Legal Update 2020
Instructor: John Henderson
REAL ESTATE TEAM
Dispute Over the Break-Up of a Real Estate Team
Capps v. Harris, et al., No. 5:18-CV-133-FL, U.S. Dist. LEXIS 199408 (2018)
U.S. District Court for the Eastern District of N.C.
Facts: In 2014, Katz and Capps worked together as real estate brokers leading a team representing corporate tenants. The team was recruited by Newmark, a real estate brokerage firm, to work as independent contractors. Katz and Capps eventually were no longer able to work together, and the resulting claims involve the parties attempting to deal with the unraveling of this relationship. Capps alleged he was entitled to commissions from transactions he should have been a part of but that Harris, a member of their team, purposefully kept secret. After this dispute, Newmark planned a meeting to moderate the issue but Capps alleges the "arbitration" was insufficient and biased. Capps also alleged Newmark forbade counsel to be present at the arbitration, the arbiter was biased to Harris, and other arbitrations initiated against Capps were meritless. Among other things, Capps alleged the actions by both Newmark and Harris violated the Unfair and Deceptive Trade Practices Act (UDTPA). Newmark moved to dismiss Capp's claims.
Issue: Whether Capp's claims of unfair and deceptive trade practices were supported by the allegation that the acts were within and affected commerce.
Held: Motion granted in part. Capp's claim of unfair and deceptive acts are not in commerce within the meaning of the UDTPA because the facts alleged in the complaint demonstrate the controversy in this case to be an employment dispute internal to the brokerage firm.