Residential real estate brokerage Town Residential has filed suit against its former new development chief, Reid Price, claiming he owes the firm nearly $500,000 and breached a noncompete agreement by accepting a job offer from rival Douglas Elliman.
Price, one of the first recruits of the two-year-old brokerage, departed Town in April and joined Elliman several weeks later to work on marketing projects such as the 33-unit Sterling Mason at 71 Laight Street in Tribeca. Price joined Town in 2010 as a managing director with a seven-year contract, the suit says.
The suit, filed late last month in New York State Supreme Court, alleges that Price reneged on his obligations to Town by working in a new development role at Elliman. While Price’s contract with Town allowed him to work as a regular sales broker at a competing firm, it specifically barred him from working on new developments at several real estate companies — including Douglas Elliman, Brown Harris Stevens, the Marketing Directors and CORE — for two years after leaving Town, the suit alleges. He was also forbidden from working in any capacity as an in-house broker for developers such as the Related Companies or Extell Development, according to the suit.
Price has not yet submitted an answer to the complaint but said in a statement: “The allegations in the lawsuit are inaccurate and unfounded, and they will be defended vigorously.”
A spokesperson for Elliman, which was not named as a defendant in the suit, declined to comment.
Town is seeking a permanent injunction preventing Price from working at Elliman, where he has allegedly approached developer clients of Town. Without the injunction, the firm said it will incur “irreparable damage.” It is also seeking $460,000 that Price allegedly received in the form of profit-sharing loans, plus interest.
Price was compensated via a share of the operating profits of the new development division, as well as through a series of $20,000 monthly loans against future profits made in the form of promissory notes. Price allegedly received notes totaling $460,000 over his tenure at the brokerage, according to the complaint.
Price “abruptly” quit by email on April 1, the suit says. “Price had given no prior notice of his resignation,” the complaint said. “Price did not prepare any departure memorandum or any other writing concerning the status of the division’s marketing and sales efforts and refused to discuss the status of those efforts.”
Town CEO Andrew Heiberger said in a statement to The Real Deal that he had yet to sue anyone in his two-decade real estate career, but noted that he was not concentrating on the litigation.
“It’s out of my hands,” he said. “I am focused on closing deals.”