FDD Items 3 & 4 · 2025 filing

Realty Executives litigation history

What Realty Executives disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 9; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

9 disclosed cases: 1 class-action antitrust suit naming REI as co-defendant (stayed as to REI); several franchisor-initiated collection/breach suits against former franchisees (Gallery Properties, BCC Mountain Resorts, Whaley Realty, Realty Executives Lifestyle Group, Struzan Holdings, IBJ Inc., Devonshire Western Canada, FJM Corporation) mostly resulting in default judgments or settlements in REI's favor.

Item 3 (litigation) · 9 matters disclosed · 2 pending listed

Litigation cases

The franchisor

Pending (2)

ALEJANDRO LOPEZ V. NEXTHOME, INC., REALTY EXECUTIVES INTL. SVCS., LLC, SHOREWEST REALTORS, INC.
pending
Brought by a third party · filed 2024-11-14 · United States District Court, Northern District of Illinois · 24-cv-11735
“… Case No. 24-cv-11735, United States District Court, Northern District of Illinois, filed November 14, 2024.”Page 11 of the 2025 FDD, Item 3
Outcome: “The lawsuit is presently stayed as to REI.”
REALTY EXECUTIVES INTL. SCVS., LLC V. BCC MOUNTAIN RESORTS MANAGEMENT, INC.
pending
Brought by the franchisor · filed 2023-03-03 · In The Supreme Court of British Columbia, Kelowna Registry · 136614
“… Case No. 136614, In The Supreme Court of British Columbia, Filed March 3, 2023.”Page 11 of the 2025 FDD, Item 3
Outcome: “On November 1, 2024, the court struck BCC Mountain’s response to the Civil Claim due to various disclosure violations on the part of the former franchisee. The parties are presently waiting for judgment to be entered against BCC Mountain.”

Concluded (7)

REALTY EXECUTIVES INTL. SVCS., LLC V. GALLERY PROPERTIES RE, INC., GALLERY PROPRETIES RE II, INC., ROGERS P&L ENTERPRISES, INC., AND CHRISTOPHER NUTT
concluded
Brought by the franchisor · filed 2024-08-12 · Maricopa County (Arizona) Superior Court · CV2024-021690
“… Case No. CV2024-021690, Maricopa County (Arizona) Superior Court, Filed August 12, 2024.”Page 11 of the 2025 FDD, Item 3
Outcome: “The Court has entered Default Judgment against all Defendants. On March 17, 2025, Christopher Nutt filed for protection under Chapter 13 Bankruptcy, which stayed all enforcement of REI’s claims against him.”
REALTY EXECUTIVES INTL. SVCS., LLC V. WHALEY REALTY CRL, LLC AND KRYSTAL WHALEY
concluded
Brought by the franchisor · filed 2023-01-20 · Maricopa County (Arizona) Superior Court · CV2023-001036
“… Case No. CV2023-001036, Maricopa County (Arizona) Superior Court, Filed on January 20, 2023.”Page 11 of the 2025 FDD, Item 3
Outcome: “On December 4, 2023, Default Judgment was entered against Krystal Whaley in the principal amount of $228,922.72, along with interest accruing at 18% per annum and court costs.” (page 12)
Realty Executives Intl. Svcs., LLC v. Realty Executives Lifestyle Group, LLC, Thomas Clark, Karen Ann Murphy Clark, Larry J. Spann, and Southeastern Real Estate Associates, LLC
concluded
Brought by the franchisor · filed 2022-04-06 · Maricopa County (Arizona) Superior Court · CV2022-004288
“… Case No. CV2022-004288, Maricopa County (Arizona) Superior Court, filed on April 6, 2022.”Page 12 of the 2025 FDD, Item 3
Outcome: “As of the date of this Disclosure Document, Mr. Clark is not in compliance with his payment obligations under the settlement agreement.”
Realty Executives Intl. Svcs., LLC v. Struzan Holdings LTD., Dwight Streu and Bernie Molzan
concluded
Brought by the franchisor · filed 2020-01-07 · Court of Queen's Bench of Alberta · 2001-00239
“… Court File Number 2001-00239, Court of Queen’s Bench of Alberta, filed on January 7, 2020.”Page 12 of the 2025 FDD, Item 3
Outcome: “This case and all claims related to it were resolved by settlement, with a discontinuance of claim filed on January 19, 2022.”
Realty Executives Intl. Svcs., LLC v. IBJ, Inc. et. al.
concluded
Brought by the franchisor · filed 2019-03-15 · Maricopa County (Arizona) Superior Court · CV2019-005351
“… Case No. CV2019-005351, Maricopa County (Arizona) Superior Court, filed on March 15, 2019”Page 12 of the 2025 FDD, Item 3
Outcome: “This case and all claims related to it were resolved by settlement, and all matters were dismissed with prejudice on January 15, 2021, with the defendants agreeing to pay $150,000 to REI as part of the final settlement.” (page 13)
Realty Executives Intl. SVCS, LLC v. Bill Tarrabain, Philippe Roy, Rick Roswell, Gary Kirkham, and Devonshire Western Canada Ltd.; Realty Executives Intl. Svcs., LLC, v. Devonshire Western Canada Ltd, a Canadian entity, Bill Tarrabain and Najat Tarrabain, Philippe Roy and Jane Doe Roy, Richard Rowsw
concluded
Brought by the franchisor · filed 2017-06-16 · Court of Queen's Bench of Alberta, Calgary; then the U.S. District Court for the State of Arizona; and the American Arbitration Association · 1701-08015 and 2:17-CV-02671-PHX-DJH, plus an American Arbitration Association case
“Realty Executives Intl. SVCS, LLC v. Bill Tarrabain, Philippe Roy, Rick Roswell, Gary Kirkham, and Devonshire Western Canada Ltd.; Court File No. 1701-08015, Court of Queen’s Bench of Alberta, filed on June 16, 2017; Realty Executives Intl. Svcs., LLC, v. Devonshire Western Canada Ltd, a Canadian entity, Bill Tarrabain and Najat Tarrabain, Philippe Roy and Jane Doe Roy, Richard Rowswell and Stella Rowswell, and Gary Kirkham, Case No. 2:17-CV-02671-PHX-DJH, Filed August 8, 2017”Page 13 of the 2025 FDD, Item 3
Outcome: “the parties reached a confidential, mutually agreed resolution of their disputes and the various legal actions brought and pursued by us against the Devonshire-associated entities and individuals in multiple venues since 2015.”
Realty Executives Intl. SVCS, LLC v. FJM Corporation, Charles J. Moore, Frances E Moore and Brokers Holdings, LLC
concluded
Brought by the franchisor · filed 2016-06-24 · United States District Court, District of Nevada · CIV2:16-cv-01511-RFB-NJK
“… Case No. CIV2:16-cv-01511-RFB-NJK, United States District Court, District of Nevada, filed on June 24, 2016”Page 14 of the 2025 FDD, Item 3
Outcome: “This case and all related actions were resolved by settlement and all matters were dismissed with prejudice on July 24, 2017, with the defendants agreeing to pay damages as part of the final settlement and refrain from any further use of our Marks.”

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosure signals that moved the score

How this shows up in the verdict

9 litigation matters incl. antitrust class action (stayed as to REI)

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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