf Ruben~teh1's
business to i11ake .such records;
.S,vmn to before me this
_.. _cfaypf ,2-919 ·
Notaty Public
2
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EX1IIBI'J'B
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JFILEn: WESTCHESTER COUNTY CLERK 06/10/2019. 04:45 PM] INDEX No. 60767 /iois
NYSCEf boc. NQ, 5S7 RECEIVED NYSCEF: 06/10/2019
SUPREME COURT OF 'fB:E STATE OF NEW YTJR:t{
COUNT'Y OF WESTCHES'I'ER
PAMELA GOLDSTEIN
: ·.· ... . . . , ..
ELLYN & TONY BERK as Administrators .. .. .
oftb.e.Estate ofWWfredB~rit, arid PAUL . 1:ndex.No'. 6Q767/2018
BENJAMIN, 0.11 ~ehalf of themselves and .
all others similarly sitil~ted, . .. . . HofL Linda S; Jan:i.ieso:n.
P+siritiffs, 'THIRD NY.IENDED
v. dI,ASS aCTlON OQMPLAIN't
B:OULIHAN/LAWRENOE.INO~,
Defen:ciant.
Plaintiffs.Paniefa GQldsteiri, Dr. :Ellyna:r1d.Tony :B:erk as Ad,rrrintstr~tpr$ .of:
tl),~ ~tate o£Wiiifrid J3er~ w.1.d Paw 13'enjami~ Ori beh~l£.oft4eniselves a:nilall ·
others .similarly situated, bai:H:!d o:o: P'tiS.ollfl,1 ~nqwledg¢ ~-- to th~mse1ve~, ~Ild ttpon ··
information a'.i:ld beliefas tq all other matters, allege as follows ..
.INTROPTJCTION
.1. Rolilebuyers f1nd ~elleta h$ye .the right to he: teptesent¢µ by::a: re~l' ·
.estate age:ol whb is loyalJothelll. an,ci. only. them when quym:g or s¢llin.g a home.:.
. ,'.
2. Howihan tawrence1 thl:) ieaJb.1g, real esfateLbrokerage :o.nn it New
Y61~~ City's northe:en subµrb~; has deprived, thous·aitds ofN¢wYork~rs ofthi,s
in:11~ortarit rijlit by re~resentmg b6th tlie'hofuehuyer ?nd s~ner. in tlie sar11~
3. Plaintiff Pamela Goldstein, at all rel~vant times,is .~u.d was, a c.iti:2:en:
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.[FI
.· . ,:;'ID :
L,e, .
WES TC
· · H.c.STER
r.l CO.UNT y. CLERK.. 06/·
. 107·2019
·~ .·.· 04. : 45· pMJ' IN:DEX WO; 60767/2.0lB
NYSCEF POC .. NO. 557 RECE:IVEP NYSCE:F: 06/ld/201.9
pt.U"chased thi p:r:opepty lqcated. at, 6 Wellington .Terrace, \iVm.te·Plains, NeN.i 'York
10607. Houlilian Lawrenc.e tep±es¢nted both Goldstein.and the qeJ+et fo t,h~ ·
tra,ri.sactfon.
4" PlaintiffD:i\ Ell¥11 Berk, at allrelevi3.nt times, is and, was a. ci:ti,ze;n and
fesident of New York County, N ¢w Yor~, •Plaintiff To:o.t Berk,• at ·all relevant times,
is 13.nd.wa,s· acitirzeu an.die8:irior: to his-pµ;rcha,se
of 1e b~a Logging '.Road, B~ilfarmn was a citizen an<;! r~sident ofKings Cotj.~ty~ N¢,y
Yqrk~ .Since th~ pmchas.e, ·Benfa:n:dn has been a ci:tizetr aria: res{dent of W.estchester· ··
·QountfrN~w Yotl{;
6. DefendairtHouiihanJLawrenCe fnc; C':ff.oulihan'):.awrej:ice') 1S' fl, ·:New .
York coli)oratfon withitspriiicipal p{ace o:f fo:i,sin,ess at.SQQ We&tchester Aventte,
Rye Broo~ :New Y9:r'.k 10573. Hml~_iliaJi LaViirence'fa a'fyll"servirere'al e~tate.
brolrnra,ge firm that represents buyers and sellers in real estate transactions .
.2
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[FILED: WESTCHESTER COUN.TY CLERK 06/10/2019 04: 45 · pfilj INDEX NO. 60767/20lB
NYSCEF DOC. NO, 5$7 RECEIVED NYSCEF: 06/:10/2019
Houlihan.
..
Lawrence ow11s and.. op:erates 30 offices, with over 1)30U agents,..
'' ' .. . . ,. .•..
aci·ossthe
Westchester, Putnam, and])utchess tri,ccnmty area. InJa11.uary 20171 Hcnilihati
.. :.
L;awr~nJ.p\3 was pought by Horu~Services .pf Ame:cfo~, Inc.,. a Berkshire Hathaway
affiliate.
. '
7. 'X'l1is dolil't has jmisdictioµ ()ver Hqi,tlihfl.ll L~:vvre11ce pu~·s;tiant to
CPLRSO:l.
S·; Ther~is no fedei'i'.d tliversity jur.is<4c:tionover the µiattet\
GENERAL FACTUAL KLLEG-41;ION$ ·
·10~ Areal estate :agent owes its clients f5.4udary dt1.qe$ of wiqivideg ai1d.
undil:ctted loyalty; .obedien9e, con:I'identialityi fu]l d.isclosurelandre~onable t::are.
lL. Areal
.' .··esta4l1:irc>kerwho·a#sfor
..
...
: . .·
·' . ...
. .: :·. ' , the b,uyer.and13elletir; the same.
.. . . .
·,. .. ·...
' .......
·,, · ...
' . . . ·..
·:· . ..
12. A dual
···.' .l:l.gent cqllecte ..a double..
.•... . . . ..... '
comfuissio~ on:a, single tra:'rlsactfon:-
. . . . .. .. . ' .;.
ls. ·A dual a~eJ1t canrl.Ot prqvide the. full !'a:ilije pf fid,µciaty. du.tie's: to eith.e1;.·.·
of:its clients..
14.. Dual atency a,ri_sel:l: wh.et1ever a single brokerage firm repre:sents:botl,i
the seller a11d. the b11yer, even if two different salesptiople ,vitbin that one firm ~e,
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NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019
(FILED: wEsTcaEsTER corrNTY cLERK 06/1072019 o4!4S PMJ INDEx.wo. 607 5 712°:u~
NYSCEF DOC, NO;. 557 RECEIVED N'.lBCEF; 06/10/2019
15. A real estate agent m.ay act as a dual agent only after the. a~ent fully
@d frankly explains to· f:lach client the risks; downsides, anci opttons of its dual
agency, including that a dual agent cannot :ptovide undivided an;d undiluted Joyaity
· to either ofits clients.
