APPEAL from the Circuit Court of Cook County; the Hon. CHARLES
R. BARRETT, Judge, presiding.
MR. JUSTICE BURKE DELIVERED THE OPINION OF THE COURT:
This is an action brought under the Illinois Antitrust Act (Ill. Rev. Stat. 1973, ch. 38, par. 60-1 et seq.) wherein the plaintiff has alleged that the defendants have violated subsections 3(1) and 3(2) of the Act. (Ill. Rev. Stat. 1973, ch. 38, pars. 60-3(1), (2).) The circuit court of Cook County, in a bench trial, found for the defendants on all counts and denied the plaintiff's prayer for damages and injunctive relief. The plaintiff appeals contending that the trial court erred in finding that the defendants had not violated the Antitrust Act. The plaintiff contends that the defendants had unreasonably restrained trade by: (1) entering into an agreement not to deal with the plaintiff and other real estate brokers who were not members of the defendants' multiple listing service, and (2) refusing membership in their multiple listing service to the plaintiff and other real estate brokers based upon certain membership requirements which the defendant alleges are unreasonable.
The evidence at trial revolved around the H-F Group Multiple Listing Service in which the four defendant real estate companies were the only members. There is little disagreement concerning the facts in the case. Any disagreement relates to the inferences and legal conclusions one may draw from the facts. The H-F Group's real estate business was primarily conducted in the Homewood, Flossmoor and Olympia Fields area in the south suburbs of Cook County. The plaintiff, Ruby Ray Blake, was a licensed real estate broker who was unsuccessful in her attempts to obtain the cooperation of the H-F Group in sharing commissions with her on sales made to clients she referred to them and in her efforts to gain membership in the group. The plaintiff contends that the defendants' concerted refusal to cooperate and their denial of membership to her and others constituted an unreasonable restraint of trade in violation of the Illinois Antitrust Act.
The H-F Group Multiple Listing Service was organized in March of 1969 by the four defendant real estate companies who remained through the time of trial the only members. The four defendant companies are: C.A. Baker Real Estate, F.C. Naughton & Company, Inc., E.M. Seay, and F.W. Prindiville & Company Real Estate. Each of these companies has its sole office in the Homewood-Flossmoor area and the four are the oldest real estate firms in the area. They primarily deal in the sale of residential properties in the Homewood-Flossmoor area.
The president or senior partner in each of the four defendant firms testified at trial concerning their reasons for organizing the H-F Group Multiple Listing Service and the operation of this service. Henry J. Bodnar, the President of both the H-F Group and his own firm, F.C. Naughton & Company, testified that prior to the formation of the H-F Group, the four member firms had "cooperated" with many other real estate firms. The term "cooperation" when used in the real estate business means that a real estate broker who has a client desiring to purchase a home may refer that client to another broker who has a home listed in which the client is interested. If the client then decides to purchase the home, the referring broker and the selling broker will "cooperate" by sharing the commission earned from that sale.
Mr. Bodnar testified that the four defendant firms had a number of problems when they were cooperating with other brokers. He complained of incidents where the brokers they referred clients to were often very unfamiliar with the homes they were selling and the community in which the homes were situated. He stated that this led to his clients being given inadequate service.
Ernest M. Seay, the President of the E.M. Seay firm, another defendant, testified that at the time the defendants formed the H-F Group Multiple Listing Service, there was another group already in existence, the South Suburban Multiple Listing Service. South Suburban, as the H-F Group, was a multiple listing service which is an organization of real estate brokers which shares with its members the listings of all real estate parcels for sale which the other members have. This type of organization is apparently quite common throughout the United States. When a home is listed for sale with a certain member broker, that broker will share the listing with all the members of the listing service. If a sale is made by one of the members, then there is an arrangement provided for the sharing of the commission earned.
Mr. Seay testified that the South Suburban group covered a much wider area than the Homewood-Flossmoor area. The defendants had no interest in joining this group, Mr. Seay testified, because they did not feel they could properly serve persons selling homes in areas outside of the immediate Homewood-Flossmoor area. The defendants felt this way because they believed that to adequately serve their clients, all of their sales people should be personally familiar with both the home to be sold and its surrounding area. Because the defendants did not desire to join the South Suburban group, and because they felt they had to "meet the competition" of that group, the defendants formed their own multiple listing service, which was to be confined to the Homewood, Flossmoor and Olympia Fields area. Cornelius Baker and William Moore, who were partners in the other two defendant real estate firms, also testified that the H-F Group was formed to meet the competition of the South Suburban group.
In March of 1969, the four defendant real estate firms formed the H-F Group Multiple Listing Service. The charter of the H-F Group was set forth in an agreement signed by representatives of the four defendant firms. Paragraph 2 of the agreement provided that:
"2. Each of the Realtors shall have the right to offer for sale, subject to the terms of this Agreement, any residential real estate on which any other Realtor has an exclusive listing. Such right shall not be given to other persons, firms or corporations who are not part of this Agreement."
In October of 1969 the agreement was amended to include certain membership requirements for new brokers who might apply for membership. These included that an initiation fee of $1000 be paid, a requirement that the applicant must not employ part-time salespersons, that the applicant not have more than one office, and that that office must be located in Homewood, Flossmoor or Olympia Fields. These membership requirements and the rule in paragraph 2 that members of the H-F Group may not cooperate with nonmember brokers are the basis of the plaintiff's case.
