Preview
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
HL EXHIBIT 22
BARRY GRAZIANO AFFIDAVIT
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 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
Barry Graziano, being first duly sworn, deposes and says:
1. My name is Barry Graziano. I am 61 years old, and I live in Katonah, New York.
I am married and have two children. I have lived in Westchester County for most of my adult
life.
2. I first began practicing as a real estate agent in New York in 2003. 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, I have represented numerous sellers and buyers in real
estate transactions in New York. Sometimes I represented the seller of the home. Sometimes I
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
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
house on the market and will spend months looking at properties. Other homebuyers buy the first
house they go through. Regardless, my job as a real estate agent was to do everything that I
reasonably could to make sure my client was happy with their transaction.
5. Positive referrals are key to becoming a successful real estate agent. When an
agent successfully represents a client and that client is happy with the services they provide, that
client may then recommend the agent 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. I would say that the vast majority of a real
estate 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 clients were not generally happy with the services and advice that a particular real
estate agent provides, that agent will not remain in this business as a successful agent.
6. I first became affiliated with Houlihan Lawrence in 2010, as manager of the
Yorktown Heights and Croton on Hudson offices. I became manager of the Chappaqua office in
2012 and the Armonk office in 2014. In 2020, I also started managing the Katonah office. I
2
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
currently manage all of these brokerages, except for the Chappaqua office. I manage
approximately 100 independent contractor agents across these brokerages.
7. Generally, real estate agents decide how much they work, how they market their
services, which listings and/or clients they want to accept, how many hours they want to work in
any given day, where they want to work from (i.e., from a Houlihan Lawrence office, from my
home, etc.). From my perspective, being a real estate agent is like running your own small
business.
8. As a manager, I am an employee of Houlihan Lawrence.
9. 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.
10. As an office manager, I am familiar with the types of training and support
services offered by Houlihan Lawrence to its agents.
11. 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.
12. 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
3
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
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 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.
13. 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.
14. As a preliminary matter, all real estate agents in New York are required to provide
their clients with a State-mandated form with 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.)
4
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
15. 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.
16. In the offices that I manage, it is my expectation and experience that, generally,
when our agents obtain consent to dual and/or designated agency from their clients, they go
through the Agency Disclosure Form with their clients. They generally highlight the different
types of 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.
17. Based on my own experience as an agent and based on my experience managing
agents and discussing agency-related topics with them, I understand that 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 tell their agent they do not need an explanation of the forms; others
want the explanation.
"script"
18. 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
.
5
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
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.
19. 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 or to
favor such transactions over non-dual agency transactions. Nor have I, as a manager, ever put
such pressure on any other agent.
20. 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.
21. 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.
22. 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
6
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
and Prompt Sheet; and I have never required or encouraged agents in my office to use the
Disclosure and Prompt Sheet for any purpose.
23. 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. During my tenure with Houlihan Lawrence, I never received any training, direction, or
advice from Mr. Arlt related to dual or designated agency.
24. As a manager, I generally do not 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 offices 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 offices fail to do so.
25. 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.
7
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
26. 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. 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 refenals. In my experience, agents are unlikely to take that risk.
27. Prior to becoming affiliated with Houlihan Lawrence, I had worked as an agent
with Prudential, another brokerage company in New York. In my experience, Houlihan Lawrence
and its agents handle dual and designated agency transactions and disclosures similar to the way
that Prudential and its agents did while I was there.
28. 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.
29. 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.
8
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
30. 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.
31. 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.
9
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
STATE OF NEW YORK )
) ss:
COUNTY OF WESTCHESTER )
Bany Graziano
Sworn to and subscribed before me
this j_ day of 66 , 2024.
