Schwartz v. Urban Compass, Inc

CourtDistrict Court, District of Columbia
DecidedApril 20, 2020
DocketCivil Action No. 2019-0340
StatusPublished

This text of Schwartz v. Urban Compass, Inc (Schwartz v. Urban Compass, Inc) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schwartz v. Urban Compass, Inc, (D.D.C. 2020).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

JILL SCHWARTZ,

Plaintiff,

v. Civil Action No. 1:19-cv-00340 (CJN)

URBAN COMPASS, INC., et al.,

Defendants.

MEMORANDUM OPINION

Jill Schwartz alleges that three of her former colleagues in the real estate industry

conspired to poach her clients and listings, thereby breaching their contract with her and

committing several torts in the process. See generally Compl., ECF No. 1. She also alleges that

Urban Compass, Inc. (“Compass”), was complicit in the scheme. Id.

The individual Defendants, Alexandra Thomas Schwartz, Danielle Spira, and Raymond

Ferrara, answered the Complaint. See generally Def. Thomas Schwartz’s Answer, ECF No. 20

at 1–25; Defs. Ferrara & Spira’s Answer, ECF No. 29. Thomas Schwartz also filed a

Counterclaim. See generally Def. Thomas Schwartz’s Counterclaim, ECF No. 20 at 25–37; see

also Pl.’s Answer to Counterclaim, ECF No. 28. Compass, for its part, moved to compel

arbitration as to any claim against it individually and to dismiss those claims. See generally Def.

Urban Compass, Inc.’s Mot. to Dismiss Pl.’s Compl. and Compel Arbitration, ECF No. 27; Def.

Urban Compass, Inc.’s Mem. of P. & A. in Supp. of its Mot. to Dismiss Pl.’s Compl. and to

Compel Arbitration (“Mot. to Compel”), ECF No. 27-1. In turn, Plaintiff petitioned the Court

for leave to amend her Complaint. See generally Pl.’s Mot. for Leave to File Am. Compl., ECF

No. 33; Pl.’s Mem. in Supp. of Pl.’s Mot. for Leave to Amend Compl. (“Mot. for Leave”), ECF

1 No. 33-1. The Court grants Plaintiff leave to amend in part and stays the sole count against

Compass while that claim is submitted to arbitration.

I. Background

Jill Schwartz is a real estate agent working in the Washington, D.C. area. Compl. ¶ 3.

She affiliated with Compass in August 2016, signing an Independent Contractor Agreement

(“ICA”) that provided her with office space, marketing, and technical support in exchange for

15% of her real estate commissions. Compl. ¶¶ 9, 66; see also ICA, ECF No. 27-2; ICA

Appendices, ECF No. 27-3. In 2017 Schwartz recruited three other agents to work as part of her

“team” under the name “The Jill Schwartz Group:” Alexandra Thomas Schwartz (any relation to

Plaintiff is unclear from the pleadings), Danielle Spira, and Raymond Ferrara. Compl. ¶¶ 10–13.

Each signed an ICA with Compass and then separately signed (or orally agreed to, without

signing) an addendum between the agent and Jill Schwartz laying out commission splits and

support from the Jill Schwartz Group. Id.; see also Def. Thomas Schwartz’s Addendum, ECF

No. 20-1 at 2–3. Schwartz’s name went on all official documents and listings, and she received

the commission on all sales. Compl. ¶ 14. In return, Schwartz split the commission with the

relevant team member on each sale and provided office space, parking, marketing, and other

technology support. Id. The group focused on high-end, luxury properties. Id. ¶ 8.

Schwartz alleges that, by mid-2018, the other team members decided to abandon their

affiliation with her and form their own team in secret. Id. ¶¶ 19–20. According to Schwartz, the

three downloaded a proprietary marketing database, did their own deals on the side without

crediting or paying Schwartz, took over Schwartz’s license to use a listing database, and

eventually took over some of Schwartz’s listings after going behind her back to the clients. Id.

Soon after, Defendants openly declared their intention to eject Schwartz from the team and

2 proceed on their own, all while retaining property listings they acquired while relying on

Schwartz’s assistance and brand recognition. Id. ¶¶ 21–22.

Schwartz sought assistance from Compass’s managers and requested that they terminate

Defendants’ affiliation with the company, but Compass instead chose to endorse Defendants’

plan. Id. ¶ 25. The managers tried to mediate the dispute by dividing the listings between

Schwartz and her former teammates, id. ¶¶ 26–35, but the Parties were unable to reach a

mutually agreeable solution, id. ¶ 36. At Compass’s insistence, Schwartz terminated her

affiliation with the company. Id. ¶¶ 36–37. The agent Defendants continue to be affiliated with

Compass. Id. ¶ 38.

Schwartz filed a six-count complaint on February 11, 2019, alleging that the agent

Defendants and Compass engaged in a civil conspiracy to take advantage of Schwartz’s brand, to

pilfer her listings for themselves, and to force Schwartz to leave the company (Count I). Id.

¶¶ 48–55. Schwartz also alleges (II) breach of contract (as to the agents), id. ¶¶ 56–60; (III)

unjust enrichment (same), id. ¶¶ 61–64; (IV) breach of contract (as to Compass), id. ¶¶ 65–73;

(V) misappropriation of trade secrets under the D.C. Uniform Trade Secrets Act, D.C. Code

§ 36-401 et seq., Compl. ¶¶ 74–80; and (VI) trademark infringement under the federal Lanham

Act, 15 U.S.C. § 1125, Compl. ¶¶ 81–91. Schwartz alleges that the Court has federal-question

jurisdiction over Count VI, 28 U.S.C. § 1331, and diversity jurisdiction over the remaining

counts, id. § 1332, because Schwartz is a Maryland citizen, the agent Defendants are District of

Columbia citizens, Compass is a Delaware corporation with its principal place of business in

New York, and the amount-in-controversy exceeds $75,000. Compl. ¶¶ 1–7.

The Parties agreed to undergo Court-supervised mediation, but that process failed to

resolve the case. See Order, ECF No. 10; Minute Order of Sep. 26, 2019 (lifting stay following

3 mediation). Thomas Schwartz answered the Complaint and filed a Counterclaim against

Schwartz, alleging (I) false advertising under the Lanham Act, 15 U.S.C. § 1125, Countercl.

¶¶ 110–22; (II) defamation, id. ¶¶ 123–30; (III) intentional interference with prospective

economic opportunity, id. ¶¶ 131–41; and (IV) unfair competition, id. ¶¶ 142–53. Thomas

Schwartz’s Answer contained detailed affirmative defenses arguing that Schwartz’s Complaint

failed to state a claim for relief on all counts and suggesting that the Court should dismiss the

Complaint, but Thomas Schwartz did not file a motion to dismiss any count at that time. See

Def. Thomas Schwartz’s Answer at 12–22. Defendants Spira and Ferrara jointly filed their own

Answer, which expressly adopted Thomas Schwartz’s arguments against the Complaint. See

Defs. Spira and Ferrara’s Answer at 11.

Compass separately moved the Court to compel Schwartz to submit her claims against it

for arbitration under the binding arbitration clause contained in Schwartz’s ICA with Compass.

See generally Mot. to Compel. Compass also requested that the Court dismiss the claims after

sending them to arbitration. See generally id.

In response to the Answers, the Counterclaim, and the Motion to Compel, Schwartz

sought leave to amend. See generally Mot. for Leave. The proposed Amended Complaint would

add no new factual allegations but would merely reframe Schwartz’s claims into five new

counts. Id. The proposed Amended Complaint would level a single claim against Compass for

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