Read the full decision: Meier v. Douglas Elliman Realty LLC
A New York court has determined that a team commission-sharing agreement should be upheld.
In 2006, Michael Meier (“Plaintiff”) joined Douglas Elliman Realty, LLC (“Broker”) as a salesperson. Upon joining Broker, Plaintiff signed an agreement with Broker stating that Broker was obligated to pay Plaintiff commissions in accordance with a commission schedule.
Broker’s policy allowed for the creation of teams among its affiliated salespeople. Pursuant to Broker’s policy manual, any commissions earned by a salesperson who was a member of a team would be attributed to the team, and not to the individual salesperson. Upon joining a team, the individual salesperson gave up his individual financial relationship with the Broker in order to form an entity which, as a collective unit, would earn a larger commission split.
Shortly after joining Broker, Plaintiff entered into a second agreement (“Team Agreement”) with two other salespeople affiliated with Broker in order to create a team. In 2009, Plaintiff left Broker. At the time he left, he was owed outstanding commissions totaling $150,651 for transactions he had earned according to the terms of the Team Agreement. Broker sent commission checks for the transactions to Plaintiff’s team members, who then split the commission among themselves, failing to send Plaintiff the portion he was due pursuant to the Team Agreement.
Plaintiff sued Broker and his former team members for unpaid commissions. He then moved for summary judgment, asserting that the facts of the case were undisputed, and that pursuant to the terms of the contracts at issue, it was undeniable that he was owed the commissions. The court denied Plaintiff’s motion for summary judgment against Broker, finding that triable questions of fact did exist on that count, including whether or not Broker knew, when it sent the checks to Plaintiff’s team members, that they would not forward Plaintiff his split.
However, the court granted Plaintiff’s motion against his former team members. In upholding the Team Agreement and granting Plaintiff the full $150,651 commission owed pursuant to its terms, plus interest, the court stated that Plaintiff’s former team members were liable for breach of contract and that they were “unjustly enriched at [Plaintiff’s] expense.”
Meier v. Douglas Elliman Realty, LLC, 2013 NY Slip Op 33433(U) (November 19, 2013). [Note: This opinion is not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion].