Preview
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
HL EXHIBIT 1
AFFIDAVIT OF BRENDON DESIMONE
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 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
Brendon DeSimone, being first duly sworn, deposes and says:
1. My name is Brendon DeSimone. I am 49 years old, and I live in Greenwich,
Connecticut.
2. I first began practicing as a real estate agent in New York in 2012. In order to
become a real estate agent, I had to obtain a license, which required me to complete dozens of
hours of courses that are required by the State of New York. I also had to take and pass a State-
administered test. The required license courses covered many topics related to being a real estate
agent, including agency law, license law, finance, construction and development, taxes, Fair
Housing and Fair Lending, and other similar topics. To maintain my license, I have to complete a
required number of additional continuing-education classes every two years.
3. As a real estate agent, 1 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
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
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
house on the market and will spend months looking at properties. Other homebuyers buy the first
house they go through.
5. Positive referrals are key to becoming a successful real estate agent. When a real
estate agent successfully represents a client and that client is happy with their services, that client
may then recommend them to their friends and family members who are looking for a real estate
agent. And if that client decides to sell or buy another house a few years later, a satisfied client
will often become a repeat client. In my experience working with agents, I would say that the
vast majority of an agent's business today comes to them based on their prior work, either in the
form of positive referrals from previous clients, repeat business from previous clients, or people
who have sought them out because of the good reputation they have built up over the years. In
my opinion, if an agent's clients were not generally happy with his or her services and advice,
that agent would not have been able to remain in this business as a successful agent.
6. I first became affiliated with Houlihan Lawrence in 2016 as a manager of the
Bedford office. I was also manager of the Katonah office for a period of time. I oversaw
approximately 100 independent contractor real estate agents. Before that, I worked as a real
estate agent in San Francisco, California, for Paragon Real Estate Group, which was acquired by
Compass Realty. Then, I became licensed in New York in 2011 and worked as a real estate agent
at Core Real Estate and Stribling & Associates. I currently manage the Bedford office.
2
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
7. As a manager, I am an employee of Houlihan Lawrence.
8. 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.
9. As an office manager, I am familiar with the types of training and support
services offered by Houlihan Lawrence to its agents.
10. 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.
11. In my experience, Houlihan Lawrence real estate agents receive both formal and
informal training from a variety of sources. First and foremost, as I stated earlier, 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 Å license, the agent must take
continuing 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
3
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
these events include presentations and training on various topics related to being a real estate
agent.
12. 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.
13. 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
Form"
permitted under New York law. I generally refer to this form as the "Agency Disclosure
Form." "443"
or the "443 Disclosure (The refers to the section of New York's Real Property
Law that imposes this requirement.)
14. The Agency Disclosure Form is the primary document our 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.
15. I know from my own experience both as an agent and a manager that, generally,
when agents in my office obtain consent to dual and/or designated agency from clients, they go
through the Agency Disclosure Form with clients. They generally highlight the different types of
4
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
agency described on the form, they explain who they will be representing in the transaction and
in what capacity they will be acting (i.e., as a seller agent, buyer agent, designated agent, or dual
agent), and they answer any questions the client may have.
16. I know from my own experience as an agent and from my interactions with
Houlihan Lawrence agents whom I manage that, generally, the conversation about the Agency
Disclosure Form varies from one transaction to the next. Some clients ask questions about the
form; others do 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 state they do not want an explanation of the forms; others want the explanation.
"script"
17. 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.
18. 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 Educiary 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 or to
5
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
favor such transactions over non-dual agency transactions. Nor have I ever put such pressure on
any other agent.
19. 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.
20. To the contrary, during my tenure, Hou)ihan 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.
21. 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. I have never used
"script"
the Disclosure and Prompt Sheet as a for obtaining consent to dual or designated agency,
nor have I used the Disclosure and Prompt Sheet for any other purpose. The same is true for the
work I have done in my capacity as a manager-I do not recall ever having seen the Disclosure
and Prompt Sheet; and I have never required or encouraged agents in my office to use the
Disclosure and Prompt Sheet for any purpose.
22. 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. Moreover, during my tenure with Houlihan Lawrence, I never received any training,
direction, or advice from Mr. Arlt related to dual or designated agency.
6
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
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 afEliated 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 both as an agent and as a manager, it would not be a good
business practice to favor dual and designated agency transactions over non-dual agency
transactions. 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-term value of positive referrals. In my experience, agents are unlikely to take
that risk.
25. Prior to becoming affiliated with Houlihan Lawrence, I had worked as an agent
with Core Real Estate and Sibling & Associates, other brokerage companies in New York. In my
experience, Houlihan Lawrence and its agents handle dual and designated agency transactions and
disclosures similar to the way that these other brokerages and its agents did while I was with them.
26. 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 an agent and manager for Houlihan Lawrence, I have not seen
7
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
any evidence to support this allegation. To the contrary, based on my own experience at Core
Real Estate and Sibling & Associates and based on my efforts to recruit agents from other
brokerage companies over the years, I know that other brokerage companies in New York also
offered in-house bonuses, including Ginnel Real Estate.
27. 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.
28. 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.
29. 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 reviewed it carefully, made changes
where I thought it was appropriate, and affirm that the contents of this affidavit are true and
accurate.
8
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
own¢ef eit
-
STATE OF N )
8 / ) ss:
'
COUNTY OF )
NA 4E
Sworn to and subscribed before me
this _/__ day of Ol , 2024.
7 Fanny E Guerra-Zamora
NOTARY PUBLIC
UB urconsiniannisseaums
SEAL
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024
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 2404 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
this'
word count for document is 2404 words.
