A lawsuit against four local real estate agents who left Long & Foster to start their own brokerage has been settled and is slated to be dismissed.
Scott Shaheen, who with colleagues Mahood Fonville, John Martin and Scott Ruth jumped from Long & Foster to form SRMF Real Estate in May, said last week that the lawsuit they faced from their former brokerage was being dismissed through a “mutually agreed-upon” settlement.
He declined to discuss the settlement, the terms of which he said are confidential.
“Everybody is happy with the resolution, and we’re both moving forward,” Shaheen said.
Long & Foster CEO Jeff Detwiler confirmed the settlement, which first was reported by the Times-Dispatch. He declined to comment further.
Filed June 5, the suit from Long & Foster had alleged breach of contract, contending that the agents had “successfully” solicited nine of the company’s agents, plotted together to quit simultaneously and utilized their leadership positions to undermine the company’s policies and benefit their new firm.
Attorney Kevin Martingayle, who represented Shaheen and the other defendants in the case, said a dismissal order was being sent to the court Friday. He would not comment on the settlement.
The lawsuit’s dismissal comes as Long & Foster is being acquired by HomeServices of America, an affiliate of Warren Buffet’s Berkshire Hathaway.
The companies announced the acquisition last Thursday. Terms of the deal, which closed Sept. 1, were not disclosed.
Detwiler, who is assuming the CEO role on top of his duties as Long & Foster’s president and chief operating officer, said the acquisition will not change the firm’s Richmond presence or operations. It will continue to operate under the Long & Foster flag.
“We’re very excited by our shareholder news, and we’re going to take our overwhelming market position in the Richmond market and accelerate our growth plans,” Detwiler said. “We’ve got even more resources and capabilities today for growth, and we’re going to be deploying those in the Richmond region.”
No changes in local leadership are expected to result from the acquisition, said Detwiler, who noted the recent appointment of VCU alum Brian Haug to lead Long & Foster’s Richmond market – the role previously served by Shaheen.
Headquartered in Chantilly in Northern Virginia, Long & Foster has 11,000 agents in over 230 offices in Virginia, Maryland, West Virginia, North Carolina, Pennsylvania, Delaware, New Jersey and Washington, D.C. The company had nearly $29 billion in sales volume and more than 81,000 home sales last year, according to a release.
Despite the lawsuit, Shaheen acknowledged the acquisition as a “big deal” for Long & Foster, adding that he is happy for co-founder Wes Foster, who is remaining with the company as chairman emeritus.
“I’m happy for Wes Foster. He worked hard for 50 years, and he’s in his 80s and decided to sell. I think that’s a wonderful opportunity for him and his family,” Shaheen said.
Shaheen, a regional senior vice president for Long & Foster when he left, oversaw 46 offices and 1,500 agents, while Ruth, Martin and Fonville were managing brokers at the company’s Tuckahoe, Short Pump and Strawberry Street offices, respectively.
In their response to the lawsuit, the SRMF group cited a 2011 case also involving Long & Foster in which a judge said non-compete and non-solicitation provisions in the company’s employment agreements with agents were “overly broad and unenforceable.” In an interview with BizSense, Martingayle called the lawsuit “fatally defective” and “sour grapes about good old-fashioned competition.”
In the four months since SRMF formed, Shaheen said, the brokerage has grown to nearly 60 agents and has closed 58 transactions. The firm’s ranks include a recently formed team, Providence Hill, consisting of former Re/Max agents Jenny Brock, Elliott Gravitt and John McGurn and former Long & Foster agent Dawson Boyer.
“We have a good mix of agents with us that came from all different firms, so we’re excited,” Shaheen said. “For four months in the business, that’s a pretty big feat in itself.”
As of Friday, SRMF had 52 active listings and as many sales pending, Shaheen said. The brokerage is headquartered at 420 N. Ridge Road, across from Tuckahoe Shopping Center in western Henrico County. Shaheen said it also opened a satellite office at 513 Forest Ave., providing an additional 1,100 square feet for training and other needs.