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FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1773 RECEIVED NYSCEF: 03/11/2024
HL EXHIBIT 18
GEOFF BERRY AFFIDAVIT
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1773 RECEIVED NYSCEF: 03/11/2024
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 ) AFFIDAVIT
others similarly situated, )
) Index No. 60767/2018
Plaintiffs, ) Hon. Linda S. Jamieson
)
vs. )
)
HOULIHAN/LAWRENCE INC., )
)
Defendant. )
)
AFFIDAVIT
Geoff Berry, being first duly sworn, deposes and says:
1. My name is Geoff Berry. I am 72 years old, and I live in Stamford, Connecticut. I
am married and have two children.
2. I first began practicing as a real estate agent in New York in 1986.
3. As a real estate agent, I have represented numerous sellers and buyers in real
estate transactions in New York. Sometimes I represented the seller of the home. Sometimes I
represented the buyer of the home. In every transaction, I tried my best to give good advice to
my client and to provide great customer service. My goal was to make the transaction as easy as
possible for my clients and to help them to achieve their objectives.
4. In my experience, every real estate transaction is unique. Some home sellers are
under time pressure and want to sell as quickly as possible. Other home sellers are more patient
"perfect"
and are willing to wait for the so-called offer. Some homebuyers want to see every
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house on the market and will spend months looking at properties. Other homebuyers buy the first
house they go through.
5. In 2004, I became a manager for Houlihan Lawrence in its White Plains office,
which is located in Westchester County, New York. I manage approximately 90 independent
contractor agents.
6. As a manager, I am an employee of Houlihan Lawrence.
7. As part of my duties as a manager, I am responsible for supervising the
administrative support staff in the office. I am also responsible for recruiting new agents to join
our office, retaining our agents (the most successful of whom are often recruited by other
brokerage companies), keeping agents updated on developments within the real estate industry,
providing support to agents as requested, organizing office events, and assisting in resolving any
disputes between agents, among many other tasks.
8. As an office manager, I am familiar with the types of training and support
services offered by Houlihan Lawrence to its agents.
9. As a preliminary matter, all real estate training courses and materials offered by
Houlihan Lawrence to its real estate agents are optional. During my time as an office manager,
Houlihan Lawrence has never required its real estate agents to attend any particular training.
Rather, the Houlihan Lawrence training is offered as an optional benefit of affiliation with
Houlihan Lawrence.
10. In my experience, Houlihan Lawrence real estate agents receive both formal and
informal training from a variety of sources. First and foremost, most real estate agents in New
York have completed the State-required courses to become licensed either as a salesperson or a
broker under New York law. To maintain such a license, the agent must take continuing
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education courses. In addition, most real estate agents are members of the National Association
of REALTORS®, the New York State Association of REALTORS®, and local boards of
REALTORS® (such as the Hudson Gateway Association of REALTORS®). These associations
host numerous events and gatherings throughout the course of the year, and many of these events
include presentations and training on various topics related to being a real estate agent.
11. I understand that there is a lawsuit currently pending against Houlihan Lawrence
in the Supreme Court of New York in Westchester County and that this affidavit will be
submitted to the Court in that matter. I understand that the plaintiffs in this lawsuit allege that
Houlihan Lawrence and its agents systematically fail to obtain informed consent from their
clients when acting as either a dual agent or a dual agent with designated salespersons.
Specifically, I understand that the plaintiffs allege that Houlihan Lawrence has imposed some
script"
type of "uniform such that all Houlihan Lawrence agents provide the same information to
clients about dual and designated agency when obtaining their consent. Based on my own
personal experience, I can say that these allegations are wrong.
12. As a preliminary matter, all real estate agents in New York are required to provide
their clients with a State-mandated form that describes the types of agency relationships
permitted under New York law. Agents generally refer to this form as the "Agency Disclosure
Form" Form." "443"
or the "443 Disclosure (The refers to the section of New York's Real
Property Law that imposes this requirement.)
13. The Agency Disclosure Form is the primary document Houlihan Lawrence agents
use when discussing dual and designated agency with clients. The Agency Disclosure Form
specifically warns clients of the default position under New York law that neither dual nor
designated agents provide undivided loyalty to their clients.
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14. In the White Plains office, generally, it is my expectation and experience that the
agents in my office will go through the Agency Disclosure Form with their clients when
obtaining consent to dual agency and designated agency transactions.
15. Based on my experience managing agents in the White Plains office and
discussing dual agency-related topics with them, I understand that the conversation about the
Agency Disclosure Form varies from one transaction to the next. Some clients have asked
questions about the form; others have not. Some clients have bought and sold homes before and
have already been told about the different types of agency; others have not. Some clients are very
sophisticated with respect to real estate transactions and fiduciary duties (for example, real estate
lawyers, bankers, real estate developers, real estate investors, etc.); others are not. Some clients
ask to send the Agency Disclosure Form and other documents to their lawyers before signing;
others do not. Some clients ask for explanation of the forms; others do not.
"script"
16. During my tenure, Houlihan Lawrence has never imposed any type of on
its agents for how to handle the Agency Disclosure Form. Instead, Houlihan Lawrence has relied
on its agents to use their own training and experience, which includes the State-mandated
training required to obtain and maintain a real estate license under New York law, when
presenting the Agency Disclosure Form and obtaining consent to dual and designated agency.
17. I understand that the plaintiffs in this lawsuit allege that Houlihan Lawrence has
attempted to increase the number of dual agency and designated agency transactions by requiring
agents to mischaracterize their fiduciary duties in such transactions or by mischaracterizing the
"risks"
of such transactions. Based on my own personal experience, this is not true. I have never
experienced any pressure to increase the number of dual or designated agency transactions in the
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White Plains office or to favor such transactions over non-dual agency transactions. Nor have I,
as a manager, ever put such pressure on any agent.
