On the final day of testimony in the trial of six Montgomery County real estate firms on charges that they conspired to fix prices, a government witness confirmed that one of the defendants had told him in advance he intended to announce an increase in his commission rate at a dinner meeting of realtors.
This is the first time that prior knowledge of the announcement was established.
Dean Maury, one of the guests, told the court today that he had asked the host. John P. Foley, Jr. president of Jack Foley Realty, Inc, during a gold match how long the dinner would last because he had a later engagement. Foley told him he had only a few points to make and added "I have about made up my mind to go to 7 per cent" (in the commission rate).
Maury corroborated other witnesses' testimony that Foley had also said he didn't care what anyone else did (whether or not they raised commissions).
Under questioning by defense counsel. Maury stated that Foley said he intended to announce his decision at the dinner. The Department of Justice is seeking to prove that the purpose of the dinner, on Sept. 5. 1974, was to obtain agreement by those present to raise commissions from 6 to 7 per cent. The defense has maintained that increases occurred separately and were due to adverse economic conditions and a conspiracy.
The defendants are Bogley, Inc., and its president Robert W. Lebling: Colquitt-Carruthers, Inc., and its president, John T. Carruthers, Jr: Jack Foley Realty Inc., and its president. John R. Foley Jr. Robert L. Gruen, Inc. Schick & Pepe Realty, Inc., and Shannon & Luchs Co.
Another witness, Foster Shannon, president of Shannon & Luchs testified that a company wide policy to charge 7 per cent was not adopted until January 1975. The government produced minutes of a Shannon & Luchs managers meeting on Sept. 9, 1974, that recounted how vice president William M. Ellis had discussed going to 7 per cent then. That percentage, the minutes noted, would not be mandatury but agents would be encouraged to get 7 per cent listings and bonuses would be given for doing so.
Ellis named as an unindicted co-conspirator attended the Sept. 5 dinner and according to witnesses, said then that Shannon testified that he was not aware that Ellis had asked managers to get 7 per cent (Shannon did not attend the meeting), and that in fact he was very much opposed to the idea at the time.
At an executive committee meeting three days later which Shannon did attend, he said Ellis did not push for 7 per cent Shannon changed his mind about raising rates in January when Ellis showed him shannon & Luchs was not getting more listings at 6 per cent than its competitors were by charging 7 per cent.
Shannon insisted that the change was "absolutely not due to conspiracy and that Ellis did not have the final authority to raise commissions anyway. Multiple Listing Service records indicate all Shannon & Luchs listings for the month of September 1974 were at 6 per cent but by March 1975 half were at 7 per cent. By December 1975 9 out of 10 were at 7 per cent.
The third defendant John T. Carruthers did not testify.
Closing arguments will be made Monday before the case goes to the jury of eight women and four men.