16. A I'EJ~l estate agent 11iust obtain. each client'i!r:fo.for:rined writteri. C()Ut,ent
qefore acting EtS El dua[i;l.gei;rt,
17. Pux. ·suant to Real PropertyL~wSection
.. ' . . 443, .a :teal estate agent :inc:µst
.... .. .. .
a1so provide co11stm:ters with, the New yorh: State Di~ciosure :B'otl)l for l3uyer a,:nd
Seller (the "Stafutdxy:Disclosme.. ..
Form'' or. ;'Form") before.entering
. . into a.n agerii.:31~
. . .
. c::lient l"el?,tipnship;
18. The Stat11toi'.Y Dfaclosiµ;e Form does n;ot pwvide ~onsumeii·s with all
.tht=; iri:rorm.ation.the;f Wouid need in· o:r4e:r:to p1·ovideinformed cotiMnt to• dual
agency.
19; A teal. estate agent xnµst stillniakefulland. frank dj.sctlosur,e. above anit
· beyond the irrf'o:rtn~tion in tl:ie Statµttn'Y ])1.s~lpsUJ.'.'e For:tll.,.
20. .Ai ..
2fL S~rice, atlel:lst cla:tiuary->l, .2011, Houlihan.Lawrence :fi~s ope~ated a
Bcherr:t~• tC> h.}1'$ thot(satid:s of hoinebuy~ts EJ.rid;seµet$: ini;(i :undisclosed;• non~
¢onsen~:u,a;1. d1:1-al-;;i;gerit tiansact~011S:'.
'i7. Houlihan Lawrence has .~~ey\ited it~ scliem,e l;Jy;· ~m1g ottier things;
{i} 01.l),tlyat~, i;f Urlll cultttt~. p:f'tm-d.i$;Cfosed1 J:10ll.-CQ1lS8ll:Stia.1 duala~enc:y;,
(ii.) ehga,gmg,1n :aece1Jtive and mislea:q.ing. acfvertisilig; '(iii} fgllowing: f:i,ri31swig.~ ·
' . . . .....
. . . .
,1Wltb'F'a&~ the Coni'lnisswnf, Turn fo the' 1ifw~tt Team}' Toni ·aJid•Terti@Houlihan L Worm sell~:rs qf flU the i-Lsl~s.
d6w'n$ides, a:n& options.of dual agency a11d that .
i:qiptoperly s:Uggest. tba t. seller(3 will lose OU~ 011
·votentiaJpufohaee:rs; iiiJless: they a~tee to dual agency•..
g; Faµ.ip.g totn:ovide theStatutotv Disclosme Form to
•cli.ents . p:rior.to.agieeing.to'..:act
.
:;),Er their igent,
,
h. Failing to thnely notify client$ whep,dua,!:-agent
srtuatiqns al:'ise,
i. failing;to clli;blose tb bµyer cli.eiits the full
C<:inipip.sation 'it .·~ill receiv¢.-f6r a.d;a1"agent de.aL
J. danfe#irig financial a1id otl1er pene£its OP: its clients'
attqrne:y$.1
.k. Permitting a siri~le agenttorept.esentthe buyer ~nd
seller ih the $a,irle tta.nsactidri.
.1. Having fn.:1ouse sales• teams uniawfully matket.
themf3elve~ a~- if .tb.o~i t~qm~Wexe atalida,l6rie rea}
estate brokerage firms:
·:pl. 'rrictitip.g 1\yith;i.;r+-fa~al1:l'
detig_ti:;i::ted d11.al agency with
1
di££e:ren,t members of the·1,~µie I3:oulihantaw~eI1c~· tu~
hc:rµse a~:1es teaui . .
)J.. ,Pr:a,g~ii;irig ·"~itliin~te~nr'' desigrisiJed 4i9,1 ~gehcy wit4 .·
the: t~amle~.d.ei act1hg, as a desitnated .sales. a,g;eI1t 0Il .
..behalf of ope.of.tlle,p~J~ties'.· . . .
. o. Pit1;·ri;titfu:i.g)iintra~offioe';, :desigrratea dual: :agency ,vith
. the :office ~arniger ac-tihg· as. a designated $~le$ agent:
oh 1:iehaif: otoile ofthe p·a.rtie:s. . . .
J?~·Permittfag·$ales,Agents who are family mem.he.t!:l to
:9:ct ~s op:poi:lm~i; {h~signat~d sales· ageii~a· ih ·du~ka~ent. ·
transactions,
32; B:bulil:iari J.1iwi~!;!hi'.le l:ias. falleR to l)f"Op~Ay tram, ·.dire¢t, an4 superyise
it.s Sales Agents, indudii1.g:
8.
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[FILED! . WESTCHESTER. COUNTY· CLERK. 06/10/2019 04:45 PMI J;NjJE~ NO. fi0?67/'.,201.B
NYSCEE' DQC. NQ. 557. RECEI.VBP NYSCEF: 06/10/2019
a. Ttahu11g Sale$ A.gents to adhere to a ,defective
standaJ;'d.J:z;ed. age·µcygisclo:,m:r!3 .proto~o't. including to
miy no ;more ah9ut dual F.tge,~.GY" thfln i.$ tu staridard
· form docurnents that fail to n1ake su,fficient disclos1.1fo .
. h: Tra:inmg Sal!3$ Agentir to p:re~£i11 the· Statutory
pisclosvre •Form to i11dicate cli~nts/ ·advance informed·.
conse:nt to dualagency.
c. I>rpvidin.g its .Sales Agents:systEJlllllµ_ci3JJ.y.int:!orrE!Ct
tr:ainirig. OIL age'nGY di;clbsur¢s:.
d, Providing its Sales Agents syste1n~ticfiliy incorrect
scripted. ;:),gency disclosurE!$,
e.. Disregard,ing reale.stat~ i11.dustry guidaD:ce. to equip ·
Sales Agents with wxJtte±+ ttn to clit3nts as part
ofa. group of ;,paperwork' 1
dociiinenfafo1~ signature,
ancl (ili,) J)X<{Seritthe Fqrm fot !:lign:1tura PY~~mail .
ratp.e:r.thl;J,n:•tri perso~
g, .:failiiig to;aclequ~t:ely. trai:n.$a1es· Ag~n.ts • toproperly
compleiteiindtimely•provide the Statutory Disclosure
Form:.
h ..Notreqµfririg Sales Ag~'ri.ts t6.usethe Statutory
Di~closµre F91•IJ1.to·n:1ake tlv~requiredflillow~up
di~.cfosfue orfoe•a dual-igeut s:i.tuation has arjse;i ~nd .
:ri1cr:=Il~~=::;c;~.""d mfotme~
L Pe;i.iri.itting a,:i:ld e.11co111·aging'S,alesAg~ntsta share
. confideittia.tinforp:iationabout ~~w listings 3,t officj3:
•and.sale~$ teaJnfoeetip,g$ ancllateract. as dti111 :ageiits.•
.· ... ...
-'•••• -,·. .. . . .....
