Effective today, CBRE dismissed, with prejudice, the lawsuit it filed last July against Hughes Marino for being an alleged co-conspirator to steal CBRE’s trade secrets. After recognizing that Hughes Marino never stole or misappropriated anything, CBRE was forced to dismiss the suit as part of a settlement agreement with its former top brokers who left CBRE last summer.
From the beginning, this lawsuit was more about CBRE trying to send a message and settle scores, than trying to win any legal arguments. In fact, they distributed their lawsuit first to the Puget Sound Business Journal before even bothering to serve a single defendant. And they filed it in federal court even though the agreements with their former brokers called for a private arbitration. But once Hughes Marino struck back hard, CBRE ran straight to private arbitration because they knew they couldn’t actually prove that Hughes Marino had done anything wrong.
CBRE had claimed that Hughes Marino Executive Vice President Owen Rice, one of CBRE’s former perennial top producing brokers for the State of Washington, had “misappropriated” files and emails containing CBRE’s confidential information. Similar claims were made against Gavin Curtis, a Hughes Marino Vice President. What quickly became apparent to CBRE was that virtually none of that information was ever transferred to Hughes Marino – and the only information being accessed was being used by Rice and Curtis to complete client transactions in progress (for which CBRE was always going to be compensated for regardless).
Hughes Marino CEO, Jason Hughes, asserts that he “…believes CBRE knew the suit was meritless against Hughes Marino from the get-go, and used it as an attempt to give our company a black eye in the community as well as an extortion lever to change the fee distribution on Rice and Curtis’s 35 client transactions in progress.” Hughes made a point to clarify that Hughes Marino owes absolutely no money to CBRE and none of the defendants will end up having to write a check to CBRE. Hughes asserts that rather than involve any regulatory agency on behalf of Rice and Curtis against CBRE to contest CBRE’s retention of fees, the two high-level Seattle brokers wanted to “move on” past this nuisance suit so that their energy could be further focused on their continued dominance of CBRE on the playing field.
Hughes Marino did not pay any fees, costs or damages to CBRE. Hughes contends that “Owen and Gavin made a business decision to let CBRE take some of their future fees to offset CBRE’s expenses and costs (so the only people making out after all of this are the attorneys).” Hughes continued with “I feel that CBRE is reeling from a fairly significant exodus of its top professionals – and rather than reflect on why all of these people are leaving, local leadership for some reason thought that they might stop the hemorrhaging by bullying recent departures – especially their former top brokers. This is just one of many reasons why many, not just me, believe CBRE is at a crossroads. I liken them to GE; great name and huge in size – but fracturing all over the place. It has become too big and is trying to serve too many – all while having huge conflicting interests for most.”
Hughes says that “CBRE likes to attempt to take the moral high ground, stating that it would have never sued had the brokers not taken the data. The hypocrisy is that other brokers at CBRE did the exact same thing when joining CBRE years ago, and CBRE allowed other brokers that left it recently to take data with them. Additionally, CBRE had separate arbitration agreements with its former brokers that called for all disputes to be resolved privately – yet the Seattle Manager of CBRE ignored that so he could sue in Federal Court while simultaneously leaking the lawsuit to the press. Additionally, Rice and Curtis were only taking what they believed to be their rightful information (as independent contractors), the majority of which was used to complete their remaining CBRE client transactions to the best of their ability. I really believe this was a bully shakedown. In retrospect, I actually view the lawsuit as a huge compliment from CBRE, as it would not have conjured up a lawsuit against us unless it recognized Hughes Marino as a true threat to it; one that disrupts the entire industry in every market we enter.”
Hughes says “Hughes Marino, while representing corporate tenants, has worked with CBRE on thousands of transactions around the world. They are a fantastic landlord brokerage firm, they are a great landlord themselves, and their development arm, Trammell Crow, is one of the best developers out there – but they should stay in their lane of representing and being a landlord. The industry is evolving – and corporate tenants are understanding that they need un-conflicted, fiduciary representation on their real estate needs.”
Hughes has been on a crusade to educate companies on the perils of dual agency (when a brokerage firm represents landlords and tenants) – as he says it is fraught with conflicts all of which hurt the tenant. His particular criticism with CBRE is that not only is CBRE an enormous landlord brokerage firm, representing all of the largest landlords in the world, but it too is an enormous landlord. Hughes contends CBRE “either owns or acts as a fiduciary manager (in essence, an owner) of approximately 2.5 BILLION square feet of commercial space. Hughes says that is equivalent to all of the office space in all of the states from Washington across to Wyoming, down to New Mexico and back over to California. Literally the entire western half of the United States has only approximately 2.4 BILLION square feet of office space. Everyone understands where CBRE’s allegiances are once they comprehend the scope of its landlord ownership interests.”
Defendants were represented by Seattle attorneys David Perez and James Williams of the esteemed national firm Perkins Coie. Additional comments from Perez can be read here.
For more information, please direct all inquiries to Robert Bello, General Counsel of Hughes Marino. He can be reached by email at firstname.lastname@example.org or by phone at (206) 624-3111.
About Hughes Marino: Hughes Marino is an industry-leading commercial real estate company that exclusively represents business owners and corporate real estate decision makers. The company only represents tenants and buyers–never landlords–which eliminates the potential for conflicts of interest that other commercial real estate firms have. In addition to tenant and buyer representation, the firm offers in-house program, project and construction management, lease auditing, and lease administration services as added value for their clients. The firm has offices in Seattle, San Diego, Orange County, Los Angeles, Inland Empire, San Francisco, Silicon Valley and New York.
Briana Waris is marketing director at Hughes Marino, an award-winning commercial real estate company specializing in tenant representation and building purchases with offices in San Diego, Orange County, Los Angeles, San Francisco, Silicon Valley and Seattle. Contact Briana at 1-844-NO-CONFLICT or email@example.com to learn more.