Caudill V Keller Williams.pdf

Jana Caudill, an Indiana resident and owner of a real estate brokerage company, sued Keller Williams Realty, Inc., a Texas corporation, for breach of contract. The case was settled in 2012, with a confidentiality agreement that prohibited disclosure of the settlement terms, including the amount paid to Caudill. However, Keller Williams later issued a Franchise Disclosure Document (FDD) to approximately 2000 recipients, which included details of the settlement, violating the confidentiality agreement.

Caudill claimed that this widespread dissemination of the FDD was a breach of the confidentiality clause and sought $20 million in damages, based on a liquidated damages provision of $10,000 per breach. The district judge disagreed, finding that the liquidated damages clause was unenforceable as a penalty under Texas law, as the harm caused by the breach was not incapable of estimation and the amount of damages specified was not a reasonable forecast of just compensation.

The court held that the dissemination of the FDD did not cause Caudill a $20 million loss, as she failed to identify any recipient who had come to think less of her or her company as a result of the disclosure, or any referral that she had lost. The court also noted that any fluctuations in Caudill's annual profits could be explained by factors other than the disclosure, such as the termination of her business relationship with Keller Williams. Therefore, the district judge's decision to deny Caudill's claim for $20 million in damages was affirmed.