Comments on: CondoDomain Sued By Minority Shareholders

By: jfsellsius

jfsellsius — Wed, 28 Jan 2009 22:43:41 +0000

Gee, I hope any personal bias did not skew my legal interpretation of the
complaint and my experience (in NY) in breach of contract/shareholder
cases. I read the entire 100 pages of the complaint and exhibits. IMO, in
order to win, plaintiffs must prove the expansion into buyers' brokerage
was *not* "complementary to the core business" of a search portal and
*not*a "thing" otherwise permitted under MA law (these are straight
from the
agreements and highlighted in the post under point 5). In addition, they
must prove they suffered monetary damages as "minority shareholders" NOT as
brokers. It seems to me, plaintiffs are arguing damage to them as brokers
(that, in itself, may be very difficult to prove).
They also must prove there was an agreement that condodomain.com would not
compete with plaintiffs' business as brokers. *This prohibition against
brokerage is not spelled out in any of the 100 pages*. Instead, plaintiffs
allege that agreement was "implied" (see introduction to complaint). I can
tell you from experience that judges don't look usually let you off the hook
on "implied" contracts, when they have a written one staring them in the
face (which plaintiffs themselves modified).
Look, if plaintiffs took the time to modify the agreement, they should have
been clear as to any prohibitions and not rely on legal gobbledeegook like
"complementary to core business'. What the heck does that mean? These
fellows are intelligent business men and certainly had the ability to make
crystal clear that they did not want condodomain.com to get into brokerage.
Don't pussyfoot around the issue with legalese-- it always bites you in the
butt-- As Will Rogers said, "The minute you read something that you can't
understand, you can almost be sure that it was drawn up by a lawyer."
You should also know, there is an old principle of law, somewhat abandoned,
but nonetheless in the back of every judge's mind, that any ambiguity in an
agreement YOU draft is construed *against* you. http://tinyurl.com/ajgj22

PS: All those who practice law need their heads checked.
Thank you, nonetheless, for your comment.

By: Interested Observer

Interested Observer — Wed, 28 Jan 2009 21:15:30 +0000

Joseph, your bias is obviously skewing your judgment. Anthony Longo has definately screwed up. He changed the business model from a real estate advertising firm to a real estate brokerage in clear violation of the terms of the LLC! In what capacity would you ever believe that the investors would ever want to invest in a competing real estate brokerage?! Seriously, you need your head checked!

By: JeffX

JeffX — Mon, 26 Jan 2009 03:50:21 +0000

Rule 11 sanctions against the plaintiffs for a frivolous lawsuit…

By: Andew

Andew — Sun, 25 Jan 2009 23:48:38 +0000

I read the case and chatted with Tony. The case is BS but I am still concerned for Tony's sake because either way he loses. Startups just don't have the cash flow for legal fees like this. I would get this mess in front of a mediator or someone rather than jury. Might be cheaper to just rename the brokerage and go on with business and resume condodomains original concept to get them to chill out.

By: jfsellsius

jfsellsius — Sat, 24 Jan 2009 02:28:25 +0000

If there is anything I can do to help resolve the matter, let me know. I wish both sides a peaceful solution.

By: jfsellsius

jfsellsius — Sat, 24 Jan 2009 02:23:21 +0000

Thanks for your comment JT. You may be right but I don't see a search portal and a buyer brokerage as clearly competing. The search portal says, “Look at all these great properties” while the brokerage says “If you want to buy one, call us and we'll save you money.” Ads can still be placed for homeowners coming to view the homes or hire an agent.

But you correctly identify the way the Court will look at the case. And when it comes to the issue of damages, the court will want proof that expanding into brokerage has hurt the minority shareholders of condodomain.com,– and not whether it has hurt OA? The fiduciary duty runs to the minority shareholders of CD not to OA. The effect on OA is irrelevant IMO.

By: JT

JT — Fri, 23 Jan 2009 19:33:41 +0000

I'm not sure it is enough for OA to shut down the brokerage business of CondoDomain, but isn't switching to a brokerage model and ditching the advertising revenue in a sense competing with the original business plan? I'm not sure what the rules are in Mass., but I'm guessing you can't do both: Collect advertising revenue from your website AND convert visitors to your website to clients in a real estate transaction. Also, why would a developer pay for a listing on CondoDomain if CondoDomain is not sending the leads to the developer and instead keeping for themselves? You would have to be a pretty powerful real estate brokerage to be able to collect ad revenue AND potentially get paid a commission by the same developer.

I agree that they should be able to work this out without going to court, but maybe they have already tried that and gotten no where?

By: Charles

Charles — Fri, 23 Jan 2009 19:18:43 +0000

I have to agree with you, Joe. Their arguement is weak. They tap danced around the issue and now it has bitten them in the butt. Seems a case of sour grapes more than anything.