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

October 29, 2009

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



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

Magistrate Judge Arlander Keyes

MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT AS A MATTER OF LAW AND REQUEST FOR NEW TRIAL

I. INTRODUCTION

From October 5, 2009, through October 9, 2009, this Court conducted a jury trial in this matter. At the close of Plaintiff/Counter-Defendant Marcus & Millichap Real Estate Investment Services of Chicago, Inc.'s ("M&M Chicago") case-in-chief, Defendant/Counter-Plaintiff Tony Sekulovski ("Sekulovski") made a motion pursuant to Fed. R. 50(a) for judgment as a matter of law. Sekulovski's motion was granted in part and denied in part. M&M Chicago made a similar motion at the close of Sekulovski's case-in-chief, which was granted in part and denied in part. On October 13, 2009, the jury returned a verdict in favor of M&M Chicago on all of its remaining claims against Sekulovski. The jury also returned a verdict in favor of M&M Chicago and against Sekulovski on all of Sekulovski's counterclaims.

Sekulovski now renews his Motion for Judgment as a Matter of Law pursuant to Fed. R. 50(b) and, alternatively, requests a new trial pursuant to Fed. R. 59.

II. ARGUMENT

A. Sekulovski is Entitled to Judgment as a Matter of Law on M&M Chicago's Fraud Claim

M&M Chicago's fraud claim was based solely on an allegation made by one of its former agents, Mark Luttner ("Luttner"), who alleged that he and Sekulovski had devised a plan to run all commission splits through Sekulovski so that Luttner would ultimately receive more in commissions than he was otherwise entitled at the expense of M&M Chicago. Sekulovski denied the existence of any such agreement between him and Luttner.

The evidence presented to the jury at trial demonstrated that Sekulovski and Luttner agreed to split commissions in a variety of ways on several transactions and that M&M Chicago was aware of the manner in which the commissions were being split. Indeed, both Jonathan Lee, the former regional manager for M&M Chicago, and John Kerin, the corporate representative for M&M Chicago at trial, testified that they were aware of and approved the splits. M&M Chicago's sole basis for alleging fraud after the fact is Luttner's claim that Sekulovski was going to pay a portion of his commissions to Luttner. However, the evidence at trial also demonstrated that Sekulovski did not pay any portion of his commissions to Luttner and Sekulovski denied that he ever agreed to pay any commissions to Luttner.

In order to establish a claim for fraud, M&M Chicago was required to prove:

1. The statements Sekulovski made in the commission booking statements were false statements of material facts;

2. Sekulovski knew the statements were false or believed the statements to be false or made the statements in reckless disregard of whether they were true or false;

3. Sekulovski made the statements with the intent to induce M&M Chicago to pay a larger percentage of commissions than Mr. Sekulovski was entitled to;

4. M&M Chicago reasonably believed the statements and acted reasonably in justifiable reliance on the truth of the statements; and

5. M&M Chicago sustained damages as the result of its reliance.

Gerill Corp. v. Jack L. Hargrove Bldrs., Inc., 128 Ill.2d 179, 538 N.E.2d 530 (Ill. 1989).

As the undisputed evidence demonstrated, the commission booking statements did not contain false statements. Rather, they merely reflected the manner in which the commissions on each particular transaction were to be split. The evidence at trial established that agents were permitted to split commissions as they saw fit so long as M&M Chicago approved the splits. M&M Chicago did indeed approve the commission booking statements and distributed commissions accordingly. Further, Sekulovski specifically denied making any false statements or intending to mislead M&M Chicago in any way. Therefore, M&M Chicago failed to prove all of the elements necessary to establish fraud and the Court should enter judgment as a matter of law on that claim in favor of Sekulovski.

B. Sekulovski is Entitled to a New Trial on M&M Chicago's Fraud Claim and Must be Permitted to Present All Evidence Regarding Mark Luttner

In the event the Court does not grant judgment as a matter of law on M&M Chicago's fraud claim, it should order a new trial on the claim and allow Sekulovski to present all evidence concerning Luttner without redaction. At trial, Sekulovski attempted to demonstrate that Luttner was not a credible witness but, rather, was influenced by M&M Chicago. Sekulovski sought to introduce an e-mail dated March 18, 2008, in which Luttner told Sekulovski that during his deposition testimony, Luttner told M&M Chicago "what they wanted to hear." (DX 1117). However, the Court sustained M&M Chicago's hearsay objection and allowed Sekulovski to present the e-mail only after redacting the most crucial portion.

Similarly, Sekulovski sought to present a second e-mail dated October 13, 2008, in which Luttner said that M&M Chicago was paying his legal bills associated with his separate lawsuit against Sekulovski and that M&M Chicago represented that it was going to drive Sekulovski to bankruptcy. (DX 118). Again, the Court ordered Sekulovski to redact these portions of the e-mail before admitting it into evidence.

Sekulovski argued at the trial that the e-mails were not being offered for the truth of the matter asserted but, rather, to show bias and Luttner's lack of credibility. The Court nevertheless sustained M&M Chicago's objections. Thus, Sekulovski's ability to show ...


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