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NAR Legal Funding Support Cases Selected at the 2016 Annual Convention

November 16, 2016

Three Cases Selected for Legal Funding

Below are summaries of the case funding recommendations made by NAR's Legal Action Committee, which were subsequently approved by the Board of Directors at the 2016 REALTORS® Conference & Expo, held in Orlando, FL during November 2016.

NAR has renewed its Professional Liability Insurance policy with Chubb for 2017.The coverages provided through the program will remain unchanged in 2017. NAR is also adding insurance that will protect NAR, associations, and MLSs from patent infringement claims brought by non-practicing entities (aka "patent trolls") with a policy from RPX Insurance Services.

NAR provided funding of $220,651.69 in three cases as follows:

  1. St. Louis Association of REALTORS® v. St. Louis County (MO)

    The St. Louis Association of REALTORS® is challenging a residential rental property licensing ordinance enacted by St. Louis County. That ordinance requires landlords to obtain a license from the County before renting property, authorizes the County to revoke the license if a property is found to be out of compliance with the County's Property Maintenance Code, and, in particular, requires owners to evict tenants who have been convicted of a variety of criminal offenses. The Association claims the ordinance is preempted by state law and is unconstitutional for various reasons, including impairment of the owner's property rights.The Association obtained a temporary injunction enjoining the County from applying or enforcing the ordinance, and is now seeking a permanent injunction.

  2. Waldo v. Cousins and South Carolina Association of REALTORS® (SC)

    Andrew Waldo filed an action seeking to overturn an arbitration award issued by the South Carolina Association of REALTORS® in favor of Sperry Van Ness/Michael Cousins.Cousins filed an action seeking confirmation of the award and the cases were consolidated.Waldo claims that the award was not supported by evidence demonstrating that Cousins was procuring cause or otherwise sufficiently involved in the transaction to justify awarding him one half of the $500,000 commission paid, and that the arbitration award was issued in "manifest disregard of South Carolina law." The court denied Cousin's Motion to Dismiss/Motion for Summary Judgment and Cousin's Motion to Confirm the Award, holding that Waldo had set forth a viable claim to overturn the award. The case continues and is now in discovery. The South Carolina Association seeks to defend the enforceability of its arbitration award.

  3. NAR v. DDT (USPTAB)

    NAR initiated this "Inter Partes Review" proceeding in the U.S. Patent and Trademark Office challenging the validity of a patent owned by Data Distribution Technologies, Inc. entitled "Web-Updated Database With Record Distribution by Email," and also filed a petition in federal district court seeking a declaration that the DDT patent is invalid.The patent covers a system that provides email updates of new or changed information of items in a database in which users have previously expressed an interest.DDT previously asserted the patent against several real estate firms and succeeded in extracting settlements and license agreements from some of the firms.

    NAR's challenge to this patent was highly successful.DDT agreed to grant a "covenant not to sue" applicable to the entire real estate industry in exchange for NAR dismissing its challenges to the validity of the patent. This covenant protects the entire real estate industry from further claims or litigation alleging infringement of this patent.

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