Mr. Bodnar, the H-F Group president, testified that the "sole office" rule was established because the defendant firms had had unsatisfactory experiences with multiple office firms showing people homes in their area in instances where the salesperson knew nothing about the home or the community. Bodnar also testified that the "no part-time salespersons" rule had been established because they had had many bad experiences with part-time sales people who lacked the motivation or training to do a good job or who were out of the office just when they were needed.
The defendants testified that each had its sole office in the Homewood-Flossmoor area and employed only full-time real estate salespersons. They also testified that all of their sales people would tour every home they had listed for sale each Tuesday morning in what they termed the "Tuesday morning sales caravan." The defendant firms did almost all their business in Homewood, Flossmoor and Olympia Fields with occasional sales in nearby Hazel Crest, Glenwood and Chicago Heights. Great emphasis was put on each of the defendant's salespersons being fully informed about the homes they were selling and the surrounding community.
Ruby Ray Blake, the plaintiff, is a licensed real estate broker in Illinois and is the sole proprietor of the S. Ray & Blake Realty Company, which has an office in Harvey, Illinois, a suburb in southern Cook County. This office was opened in September 1967 and until several months prior to trial, the plaintiff had two to four sales people working in that office. At the time of trial, she only had a single part-time sales person working at her Harvey office.
The plaintiff had made most of her sales in the Harvey area, but she was interested in selling homes throughout the south suburban area, including the Homewood-Flossmoor area. She testified that the Homewood-Flossmoor area is about a 15- to 25-minute drive from her Harvey office, depending on the part of the area to which one would be driving. A cross-section of application forms of some of the plaintiff's clients seeking homes demonstrated that the plaintiff did have clients who were financially able to purchase homes in the Homewood-Flossmoor area. Homes in that area generally started at about $28,000, with most in the $40,000 plus range. The plaintiff testified that many of these clients were willing to purchase homes in the Homewood-Flossmoor area if they found the type home they were looking for there. She also testified, that while she had little personal knowledge of the Homewood-Flossmoor area, she had access to various publications which detailed what community resources were available there. From time to time she would advertise in newspapers which in part covered the Homewood-Flossmoor area. Plaintiff testified that she had sold a home in Flossmoor through a listing she had obtained from her membership in the South Suburban Multiple Listing Service.
The plaintiff's initial contact with the defendant multiple listing service, the H-F Group, was in May of 1970. The plaintiff contacted the E.M. Seay Company, a member of the H-F Group, about showing homes in the Homewood-Flossmoor area to a client of hers, a Bishop Primm. The Seay Company did show several homes to the plaintiff's client, but a sale was never consummated. During this time the plaintiff contacted Mr. Bodnar, the President of the H-F Group, by telephone about cooperating by sharing commissions on sales made through clients she referred to the H-F Group. Mr. Bodnar testified that he explained to the plaintiff that the members of the H-F Group had a policy against sharing commissions with nonmember brokers. While the defendants showed a willingness to show homes to the plaintiff's clients, they never agreed to share commissions with her.
In September of 1970 the plaintiff sent a letter to the H-F Group indicating that she would like to join their multiple listing service. She received a reply which informed her that she was ineligible for membership because she did not have her office in Homewood, Flossmoor or Olympia Fields. Another request and a similar denial were exchanged several months later, this denial quoting the "sole office" provision of the H-F Group's by-laws. There was testimony that other brokers had also been excluded from membership in the H-F Group based upon the fact that they did not have their sole office in Homewood, Flossmoor or Olympia Fields.
In addition to the H-F Group, there were several other multiple listing services who had listings in the Homewood-Flossmoor area. The South Suburban Multiple Listing Service, mentioned previously, had been formed prior to the H-F Group and it covered a wide area in southern Cook County including the Homewood-Flossmoor area. The plaintiff testified that she joined South Suburban in about June of 1970 and had sold a home in Flossmoor through a listing she had obtained by virtue of her membership in the group. In September of 1970, a number of the large real estate firms terminated their membership in South Suburban. The plaintiff testified that South Suburban had therefore become "inactive" due to the loss of the listings provided by the large firms.
A number of firms who were members of South Suburban then formed a new group, the Exchange Multiple Listing Service. The formation of the Exchange group was followed shortly by the formation of the Homewood Flossmoor Board of Realtors Multiple Listing Service (not to be confused with the defendant H-F Group). This group was formed in 1972, approximately a year before this case was tried. There were approximately 18 real estate firms in the Homewood Flossmoor Board of Realtors group. The defendants were not members of this group. A number of former members of the Exchange group, however, were members of the Board of Realtors group. The Board of Realtors group covered an area which included Homewood, Flossmoor and Olympia Fields, but also extended beyond this immediate area. From October of 1972 through November of 1973 this group sold 1,796 homes which amounted to $58,826,522 in sales. The group had only two membership requirements: that the applicant be a licensed real estate broker and that the applicant have an office located in the jurisdictional boundaries of the group's area. They did not require the applicants to be single office firms with their sole office in the area as the H-F Group did. The plaintiff, however, did not have an office in their area, and could not become a member unless she established an office there.
In addition to being a member of the South Suburban Multiple Listing Service, the plaintiff was also a member of the National Multiple Listing Service. The plaintiff estimated that her membership in the National group gave her access to about 100 listings in ...