Former contractor sues NAR, alleges RPR tech is ‘very fragile’

A former technology consultant for National Association of Realtors subsidiary Realtors Property Resource has filed a lawsuit against NAR and RPR, alleging he was wrongfully accused of overbilling for his work, which resulted in his termination and caused him economic harm.

Software developer Len Komar worked as a contractor for RPR from March 2016 to June 2017. He worked on RPR’s core platform — the property database — not broker data management platform Upstream, which RPR delivered in May 2018, two years behind schedule and defective. Upstream and RPR ended up going their separate ways at the end of 2018.

In August 2018, Komar launched a crowdfunding campaign to sue RPR and told Inman at the time that, “They had to start [building Upstream] from scratch because they couldn’t use a lot of the code from RPR because it was so bad.” He described RPR’s technology as “very fragile” due to its “poorly architected system” and “poorly written” and “non-optimized” code.

While Komar’s campaign appears to have failed without any pledges, he was able to submit a complaint at the end of April against NAR; RPR; RPR’s general manager, Jeff Young; RPR’s former president Marty Frame; RPR’s former CEO Dale Ross; RPR’s vice president of technology Brett Nordby; and HMB Consulting, a firm owned by tech consultant Riad Bacchus, who is also a defendant and a contractor for RPR.

The April 25 complaint alleges intentional interference with contract, intentional interference with prospective economic advantage and negligent interference with prospective economic advantage.

“Here’s the deal: I don’t mind being fired,” Komar told Inman last August. “I’m a contractor. It’s the fact that I was accused and slandered in the process. And I was never communicated to, I was never talked to, I was never given the chance [to defend myself].”

Because he was unable to find work for approximately six months, until December 2017, he alleged $53,000 in actual damages at the time and said being wrongly accused had taken a “personal and emotional toll.” The complaint alleges that defendants’ acts were “willful and malicious” and seeks punitive damages.

NAR declined to comment, saying it did not comment on employment disputes. The remaining defendants did not respond to requests for comment.

Komar declined to comment for this story, directing all questions to his lawyer, Naveen Madala of Irvine, California-based Madala Law. Madala told Inman in an email, “We will start the discovery process shortly. No further comment at this time.”

The discovery process could potentially yield more information about RPR’s inner workings. RPR’s finances are a mystery to virtually all of the 1.3 million Realtors who pay for the company’s existence. NAR only provides select groups of members with information about how the company spends its money — and none of those groups include the 800-member NAR board of directors.

By the end of this year, NAR will have spent about $226 million on RPR since its inception. That figure includes budget cuts to the company NAR made in early 2018 as well as funding for broker data platform Upstream (which RPR no longer operates) and the now-defunct Advanced Multilist Platform (AMP) project. NAR’s board has approved an additional $19 million in RPR spending for 2020.

The for-profit subsidiary has never produced a profit and 88 percent of NAR’s members don’t use the RPR platform regularly, according to the most recently-released figures from the company.

According to NAR, “the vast majority of RPR’s budget is devoted to technology to create, manage and grow” its property information database. In fall 2017, an Inman investigation found that the software developers and engineers who work for RPR were nearly all independent contractors — contrary to what then-RPR President Marty Frame told Inman.

At the time, at least 19 contractors from four different consulting firms were working for RPR, including the firm that hired Komar, Lateral Data Solutions (LDS).

Just before Komar started at RPR he received a forwarded email in which Nordby expressed his frustrations with the RPR platform’s performance and said Komar would be coming on to investigate why RPR’s servers couldn’t handle more than 600 concurrent users — for a platform that is supposed to be available to all of NAR’s million-plus members.

“[My timesheets show] all the work that I did fixing their crappy code. RPR spent millions of dollars on garbage,” Komar said.

According to Komar’s complaint, he “performed exceptional work on the RPR Project” and “directly contributed to the increased speed and efficiency of RPR’s website.”

It was Nordby who ultimately accused Komar of overbilling, Komar said. Komar contended this was due to a flawed interpretation of computer logs that showed when he was connected to RPR’s network and servers.

“Defendant Brett Nordby falsely represented to Defendant Marty Frame and Defendant Riad Bacchus that he had discovered that Plaintiff had been billing for hours he had not worked and was therefore collecting money to which he was not entitled,” the complaint said.

“Defendants Marty Frame and Riad Bacchus knew the allegations of unethical, fraudulent and/or illegal billing practices by Plaintiff were in fact false. Despite their knowledge of the falsity of the allegations, Defendants Marty Frame, RPR, HMB and Riad Bacchus went along with the scheme to induce LDS to terminate the LDS Contract with Plaintiff.

“Defendants NAR, Dale Ross, Jeff Young were aware of Brett Nordby’s scheme to harm Plaintiff and interfere with the LDS Contract. Defendants NAR, Dale Ross and Jeff Young ratified and approved the scheme for the benefit of Brett Nordby.”

Komar said he did not know why Nordby accused him and hoped it would come out in court. But Komar suspected the reason Frame did not try to challenge Nordby’s claims was because of how important Nordby was to the functioning of RPR.

“He’s the one that controls everyone’s access to everything,” Komar said.

“It is a fact that without his daily intervention the RPR platform does not function properly. That is what $200 million has bought,” Komar added.

The complaint alleges Bacchus, acting on behalf of all of the defendants, told LDS owner Stephen Roe that he had to fire Komar in order for LDS to continue to work for RPR. Roe terminated Komar, which the complaint alleges ended “an economic relationship that would have resulted in Plaintiff becoming a salaried employee with LDS.”

Last year, Komar provided Inman with a letter of reference and a letter of absolution from Roe.

The letter of reference thanks Komar for his “exceptional work” and says his performance issue resolution enabled “our customer” (who is not identified) “to avoid tens of thousands of dollars’ worth of hardware acquisition cost by simply improving the performance characteristics of the existing system.”

“Your technical acumen, work ethic, and personality have all been a great fit for our team and we look forward to future opportunities to engage with you. Your contributions have added significant customer value,” Roe wrote.

In the letter of absolution, which Komar received as part of a small claims settlement in February 2018, Roe clears Komar of the allegations of overbilling and admits the allegations were false and unsubstantiated and based on an erroneous interpretation of system logs. Roe did not respond to a request for comment.

Komar said he hoped a lawsuit against RPR would bring him “justice,” but also hoped it would bring to light how RPR has been spending millions of NAR members’ dues. “I really believe [Realtors] have grounds for a class-action lawsuit for breach of fiduciary duty by RPR,” he said last year. “NAR members and directors should demand a full audit of the money.”

At the beginning of 2018, RPR’s deal with Upstream appeared to have guaranteed the company’s continued existence and kept the majority of its funding from NAR intact. In a live stream on April 5, 2018, NAR CEO Bob Goldberg acknowledged RPR is “an expensive product,” but that as the vendor for Upstream, RPR needed to remain in its core form.

Now that the deal with Upstream is over, it remains to be seen whether there will be more changes at NAR’s tech company. In a May 2019 NAR Finance Committee report, the trade group said RPR retained ownership of all technology and intellectual property created for the Upstream project and that efforts to pursue opportunities to license the technology to third parties are “ongoing.”

Email Andrea V. Brambila.

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