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

After a listening to Monday, Choose Reed O’Connor of a federal district courtroom in Fort Price, Texas, granted a movement to compel arbitration in Davis’s case filed by Keller Williams, Keller, and former KW President Josh Group final month. Arbitration is a non-public course of by which the events agree {that a} impartial third social gathering could make a binding determination a couple of 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 mentioned is an effort to revive his status after sexual misconduct allegations in opposition to him surfaced earlier in 2022 and to recuperate $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 in opposition to Davis, as a defendant. On the finish of January, the courtroom refused Keller’s request to merge the fits filed by Davis and Dow, ruling that they are going to 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 Group responded by smearing him and withholding Dow’s accusations from him when he was negotiating the sale of his KW market heart areas after his resignation, leading to tens of hundreds of thousands in monetary losses.

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

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

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

“It’s not solely John’s reality, but additionally different individuals,” Omodt mentioned. “It simply exhibits the way it’s not the correct technique to do enterprise.”

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

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

Keller, Keller Williams, and Group 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 instructed the courtroom she agreed with Keller Williams that Davis’s claims — together with these in opposition to her — ought to be resolved below arbitration.

However on Feb. 16, Davis instructed the courtroom 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 stop franchise homeowners from suing and subsequently preserving Keller Williams’ alleged wrongdoings from coming to mild. The submitting alleged that Keller runs Keller Williams “much like a prison enterprise, whereby investments and pursuits are taken or devalued by means of illegal ways, whether or not by means of 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 Group didn’t deal with Davis’s allegations relating to 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 courtroom to intercede,’ which is the usual for substantive unconscionability,” the submitting reads.

“Lastly, arbitration will not be in opposition to public coverage,” the submitting continued. “It’s nicely established that arbitration of disputes between events is strongly favored below federal and state regulation.”

Electronic mail Andrea V. Brambila.

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