.· .. .. .
J. Periilitting . and..enoour13,girig Sal~sAgents to re'fer to
Jhemselves a11cd o:ci.el:lrtotµe:{as:,i~uyer;s fig;eµt' 1of
''.seller's age:t1t" wh~rt· facilitating ne~otiations h~t\veen,
pai't1esto :duafagent trs,nsac;ti911~.
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(FILED: WESTCHESTER COUNTY··CLERK 06/10/20.19 04:45 PM) INDEX NO. P07.$7/2QlB.
:-t,il'.'SCEF
DOC. 'No. 557 RECEIVED NY$(.;EF ~ os/;Lo/2019
33'. Houlihan L1;1wrence bas· failed to pµt in plac~ nec~ssa:ry alld
appropdate.complia1i.c$sy~temEl; in);:lu;dfog:
,a. Adopti11g a too~littl?i too-late 'Fcilosin,g' protocol" to
check o:nlY fo1· a S.tatutbryUisdpsure; Form bearing a
·sigp_at:ur~) aridf :i'is fid1+dru:y ~µtie$ c1nd .·
coilsutner-:orientep..m.:i,scon.duct. are ,~at.innocent mistake~, .teciu:ric~i violations, 01•
acts. qf aJew ro~e agertt;s,
35.. B:oulili.a.Il Lawrence's Pi'esicient (then·COQ) expfain~d ta M~lrntWatclJ:
irt.,J:;ib.Uaty 20tl.thatt)j.~ fhin''s agen,tsWotkto"l:ioQst'rp.-hcrµ13e' sal'efi,,il'.'ecogrilz~~ •.
the, vliJ.Lµe of being able·. to· "c;olJect "bot4 sid~s 9£ the coµtlJ:lis,§iqI1 on s.u.~11 ·~ s~e} · ·
36. Ho-uliha11. L;fwrence;s dµa}a~e:Ucy pr.aetiye ribt oply @11:abl~,it to c9Uect·
doubltH'!otnmissior11; at th~ e?Ct>ens~ pfits"£!JiµJ?·etitot~~· huta.lsq g:iyes it an in'Elide:
- .
tra WESTCHESTER_ COUNTY CLERK 06/10/2019 04: 45 PM) INDEX No, 60767/201~
NYSCF.:F .DOC, 1\JQ. 557 RECEIVED NYSCEF: 06/10/2019
37. Houlihan Lawrence's conduct in furtherance of its sohe1ne fo promote
and p1·actice widespI'ead undisclosed, nqn-consensual dual agency derno11strates
conscious disregard for its fiduciary duties:
38. I-Iouliliaii Lawrence e~rcises control ove:rits SalesAgetifaby, among
othei:. things, x~9-uiri'.ng Sales Agents to -comply with Houlihan Lawrtfoct:{s policies
- -
and p_rpcedures; to l.J.SEf- cmnpari.i-ii:riproved contracts, :and to attend. cb:i:npfeb_erisiye·
ti~afoin,g provided by Houlihan Lawre11ce; In these and other ways, Houliliau
Lawre11ce erisur~s that its Si;iies Ag{;nts at- aH times act in ·3:cpordaI1,ce· vv:it4
HcmlihanLawrence' s fi.tm~wide scheme a:nd' strategy fo- p:romote undisclosed, non-
.coi1sel1sual duaragent_transactiims~
39/ Houlihan·La'V\,rence'sirtstituiipnal cultur~1 sttategyi a.ndpti:tcticl3 of'
-- -
Iion.:disclosw·e and mistufb;rm:ation :about d1,.1~1 agency c~·eates a syst~mfo disdosµte
0
void that indivi4ual
'. . ...
$;des Agents cannot possibly
. . . . . .. . .:... . . .,
fill on'an_ ad. . hoei'. basis ..
', . ; . . .. . ..,
46:- HoulihariLavvrerice would have identifiedwi~es~r¢~c;Fviola#oris of its
cli:i:,closu:re and infcn:PJ.ed-consent bbligationsif it acted tn acc&dance with.a proper
-compliance_ pla,rL
4L .All class membelfs! claims. arise as a tesuit of Boµ]Jhan Lawielice's
unfa wiu;l course. of coiiduot; - -
·42; Hcmlihan·Lawi'~JJ.ce ~as foapedJ:niridred.s ofmillions ofdollars m
--m-gotteri. duala_gent sale.s-ddnttnissions-frorn the undisclosed;. non-consensual dual--.
ii.gent transactions. _
li bf 32
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:NYSCEF DOC, JifO. 5$7 RECEIVED NYSCEF: 06/10/2019
PLAINTIFFS'ALLEGATIONS
1. Plaintiff Pamela Goldstein·
43. Plaintiffs tepeat an,q r,e~a1lege the l3,llegatiori,El a~ove iu3 if fully set fortll
·44. Qli Miw 221 2'0I'7, Pla.intiff PaU1ela; CJoldsteih purchased the p,roperty
.. ·,. :
.lopated at GWellington Ter1:ax:el \¥),1j.te Pl ams,. 1':tew York 10607 for $63·'71.000,
$B8100Q:aboye the lietpr:i;c~.
45; Eoul:ilign I,aw:rencf) acted. as a dllal rageri.t o.:q. behalfofGoldstem ~n,d
the sell~r in connection With. d~ldstei111s :PurCha$~ of:6 WeHingto)J T~rra:ce witJiqut
.:o:1pltjng full and frank disdpsute to Goldstein of the tisks; downsides, an:d .
· .... · ,,·.:. ·· . . . -
':. :.. :
.··. , .. ·...
•:. ':.·,···
' .. ..
. :. : .......)·... ·
,· :-:,. ·. \,.
'... :.
. .
Houlihan Lawrence. in-house. sales· foiuzj ·k:no:wri·as."G{rio BeAblioµiesY
Bello was the; founder arid 'tearii leader of the #Gi:iio Bello Homes'.'
......·.,<.,
'. · ..
-...•...
-.... :··:..
,.•.
:·.·
:·. . • . . . .
•. ··. .. :I•-.. . . .·. . ,· . . . ,,:.
'.
Houlllian Lawiep,ce. in~hoi:tse Bfllrui team! ~aAri .that 9apacity eicerGised J3elfo pOVf ~J;
and authority over Cezin:1hra.
56. HoulilianLawrenc_e did not disclose to"Golq.steiit th~ na.ture antoperty.
11
a,s~is:' ~yen alter the ilisJ.)ection reveaJ.ed irufueroiis Jssu.e~· wtt}i, fi1e property.
6L. .Houlihan La:W:tence <:oUec:ted if- 5% cb:otinissibn. on G.oldsteiil:s puichase ·
of 6 Wellu}gton''\¢:rrace. 13:oul:i.ha]j,L~~rep.ce'~ sa.les: 901nniisJ!iq:µ wa,.s. J_Jqid out pf the·
p;roceeullhan Lawte-nceC(Jl,'(the hapsflbtionj ir1,cluwng ·~~q:;l'i1$e 'it .
was· ''in69rporated within :the .)?rice'' siie ·''agree~ td pay, ,for the ho~se a114 t11:e 9wi1er.
ag:reed to l;l.ccept}-4
i4
i4 o.f 3?