18. I have never required or encouraged any of the agents whom I manage to
"risks"
mischaracterize their fiduciary duties or to mischaracterize the of acting as a dual or
designated agent.
19. To the contrary, during my tenure, Houlihan Lawrence has always sought to
ensure that all agents present the State-required Agency Disclosure Form to their clients and
obtain their written, informed consent before acting as a dual or designated agent.
20. I understand that one of the documents that the plaintiffs have focused on in this
Sheet."
case is a document entitled "Disclosure and Prompt In connection with preparing this
affidavit, I was shown a copy of the Disclosure and Prompt Sheet by counsel. Prior to the filing
of this case, I do not recall having ever seen the Disclosure and Prompt Sheet. During my tenure,
"script"
the White Plains office has never used the Disclosure and Prompt Sheet as a for
obtaining consent to dual or designated agency, nor have we used the Disclosure and Prompt
Sheet for any other purpose.
21. I understand that the plaintiffs in this lawsuit have alleged that Lewis Arlt was
"guru"
Houlihan Lawrence's on dual agency and that he was somehow instrumental in Houlihan
Lawrence's supposed efforts to mischaracterize dual and designated agency relationships. Mr.
Arlt was a manager in Houlihan Lawrence's Scarsdale office for part of the time at issue in the
lawsuit. I never worked directly with Mr. Arlt. Moreover, during my tenure with Houlihan
Lawrence, I never received any training, direction, or advice from Mr. Arlt related to dual or
designated agency.
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22. As a manager, I do not generally participate in the disclosure conversations
between Houlihan Lawrence agents and their clients. Therefore, I generally do not know what
any particular agent said to any particular client when obtaining their consent to dual and/or
designated agency. I generally trust the agents who work in my office to comply with their
obligations to obtain informed, written consent to dual and designated agency, and I do not have
any reason to think that the agents who work in my office fail to do so.
23. Prior to the filing of this lawsuit, I am not aware of any client who ever
complained about the fact that Houlihan Lawrence and its agents acted as dual or designated
agents in a particular transaction. In my experience, it is very common for the larger brokerage
companies in New York to regularly act as dual and/or designated agents. Generally, the more
agents who are affiliated with a particular brokerage company in a given area, the more likely it
is that a dual or designated agency transaction will occur because it is more likely that a potential
buyer will happen to be working with an agent affiliated with the same company as the agent
working with the seller. In other words, the more successful a real estate brokerage company is at
growing its number of agents, the more dual and designated agency transactions it will have.
24. In my experience as a manager, it would not be a good business practice to favor
dual and designated agency transactions over non-dual agency transactions, especially in the
context of potential cross-agency alternatives. Successful real estate agents rely on positive
referrals to grow and maintain their businesses. If an agent were to push a seller to accept an
inferior offer or a buyer to overpay for a house just because it would result in a dual or
designated agency transaction, that agent would be risking the long-tenn value of positive
referrals. Moreover, had I ever seen evidence that any agents working in the White Plains office
had engaged in such behavior during my tenure, I would have viewed that as grounds to
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discipline the agent or terminate our relationship. In my experience, agents are unlikely to take
this risk.
25. I understand that the plaintiffs in this lawsuit allege that Houlihan Lawrence's in-
house bonus program is part of some alleged strategy to increase dual and designated agency
transactions. In all of my years as a manager for Houlihan Lawrence, I have not seen any
evidence to support this allegation.
26. Not all Houlihan Lawrence agents are eligible for in-house bonuses. Moreover, I
have not seen any evidence that the in-house bonus plays any role in causing a dual or designated
transaction to occur. in my it is the opposite - a dual or designated
agency Instead, experience,
agency transaction occurs because a particular buyer wants to purchase a particular house and
presents the most compelling offer, and the agent then may happen to receive an in-house bonus
if they are eligible. But the presence or absence of an in-house bonus does not drive agent
behavior. Indeed, over the years, as agent compensation has become increasingly agent-friendly
(meaning that agents retain an increasing percentage of the total commission), the in-house
bonus has become less and less common.
27. I have not seen anything during my tenure at Houlihan Lawrence that leads me to
believe that Houlihan Lawrence has some kind of orchestrated strategy to increase the number of
dual and designated agency transactions that occur.
28. I am a citizen of the United States, and I am competent to give testimony in this
matter. Unless stated otherwise, the above testimony is based on my own personal knowledge.
And although counsel assisted in preparing this affidavit, I rev'iewed it carefully, made changes
where I thought it was appropriate, and affirm that the contents of this affidavit are true and
accurate.
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STATE OF NEW YORK )
) ss:
COUNTY OF WESTCHESTER )
Swom t nd s scribed before me
this . ay o 024.
NOTARY PUBLIC
SEAL
Osa D. Potterson
NEWYORK
PUBUC-STATE OF
NOTATY
No. 01PA631240S
Westchester County
Qualified in Explrea:09/29/2028
Commission
My
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Certificate of Counsel
Pursuant to Conunercial Division Rule 17
I, Robert D. MacGill, counsel for Defendant, hereby certify, pursuant to
Commercial Division Rule 17, that the word count for the foregoing document, excluding
the caption, table of contents, table of authorities, and signature block, is 2020 words.
This document therefore complies with the rule that limits briefs, memoranda,
affirmations, and affidavits to 7,000 words. I certify that the Microsoft Word generated
word count for this document is 2020 words.
Dated: Indianapolis, Indiana
March 11, 2024
/s/Robert D. MacGill