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Mar 5, 2018 2:16 PMPublication: The East Hampton Press & The Southampton Press

Jury Finds In Favor Of Saunders And Associates In Trial With Meg Salem

Andrew Saunders, founder and CEO of Saunders & Associates, and former Saunders broker Meg Salem.
Mar 8, 2018 10:46 AM

The outcome of a lawsuit between Saunders & Associates and one of the East End real estate firm’s former brokers, Meg Salem, was decided in federal court last month, with the jury finding in favor of Saunders on all claims.

The litigation arose after Ms. Salem and her team left Saunders in 2015 to join the start-up brokerage Compass. Saunders claimed that Ms. Salem and her colleagues “pirated” 11,600 real estate listings from Saunders’s proprietary database, and Compass subsequently parted ways with Ms. Salem.

Ms. Salem filed a counterclaim against Saunders & Associates, and against founder and President Andrew Saunders individually, alleging she was being defamed.

Jury selection began on February 12. After closing arguments on February 20, at the U.S. District Court in Central Islip, the jury returned a verdict the same day that found that Saunders proved Ms. Salem breached her contract and violated the Computer Fraud and Abuse Act.

Jurors also found that Saunders was not in breach of contract, and that Ms. Salem did not prove she had been defamed.

The jury, under instructions from the court, awarded nominal damages of $1 to Saunders for the breach of contract claim. For violating the Computer Fraud and Abuse Act, Ms. Salem was ordered to pay Saunders $13,299.60.

“Under the Computer Fraud and Abuse Act, we were entitled to get back our costs of having to investigate the hack that occurred on November 17, [2015], and so the jury granted us those costs, which was about $13,299,” explained Claude Szyfer, of Manhattan law firm Stroock & Stroock & Lavan LLP, who was Saunders’s trial counsel.

Ms. Salem had argued that Saunders owed her more than $400,000 in commissions, but because the jury decided she breached her contract, Saunders will not be required to pay her.

“Her claim was that she was entitled to certain commissions that came due after she left, and our position was that, because she breached, she was not entitled to those commissions,” Mr. Szyfer said.

“Obviously, we were displeased with the verdict,” said Bob Folks, Ms. Salem’s attorney of the firm Robert L. Folks and Associates LLP in Melville. But he added that the fact that the jury awarded Saunders just $1 for the breach of contract claim shows that Saunders did not prove that it had suffered any damages.

Mr. Folks denied that Ms. Salem took any listings from Saunders besides her own.

“The only evidence that’s in this case is that she brought over to Compass her own listings,” Mr. Folks said. “There were 441 of them. The standard in the industry is, if you are the salesperson named in the listing, you can take them to your new agency. And this was reaffirmed by Mr. Saunders himself, who, by the way, was an avid practitioner, because whenever he took on a news salesperson, it was expected that you would bring your listings with you.”

Ms. Salem did not use the database to take listings, according to Mr. Folks. “She went into the Saunders database after she had left because she was looking for a place to live,” he said. “She never used them, never downloaded anything, never took anything, never changed the system, didn’t do anything to it.”

Regarding the defamation claim, Mr. Folks maintains that “the evidence shown at trial showed Saunders’s sole goal was to stop Meg Salem from going to Compass as a successful salesperson.”

Though the trial is over, the matter is not necessarily resolved.

“There’s two steps we can take, and we’re considering them both,” Mr. Folks said. “One is to make a motion to the court to overturn the verdict as improper as a matter of law. And the second is to file an appeal with the 2nd Circuit Court of Appeals.”

He is leaving both options on the table.

“We have a little time to do it, and we want to be very careful in how we do this. But we don’t believe this is in any way the end of the line,” Mr. Folks said.

However, Saunders is not looking to pursue the matter any further. “We obviously are very satisfied by the jury’s verdict, and we don’t have any other outstanding claims against her,” Mr. Szyfer said.

Saunders’s original claim also named Compass and three other former Saunders employees who defected to Compass: marketing administrator Jessica Grainger-Rozzi, and agents from the “Meg Salem Team,” Jesse Spooner and Vanessa Bogan. All of those claims were dropped before trial, leaving Ms. Salem as the sole defendant.

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