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(FILED: WESTCHESTER COUNTY CLERK 06/10/2019 04:45 PM] Ii-1PEX NO, 60767/201Ei
NY1:iCEF !JOC; NC>. 557 RECEIVED NYSCEF; 06/1'0/2019
2. Plainti:ff,?Dr. Ellyn and Tony Berk
62, :Plaintiffs repeat' andre~all!'lge the a1legations above, as if fully set forth
here.
63. On c>t about'June 30, 2014, ,Plaintiff.s D:t\ Elly~ ;lridT011y Berk, iii their,
capacity as Administrators' of the Estate of Winifred Ber]( d.u1ya:ppo1n{ed by. order
of the New York Stat~ Surrogate's Com:t, Westchester County, sol4Jhe propei:ty
lpoated ?t 190 Davis Avenue Jot $479; oop, well below the sale price, of 1:m:mpatable'
properties~,
' '
Houlihan Law1·ence acted as }idtial agent 011 behalf Qf the, Be:tk:s aIId
the.buyer hi corinectfonwitb. {heJ3erks;s:ale,ofl9Q J)avi&.Ay~11ue withoU:tma~
.full and franic disclosure to the '.Berks of the risks/, clownsides, and options: of dual
agency 'an{l withov.t qbtainijig- tb.eii".foforni.ed ViTJ.titten. con~en,t.
65. .Jfou~hari.Law1•ince: knowledge or consent, Hbulihi:tn Lawrence latet ·
copied and p.asted the Berks' signatures onto a diffetent St,a.tutol."Y I)isc1osure Fol'nf .
69. :S:o1Jlihan. Lawie:n.c!3 dig, nbt givl:l the Ber:ks a ¢opy of the Statµtory,
D1$closv.r¢ Forµf"7i th thei£ copl~d an,d past13d s:i,gµa.tutes; •.
70. HouljllanLaw:cence p:r9mi~m;lthe )3eI'k.$ th~tit would giv~>l90'D?-vis.
Avep.µe i•ma1omu:m exposure/) includin;g hy ]isfj.:ng the. P!bp~rty op. fhe Illultipie
li~t.ing.'se:rvice 1:1:r:i:d,. prorhi:/tingit on at least 30 ma3or realestafa portals and ove1· 500
.o.thernt:1tional w~bsitBs,; inI!oulihaii Lawrence's "exclusive '(}alJ,er;Yof'HoJ?leS:
Magazinei"'and through :a :IJ:'c:H:Jtcai·d M#ketirig Cfoxnpaig'J:x'.; bf 50Q \Just l,ist~d.';
ca.ids •.
li$,ting. s~:r;vice qi', otb:erwis~ p1·orn6tep.. it qut13iife.
Preview
FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER ---------------------------------------.------------------------){ PAMELA GOLDSTEIN, ELLYN & TONY BERK, as Administrators of the Estate of Winifred Berk, and PAUL BENJAMIN, on behalf of themselves and all other similarly situated, Index No. 60767/2018 Plaintiffs, Hon. Linda S. Jamieson -against- HOULIHAN/LAWREN CE INC., Defendants. ----------------------------------------------------------------){ APPENDIX OF EXHIBITS TO REPORT AND RECOMMENDATION OF DISCOVERY REFEREE DATED SEPTEMBER 11, 2019 William P. Harrington, Esq. Bleakley Platt & Schmidt, LLP One North Lexington Avenue White Plains, NY 10601 (914) 949-2700 1 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 EXHIBIT 1 (REPORT AND RECOMMENDATION OF DISCOVERY REFEREE DATED SEPTEMBER 11, 2019) 2 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 SUPREME COURT OF THE STATEOF NEW YORK · COUNTY OF WESTCHESTER -.- .-. -...---· .· .. ~>--- ·. --- .-. --- .-:--- ·... ---. -.---. -..:X ----. ---. - PAMELA GOLDSTEIN~ BLINN & TONY BB~ as A,dlmnistrafo~:s SUBPOENA DUCES TECOM of the Estate ofWiriifred Berk, and PAUL BENJAMIN, on behalf of themselves · Index No, 60767/2018 Afl!l all others siinilarlysituated, Hon; Liµda S; Jamieson Plaintiff's, ..against., HOULIHAN/LA WR.ENCE INC., Defendant. :· --··· - .x ·.. -· ...'. ::-;. ........ ,. . - .. :"'!- ·.·.·- . . . . . . . . . . . - - - - - - - - .... ___ .. -- .......... · - :···;..·_' The :Pe9ple ofthe State of 1:-Jew Yo.rk TO: Rubenstein Publ1c Relations, inc. 1~0 LAveri:ue of the .A:niericas, 13th Flop:i; New York, NY l00l9 c/oLoeh & Lo·eb LLP 345 ParkAvertue . NewYor~NY 10154-()037 . . GREETING-: .· ·w:m·col\iMAN)) YOU, that!lijbµsip:ess and. excuses beingla1dp.side,youarid e~c11 of you produce; :. on July·. ·. 3t 2019 .at2:0(), p.m;, it1 the.. ,.. .· aftempon, . . . . pursuant to· CPLRArticle 3 La11d . -. C:PLR:,A.tticle23, atth~ offic~s ofJ:,oeb ~ Loeb LLP, ·~>45 Park A..ven~e,N"e\vYork, NY 10154;. 0037, c(m,1plete and accurat~ copies of the following; documents: L Docurrients. 'corn,e11i1ng or related tcdp:e alleg_ations in the Complaii1t fifod by Prunela ·Goldstefo in the above'.'referencyd matter, includfog without limitation ah commi;ini~tkins vvith Pamela Goldstein, het co~insel. or invdlvlrig any Rubenstein agent or employee. 3 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 2.. Documents related to or teferencing the Coinplaint filed by P~mela Goldstein in: the a,bove~tefere11ced 1natte1\ 3. DocumeJ.'lts r~lat~d ·to or r~ferench1g the lawsuit Gaptioned Goldstein v. ·Houlihari/La,111·ence In(,Jndex.Na.~ 60767/201,8 (Sup.Ct, Westcl~esfo!' CoUllty): 4~ ·Documents reh1ted to oi' reforehc;:ing,~idton111mnicatiohs concerning, any.press release concerning the lawsuit ,captiot1ed ·Goldstein v; Rqulihan/L4wre11ce Inw~ 111.dex. No; 60767/2018 (~up'. Ct.;·Westchester Cpunty), Bu.siness :record~ produced _pursuant to this Subpo~na must be accompanied by the 11ecessaryC1,rtificatfon of Business Records requfred 1:,y CPLR Rule J 122~a1 and in conformance ther¢with; mtl1¢ forni aun,exeg hereto a~ Exhil;iitA. TI1¢ cirQumstances and reasoi1s why such disdosure i~,.