$70 Million Win for Family Owned Franchise

After two years of litigation in State and Federal Courts in Texas and a week long trial before an Arizona arbitrator, on May 12, 2006 SSH won a huge victory on behalf of Realty Executives International (REI) of Phoenix, Arizona. REI successfully claimed that the Texas state-wide franchise rights holder Gary Yarbrough had breached his Franchise Agreement with REI, that REI had, therefore, rightfully terminated the Agreement, and that REI was entitled to all its attorney's fees and expenses incurred in enforcing its Franchise rights. REI also successfully defeated Yarbrough’s claims that he had been fraudulently induced into the Franchise Agreement, that REI had breached the agreement, that REI had failed to properly police its copyrights and trademarks, and that REI engaged in conduct in violation of the Texas Deceptive Trade Practices Act. Yarbrough sought treble damages of $70,000,000.00 and proffered expert testimony in support of the damage calculations.

Yarbrough initially sued REI in state court in Houston, Texas.  REI successfully stayed the litigation and obtained an order compelling all claims between the parties to Arbitration. Yarbrough then dismissed the lawsuit and filed a new suit in Federal Court in Dallas, Texas.  REI then terminated Yarbrough and Yarbrough sought a Temporary Restraining Order in federal court in Texas. SSH successfully defeated the TRO and stayed the federal court litigation as well.

SSH also won on behalf of REI an award of all its attorneys’ fees, costs and expenses under the Franchise Agreement as the "prevailing party."

Patrick Stueve was lead trial lawyer on the cases and was ably assisted by associates Liz Orr and Eric Dirks. Sherry Barry the firm's trial paralegal assisted Mr. Stueve throughout the litigation and at the week long trial in Arizona.

 

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