Hamptons, real estate

Real Estate Center

Aug 11, 2009 10:52 AMPublication: The East Hampton Press & The Southampton Press

Simpsons drop lawsuit against real estate heavyweights

Aug 11, 2009 10:52 AM

Earlier this month, George and Jean Simpson withdrew their lawsuit against 25 of East End’s most successful real estate brokerages, agents and service providers, seeking at least $9 million.

The lawsuit, filed in March, charged that the companies and individuals named were acting illegally by using monopolistic and anti-competitive behavior to control the Hamptons real estate market. Among the charges filed in the lawsuit were collusion, price-fixing and breaking real estate law via restraint of trade by operating and participating in the Open RealNet Exchange (OREX) system.

The lawsuit was withdrawn on Wednesday, August 5.

The Simpsons, who have been representing themselves in the case, own the Hamptons Bays-based Suffolk Research Service, a company which provides data on East End real estate transactions. Ms. Simpson is also a real estate broker.

Mr. Simpson has described OREX, owned by Nicholas Khuri, as an illegal and cost-prohibitive multiple listing service that charges approximately $40,000 in annual subscriber rates, making it too expensive for small firms to use.

Other companies included in the lawsuit, in addition to OREX, were Hamptons Real Estate Online (HREO), which is also owned by Mr. Khuri, and most of the big East End firms, including Brown Harris Stevens, the Corcoran Group, Prudential Douglas Elliman, Sotheby’s and Town and Country Real Estate. Four individuals were also named in the suit: Corcoran’s Tim Davis, Susan Breitenbach and Gary DePersia, and Prudential’s Paul Brennan.

In an e-mail on Tuesday morning, Mr. Simpson said he is still adamantly opposed to the use of OREX, even though he has dropped his lawsuit.

“The exclusionary subscription to and use of RealNet/OREX by 30 real estate agencies and their hundreds of agents is a cruel and illegal violation of civil and criminal law. Such subscription and use damages non-subscriber brokers, agents, buyers, and sellers in the Hamptons,” he wrote. “All subscriptions to RealNet/OREX and other illegal real estate practices must be stopped.”

Most of the parties targeted in the lawsuit responded to the Simpsons’ allegations with motions to dismiss the case back in June, claiming the Simpsons did not have a legitimate legal position.

In seeking a response to the lawsuit being dropped, Tuesday morning calls made to Mr. Khuri and his legal counsel, the Manhattan-based law firm of Kagan Lubic Lepper Lewis Gold & Colbert, were not immediately returned.

Attorney Claude Szyfer from the Manhattan-based law firm of Strook & Strook & Lavan—which represents several of the larger firms and some of the individuals named in the suit, including the Corcoran Group, Prudential Douglas Elliman Real Estate, Sotheby’s International Realty, Norma Reynolds Sotheby’s Real Estate, Saunders & Associates, Mr. Davis, Ms. 
Breitenbach, Mr. DePersia and Mr. Brennan—said on Tuesday morning that he was not at liberty to comment on the case

Calls made to Philadelphia-based Kohn, Swift & Graf—whose clients include “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—on Tuesday morning were also not immediately returned.

Earlier this week, Mr. Simpson hinted that although he and his wife had dropped the lawsuit for now, what they see as a David-vs.-Goliath fight for justice is not over.

“We withdrew the lawsuit, but we are not through fighting this battle,” Mr. Simpson said, adding that he will continue to shed light on the exclusionary practices he said are still being conducted on the East End. “Additional and expanded legal moves can be expected in the coming months. The suit attracted lots of attention to the illegal and damaging actions of the subscribers of RealNet/OREX. Many small brokers are literally going broke because they are being excluded due to high prices of the service.”

This article may be updated throughout the week at 27east.com.

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