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Two Keller Williams Market Center owners have added fuel to the legal saga between Keller Williams founder Gary Keller and former CEO John Davis, with a new set of claims that accuse Keller of retaliating against franchisees who supported Davis after his departure in January 2019.
In a petition filed with Travis County, Texas, courts on Friday, Colleen and Bart Basinski said KW CEO Gary Keller, President Marc King and regional leaders Dan Holt and Colette Ching “maliciously interfered” with multiple business contracts that allegedly caused the couple to lose approximately $10 million in investments, disbursements, profits and income from their roles as market center owners, KWRI coaches and team leaders.
Colleen and Bart Basinski
According to the petition, the Basinskis are direct or indirect majority interest holders of the NW Indiana Market Center and Elite Oak Lawn Market Center in Illinois and were direct or indirect interest holders of the Legacy/Costa Mesa Market Center in Southern California until 2021.
In addition to owning those three market centers, Colleen was a team leader for Orland Park Market Center from 2010 to 2019 and a coach for Keller Williams‘ in-house coaching program, MAPS — two roles that yielded five and six-figure annual earnings for Colleen from 2015 to 2019.
Colleen said she developed a strong professional relationship with Davis in 2018 after the former CEO asked her to coach regional directors due to her previous success coaching agents and market center team leaders. The couple alleged their connection to Davis didn’t become an issue until the former CEO suddenly resigned from his post in January 2019.
“Colleen was at the top of her game until February 2019, when KWRI and Keller targeted her because of her association with KWRI’s former CEO, John Davis, who was despised by Keller for his success and winning strategies, and because he voluntarily stepped down from his role as CEO rather than… employ a preset market center cap, that would hurt market centers and violate licensing agreements,” the petition reads.
Over the course of two months, Colleen lost her MAPS coaching and Orland Park Market Center team lead positions, which collectively resulted in an annual income loss of $436,000 ($36,000 from coaching and $400K as a team leader), according to the court filing.
Keller Williams spokesperson Darryl Frost said the franchisor has no comment on the Baskinskis’ claims. “It would be premature to comment at this time,” he said.
However, the Basinskis said their relationship with KWRI and Keller continued to worsen in 2020 when the couple refused to follow a new policy that would set a standard preset market cap, which refers to the fees that agents pay their market centers.
The Basinskis said they and others believed a preset market cap violated individual licensing and partnership agreements and would “severely harm” market center owners in bigger, higher-cost markets. However, the couple eventually agreed to the new cap after allegedly receiving threats from Keller, King, Holt and Ching.
“[They] threatened to terminate or decline renewal of the market center’s licensing, take away high grossing agents and place them in competing markets and more subservient market centers, and other oppressive measures to ensure that market centers, including Plaintiffs’ market centers, lowered their caps,” the filing reads.
Although they complied with the new policy, the couple said Keller kept threatening them and unlawfully stripped their ownership stakes in their Legacy/Costa Mesa Market Center, which they bought in October 2019 with Tony Dicello and Dianna Kokoszka.
The group collectively paid $210,000 for 10,000 shares. Colleen and Bart said their portion — $105,000 — gave them a 19 percent ownership stake in the center. The couple said they were barely two years into roles as owners and operating partners when KWRI “extinguished” their ownership interests for underperformance. The Basinskis spokesperson Paul Omodt said the Basinskis are seeking a jury trial.
“KWRI and Keller extinguished Collen and Bart’s ownership interests and kept [the] investment of $105,000 because Costa Mesa MC was in the bottom 25 percent,” the petition reads. “Notably, Costa Mesa MC was in the bottom 25 percent when they invested in the franchise.”
“It is well understood in the industry that it takes approximately two to three years to turn a failing market center profitable,” it continues. “Therefore, the reason given for terminating Collen and Bart’s interests is pretextual and shows the retaliatory nature of KWRI and Keller’s scheme to ruin plaintiffs.”
Omodt said the couple’s lawsuit is part of a long, alleged pattern of behavior from Keller and pointed to John Davis’ $300 million lawsuit against the franchisor as another example of “illicit and heavy-handed” business tactics.
Davis is currently suing KWRI, Keller, former president Josh Team and Inga Dow, the CEO of multiple Texas-based Keller Williams offices who accused Davis of sexual misconduct. Davis said Keller and Team withheld Dow’s complaints and used them to ruin his reputation while attempting to sell his market center regions.
“We are starting to get a clearer picture of how Keller Williams Realty and Gary Keller operate which isn’t pretty and needs further scrutiny,” Omodt said. “A clear pattern of changing franchise agreements, devaluing businesses, pressure tactics, and character assassination if you don’t comply with Gary Keller’s illicit schemes is emerging. Yet another shoe drops in the sordid tale of Keller Williams Realty.”
“John Davis took a stand against the real estate giant and its founder Gary Keller with stunning allegations of fraudulent business practices, deceit, and operations ‘similar to a criminal enterprise’ in a suit filed earlier this year,” Omodt said. “Colleen and Bart are incredibly hard-working people who used the systems and tools set up by former CEO John Davis and found great success for themselves, their agents and ultimately Gary Keller.”
“They however refused to be manipulated by Keller and his cohorts and lost millions,” Omodt added.
