Settlement reached in second lawsuit between Long & Foster and SRMF

Long & Foster has more than a dozen offices in metro Richmond. (BizSense file photo)

It took longer this time, but a second legal dispute between a local residential real estate firm and the regional industry heavyweight that its founders broke off from has likewise been resolved, months before a scheduled jury trial.

Henrico-based Shaheen, Ruth, Martin & Fonville Real Estate and Long & Foster Real Estate are asking a circuit court judge to dismiss the lawsuit that Long & Foster brought against SRMF in March 2020, as well as subsequent counterclaims brought by SRMF and other defendants in the case.

A draft dismissal order was filed last Wednesday in Henrico Circuit Court and awaited a judge’s signature as of Friday.

The draft order does not specify terms of the settlement but states that “all matters in controversy have been compromised and settled between the parties.” The order calls for the lawsuit and counterclaims to be dismissed with prejudice, meaning they cannot be filed in that court again.

The order adds that the parties “agree that the dismissal shall serve as an adjudication on the merits” and will bear their own costs and attorney’s fees.

Principals Scott Ruth, John Martin, Mahood Fonville and Scott Shaheen, from left.

The resolution ends an on-again, off-again legal dispute between the two firms that stems from the defection of SRMF principals and former Long & Foster executives Scott Shaheen, Scott Ruth, John Martin and Mahood Fonville, who jumped ship to form their brokerage in 2017.

Weeks later, Long & Foster sued SRMF, alleging breach of contract and contending that the group had poached nine of its agents and utilized their leadership positions to undermine Long & Foster’s policies and benefit their new firm. The parties settled that lawsuit three months later.

Long & Foster filed the second suit in March 2020, alleging damages stemming from the subsequent departures of former Long & Foster executive Cindy Jez, associate broker Lois Thomas and sales team The Beran Group, who were all named as defendants along with SRMF and Shaheen individually.

Among the suit’s allegations was a claim that The Beran Group, led by Kristen Beran Krupp and Sherry Beran and previously affiliated with Long & Foster’s Midlothian office, took with them Long & Foster clients, including $6.9 million in business related to 17 homes by Texas-based builder D.R. Horton.

At that time, around when SRMF was planning an office expansion in the Southside, Shaheen told BizSense that about half of SRMF’s agent count, then totaling 104, had come over from Long & Foster. SRMF’s agent count this year stood at 187 in January, when the now 5-year-old firm purchased its headquarters building at 420 N. Ridge Road for $1 million.

SRMF issues statement

This latest settlement coincides with a statement that SRMF put out last week and asked to be published in full. The statement reads as follows:

“Long & Foster is a reputable and upstanding company with a long history of excellence in the real estate market, both in the Richmond region and throughout the Mid-Atlantic and Northeast. Having spent many years with Long & Foster prior to forming Shaheen, Ruth, Martin & Fonville Real Estate, SRMF’s owners are grateful for the opportunities and strong foundation that Long & Foster provided in our careers.”

The statement adds: “Long & Foster offered us – just as it continues to provide agents today – a truly unique entrepreneurial environment focused on helping real estate professionals to build their business acumen and learn how to achieve success in the industry. Since opening SRMF, our team has worked successfully with Long & Foster and its associates on numerous real estate transactions, and we look forward to continuing to work together to provide the highest level of service in the Virginia real estate market.”

Asked for comment on the settlement, Long & Foster referred to SRMF’s statement.

Counterclaim detailed previous settlement

In late 2020, SRMF and Jez struck back against the lawsuit with respective countersuits, with SRMF arguing that it was merely competing in the marketplace after abiding by an agreed-to non-compete period that followed the 2017 settlement.

That one-year period, which expired in September 2018, was one of several stipulations that the parties signed off on in that settlement agreement.

The brokerage now totals 187 agents and 11 staff members across five offices.

In its counterclaim, SRMF argued that Long & Foster effectively breached that agreement by bringing this latest suit. It also alleged that Long & Foster fraudulently induced SRMF into signing the agreement because, by threatening and then going forward with litigation, it showed that it had no intention of abiding by the agreement’s terms.

Long & Foster, which is based in Chantilly and has multiple offices in the Richmond area, had sought at least $1 million in relief plus punitive damages in its latest lawsuit. SRMF’s counterclaim sought $1.55 million in damages.

In her counterclaim, Jez, who joined SRMF in early 2019, contended that Long & Foster fired her without cause and subjected her to harassment and a hostile work environment based on her age and gender.

The complaint stated Long & Foster staff worked to change her compensation and added a no-solicitation clause when she offered to resign at a later date in 2019. Jez claimed four counts including breach of contract and unjust enrichment and sought upwards of $118,000 in damages and back pay.

Long & Foster argued that documents filed in the case refuted Jez’s claims and asked that they be dismissed with prejudice. In a statement to BizSense after the counterclaims were filed, Long & Foster said it is “committed to providing a safe and productive work environment where all employees are treated with dignity and respect,” adding that it believed the claims were “without merit.”

The lawsuit and counterclaims were set to go to a jury trial that had been scheduled for next April.

Attorneys on both sides of the case declined to comment on the dismissal order, which is signed by attorneys for all parties in the case.

Long & Foster was represented in the case by Elizabeth Ebanks, Scott Siegner and Jimmy Robinson Jr. with downtown firm Ogletree Deakins.

SRMF and Shaheen were represented by Kevin Martingayle of Virginia Beach-based Bischoff Martingayle and by Mark Nanavati, G. Christopher Jones Jr. and Sarah Gallo with Midlothian-based Sinnott Nuckols & Logan.

Jez and Thomas were represented by local attorneys Blackwell Shelley and Nichole Vanderslice, respectively. Zev Antell of Richmond-based Butler Curwood represented The Beran Group, Krupp and Beran.

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