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In 2022, Crye-Leike Real Estate Services closed roughly $7 billion in sales volume, according to data from the 2023 RealTrends Verified rankings. The T3 Sixty Real Estate Almanac reports the same numbers, while the brokerage company’s 2022 Annual Report pegged its sales volume at $8.5 billion.
But now the Memphis-based firm wants to walk back these numbers. In a document filed on Wednesday in the Gibson commission lawsuit, Crye-Leike is asking Judge Stephen R. Bough to stay the case against it until all appeals of the National Association of Realtors’ (NAR) settlement have been exhausted.
The firm believes it should be covered by NAR’s settlement, which protects all real estate brokerages with a sales volume of less than $2 billion in 2022. It claims it is protected under NAR’s settlement because only Crye-Leike Inc. — which the company said did $1.75 billion in sales volume in 2022 — is named as a defendant in the Gibson suit.
The Crye-Leike umbrella encompasses six companies: Crye-Leike Inc., Crye-Leike of Arkansas, Crye-Leike of Mississippi, Crye-Leike of Nashville, Crye-Leike South and Adaro Realty. The six firms are wholly owned by Harold Crye, but according to the court filing, they are independent companies with their own management teams and they keep separate accounting records.
But the filing notes that Crye-Leike Inc. provides support, human resources, information technology and in-house legal services for the other firms in exchange for a fee.
“Crye-Leike is only in the position of defending this lawsuit because the T3 Sixty Report Form requests information for only two types of brokerages,” the filing states. “The form requested three items: total sales volume, number of agents, and transaction sides closed. The form provided a line for company owned brokerages and a second line for franchised brokerages.The Controller did as she did every year and grouped together the transactions volume, transactions size, and agents of the six independent Crye-Leike owned companies.”
According to the filing, the plaintiffs cannot prove that Crye-Leike Inc. had full control over the six independent firms, which would enable them to treat the firm as one company with a sales volume well above the $2 billion threshold.
“In order to exclude Crye-Leike from the [NAR settlement] release, the Plaintiffs must show the group of companies acted as a single entity or alter-egos so that they should be viewed collectively, not individually,” the filing states.
The plaintiffs have 10 days to respond to Crye-Leike’s filing.
According to RealTrends Consulting co-founder Steve Murray, even though the six Crye-Leike companies report their sales volumes as one entity for ranking purposes, if they are truly 100% independent, then Crye-Leike Inc. should fall under the NAR settlement.
“Unless they named all six brokerages in the lawsuit, then the plaintiffs messed up,” Murray said. “If they didn’t make it clear in the complaint that it applied to all six brokerages, then they very well may have a case.”
