Newmark messes with Texas

Brokerage sues Houston-based Transwestern and Jonathan Tootell, alleges breach of contract
By Konrad Putzier | August 28, 2015 03:15PM

Newmark Grubb Knight Frank is suing one of its former brokers, Jonathan Tootell, claiming that he breached his contract with the firm when he jumped ship to rival Transwestern.

Transwestern is also named as a defendant, court documents filed Friday show. NGKF is accusing the Houston-based property management and brokerage firm of “tortious interference” with Tootell’s contract at Newmark.

Tootell, who is chair of the Young Men’s/Women’s Real Estate Association of New York, resigned from Newmark in April and joined Transwestern’s New York office as a partner the same month. Newmark’s suit alleges its President Jimmy Kuhn never accepted Tootell’s resignation, arguing he is still bound by an employment agreement prohibiting resignation or work for rival firms until January 2016. His premature departure “damaged Newmark’s business” by costing it any commissions it would have received from his deals over the remaining nine months of the contract, the suit states.

Newmark also alleges that “Transwestern knew or should have known” of its agreement with Tootell, and that it “induced” him to breach it.

Tootell and Transwestern did not respond to requests for comment.

The suit comes as Transwestern, a large player nationally but a relative newcomer to New York, is looking to take market share away from leading incumbents like Cushman & Wakefield, JLL and Newmark. The firm’s New York office, co-headed by Lindsay Ornstein and Patrick Robinson, opened in 2011 and has since grown to 69 employees, according to the company website. In April 2013, the MTA tapped Transwestern to manage its two million-square-foot portfolio of office buildings. The firm is also the exclusive leasing agent for the Olympic Tower, an office building at 645 Fifth Avenue.

Newmark’s employment contracts were in the news in 2011, when brokers complained about its plans to partially pay commissions in company stock. According to sources, Newmark later backtracked.