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Marcus & Millichap Real Estate Investment Services Inc. v. Sekulovski

June 2, 2009

MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES INC., AND MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES OF CHICAGO, PLAINTIFFS,
v.
TONY SEKULOVSKI, DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court are the parties' Motions for Summary Judgment. Defendant Tony Sekulovski (hereinafter, "Sekulovski") moved for summary judgment on Counts VII and VIII of the Second Amended Complaint. Plaintiff Marcus & Millichap Real Estate Investment Services Inc. (hereinafter, M&M REIS") and Defendant Sekulovski cross-moved for summary judgment on Count VIII of Defendant's Second Amended Counterclaim. For the following reasons, Plaintiff M&M REIS's Cross-Motion for Summary Judgment is granted and Defendant Sekulovski's motions are denied.

I. BACKGROUND

M&M REIS is a real estate investment services corporation with subsidiaries in various locations throughout the United States. The subsidiaries relevant to the pending motions are Plaintiff Marcus & Millichap Real Estate Investment Services of Chicago, Inc. ("M&M Chicago"), M&M Ohio and M&M Louisville, each of which is a licensed real estate broker in the state in which it operates (Illinois, Ohio and Kentucky, respectively). Each M&M REIS subsidiary employs sales agents on an independent contractor basis.

In November 1999, Defendant Sekulovski became a sales agent with M&M Ohio, the Ohio-based subsidiary of M&M REIS, as his sponsoring broker. In February 2005, Sekulovski ended his relationship with M&M Ohio and became a sales agent with M&M Chicago as his sponsoring broker. Sekulovski remained a sales agent with M&M Chicago until he terminated that relationship on June 15, 2007. Sekulovski subsequently negotiated the terms of his separation and compensation with representatives of M&M REIS and M&M Chicago. Obviously that negotiation failed to resolve all issues between the parties because this lawsuit resulted.

The parties brought multiple claims and counterclaims but on August 26, 2008, the parties stipulated to the dismissal of those claims brought by M&M REIS. Thus, only M&M Chicago's claims and Sekulovski's counterclaims remain before the Court. The pending motions relate to M&M Chicago's claims against Sekulovski for tortious interference with contractual relations and tortious interference with prospective business relations, and Sekulovski's counterclaim against M&M REIS for breach of contract. All of these claims involve real estate deals which Sekulovski allegedly began working on before his termination but which closed afterward.

M&M Chicago's tortious interference claims relate to its failure to receive commission fees for five real estate deals: Arby's, Bradley Place, Paxton Street, Honey Creek and Alameda. There is evidence that Sekulovski began working on each of these deals before June 15, 2007, while M&M Chicago was still his sponsoring broker. For example, Sekulovski prepared and executed representation agreements for the first four deals prior to June 15, 2007. None of these representation agreements listed M&M Chicago as the seller's agent. The representation agreements for Arby's and Bradley Place listed M&M REIS as the agent and the representation agreements for Paxton Street and Honey Creek listed "The Sekulovski Group" or "The Sekulovski and Luttner Group" as agent. There also is evidence that Sekulovski began working on the Alameda deal prior to June 15, 2007, as Alameda's representative, Alan Doppelt, stated in his affidavit that Sekulovski began working on Alameda no later than April 2007. Sekulovski has collected commission fees from the seller for each of these five deals.

The Representation Agreement for the Alameda deal, which Sekulovski produced on the eve of his deposition, is a source of debate among the parties. The agreement listed NAI Horizon, Sekulovski's current sponsoring broker, as agent and was dated June 1, 2008. M&M Chicago disputes the authenticity of this document and Alan Doppelt, Alameda's representative, testified that his signature thereon is forged. Although the Alameda sale has closed, the seller is holding the commission fee in escrow pending resolution of this lawsuit.

Although the Arby's, Bradley Place, Paxton Street, Honey Creek and Alameda deals differ factually, M&M Chicago's tortious interference claims are the same with respect to each one: Sekulovski began working on these deals while working as a sales agent for M&M Chicago so these deals belong to M&M Chicago, not Sekulovski, regardless of what the representation agreements state. Sekulovski's defense is that (1) M&M Chicago had no contract, or any expectation of entering into one, with any of the sellers for these five deals, and (2) M&M Chicago cannot show that it suffered damages by the loss of these commissions because in the normal course commissions are paid to M&M REIS, not M&M Chicago.

Sekulovski's counterclaim against M&M REIS for breach of contract relates to Stony Brook South, a retail development in Louisville, Kentucky. Stony Brook South was listed for sale with M&M Louisville, M&M REIS's subsidiary in Louisville, and was purchased by DBSI. Sekulovski worked on Stony Brook South prior to June 15, 2007, while he was working as a sales agent for M&M Chicago. During that time Sekulovski brought DBSI in as a potential buyer but the parties failed to reach agreement. Later, after Sekulovski terminated his relationship with M&M Chicago, he reintroduced DBSI as a potential buyer, the parties were able to reach an agreement, and DBSI purchased Stony Brook South.

On July 19, 2007, Sekulovski executed a written "Commission Agreement" purportedly between The Sekulovski Group of NAI Horizon and Marcus & Millichap Real Estate Investment Brokerage Company, the predecessor of M&M REIS. In addition to Sekulovski, the document was signed by Larry Hausman, as "agent," and Aaron Johnson, as "principal broker of M&M Louisville." The Commission Agreement states:

This will serve as our agreement of the referral arrangement between The Sekulovski Group of NAI Horizon and Marcus & Millichap Real Estate Investment Brokerage Company: Referral Fee: Marcus & Millichap will pay a $160,000 referral fee to The Sekulovski Group of NAI Horizon upon the close of escrow between Hurstmile, LLC (Seller) and DBSI - Discovery Real Estate Services LLC (Buyer).

Sekulovski now seeks to enforce the Commission Agreement against M&M REIS under the theory that Hausman and Johnson were M&M REIS's agents. M&M REIS argues that Hausman and Johnson were not its agents and, even if it were a party to the Commission Agreement, that agreement lacks consideration.

Sekulovski has moved for summary judgment in his favor on M&M Chicago's tortious interference claims and his counterclaim against M&M REIS for breach of contract. M&M REIS has cross-moved for summary judgment in its favor on Sekulovski's breach of contract ...


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