Luxury brokerage faces court battle to get its buyer agent paid

Beverly Hills Estates, led by Branden and Rayni Williams, is fighting for buyer agent Michelle Graci’s right to an agreed-upon 50 percent of the deal’s broker commission after seller Ronen Nahum alleged misconduct.

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Luxury brokers involved in the recent sale of a Hidden Hills spec mansion to LA Rams quarterback Matthew Stafford are now enmeshed in a dispute over the divvying up of escrow funds two months after the deal closed, The Real Deal reported on Tuesday.

Rayni Williams

Rayni Williams

Beverly Hills Estates, a luxury firm headed by real estate power couple Branden and Rayni Williams, has alleged that the escrow company involved in the transaction, Escrow of the West, led by Galit Ofengart, is refusing to pay Beverly Hills Estates buyer agent Michelle Graci 50 percent of the deal’s $1.12 million broker commission based on a demand from seller and real estate developer Ronen Nahum of DOR Homes, court records show.

DOR Homes “demanded that EOTW withhold all funds,” according to a legal filing in the Superior Court of the State of California from early February, claiming that Beverly Hills Estates and another defendant in the lawsuit, Berkshire Hathaway HomeServices California Properties, were entitled to less than their agreed upon commissions because of “alleged misconduct and damage caused to DOR” during the sale.

Branden Williams

Branden Williams

What the alleged misconduct and damage were is unclear, since it was not specified in the legal filings. Inman was unable to immediately get in touch with Nahum.

“If [Ronen Nahum] wanted to claim fraud on behalf of Michelle Graci — first off, she didn’t represent him, she represented the buyers — then why didn’t he hold up the closing due to the ‘fraud’?” Rayni Williams asked Inman. “He didn’t hold up the closing because he was making millions and millions of dollars in profit. It’s one of the highest sales in Hidden Hills and this is a money grab, that’s all.

“Bullies like this look to the agents,” Williams continued. “They try to get the agents because they know how very hard they work, and they work on a commission basis only, so they don’t get paid until the deal closes. So they make them work tirelessly, they make them conduits to the deal closing, get the deal done for them, and then try to grab their money at the end because they know oftentimes, these agents are working commission-to-commission to support themselves.”

Since DOR Homes, Beverly Hills Estates and BHHS California Properties were unable to come to an agreement, Escrow of the West is turning the matter over to LA Superior Court in order to decide “to whom the escrow funds should rightfully be delivered,” the court filing states.

Galit Ofengart e1707950673567

Galit Ofengart

The complaint levied by Escrow of the West against DOR Homes, The Beverly Hills Estates and Pickford Real Estate (which operates as BHHS California Properties in the state of California) came after The Beverly Hills Estates first filed a complaint against the escrow company with the California Department of Financial Protection and Innovation.

Williams also suggested that Nahum and DOR Homes had pulled a similar move, while using Escrow of the West as an escrow agent, on a previous transaction that involved Graci.

“Escrow of the West (EOTW) processed this escrow like it handles all of its escrows: totally and completely neutral,” Daniel Krishel, an attorney representing Escrow of the West, said in a statement emailed to Inman. “When it comes to disbursement of funds, EOTW will only act in accordance with the parties’ mutually agreed upon written instructions; however if a dispute arises concerning those instructions or funds, and the parties cannot resolve that dispute amongst themselves (as in this case) an Interpleader action is filed and the disputed funds are deposited with the court for final disposition.

Michelle Graci e1707950717133

Michelle Graci

“Whether or not EOTW has repeat business from any former client is absolutely and totally irrelevant,” Krishel continued. “EOTW complies with California escrow law — period.”

The California Association of Realtors’ guide to broker compensation under the Residential Purchase Agreements states that “broker compensation instructions are irrevocable” and “subsequent instructions from principals that contradict the commission instructions submitted by the brokers should not be followed by the escrow holder.”

Williams argued that Nahum’s and Escrow of the West’s dealings were unethical.

“We need the word to be out there that corruption like this could change the industry standard,” she told Inman. “What is the point of a contract? What is the point of escrow if it’s not going to be a neutral third party and going to protect both sides? So any seller can then decide after signing irrevocable commission instructions — a listing agreement, which has commission instructions in it and the subsequent escrow instructions — that after closing, they want to hold up a hard-working Realtors’ agreed-upon fee? This is unethical greed.”

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