JmÆpd
NOTARY P B IC
Jane Abbate
Notary Public State of New York
NO 01AB4999694
SEAL
Qualified in Westchester County
Term Expires 30ly 2/,
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024
Certificate of Counsel
Pursuant to Connnercial 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 2517 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 2517 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. 1695 RECEIVED NYSCEF: 03/11/2024 HL EXHIBIT 22 BARRY GRAZIANO AFFIDAVIT FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 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 Barry Graziano, being first duly sworn, deposes and says: 1. My name is Barry Graziano. I am 61 years old, and I live in Katonah, New York. I am married and have two children. I have lived in Westchester County for most of my adult life. 2. I first began practicing as a real estate agent in New York in 2003. 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, I have represented numerous sellers and buyers in real estate transactions in New York. Sometimes I represented the seller of the home. Sometimes I FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 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 house on the market and will spend months looking at properties. Other homebuyers buy the first house they go through. Regardless, my job as a real estate agent was to do everything that I reasonably could to make sure my client was happy with their transaction. 5. Positive referrals are key to becoming a successful real estate agent. When an agent successfully represents a client and that client is happy with the services they provide, that client may then recommend the agent 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. I would say that the vast majority of a real estate 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 clients were not generally happy with the services and advice that a particular real estate agent provides, that agent will not remain in this business as a successful agent. 6. I first became affiliated with Houlihan Lawrence in 2010, as manager of the Yorktown Heights and Croton on Hudson offices. I became manager of the Chappaqua office in 2012 and the Armonk office in 2014. In 2020, I also started managing the Katonah office. I 2 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 currently manage all of these brokerages, except for the Chappaqua office. I manage approximately 100 independent contractor agents across these brokerages. 7. Generally, real estate agents decide how much they work, how they market their services, which listings and/or clients they want to accept, how many hours they want to work in any given day, where they want to work from (i.e., from a Houlihan Lawrence office, from my home, etc.). From my perspective, being a real estate agent is like running your own small business. 8. As a manager, I am an employee of Houlihan Lawrence. 9. 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. 10. As an office manager, I am familiar with the types of training and support services offered by Houlihan Lawrence to its agents. 11. 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. 12. 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 3 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 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 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. 13. 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. 14. As a preliminary matter, all real estate agents in New York are required to provide their clients with a State-mandated form with 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.) 4 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 15. 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. 16. In the offices that I manage, it is my expectation and experience that, generally, when our agents obtain consent to dual and/or designated agency from their clients, they go through the Agency Disclosure Form with their clients. They generally highlight the different types of 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. 17. Based on my own experience as an agent and based on my experience managing agents and discussing agency-related topics with them, I understand that 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 tell their agent they do not need an explanation of the forms; others want the explanation. "script" 18. 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 . 5 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 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. 19. 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 or to favor such transactions over non-dual agency transactions. Nor have I, as a manager, ever put such pressure on any other agent. 20. 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. 21. 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. 22. 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 6 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 and Prompt Sheet; and I have never required or encouraged agents in my office to use the Disclosure and Prompt Sheet for any purpose. 23. 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. During my tenure with Houlihan Lawrence, I never received any training, direction, or advice from Mr. Arlt related to dual or designated agency. 24. As a manager, I generally do not 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 offices 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 offices fail to do so. 25. 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. 7 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 26. 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. 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 refenals. In my experience, agents are unlikely to take that risk. 27. Prior to becoming affiliated with Houlihan Lawrence, I had worked as an agent with Prudential, another brokerage company in New York. In my experience, Houlihan Lawrence and its agents handle dual and designated agency transactions and disclosures similar to the way that Prudential and its agents did while I was there. 28. 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. 29. 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. 8 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 30. 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. 31. 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. 9 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 STATE OF NEW YORK ) ) ss: COUNTY OF WESTCHESTER ) Bany Graziano Sworn to and subscribed before me this j_ day of 66 , 2024. JmÆpd NOTARY P B IC Jane Abbate Notary Public State of New York NO 01AB4999694 SEAL Qualified in Westchester County Term Expires 30ly 2/, FILED: WESTCHESTER COUNTY CLERK 03/11/2024 10:30 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1695 RECEIVED NYSCEF: 03/11/2024 Certificate of Counsel Pursuant to Connnercial 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 2517 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 2517 words. Dated: Indianapolis, Indiana March 11, 2024 /s/Robert D. MacGill