Re/max International, Inc., Re/max Northeast Ohio Limited Partnership, Intervenors-Appellees v. Realty One, Inc., Smythe, Cramer Company

271 F.3d 633, 51 Fed. R. Serv. 3d 1389, 2001 U.S. App. LEXIS 24190, 2001 WL 1388892
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 9, 2001
Docket00-4235
StatusPublished
Cited by128 cases

This text of 271 F.3d 633 (Re/max International, Inc., Re/max Northeast Ohio Limited Partnership, Intervenors-Appellees v. Realty One, Inc., Smythe, Cramer Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Re/max International, Inc., Re/max Northeast Ohio Limited Partnership, Intervenors-Appellees v. Realty One, Inc., Smythe, Cramer Company, 271 F.3d 633, 51 Fed. R. Serv. 3d 1389, 2001 U.S. App. LEXIS 24190, 2001 WL 1388892 (6th Cir. 2001).

Opinions

OPINION

CLAY, Circuit Judge.

Defendant, Realty One, Inc. (“Realty One”), appeals the district court’s summary enforcement of a settlement agreement in this antitrust action instituted by rival northeast Ohio real estate brokerage firm RE/MAX International, Inc (“RE/ MAX”). After the parties reached a settlement agreement, the district court dismissed the case with prejudice without incorporating the terms of the agreement into its order or explicitly stating that it was retaining jurisdiction to enforce those terms. On appeal, Realty One challenges the district court’s jurisdiction to enforce the settlement agreement. Realty One also contends that even assuming the district court had jurisdiction to enforce the settlement agreement, it abused its discretion by not limiting its order to the terms in the transcript of the settlement proceedings. For the reasons that follow, we AFFIRM the district court’s judgment.

BACKGROUND

A. Initial Proceedings

RE/MAX is a franchisor of a real-estate brokerage system which it sells to franchisees across the nation, including northeast Ohio. Intervenor RE/MAX Northeast Ohio Limited Partnership is the RE/MAX sub-franchisor for the northeast Ohio region, which consists of Cleveland and the surrounding area. Defendants Realty One and Smythe, Cramer Company (“Smythe, Cramer”) are the largest real estate brokerage companies in northeast Ohio in terms of market share. RE/MAX filed suit against Realty One and Smythe, Cramer in the United States District Court for the Northern District of Ohio, alleging that their practice of paying brokers associated with RE/MAX’s franchisees lower commissions on split commission transactions violated the Sherman Antitrust Act and analogous state laws. This practice was known as an “adverse split” and was allegedly designed to drive RE/MAX out of business in northern Ohio by deterring its agents from doing business there.1 The case was initially assigned to District Judge David Dowd, who granted Defendants’ motions for summary judgment as to some of RE/MAX’s claims. See Re/Max Int’l Inc. v. Realty One, Inc., 924 F.Supp. 1474 (N.D.Ohio 1996). RE/ MAX appealed and Realty One cross-appealed. We reversed in part and remanded for further proceedings. See Re/Max [637]*637Int’l, Inc. v. Realty One, Inc., 173 F.3d 995 (6th Cir.1999).

The case proceeded to trial on April 10, 2000. Judge Dowd bifurcated the trial. After the presentation of the evidence, Judge Dowd instructed the jury to first decide whether Defendants had entered an agreement to issue adverse splits, which was an essential element of RE/MAX’s federal antitrust claim. Following deliberations, the jury returned a verdict finding that Realty One and Smythe, Cramer had illegally agreed to restrain trade. Judge Dowd then instructed the jury to consider additional elements of RE/MAX’s claims. During deliberations on these issues, the jurors posed a question that suggested they had misunderstood Judge Dowd’s instructions regarding their earlier deliberations. Finding that the earlier misunderstanding could not be corrected, Judge Dowd declared a mistrial on June 26, 2000. On that same day, the case was transferred to District Judge James Gwin’s docket and a new trial was scheduled for August 7, 2000. Settlement negotiations commenced shortly thereafter.

B. Settlement Negotiations

On June 29, 2000, Judge Gwin appointed Judge Dowd to mediate settlement discussions with the parties. After Judge Dowd’s efforts to mediate the dispute proved unsuccessful, Judge Gwin conducted mediation sessions with the parties on July 11, 12, and 13, 2000. The settlement discussions focused on two areas-a multimillion dollar monetary settlement and limitations regarding future commission-splitting and related matters. After many hours of negotiations, the parties significantly narrowed their gap with regard to a monetary settlement. The parties then shifted their focus to the issues associated with their future commission-splitting relationship. On July 13, 2000, RE/MAX and Smythe, Cramer reached a comprehensive settlement agreement. Judge Gwin asked RE/MAX and Smythe, Cramer to state the general terms of their agreement on the record. The parties did so, and stated their understanding, confirmed by the court on the record, that they would complete a written settlement agreement within forty-five days.

At the time the RE/MAX Smythe, Cramer settlement was reached, Realty One had refused to settle with RE/MAX and indicated that it was prepared to go to trial.2 In particular, Realty One would not [638]*638agree to the same limitations upon future conduct to which Smythe, Cramer had agreed. However, as RE/MAX and Smythe, Cramer confirmed their agreement on the record, Realty One’s counsel unexpectedly stated that he desired a settlement on the same terms as Smythe, Cramer, except that Realty One would pay nearly twice as much in the settlement.3 The next day, the district court entered an order dismissing the action with prejudice pursuant to Federal Rule of Civil Procedure Rule 41(a)(2).

C. Post-Settlement Activities

In the days that followed, Realty One issued a press release indicating that the “[f]inal details of the settlement ... [were] being conducted by attorneys for the various parties.” (J.A. at 1025.) Realty One also circulated a newsletter to its employees which stated “[Realty One has] reached an agreement, in principle, to settle our long-running lawsuit with RE/ MAX. Though the details are still being finalized, the definitive agreement is expected by the end of August.” (J.A. at 1025.) Over the course of the next month and a half, the parties engaged in continued talks, but failed to prepare a draft of the final agreement.

First, RE/MAX sent a draft of a written agreement to Realty One on July 25, 2000. Realty One did not respond to RE/MAX’s draft for over three weeks. On August 17, 2000, Realty One informed RE/MAX that it was “not necessary to prepare any additional documentation concerning the settle[639]*639ment” because “the transcript dictated by Judge Gwin and agreed to by counsel and the parties in court on July 13, 2000, is the complete settlement of the parties.” (J.A. at 1810). Realty One also claimed that RE/MAX’s proposed draft contained “additional terms and provisions” not included in the July 13, 2000 settlement. Yet, Realty One failed to identify the allegedly different terms despite repeated requests to do so.

On August 24, Realty One’s counsel sent a letter to RE/MAX’s counsel which stated,

The July 13 agreement does not require any additional written agreement (except the ... [written] releases). However, as I indicated in our [August 17th] conversation, if plaintiffs believe that it may be useful to incorporate the terms of the agreement as dictated by Judge Gwin in a separate document we are willing to discuss preparing such a document.

(J.A. at 1812.)

RE/MAX responded the next day by again asking Realty One to identify the specific terms it found objectionable by providing a “black-lined” version of the agreement, which Realty One failed to do.

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271 F.3d 633, 51 Fed. R. Serv. 3d 1389, 2001 U.S. App. LEXIS 24190, 2001 WL 1388892, Counsel Stack Legal Research, https://law.counselstack.com/opinion/remax-international-inc-remax-northeast-ohio-limited-partnership-ca6-2001.