Douglas Elliman, broker in bust up over $150K in commissions

Firm, Michael Meier to square off in front of mediator today; agent was member of star team that unraveled in 2009

Aug.August 07, 2014 01:30 PM

A longstanding legal dispute between Douglas Elliman and a former top broker is headed to court-ordered mediation today.

Broker Michael Meier, a member of the now-disbanded Sporn-Roth Group at Elliman, sued the brokerage along with Lenny Sporn and Mickey Roth in 2009, alleging he was bilked out of more than $150,000 in commissions. Last fall, a judge ruled in Meier’s favor with regards to his dispute with Sporn and Roth, but not Douglas Elliman.

Meier says the brokerage knew he wouldn’t be paid when the firm sent one commission check to the team. But his claims have dragged on, necessitating the use of a mediator to settle the matter.

Beyond the legal minutiae, the case offers a glimpse behind the scenes at one of Douglas Elliman’s formerly top-producing sales teams, which unraveled amid the financial crisis.

Meier initially filed suit in New York Supreme Court in August 2009, shortly after leaving Douglas Elliman for Charles Rutenberg Realty.

In court documents, Meier alleged he was owed $150,651 for his role in 11 transactions, including the sale of 14 East 75th Street and 107 West 25th Street, for which he was owed more than $90,000. Douglas Elliman cut a check to the team, Meier alleged, but he never saw the money.

According to the 2009 complaint filed by Meier, he was earning a 60 percent commission split as an independent contractor at Douglas Elliman, with the remaining 40 percent shared by Sporn and Roth (who earned 5 percent each) and Douglas Elliman (30 percent). Meier also got a cut when the team brokered deals resulting from a listing he obtained or resulting from information he shared with members of the team.

In response to Meier’s claims, Sporn and Roth filed a counterclaim alleging that Meier took a proprietary listings database when he left Douglas Elliman and their team in 2009. In the counterclaim, they sought $3.7 million in damages.

For its part, Douglas Elliman maintained in court documents that it was only obligated to send a single check to the sales team. “When an agent is a member of the team, all of the commissions earned by that agent are attributed to the team, and not the individual agent,” court documents said. “The individual agent forfeits his or her individual financial relationship with Douglas Elliman, in order to form one entity which collectively earns a larger commission split.”

But the brokerage, which had initially answered Meier’s claim jointly with Sporn and Roth, severed its argument from theirs after Sporn and Roth failed to show proof that Meier wasn’t owed the commission, according to court documents.

The Roth-Sporn Group was once the fifth highest-grossing sales team at Douglas Elliman. In 2008, it briefly merged with the Bracha Group, and the combined team had the most transactions of any team at Elliman that year, as The Real Deal reported at the time.

But the partnership lasted less than a year and, in 2009, Meier left Douglas Elliman for Rutenberg. Later that year, he launched his own boutique brokerage, the Meier Group.

A few months after Meier’s departure, Roth and Sporn also left Elliman and formed a short-lived firm of their own, Park River Properties. In 2010, Roth founded Galleria Group, which merged briefly with Urban Sanctuary.

Meanwhile, Sporn returned to Elliman, where he’s now part of the Tavivian Sporn Team.

In November, Judge Paul Wooten ruled in favor of Meier in his dispute against Sporn and Roth, ordering them to pay Meier a little more than $210,000 – an amount that represents the original payment he was owed, plus 9 percent annual interest.

Nine months later, Meier is currently seeking payment, but he told The Real Deal in a brief phone conversation that he was pleased. “I won,” he said.

Both Sporn and Roth referred requests for comment to their attorney, Robert Rimberg, who told TRD that he anticipated the case would be settled within days. “They’re getting it resolved and hopefully it will be over in the next few days,” he said.

With today’s mediation, Meier’s long dispute with Elliman also appears to be nearing a close. In his decision in November, Judge Wooten wrote that certain “triable issues” remain questionable, including “whether Douglas Elliman knew when it sent the checks to the [Sporn-Roth Group] that Meier would not receive his share, and whether Douglas Elliman breached its contract with Meier when it sent the checks to the team with knowledge of the dispute between Meier and the team.”

A spokesperson for Douglas Elliman said the brokerage doesn’t comment on litigation.

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