$otight by Defendant, 1 oqtaui is. to ooGllments; facts ~11d evidenc~ fo enable pefe11dant to obtain, admissible do~utl'.lents and testirp.oily to prosec:ute i:lnd defend· tb.is acti.61}, · 4 qopy ofthe pl~~di11gs, p:,ed h!!retg ··B:S I!'.xhibitK Failurnto.corilpiy with this.subpoena.is punisliablea~.a coiitempt of Cotitt: aud11J}iy· 111ake you, liable to the pers9n qrt whose behalfiliis subpoena was: is,sued .fot a penalty l:1.oito exoeed 011e li.(!11c1ied Jiftj(dotlars ~nid: aH dama,ges ~ustajried by-reason ofyour.fa,1lm:e t() co1riply, 2 4 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 Dated: White Plains, New York July 5, 2019 COLLIERHALPERN & NEWBERG, LLP By:~···· . .-.fup M, Halpern AMefu.bet of the Firm One North Lexington Ave11tie White Plain$, New Yo:rlc J06Q 1 (914)684-6800 . .. .. .. . .. . . . . Robert D. MaoGill (Pro Hae Vice} Jessica M. Lindemann (Pro Eaa Vice). BARNES·& THORNBURG LLP 11 Sollth Meridfa.11 Street Incliaiiapoiis,IN 46204 (317) .231~ 7223 :,Atton1eys .f'o1· Defendant 3 5 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 í ÉXHIBIT A 6 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 SUPREME COURT OF THE STATE OF NEW YORK COTJNTY OF WESTCHESTER - - - -- ·--.. -___ . . -_- ____ -__ -_- _- ___ ·v--·<_- . -- _=_-~< ---~~------_--+X PAMELA GOLPSTEIN·, ELLYN & TONY BERK,as Administrators , .. . of the Ei:;tate of Winifred Berk, a.nd PAUL CPLRRUI,E 3122--a BENJAMIN, 011 l;,ehalr of themselves - CER'IIFICATION OF - and all others_ . ' . similarly ' . situated, . ... BUSINESS RECORDS Plahitiffa, - indexNo: 60767/2018 :.agafo.st, Hon._Linda S. Jamieso11. Defendant ___ ·:- _______ _,_ ----r._ - -__ .~--- ------ .---- , _-~ _ _ -- - ___ -~- ---- -- -X STATE OF~~~~_.....) }ss.: cotJNtYo:F·. ~---~-I .. . .. ------'--'~----'-----')~.ingdWy $WC>TI\ deposes.and says: t. I -am the duly authorized custodiaii qf the business records of Rubenstein Public Relations, iilc. _(lwreinafter '~R.ubenstein''), -and have.authc:frity:,to :tnfikethis certifi9a#on. .. . . 2; to the b~st of 111.y ktiowieclge; after teasoµablei]'.J,quµy, rc~rtify that the c6pies of docurhe11ts accon1panyingthis certification.are ac9t1tate yetsion~ dfthe d,ocunwnts responsi-veto . . . . the Subpoena Duces Tec;;um dated Jgiy $, 2019, and djrecte4 to gubenst~in (heteihaft~r the ''Subpoemt), ,¥1uch are within-my possessicni, ttistody or contfoL - 3. To the best of my kno~ledgf!;, after reasoJ1ableinqliiry;· I certify th~t-tli~.recci:rds 91'. copies acccimpanying this certification represent .all tlie dociu11eiits ·descl'.ibed in the Subpi)ena;. or docuiiients are 111issing arid a reason for their ah,se1ke js as foUbws; 7 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 4. The documetJts c).cCompanyiug.this ·ce1iificati011 :are btJSiness recotdswh:ichwere made ~Y tlie petsc,nµel of Rubenstein or p~rsons acting midet their contr9l; wete tnad.e in the regular course of business at fhe time of the a,ct, ttari.sactlcm,. occurrence;.· orevent recorded therein; or vii.thin ai'~sollable time thereafter; al\d it was the regular course qf Ruben~teh1's business to i11ake .such records; .S,vmn to before me this _.. _cfaypf ,2-919 · Notaty Public 2 8 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 EX1IIBI'J'B 9 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 JFILEn: WESTCHESTER COUNTY CLERK 06/10/2019. 04:45 PM] INDEX No. 60767 /iois NYSCEf boc. NQ, 5S7 RECEIVED NYSCEF: 06/10/2019 SUPREME COURT OF 'fB:E STATE OF NEW YTJR:t{ COUNT'Y OF WESTCHES'I'ER PAMELA GOLDSTEIN : ·.· ... . . . , .. ELLYN & TONY BERK as Administrators .. .. . oftb.e.Estate ofWWfredB~rit, arid PAUL . 1:ndex.No'. 6Q767/2018 BENJAMIN, 0.11 ~ehalf of themselves and . all others similarly sitil~ted, . .. . . HofL Linda S; Jan:i.ieso:n. P+siritiffs, 'THIRD NY.IENDED v. dI,ASS aCTlON OQMPLAIN't B:OULIHAN/LAWRENOE.INO~, Defen:ciant. Plaintiffs.Paniefa GQldsteiri, Dr. :Ellyna:r1d.Tony :B:erk as Ad,rrrintstr~tpr$ .of: tl),~ ~tate o£Wiiifrid J3er~ w.1.d Paw 13'enjami~ Ori beh~l£.oft4eniselves a:nilall · others .similarly situated, bai:H:!d o:o: P'tiS.ollfl,1 ~nqwledg¢ ~-- to th~mse1ve~, ~Ild ttpon ·· information a'.i:ld beliefas tq all other matters, allege as follows .. .INTROPTJCTION .1. Rolilebuyers f1nd ~elleta h$ye .the right to he: teptesent¢µ by::a: re~l' · .estate age:ol whb is loyalJothelll. an,ci. only. them when quym:g or s¢llin.g a home.:. . ,'. 2. Howihan tawrence1 thl:) ieaJb.1g, real esfateLbrokerage :o.nn it New Y61~~ City's northe:en subµrb~; has deprived, thous·aitds ofN¢wYork~rs ofthi,s in:11~ortarit rijlit by re~resentmg b6th tlie'hofuehuyer ?nd s~ner. in tlie sar11~ 3. Plaintiff Pamela Goldstein, at all rel~vant times,is .