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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 will probably be dealt with via arbitration moderately than via a public trial.

After a listening to Monday, Choose Reed O’Connor of a federal district court docket in Fort Price, 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 wherein the events agree {that a} impartial third occasion could make a binding determination 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 mentioned is an effort to revive his status after sexual misconduct allegations in opposition to him surfaced earlier in 2022 and to get better $300 million in damages. The Oct. 27 criticism additionally names Inga Dow, the CEO of a number of Keller Williams workplaces who lodged the allegations in opposition to 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 may 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 usher in much less revenue to Keller Williams workplaces, 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 tens of millions in monetary losses.

In a cellphone interview, John Davis spokesperson Paul Omodt advised Inman that whether or not the case is heard via arbitration or a public trial, the reality will finally 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 middle homeowners have been making comparable 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 folks,” Omodt mentioned. “It simply exhibits the way it’s not the precise solution 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 very happy with right now’s court docket ruling that enforced the events’ settlement to arbitrate, and we sit 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 in opposition to her — needs to be resolved below 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 stop franchise homeowners from suing and due to this fact protecting Keller Williams’ alleged wrongdoings from coming to gentle. The submitting alleged that Keller runs Keller Williams “just like a legal enterprise, whereby investments and pursuits are taken or devalued via illegal ways, whether or not via 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 handle Davis’s allegations concerning the operation of Keller Williams. Slightly, 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 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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