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Real Estate Center

Jun 17, 2009 10:59 AMPublication: The East Hampton Press & The Southampton Press

Simpson suit against heavy-hitters continues

Jun 17, 2009 10:59 AM

The fight against what George and Jean Simpson call an outright case of monopolistic, anti-competitive and illegal behavior in the East End real estate marketplace continues this month as the deadline for responses to their legal claims arrived on June 10.

The Simpsons, owners of the Hamptons Bays-based Suffolk Research Service, filed a $9 million minimum lawsuit against 21 real estate brokerages, four individuals and two real estate service providers on March 6.

Most of the East End’s major real estate players were named in the suit, including the Corcoran Group, Prudential Douglas Elliman, Sotheby’s, Brown Harris Stevens, and Town and Country Real Estate, as well as the company that owns and operates RealNet Solutions and Hamptons Real Estate Online (HREO). Most of these firms have responded with motions to dismiss the case, claiming the Simpsons do not have a legitimate legal position.

In the suit filed in March, the Simpsons alleged that the defendants engaged in anti-competitive practices, collusion, price-fixing, and breaking real estate law via restraint of trade by operating and participating in the Open RealNet Exchange (OREX) system, which the Simpsons describe as an illegal and cost-prohibitive multiple listing service. Those who have responded with motions to dismiss include three separate groups.

In a nutshell, those who have filed motions to dismiss the case are saying that Mr. and Ms. Simpson’s claims can’t be backed up and are, in fact, nothing more than frivolous, conspiracy-theory nonsense.

Eight defendants included in the complaint have not yet filed responses and have now been served with additional default claims by the Simpsons.

The two companies at the core of the battle, RealNet Solutions and Hamptons Real Estate Online Inc.—both owned by Nicholas Khuri—filed a motion to dismiss the case on June 12 through the Manhattan-based law firm of Kagan Lubic Lepper Lewis Gold & Colbert. Calls to the law firm seeking comment were not returned.

Another group, represented by the Manhattan-based firm Strook & Strook & Lavan, consists of several of the larger firms and some of the individuals named in the suit. That group—which includes the Corcoran Group, Prudential Douglas Elliman Real Estate, Sotheby’s International Realty, Norma Reynolds Sotheby’s Real Estate, Saunders & Associates, Tim Davis, Susan Breitenbach, Gary DePersia and Paul Brennan—filed a separate motion to dismiss on June 10.

Attorney Claude Szyfer from Strook & Strook & Lavan said on Friday, June 12, “Our general practice is no comment on pending lawsuits.” He then added that the motion to dismiss—which states that the Simpsons failed to allege antitrust injury and harm to competition, and also failed to allege any plausible conspiracy claims against any of the broker defendants—contained all 
the information needed for a response.

Another group of agencies, which also responded on the June 10 deadline, is being represented by Kohn, Swift & Graf of Philadelphia. This group includes: “Diva” at the Beach Real Estate (doing business as Hampton Homes), Town and Country Real Estate of the East End, Agawam Realty, Mrs. Condie Lamb Agency, Marketplace Realty, Strough Real Estate Associates and Atlantic Beach Realty Group.

When contacted last Friday, attorney Neil Glazer of the firm Kohn, Swift & Graf, said simply, “We don’t believe there’s any merit to the suit.”

The preliminary statement issued by his firm states, “While the complaint contains the usual litany of antitrust jargon and conclusory accusations of a conspiracy, it lacks any of the requirements essential to an antitrust complaint.” The motion to dismiss also states, “Plaintiff George R. Simpson is a prolific pro se litigant having filed numerous meritless lawsuits during the last three years.”

The Simpsons have returned fire with a motion for entry of a default judgment against some of the companies that had not yet responded by the deadline, including: Brown Harris Stevens, Coldwell Banker Prestigious Properties, Devlin McNiff Real Estate, Engel and Volker Real Estate, Keeshan Inc, 91 Jobs Lane Realty (doing business as Beau Hulse Realty Group), the Morley Agency, First Hampton Realty and Simon Harrison Real Estate.

Mr. Simpson, who received copies of the motions to dismiss last week, said he will not give up his fight to correct what he sees as a direct violation of the law.

“I’m sort of a nut on making people do what they’re supposed to do,” he said. “I want to do what’s best for the Hamptons and make them stop breaking the law ... If I win or lose, at least it’s been focused on.”

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