~u.d was, a c.iti:2:en: 10 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 .[FI .· . ,:;'ID : L,e, . WES TC · · H.c.STER r.l CO.UNT y. CLERK.. 06/· . 107·2019 ·~ .·.· 04. : 45· pMJ' IN:DEX WO; 60767/2.0lB NYSCEF POC .. NO. 557 RECE:IVEP NYSCE:F: 06/ld/201.9 pt.U"chased thi p:r:opepty lqcated. at, 6 Wellington .Terrace, \iVm.te·Plains, NeN.i 'York 10607. Houlilian Lawrenc.e tep±es¢nted both Goldstein.and the qeJ+et fo t,h~ · tra,ri.sactfon. 4" PlaintiffD:i\ Ell¥11 Berk, at allrelevi3.nt times, is and, was a. ci:ti,ze;n and fesident of New York County, N ¢w Yor~, •Plaintiff To:o.t Berk,• at ·all relevant times, is 13.nd.wa,s· acitirzeu an.die8:irior: to his-pµ;rcha,se of 1e b~a Logging '.Road, B~ilfarmn was a citizen an<;! r~sident ofKings Cotj.~ty~ N¢,y Yqrk~ .Since th~ pmchas.e, ·Benfa:n:dn has been a ci:tizetr aria: res{dent of W.estchester· ·· ·QountfrN~w Yotl{; 6. DefendairtHouiihanJLawrenCe fnc; C':ff.oulihan'):.awrej:ice') 1S' fl, ·:New . York coli)oratfon withitspriiicipal p{ace o:f fo:i,sin,ess at.SQQ We&tchester Aventte, Rye Broo~ :New Y9:r'.k 10573. Hml~_iliaJi LaViirence'fa a'fyll"servirere'al e~tate. brolrnra,ge firm that represents buyers and sellers in real estate transactions . .2 2 of 32 11 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 [FILED: WESTCHESTER COUN.TY CLERK 06/10/2019 04: 45 · pfilj INDEX NO. 60767/20lB NYSCEF DOC. NO, 5$7 RECEIVED NYSCEF: 06/:10/2019 Houlihan. .. Lawrence ow11s and.. op:erates 30 offices, with over 1)30U agents,.. '' ' .. . . ,. .•.. aci·ossthe Westchester, Putnam, and])utchess tri,ccnmty area. InJa11.uary 20171 Hcnilihati .. :. L;awr~nJ.p\3 was pought by Horu~Services .pf Ame:cfo~, Inc.,. a Berkshire Hathaway affiliate. . ' 7. 'X'l1is dolil't has jmisdictioµ ()ver Hqi,tlihfl.ll L~:vvre11ce pu~·s;tiant to CPLRSO:l. S·; Ther~is no fedei'i'.d tliversity jur.is<4c:tionover the µiattet\ GENERAL FACTUAL KLLEG-41;ION$ · ·10~ Areal estate :agent owes its clients f5.4udary dt1.qe$ of wiqivideg ai1d. undil:ctted loyalty; .obedien9e, con:I'identialityi fu]l d.isclosurelandre~onable t::are. lL. Areal .' .··esta4l1:irc>kerwho·a#sfor .. ... : . .· ·' . ... . .: :·. ' , the b,uyer.and13elletir; the same. .. . . . ·,. .. ·... ' ....... ·,, · ... ' . . . ·.. ·:· . .. 12. A dual ···.' .l:l.gent cqllecte ..a double.. .•... . . . ..... ' comfuissio~ on:a, single tra:'rlsactfon:- . . . . .. .. . ' .;. ls. ·A dual a~eJ1t canrl.Ot prqvide the. full !'a:ilije pf fid,µciaty. du.tie's: to eith.e1;.·.· of:its clients.. 14.. Dual atency a,ri_sel:l: wh.et1ever a single brokerage firm repre:sents:botl,i the seller a11d. the b11yer, even if two different salesptiople ,vitbin that one firm ~e, 3 of. 32 12 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 (FILED: wEsTcaEsTER corrNTY cLERK 06/1072019 o4!4S PMJ INDEx.wo. 607 5 712°:u~ NYSCEF DOC, NO;. 557 RECEIVED N'.lBCEF; 06/10/2019 15. A real estate agent m.ay act as a dual agent only after the. a~ent fully @d frankly explains to· f:lach client the risks; downsides, anci opttons of its dual agency, including that a dual agent cannot :ptovide undivided an;d undiluted Joyaity · to either ofits clients. 16. A I'EJ~l estate agent 11iust obtain. each client'i!r:fo.for:rined writteri. C()Ut,ent qefore acting EtS El dua[i;l.gei;rt, 17. Pux. ·suant to Real PropertyL~wSection .. ' . . 443, .a :teal estate agent :inc:µst .... .. .. . a1so provide co11stm:ters with, the New yorh: State Di~ciosure :B'otl)l for l3uyer a,:nd Seller (the "Stafutdxy:Disclosme.. .. Form'' or. ;'Form") before.entering . . into a.n agerii.:31~ . . . . c::lient l"el?,tipnship; 18. The Stat11toi'.Y Dfaclosiµ;e Form does n;ot pwvide ~onsumeii·s with all .tht=; iri:rorm.ation.the;f Wouid need in· o:r4e:r:to p1·ovideinformed cotiMnt to• dual agency. 19; A teal. estate agent xnµst stillniakefulland. frank dj.sctlosur,e. above anit · beyond the irrf'o:rtn~tion in tl:ie Statµttn'Y ])1.s~lpsUJ.'.'e For:tll.,. 20. .Ai .. 2fL S~rice, atlel:lst cla:tiuary->l, .2011, Houlihan.Lawrence :fi~s ope~ated a Bcherr:t~• tC> h.}1'$ thot(satid:s of hoinebuy~ts EJ.rid;seµet$: ini;(i :undisclosed;• non~ ¢onsen~:u,a;1. d1:1-al-;;i;gerit tiansact~011S:'. 'i7. Houlihan Lawrence has .~~ey\ited it~ scliem,e l;Jy;· ~m1g ottier things; {i} 01.l),tlyat~, i;f Urlll cultttt~. p:f'tm-d.i$;Cfosed1 J:10ll.-CQ1lS8ll:Stia.1 duala~enc:y;, (ii.) ehga,gmg,1n :aece1Jtive and mislea:q.ing. acfvertisilig; '(iii} fgllowing: f:i,ri31swig.~ · ' . . . ..... . . . . ,1Wltb'F'a&~ the Coni'lnisswnf, Turn fo the' 1ifw~tt Team}' Toni ·aJid•Terti@Houlihan L Worm sell~:rs qf flU the i-Lsl~s. d6w'n$ides, a:n& options.of dual agency a11d that . i:qiptoperly s:Uggest. tba t. seller(3 will lose OU~ 011 ·votentiaJpufohaee:rs; iiiJless: they a~tee to dual agency•.. g; Faµ.ip.g totn:ovide theStatutotv Disclosme Form to •cli.ents . p:rior.to.agieeing.to'..:act . :;),Er their igent, , h. Failing to thnely notify client$ whep,dua,!:-agent srtuatiqns al:'ise, i. failing;to clli;blose tb bµyer cli.eiits the full C<:inipip.sation 'it .