Dated: Indianapolis, Indiana
March 11, 2024
/s/Robert D. MacGill
Preview
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 HL EXHIBIT 1 AFFIDAVIT OF BRENDON DESIMONE FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 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 Brendon DeSimone, being first duly sworn, deposes and says: 1. My name is Brendon DeSimone. I am 49 years old, and I live in Greenwich, Connecticut. 2. I first began practicing as a real estate agent in New York in 2012. In order to become a real estate agent, I had to obtain a license, which required me to complete dozens of hours of courses that are required by the State of New York. I also had to take and pass a State- administered test. The required license courses covered many topics related to being a real estate agent, including agency law, license law, finance, construction and development, taxes, Fair Housing and Fair Lending, and other similar topics. To maintain my license, I have to complete a required number of additional continuing-education classes every two years. 3. As a real estate agent, 1 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 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 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 house on the market and will spend months looking at properties. Other homebuyers buy the first house they go through. 5. Positive referrals are key to becoming a successful real estate agent. When a real estate agent successfully represents a client and that client is happy with their services, that client may then recommend them to their friends and family members who are looking for a real estate agent. And if that client decides to sell or buy another house a few years later, a satisfied client will often become a repeat client. In my experience working with agents, I would say that the vast majority of an agent's business today comes to them based on their prior work, either in the form of positive referrals from previous clients, repeat business from previous clients, or people who have sought them out because of the good reputation they have built up over the years. In my opinion, if an agent's clients were not generally happy with his or her services and advice, that agent would not have been able to remain in this business as a successful agent. 6. I first became affiliated with Houlihan Lawrence in 2016 as a manager of the Bedford office. I was also manager of the Katonah office for a period of time. I oversaw approximately 100 independent contractor real estate agents. Before that, I worked as a real estate agent in San Francisco, California, for Paragon Real Estate Group, which was acquired by Compass Realty. Then, I became licensed in New York in 2011 and worked as a real estate agent at Core Real Estate and Stribling & Associates. I currently manage the Bedford office. 2 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 7. As a manager, I am an employee of Houlihan Lawrence. 8. 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. 9. As an office manager, I am familiar with the types of training and support services offered by Houlihan Lawrence to its agents. 10. 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. 11. In my experience, Houlihan Lawrence real estate agents receive both formal and informal training from a variety of sources. First and foremost, as I stated earlier, 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 Å license, the agent must take continuing 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 3 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 these events include presentations and training on various topics related to being a real estate agent. 12. 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. 13. 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 Form" permitted under New York law. I generally refer to this form as the "Agency Disclosure Form." "443" or the "443 Disclosure (The refers to the section of New York's Real Property Law that imposes this requirement.) 14. The Agency Disclosure Form is the primary document our 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. 15. I know from my own experience both as an agent and a manager that, generally, when agents in my office obtain consent to dual and/or designated agency from clients, they go through the Agency Disclosure Form with clients. They generally highlight the different types of 4 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 agency described on the form, they explain who they will be representing in the transaction and in what capacity they will be acting (i.e., as a seller agent, buyer agent, designated agent, or dual agent), and they answer any questions the client may have. 16. I know from my own experience as an agent and from my interactions with Houlihan Lawrence agents whom I manage that, generally, the conversation about the Agency Disclosure Form varies from one transaction to the next. Some clients ask questions about the form; others do 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 state they do not want an explanation of the forms; others want the explanation. "script" 17. 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. 18. 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 Educiary 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 or to 5 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 favor such transactions over non-dual agency transactions. Nor have I ever put such pressure on any other agent. 19. 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. 20. To the contrary, during my tenure, Hou)ihan 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. 21. 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. I have never used "script" the Disclosure and Prompt Sheet as a for obtaining consent to dual or designated agency, nor have I used the Disclosure and Prompt Sheet for any other purpose. The same is true for the work I have done in my capacity as a manager-I do not recall ever having seen the Disclosure and Prompt Sheet; and I have never required or encouraged agents in my office to use the Disclosure and Prompt Sheet for any purpose. 22. 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. Moreover, during my tenure with Houlihan Lawrence, I never received any training, direction, or advice from Mr. Arlt related to dual or designated agency. 6 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 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 afEliated 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 both as an agent and as a manager, it would not be a good business practice to favor dual and designated agency transactions over non-dual agency transactions. 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-term value of positive referrals. In my experience, agents are unlikely to take that risk. 25. Prior to becoming affiliated with Houlihan Lawrence, I had worked as an agent with Core Real Estate and Sibling & Associates, other brokerage companies in New York. In my experience, Houlihan Lawrence and its agents handle dual and designated agency transactions and disclosures similar to the way that these other brokerages and its agents did while I was with them. 26. 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 an agent and manager for Houlihan Lawrence, I have not seen 7 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 any evidence to support this allegation. To the contrary, based on my own experience at Core Real Estate and Sibling & Associates and based on my efforts to recruit agents from other brokerage companies over the years, I know that other brokerage companies in New York also offered in-house bonuses, including Ginnel Real Estate. 27. 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. 28. 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. 29. 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 reviewed it carefully, made changes where I thought it was appropriate, and affirm that the contents of this affidavit are true and accurate. 8 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 own¢ef eit - STATE OF N ) 8 / ) ss: ' COUNTY OF ) NA 4E Sworn to and subscribed before me this _/__ day of Ol , 2024. 7 Fanny E Guerra-Zamora NOTARY PUBLIC UB urconsiniannisseaums SEAL FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1674 RECEIVED NYSCEF: 03/11/2024 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 2404 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 this' word count for document is 2404 words. Dated: Indianapolis, Indiana March 11, 2024 /s/Robert D. MacGill