Douglas Elliman is trying to sidestep a payment to Warburg Realty by calling foul on the Real Estate Board of New York’s arbitration process, rehashing a past spat between Bob Knakal and the top resi agent team of Fredrik Eklund and John Gomes.
It all started after Elliman was ordered to pay rival residential brokerage Warburg $244,380 in January after REBNY’s arbitration committee considered the case of a $8 million condominium sale at GDS Development’s 25 Mercer Street, according to court documents. Warburg broker Ana Centola accused Elliman’s Eklund and Gomes of cutting her out of the 2017 deal, and REBNY’s three-person arbitration committee — comprised of JLL’s investment sales chief Bob Knakal, HSP Real Estate Group partner Ira Fishman and Peter Ashe Realty’s Asher Alcobi — unanimously agreed.
About two weeks later, Elliman requested a new arbitration hearing claiming that “bias and impartiality” on the part of Knakal due to a “prior monetary dispute” between him and Eklund and Gomes the brokerage claims resulted in Warburg’s favorable award.
This alleged dispute was that Knakal “claimed a referral fee for his purported referral of a new development to the agents,” according to a letter written by Elliman’s attorney Jessica Rosenberg. Elliman claims Knakal was not involved in negotiating a fee or any discussions with the project developer. As such, Eklund and Gomes did not pay, which led to Knakal allegedly questioning the agents’ ethics, according to Rosenberg.
Then, upon being appointed to be an arbitrator in Eklund and Gomes’ commission dispute with Warburg’s Centola, “Mr. Knakal [sic] demonstrated [sic] his bias by repeatedly questioning the Agents’ ethics during the proceeding,” Rosenberg wrote.
The brokerage’s outside counsel argued that the previous dispute between Eklund, Gomes and Knakal was “remarkably similar” to the Warburg case and “this bias explains how the panel could have improperly awarded to Warburg an amount of $244,380.00 without identifying any basis for its decision or that calculation.” The award is $244,380, more than Centola’s 3 percent commission would have been.
Rosenberg also wrote that Elliman would have objected to Knakal being on the committee, but the brokerage had been unaware of the history between the agents and Knakal, until after they lost the case.
Knakal, however, has a different take on the beef. He denied that his decision was biased and also said he doesn’t “think John and Frederik [sic] believe there was any issue.”
“I thought my relationship with them was good,” he told The Real Deal. “They sold my old apartment at 45 Park and did a great job. I think they are among the best agents in the city.”
Knakal believes the issue involved one of his clients asking for an introduction to the celebrity agents. Knakal said the Elliman brokers then claimed to already know and be working with the client.
“I asked why the client would want an introduction if that was the case and they didn’t give me a good answer. But I let it go. It was not a big deal and wasn’t anything to get upset about,” Knakal told TRD. He said that he turned over his emails to a panel that conducted a procedural review of the hearing in late March in response to Elliman’s concerns about “bias.” The review panel upheld the original decision.
“For years I served as the chairman of REBNY’s arbitration committee and know the do’s and don’ts very well. There was nothing inappropriate here,” Knakal wrote.
Meanwhile, Warburg, which is still waiting on money from Elliman, filed a petition to confirm the arbitration award in mid-April and noted that the $244,380 award has been collecting interest at the rate of 9 percent per year since Jan. 17.
According to Rosenberg’s letter, Eklund and Gomes seem to be on the hook for the award as “they received the majority of the commission at issue in this case.”
Eklund and Gomes declined to comment, as did Elliman. Warburg also declined to comment.