·~ill receiv¢.-f6r a.d;a1"agent de.aL J. danfe#irig financial a1id otl1er pene£its OP: its clients' attqrne:y$.1 .k. Permitting a siri~le agenttorept.esentthe buyer ~nd seller ih the $a,irle tta.nsactidri. .1. Having fn.:1ouse sales• teams uniawfully matket. themf3elve~ a~- if .tb.o~i t~qm~Wexe atalida,l6rie rea} estate brokerage firms: ·:pl. 'rrictitip.g 1\yith;i.;r+-fa~al1:l' detig_ti:;i::ted d11.al agency with 1 di££e:ren,t members of the·1,~µie I3:oulihantaw~eI1c~· tu~ hc:rµse a~:1es teaui . . )J.. ,Pr:a,g~ii;irig ·"~itliin~te~nr'' desigrisiJed 4i9,1 ~gehcy wit4 .· the: t~amle~.d.ei act1hg, as a desitnated .sales. a,g;eI1t 0Il . ..behalf of ope.of.tlle,p~J~ties'.· . . . . o. Pit1;·ri;titfu:i.g)iintra~offioe';, :desigrratea dual: :agency ,vith . the :office ~arniger ac-tihg· as. a designated $~le$ agent: oh 1:iehaif: otoile ofthe p·a.rtie:s. . . . J?~·Permittfag·$ales,Agents who are family mem.he.t!:l to :9:ct ~s op:poi:lm~i; {h~signat~d sales· ageii~a· ih ·du~ka~ent. · transactions, 32; B:bulil:iari J.1iwi~!;!hi'.le l:ias. falleR to l)f"Op~Ay tram, ·.dire¢t, an4 superyise it.s Sales Agents, indudii1.g: 8. 8 of 32 17 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 [FILED! . WESTCHESTER. COUNTY· CLERK. 06/10/2019 04:45 PMI J;NjJE~ NO. fi0?67/'.,201.B NYSCEE' DQC. NQ. 557. RECEI.VBP NYSCEF: 06/10/2019 a. Ttahu11g Sale$ A.gents to adhere to a ,defective standaJ;'d.J:z;ed. age·µcygisclo:,m:r!3 .proto~o't. including to miy no ;more ah9ut dual F.tge,~.GY" thfln i.$ tu staridard · form docurnents that fail to n1ake su,fficient disclos1.1fo . . h: Tra:inmg Sal!3$ Agentir to p:re~£i11 the· Statutory pisclosvre •Form to i11dicate cli~nts/ ·advance informed·. conse:nt to dualagency. c. I>rpvidin.g its .Sales Agents:systEJlllllµ_ci3JJ.y.int:!orrE!Ct tr:ainirig. OIL age'nGY di;clbsur¢s:. d, Providing its Sales Agents syste1n~ticfiliy incorrect scripted. ;:),gency disclosurE!$, e.. Disregard,ing reale.stat~ i11.dustry guidaD:ce. to equip · Sales Agents with wxJtte±+ ttn to clit3nts as part ofa. group of ;,paperwork' 1 dociiinenfafo1~ signature, ancl (ili,) J)X<{Seritthe Fqrm fot !:lign:1tura PY~~mail . ratp.e:r.thl;J,n:•tri perso~ g, .:failiiig to;aclequ~t:ely. trai:n.$a1es· Ag~n.ts • toproperly compleiteiindtimely•provide the Statutory Disclosure Form:. h ..Notreqµfririg Sales Ag~'ri.ts t6.usethe Statutory Di~closµre F91•IJ1.to·n:1ake tlv~requiredflillow~up di~.cfosfue orfoe•a dual-igeut s:i.tuation has arjse;i ~nd . :ri1cr:=Il~~=::;c;~.""d mfotme~ L Pe;i.iri.itting a,:i:ld e.11co111·aging'S,alesAg~ntsta share . confideittia.tinforp:iationabout ~~w listings 3,t officj3: •and.sale~$ teaJnfoeetip,g$ ancllateract. as dti111 :ageiits.• .· ... ... -'•••• -,·. .. . . ..... .· .. .. . J. Periilitting . and..enoour13,girig Sal~sAgents to re'fer to Jhemselves a11cd o:ci.el:lrtotµe:{as:,i~uyer;s fig;eµt' 1of ''.seller's age:t1t" wh~rt· facilitating ne~otiations h~t\veen, pai't1esto :duafagent trs,nsac;ti911~. 9 cif 32 18 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 (FILED: WESTCHESTER COUNTY··CLERK 06/10/20.19 04:45 PM) INDEX NO. P07.$7/2QlB. :-t,il'.'SCEF DOC. 'No. 557 RECEIVED NY$(.;EF ~ os/;Lo/2019 33'. Houlihan L1;1wrence bas· failed to pµt in plac~ nec~ssa:ry alld appropdate.complia1i.c$sy~temEl; in);:lu;dfog: ,a. Adopti11g a too~littl?i too-late 'Fcilosin,g' protocol" to check o:nlY fo1· a S.tatutbryUisdpsure; Form bearing a ·sigp_at:ur~) aridf :i'is fid1+dru:y ~µtie$ c1nd .· coilsutner-:orientep..m.:i,scon.duct. are ,~at.innocent mistake~, .teciu:ric~i violations, 01• acts. qf aJew ro~e agertt;s, 35.. B:oulili.a.Il Lawrence's Pi'esicient (then·COQ) expfain~d ta M~lrntWatclJ: irt.,J:;ib.Uaty 20tl.thatt)j.~ fhin''s agen,tsWotkto"l:ioQst'rp.-hcrµ13e' sal'efi,,il'.'ecogrilz~~ •. the, vliJ.Lµe of being able·. to· "c;olJect "bot4 sid~s 9£ the coµtlJ:lis,§iqI1 on s.u.~11 ·~ s~e} · · 36. Ho-uliha11. L;fwrence;s dµa}a~e:Ucy pr.aetiye ribt oply @11:abl~,it to c9Uect· doubltH'!otnmissior11; at th~ e?Ct>ens~ pfits"£!JiµJ?