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John Davis’ Lawsuit Against Keller Williams Won’t Get Its Day In Court

U.S. District Decide Reed O’Connor on Monday granted a movement to compel arbitration in Davis’s case filed in February by Keller Williams, Gary Keller and former KW President Josh Crew.

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Keller Williams co-founder Gary Keller is getting his want: claims towards him and the corporate introduced by former KW CEO John Davis shall be dealt with by arbitration reasonably than by a public trial.

After a listening to Monday, Decide Reed O’Connor of a federal district court docket in Fort Value, Texas, granted a movement to compel arbitration in Davis’s case filed by Keller Williams, Keller, and former KW President Josh Crew final month. Arbitration is a personal course of during which the events agree {that a} impartial third occasion could make a binding choice a few dispute after contemplating proof and listening to arguments.

The ruling suspends the case pending the outcomes of arbitration. How lengthy the method will final is an open query. O’Connor ordered the events to file a joint standing report and both a movement to reopen the case or a movement to dismiss the case two weeks after arbitration concludes.

Within the fall, Davis filed a fraud lawsuit in what Davis stated is an effort to revive his status after sexual misconduct allegations towards him surfaced earlier in 2022 and to get well $300 million in damages. The Oct. 27 grievance additionally names Inga Dow, the CEO of a number of Keller Williams places of work who lodged the allegations towards Davis, as a defendant. On the finish of January, the court docket refused Keller’s request to merge the fits filed by Davis and Dow, ruling that they’ll proceed as two separate instances.

In his swimsuit, Davis alleges he resigned from KW due to a disagreement with Keller over a enterprise technique that he believed would herald much less revenue to Keller Williams places of work, and that Keller and Crew responded by smearing him and withholding Dow’s accusations from him when he was negotiating the sale of his KW market middle areas after his resignation, leading to tens of hundreds of thousands in monetary losses.

In a telephone interview, John Davis spokesperson Paul Omodt advised Inman that whether or not the case is heard by arbitration or a public trial, the reality will ultimately come out.

“Keller Williams can’t disguise from the reality,” Omodt stated. “The reality will nonetheless come out.”

He added that different Keller Williams market middle homeowners have been making related allegations towards Keller and Keller Williams, together with in a lawsuit filed final week.

“It’s not solely John’s fact, but additionally different folks,” Omodt stated. “It simply exhibits the way it’s not the precise method to do enterprise.”

The court docket’s order didn’t elaborate on O’Connor’s causes for granting the movement to compel arbitration.

“We’re more than happy with at the moment’s court docket ruling that enforced the events’ settlement to arbitrate, and we stay up for an arbitrator dismissing this meritless dispute,” KW spokesperson Darryl Frost advised Inman in an emailed assertion, talking on behalf of KW, Keller, and Crew.

Keller, Keller Williams, and Crew filed their movement to compel arbitration in Davis’s case on Feb. 8, arguing that Davis signed “quite a few agreements” with the defendants that embody arbitration clauses. On Feb. 13, Dow advised the court docket she agreed with Keller Williams that Davis’s claims — together with these towards her — must be resolved underneath arbitration.

However on Feb. 16, Davis advised the court docket that an settlement he signed with Keller Williams on Nov. 4, 2020 “expressly cancels all earlier contracts and agreements.”

Furthermore, Davis’s attorneys argued that the arbitration settlement the defendants search to implement is “unconscionable” as a result of it’s designed to forestall franchise homeowners from suing and due to this fact conserving Keller Williams’ alleged wrongdoings from coming to mild. The submitting alleged that Keller runs Keller Williams “just like a felony enterprise, whereby investments and pursuits are taken or devalued by illegal techniques, whether or not by improper discount of market caps or different means, due to Gary Keller’s greed.”

In a Feb. 20 reply to Davis’s submitting, attorneys for Keller, Keller Williams and Crew didn’t deal with Davis’s allegations concerning the operation of Keller Williams. Somewhat, they argued that Davis’s place that the topic arbitration settlement is unconscionable is “unsupported.”

“[T]right here is nothing within the Settlement’s arbitration provisions that’s ‘sufficiently surprising or gross to compel the court docket to intercede,’ which is the usual for substantive unconscionability,” the submitting reads.

“Lastly, arbitration isn’t towards public coverage,” the submitting continued. “It’s properly established that arbitration of disputes between events is strongly favored underneath federal and state legislation.”

E-mail Andrea V. Brambila.

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