·etitot~~· huta.lsq g:iyes it an in'Elide: - . tra WESTCHESTER_ COUNTY CLERK 06/10/2019 04: 45 PM) INDEX No, 60767/201~ NYSCF.:F .DOC, 1\JQ. 557 RECEIVED NYSCEF: 06/10/2019 37. Houlihan Lawrence's conduct in furtherance of its sohe1ne fo promote and p1·actice widespI'ead undisclosed, nqn-consensual dual agency derno11strates conscious disregard for its fiduciary duties: 38. I-Iouliliaii Lawrence e~rcises control ove:rits SalesAgetifaby, among othei:. things, x~9-uiri'.ng Sales Agents to -comply with Houlihan Lawrtfoct:{s policies - - and p_rpcedures; to l.J.SEf- cmnpari.i-ii:riproved contracts, :and to attend. cb:i:npfeb_erisiye· ti~afoin,g provided by Houlihan Lawre11ce; In these and other ways, Houliliau Lawre11ce erisur~s that its Si;iies Ag{;nts at- aH times act in ·3:cpordaI1,ce· vv:it4 HcmlihanLawrence' s fi.tm~wide scheme a:nd' strategy fo- p:romote undisclosed, non- .coi1sel1sual duaragent_transactiims~ 39/ Houlihan·La'V\,rence'sirtstituiipnal cultur~1 sttategyi a.ndpti:tcticl3 of' -- - Iion.:disclosw·e and mistufb;rm:ation :about d1,.1~1 agency c~·eates a syst~mfo disdosµte 0 void that indivi4ual '. . ... $;des Agents cannot possibly . . . . . .. . .:... . . ., fill on'an_ ad. . hoei'. basis .. ', . ; . . .. . .., 46:- HoulihariLavvrerice would have identifiedwi~es~r¢~c;Fviola#oris of its cli:i:,closu:re and infcn:PJ.ed-consent bbligationsif it acted tn acc&dance with.a proper -compliance_ pla,rL 4L .All class membelfs! claims. arise as a tesuit of Boµ]Jhan Lawielice's unfa wiu;l course. of coiiduot; - - ·42; Hcmlihan·Lawi'~JJ.ce ~as foapedJ:niridred.s ofmillions ofdollars m --m-gotteri. duala_gent sale.s-ddnttnissions-frorn the undisclosed;. non-consensual dual--. ii.gent transactions. _ li bf 32 20 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 [FILED: WESTCHESTER -COUNTY. CLERK 06/10/2019 04 :45. P@ Il'fDEx ~o. 60767/2018 :NYSCEF DOC, JifO. 5$7 RECEIVED NYSCEF: 06/10/2019 PLAINTIFFS'ALLEGATIONS 1. Plaintiff Pamela Goldstein· 43. Plaintiffs tepeat an,q r,e~a1lege the l3,llegatiori,El a~ove iu3 if fully set fortll ·44. Qli Miw 221 2'0I'7, Pla.intiff PaU1ela; CJoldsteih purchased the p,roperty .. ·,. : .lopated at GWellington Ter1:ax:el \¥),1j.te Pl ams,. 1':tew York 10607 for $63·'71.000, $B8100Q:aboye the lietpr:i;c~. 45; Eoul:ilign I,aw:rencf) acted. as a dllal rageri.t o.:q. behalfofGoldstem ~n,d the sell~r in connection With. d~ldstei111s :PurCha$~ of:6 WeHingto)J T~rra:ce witJiqut .:o:1pltjng full and frank disdpsute to Goldstein of the tisks; downsides, an:d . · .... · ,,·.:. ·· . . . - ':. :.. : .··. , .. ·... •:. ':.·,··· ' .. .. . :. : .......)·... · ,· :-:,. ·. \,. '... :. . . Houlihan Lawrence. in-house. sales· foiuzj ·k:no:wri·as."G{rio BeAblioµiesY Bello was the; founder arid 'tearii leader of the #Gi:iio Bello Homes'.' ......·.,<., '. · .. -...•... -.... :··:.. ,.•. :·.· :·. . • . . . . •. ··. .. :I•-.. . . .·. . ,· . . . ,,:. '. Houlllian Lawiep,ce. in~hoi:tse Bfllrui team! ~aAri .that 9apacity eicerGised J3elfo pOVf ~J; and authority over Cezin:1hra. 56. HoulilianLawrenc_e did not disclose to"Golq.steiit th~ na.ture antoperty. 11 a,s~is:' ~yen alter the ilisJ.)ection reveaJ.ed irufueroiis Jssu.e~· wtt}i, fi1e property. 6L. .Houlihan La:W:tence <:oUec:ted if- 5% cb:otinissibn. on G.oldsteiil:s puichase · of 6 Wellu}gton''\¢:rrace. 13:oul:i.ha]j,L~~rep.ce'~ sa.les: 901nniisJ!iq:µ wa,.s. J_Jqid out pf the· p;roceeullhan Lawte-nceC(Jl,'(the hapsflbtionj ir1,cluwng ·~~q:;l'i1$e 'it . was· ''in69rporated within :the .)?rice'' siie ·''agree~ td pay, ,for the ho~se a114 t11:e 9wi1er. ag:reed to l;l.ccept}-4 i4 i4 o.f 3? 23 of 188 FILED: WESTCHESTER COUNTY CLERK 09/11/2019 03:26 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 561 RECEIVED NYSCEF: 09/11/2019 (FILED: WESTCHESTER COUNTY CLERK 06/10/2019 04:45 PM] Ii-1PEX NO, 60767/201Ei NY1:iCEF !JOC; NC>. 557 RECEIVED NYSCEF; 06/1'0/2019 2. Plainti:ff,?Dr. Ellyn and Tony Berk 62, :Plaintiffs repeat' andre~all!'lge the a1legations above, as if fully set forth here. 63. On c>t about'June 30, 2014, ,Plaintiff.s D:t\ Elly~ ;lridT011y Berk, iii their, capacity as Administrators' of the Estate of Winifred Ber]( d.u1ya:ppo1n{ed by. order of the New York Stat~ Surrogate's Com:t, Westchester County, sol4Jhe propei:ty lpoated ?t 190 Davis Avenue Jot $479; oop, well below the sale price, of 1:m:mpatable' properties~, ' ' Houlihan Law1·ence acted as }idtial agent 011 behalf Qf the, Be:tk:s aIId the.buyer hi corinectfonwitb. {heJ3erks;s:ale,ofl9Q J)avi&.Ay~11ue withoU:tma~ .full and franic disclosure to the '.Berks of the risks/, clownsides, and options: of dual agency 'an{l withov.t qbtainijig- tb.eii".foforni.ed ViTJ.titten. con~en,t. 65. .Jfou~hari.Law1•ince: knowledge or consent, Hbulihi:tn Lawrence latet · copied and p.asted the Berks' signatures onto a diffetent St,a.tutol."Y I)isc1osure Fol'nf . 69. :S:o1Jlihan. Lawie:n.c!3 dig, nbt givl:l the Ber:ks a ¢opy of the Statµtory, D1$closv.r¢ Forµf"7i th thei£ copl~d an,d past13d s:i,gµa.tutes; •. 70. HouljllanLaw:cence p:r9mi~m;lthe )3eI'k.$ th~tit would giv~>l90'D?-vis. Avep.µe i•ma1omu:m exposure/) includin;g hy ]isfj.:ng the. P!bp~rty op. fhe Illultipie li~t.ing.'se:rvice 1:1:r:i:d,. prorhi:/tingit on at least 30 ma3or realestafa portals and ove1· 500 .o.thernt:1tional w~bsitBs,; inI!oulihaii Lawrence's "exclusive '(}alJ,er;Yof'HoJ?leS: Magazinei"'and through :a :IJ:'c:H:Jtcai·d M#ketirig Cfoxnpaig'J:x'.; bf 50Q \Just l,ist~d.'; ca.ids •. li$,ting. s~:r;vice qi', otb:erwis~ p1·orn6tep.. it qut13iife.